Locally, no less than nationally, the economy was the dominating topic in November.
Fiscal restraint measures [cont.]: This month, the city continued to work on measures to ensure that projected revenue shortfalls don't exhaust our financial reserves. Last month I reported on measures already put in place: hiring freezes, fuel use and travel restrictions, service contract reviews, a freeze on non-critical capital equipment purchases, and orders to city departments to set aside a designated percentage of their budgets. In November, the city manager reported that projected savings from these measures should be sufficient to get city government through the fiscal year without exhausting our available general fund balance.
Note: In order to keep a safe reserve, hold our city's high credit rating, and keep our interest costs on city bonds low, Winston-Salem maintains a minimum reserve equal to 10% of our annual general fund budget. When I refer to "available" general fund balance, I mean reserve beyond that minimum 10%.
If the local economy and revenue picture do not substantially strengthen by next spring, we will have to consider more long-term budget cutbacks in order to maintain fiscal prudence.
Economic development discussion: Limited available funding for economic development efforts, and the urgency of measures to strengthen our local economy, both underlined the importance of our current discussions on economic development. On November 18, the mayor and city council held a special discussion and public comment opportunity on economic development efforts in Winston-Salem.
Included in the briefing presentation was a review of economic development incentives as used in Winston-Salem. The city's program is aimed at recruitment and expansion of development projects that increase the tax base and create new jobs. Private capital investment, job creation, and average starting wage are all considered. The potential for project assistance varies with the amount of new local tax revenue projected to result from the project. Finally, participating companies must enter into a binding performance agreement which includes "clawback" provisions through which the city can recover assistance from a project which falls short of agreed-upon standards.
Because of this fiscally conservative approach, the great majority of direct city investment projects have met or exceeded their goals. Of the 49 such projects in Winston-Salem since 1990, a total city investment of $61.2 million has leveraged new private investment of $1.01 billion—a return on city investment of 16.5 to 1. The estimated net new property taxes generated from these projects is now $4.9 million annually.
The city also considers requests for incentives to property development projects, although these are fewer in number. Project criteria include elevating property values and tax base, restoring economically blighted areas, and reducing costly urban sprawl.
Finally, wise city investment in public infrastructure is fundamental to a strong local economy. This includes streets and other transportation systems, water and sewer service and other utilities, and quality of life amenities like parks. Along with public safety and sanitation, sound planning and investment in this infrastructure are probably a city government's most important roles.
The public comment stage of this meeting produced a wide-open range of comments and suggestions. They ranged from plugs for specific development projects, through the need for balanced investment in all parts of the city, to the importance of affordable housing.
NLC meeting report: November also contained the annual National League of Cities (NLC) conference. This is an important opportunity to exchange information on current city issues with national experts and representatives from other cities across the nation. In addition, several members of Winston-Salem's City Council serve on policy governing bodies of the NLC and contribute to setting policy priorities for this important national organization. (I serve on the NLC Energy, Environment, and Natural Resources Policy and Advocacy Committee, and on the NLC Large Cities Council. Both of those policy bodies met at the NLC conference in November.) During this conference, I focused on developments relevant to Winston-Salem in the areas of transportation, energy, and public safety. (Transportation and energy issues are personal focus topics for my city service, and public safety issues are always of broad concern.) I've prepared notes in each of those areas, and shared findings with city staff and other council members.
Please let me know if you would like to receive a copy of any of my note summaries on relevant current developments in these areas:
In addition, I still have available on request my following note summaries from the annual N.C. League of Municipalities meeting held in October: