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If approved, Kannapolis budget would keep same tax rate

By Hugh Fisher
hfisher@salisburypost.com
KANNAPOLIS ó Even after almost a million and a half dollars worth of belt-tightening, the city of Kannapolis’ proposed fiscal year 2010 budget is relatively painless in the short term.
The $44.8 million budget presented last night at a special meeting of the Kannapolis City Council deals as well as possible with the slack pace of construction and the delay in financing of projects at the North Carolina Research Campus.
The proposed budget maintains the current property tax rate of 49 cents per $100 value, with no increase in the stormwater fees that have been collected from residents and businesses since 2008.
“This is not the right environment for any tax increase and not really the time for any fee increase,” City Manager Mike Legg said.
Also, the proposal can be funded by cuts in operating expenses and the delay of some spending.
General fund operating expenses are cut by $421,349 in the current proposal. Many of the cuts are for nonessential items, such as $74,590 originally slated for Walker Marketing to develop the city’s Web site, and $10,000 for funding the Nextel All-Star Challenge celebration.
Money originally planned for the Cabarrus Arts Council, additions to the Dale Earnhardt Tribute and the Cabarrus Events Association has either been reduced or cut entirely.
Legg said that the reduction in Cabarrus Events Association funds means the organization will likely continue to organize the city’s Christmas parade, but may not choose to host Village Fest downtown next May.
There is good news in the budget: at this time, Legg said, city employees will be free from layoffs, furloughs or salary decreases.
However, city employees’ pay will be frozen for the 2010 fiscal year, with no merit raises planned.
Six vacant positions will not be filled, while four employees retiring by July 1 ó two police officers, a water department staffer and a customer service associate ó will not be replaced.
Despite the cuts, Legg said he felt the city’s level of service to citizens would not be affected.
City staff began planning with a projected $1.7 million shortfall, when tax revenues from the North Carolina Research Campus were taken out of their calculations.
Those tax revenues were originally intended to pay for the TIF bonds, had they been issued as planned.
The economic downturn has indefinitely delayed that bond sale. Now the $991,366 in property taxes paid by Castle & Cooke for the Research Campus is in limbo. Also, it’s not clear what will happen to the matching amount of money that would have come to Kannapolis from Cabarrus County’s tax revenues under the TIF plan.
Legg said the city’s revenues from the campus may be used to pay for projects that the city and Castle & Cooke have already paid for out of their funds.
And the city agreed to use TIF revenue to construct a new building for the Cabarrus Health Alliance on the Research Campus.
Legg said that project needed to go forward if possible because it represented support for the campus and fulfilled an agreement made during negotiations for the TIF.
“The county is under some pressure … and you’re never going to get better bids from construction,” Legg said, adding that current construction bids are far less than the $15 million that would have been set aside for the facility if the bonds had been sold.Council members’ discussions centered on the fact that without a bond sale, those talks with Cabarrus County are currently just “gentleman’s agreements,” to use Mayor Bob Misenheimer’s term.
“I’ll be very frank. You have access to (the money),” Legg said to council members. However, he added, “There’s clearly an understanding by all parties that these are dedicated monies.”
Legg said that Cabarrus County’s commissioners had not said whether they will turn over the matching share of funds they’ve collected, adding that he had wanted to broach the subject to council members first.
Many members seemed supportive of the budget. “I think it’s one of those years when the revenue is such that you pay the essentials, and there’s not much left to discuss,” council member Roger Haas said.
Longtime council member Richard Anderson was more frank: “You’re damned if you do and damned if you don’t,” he said at one point during the discussion.
A public hearing on the 2010 budget will be held at next Monday’s regular council meeting.

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