It's that time of year when town staff and the council crunches the numbers for the fiscal year's budget.
Thursday's meeting of the town council was a special meeting to discuss and possibly take action regarding the proposed budget for fiscal year 2003/2004.
This is the start of the council review period, which will include work study sessions as well as public scrutiny and hearings.
Deputy Town Manager and Chief Financial Officer Glenn Smith gave the council a basic overview of the budget including a breakdown of revenues and expenses.
The town's primary revenue sources are sales tax from retail and construction, building permits, state shared revenues from sales and income tax, the Highway Users Revenue Fund (HURF) and water.
Revenues are also derived from a variety of special funds such as the equipment replacement fund, a park development fund, the airport fund, a gifts and grants fund and others.
According to Smith, state shared revenues, which comprise 11.5 percent of the town's income, are down this year.
"This hurt us more than anything," Smith said, "and it will for years to come."
State shared revenues are appropriated on a two-year lag time, meaning that money the town is getting this year resulted from state income and sales tax made two years prior. Economic conditions statewide have continually worsened since then, therefore that source of revenue is not expected to improve anytime soon.
"This is happening statewide," town manager Fred Carpenter said. "This revenue is directly proportional to population."
The HURF, according to Smith also is a trouble spot in the budget. This source of revenue is primarily for pavement preservation.
"That's one that's hurting us," Smith said. "We'll have to see what's going to happen."
The $400,000 for pavement preservation, according to town engineer LaRon Garret, is enough money for about 8 miles of street preservation.
Voters will have an opportunity in September's bond election to approve a public works capital improvement project that will provide an additional $4.4 million for street projects.
The town's general fund covers operating expenses, while the other special funds such as the airport fund, park development fund and other special revenue funds have specifically designated allocations.
Department heads met with Smith and reviewed their budgets, making cuts where they could. Their efforts resulted in saving the town $200,000 of general fund money.
"All the cuts were made in concert with department heads," Smith said. "Nobody argued about it."
Smith said that the town is lucky since many other towns have been forced to lay people off. While town employees can expect their 3 percent merit raises, there will be no market raises. So far, any employee lay offs have been avoided thus far.
"We did not want to compromise service or lay anyone off," Smith said.
Smith and Carpenter appeared cautiously optimistic about the town's budget in what seems to be a fiscally treacherous period. Another meeting on the budget is scheduled for June 19 and is open to the public.