Thursday, July 25, 2024

Southport considering 18% tax increase, driven by water and sewer merger with county

Southport Board of Alderman met about its budget last week and will vote Wednesday on its proposal. (Courtesy Southport livestream)

SOUTHPORT — Originally faced with a 22% property tax increase, Southport residents could now pay18% more in taxes if the current budget passes by the July 1 deadline.

It’s a trend that’s been snowballing across coastal cities. Leland passed a 17% increase last month, Wilmington is proposed to increase taxes by 7% and Carolina Beach is increasing taxes by 9%, though New Hanover and Brunswick counties have remained steady for the next fiscal year.

Last week, Southport aldermen heard city manager Bonnie Therrien’s proposed 2025 budget and subsequent public hearing. Just over a dozen people either spoke at the meeting or wrote letters to the board regarding the budget.

“Aldermen, I don’t envy you but you’ve got some hard decisions to make,” resident Paul Gross said during public comment. “[Do] not take the easy road out simply by balancing the budget on the backs of taxpayers by increasing taxes 22% again this year.”

Therrien proposed the budget to have a 6.1-cent increase last Monday, but by Friday’s special deliberation meeting with council, it decreased to 5.1 cents after staff re-evaluated the city’s capital costs.

This leaves the tax rate per $100 at $0.326, which is roughly just over a $200 increase for the $450,000 average priced Southport home. It’s the first year since 2022 that rates have increased; they stayed 0.2956 per $100 from 2018 to 2021, increased to 0.3956 in 2022, then decreased to 0.275 in 2023. Therrien attributes this trend to reevaluation of property values last year. 

However, residents are saving approximately $50 with the 1-cent decrease from the original proposal. 

The bulk of the property tax increase is coming from the merger of City of Southport’s water and wastewater with Brunswick County Public Utilities. The vote to merge the two systems passed unanimously in the June 17 meeting. 

Roughly 3,500 Southport residents will immediately join the county’s utilities system and will save an average of $775 per year. The first bill from the county will be issued to residents Aug. 1, and they must re-establish payment preferences on the Brunswick County water and sewer payment page

The merger takes up 3.8 cents of the overall 5.1-cent tax rate increase.

Now that the city will not receive revenue from the water and wastewater bills, the budget faces a $1.2 million gap. This is what the tax increase helps cover. 

“The board made a decision to not do it all in one year, but to spread the pain out a few years, instead of just whacking everybody with an even larger tax increase all at once,” city manager Bonnie Therrien told Port City Daily June 18.

Merge costs are estimated to be included in tax rates for the next three to four years, according to Therrien.

Though the merger passed unanimously, the issue has been contested among Southport administration for roughly 20 years, according to Therrien. Four years ago, the city purchased 400 acres of land on Sunny Point to build Southport’s own sewer plant, though in February the board voted to sell the property and scrap the sewer construction plan.

“To build your own sewer plant is a huge amount of money, so I think they made a smart move by doing this merger instead,” Therrien said.

Mayor Rich Alt said in the June 17 meeting the sale of the sewer property was because “the city was broke” and he blamed past city administration for the shortcomings. 

Since the city still does not have its own sewer plant, it is already using the county’s services for water treatment, though infrastructure repair costs were still a problem Southport had to deal with by taking out loans, causing increases in water and sewage rates for residents. 

Now, following a study suggesting merging services with the county would be the most cost-effective option for Southport, all debts owed by the city will be absorbed by the county in the merge.

Though some aldermen struggled over the budget costs caused by the merger, they maintained the tax increases were necessary.

Capital costs

Just over $1 million is needed to cover capital expenses, such as dredging at the Old Yacht Basin, Franklin Square Park improvements, sidewalk repairs, renovations of city buildings and stormwater projects.

Therrien said at the June 17 meeting that Southport’s capital costs have not been adequately funded for years, resulting in higher expenses and more taxes to keep up infrastructure.

“Southport, you are not addressing your capital issues. You are not. You’ve got buildings falling apart,” Therrien told aldermen. “You don’t pave roads, you’ve got some issues here.”

The capital costs include $700,000 for an environmental assessment of the Brunswick County historic courthouse, which served as city hall previously. However, Thierren told the aldermen some bids have come in less so far. The board will be presented the bids in August, to address lead and mold remediation and include an HVAC replacement in the building.

READ MORE: Southport historic courthouse renovations move forward, its end purpose still unknown

Fire costs

The budget is also proposing 1.3 cents go toward hiring three new firefighters following dwindling numbers in volunteers, part of a national shortage.

Southport’s volunteer firefighter population has consistently declined since 2018, as the city has lost roughly 600 volunteers over a six-year period. Response calls, however, have consistently increased.

Therrien pointed out that fire insurance rates for residents would increase without better fire service. Though fire inspection fees were doubled last year, the Southport Fire Department is still in need of additional funding. 

Next year, the fire department will undergo an inspection of fire personnel and vehicles, which will determine insurance rates, according to Therrien.

“If they’re not up to speed, insurance rates are going to change and they’re not going to change for the better,” she told aldermen last week. 

Other changes to the budget since the June 17 hearing include the elimination of a full-time position within the Southport Community Building, cutting the lease on an administrative vehicle and increasing fees for filming in the city from $150 to $200 per day, and storing equipment at filming locations on non-filming days will change in cost from $50 to $100 per day.

The final budget vote will be Wednesday at 6 p.m. in the Southport Community Building. 

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Shea Carver
Shea Carver
Shea Carver is the editor in chief at Port City Daily. A UNCW alumna, Shea worked in the print media business in Wilmington for 22 years before joining the PCD team in October 2020. She specializes in arts coverage — music, film, literature, theatre — the dining scene, and can often be tapped on where to go, what to do and who to see in Wilmington. When she isn’t hanging with her pup, Shadow Wolf, tending the garden or spinning vinyl, she’s attending concerts and live theater.

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