News

Personnel, inflation nudge cities' tax rates above revenue neutral

By AMY MCCRAW and BILL MOSS, Published: June 29, 2023

With a 3-2 vote last Thursday night, the Mills River Town Council became the last of the county’s local governing boards to adopt a new budget for the fiscal year beginning July 1.

This spring marked a pivotal time for the elected leaders of Henderson County and the county’s five towns because of the countywide property revaluation, which led to an increase in the overall tax base of 48 percent. The increases among cities were Laurel Park, 51.1 percent; Mills River, 52.7 percent; Fletcher, 49.5 percent; Flat Rock, 42.7 percent; and Hendersonville, 38.8 percent.

Citing inflation, personnel costs and other factors, all five towns adopted rates higher than the revenue neutral number, as did all 12 rural fire and rescue departments. After County Commissioner Bill Lapsley declared a case of “heartburn” over the fire tax rates, fire chiefs raced to the courthouse to defend the numbers and, in a later meeting, commissioners adopted the rates without change.

While they missed the revenue neutral rate, elected leaders and town managers cited services and assets their citizens would gain:

Laurel Park embarked on a six-year repaving program to catch up on overdue repaving and repairs.

Mills River is spending $2 million to buy the 68-acre Mills River Creamery dairy next door to the town hall and town park.

Hendersonville’s budget funds 6½ new employees picks up the full cost of 12 fulltime firefighters initially funded by a federal grant. City leaders pointed out that homeowners could see lower insurance rates because of the city’s new ISO Class 1 rating made possible in part by the increase in fire personnel.

While it held the line on operating costs, the Village of Flat Rock adopted a tax rate 2.4 cents higher than the revenue neutral rate because of the fire tax increases of three departments that serve the village.

Among the town’s Fletcher came closest to adopting a revenue neutral rate. Its 2023-24 levy of 28 cents per $100 valuation is just a third of a penny above revenue neutral. The town is buying new police bodycams and dashboard cameras and funding a COLA for employees.

Laurel Park embarks on aggressive road plan

Laurel Park’s Town Council voted unanimously last week to adopt a $7.38 million budget that will fund a large paving project in town that council members said was long overdue.

“We should be ahead of the curve by 2029,” Mayor Carey O’Cain told a room full of Laurel Park residents who came to Town Hall for the meeting on June 20. “Our roads will be back in acceptable shape by 2029.”
Immediately after the vote to approve the budget, the council again voted unanimously to award Tarheel Paving $1,160,738 to pave roads in Laurel Park.
Although the budget lowers the tax rate to 39.5 cents per $100 of property valuation — 4 cents lower than the current rate — the new levy is 8.5 cents above the revenue neutral rate of 31 cents.

The 2023-2024 budget is 22 percent higher than the town’s current budget of $6 million and reflects the town’s commitment to improving the 35 miles of roads it maintains.
The budget the council approved Tuesday carries forward the town’s streets project from 2023. The budget includes $1,672,720 for roadwork in Laurel Park and will be funded through previous appropriations, 6 cents of the property tax rate and $200,000 from the town’s reserves, Town Manager Alex Carmichael said.
Carmichael said after the meeting that after the initial amount awarded to Tarheel Paving on Tuesday for the paving project, more of the $1,672,720 set aside for roads will go toward other roads the town identifies as needing to be repaved.
The spending plan also appropriates $742,565 in American Rescue Plan money for culvert and stormwater infrastructure repair.
Fire protection in Laurel Park will also cost more in the coming year even though Valley Hill Fire and Rescue is to be funded at a lower rate of 9 cents of the proposed 39.5 cents tax rate. Under the current budget, 10 cents of the tax rate pays for the town’s fire protection contract with Valley Hill.
Tuesday’s vote came after a few of the about 15 Laurel Park residents who attended the meeting asked the council to reconsider the budget and cut how much the town is setting aside for roads.
Council members said the 2023-2024 budget triples the amount the town had been appropriating for roadwork.

“Our $1.6 million is three years of paving rolled into one,” council member George Banta said. “We get the biggest bang for our buck for doing it.”
Council members also noted that they began working on the budget in January and February but only began hearing concerns from residents about tax rate shortly before Tuesday’s vote.
“Please come earlier,” council member Paul Hansen said.

Mills River buys 68-acre dairy farm

Mills River’s Town Council adopted a 2023-2024 budget last Thursday that lowered the town property tax rate by 2 cents while dropping proposed new positions and trimming other expenses.

