AG 2002 10 21 (Regular) - Laserfiche WebLink

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· The partial reimbursement for the homestead exemption; · The municipal utility franchise tax on electricity; · The excise tax on natural gas; · The new sales tax on telecommunications; and · The beer and wine tax. These longXstanding municipal revenue soUrCes are not subject to the annual appropriations process. Changing the distribution in any way would require action by the General Assembly. We must insist that the General Assembly honor these long-standing commitments. Council is actively seeking, through the NC League of Municipalities, new legislation to protect the utility and beer and wine tax revenues from any future withholding. Even though we expect to receive all of these revenues, we must acknowledge the uncertainty associated with their distribution. Therefore I have included a contingency plan in this budget recommendation' in case Concord does not receive the reimbursement revenue. These cuts contain many items already delayed due to the withholding of funds in FY 2001.-2002, special projects, capital projects, the few new positions being recommended and other specified items. These funds will be spent only if and when the revenues are received. It is important to note that FY 2002-2003 will be the final year for the reimbursements for previously repealed local taxes. The General Assembly, during the 2001 session, Passed legislation to end these reimbursements effective June 30, 2003, The General Assembly provided authority for counties to convert the most recent one-half cent state sales tax to a local option sales tax effective July 1, 2003. The legiSlation also provides that each municipality and county will get at least as much from the one-half cent tax as it did from the reimbursements. Local option sales taxes are not subject to withholding by the governor. Concord receives approximately $1.6 milli6n annually in reimbursements, an amount equivalent to 3 cents on the property tax rate. This revenue source will end June 30, 2003. Whether there is a long-term alternative revenue source will depend on action of the Cabarrus County Board of Commissioners. The proposed budget for 2002-2003, which includes the reimbursement money, involves a financial plan for the ensuing fiscal year which allows She City to catch up on a few of the needs that could not be addressed in FY 2001-2002 due to the withholding of revenues, plus a few new initiatives outlined in the Mayor/Council Goals. Most importantly it provides for a plan, including necessary revenues, to establish another water line connection with the Charlotte/Mecklenburg Utility Department and to upgrade existing water treatment facilities to provide for much needed water due to the drought and to prepare for the additional growth the area is experiencing. These improvements, combined with water and sewer revenue losses due to water .use restrictions and the change from a textile based economy to a service based one, have led to a total revamping of. the water and sewer rates and fees to prepare to meet future water and sewer needs. Because of this overall change in the structure the impact on the rates charged will vary according to individual user but overall residential rates are recommended to increase by 18% on water and 15% on wastewater. Also, water is going to a two-tiered rate format to incorporate a conservation rate necessary to justify the necessary Interbasin Transfers the City is pursuing from the' Catawba and Yadkin Rivers. This will make it more costly for those using extensive amounts of water at home. Finally, it was determined that the current rate structure was putting too much of the burden on the residential water rate' so commercial and industrial water rates are increasing at a higher percentage, This is somewhat offset, however, by the overall lower sewer cost increases on the industrial and commercial users where it was found revenues from this source were more equitable and where the impact of adopting a Base Charge component was negligible.