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Kannapolis City Council approves 2021 budget with no tax increase

KANNAPOLIS — The Kannapolis City Council approved the fiscal year 2021 budget on Monday evening. The budget is $80.5 million and includes no property tax increase or utility fee hikes.

The tax rate will remain at 63 cents per $100 valuation. A home valued at $150,000 will have a $945 annual property tax bill for all services.

“We find ourselves in a new world. COVID-19 is impacting the way we do business today and it will in all likelihood greatly impact how we do business tomorrow,” Kannapolis City Manager Mike Legg said in a news release. “The city is projecting the loss of approximately $2.25 million in revenues due to COVID-19 in the new fiscal year. This approved budget could be described as ‘keeping the lights on.’ We will maintain all city services at the level our residents expect but it will be difficult to move forward with any new capital projects or new services in the upcoming year.”

City departments are maintaining their expenditures with only inflationary or contractual increases. For example, the police department will not replace any vehicles this year, the fire department will not purchase a fire engine that was planned, new staffing positions are on hold, there will be reduction in street repaving and preventive maintenance on city facilities will be delayed.

“We are very fortunate that our long-range financial planning for the city and new growth in the private sector development will help us get past the COVID crisis. This growth enables us to not increase property taxes or fees and there are no reductions to the current services we provide to our residents,” Legg said in the release.

This year’s budget includes funds to continue all operations, pay for inflationary increases for items needed to operate and to pay debt on projects the city has recently completed like two new fire stations, infrastructure improvements (water, sewer, sidewalks, streets) and the Atrium Health Ballpark.

“As the year progresses, we will be monitoring revenue streams closely and will make adjustments as necessary. We are hopeful that the negative impacts of COVID-19 will not linger and we can move forward with several of the budget items we are delaying,” Legg said.

The majority of revenue comes from two sources — property taxes and sales taxes. Due to COVID-19, the city expects to lose $2.25 million in revenues (this equates to 5 cents on the property tax rate). Revenue streams that are expected to decrease are property taxes, sales taxes, Powell bill funding (for maintaining streets), franchise taxes, water and sewer revenues, and rental property income.

The CK Rider System will receive CARES Act funds as part of the COVID-19 relief efforts to assist public transit systems.

Other notable items in the budget include:

  • Hiring an additional school resource officer for the Kannapolis Police Department. This position is offset by a grant Kannapolis City Schools is expecting from the state.
  • Hiring a fire mechanic to assist with vehicle repairs in-house. This position is offset by a reduction in what the city pays to contract out this service.
  • A $300,000 increase for the local government retirement system contribution for employees as mandated by State Treasurer’s Office.

Other increases in the budget include:

  • $625,000 in employer paid contribution for health insurance.
  • $141,450 in liability and workers compensation insurance.
  • $40,000 for the city’s financial software upgrade, which is required to be compliant with W-2 printing for tax purposes.
  • $83,144 in public safety software and annual maintenance on city-wide applications
  • $29,405 for safety platform installations at City Hall and the Public Works Operations Center.
  • $24,596 for preventative maintenance at city-owned and operated facilities.
  • $50,000 in financial contracted services for assistance with the audit. This increase is offset by p-card rebates.
  • $48,358 in the contract with Odell Volunteer Fire Department due to projected revaluation of properties and new home growth.
  • $34,000 in asphalt costs for resurfacing city-maintained streets.
  • $25,117 in mowing contracts for all city-owned properties.
  • $280,000 in debt service for Irish Buffalo Creek Greenway.
  • $122,500 in repair and maintenance of vehicles, equipment and tanks for water and sewer operations.
  • $1.76 million in debt service for the following water and sewer projects: Kannapolis Crossing, Lane Street and Water Treatment Plant improvements.
  • $222,151 in sewage treatment costs as part of the agreement the City has with the Water Sewer Authority of Cabarrus County (WSACC).
  • $100,000 in costs to maintain the ditching program for Stormwater operations.
  • $436,173 in costs for solid waste and recyclable material expenses in the Environmental Fund.

The budget also includes:

  • $2.6 million for the principal debt service payment for the Atrium Health Ballpark.
  • A 2.5% cost of living increase for employees.
  • $91,000 in debt service for the purchase of a Vac Truck replacement and $16,800 in replacement of equipment for water and sewer operations.
  • $20,000 to implement a youth flag football program.

Click here to view graphic on budget.



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