Kannapolis leaders brace for revaluation impact

KANNAPOLIS, N.C. — As Kannapolis City Council prepares for the impact of Cabarrus County’s 2012 Revaluation on its property tax revenue, council members say they favor increasing fees over changing the tax rate.

Council members met recently for their annual retreat. A facilitator helped council members determine their preferences for replacing lost revenue using an exercise in which they ranked possible solutions from one to seven.

The results showed overwhelming favor for increasing user fees to help make up for losses anticipated from the revaluation.

Countywide, the assessed value of property has decreased by 13.3 percent with the revaluation. Kannapolis properties decreased by 11.62 percent while Concord dropped by 13.27 percent. Kannapolis officials said the city’s tax base will decrease by about 9.55 percent to about $3.4 billion.

Eric Davis, financial director for the city, recommended several rate increases over the next 10 years to help adjust for changes to property values this year and also to position the city for future growth and projects such as the proposed police department and city hall facilities.

Many of the proposed user fee changes would happen in the next five years, which Davis said would get the city to where it needs to be by fiscal year 2022.

The proposed fee increases were: a proposed 40-cent rate adjustment to the city’s stormwater fee each of the next six fiscal years; a proposed $5 rate adjustment in fiscal year 2013 to the environmental fee and an additional $2.50 increase every other year after that through fiscal year 2021; a 52-cent rate adjustment for water and sewer in fiscal year 2014 and additional adjustments through fiscal year 2021; and a proposed tax rate increase of 6 cents in fiscal year 2013 and 3.5 cents in fiscal year 2015.

“I think the citizens will say, ‘We’re hurting now, I don’t care about 2022,” Kannapolis City Council member Thomas Kincaid said.

City Manager Mike Legg said the proposed increases are just suggestions for the future at this point.

“What we wanted to do is show them all the needs that are identified and here’s what it would take to make all of this happen,” he said.

He said the discussion about increasing fees was a way to gauge city council members’ goals for the future.

“It’s been difficult to make big decisions because the economy has tanked,” he said. “It’s hard to think long term and make big decisions when you are worried about next week.”

Legg said the city needs to start planning for the future. That plan may also include about a 6 and half cent per $100 valuation tax rate increase for property owners. The increase is the revenue neutral rate the city calculated based on early revaluation data.

Kannapolis’ tax rate is 49 cents per $100 valuation, or a $980 tax bill on a $200,000 house. Kannapolis officials expect to collect $17.8 million in real and personal property tax revenue in the current fiscal year. Next fiscal year, or fiscal year 2013 – which starts July 1 – city official expects to collect $16.3 million, a decrease due largely to the revaluation.

WSOC