COMMUNITY NEWS

City Manager Brian Hiatt presents FY 2017 budget recommendation
Wednesday, May 25, 2016

Update-June 9, 2016: City Council adopted the FY17 budget as recommended at the June 9, 2016 regular session, following a public hearing.

CONCORD – City Manager Brian Hiatt presented his fiscal year 2016-17 budget recommendation to the Concord Mayor and City Council at a special meeting on Wednesday, May 25. The City-wide budget totals $230,157,100 for all funds, including utilities and various special revenue funds. The recommended General Fund budget, where the historical funding sources are property and sales tax receipts, is $78,771,691. The property tax rate is recommended to stay at the current 48 cents per 100 dollars of valuation.

For the first time since before the 2008 recession, the City started the budget process by asking departments to prepare a budget with up to, but no more than, a two percent operational increase. Management considered the impact of these operational needs in an environment of a strengthening economy and growth, and recommended those new requests that will meet Council goals and/or have the greatest impact on direct service delivery to citizens.

"The growth in all sectors of Concord's economy speaks well for the desirability of our community," said Hiatt. "We have been extremely conservative in expenditure growth over the past eight years, first due to the recession, then to the turmoil caused by the General Assembly’s elimination of the business license revenue and the sales tax redistribution debate."

Hiatt explained to City Council that factoring Concord's growth, the City cannot maintain current services levels or meet Council goals without adding positions and increasing operational line items. The City Manager's recommendation assumes the General Assembly will not make changes to local government revenues impacting the City of Concord.

As in past years, the proposed budget restricts the equivalent of two cents on the tax rate to supplement State funding for transportation projects, as mandated by City Council.

The recommended Concord property tax rate continues to be among the lowest third of full-service North Carolina municipalities with populations greater than 40,000—and the lowest of those that do not charge solid waste and/or recycling fees. All of these cities whose property tax rates are lower than Concord's charge additional user fees for solid waste collection and/or disposal, and a few make extensive use of impact fees authorized by the State just for their municipalities.

Hiatt's Budget recommendation allows for service and infrastructure expansions where necessary to meet the demands of growth. In the General Fund, 55 percent of proposed expenditures will go to public safety. Other budget highlights include:

Beginning the update of Land Use Plan to provide guidance on how the City will grow and look in the future.

Funding a total of $1.3 million designated for street resurfacing.

Aligning City staffing with growth and service needs, to include 35.1 FTE in new or unfrozen staff positions added across the City to focus on services, expanded airport operations, public safety, and economic growth.

Focusing on investment in the City’s parks and recreation facilities, including renovation of Hartsell Recreation Center, a playground at the Bark Park, resurfacing of the pool at McGinnis Aquatics Center, upfit of the Burrage Road facility, and McEachern and Henry greenway phase expansions.

Updating the Wastewater Master Plan to evaluate future needs related to growth.

Implementing the Smart Community program through installation of advanced electric and water metering technology to improve operational efficiency, reliability, and service to customers.

No increase in Water, Stormwater, or Sewer rates despite a five percent increase in WSAAC treatment costs.

Preparing for growth at Concord Regional Airport through the completion of a new commercial service terminal and parking deck, staffing of 5 Police and 6 Fire personnel, and 6 Aviation personnel to meet increased customer service and operational needs.

Completing of the update to the Downtown Master Plan to make downtown a more appealing place to live, work, and play

The City Manager stated that a revenue-neutral FY17 tax rate would be 45.94 cents, based on an overall 8 percent increase in Concord’s assessed property values determined during the 2016 Cabarrus County revaluation process.

In light of growth and increased service demands, and the General Assembly's elimination of the Business License Tax two years ago (resulting in a greater than $1 million loss— equivalent to over a penny on the property tax rate), the maintenance of existing revenues is more important than ever. Another factor in maintaining the existing tax rate during the revaluation year is the connection between property tax rates and local sales tax distributions. Concord’s portion has been on a downward trend over the last ten years, primarily due to changing tax rates among local governments.

As determined by the Cabarrus Board of County Commissioners, sales taxes are distributed among Cabarrus local governments using the ad valorem basis. Using this method, the proportion each unit’s property tax levy bears to the total levy of all units in the county determines the amount of local sales and use tax revenue that each local government receives. Thus, when one Cabarrus local government increases its tax rate and/or grows significantly more than another, it impacts the distribution of these sales taxes. Currently, Concord receives 21.53 percent of the local sales tax returned.

"Since it appears most, if not all, other Cabarrus local governments are recommending maintaining their current property tax rate following the revaluation, it is important that Concord do so too to avoid further decline in the proportion of sales tax received," said Hiatt.

The City Council will hold at least one budget workshop on June 7, 2016 and a public hearing is scheduled for Thursday, June 9, 2016 during the regular City Council meeting. Interested individuals can view the City Manager's recommended budget on concordnc.gov and also in print at the City Clerk's office.