Board consensus: Let voters make decision on four-year terms
DAVIDSON – It appeared to be a draw between which issue drew the most speakers to Davidson’s town board meeting Tuesday night, May 10: the town’s proposed budget – and potentially higher property tax bills – or the proposal to change the town’s charter and elect future mayors and commissioners to staggered four-year terms.
Mayor John Woods tried to pre-empt some of the angry words at the beginning of the discussion about town board members’ terms. Before recognizing the first speaker, Woods announced he had spoken with all the commissioners and “we all agree a referendum is in the best interest” of the town to resolve the issue.
Some audience members seemed doubtful and even asked if the board was going to commit – by vote – to a referendum Tuesday night. But later in the meeting, commissioners repeated their support for a referendum, and that seemed to satisfy opponents of the idea for now.
Board members could offer less assurance to residents who are concerned that the appraised value of their property is increasing – in some cases dramatically – this year as the county revalues all property in the county for the first time in eight years.
Unless the town board reduces its current tax rate of 36.5 cents per $100 of assessed value, most homeowners in Davidson will pay higher town property tax bills next year because their assessed value is increasing. The average residential property will see its assessed value go up 17.6 percent, according to the county tax assessor’s office.
Town Finance Officer Eric Hardy did his own comparisons in neighborhoods throughout the town and found values increasing 70 percent or more on Pine Road and in the Old Town neighborhood, while actually declining in three neighborhoods: Spinnaker Reach, Summer’s Walk and Bradford.
Town Manager Leamon Brice has recommended leaving the tax rate the same and using the additional $500,000 the town would collect to replace worn-out equipment, make some badly needed repairs to town facilities, including streets, and give employees their first raise in three years.
But at a public hearing on the budget, a woman who lives in Lake Davidson Park, where Hardy found a median increase of 49 percent in assessed values, wanted to know how town board members could justify not lowering the tax rate to help homeowners.
A River Run resident observed that he got a 14 percent increase in town taxes last year when the town board created a new garbage collection fee, and he faces another 10 percent increase this year if the board doesn’t lower the current tax rate.
Acknowledging property values have increased dramatically since the last valuation eight years ago, another resident pointed out that homeowners only realize that value if they sell their homes. And he wanted to know if town officials have tracked income levels to see if they had kept up with property values.
When they got their chance to speak, town board members took a shot at cutting parts of the budget – from new wayfinding signs for downtown businesses to park maintenance work and the town’s share for a new victim’s advocate to work with victims of domestic violence and abuse.
But in the end, Commissioner Margo Williams, the senior member of the board, got them to agree that Brice’s recommended plan for addressing town needs is sound.
The commissioners didn’t agree, however, on how to pay for it.
Mayor Pro Tem Laurie Venzon was most vocal in arguing to reduce the tax rate by 3 cents and taking an extra $500,000 from the town’s fund balance. The town should try to help people still struggling in the economy, “people who haven’t had raises, people who are still out of work.”
Taking extra funds out of Davidson’s fund balance will reduce the town’s cash cushion as a percentage of its operating budget from 47 to 32.2 percent. Other N.C. towns of comparable size currently keep their fund balances at a level equal to 44 percent of their operating budgets.
Venzon and Commissioner Tim Dreffer argued that the 44 percent average among comparable cities has no real meaning as long as the town remains strong financially. And Venzon believes MI-Connection, the broadband company owned by Davidson and Mooresville, will continue to grow financially, meaning the town will have to pay less each year to cover MI-Connection’s debt. The town can use the money it saves from smaller payments to MI-Connection to restore its fund balance, Venzon said.
But Commissioners Williams and Connie Wessner said they don’t think the town should dip into the fund balance to pay for recurring operating expenses, such as replacement police cars or employee raises. And they pointed out that cutting the tax rate will save even homeowners seeing the largest increase in values $168 or less on their town tax bill, based on Hardy’s research.
The median home value in Davidson, which is $359,694, paid a $1,313 town property tax bill this year. If that property increases the average – 17.6 percent – the owner would pay $1,544 if the town board leaves the tax rate unchanged. Reducing the tax rate to a “revenue neutral” 33.1-cent rate would cut the bill to $1,400, or a savings of $144.
Williams and Wessner argued such savings would be largely “symbolic” and not worth the price of letting town facilities, programs and employees suffer another year.
Board members will continue their budget discussions at their regular workshop in two weeks.
Two- or four-year terms?
If hearing from the public about taxes wasn’t enough, town board members also picked Tuesday for a public hearing on changing the terms for commissioners and the mayor from two- to four-year staggered terms. The question of changing the terms has prompted two criticisms: 1) the change itself and 2) the possibility commissioners would make the change unilaterally and not let voters decide in a referendum.
Woods addressed the second criticism at the start. Bill Jackson, a vocal critic of the change in letters to the editor, asked Woods if the board was going to take a vote in public Tuesday night. Another person in the audience asked if any vote would be binding.
In the end, commissioners said they can’t make critics believe them.
But that still left the question of whether to put four-year terms to a referendum or drop it altogether. Sandy Carnegie, who served seven terms on the board from 1983 to 1997, said the issue of four-year terms has arisen a number of times in past decades, and each time the board decided not to pursue a change.
“It was an issue of accountability,” Carnegie said. “If they didn’t like us, they voted us out.”
Carnegie and others said the board had frequently debated the question of “continuity” for the town if voters were to elect all new commissioners at once. But historical statistics compiled by Town Manager Leamon Brice show that voters end up returning commissioners to the board multiple times.
Venzon, who said she doesn’t feel strongly one way or the other on longer terms, and Williams, who said she doesn’t favor them, said the whole discussion comes from a committee that studied governance when the town approved its Comprehensive Plan last year. And both commissioners said they feel an obligation to those volunteers to take the proposal to a referendum.
Dreffer, who also said he doesn’t feel strongly one way or the other, said he heard many residents at the board’s neighborhood chats and workshops say they thought four-year terms were a good idea. For that reason, he also favors letting the town’s voters decide.
At the request of Town Attorney Richard Kline, who said he needs to study the proper wording for a referendum, commissioners delayed a vote until their meeting. Commissioners appeared to favor putting the issue on the general election ballot this November – or even in November 2012. If voters did approve a change in the town charter, the mayor and first group of commissioners wouldn’t start four-year terms until 2013.