No tax rate change planned for Kannapolis in next decade
By Susan Shinn
For The Salisbury Post
KANNAPOLIS — The citizens of Kannapolis got some good news Monday evening: there are no planned changes for the tax rate for the next 10 years.
During the City Council work session, Eric Davis, the city’s finance director, presented the 2015 fiscal year audit, as well as a capital improvement plan that stretches from fiscal year 2017 to fiscal year 2026.
Davis noted that the unassigned balance from the General Fund is 28.5 percent — which translates into 13 to 17 weeks of operating funds. The goal is 25 percent to 33 percent, he said. “We’re right in the sweet spot. Percentage-wise, we’re showing we’re right where we want to be.”
A city’s absolute minimum, Davis said, should be 8 percent. Higher cash reserves mean lower risk, and better interest rates for the city.
The city’s annual budget is $52 million, Davis said. “We’re spending about $1 million a week. With $10 million in reserves, that’s not a lot. It does give us flexibility to cash-front a project.”
The sales tax, Davis said, represents the city’s second-largest cash stream, and is therefore “hugely important.”
Davis said of the city’s financial plan, “This will be our guiding principle moving forward. Everything in the capital improvement plan can be accomplished if the city meets growth rates.”
Davis said that the city’s bond rating is AA-minus overall. Only five cities in North Carolina have a AAA rating, including Charlotte and Raleigh.
“Our bond rating benefits from the Charlotte rating,” Davis said.
The city has completed some 126 capital projects ($25,000 and above) totaling nearly $153 million in fiscal years 2006 to 2015. During fiscal years 2017 to 2026, the city plans some 89 proposed projects, again with a total of nearly $153 million.
Davis went over details of four of the city’s funds: general fund, water and sewer, stormwater and environmental.
The smaller funds, he said, are meant to be self-sufficient, and are moving in that direction.
In the water and sewer fund, residents will see their monthly bills increase by 78 cents in fiscal years 2018 and 2022.
“If you would rather have it spread out, let us know,” City Manager Mike Legg told council members.
This plan, however, “makes it certain” the city will have the cash to extend water and sewer services as opportunities arise, Mayor Darrell Hinnant said.
In the stormwater fund residents will see fee increases of $1.50 per month in fiscal year 2018 and 75 cents per month in 2020. The environmental fund will see increases of $2.50 per month in odd years 2017 through 2025.
The increases correlate to planned downtown infrastructure improvements, including 22 projects that total $42 million.
Under the general fund, some 53 projects are planned, totaling $98.9 million. This includes two economic development projects at $25 million each, although those details have not been decided.
“Absent of another recession,” Davis noted, “Kannapolis is positioned for strong financial growth, allowing us to aggressively meet the public’s demand for services.”
Legg said that the capital improvement plan is presented to council every couple of years for input.
“It is not carved in stone,” he said. “It is a living, breathing document.”
And it serves to inform council about upcoming projects, he added. The plan changes to reflect economic conditions and the desires of City Council, Davis said.
Council also looked at an extensive list of sidewalk requests, at present unfunded.
For sidewalks, Legg said, the projects must be assigned based on how cost-effective they are, along with the number of people and businesses served.
Council also discussed funding needs and priorities for parks and greenways.
Gary Mills, parks and recreation director, presented a draft for a joint use agreement with Kannapolis City Schools. The agreement would cover the following school facilities: the gyms at Forest Park, Fred L. Wilson, and Shady Brook elementary schools, as well as at Kannapolis Middle, Kannapolis Intermediate and A.L. Brown High School. The tennis courts at A.L. Brown would also be made available under the agreement.
The motion to execute the agreement passed unanimously.
Freelance writer Susan Shinn lives in Salisbury.
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