The council voted 3-2 to adopt the $9,145,905 budget after Mayor pro tem Randy Austin made a motion to set the tax rate at 17 cents per $100 of property valuation. Austin’s motion also specified that the budget would not include money for a fulltime deputy tax collector.
Council members Sandra Goode and James Cantrell joined Austin in voting in favor of the motion. Mayor Shanon Gonce and councilman Jeff Young voted no.
Goode said she supported lowering the tax rate from the current rate of 19 cents to 17 cents because the town council should do all it can to keep taxes low for residents.
But Gonce and Young said the tax rate needed to be higher to fund investments the town is making in buying property and funding important needs in the town.
“I’m with Jeff,” Gonce said of his opposition to the 17-cent tax rate. “I would be at 19 cents just so in two or three years I don’t have to jack it back up.”

The new budget likely means the postponement of a proposal to move the Mills River Farm Market to a large milking shed on the Mills River Creamery farm the council is buying next door to the town park. Farmers market supporters who filled the council meeting room Thursday implored the board to invest in improvements to the shed so the market could move there next May.
Donald Renshaw, who sells wood products at the market, volunteered to help work on the project as soon as the current market season ends.
“I’m more than willing to offer my time and it won’t cost you a dime,” he said.
Karen Rose, who sells eggs at the market, also urged council members to fund the move in the new budget.

“Be a forward-thinking town council and get the community involved,” she said. “Get people and families involved in cleanup and painting, get kids involved in community service. Don’t just let it sit. We need it.”

Property values in Mills River increased by almost 34 percent after the 2023 reappraisal. Earlier this month, the council directed Town Manager Daniel Cobb to lower the FY2023-24 tax rate by beginning with the revenue neutral rate of 15.2 cents per $100 of property valuation and then increasing the rate only enough to include money for the property purchase and to cover salary increases for town employees.
The budget Cobb presented to council in May reduced the tax rate from 19 cents per $100 of property valuation to 18 cents. The recommended 1 cent decrease was the result of the part of the rate going to Mills River Fire and Rescue going from 11 cents to 10 cents. The portion of the tax rate going to fund town operations remained at the current rate of 8 cents. The reduced tax rate means the town will not hire a deputy tax collector or fill positions in its parks department.

Overall, the budget Cobb recommended in May was $3.7 million higher than the town’s current budget of $5.74 million.
“It should be noted that while year-over-year this budget represents over an 80 percent increase in total expenditures, the operating budget is a mere 7 percent over the amended FY23 budget,” Cobb said in his budget message to the council. “The majority of the increase is due to one-time capital expenditures.” The budget, he added, reflects “three major milestones” —the largest land purchase the town has ever made, appropriation of the last of the town’s American Rescue Plan grant and the 2023 countywide revaluation.

The budget Cobb recommended in May included $3.36 for capital projects — $2 million of which is covered by American Rescue Plan money — and $6.2 million for operations. Of the $2 million in ARP funds, $1.5 million would offset the $2 million the town is spending to buy the 68-acre dairy farm property. The remaining $500,000 will come from the town’s reserves.
The budget the town approved Thursday includes $3.15 million for capital investments — including the $2 million in ARP funds — and sets the operating budget at $5.99 million

Fletcher funds bodycams

Fletcher’s town council approved a 2023-2024 budget on June 12 that sets a lower property tax rate for residents of the municipality.

The budget council approved was almost unchanged from the plan Town Manager Mark Biberdorf presented to the council in May.
During a budget retreat at Town Hall in May, Biberdorf outlined to council members a $9,350,734 budget that lowered the town’s current tax rate from 34 cents per $100 valuation to 28 cents per $100 valuation.
The 2023-2024 budget is a $699,297 increase over the 2022-2023 budget and reflects a 43 percent increase in real property values in Fletcher determined by the reappraisal. The new 28-cent tax rate adopted in Fletcher is only .3 cents above the revenue neutral rate of 27.7 cents, which taxing authorities must publicize by law in a revaluation year.
The only difference in the budget proposed in May and the one council adopted was in the amount set aside for Fletcher Fire and Rescue.
Biberdorf proposed that the council dedicate 9.5 cents of the 28-cent tax rate to fund the fire department. The budget council adopted provides 10 cents of the 28-cent tax rate for the department, which was slightly less than the 10.5 cents Henderson County commissioners set for Fletcher’s Fire Department. The revenue neutral rate for the fire department was 8.7 cent.
Increases in the 2023-2024 budget in Fletcher are mostly for expenses related to personnel and equipment; it also includes a 4 percent cost of living increase.
The budget increases the police department budget from $1,983,268 to $2,301,954.
Most of the increase for the police department comes in a $234,625 appropriation to buy bodycams and dashboard cameras.