FY2018 Recommended Budget

remaining project areas (Carpenter Park, Carpenter Village and the Gables) will determine the next project. Funding reserves may need to be accumulated prior to the start of the next MSD project.

The tax rate will continue to be levied for all six neighborhoods until the cost of all improvements for all projects is complete. The MSD tax increment is anticipated to generate approximately $96,000 at an estimated 99.7% collection rate in Fiscal Year 2018. In addition, the General Fund provides an annual transfer from the General Fund of $110,000 to fund future projects. This transfer is a mechanism to accelerate the much needed projects and will be repaid by the MSD tax increment over time, even after all projects are complete. The repayment timeline is approximately 25 years, and is dependent upon both the revenues collected from the tax increment and the cost of the MSD projects themselves. Individual neighborhoods are not relieved of their responsibility for payment of the MSD tax increment until all street improvements within the district are complete and funds advanced by the General Fund are repaid.

Other non-operating budgets for Fiscal Year 2018 include two annually adopted fiduciary funds:

Retirement Health Care Fund (OPEB) Fund

$308,730

Retirement LEO Separation Allowance Fund

$ 62,740

Capital Projects Funds with approved project ordinances are on multi-year budget schedules and are not related to the annual operating budget ordinance unless through a planned interfund transfer(s) or debt obligation(s).

GENERAL FUND OVERVIEW

Ad Valorem Taxes (Property Tax/Auto Decal Fee) The Fiscal Year 2018 property tax rate is recommended to remain at $0.039 per $100 of property valuation. This rate was originally approved as a part of the FY 2017 Annual Operating Budget.

In Fiscal Year 2017, Town Council authorized an amount equivalent to the estimated value of one cent ($0.01) on the tax base to be set aside in a Roadway and Transportation Capital Reserve Fund to plan and prepare for road improvements that may be identified and designated by Town Council in future years. Allocation of these funds to the Roadway and Transportation Capital Reserve are discretionary, based on annual affordability, may be incorporated into the proposed operating budget, and must be approved by resolution or ordinance, which includes the budget ordinance. An appropriation of $460,000 is recommended in the Fiscal Year 2018 proposed operating budget. No withdrawal may be authorized for any other purpose than what is defined in the resolution authorizing establishment of this capital reserve fund. The property tax rate also includes $0.04 dedicated to the costs of bond debt for capital projects approved by our voters in 2012 and has been used to cash flow upfront costs for the McCrimmon Parkway Extension. Bonds were issued for Phase I during Fiscal Year 2017, and we broke ground in October 2016. Work on Phase II is ongoing and work on this phase will begin during Fiscal Year 2018. Preliminary planning and design for the Parks and Recreation improvements, specifically renovations at the Morrisville Aquatics and Fitness Center have also started during Fiscal Year 2017. Similar to the McCrimmon Parkway Extension Project, up-front costs for project development prior to bond issuance will be recaptured after the bonds are issued and will then used for debt service management. These funds have not been used to offset any ongoing operational costs of the annual budget. Our Town of Morrisville property owners continue to benefit from one of the lowest tax rates and costs for service in Wake County and a continued commitment

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