City Council - Special Meeting

I'll call this special workshop meeting to order. And uh we have an agenda for this evening. And on that agenda uh we're going to take number seven off uh tonight and also the close session. And I'm sure that'll move to a later date if correct. All right. So with that, I would entertain a motion to adopt the agenda as amended and the consent items. So move second. Motion and second. Any other discussion hearing? None. All in favor signify by saying I.

All oppose. We have uh adoption of the minutes and and there's uh six consent items on on the agenda here. Uh adoption of the minutes from the January 20th, 2026 regular meeting and the consent items. Motion second. A motion and second. All those in favor signify by saying I. All opposed. Okay. So, we're going to uh go now to Mr. Ray with the pro 2026 property tax revaluation.

Thanks, Mayor. Uh part of the process that we have here, and I appreciate council being available for today in a in a different week, but with the county going through a property tax revaluation, our schedule is uh is a little different this year. We want to get information out to our citizens. So, part of tonight's presentation, albeit brief, is to set that stage for citizens so that they want to come back and watch this meeting. They can pull up these slides. they can see what the property reval looks like. It won't get us into the crux of what our reval are going to look like inside the city. It's just the basic information of why the county does it and how the process works. So, uh so this is a briefer presentation. We will have followup and I'll show you something at the end slide here uh so that we can see it. But the Enso County, they handle property reevaluation process for all municipalities and the county property. They're in the middle of that process right now and that process u will be effective I'll give you that calendar by May of this year. That's when their process should be completed. A property reevaluation is a a reappraisal of property inside of the community. So what you have on the general statutes is we're required to do this every eight years by the state. However, the counties can decide how often they want to complete a reappraisal. Enslo County, the board of commissioners decided in 2001 that they'll do it every four years. So, they did that by a resolution and then they started effectively January 1st of 2006 with their every four-year program. So, that's where we're at right now where they're at the process of the revaluation uh for your property. So, uh the state requires it. That's why we do it. It looks at all property, real and personal. And the goal is to make sure that your property is valued at market

or retail value. Uh their process is they look at it every year, but since we only do a reval every four years, your property may not catch up to that level. And so what you want to say is you want the process for ad valorum tax to be fair for everyone. If someone's property accelerates in value at a different rate than someone else's, they don't catch back to that fair market value except every four years. And so they use their staff to level the playing field and to equalize the tax burden according to market value. So when someone asks you that question, why do we do this? You're just trying to uh to get more money out of your property tax. That's not the reason. We do that because we want our property values to be equal not only in our county but across the state. So everyone follows the same stat state statute. The counties can make their own decision on how often they do it as long as they do a reval every eight years and then they use market data to determine what that property is. A lot of times people will say personally I would say the same. I want my property valued by the county at the lowest level, but if I sell it, I obviously want it to be valued at the highest level. That's not the way it works. And so, the good thing is the county uses their staff to minimize the inequities in the tax base over time by looking at market data. So, basically, they're looking at their comps. Then the property tax bill is a little separate. So, the reval is something that the county does. They value your property and then they send you out a tax bill. The tax bill has two sections. One, it's going to be the taxable value, what they've determined to be the value of your property. And then two, it's going to be the tax rate. The county sets the property value. The city council then sets the tax rate.

So when you're here, that that's the two values that'll come out. So what happens in the value of the property? They set that effective January 1 and that's where your tax bill is going to be equated. So the city council every year sets a tax rate when you adopt the budget. For example, right now the city's tax rate is 60 cent per $100 of valuation. Um and that's that that's this right here. So if if someone has a property value now that is at $100,000 and then their reval comes back and their property is now $110,000. If the tax rate doesn't change then the only thing that changed was their property value. So that's the differences that we want to explain to our citizens when they ask those questions. Uh some may say if the why did the city revalue my property at a higher value? City doesn't handle any of that. They don't ask us any questions. The assessor's office doesn't call us. We don't provide data to them. They do all all of that internally. And then they send us the values just as a whole, not individually. They'll send out your tax bill. We send them the adopted tax rate that the council adopts every year. They update their tax bills based on that information. We do not send out uh tax bills to our citizens. So, the process is pretty clear. The county uh the county tax assessor's office collects the data based on existing property values and recent sales. They analyze data. They update their values. They do statistical testing and then they send that information to the North Carolina Department of Revenue to make sure that it's validated. So, the Department of Revenue looks at it to make sure that one county isn't doing something differently than the other counties and they uh they statistically test those figures and confirm back

