At its meeting on Tuesday, Local Government Commission (LGC) officials received an update from Rocky Mount officials on the city’s progress in gaining better control of its finances.
Last month, the LGC agreed to postpone a potential state takeover of the city’s finances, contingent on the city complying with specific requirements.
The city was the subject of a recent 257-page performance audit released in March by State Auditor Dave Boliek’s office.
Elton Daniels, city manager, told commission members on Tuesday that they had closed out April and reconciled their accounts. Projections for the summer months are about $1.7 million. Council also voted to increase rates across the board for the city’s utilities. They were also able to work with the LGC staff over the last several weeks and negotiate an item with the North Carolina Department of Environmental Quality (NCDEQ), which will help the city’s cash flow by postponing payments for about two years.
They also decided to pass on renegotiating the debt associated with the city’s Event Center after two Requests for Proposals (RFPs) from Capital One and PNC would have increased the number of years from 10 to 15 and added an additional $5-6 million to what they owe. He said they will continue to explore other options.
Daniels said they were able to submit the city’s audit to its auditors, and they anticipate submitting the final document back to the city and the LGC the week of May 18. All other accounts have also been reconciled; they are up to date on all city debt payments and don’t anticipate any missed payments.
Cash Flow remains Rocky mount’s main issue
He did say, however, that cash flow still remains the main issue for Rocky Mount.
“I will be presenting our fiscal year 2027 budget on Monday night, in which I can tell you all at this point, other department heads across the city did a good job,” Daniels said. “Everything that they requested was below the currently amended budget that we have for the current fiscal year. And then I was able to take a little bit off of those, and so when you compare last fiscal year’s amended budget to where I’m anticipating we will be for our fiscal year [20]27, we should realize about $16 million in annual savings across the board.”
He added that third-party grants outside any major ones previously discussed will be eliminated.
Daniels also said there is currently a $3 million deficit in the transit fund due to a previous staff member not drawing down funds from grants received from the state and federal governments in a timely manner.
“So, as of about two months ago, we hired a new transit manager, and we actually moved in a different direction with the person who was responsible for the grant administration as well,” he said. “So, we haven’t hired anyone for that position yet, but we do anticipate doing that within a couple of months. So it’s really just a lag of pulling down from the federal level, and then we also have to look at adjusting our rates as well.”
public transit routes may be altered in the future
Daniels said they may have to adjust public routes in the future.
“In the short term, being that we have federal funds tied to that, we couldn’t make a decision within the last couple of weeks, but that’s something that we’re going to evaluate moving forward,” he said. “We may have to adjust what we offer to the public.”
Daniels also acknowledged that revenue budget projections were overestimated in previous years, and they have since hired a chief budget and strategy officer, who is also a certified public accountant, bringing the number of CPAs on board to two.
Cheryl Spivey, finance director, said the revenue numbers in the new budget will be very conservative, and expenditures will be showing to be a little higher, and that they used audited 2025 figures in coming up with the budget.
“We’re trying to be conservative in our approach, and also in the method that we present the information,” Daniels said. “In years past, the city has shown the operating budget, and then we have other fund accounts. I’m combining everything to give full transparency to the council, outlining what each fund is, but having the full picture. So not only are we providing more information and more transparency, we’re providing a different way and trying to make it easier.”
He told LGC members that he is hopeful that the way they are presenting the information now, using the actual numbers as opposed to projections, and making sure that the revenue projections are conservative, will put the city on a better financial footing.
electric, water, and sewer rates increased 14% across the board
Spivey said, for example, they have increased rates 14% across the board for electric, water, and sewer based on the 2025 numbers, so they aren’t overstating the estimated amounts.
Denise Canada, director of the State and Local Government Finance Division and Secretary of the Local Government Commission, told Rocky Mount officials that she appreciates their going back to fiscal year 2025 figures, especially on the revenue side.
may take 24 months to get out of crisis management
When asked when he thought the city would be moving out of crisis management, Daniels said that based on current levels of cash flow and the fund balance, which they will be monitoring closely, it could be another 24 months, or possibly sooner, depending on where things go in the next couple of months.
He added that he feels it will be years before they can rebuild the fund balance to the level they previously had, which was over $80 million.
The city also cut costs by reducing staff, either through cuts or resignations, by about 16-17%, bringing the total number of employees from about 917 last year to about 760 right now. Daniels said he expects that to be the new norm and will recommend combining roles in the new budget proposal.
While the city has not cut core services like police or fire, he said they have had to reduce services like trash pickup to every other week to save money.
No screaming but more efficiency
Mayor Sandy Roberson told LGC members that he hasn’t heard anyone “scream” that services are awful since they have gone through the process, but he has, in fact, seen things become more efficient.
“My experience personally in my own business is that the fewer people you have, the more effective they are, the more efficient they are, the happier they tend to be,” Rober said. “I think we’ve gone through that process, and it’s really more of a morale issue. I think Elton has done a great job of maintaining that. I think that our services have maintained very well, and I’m proud to walk around the streets of Rocky Mount.”
Daniels said staff salaries have been maintained, but they did lose the city’s contribution to their 401(k) s, which saved the city about $1.3 million a year, and there have been changes to the longevity program.
He also said they hope to have a resolution on what to do with surplus assets, including vacant land, by June or July.
“I think the proof of the pudding,” Roberson said. “I think that the experience will be once we get through this budget process, if we can deliver to the LGC, to our citizens, and to ourselves a budget that is something that is functional, that delivers a product, services that we need to our customer base, which are our citizens, in a consistent manner without deviating from that course and building the fund balance, we will have won. We will know that very soon.”
Rocky Mount officials are scheduled to return to next month’s LGC meeting on June 9 to give a progress report.
