Archived Story

Franklin finance director gives budget update; city owes hospital

Published 11:39am Saturday, March 29, 2014

FRANKLIN—Franklin City Council granted a budget amendment to the Franklin-Southampton County Community Development Office during Monday’s meeting. The consolidated department – which began after the 2013-14 budget was adopted – requested additional money to cover expenses for the rest of the fiscal year, which ends June 30. The amendment asked for $75,529 for Building Inspections and $26,875 for the Planning Department. The request passed 5-1, with Ward 3 Councilman Greg McLemore voting no.

City Manager Randy Martin said the personnel cost for the shared services were not fully included in the original budget. One position was added to building inspections and the other in the planning department. The amendments also include benefits, repairs, travel and supplies.

McLemore’s concern was regarding the original assumption that this consolidation was supposed to save Franklin money.

“If we are reducing expenses,” he asked, “how come there is not enough money in the allocated budget already?”

Melissa Rollins, director of finance, said that the city would later submit a request to Southampton County.

Martin added that the savings would be a net saving, collectively, in that if they had maintained two departments, the two would have spent more in total.

Ward 2 councilman Benny Burgess wondered what the head count was.

Community Development Director Donald Goodwin said right now it is at nine. Franklin originally had five people, and Southampton County had two.

A stormwater department was consolidated into community development, and that added two more people.

“I’d like a clarification,” McLemore said. “I’ve seen the breakdown of population for Southampton County, and its square miles, and the population for Franklin and square miles.

“They have a significantly greater area to cover than we, but yet, the city had five employees prior to bringing on county? And still, it seems, we are still responsible for more payroll than the county, considering we are substantially smaller? They were able to function with two, and we had five.”

Martin said due to the city being urban, and with more commercial development, that it isn’t a completely fair comparison. The city also has to deal with more regulations than the county does.

That said, he added that the city had a net reduction of one staff member before adding stormwater folks.

Rollins added that not all aspects of the department’s budget are 50-50, and some services that the county uses more will be billed more like 80-20 toward the county.

Commissioner of Revenue Brenda Rickman added that the city owes Southampton Memorial Hospital, as it has been overpaying on its business license taxes.

SMH has been overpaying for many years, but it can only recoup the current year plus the three previous years due to state law. In total, the city owes approximately $59,000.

The hospital changed its accounting method, and it is no longer counting bad dept toward revenues.

Rickman said businesses self-report these taxes, and that unless there is a suspicion based off of previous data, they are taken on face value. Ward 1 councilman Barry Cheatham, who is an accountant, added that larger localities have auditors who go out and make sure businesses are paying what they should be paying, but that Franklin doesn’t have that benefit.

Rickman said she would like to have a part-time auditor, as they can go back up to eight years, and in the end, they can pay for themselves.

“I think this was their fault,” McLemore said. “Now we are going to have to take a loss, because we budgeted for revenues collected.

“I think in view of that,” he continued. “They should have to produce the documentation. Also, are we required by law to issue a refund, as opposed to giving them a credit on future taxes?”

Martin said that state law would require them to pay the funds now, and also that Rickman has received the documentation and has validated it.

Rickman added that the hospital has agreed to not take interest, which they could, since it was their error.

The city unanimously voted to give the refund.

Rollins also gave a budget update. Expenses and revenues are tracking accordingly, with the exception of the Community Development Department.

There were highlights in the solid waste fund’s cash balance, as well as the electric fund.

Cash in the solid waste fun at the end of February was $340,434, for an overall increase of approximately $149,000 in the fund’s cash position since July 1.

Revenue in the Electric Fund is roughly 68 percent of the budget and represents eight months of billed revenue at $8.93 million. It’s slightly higher than the same period last year, in which billed revenue of $8.56 million was 65 percent of budget.

Expenses are comparable to the previous year.

The cash balance is once again moving upward. At the end of January, the fund was down to $438,344, while the balance at the end of February was $559,511. The fund is $271,747 higher than it was at February last year.

