Hiring freeze but no cuts to jobs or pay in Dare County

With land transfer tax revenue in free fall on the Outer Banks, finance officials are keeping an eye on their charges to make sure they don't go off a cliff.

For the time being, budgets for Dare County and its towns have been snipped rather than slashed, and jobs have not been cut.

Dare has seen steep decreases in revenue from real estate and construction fees this year, ranging from 18 to 32 percent, said Dave Clawson, county finance manager.

"Right now we're guessing we'll be short this year in revenue $1.7 million," he said. "The only good news is that comes to 1.65 percent of our budget, and in most other places it's between 3 and 5 percent."

The county has a hefty $22 million reserve fund balance, which is 24.4 percent of the budget. But for the first time since 1997, the county had to tap into it in fiscal year 2007- 08, using $800,000.

July and August sales taxes were also down about 2 percent from last summer.

Recommendations Clawson made to the Dare County Board of Commissioners at its Monday meeting - which it approved - included reverting unspent costs for training, travel, fuel and repairs. Other parts of the spending plan were tweaked when possible, he said. The county also instituted a hiring freeze and put restrictions on travel.

This time, jobs and salaries were not pared, but Clawson said there is concern about a continued drop in construction and real estate revenue.

"If it gets worse, we may not be able to rule that out," he said.

Town budget minders have also taken microscopes to their spending plans.

Revenue from land transfer taxes was budgeted this year at $125,000 per quarter - compared with last year's $160,000 - but only $111,000 was received, said Nags Head finance officer Kim Kenney.

"We've frozen hiring, and meetings have been put on hold," she said. "Occupancy is flat and sales are down, but we anticipated sales being down - maybe not as much as it has been."

In Kill Devil Hills, projections from February were based on dismal and slowing indicators, said town finance officer Beverly Brooks, so far sparing the need for substantial cuts. But off-season trash pickups have been pared to once a week rather than twice.

"We did budget very conservatively," she said. "We really did not increase our budget in areas where we normally would see growth.

"Now if things deteriorate further, then yes, we may have to make some cost-cutting measures."

Manteo has also not had to take the ax to its budget, but finance officer Shannon Twiddy said she has told the board she has concerns about budget shortfalls.

Twiddy said she has suggested to the board that capital expenditures be reduced or eliminated; that it consider not filling an open police officer position; and that it look at individual departments to decrease expenses.

No action has been taken, she said.

"At this point in time," Twiddy said, "comparing revenue and expenses this year to last year, we're OK."

Duck is not immune to the economic slowdown, said Town Manager Chris Layton, but it's not hurting too much yet.

"We're not feeling the same sort of shortfall the other towns are, because we took the step of raising our taxes," he said.

The town increased taxes 2.5 cents in fiscal year 2008- 09.

Purchases of capital improvement items will be frozen until it's clear after Jan. 1 what real estate tax revenue will be, Layton said. Layoffs are not being considered, partly because the staff is so small anyway.

"We're not expecting a major shortfall, at worst a couple of hundred thousand," he said. "As of now, it's not time to fall on our swords or anything."

The budget is also holding steady in Southern Shores, said finance officer Bonnie Swain. There have been no hiring freezes or work-force cuts, but the town is also not buying anything unless it's critically needed.

The town will review the November numbers this month, she said, and reconsider its finances if necessary.

"Until we really know where our revenue is at, it's really kind of scary," Swain said. "We're just being really frugal."

Wait-and-see is also the approach in Kitty Hawk, where Town Manager John Stockton said cuts or hiring freezes have yet to be instituted.

"We basically are continuing to monitor the revenues as they are reported to us," he said. "We have informally talked to the department heads and said they need to review their budgets."

So far, he said, sales and occupancy tax revenues are about the same, but land transfer taxes have decreased.

"Probably in February, we'll take another look at our figures and see where we're at," he said. "We anticipate we'll have less revenue next year."

Catherine Kozak, (252) 441-1711, cate.kozak@pilotonline.com