FROM STAFF REPORTS
Statesville City Manager Ron Smith has called for a nearly 10 percent increase in the city’s property tax rate and a 20 percent hike in water and sewer fees in the city’s proposed budget for fiscal year 2021-2022.
“Growth is here and affecting operations,” Smith said in his annual budget message. “Although revenues are increasing, alone these cannot fund some of the necessary actions that have taken place, and the overall needs of the City.
“A tax rate increase, coupled with water and sewer rate increases is not ideal, but it is a significant step toward stabilizing our financial position,” he added. “Statesville weathered the pandemic much better than expected. We are standing strong based on development, sales tax activity, and developer’s bullish view of the City. This budget helps us to maintain our status, take care of our infrastructure, and provide the basic services to our residents.”
Smith unveiled the proposed budget during Monday’s City Council meeting.
If the plan is approved by the City Council, the city’s property tax rate would increase by more than 5 cents to 60 cents per $100 valuation. The budget also calls for the elimination of the annual $120 solid waste fee that residents pay.
Smith cited increases expenses tied to employee compensation and benefits and the necessity of funding several capital projects as driving forces behind the need to increase the city’s revenue stream.
Council members are expected to take a deeper dive into the spending plan when they meet with the city manager at noon on Monday in the Statesville Civic Center. The meeting is open to the public.
The public will have an opportunity to comment on the budget during the City Council meeting scheduled for Monday, May 17.
The proposed budget for 2021-2022 calls for nearly $116 million in expenses, up sharply from $101.5 million in the current budget. The budget contains six different funds:
The General Fund is used to pay operating expenses for departments that are not paid for by the other fund sources. For example, this fund pays for administrative salaries along with police and fire protection, planning and zoning, and parks and recreation.
The tax rate of 60 cents per $100 would generate more than $20.2 million for city coffers. The proposed property tax increase accounts for $1.7 million of this total.
The budget also relies on $8 million in local sales tax revenues, which is an increase of more than $2 million over the current budget.
Major Capital Expenses
The budget calls for pulling $6.7 million from the city’s reserves to fund construction of a new fire station ($5.7 million) and a dozen new police, fire and sanitation vehicles ($1 million).
Department heads requested 24 new positions. The budget allocates funding for only five — two sanitation waste collectors, an assistant information technology director, a code enforcement officer, and a skilled laborer in public grounds.
Water & Sewer Fees
“The City’s rates are significantly lower than our peers, and much of the State,” Smith said in the budget message. “Although drastic, a rate increase of 20% is necessary to fill the gap.”
Based on a proposed 20 percent rate increase, water sales are estimated at $5,275,000 and sewer fees at $8,521,000.
No across the board rate hikes are proposed. This budget proposal includes almost $3,700,000 in capital funds for system improvement and expansion, up from $3,597,000 in the current budget.
The budget calls for spending $700,000 for a new roof for the Civic Center. Major capital projects and equipment paid for by the Stormwater Fund are budgeted at $715,000.
Read the City Manager’s Budget Message and the Proposed 2021-2022 Budget HERE.