these are acceptable values. They have to do that before they start finalizing their process. The schedule of values is then delivered to their board to review and then they set that number. Currently, this is why the this slide right here is why the reval process matters for us. Currently, median sales ratio to what the values are, we're at 73% of the market. If the values were correct, they would be at 100% of the market. That's the that's the point. Median assessed value in 2022, $215,000. Now, the median assessed value is $295,000. So overall in Enslo County, the increase is 37%. So if people are talking to you about what should they expect with their tax value increase, the median increase in the county, it's 37%. That doesn't mean that all of us sitting here are going to see a 37% increase. Someone could have a 10% increase. Someone could have a 50% increase. I've talked to one individual who's looked at theirs and they said that their value on their property increased by $140,000 from four years ago. Now, you don't know how much that person's property was valued at then. It could have been 100 to to 240. Could have been 300 to 440. But the point is their value increased in four years by $140,000. So then do the math. That's what their proposed tax bill would be increased next year. Roughly based on knowledge that they have, it could be $1,200 between their city and county taxes from one year to the next.

But if there's a county that's take on the beach properties and everything too, right? That's right. So if you're looking at North Toppsil, if you're looking at Surf City, you're looking at Swansboro, those could be some of your higher increases because you see that often. you see a lower start and then you see an increase in those based on the sales. And so if you're inside the city where you don't have those properties, you may see a lower number in some areas. There is an appeals period too where contest what their valuation was.

So here's their here's their schedule and this is a very similar presentation that the assessor's office gave the county commissioners a month ago just to give their uh give their process. So the effective date of the revaluations will be January 1. They mail notices out as close as they can to February 1st. In March, they do the informal review. And so that's where the mayor's point of you can appeal your value. There's a few appeal processes that go um they're nonformal. They would look at data and say you've removed something from your property. Maybe you had a a boat trailer that you no longer have and they sent you that and they say, "Do you want to do you want to appeal this?" Maybe you sold half of your property and that didn't get filed correctly and so that's still on your tax bill. You send that back in. They check the documentation and they can verify it. They can make that happen. Now, if you want to go through the formal review process as as the mayor said, then you submit an application. You submit documentation and then you'll go before the board and your appeal will be heard. In May, they want to finish all of those hearings so that they can finalize their total values for properties. Then in June, by June, the board of commissioners has to set their tax rate for the new values. We'll have our tax rate set based on the adoption of the budget because it matters of how we determine revenues for FY27. So our process is we want to make sure that we're getting our data as soon as we can and then council makes the determination based on that data. Uh and that'll that'll matter on the revenues and the expenditures. So the key information that we've put on here theoretically across the county 35 to 40% increase uh

growth has been consistent in all areas not just one. So back to Mr. Sosa's point the growth is not just in beach property there's growth across the county [clears throat] although there are no isolated spikes. So as I said North Topppsel is not the only place seeing increases in value. They don't see any ine inequities throughout Enzo County. So what I would say is without seeing those drill down the numbers, you expect 30 to 37% increases in property values and and that means different for individual property owners. The purpose of the schedule of values is to ensure that they're fair uniform application of all the changes. They don't just look at it and say for one person here's one standard. for another person. Here's another standard. When they do the schedule of values, they're standardizing that process so that even through the appeal process, just because you say, "My property's only valued at this, and here's a comp for where another property sold for this amount," that may not change their overall value determination for your property. And the goal of the assessor's office is equity and transparency. the transparency comes through. They publish their schedule of values before you do your appeal so that you can use that in your appeal process. [snorts] Our process is we wanted to submit this information to citizens so that they know this is what the county's process is right now. then we would like to come back at the [snorts] March 3rd workshop and then talk about the city's tax rate at that workshop. So that gives that gives basically a month for citizens to even ask you questions, bring information to you, to contact staff to ask some general questions, maybe they want to talk to the assessor's office. Then they'll come back and we will have

our next presentation on March 3rd. We'll also have our retreat in about a week and a half with council. And so we'll be able to talk about the tax rate a little bit at that date and we'll have another presentation. Part of our goal for this is we want to make sure that citizens can see this presentation, access either the city website or the county website to gather more information so that maybe they come for our public hearing and they can ask questions about FY27 in a public hearing or they can contact you directly.

