City mulls slashes to $21.7M deficit, including development fee increases

By: Roberta Fuchs//April 20, 2015//

City mulls slashes to $21.7M deficit, including development fee increases

By: Roberta Fuchs//April 20, 2015//

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ConstructionOutlookThe city of Charlotte continues to hash out proposals on reducing the $21.7 million budget deficit it faces next year, with ideas ranging from slashing spending to raising property taxes and fees. Some of the plans, presented by City Manager Ron Carlee late last week, met with resistance from City Council members.

The deficit is a result of two factors: an ongoing revaluation of all Mecklenburg County properties, which is estimated to cost the city $10.8 million in lost revenue, and the N.C. General Assembly’s elimination in May of the Business Privilege License Tax, an $18.1 million loss.

In an effort to balance the budget, Carlee raised the subject of increasing fees, many of which are paid by developers. Of the city’s 327 general-fund user fees, Carlee proposed increases to 66 of them, in addition to implementing a state-mandated fire inspection fee. Such changes would bring in $1.8 million in additional revenue next year, the city says.

Among city staff recommendations were the following cost increases:

  • Conventional rezonings: $1,950 flat fee in fiscal 2016 from a range of $925 to $2,300.
  • Minor conditional rezonings: $3,100 in fiscal 2016 from a range of $1,250 to $3,100.
  • Major conditional rezonings: $5,000 in fiscal 2016 from a range of $1,250 to $3,100.
  • Text amendments: $1,500 in fiscal 2016 from $1,000.
  • Legal advertisements for rezoning petitions: $225 in fiscal 2016 from $200.
  • Major commercial subdivision reviews and inspections: $8,110 + $100 per acre in fiscal 2016 from $3,740 plus $100 per acre.
  • Major residential subdivision reviews and inspections: $8,535 plus $100 per acre in fiscal 2016 from $4,200 plus $100 per acre.
  • Single-family residential lot inspections: $70 in fiscal 2016 from $50.

Carlee also proffered converting a $47 annual residential trash-disposal fee to a 1.5-cent hike in the property-tax rate. He said the move would spread the cost over the total tax base and swap a “regressive” tax in which lower-income homeowners pay the same as wealthier property owners with a sliding-scale fee where lower-valued homes are charged less than those valued at $313,350 and above.

Carlee said the move would result in 80 percent of homeowners paying the same amount or less than the current $47 fee and $4.5 million in additional revenue in fiscal 2016, which begins in July.

Republican Councilman Ed Driggs of District 7 voiced his opposition to the plan, saying, “People will see this as a tax. I can’t accept a change in the tax rate.” He was seconded by fellow Republican Kenny Smith of District 6, who thought the conversion plan would disproportionately take money from the higher-end homeowners in his south Charlotte district.

Mayor Pro Tem Michael Barnes, a Democrat bidding for the mayoral post in this year’s primary, was also against the idea. “I have no intention to support a tax increase,” he said, adding that he wanted to hear more about cutting spending.

Mayor Dan Clodfelter, who is running for a second term, cautioned councilmembers to listen to Carlee’s entire plan before “going on the record” with their opinions.

“We are trying to avoid involuntary layoffs,” Carlee said, before expressing his view that city employees should receive a pay raise this year. Smith responded that the private sector has suffered from stagnant wages, and that city staff should not be subject to special treatment.

Carlee also outlined a total of $4 million in preliminary expense reductions to various city departments, including cuts of nearly $51,000 to the mayor and city council’s budget, $179,600 to the city fire department and $755,000 to the police department.

In total, the city has identified between $14.7 million and $16.5 million in changes it can make to balance the budget, leaving a gap of at least $5.2 million. Carlee didn’t outline methods of funding that deficit.

Carlee is slated to present his recommended budget May 4. That will be followed by a May 11 public hearing and City Council adjustments. A vote on the proposed budget is scheduled for June 8.

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