Cary News

Trash fee debate divides council

The idea of instituting a flat fee for trash collection is dividing the Morrisville Town Council.

Council members debated changing the current system Tuesday but didn’t take any action. Now, the town’s trash services are funded by 3 cents of Morrisville’s 39-cent property tax rate, meaning the collection is subsidized by residents who pay higher taxes and businesses. The town spends about $1 million a year on trash pickup.

But with a property tax hike looming and last year’s statewide tax reform leaving an $800,000 hole in the town budget, the town is exploring its options. A separate fee for utilities is common for municipalities and is similar to how Morrisville handles its water bills.

Some worry the change would put too much of a burden on residents.

“It’s a system that’s maybe not perfect, but it’s not broken,” said Council member TJ Cawley, who said the system doesn’t need to be changed immediately.

Tony Chiotakis, the town’s director of public services, urged the town to either come up with a solution in March – to give the town’s staff enough time to change the system in the next budget, which starts July 1 – or wait another year.

It’s expected to be discussed at their next meeting March 10.

Council member Michael Schlink said Morrisville has three options: raise taxes, cut services, or pay for trash pickup. He and Mayor Mark Stohlman strongly advocated for a user fee at the town’s meeting last week, although other council members were less enthusiastic or flat-out opposed to the flat fee.

Stohlman has previously said a user fee is the fairest option. He said at the meeting it would also bring in even more money for the town.

“I want to make that a user fee, to relieve the pressure from having the general fund pay for it,” Stohlman said.

The town plans to raise taxes this spring by 2 cents to help pay for the $20 million bond referendum voters approved in 2012 to fund road and park improvements.

Stohlman said that by switching to a user fee, the town could keep the tax rate the same while accommodating the bonds, plus an extra 1 cent’s worth of revenue – about $380,000 – left over to put toward other projects.

The town would win in such a scenario, he said, by bringing in more money while keeping its property tax rate the same.

Council member Kris Gardner said he might be uncomfortable using a fee paid entirely by residents to make up for the loss of the privilege tax revenue that had been paid entirely by businesses.

“We’re running out of revenue sources here, from the General Assembly (tax reforms),” Gardner said. “But I don’t think it’s fair to make the residents bear the loss of that revenue.”

On the other hand, Gardner said, the town is probably going to need to switch to a user fee eventually. He suggested doing so in phases.

Phasing in the fee wouldn’t change the solid waste budget or service level, but it would mean most residents would see their bills increase gradually instead of all at once.

Cawley and Mayor Pro Tem Liz Johnson agreed that a user fee puts an undue burden on residents. They suggested keeping trash pickup funded by property taxes and raising the rate to 41 cents to fund the bonds.

“I am OK with that, and the public is OK with that,” Johnson said, noting that the bonds passed overwhelmingly.

Stohlman, however, warned of potential adverse affects to economic development.

“We have to be very careful about our tax rate, because that does drive how people invest in our town,” he said.

Johnson disagreed that a 41-cent tax rate would be bad for Morrisville’s business climate, noting that the Morrisville Chamber of Commerce campaigned in favor of the bond, knowing it would require a tax hike.

She said businesses value a nice area and good quality of life over minor differences in property taxes. Being in a nice area makes it easier to attract good workers.

Council member Steve Rao cut in to defuse the back-and-forth, saying that both Stohlman and Johnson made good points.

Voters approved the bonds knowing about a 41-cent tax rate, he said. But, he said, residents likely would approve of the town having more money to do more work on roads, parks and other local projects.

“I’d rather get more information,” on the user fee, Rao said. “But I don’t want to rule it out.”

Doran: 919-460-2604; Twitter: @will_doran