Questions? I I have one question. The legislation that's going to say that you u can't go so much over uh revenue neutral, where is that legislation? And

so uh Mayor Dr. Washington had talked about this before. There's a special house committee right now looking at uh tax reform for cities and counties. Uh there's talk of forming a Senate committee as well that will look at the same thing. Uh we just had a meeting last week. We've had the metro mayor's update and at this point they don't predict that you'll see any movement in the short session coming up. But that prediction, it means nothing. If they if they get into the the meetings and the sessions, it could gain traction. It could be the only bill that that they address during the short session and they could say we're going to put a cap on on what a city and a county combined could be. You know, there are tax rates across the state that vary. Lauren and I were just looking at some numbers from some of our fellow municipalities that have more population and less population and their tax rate is higher than ours and it's lower than ours. And there's never a consistent rhyme or reason except for what it cost to provide those services to citizens. So one of the things that we do, Mr. Nero, is we're providing information back to the league and to our representatives about what it cost us to do business in Jacksonville. If you'll remember, 103% of our adorum taxes plus or minus is what it takes to fund public safety in our community. 103%. So when everybody else in those other cities are talking about 68 to 70% for police and fire, that's what they're getting for their services. The difference is we have two of the top agencies in the state. And so we put our our money into those services and we have a low crime rate and we have one of the best fire departments that anyone can compare to nationwide. Those two things this the Senate and the House have to consider when they're looking at what those caps mean in different communities because again we only tax

approximately 46% of our land because the United States government owns 54% of our land. Hopefully when they do the studies on this, if if they do decide to look at u taking some of that away, uh hopefully they'll be looking for some type of replacement revenue. Of course, unlike what they did with these uh privilege tax when they took that away, what it was it was quite a significant hit to the budget was threequarters of a million dollars that we lost annually on that. Um there was no replacement for that.

Yeah. Mayor, do you remember last year when we met with our legislative delegates, one of the conversations came up about removing POW bill uh from the process? And then the question is, what is the replacement for state and local funds? If you remove the the PAOW bill to create a budget, you have to have a replacement revenue source, whatever that may be. And so, if you're going to have cities and counties, they have to be able to have funds to provide this level of services. If the county were going to be the only entity providing services, then they would need the taxable authority to receive revenues to provide all those services. U you know, we talk about this all the time. You look at our response time for fire department response time and it's one of the lowest in the country, not just in the state. And so countywide, they can't provide that same level of service no matter what their taxable authority is because they cover such a larger area. And so the revenue is going to have to be there. So back to your question, Mr. Nero, we'll give you updates. We'll be active. We'll give you the dates when it's time to go lobby with our delegates, but I tell you that's a every issue that comes up at the state level that talks about our revenue streams. We've got to be very loud in how we feel about utilizing those revenues. We do not want to overt tax our individuals. Those numbers alone tell you though, we're not overt taxing just for frills of providing services here in the city of Jacksonville. We're doing that to keep our people healthy and safe.

Now, there's a couple states already that have uh that have kind of enacted that and their idea is to share state revenue with you to to make up that uh shortfall. It'll be interesting. Yeah. problem is if they do that second part of it, you know. Yeah. Well, [clears throat] when things get lean, then it's going to it's going to be a burden on the municipalities and the counties. Be one of those trust me situations. That's right, Mayor.

So, at this point, that's that's the first I encourage you to tell people to to come back to this. I'm not as eloquent as the tax assessor's office, but you can also see these slides. will have them online and the county has multiple sections that you can check online to see their information. I would encourage people to look at those because we want an informed citizenry when they have questions about the reval process and to know that typically our plan and our history in Jacksonville is once you set that tax rate, you try not to move it again for four years until the next rebound. Doesn't mean council can't set that tax rate every year at a different rate, but that's the goal. And so you look at how do we bring in adequate revenues for that time period to complete the projects of of the city and and the priorities of the city council.

