Town of Murphy Financial & Budget Information

Manager's Budget Message

The Town of Murphy consistently seeks to provide the best service to all citizens, in the most efficient way possible. The 2018-2019 proposed fiscal year budget continues to build upon this tradition, while addressing infrastructure and equipment priorities.

The current ad valorem tax rate of forty two ($0.4200) cents per one hundred dollars ($100) of valuation is proposed for fiscal year 2018-2019. It is important to note that we have appropriated over $300,000 from fund balance in the current fiscal year. While the Town is unlikely to spend the fund balance appropriation fully, it illustrates the Town's inability to keep expenditures in line with revenues. If the economy experiences a setback, it could leave the Town vulnerable and threaten our healthy fund balance. This budget proposal attempts to curtail spending, and accomplishes this goal mainly by transitioning the Town to a new health insurance plan. The change will save the Town over $100,000, while improving the Town's comprehensive benefits package.

Administration was able to reduce projected spending by $124,695 from the current year's original fiscal year appropriation. However, $173,805 in fund balance will be needed to balance. Projected ad-valorem revenue estimates are conservative, and we will continue to have tight spending policies to ensure we do not need the full fund balance appropriation.

Personnel

The budget calls for a one-time Christmas bonus of $500.00 for all full-time employees. Administration evaluated a cost of living increase of two (2) percent for all employees to maintain their purchasing power, but projected revenues could not support the effort. The Town's workers compensation insurance will increase by $20,000, but the reduction in health insurance spending will help offset the increase. The Town continues to prioritize safety training in order to reduce our risk exposure and protect our workforce, and this will pay off in future budget years.

This budget allocates $5,500 for a pay plan and position classification study. The study will evaluate each position, develop job descriptions, and recommend a pay scale for the Town Council to consider adopting. This project will help the Town recruit and retain the most qualified employees, and compare our pay to our peers.

Capital Projects

Regal Street

The Regal Street water and sewer replacement project is scheduled to go out to bid in June, with a construction start date set for July of 2018. The $2 million infrastructure project is fully funded with CDGB grant monies, and the proposed project consists of the replacement of approximately 4,000 linear feet of asbestos cement water lines and clay sewer lines. The project will resolve one of the Town's major problem areas in our collection and distribution systems, and will likely be completed during the 2018-2019 fiscal year.

AIA

The Town is in the process of mapping our water and distribution system, a project funded through the state Asset Inventory and Assessment grant. The $150,000 grant will also pay for a new rate study and Capital Improvements Plan. The 2013 rate study conducted by Martin-McGill covered 2014-2023, but updating the plan with a new rate study and CIP this year will be paramount as the Town looks to the future.

Campbell Street Water Line Replacement

The Campbell Street water main consist of three (3) inch cast-iron pipe installed in the 1940s. The water main has plagued our crew for several years. The water main also happens to run through sewer man-holes, posing an even greater health risk to our community. This budget allocates $45,000 to replace the cast-iron main with six (6) inch ductile iron pipe. With the six (6) inch upgrade, two fire hydrants can be installed that will enhance the fire protection of residential homes on Campbell Street.

Capital Outlay Equipment

Billing and Meter Reading Software

The Town has experienced significant problems with our meter reading and billing software system, and this is largely due to its age. This budget allocates $25,000 to update our software to a web-based feature. Annual fees to keep and update the system will be $3,000 in subsequent years.

SCADA

The Water Plant's SCADA system no longer gets upgrades from the company because of its age. Consequently, our operators have experienced failures with the system several times in the past. This budget appropriates $30,000 to update the system, an investment that is vital to the operation of our water system.

Currently, six (6) sewer lift stations lack an auto dialer or similar alarm system to notify our employees when a problem arises. This means that our staff must check each lift-station daily, which can take over two hours to complete. Connecting each lift-station to a phone-line or wireless device will eliminate this inefficiency and enable our employees to focus their efforts elsewhere. This will cost an estimated $12,000 to complete.

Trench Box, Sewer Camera, Leak Detection Equipment

This budget calls for the purchase of a trench box, sewer camera and leak detection equipment. A camera will allow our workers to better monitor our collections system, identifying problems and potential problems without relying upon local contractors. A trench box is important to the safety of our water and sewer employees, and will prevent the Town from having to contract out larger jobs. Viable leak detection equipment will be crucial as the Town looks to reduce our unaccounted for water. The total costs for these items will be $15,000.

Radios

The model radio currently used by our police department is no longer on the market, which makes repairs and maintenance more costly. This budget allocates $10,000 for new radios for each officer, two for administration, and an additional one to be used as a spare.

