FLORENCE, S.C. – The Florence City Council voted unanimously this week to approve a $92.848 million budget for the next fiscal year.
The revenue-neutral budget is divided into nine funds: the general fund, the general fund debt service fund, the hospitality fund, the water and sewer utilities enterprise fund, the water and sewer utilities construction fund, the water and sewer equipment replacement fund, the storm water utilities enterprise fund, the storm water utilities construction fund, and the storm water equipment replacement fund.
The general fund is the largest of the city’s funds. It has a budget of $38.489 million for the next fiscal year. This is an increase of $2.72 million over the previous year.
Initially, requests for funding were $2.8 million over projected revenues of $38.440 million. This shortfall was resolved through by adjustments to capital requests ($408,000), adjustments to the city’s hiring schedule ($1.656 million), adjustments to departmental operational requests ($231,000) and adjustments to revenue projections.
The city added $49,000 of projected revenue increases for projected revenues of $38.489 million. These additional revenues are derived from increased business license revenue ($10,000) and an increase in the state-provided local government fund of $39,000.
The city derives revenue for the fund from six sources: property taxes, licenses and fees, governmental reimbursements, permits and fees, fines and forfeitures, interfund transfers, and miscellaneous sources. The largest of these are licenses and fees which account for 36.4% of the fund’s revenue. Property taxes are the next largest source at 26.61% of the revenue.
However, as City Manager Drew Griffin told the city council, Florence maintains one of the lowest property tax rates in South Carolina. Also, the 58.1-millage rate will stay the same for the second consecutive year. The city also taxes at a rate of an additional 4 mills to pay for debt service.
The year 2019 is also a property tax reassessment year for Florence County.
Interfund transfers make up 14.47 percent of the revenues and governmental reimbursements comprise 12.65% percent. Permits and fees are 6.7% percent of the revenues while the two remaining sources combine to equal less than 3% of the revenue.
Personnel and benefits are 64.37% of the expenses in the general fund.
The budget does include a cost-of-living and merit pay increase for city employees.
Departmental operations are an additional 15.66%, debt service is an additional 7.12%, and fixed non-departmental costs are another 5.25%.
A portion, 0.91%, of the general fund budget is used to fund community programs. A large portion of that money, $218,000, is used to fund the Pee Dee Regional Transportation Authority and allow the authority to receive grant matches to continue to operate the downtown shuttle service.
The Boys and Girls Club receives $41,000, the No One Left Unsheltered program receives $75,000, and the Florence Family Support Center receives $21,000.
Programs from the Salvation Army, Lighthouse Ministries, the Manna House, and My Brothers Keeper also being funded by the general fund this year because the Housing and Urban Development Authority does not recommend funding the same programs through a grant more than three years.
Water and Sewer Utilities Enterprise Fund
The next largest fund is the water and sewer utilities enterprise fund.
It has a budget of $35.66 million, up from $33.9 million during the 2018-19 fiscal year.
The revenues for the fund are derived from wastewater fees (48%), water fees (45%), and other sources (7%).
The city’s projections show that the water billing revenue will be very slightly higher than estimates for the 2018-19 fiscal year. However, during the 2017-18 fiscal year, the revenues were slightly lower than estimates.
For two of the last three years, the 2016-17 fiscal year and the 2018-19 fiscal year, wastewater billing will result in higher revenues than estimated. The revenues for the 2017-18 fiscal year are very slightly lower than estimates.
The expenses of the fund are debt service (29.56%), non-departmental (22.36%), waste water treatment (14.87%), utility finance (7.68%), surface water production (5.98%), distribution operations (5.94%), groundwater production (5.6%), engineering (4.06%), and collection operations (3.98%).
Water and Sewer Utilities Construction Fund
The water and sewer utilities construction fund is the next largest with a budget of $10.307 million.
This is a decrease from the $11.582 million budgeted during the last fiscal year.
The fund derives revenues from seven sources. Those are funds on hand of $4.022 million, a transfer from the water and sewer operating fund of $2.5 million, a reimbursement from the county from penny sales tax funds for utility relocations in the amount of $1.8 million, a capital construction fund transfer of $1 million, a FEMA grant for McLeod Water Reliability upgrades of $800,000, an economic development grant for Interstate 95’s Exit 170 in the amount of $160,000, and projected interest earnings of $25,000.
The McLeod water reliability project is designed to create a separate system that can be activated when there’s a storm. The rest of the time, the system can be used to facilitate water to other areas.
The fund is expended upon 26 different projects the largest of which are utility relocations on Alligator Road ($2 million), an FTP filter vessel replacement on McCown Street ($1.15 million), the McLeod Water Reliability upgrade ($1,000,000), running utilities to the new Alligator West development ($949,000), and sewer interceptor manhole cover upgrades in Middle Swamp ($500,000).
Over $1 million will be reserved for other projects.
The hospitality fund is the next largest fund with a budget of $5.165 million.
This is a decrease from $6.245 million in 2018-19. Although the city will receive more in fees it will receive less grant money.
The revenues are derived from hospitality fees of $4.41 million, a grant from the Drs. Bruce & Lee Foundation of $750,000, and interest earnings of $5,000.
The city is limited by state law as to what it can do with the hospitality funds. The short answer is that the city can only use the funds on things that are tourism-related. The city receives recommendations from the hospitality fund committee as to how it should spend these revenues.
The largest expenses are the Florence Center at $1.406 million, athletic facilities operations at $1.303 million, debt service on the soccer complex at $758,700, and tennis center/performing arts center debt service at $529,000.
The expenses at the Florence Center are divided between debt service ($643,500), operations ($437,000), business development and marketing ($175,000), and capital improvements ($150,000).
The city funds 50% of the city’s operational deficit. The other portion is funded by Florence County.
Mayor Pro Tempore Frank J. “Buddy” Brand noted the center had made money the last two months during the meeting.
The debt services are projected to be completed in 2020 (soccer complex) and 2024 (tennis center/performing arts center).
The grant from the foundation funds the debt service on the soccer complex.
The remaining funds all have budgets of less than $1.5 million. Those funds are the water and sewer utility enterprise fund which has a budget of $1.4 million, water and sewer utilities equipment replacement fund which has a budget of $982,000, the general fund debt service fund which has budget of $455,000, the storm water utility construction fund which has a budget of $240,000, and the storm water equipment replacement fund which has a budget of $150,000.