Will commercial property be affected as well? Yes, sir. Across the board.

Well, also talking about the PAL bill, the tax on that stuff with all the electric vehicles. I mean, that puts, you know, kind of heartache on it, too, because I mean, they're they're putting a lot of wear and tear on the roads, but then they're not paying up the pumps. So, that kind of, you know, hurts you, too, cuz I mean, they're they they weigh more than, you know, most vehicles do.

You know, part of that discussion that Senator Lazaro told us last year is the state they they added a use fee to their registration for all EV vehicles. So, as a way to try and offset that, they tried to make the math work so that for the for the life of your vehicle, you're paying X number of dollars in POW bill for gasoline purchases. They want them to pay something, but it's not fine-tuned at this point. And so, they they add that as a registration fee, but who knows how well it works out. Nice thing about EVs, they're kind of phasing or they're kind of slowed down on that production now. So since gas is lower, yeah, it's made a difference.

Well, that and you need to buy a whole new car if the battery goes bad in that thing. I mean, it's not like you're get a new one. So, you know, battery I was told that one of those batteries in an EV last about 15 years at max. Yeah. Now, you can buy this car, you spend and you're spending a lot of money for electric vehicle, a lot more than a traditional gas engine. and you go you say you keep that thing eight or nine years or seven or eight years or whatever and try to trade it you won't be able to get any value out of it for it

actually I think eight years of those batteries are good it seems like 15's a long time say I think it was eight years and you know most people keep their cars a little bit longer at least I do keep mine for a while just try to get rid of you know I keep mine on there. Nobody's going to buy it. They had to replace it. How? And the batteries are way expensive. It's just ridiculous. You got a 98 Honda Condo Cord still on the road. [clears throat] So, [laughter] we can't They're good cars. We keep our car. It's running. Thanks to YouTube. [laughter]

So, any other questions about the tax situation there? You have one city. I do. Yes, sir.

A couple items, mayor. The first one I just wanted to talk about. We did just have the winter storm event. Thank you to our team for staying active. Last year was the first snow event we've had in a while and it was a nice little snow. This year was a real snow and we had anywhere from uh from 8 to 12 inches in different areas. And I'll tell you, our team between uh Anthony Prince and Chief Tomman, Chief Phelps, and Wally Hansen did an amazing job of managing through this process with their teams. We were able to to get out and about and to manage the streets. We were able to respond to emergency calls and we took action based on a communitywide effort where we stayed in commun in constant contact with Enslo County and with the base, the schools and every partner you can imagine. There are still some holes and some gaps and everything that we have to do countywide, but when you look at Western Boulevard right here, looks like one heck of a slope. If you could have just hit it at the right speed at the right time, you could have made it all the way down from Gum Branch to Lune. It would have been perfect. Um, you new construction here on the left. So, thanks to Elijah for this picture, but collectively seeing our teams out and about. Kelly Cannon is our is our street superintendent and his teams were incredible. This is not something we do on a regular basis. So when you look at the impact that they had, they are the ones even though we say we're not operating today, they're out there making sure the roadways are as good as possible so that Chief Tomlin and Chief Phelps teams can respond and get to people when they need to. Uh so overall a great process for us. The good Lord has given us the snow and then now he's given us uh less snow and hopefully by next week everything will be clear. uh we were able to effectively send out

