Apex Town Council votes to REDUCE Proposed Budget and Hold the Line on Taxes

In a tense budget work session, the Council narrowly voted to cut millions from the proposed budget and eliminate a planned tax hike. Read on to find out who voted for what—and what got cut or added.

On Thursday May 8th we held a budget work session, a mid point in our budget process. This was the first opportunity for the Town Council to make modifications to the manager’s proposed budget. There were several split votes and a lot of spirited discussion. Review the presentation slides here. Let’s review what happened.

The Bottom Line

The Town Council voted, 3-2 (Mahaffey/Gray/Zegerman with Gantt/Killingsworth dissenting), to cut around $2m from the proposed budget in order to leave the tax rate flat - other than incorporating the increased required by a voter approved bond in 2021. Gantt preferred to accept the proposed budget, as is. Killingsworth would accept the existing proposal plus modest increases to fund additional Affordable Housing efforts.

The Town Council then passed around a 20% cut to its own budget, but a handful of proposals for cuts to other departments put forward did not find majority support and thus were defeated or tabled.

With the savings from the Council cuts, a few additions were voted into the budget: money for a gun safety program, money for a cricket batting cage, and an increase to the IT budget.

These modifications will be incorporated into a new draft of the budget, which should be available in around a week. There will be another meeting and potential adoption of the draft at the end of the month.

The Tax Rate

When the Manager’s draft of the budget was proposed in April, it contained a 0.9 cent increase on top of a 1.6 cent planned increase for the bond. At the time, a few Council members directed the manager to prepare two additional scenarios for consideration, for what would be included with another half cent and another penny were included in the tax rate. At a subsequent Finance Committee (which is Mahaffey, Gray) meeting we asked for two additional scenarios: recommended cuts of .5 cents and .9 cents (the entire increase) be prepared for consideration as well.

We went with a flat* tax rate of 35.6 cents

At the start of the work session, CM Gantt made a motion to dispense of the entire meeting and accept the budget as proposed. It failed without a second. Gantt indicated he intended to vote against every proposed amendment today, regardless of it being an add or cut - a policy he actually almost followed.

Ultimately I made a motion to accept the scenario of a reduction of 0.9 cents below the proposal. This passed, 3-2 (Mahaffey, Zegerman, Gray in favor and Gantt and Killingsworth opposed). This leaves the tax rate flat with last year, other than the 1.6 cents for the voter approved bond (which is funding among other things a bridge, currently under construction). Recall the vote for the bond was overwhelming, 71% in favor and 29% opposed.

The accepted cuts are below.

I want to be clear, whenever we’re talking about a decrease or increase, it’s in the context of discussing the manager’s initial budget proposal (which itself contained 0.9 cent increase + 1.6 cents for the bond), not relative to this year’s adopted budget.

Getting Into The Weeds

In addition to a high level discussion about tax rates, members had the opportunity to propose specific line item changes to the budget for discussion. 19 such amendments were proposed, 5 by Zegerman, 1 by Killingsworth, 3 by Gray, and 9 by Mahaffey. Some were clerical, others were combined or moot, but I’ll highlight some others.

Zegerman proposed limiting staff cola+merit salary increase to 4% (currently, 5%). I proposed that we table the matter until other towns release their budgets over the next few weeks, so we have more actuals to compare to. The Mayor spoke out strongly against any decrease, and the other Council Members also indicated they were not supportive, so this proposal died.

Mahaffey proposed (in 5 separate line items) $85k total in cuts to the Council budget. Similarly Zegerman proposed 23k off the top line, Gray proposed at least 9k. This is from things like Printing, Travel/Training, Meeting Expenses, Outreach materials (the cool stuff we give out at festivals, etc). These proposals were consolidated into a single discussion. Ultimately Council desired to not be as prescriptive as I was, but directed the clerk to reduce $75k across these various line items - around 20% of non-election related expenses. This passed 4-1 (Gantt)

Speaking of Election Related expenses, I asked the Clerk to reach out to the Board of Elections now that they had announced early voting locations and times in order to get a more precise estimate of our costs for the election this year. Unfortunately the new estimate was around 15k higher than we had budgeted ($215k vs $200k). Accordingly, I put forward a budget amendment to fully budget for this years election costs, which was approved unanimously (even by Gantt!). I took the time to stress how us moving to even year elections would be a significant cost savings to the town.

Zegerman proposed looking at across the board expense reductions in operating and printing, community outreach, etc - across all departments. Town Manager indicated this is underway.

Killingsworth proposed an increase of .25 to .5 cents of the tax rate to increase our savings into our Affordable Housing Fund. After a long discussion, we acknowledged this didn’t fit into this years budget (we had already voted to decrease the tax rate) but will be considered in future years as needs arise.

Gray proposed adding $8k to the police budget for a gun safe storage program - where APD would provide safes to store firearms. After some discussion (with the Mayor raising some concerns from his experiences about the practicality and logistical challenges of such a program) the Town Council (5-0 I believe) agreed to fund $8k for a general gun safety program, with staff making recommendations about how it could be most effective.

Mahaffey proposed cutting $2k from the Clerk technology budget, and to delay hiring a Government Relations position in the Clerk’s office by 6 months to save money. This proposal was defeated 2-3 (Mahaffey, Zegerman in favor).

Mahaffey proposed adding $15k to the IT Budget under the “Smart Technology” line item. I believe this passed 4-1.

Mahaffey proposed adding $55k to Parks and Rec to fund a Cricket Batting Cage capital project which was cut in the initial draft. I felt this was a high impact/low cost project worthy of addition. Gray I believe commented this money would be better spent directed to APD. This passed 3-2.

Next Steps

A revised draft of the budget incorporating these changes is expected to be posted this Friday. A public hearing will be held at our final Council meeting in May. If needed, an additional work session will take place on May 29, with a final vote scheduled for June 10. By law, the budget must be adopted by June 30.

Reach out to me directly, attend the meeting on 5/27, or email annual.budget@apexnc.org if you have further feedback.

Next Tuesday’s Meeting

The agenda is out for our next meeting, and notably it will include a presentation of the results of the 3rd Party Review of the utility bills. I will be seeing the presentation for the first time with the public.

-terry