Preparation Keeps Finances in Good Shape

Clayton continues to be in good shape financially, despite the economic downturn that's causing problems for individuals and governments alike all across the country and right here in North Carolina, according to a report presented to the Town Council.

Town Manager Steve Biggs said a decline in revenue was anticipated in the preparation of this year's town budget, which is already scaled down significantly from previous years.

In fact, although sales tax collections and revenue from the sale of building permits---two important sources of revenue for town government---are down from the previous year as expected, they're still slightly ahead of projections so far this year, he said.

"Although no one foresaw the extent of the economic turmoil that we have experienced in recent weeks, the Town management staff did recognize that trends were unfavorable to continued economic expansion and took action to prepare a budget which is reflective of the changing financial environment," the report states. "All governments and businesses will be faced with making adjustments to operations and forecasts as the year progresses; however, we are pleased to report that the hard decisions that we made during the budget preparation process have substantially reduced the extent to which we will need to make mid-year adjustments."

Biggs said the town is taking "reasonable precautions" to protect its finances, but he doesn't expect any project delays or across-the-board cuts that other local governments are considering. The cuts in spending that have already taken place "really make our position at this time much stronger than it would have been," he said.

The report got a warm reception from the Council.

"On the surface, I'm pleased with what I see," said Councilman Michael Grannis.

One of the reasons for higher than projected revenues from building permits is an increase in commercial development, the report said, and the trend is expected to continue "based on current discussions with businesses and developers."

The NC League of Municipalities issued a report earlier this month warning local governments of expected revenue shortfalls on both the local and state level.