Tax hikes, Muni fee increases among city’s proposed budget

PortCityDaily.com is your source for free news and information in the Wilmington area.

The Wilmington Municipal Golf Course, or Muni as it's commonly called, is owned by the city. Port City Daily file photo.
The Wilmington Municipal Golf Course, or Muni as it’s commonly called, is owned by the city. Port City Daily file photo.

Wilmington City Council members might be divided on the fate–and funding–of a planned nine-hole municipal golf course in the coming fiscal year, but they stand united against a proposed hike in property taxes.

Following a heated discussion regarding Inland Greens, a par-3 course in Wilmington’s Cedar Ridge neighborhood, council argued in a work session Monday for a scaling back of the 4-cent tax increase recommended by city staff.

About 2 cents in that proposed increase–which account for the city’s streets and sidewalks bond approved by voters in November–are necessary in this next budget cycle, which begins July 1, council members agreed.

At issue is the remainder, needed, city staffers say, to account in part for a $2.3 million deficit resulting from the continued loss of revenue from the privilege license tax. Approved in 2014, and set to be enacted in July, is a repeal on municipalities’ ability to levy the tax, which is paid by businesses for the “privilege” of performing their services within a town.

“We need to look at reducing what we ask of our taxpayers,” council member Kevin O’Grady said, asking for a list of non-repeating expenditures that could be paid for out of fund balance. “We’ve got to pick everything out of the budget that can be taken out of fund balance…and pay for it and not ask taxpayers to pay for it.”

O’Grady noted that the city’s general fund balance has historically been more than the required 20 percent of annual operating expenditures. The current fund balance is at 31 percent, Wilmington City Manager Sterling Cheatham said.

O’Grady’s peers agreed.

“We have an obligation to fulfill the voters’ rights [on the 2-cent increase for the bond],” Mayor Bill Saffo said. “But I don’t have a problem getting the fund balance down to the 20 percent. This is a tough time because of the revenue lost at the state level.”

The impact of a 4 cent increase on a home of approximately $224,000 would amount to an additional $7.44 per month, or $89.44 annually.

The draft budget also includes the mid-year promotion of eight new detectives at the Wilmington Police Department, vehicles, community initiatives and training, as well as equipment, at a total cost of $612,588. Under the proposed spending plan, new city trash customers would also have to pay a $25 activation fee and a deposit equal to one billing cycle.

Inland Greens

City staff also recommended a 10 percent rate increase at the Wilmington Municipal Golf Course in 2015-16. The proposed Muni fee increase, which would be used to help support an overall golf course fund, sparked debate among council members Monday.

Included in that fund is Inland Greens, a property the city acquired in 2011 and is currently renovating to include a par-3 course, a playground and other amenities.

The city purchased Inland Greens for $500,000 in parks bond funds approved by voters in a 2006 referendum. The first phase of renovations–$1.2 million in stormwater improvements–is scheduled to be completed by August, according to Amy Beatty, the city’s recreation superintendent. She said a second round of renovations to the course and grounds should begin next spring.

But Mayor pro tem Margaret Haynes questioned whether it was fair to up the fees at the Muni–successfully operating to the tune of $100,000 in the black after its own renovations–to help support a course that has yet to open or prove its viability.

Haynes acknowledged that the 2015-16 increase was a scheduled one, approved by council in 2014 along with a 35 percent rate hike this fiscal year.

“My concern with the additional 10 percent increase is there no understanding or mention at all that the 10 percent increase would be used to subsidize Inland Greens,” she said. “You may kill the goose that lays the golden egg if you keep going up on the Muni.”

Saffo said another increase at the Muni–up to an average rate of $20.73–could hurt the affordable course’s customer base.

“The Muni is the crown jewel. It always been lucrative. But now it’s being used to support Inland Greens. I’m afraid the community perception will end up being that the Muni isn’t making money,” he said.

The city’s offering of a course more suited to “junior golfers,” council member Laura Padgett argued, should ultimately benefit the municipal course.

“It would allow more rounds of higher level golf at the Muni by having Inland Greens. Why would we separate inland greens from the golf fund? In the end, Muni will benefit from Inland Greens,” Padgett said.

“I don’t disagree It is a benefit to Muni….I just don’t think Muni people should have to pay another 10 percent. It just seems unfair to the Muni course to me,” Haynes countered.

City staff said if council didn’t approve the rate increase at the Muni for next fiscal year, it would be necessary by 2018 to maintain services.

Council members will take another look at the issue during its next budget meeting on May 19. Council is then expected to hold a public hearing on the spending plan on June 2 before adopting a finalized budget June 16.

Hilary Snow is a reporter at Port City Daily. Reach her at (910) 772-6341 or hilary.s@hometownwilmington.com.