Proposed budget in Kannapolis has 7-cent tax hike

Published 12:00 am Friday, June 1, 2012

By Hugh Fisher
KANNAPOLIS — A three-hour meeting of the Kannapolis City Council on Thursday gave local officials their first look at staff members’ recommended budget for 2012-13.
The proposed balanced budget of $48.3 million is a 7.3 percent increase over the current fiscal year.
In his written message accompanying the budget proposal, City Manager Mike Legg told the council that conservative projections and cuts made in last year’s budget process had lessened the impact of property revaluations. Plus, revenues from taxes and fees this year are higher than projected.
But, Legg said, “demands for services and the cost of operations have increased in all departments.”
And, despite planning for years to avoid it, the sour economy is reflected in losses in property values.
The 2012 Cabarrus County reassessment — which was required by law — resulted in a 12.4 percent decrease in property values in that portion of Kannapolis.
That’s a loss of about $364.8 million in value.
Legg said total tax value in the Rowan County portion of Kannapolis is projected to increase by 0.3 percent, or about $1.4 million.
To maintain about the same amount of revenue as in recent years, a tax rate increase of 7 cents per $100 of value would be needed. According to Legg, the amount of new revenue from the tax increase would only be about $78,000.
The loss from Rowan County’s 2011 revaluation was not fully addressed in the current year’s budget.
The revenue-neutral tax increase would result in lower property tax bills for those whose homes or properties lost value.
However, Legg said, “Some properties have increased in value, some have decreased and some have not changed.”
The tax bill for each property will depend on the combination of the new tax rate and the new value.
The growth in revenues in 2012-13 is largely expected to come from increased sales tax and franchise tax revenues.
New costs
About 49 percent of the city’s expenditures comes from police, fire and public works. The coming year’s budget includes funds to hire and outfit three new police officers and to purchase a new fire engine and new fire department radios.
Also included: $267,250 in matching funds for N.C. Department of Transportation projects to replace the Orphanage Road bridge and improve the Rodgers Lake Road railroad crossing.
And $177,366 is earmarked for efforts to improve the city’s image, revitalize downtown and for marketing to prospective employers.
City Councilman Ryan Dayvault said he was excited about the budget’s emphasis on downtown improvements and focus on economic development. “Whatever we can do to increase that over time, that’s vitally important,” he said.
The budget also includes $200,000 for a 3-percent cost-of-living adjustment for city employees.
After the meeting, Mayor Bob Misenheimer said the increase is needed to help city employees and their families.
He noted that many city employees already make less than counterparts in the private sector. There have been no pay increases for city employees in three years.
The budget recommends water and sewer rates remain unchanged. But instead of using water and sewer revenues to help fund future storm water projects, the proposal suggests a 40-cent increase in the storm water fee.
Legg said the new funds will help start making that project self-sufficient over a 10-year period.
Council members expressed some concern over proposed fee increases, saying they might hit some families harder than others.
Members unanimously voted to set a public hearing on the budget for June 11 at the regularly scheduled City Council work session.
The budget recommends renaming the Recycling Fund, and increasing the fee households pay each month. The Environmental Fund would be another 10-year financial plan.
Under the plan, a fee of $6.85 per home, per month would become known as the “household solid waste fee.”
In return, taxpayer money currently used to fund waste collection would be freed up for other purposes.
Currently, trash, leaf and limb collection are funded by tax dollars.
In addition, each household pays a $3.20 per month recycling fee for the curbside recycling program, which started last July.
That fee is added to each household’s water and sewer bill.
Businesses are not charged, but do not receive curbside recycling services, either.
After the meeting, Legg told the Post that the new police officer positions were an example of the types of things that freed-up taxpayer money might help to provide.
Meanwhile, Legg noted that citizens who recycle are helping save the city money over time.
The sale of recycled goods helps pay for city services, while saving money on fees that would have been paid for dumping that waste in the landfill.
“Every time we get someone to more aggressively recycle, I think it will pay for itself,” Councilman Darrell Hinnant said.
Following the meeting, Councilman Randy Cauthen said he would spend the time between now and then looking carefully at the budget.
“I’ve got to take a look at it,” he said, but said Legg and city staff had given good suggestions based on the economic times the city is facing.
Councilman Tom Kincaid said he believed the budget was a good start, also saying he needed time to go over the different elements.
“No doubt, we have some challenges to overcome,” Kincaid said.
Contact Hugh Fisher via the editor’s desk at 704-797-4244.