Statesville residents will have an opportunity next Monday to tell the Statesville City Council what they think of the nearly 10 percent property tax increase and 20 percent water and sewer rate hikes in the proposed city budget for fiscal year 2021-2022.

The public hearing on the budget will be held during the council’s regular meeting, which starts at 7 p.m.

City Manager Ron Smith outlined the case for increasing those revenue streams to council members on Monday, explaining that they are needed to fund the city’s day-to-day operations, capital needs and recent pay raises for city employees — and to make the water and sewer department self-sufficient.

“When you get a good understanding of what we’re talking about … you’ll at least understand this is not a crazy request,” Smith told council members during a two-hour meeting Monday afternoon.

The proposed $115,955,700 budget calls for raising the ad valorem tax rate to 60 cents per $100 valuation. The current tax rate is 54.78 cents per $100 valuation.

Increases in the tax rate and water and sewer fees, Smith explained, would be partially mitigated by a proposal to eliminate the $120 annual solid waste fee that most property owners pay.

Under the proposal:

♦ A property with a tax value of $100,000 would see an increase of $145 per year for water/sewer service and a $55 annual increase in taxes. With the elimination of the solid waste fee, the net increase for this household for water and sewer service and city taxes would be about $80 per year.

♦ A property with a tax value of $150,000 would see a net increase for water and sewer service and taxes of about $108 per year.

♦ A property with a tax value of $250,000 would see a net increase for water and sewer service and taxes of about $162 per year.

Increasing the tax rate to 60 cents per $100 valuation would generate an additional $1.78 million for the city. That money is needed to help pay for the day-to-day operations of the city, including recurring costs from multiple pay raises most employees have received since 2019, Smith said.

The budget does not include new raises for the vast majority of city employees — although there is $500,000 for public safety employees.

Some $6.7 million needed to pay for a new fire station and new police and fire vehicles would be appropriated from the city’s fund balance.

During Monday’s meeting, council members discussed the possibility of borrowing money to pay for construction of the new fire station, which would then possibly allow them to use money from the fund balance to reduce or eliminate the tax proposed increase.

Smith told council members that senior leaders trim millions of dollars of capital requests made by department heads each year in order to produce a conservative budget, but eventually the city will have to replace aging vehicles and make repairs to city facilities and infrastructure.

For example, Police Chief David Addison requested funding for 16 or 17 new vehicles in the 2021-2022 budget. Funds for nine SPD vehicles were ultimately included. In addition, the Sanitation Department needs two new trucks. Funding for those vehicles was not included in the budget.

“We’re not making any real headway,” Smith said. “Whether we like it or not, we’re just kicking them down the road.”

Water & Sewer

Finance Director Chris Tucker stressed the urgency of raising water and sewer rates so that the department could become self-sufficient — like the Electric Utilities Department.

Among the reasons for the proposed rate increase are major infrastructure projects to improve the system identified by the Water Line Asset Inventory — and the decline in flow and consumption by city residents, which has resulted in less revenue than anticipated by the city.

“We have lines from the 40s,” Smith added. “We have to do something about it.”

The 20 percent water and sewer rate hikes for 2021-2022 are not the only increases city officials envision either.

A spreadsheet that Tucker shared with the council included subsequent increases of 5 percent in 2022-2023, 3 percent in 2023-2024 and 2024-2025, and another 2 percent increase in 2025-2026.

How Statesville Compares

TAXES: Statesville’s current property tax rate is lower than many nearby municipalities as well as other cities of similar size:

♦ Asheboro: 67 cents
♦ Hickory: 59 cents
♦ Kannapolis: 63 cents
♦ Lexington: 65 cents
♦ Monroe: 62 cents
♦ Mooresville: 58 cents
♦ Salisbury: 72 cents
♦ Shelby: 52 cents 
♦ Statesville: 54.78 cents
♦ Thomasville: 60 cents
Average: 61 cents

WATER & SEWER: If the 20 percent water and sewer rate increase is approved by the City Council, Statesville’s rates would rank as the second most expensive behind Thomasville among the same group of municipalities — and be about $100 more per year than the average of those municipalities.

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