The town needs to examine its long-term health and the growing demand on its resources, Town Manager David Andrews told the aldermen Tuesday in proposing a $58.6 million budget with a half-cent property tax rate increase.
The town faces multiple challenges, Andrews said, from rising health care and retirement costs for its 165 employees to aging facilities, inadequate space, difficulty recruiting employees in a tight labor market, and sluggish growth in the tax base.
Sales tax revenues are strong and keeping the town going, he said, noting that could change quickly in an economic downturn.
“You need to really focus on land use and add that to the long-term financial sustainability plan. It’s really critical,” Andrews said. “The sky’s not falling. We know where we are, we’ve got a triple A bond rating, but there’s a demand to get more done.”
A half-cent increase would raise the town’s property tax rate on July 1 to 59.94 cents for every $100 in property value. The owner of a house valued at $300,000 would pay $1,798.20 in town property taxes — a $15 increase — plus Orange County and Chapel Hill-Carrboro City Schools district property taxes.
The increase would support the town’s affordable-housing goals. The aldermen also voted last year to add a half-cent for affordable housing to the property tax rate and could consider another half-cent increase in 2020-21.
A penny on Carrboro’s property tax rate generates roughly $227,000. The town has $358,500 in its affordable housing fund.
Alderwoman Jacqueline Gist noted that Orange County is also raising its tax rate. It would be useful to know how much that will cost residents before deciding whether to raise Carrboro’s tax rate, she said.
The Orange County commissioners have a choice between a 1.5-cent tax rate increase with more expected later, or a roughly five-cent increase now. The 1.5-cent increase would add $45 to the tax bill for a house valued at $300,000; a five-cent increase would add $150.
“Even though we think of [county and town property taxes] as two entirely separate things, they come as the same bill, and it will impact people’s ability to continue to live here,” Gist said.
The town has tried to keep property taxes in check, Andrews said, but it has to do what’s best for itself.
“When the county increases their tax rate or they increase their tax rate for schools or what not, we’re all paying it,” he said. “We fall behind by keeping our rates static, because everybody else is going up … and they’re doing what they need.”
The aldermen will hold a public hearing on the proposed budget May 28 in Carrboro Town Hall. A vote is scheduled for June 18.
Employees and highlights
▪ The 2019-20 budget includes $24.3 million for personnel and daily operations — a $1.4 million increase over the 2018-19 budget.
▪ The town hasn’t increased its salary ranges in eight to 10 years, which makes hiring and keeping employees difficult, Andrews said. He proposed a 4 percent pay raise — to better meet the rising cost of living and market salaries — for all employees; planning to promote from within; and the possibility of more pay for police who acquire training and experience.
▪ The town has reached a point where it needs more money or more staff to keep up with the demands, Andrews said.
“As a staff, we are really trying to get out as much work as we can as quickly as possible, but there’s always a lot coming, and it feels like we’re not able to get things out in the timely way,” he said. “If the expectation is that we get things out quicker and more timely, then I think we’re going to need the staff to do it.”
The proposed budget includes $31.3 million for construction and maintenance projects.
Andrews urged the aldermen to have a separate conversation about the town’s capital needs, from building renovations to new equipment and road projects. Town staff will assess those needs over the next year, he said.
The town’s major expenses include:
▪ Construction and maintenance: $9 million toward the $15.6 million Southern Branch Library and town facilities at 203 S. Greensboro St. Orange County will pay the remaining construction costs.
▪ Stormwater: $787,000 from the town’s Storm Water Utility Enterprise Fund will help replace culverts, restore stream banks, repair a “high-risk situation” at the Public Works building on South Greensboro Street, and upgrade stormwater facilities.
▪ Vehicles: $792,814, including $332,814 for six police vehicles and $430,000 for a garbage truck. The town replaces its vehicles based on age and mileage, from eight years — 125,000 miles — for a police patrol car to 20 years — 250,000 miles — for a firetruck.
▪ Transportation: $2 million for Chapel Hill Transit operations; Carrboro shares transit costs with Chapel Hill and UNC.
▪ Public safety and public works: Nearly $4 million for police, and $3 million for Carrboro Fire and Rescue. The Public Works Department would get $3.9 million to maintain streets, buildings and town vehicles; pick up trash; and manage stormwater and town landscaping.
A public hearing on the 2019-20 budget will be held at 7 p.m. May 28 in Carrboro Town Hall boardroom. The budget can be viewed in the clerk’s office at Town Hall or online at tinyurl.com/y4gn4lcy. Comments also can be emailed to firstname.lastname@example.org.