By Hugh Fisher
hfisher@salisburypost.com
KANNAPOLIS — With two members opposing its fee increases and lack of incentives to draw businesses to town, the Kannapolis City Council approved the 2012-13 city budget Monday.
Mayor Pro Tem Gene McCombs and Councilman Ryan Dayvault opposed the budget in the 5-to-2 vote.
Eric Davis, city finance director, gave the final presentation of the $48.3 million budget, which set the tax rate at 54 cents per $100 of property value.
The increase was meant to offset a loss of roughly $364.8 million in property values due to the recession, reflected in this year’s Cabarrus County property revaluation.
Last year’s Rowan County revaluation resulted in a drop of about $12 million in the portion of Kannapolis which lies in that county.
Davis reviewed some of the highlights of the budget, and noted that a truly revenue-neutral tax rate would have resulted in a nine-cent increase.
Councilman Darrell Hinnant made the motion to approve the budget; Councilman Tom Kincaid seconded.
Then Dayvault, the newest member of the board, praised Davis, City Manager Mike Legg and all who had prepared the budget.
But, Dayvault said, “We are at an important crossroads in the history of Kannapolis.”
And, he said, the city is not doing enough to bring in new businesses.
“We’re all on board with doing more, and doing more,” Dayvault said. “…We have to do all we can to keep luring businesses to the city.”
He said he would like to see a small business tax incentive, to encourage current businesses to grow and encourage new ones to locate in the city.
McCombs, too, started his remarks by congratulating city staff for their hard work and saying his vote against the budget was no reflection on them.
He said it was the council’s responsibility to make sound financial policies, and said that increases in fees in the budget were unfair.
“We are proposing that the fee increase for the environmental fund be $3.65 per month,” McCombs said.
This past year, residents paid an additional $3.20 per month for the city’s curbside recycling program, launched in 2011.
In order to make the city’s funds self-sustaining, the proposed budget pulled the cost of waste collection out of the general fund and, in turn, raised the fee and renamed the fund.
McCombs said the $6.85 per household fund would raise $744,640.
“That is a little over two cents on the tax rate,” McCombs said. “Which means people are still paying … just paying for it in a different way.”
If residents don’t pay those mandatory fees, he noted, their water and sewer service is disconnected, because payments are applied to the fees first.
“Forgive me, I’m not saying this is totally wrong, but it bothers me that we’re going to be using fees to this extent,” McCombs said.
He said that “necessary government functions,” such as garbage collection, were appropriate uses for taxpayers’ money.
And he proposed staggering some of the things that the fee would allow — such as hiring three new police officers, also included in the budget — to keep costs lower.
In turn, Hinnant said he would not be comfortable doing that.
“Public safety is one of our most important functions,” Hinnant said.
He said he’d like to see a lower tax rate in exchange for moving toward more user fees.
Hinnant noted that it costs the city the same amount to empty a home garbage can, regardless of how much income that family earns.
At the same time, “I’m all for attracting business to our community,” Hinnant said. “Goodness knows we need it.”
But, he said, “I’m uncomfortable adding more debt to our community and extending more debt to our community,” Hinnant said.
After the budget was adopted, Mayor Bob Misenheimer acknowledged his colleagues’ concerns.
“I think Mr. McCombs brought up some things that I hope the city manager and his staff will take a look at,” Misenheimer said. “I, too, believe that if you can pay cash, you’re a lot better off.”
A separate vote to adopt the 2012-13 fee schedule — which includes everything from fire inspections to park shelter rentals — passed unanimously.
And the fiscal year 2013-2022 Capital Improvement Plan was also unanimously adopted.
It sets forth a game plan showing how the city could finance, among other things, a new police station and city hall.
But it is merely for planning purposes, and does not bind the city to a timetable for making those decisions.
Contact Hugh Fisher via the editor’s desk at 704-797-4244.