Southern Shores town manager presents recommended budget

Published 12:18 pm Thursday, May 18, 2023

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Southern Shores town manager Cliff Ogburn presented his recommended budget to the town council on May 2, beginning by explaining the impact inflation and tourism has had on the budget.

Seeing a peak consumer price index of 9.1% in June 2022, the Federal Reserve has continuously raised interest rates to combat inflation.

In the 2021 calendar year, the Dare County Tourist Bureau reported a 34% increase in gross occupancy collected. This number shifted to an increase in 5.6% in 2022, and in the first couple of months of 2023, growth was less than 1%, which, according to Ogburn, “could signal a leveling out.”

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Southern Shores has created its fiscal year 2023-24 budget, as well as a projected 2024-25 budget in light of these changes in the economy.

The town has experienced significant growth in the last several years. For example, sales tax and occupancy tax revenue for the pre-Covid 2019-20 budget was $948,993 and $1,001,880 respectively. For the current fiscal year, the town expects to receive $1,750,000 in sales tax and $1,800,000 in occupancy tax revenue, and has budgeted similar numbers for next year. Compared to pre-Covid numbers, this represents an increase of 77% and 81% respectively.

“Staff recognizes that eventually these revenues will decline and are cautiously watching to see if these numbers go back to pre-covid figures in order to be able to maintain a sustainable budget. This expectation was accounted for in the planning of the current FY 22-23 budget,” Ogburn wrote in his report to the council.

The recommended budget General Fund totals $9,731,450, an increase of 10% from the current year.

Ogburn is not recommending a rate increase for residents. Revenues matched expenditures and no appropriation from the fund balance was necessary. He said an increase may be likely for the 2024-25 budget.

“Through several years of careful and deliberate conservative budgeting, the town has accumulated a large fund balance,” said Ogburn. From this, the town expects to pay for the replacement of the Trinitie/Juniper Trail Culvert, as well as the $400,0000 flat top home located at 13 Skyline Drive.

Larger projects planned include continuing the 10-year street improvement plan and a new truck for the Public Works department, as well as continued payment on the debt service for beach nourishment.

Ogburn is recommended a 6.5% cost of living increase for town employees. Medical insurance rates have increased by 5%. An increase in the cafeteria plan to offset the cost of dependent health care is recommended, as is retiree health benefits.

The council discussed possible projects in the coming years, including new sidewalks and walking paths, and budgeting in the event that the now-volunteer fire department would require personnel funding. Though the fire chief said he has a great team of volunteers, the housing shortage may make continued recruiting efforts a challenge.

A public hearing will be held on Tuesday, June 6 at 5:30 p.m. at the Pitts Center at 5377 N. Virginia Dare Trail to hear citizen input on the proposed budget.