Page 11 - CityofWataugaAdoptedBudgetFY25

August 26, 2024

To the Honorable Mayor Arthur L. Miner, Members of the City Council and the
Citizens of Watauga:

I am pleased to present the City Manager’s Annual Budget for the Fiscal Year beginning
October 1, 2024, and ending September 30, 2025, for your review and consideration, as
required by the City of Watauga’s Home Rule Charter. It presents, in summary form,
the revenues and expenditures for each of the City’s Funds, departmental highlights,
accomplishments and expenditures, as well as the five-year Capital Improvement Plan
(CIP). The Annual Operating Budget represents the single most crucial management tool
of the governing body and staff and allocates resources in alignment with the City
Council’s long-term Strategic Plan. The budget continues to maintain the conservative
fiscal approach that has allowed the City of Watauga to achieve our sound financial
position and excellent bond ratings (AA from Standard and Poor’s). The Budget
Summary section that follows this message provides a concise summary of the Budget
with summaries of revenues, expenditures, and fund balance.

During FY2023-2024, economic activity slowed down, and the City continued to be
impacted by sustained inflationary pressure and supply chain issues. The City continues
to experience significant staffing shortages, most notably in the Police Department and
Public Works.

In preparing the FY2024-2025 fiscal year budget, we strived to provide funding for the
resources to provide continued excellent service to our citizens and businesses and a
focus on the retention of our talented and skilled workforce while addressing inflationary
pressures.

Highlights of the budget are presented below:

• The property tax rate is $.5702 per $100 of assessed valuation and maintains the
same tax rate as FY2023-2024. The tax rate is under the de minimis rate that has
been calculated at $.576204. The de minimis rate is a tax rate calculation added
by Senate Bill 2 during the 2019 legislative session that is designed to give smaller
taxer units some relief from the 3.5 percent voter-approval tax rate. The tax rate
of $0.5702 allows the City to bring in more revenue in the operating budget
(approximately $432,000) to cover cost increases and an additional amount in debt
service payments, to include debt service for the 2024 Certificates of Obligation.
The debt issuance will provide funding for Automated Metering Infrastructure
(AMI), parks improvements to include an upgrade to the splashpad filtration system

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