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Cornelius: The $7 billion town (yes, it’s budget time)

$7 billion town: The current assessed value for Cornelius is $5.55 billion. The projected value after appeals is $7.224 billion

By Dave Yochum.  A war of words is under way in Cornelius as differing views on how to spend taxpayers money come to the fore during intense budgeting for the upcoming fiscal year.

The first to weigh in was Commissioner Dave Gilroy who said there appears to be three votes on the Town Board “to increase your Cornelius tax bill by 12-18 percent. Utterly ridiculous, I know.” He said a pay raise toward the end of the current fiscal year reminded him of a showdown back in 2013 when a previous board voted 3-2 to formally approve tolls on I-77, “a day that will live in Cornelius infamy.”

The second salvo came from Commissioner Kurt Naas.

In a blog article entitled “The Most Irresponsible Vote Since I77 Tolls,” Naas said the pay raise accounts for more than a third of all operating cost increases in the upcoming fiscal year.

Once again comparing the salary hike to the toll vote six years ago, Naas said “let’s hope whomever is sitting in the commissioners’ seats will insist on process discipline. Because anything less would be irresponsible.”

But Commissioner Denis Bilodeau said comparing the vote on the I-77 toll debacle to a “reasonable salary increase for sworn officers is way out of line.”

Meanwhile, the new property revaluation is still being finalized. Roughly 1,000 appeals may be under way.

Mayor Woody Washam said the driver for the pay raise is an ever-tightening labor market, thanks to a good economy.

Neighboring towns have raided the Cornelius Police Dept. staff, ranging from patrol officers to the about-to-retire former Chief Bence Hoyle. Like Anthony Roberts, the former Cornelius Town Manager,  and Cornelius’ previous finance director, Hoyle was recruited by Huntersville.

It’s fair to say the mayors of Cornelius and Huntersville are polite with each other.

“Cornelius is in an extremely competitive labor market,” Washam said.

Existing staff have the ability to work for other towns or counties making more money while not having to relocate.

“Making our staff’s salaries competitive with the market is key to maintaining the high levels of service that our community deserves,” said Washam, a banker and former chairman of the Lake Norman Chamber of Commerce.

He said the raise effective April 1 of the current fiscal year not only allows Cornelius to recruit and retain quality employees, it will help the town to keep manage turnover costs which include training and loss of productivity.

But Gilroy, in a “Town Update” email to constituents, said, “You might hear that Town employees are leaving because of low pay—that is total garbage. Outside of the Police Department, where we have unique turnover challenges, there is absolutely zero evidence of turnover tied to compensation. It just doesn’t exist. We studied the issue carefully over the last 3 years. More color on this to come.”

Town leaders disagree on the magnitude and impact of the raises.

Washam explained them this way:

There is a 5 percent impact of the salary adjustments from a citizen-driven salary study that was passed 3-2 by the board for some staff positions, bringing salaries to market, as well as police increases and adjustments.

There is a total 10.5 percent personnel expense increase which includes merit increases and new positions such as a human resources director and half a year’s salary for a records clerk in the Police Department, additional retirement costs/increases and two police grant funding officers Cornelius must pay for, having been partially funded with grants before.

Essentially half of the 10.5 percent relates to the salary study which was conducted by the citizen committee comprised of HR professionals, Washam said.

The discussion of expenses occurred at the Town Board’s annual budget retreat at the swank Graylyn Estate in Winston Salem. The cost to taxpayers: $9,100.

The expense was part of the current budget unanimously approved last year.

At least two commissioners are suggesting the retreat be held closer to home next year, Bilodeau said.

The town budget, on the order of $23 million to $24 million in the next fiscal year, will be discussed and fine-tuned during the next two months, and then ratified in June. A revenue-neutral budget, which was endorsed by all the commissioners except Thurman Ross on the campaign trail two years ago, seems more and more elusive.

Here is how it could impact the owners of a $250,000 home. They are paying the Town of Cornelius $637.50 at the old tax rate of .255.

The county tax assessor’s office has said the average increase in residential value is 29 percent, down from 30 percent forecast in late January.

We multiplied $250,000 by 130 percent, to get a 30 percent increase in value, or $325,000.

The town manager’s middle of the road spending increase—called “moderate” at the retreat—calls for a tax rate of .2251 with the new valuations. The math works out to $731.58 in annual local taxes on a $325,000 Cornelius home.

This middle-of-the-road plan suggests there could be a roughly 12.5 percent to 15 percent increase in local property taxes.

Of course there’s no telling what Mecklenburg County, with a Board of Commissioners consisting of just one party, will do. The county accounts for roughly three-fourths of the overall tax bill.

That said, the .2251 rate is for discussion purposes only—more noodling remains.

Discussion

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