WILMINGTON — City staff announced Friday the fiscal year 2024 budget will not include a tax rate increase, changing course on a financing plan for the potential purchase of a 12-story downtown building.
To help fund the nearly $70-million purchase of the Thermo Fisher Building on 12.5 acres on N. Front Street, the proposed upcoming budget was going to incorporate a 1.5-cent tax increase for city residents.
READ MORE: $1.5-cent property-tax increase part of city’s potential purchase of Thermo Fisher campus
Instead, city manager Tony Caudle informed council financing would occur within the existing tax rate of 39.5 cents per $100 valuation. The city, with a AAA bond rating, has “built up significant rainy-day savings while passing balanced budgets,” Mayor Bill Saffo said in a press release.
The $70-million contract will be divided into three limited obligation bonds, half of which are tax-deferred. The city would occupy five of the floors, and combine multiple departments into the one building. To offset costs, it would sell off nine surplus properties it currently owns.
“Over the last several years, Council has positioned the city to be financially strong, nimble, and responsive to the standard of service our residents want and have come to expect,” Saffo wrote to media. “I applaud our city manager and his staff for their diligent work in preparing a budget that allows us to meet the city government’s long-term space needs in a financially responsible way. The prospect of acquiring the northern downtown campus without raising the tax rate is a testimony to this city’s strong financial position.”
Residents have spoken out against the purchase of the building and any tax increase to cover it.
“I quite frankly am tired of our taxes being spent to purchase real estate,” resident Charlotte Hatfield wrote to city council March 29. “Enough is enough. Someone has to be lining their pockets for all this.”
ALSO: Residents speak out against $70M financing council approved for Thermo Fisher campus
The city has estimated it will take $3 million annually to operate the building, though it plans to lease out two of the 12 floors to Thermo Fisher, and the remaining four levels at market rate to companies and organizations.
City spokesperson Jerod Patterson confirmed the estimated maintenance needs for the proposed new facility can also be accommodated within the current tax rate. He does not anticipate a future associated tax increase.
State Treasurer Dale Folwell told Port City Daily last week, he’s always concerned when local governments raise taxes to cover city finances, as it impacts the residents already struggling to cover daily bills. On Tuesday, the Local Government Commission will vote on the city’s financing plan.
If approved, the city has until June 11 before losing its $500,000 due diligence deposit; it plans to close July 13.
The proposed fiscal year 2024 budget will be presented to council at Tuesday’s 6:30 p.m. meeting at city hall, 102 N. Third St.
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