Commissioners remain split on whether to lower property tax rate

by Frank DeLoache

DAVIDSON – At least one bill Davidson residents get this fall will decrease.

Davidson Public Works Director Doug Wright recommended Tuesday, May 24, that the town lower its stormwater fee, providing residents – depending on the size of their property – savings of $31 to $42 in the coming fiscal year.

Admittedly, the stormwater fee shot up last year. The town charged four different rates, which range from $45 to $93, depending on the amount of “impervious surface” on each property. The town raised the fees to pay for catch-up drainage projects, but commissioners still welcomed Wright’s recommendation and praised him and his staff for accomplishing many projects themselves.

That efficiency enabled Wright to carry forward about $162,000 in reserves this year and justified the significant reductions in this year’s fee.

Wright, Town Manager Leamon Brice and Finance Director Eric Hardy did not address the $201 trash collection fee the town also levied for the first time last year, which also rankled many residents. Town staff are still negotiating next year’s fee with Republic Services, the town’s trash contractor, and expect to bring a recommendation to the town board June 14. “We expect a reduction” but don’t know how much yet, Hardy said Wednesday.

The good news on the stormwater fee didn’t bring town board members any closer to agreeing on next year’s property tax rate. Town Manager Leamon Brice has recommended leaving the tax rate the same, at 36.5 cents per $100 of assessed value. Since the county is revaluing property countywide for the first time in eight years, officials have estimated the average property in Davidson will see its taxable value increase 17.6 percent, and many will see much higher percentage increases.

But leaving the tax rate unchanged, the town expects to get an additional $750,000 in revenue, which Brice would use to replace worn-out equipment, make some badly needed repairs to town facilities, including streets, and give some employees their first raise in three years.

Brice clarified his 3 percent salary proposal Tuesday night, saying he doesn’t propose an across-the-board cost of living increase. He expects to give raises to employees who are at the bottom of their pay scale and correct other “inequities” between employees. Those who don’t fall in that category would get a one-time $500 bonus that would not increase their salary.

Two weeks ago, Mayor Pro Tem Laurie Venzon argued strongly to reduce the town’s tax rate 3 cents to balance the increases in taxable value and provide some relief for homeowners who are still struggling with the economy. On Tuesday night, she and Commissioner Tim Dreffer said they could agree to a compromise of reducing the town tax rate 1 1/2 cents, to 35 cents per $100 of assessed value.

And considering that another payment to MI Connection, the broadband company owned by Mooresville and Davidson, is accounting for a large part of the town’s budget, Venzon and Dreffer reasoned the town should dip into its fund balance for now and replenish the fund balance as subsidies to MI Connection will eventually decrease.

But as they did two weeks ago, Commissioners Margo Williams and Connie Wessner said they don’t want to dip deeper into the fund balance to lower the tax rate. “The tax value is out of our hands,” Williams said Tuesday night, and revaluation is actually “giving a more accurate reflection of the value of property in Davidson after an eight-year lull.”

Dipping into the fund balance to cut the tax rate 1 1/2 cents would save the average homeowner less than $20 a month, she said.

Wessner pointed to the proposed 25 percent cut in the stormwater fee and said savings is equivalent to almost a 1 1/2 cent-cut in the tax rate. She also pointed out that the town had to approve a budget with only-bad options last year, including the layoff of 11 of the towns’ 50 employees. As part of a staff reorganization, the town created six new positions, which have since been filled.

The town has more options this year, and Wessner favors leaving the tax rate unchanged.

Commissioner Brian Jenest said he favors bringing the current tax rate down some, though he didn’t ever say if he would vote with Venzon and Dreffer to drop it to 35 cents and take more from the fund balance.

Brice and commissioners spent some time discussing what might be cut in operations to save $100,000, bring the tax rate down and not use more of the fund balance. Brice mentioned cutting out sidewalk work and reducing street and park maintenance, not replacing a malfunctioning “jaws-of-life” hydraulic tool for the fire department and paying only $10,000 toward a victim’s advocate salary.

United Family Services has asked Huntersville, Cornelius, Mecklenburg County and Davidson to each contribute $15,000 toward the new position, but Davidson officials toyed with paying less based on its smaller population.

In the end, the board remained divided largely along the same lines as two weeks ago: Dip in the fund balance to lower the tax rate (and some homeowners’ final town bill) or leave the tax rate the same (and send higher bills to most residents).