PPE

The Town's Fire Department is a victim of its own success. Since they secured many grants in the past, Murphy Fire is no longer eligible for grants available to other departments. Furthermore, the department is $70,000 behind in Personal Protective Equipment for staff. This budget increases funding to address this problem, mainly by strategically splitting revenues from the general fund and Murphy Rural. After obtaining their rescue certification in April, the department will work to acquire their confined space certification in the upcoming fiscal year. It will cost about $12,000 in equipment expenses to accomplish this goal, which this budget provides for. It's important to remember that this certification will serve our water and sewer team, and is required by OSHA.

As documented in Murphy Fire's annual report, the department has three (3) apparatuses in need of replacement. The Town will proceed with one (1) apparatus replacement for the next fiscal year, but this will add more to our debt service.

Capital Outlay New Vehicle

Our water and sewer department lost a vehicle in the current fiscal year, and this budget recommends $30,000 to replace it.

Staffing

The Town continues to operate below pre-recession staffing levels in order to keep operational expenses as low as possible, but call volumes in both public safety departments continues to increase. The police department will eliminate dispatching duties, funding a full-time administrative assistant to reduce redundancy and expenses. A request for an additional patrol officer was strongly considered, but revenues cannot support the request.

Our Fire Department relies heavily upon volunteers, and is responsible for protecting not only life and property in town, but several miles outside the city limits called Murphy Rural. While our risks increase, our spending in the general fund does not reflect this fact. We cannot expect to rely solely upon volunteers as our responsibilities grow. Several volunteers for Murphy Fire put in over 170 hours of training to help the department acquire their rescue certification, and did so without compensation. While this speaks volumes about the dedication of Murphy Fire staff, it is important for the Town to think seriously about strategies to fund additional full-time personnel in the future.

Debt Service

All debt payments are budgeted as required by law.

General Fund:

The Town in 2008 entered into a lease agreement with Murphy Power Board for exterior street lights. The agreement requires annual payments of $15,807, which will be paid off in 2023.

In 2007 the Town borrowed $1,900,000 from USDA to pay for a new fire station. The investment requires forty (40) annual payments of $99,600. The loan will be paid off in 2047.

Water and Sewer Fund

The Town accepted two loans in 2009 to pay for pump station improvements at Cherokee Hills and what is now Erlanger Murphy Medical Center. Annual payments are $32,920 total, and both zero interest loans will be paid off in 2032.

Powell Bill

The Powell Bill fund is budgeted at $56,000. The Town Planning Board recommended a project to extend the sidewalk from Ivie Funeral Home further down Peachtree Street, for safety reasons and to enhance pedestrian traffic. Since Powell Bill revenues are relatively consistent, the Town Council can wait and debate how to spend the monies after passing the budget ordinance.  

Water and Sewer Rates

The budget proposes an increase in base and volume charges for water and sewer, as recommended by our rate study. The increase will allow the Town to address equipment needs, and pay for the replacement of the Campbell Street water main and the upgrade to the water plant's SCADA system. It will also place the Town in a better position as we look to replace water and sewer mains on Dillard and Cherokee Streets in future budget years. Moreover, with so many aging water and sewer lines in our system, the inevitable unexpected failure will occur. The increase will allow the Town to meet the unexpected, make planned infrastructure improvements, and all without dipping into our reserves. One failure could eliminate the solvency of our utility fund.

Residential minimum inside rates will increase by $1.20 per month; Outside Residential minimum rates will increase by $2.40 per month.

Commercial inside minimum rates will increase by $2.00 per month. Outside Commercial minimum rates will increase by $4.00 per month.  

All volume charges will increase by $0.20 cents, with the exception of two tiers for inside commercial water and inside sewer for residential/commercial; those rates will increase by $0.10 cents, respectfully. 

To ensure the Town does not lose money on customers who refuse to pay their utility bills, an increase in customer deposits is recommended. The increase will cover the minimum charges for water and sewer service for two months.

A complete copy of the fee schedule is attached.

Conclusion

This budget meets the goals and priorities of the Murphy Town Council by reducing spending in the general fund, making sound infrastructure improvements in the utility fund, and placing the Town in a better position financially for the future.

Sincerely,

Chad B. Simons

Town Manager

Finance Officer

Town Clerk

Current and past financial documents for public viewing.  Click on file to view PDF document.
1.  2017 Town of Murphy Financial Audit  
2.  2018 - 2019 Budget Ordinance  
3.  2018 - 2019 Water Rates  
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