HUNTERSVILLE – By the next town board meeting on Feb. 18, town officials expect to know how the recently completed countywide property revaluation changed the town’s tax base. That number, expected to rise significantly, will be a key factor in budget talks and a decision on a tax rate.
But in the meantime, commissioners received plenty of financial food for thought during their two-day budget retreat held Jan. 31 and Feb. 1. In a presentation delivered by Finance Director Pattie Ellis and Assistant Town Manager (and former finance director) Jackie Huffman – with insights inserted by Town Manager Anthony Roberts – the facts, figures and feasibilities of current town finances were explored.
The goal of the multi-part illustration and explanation was to provide a current picture of the town’s financial status including debt, savings, commitments and funding options. All of it was part of laying the foundation for the financial debates ahead when commissioners tackle tax rate and capital project issues and determine a money-management course to follow.
Vehicles and trash
Huntersville’s value is rising. The town’s tax base has grown by close to $200 million each year since 2015 and currently tops $7 billion. And with revaluation numbers on the horizon, the total is expected to rise significantly.
When the assessment is confirmed, a revenue-neutral tax rate (the rate generating the same property tax revenue the town received on the previous assessment) will be identified. It will, assuredly, be lower than the town’s current 30.5 cents per $100 rate. It doesn’t have to be adopted, but it has to be publicized.
And with that as the starting point, commissioners tiptoed into “what if” conversations about ways to massage the rate between where it is to where it could be to eliminate some fees while also accommodating current and future expenditures.
Commissioner Danny Phillips began by asking about the town’s vehicle fee, a $20-per-unit charge with revenue directed to a fund to finance local road improvements.
“I hear more complaints about that than just about anything else,” Phillips said, asking if this was a good time to eliminate the fee, compensating with revenue from other sources. This countered previous board discussions about possibly raising the fee – the most the town could charge is $30 per vehicle – to help finance a long-list of identified road projects.
Huffman said the vehicle tax currently generates nearly $900,000 each year, while each penny on the tax rate (based on the town’s current value) provides about $680,000 in revenue. A tax-rate increase of about 1.3 cents (again, based on the current assessed value) would be required to equal the vehicle tax revenue.
Waste management fees were also a topic of discussion. Currently – after a $12 hike in the 2018-19 budget – the town charges owners of residential properties $84 a year for garbage, recycling and debris collection services provided by an outside vendor. That fee, generating around $1.6 million each year, provides revenue to cover about 40 percent of the costs. The town pays the rest from its general fund.
Commissioners weighed the value of eliminating the fee with a tax rate necessary to finance the waste management services, but also acknowledged that may not be fair to business and commercial property owners not covered by the town-subsidized residential collections.
In wrapping up those discussions, Huffman told commissioners – once again, referencing the town's current assessed value – to match the current revenue generated by the vehicle tax and waste management service fees the current tax rate would need to be increased by approximately 4 cents. Figuring out what that amount would be on the new tax base will involve a simple calculation once that value is confirmed.
A sea of finances
The early discussions were the tip of an “if this, then that” discussion of finances – with steady references to the town’s fund balance, remaining bond money and steadily growing list of capital improvement projects – all with the understanding the municipal tax base assessment will be a large part of future conversations.
With Roberts repeatedly reminding commissioners, due to current policies toward savings and a budget that has resulted in surplus funds in recent years, the town “is in good financial shape,” the presentation also highlighted prioritized projects with price tags that continue to rise.
In summarizing the town’s finances and setting the stage for what’s to come, Huffman provided an analogy of the choices – on tax rate, project prioritization and bond questions – commissioners will face.
“I’d like for you to consider this as a buffet,” Huffman said referencing the many ways commissioners could spend money, with the option to take only what they want.