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Kannapolis discusses proposed budget

By Hugh Fisher
hfisher@salisburypost.com
KANNAPOLIS — At first glance, City Manager Mike Legg said, Kannapolis’ proposed budget for the 2011-12 fiscal year doesn’t look exciting.
There aren’t many changes that stand out to the average resident.
The proposal leaves the property tax rate unchanged at 49 cents per $100 of value.
The biggest cost increase is a $3.20 per month fee for the city’s new curbside recycling program — a service many residents have requested and most cities Kannapolis’ size offer.
The important thing, Legg told members of the Kannapolis City Council at Monday’s meeting, is that the budget proposal lays the groundwork for future recovery.
“We’re in an economic cycle that continues to be stagnant at best,” Legg said.
No matter what the economists say, he told council members, there’s a lag time between when the recession “officially” ends and local people see jobs and investments.
This coming year’s budget “builds a firm foundation long-term, although average citizens won’t see major changes,” Legg said.
The proposed budget is $45 million — a decrease of $354,220 from the current year’s budget.
It means a third straight year without pay increases for employees; however, there are no furloughs or layoffs.
However, under the proposed budget, each city employee would receive a one-time $300 bonus this year.
And there will be noticeable cuts. For example, $12,000 is being cut from Kannapolis Parks and Recreation.
Director Gary Mills said this will mean the elimination of Healthy Kids Day, a joint program with the Kannapolis YMCA, and an end to the city’s participation in other programs.
Legg said cuts had been made to operating budgets across the board, some as high at 10 percent.
These cuts are aimed at making Kannapolis able to deal with whatever happens to the economy in the years ahead.
Just as Rowan County is going through tax revaluation this year, Cabarrus County’s property values will be reassessed in 2012.
Estimates say that, countywide, property values could decrease by as much as $400 million with that new assessment.
That would mean a property tax hike would be needed just to keep the same amount of money coming in.
To prepare, the proposed budget includes the seed of a contingency fund — $193,545 that would ordinarily be put into the city’s fund balance, its savings.
Instead, Legg said, that money will be budgeted specifically to deal with unforeseen problems such as increased fuel prices, landfill fees or other urgent needs.
As with any funds, the council would have to vote to spend that money.
Councilman Ken Geathers asked how making that fund was different from just putting the money in the fund balance.
The main difference, Legg said, is that it calls attention to those funds to have them in the main budget, instead of lumped in with other savings.
And, Legg said, at the end of the year, those monies could form the basis of an ongoing contingency or project fund.
Councilman Tom Kincaid said the budget was a good plan for the city.
“It also says a lot for how the city, in recent months, has controlled its spending, to be in the shape we’re in right now,” Kincaid said.
But the current budget, Legg warned, doesn’t address needs the city will have in coming years.
Among those needs: a new station and equipment for the Kannapolis Police Dept., and the best way to make use of the newly-acquired Fieldcrest Cannon Stadium.
Those expenditures will have to wait for better economic times, and in the case of the public safety spending, perhaps a voter referendum, Legg told council members.
Questions regarding the budget proposal, at first glance, were few.
Members voted 6-to-0 to hold a public hearing on the proposed budget at the next session, on Monday, June 13.
Mayor Bob Misenheimer was not present; he remained hospitalized for symptoms related to high blood pressure.
A final vote on the budget is slated for June 27, just days before the fiscal year begins.
Contact Hugh Fisher via the editor’s desk at 704-797-4244.


At a glance
Kannapolis budget highlights:
• The proposed 2011-12 budget for Kannapolis leaves property tax rates unchanged: 49 cents per $100 of property value.
However, a new $3.20 per month curbside recycling fee and a $1.35 per month increase in the base (flat) water rate are included in the proposed budget.
• Under the proposal, Kannapolis may begin to collect its own taxes this coming year instead of contracting with Rowan and Cabarrus counties to do so.
However, City Manager Mike Legg told members of the Kannapolis City Council that negotiations with Cabarrus County on a cost-saving plan remain under way.
The city may continue to use county tax collection services if such a deal is approved.
• Legg said this year’s budget eliminates the use of non-recurring funding sources.
In past years, the city has used money from the sale of land, or other such one-time income, to balance the budget.
• A public hearing will be held Monday, June 20, at 6 p.m. during the regular Kannapolis City Council meeting to give citizens a chance to speak on the budget.

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