In February, I spoke to several groups of third graders about municipal government as part of our annual civic education program. My part of the program gives the students an overview of how City government operates and what services Concord provides. I started out by asking them how many services they used that day.
Even though I spoke with them before 9:00 a.m., most students could identify at least five services they already used that day. Most noted using
water, sewer (
wastewater),
electricity, and
recycling and garbage collection. Others identified
police, if they passed a police car on the way to school or if crossing guards helped them or a friend walk there. A few added the
fire department if they passed a station along the way. Of course, all had to use one or more City-maintained
streets or sidewalks to get to school.
It is human nature to take many services for granted unless something goes wrong. For example, if the garbage is not collected or water and/or electricity is not available, we notice it quickly. Otherwise, we just assume the system will work. For other services like 911 communications, police, fire, or
parks and recreation, we do not spend a lot of time thinking about them until they are needed.
I try to communicate to the third graders, as simply as possible, that all services require operational expenses, purchases of materials and equipment, and paying personnel—regardless if they are provided by City forces such as police and fire, or contracted out such as garbage and recycling collection.
I also explain that different revenues that are used to pay for different types of services. Property and sales taxes are used for services like police, fire, garbage and recycling, limb and leaf collection, street maintenance and construction, traffic signals and signs, and parks and recreation. On the other hand, direct user fees are used for utility services like water; wastewater; electric, and
stormwater.
We have started the FY 2012-13 City
budget process. As normal; we must examine how we can provide basic services as efficiently and effectively as possible to determine the revenues needed to fund these services for the upcoming fiscal year (starting July 1). For those services in the General Fund that receive a significant portion of revenues from property taxes, this is a particularly challenging year because of the Cabarrus County revaluation process described in the
Spring 2012 City Circular.
The
revaluation process is meant to align tax values with market conditions, and affects each property in a unique way. It appears that economic conditions have led many property values to decline while others have remained essentially the same. Overall, property values in Concord have declined by an average of thirteen percent. In the past, the Concord City Council has lowered the tax rate after revaluations because property values have gone up. However, this cycle’s property value decline is unprecedented. By law, local governments are required to calculate a revenue-neutral tax rate. This is the rate that elected officials would have to adopt to raise the exact same amount of money as before property values changed. The decline in values means the tax rate will need to increase if City Council decides to fund the same level of services.
When the revenue-neutral rate is calculated this year, the City Council will consider how to fund the City’s basic General Fund services after already eliminating positions and freezing others, after losing approximately $2 million in annual sales tax revenue since 2007, and after the reduction of around $3 million in annual property tax revenue (with more to come) due to the closure of Philip Morris. Since the economic downturn, operational line items have been cut in all departments. Police and Fire and Life Safety are the only major departments that have not seen reductions in budgeted positions.
Communities, such as ours, that have invested in public systems and structures must constantly strive for more efficient service delivery. At the same time, we must also endeavor to meet basic service and infrastructure needs, which are the foundation of our quality of life and security.
Choosing to ignore our built and community infrastructure just passes the problem on to future generations. The decisions made in response to this revaluation will certainly impact how future third graders answer the question, “what City services did you use today?”
