FY23 FULL BUDGET REPORT ADOPTED

Currently, revenues approximate expenses for stormwater operations. Stormwater operations minimally align to stormwater mandate goals, and current reserves are limited and not a long-term solution for CIP planning. Required plan review and inspections workload for permits are outpacing staff capacity, and maintenance is largely reactive, and complaint driven, which may create more challenges as infrastructure ages. To address both the operational and capital needs for stormwater, the following adjustments to the stormwater program are recommended and proposed for FY 2023:

Addition of a Stormwater Engineer to support inspections and development review workload, infrastructure condition assessments, infrastructure map updates and stormwater CIP project management capacity.

Establishment of a largely Pay-As-You-Go/Cash Funding Stormwater Capital Investment Program for the 10 identified Areas of Concern to be addressed over the next 10 plus years.

Adjustment of the Stormwater ERU fee from $25 to $50. This adjustment will add $580,000 in revenues annually to support the increased operations and capital needs.

Stormwater fees are collected through Wake County as a part of the property tax bill for all property owners. The stormwater fee increase is significant and strategic to avoid higher costs and potential environmental impacts to the town in the future. 2

OTHER TOPICS

Rental Properties

The Town owns and rents several homes in the future Town Center area. Historically, rental arrangements have emerged for a number of reasons primarily from working with former property owners for relocation time, allowing further development of Town Center plans, to acquisitions bearing existing tenant situations. Costs of maintaining the properties, including utilization of staff time for maintenance, and estimated costs of projected repairs for these structures is much more than the offset from rental income. As the Town purchases property for Town Center or other project types, careful considerationmust occur to assess the viability of entering into additional tenant agreements. The Town should begin developing plans to transition out of renting property as plans for Town Center become more refined. Six original MSD neighborhoods approved an assessment of a special tax rate annually, beginning in FY 2014. 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 budget for FY 2023 maintains a tax rate of $0.10 per $100 assessed value for the costs related to the transfer and improvement of the private streets to public street standards. The Gables is the final project remaining. With an estimated cost of more than $1.3 million dollars (not yet adjusted for current market conditions), the current rate of accumulation of tax increment revenues, and the Town’s regular matching allocation, thi s project is not expected to be funded until FY Municipal Service District (MSD)

2 Town Council adjusted the proposed $50 Stormwater ERU fee to $40 per ERU fee. This changed the originally estimated additional $580K in revenues annually to approximately $348K annually. Total appropriated budget remains same at $1,208,000.

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