Rollins said that last month was expected to show some improvement due to debt service payments having an adverse impact on January, which was not the case in February. And also, outstanding fuel assistance payments were credited last month.

The cash balance is still only 4.8 percent of revenue. The minimum cash balance should be at 10 percent of revenue. Cash balances help the city deal with problems as they come up and also with handling new developments without loans.

Due to a particularly cold February, the City of Franklin paid $1.3 million to VMEA, or $300,000 more than January, and approximately $300,000 more than February 2013.

  • Curiousreader

    With so many people in the Community Development office it sure seems that someone could answer the dang phone!

    Suggest Removal

  • rmcclenny

    Take part of that part time communications money and pay the hospital back. Or maybe take some of the lunch money the city pays for those city luncheons on the taxpayers tab. Don’t take my word for it, ask those that don’t get to eat on city money.

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  • rmcclenny

    The storm water manager is here to gather information in order to give the city another angle of collecting revenue. Once he has completed his mission, there will be a storm water tax on every single property in the city. Suffolk and Isle of Wight already have it added in the tax bill. A property owner in Suffolk pays an additional 220$ per property every year. Get ready to open your checkbook wider.

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  • DryRain

    The citizens of Franklin are being outright lied to or purposely misled in order for centain people or departments to get their way and pay increases. This consultation is already costing the City $100k and that is for this year, next year and every year. Common sense should be able to cut through all the BS the City and County are trying to shovel down our throats. It is only going to get worse from here on. I cannot believe that some of our City Council members are going along with this.

    If something doesn’t sound right, challenge it, don’t go back to being a City Council that agrees with everything the City Manager tells you to agree to, been there, done that!

    Remember you were voted in by the citizens of Franklin to keep taxes down and cut spending, so far I am very disappointed. You do not work for Southampton County, and I DO NOT WANT MY TAX DOLLARS GOING TO THE COUNTY!

    What has the County given up? Like I said, I live in Franklin and I do not want my tax dollar to pay for anything in Southampton County.

    Suggest Removal

    • DryRain

      Correction – “This consolidation” not “This consultation”

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  • DryRain

    1. DryRain May 9, 2013 at 10:17 am

    According to City Manager Randy Martin, “Combining the inspections department with Southampton County has lessened the budget there, creating savings”. I would like to know how much savings and how did he come to that conclusion. Just asking.

    “$75,529 for Building Inspections and $26,875 for the Planning Department”

    I told you so!

    Just wait until they merge the waste water with the County, someone has got to pay for that, US!

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  • simplifyingit

    “Martin added that the savings would be a net saving, collectively, in that if they had maintained two departments, the two would have spent more in total.”

    “Ward 2 councilman Benny Burgess wondered what the head count was.”

    So, essentially, Martin says the city took on the role of inspections for SoCo so that the county and city could save money. The county saved but the city overspent it’s planned budget and needs more money?? That screams “mismanagement” by the city to enter into a deal with SoCo that costs us and saves them. Martin is a clown. Mclemore is onto something with his thoughts but his questions are a little off base. A better spokerperson would have ask for accounting of where the budgeted money went and how much the city saved by joining with SoCo. Then Martin would have lied and gave him some more BS.

    Burgess should wonder why the total number of employees increased by joining when it was stated by Martin and Mike Johnson it would reduce manpower when presented originally.
    Donald Goodwins explanation of stormwater being “melded” into CD is half of what the answer needed is. I’d like to know how many employees stormwater had prior and how many employee numbers were reduced totally?

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    • Councilman

      Thanks for acknowledging my thoughts might be onto something. However, what you failed to mention was that I opened up the questioning other wise the subject would have passed unchallenged. Well, we see where your mayor, hilliard and murphy stood on this subject and you praise these people while you villenize me lol. All the citizens of Franklin need to hope that I’m reelected so that there is someone up there not afraid to ask questions. Talking about cutting off your nose to spite your face. By the way I never embarrassed the City by asking questions or called the police, it was your Mayor.

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