Plans to implement several transportation and economic development projects in Fuquay-Varina could lead to a property tax increase of nearly 11 cents over the next five years in a worst-case scenario presented to town officials Monday.
Fuquay-Varina now has the second lowest property tax rate in Wake County at 38.5 cents per $100 in valuation. Yet about $99 million worth of projects presented to the town board of commissioners Monday – including the completion of Judd Parkway and construction of an industrial park – could lead to a tax rate as high as 49 cents by 2020, town staff said.
The announcement wasn’t received well by all members of the town board.
“Going from 38 cents to 49 cents is not something that I think the citizens would stomach, and it’s not something I believe I could stomach,” Mayor Pro Tem Charlie Adcock said.
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There are options to keep the tax rate lower in the future, prompting the board to tentatively approve the first step of the worst-case-scenario plan Monday night. Leaders instructed the town’s staff to prepare a bond for $30.5 million to be placed on November’s ballot.
The bond won’t be official until a second vote, currently planned for a meeting on July 6. If town officials approve it then, the bond still can’t be issued unless voters approve it in November.
The vote came after Town Manager Adam Mitchell told the council that the worst-case scenario may not mean a high tax rate. The town can budget the maximum expenses now and decide not to spend the money later, if grants don’t come through or if the economic or political situation doesn’t call for the spending.
“We can always look back and slide it backwards,” Mayor John Byrne added.
The project budgets also could be reduced or could be funded by county, state or federal grants over that time period. In those scenarios, the tax rate would not need to rise as much.
The town could take in higher-than-expected revenues in future years. There is a property tax revaluation scheduled soon, and the town is on track to issue 600 permits for single family homes this year, the most since the recession began.
The early draft of the $30.5 bond approved Monday includes $26 million to finish Judd Parkway by completing the final northwest section. The other $3.5 million would go toward extending water and sewer lines to facilitate growth.
The Judd Parkway project was a sticking point due to its high cost. The town’s entire operating budget proposed for next year is $21 million.
A TIGER grant, from the U.S. Department of Transportation, would pay for 60 percent of the project, or $15.6 million. The town would contribute $10.4 million of the $26 million, which would require a property tax hike of 2.5 cents.
Mitchell said there’s no guarantee of receiving the grant, but he said Fuquay-Varina already received a smaller federal grant to design the road, which is a good sign.
“I do not believe, unless we forgo some other projects on the list, that we will be able to do the Judd Parkway project if we do not receive a TIGER grant,” Mitchell told the council.
Byrne said the town has submitted an application for the grant with formal support from neighboring towns as well as Harnett County, Wake County Public Schools and several state senators and representatives.
“Everybody has zeroed in on how important this is to Fuquay-Varina,” he said.
To try to secure the federal funding, Byrne said he’s putting together a local delegation to travel to Washington and lobby North Carolina’s Congress members for support.
Receiving that grant would also free up funds for other road projects, such as widening the intersections of Main Street with Judd Parkway and Sunset Lake Road, and extending Broad Street to connect with Johnson Pond Road. Those projects would cost in excess of $10 million but also could be eligible for grants.
In other business
▪ Edited the draft of its budget to add purchases of new cameras for police vehicles and to postpone the $175,000 construction of an outdoor basketball court at South Park. Officials cited other existing basketball courts around town, plus the addition of a new playground and splash pad at the park, for reasons behind the decision.
▪ Identified the area where they planned to install a fiber network similar to what Google Fiber is bringing to Raleigh, Cary, Garner and other nearby towns. Officials plan to spend about $700,000 installing fiber around the Judd Parkway loop and along U.S. 401 and N.C. 55 north of town to serve existing businesses and recruit new ones.
▪ Discussed spending about $6 million in the future to buy and develop a business/industrial park that could be used to recruit manufacturing companies and create jobs. Mitchell said every nearby town has a shovel-ready site for a manufacturing plant except Fuquay-Varina.
“We’re not in the game,” he said. “We’re not competing.”
Doran: 919-460-2604; Twitter: @will_doran