information to citizens to let them know that if if you don't have to be out on the roadways, don't be there. Lisa and her crew were able to provide that information. And then we do our best trying to delegate information not just to citizens, but also to staff. As you'll recall, we were closed Monday and Tuesday. Uh today and yesterday, we came in on a two-hour delay just to try and be safe for the community. And then tomorrow we're scheduled to open up on uh on regular schedule. But uh collectively I think our people had a a fantastic time enjoying a little bit of winter weather. Some people weren't as fortunate as others and they ended up in a ditch. But that's why we say if you if you don't have to be out, please don't be out. Our parks department um had some people out there with the with some sleds. This is over at Sturgeon City. And then over at the amphitheater where anywhere you could find a heel, you could find smiling faces flying down it. Sometimes underneath the tube, you can see this young man to the top right has called air. Um, and thank you to Sturgeon City. So, uh, collectively, I just think it was an awesome opportunity for us to go through our emergency response process. U, fire departments are working all the time. There was a couple minutes they were working a little bit less, but it takes it takes talent to build a snowman that's about 8 feet tall. It's impressive. I told you one of the finest departments in the country. And that just shows you station 3 wins. [laughter] No one else had a fire had a snowman that was also a fireman. And then here's a photo courtesy of Kathern Brown. This is over at Northwoods and at the school where good powder, good fellowship, and overall it was safe. And that's the best part, you know, when people are people are just playing and the vehicles aren't going, it keeps our community a lot safer. Our teams did an amazing job and I appreciate all the council's uh positive comments to the to the staff

for the efforts they did during this process. I have one more update for you, mayor. Last week, uh, Terrell and I went to the North Carolina City and County Managers Association meeting in Winston Salem. That's why we didn't do anything on the snow. We stayed as far away as possible to make sure we weren't impacted. But at that meeting, uh, they do recognitions acr Massie was presented with the 2025 assistant manager of the year award. And unfortunately, Mr. Massie wasn't able to be there and he hasn't seen his plaque yet. AND SO [applause] I just want to say that um it's an amazing opportunity for us to recognize Mr. Massie for this. But the best part of it is when you think about his greatness and I said I told him beforehand I didn't tell anybody else. Mr. Massie on Thursday you're going to receive this award and I'd love for you to be there. and he's like, "I got to be at the American Defense Communities meeting. I'm already scheduled. We're going with Onasa. We're going with the county. We've got partners that are going to be there. I I have to be there." You can't argue with Mr. Massie on some of these things, no matter how much of a recognition it is. Um, I had to apologize that he won the award because it's just not something that he likes to do. But Terrell and I were sitting there eating some food and when they did the recognition, you talk about mentorship. We heard it from Mr. Warden. Uh he was a great mentor to council members and he still is mentoring council members. He's trying really hard to to mentor Mr. Yaniro uh to the best of his abilities. [laughter] Um he's two way.

It's a horrible process. Mayor [laughter] mentoring directors for for over 18 years. uh for this past year being a mentor to our two assistant city managers uh being our staff liaison to in a military host community. It's a big deal. It wouldn't work the way it works if he wasn't also Colonel Ron Massie. Uh there's a value to that and it gives us a a great lifeline. I would say that there's not a manager in the business that I've met in 23 years that is as talented as Mr. Massie. And I think a lot of people would agree with me on that. at least the people that decided on this award. And I would also say that there's not a there's not a there's not a better man than Mr. Massie. And so I've only known the guy for a little over three years, but he has a he has my complete trust and support in all that he does. You know that if I were to not show up to work tomorrow, no one would really care because you have that guy. And I understand because that's what true talent is. And so it was it was definitely a pleasure for us to get to hear him be recognized. Uh both Terrell and I tried to go accept the award on his behalf and they said, "No, you're not him. Please sit back down and eat your chicken." Uh so we brought the award back and I just say that um thank you. You're amazing in all that you do uh 32 plus years in this career that you've been doing across this country and we're grateful for your commitment to our team.

Thank you. THANK YOU. CAN I ADD IT? We were sitting so we had lunch together. So we we sat together quite a bit but at this particular lunchon we were at different tables but our backs were to each other. I think David Smitherman was sitting here but the people at my table when they kept hearing all of the stuff that was going on. They said are they talking about you? I said no. I said I said no he's not. I said it's our it's our deputy city manager. I said unfortunately he's not going to be here. Uh, but I said we were very um grateful to have someone like Ron on staff here. And so Ron, for me, I just want to say thank you for all that you've done this past year in my first year as uh an assistant with the city.

Thank you very much. Thanks, Mayor. It's all I have. Motion to move. All in favor sign. I post