BY STACIE LETT CAIN
The Statesville City Council is considering several options for increasing funding for the daily operations and renovations for the Statesville Civic Center.
Among the options available to the council are increasing the occupancy tax rate that visitors to the city pay when they stay overnight in hotels and increasing rates that individuals and groups pay when they rent space at the Civic Center. The council could also increase the amount of money from the General Fund — which comes largely from property tax and sales tax revenues — that is allocated for the Civic Center in the annual budget.
The occupancy tax was the central topic when council members met this week amid staff requests to fund renovations to the 20-year-old facility. The funding request led to questions about how the city spends occupancy tax revenues and how those funds should be utilized by the city.
“Our goal has been to increase funding to the Civic Center without so much reliance on the occupancy tax funds,” City Manager Ron Smith explained. “That’s what we are trying to do right now.”
The occupancy tax was instituted in the late 1990s with the intention of using those revenues to fund the construction and operation of the Statesville Civic Center and to fund the city’s tourism marketing efforts.
The 5 percent tax is assessed on the rental accommodations within the corporate city limits of the city, with 60 percent of the revenues used for construction, operation and maintenance of the Civic Center or for promotion of travel and tourism, 20 percent going directly to the Civic Center, and 20 percent to the Statesville Convention and Visitors Bureau (SCVB). The City charges an administration fee of $24,000 per year.
The tax rate can by state statute be as much as 6 percent if the city chooses, with certain restrictions that would have to be met.
Statesville collected $1,235,054 in occupancy tax revenues during the 2022-2023 fiscal year.
The council’s discussion about funding for the Civic Center evolved into discussion about the purpose of the Civic Center.
“We are in a location at Interstates 77 and 40 and we need to fully utilize that,” Council member Kim Wasson said. “We need to fully utilize the benefit we have here. People want to come here.”
Mayor Pro Tem David Jones explained that the Civic Center was built to provide a meeting place for local groups and organizations.
“I look at it like I do a park,” Jones explained. “The Civic Center’s historical purpose was to benefit the community, not bring in revenue or even be self-sufficient. Like a park, it is there for the enjoyment of the community and, as such, we can’t expect that it can sustain itself. It’s a service that we need to pay for.”
Out of the $1.4 million the city spent last year for capital improvements and operations, $1 million came from occupancy tax revenues.
That is a number that Wasson found troubling.
“To me, it’s idiocy to be losing the amount of money we are over there just for the purpose of being available to the citizens,” she said. “We are losing $1 million a year. Why can’t we do something to reduce that number? If that means transitioning use to more of a conference center to larger groups, then isn’t that what we should be looking at?”
That’s an option, according to the city manager.
“If you want to move it to a conference center, we have the ability and facility to do that and I would envision less of a reliance on the occupancy tax if that happens,” Smith said. “We use the occupancy tax because right now the focus has been more on being a civic center and being there for citizens to use.”
The next step in this discussion, according to Smith, is to ascertain the council vision’s for the Civic Center. A survey was distributed to council members to get their opinions on how the facility should be used, with those results being discussed at the Fall Council Retreat later this month.
When asked if the council is considering raising the tax to 6 percent — the maximum allowed by state law — Smith said that wasn’t really on the table at this time.
“It is just something we could request by statute,” he said. “With that request there are several strings attached, including a flip in the funding ratio, but that is only what we think would happen if we ask. I don’t see it as a true benefit unless the council wants to fund the Civic Center out of the General Fund and find revenue elsewhere.”
The fall council retreat is scheduled for October 29.