Special to Iredell Free News

The Statesville City Council has tentatively decided to scrap a proposed 5.22-cent property tax increase for fiscal year 2021-2022.

But unless the council has a change of heart in the next three weeks, the city will continue to charge residents a $120 annual Solid Waste Fee and increase water and sewer rates by 20 percent beginning July 1.

Those were the major takeaways from the council’s budget work session earlier this week. 

The revised budget will be presented at the June 21 meeting for final approval.

In his proposed budget, City Manager Ron Smith recommended the 5.22-cent tax increase as a way to eliminate the residential Solid Waste Fee. This fee generates revenue equivalent to 3.25 cents of the tax rate based on the city’s tax base. Smith proposed two additional pennies to pay for needed capital items, previously approved salary increases, and the addition of new personnel.

At the start of Monday night’s work session, however, Smith announced that revised revenue projections from Iredell County and Statesville Recreation and Parks allowed staff to drop a penny from the proposed tax increase.

With the council’s 5-3 vote to retain the Solid Waste Fee, staff was able to cut the proposed tax rate by 3.24 cents. Council then instructed staff to find an additional $225,000 in savings so there would be no need for a tax increase.

Water & Sewer Rates 

City officials said the water and sewer rate increase is needed because a recent Water Asset Inventory revealed that the Statesville’s aging underground infrastructure is badly in need of repair.

The cost to fund these projects is estimate around $12 million. Because the Water and Sewer user fees are the primary source for funding the water/sewer system, the rate increases were proposed to raise money to cover those costs.

At Monday’s meeting, council members recognized the importance of addressing theses issues and voted 6-2 to keep the proposed 20 percent increase in the budget.

New Fire Station

Council members also voted unanimously to borrow the money to pay for construction of the new fire station, which is scheduled to start later this year. Originally, council planned to use money from the Fund Balance to pay for the estimated $5.7 million facility.

Council determined that the loan terms were favorable and agreed that leaving the $5.7 million in fund balance will make it available for other capital needs.

Video

Statesville City Manager Ron Smith discusses the latest changes to the proposed city budget for 2021-2022.