Town Council - Special Meeting

solid waste fee. I think part of it was perception that it would maybe, you know, it's tangible. somebody sees, you know, my trash is getting picked up every, you know, week and I'm paying for that and other towns are doing that and they don't, it wouldn't, you know, be seen as a tax increase. It just might be the way that the public perceives it, but I got you. All right. Yeah. All right. I was just curious of kind of what if it wasn't restricted why kind of why we were. And again, it was just a scenario is like what if you know is it would it be a uh more palatable way of generating some revenue.

So Jesse, is it correct that the the best line to be looking at is on page two of net versus page one of revenues over expenditures? That is the total bottom line. Yes. Um, but when I say the scenarios cover operating, that's the bottom line on page one. Did that make sense? Operating being um expenses minus capital expenditures, just the everyday um routine expenditures, not talk, not factoring in the big capital stuff, right?

Some capital things are in this front page like police cars. We replace those every year. So, that's not a big one-time capital thing. Um, so those would be on the front page, but something like a new playground that's only being done every however many years, that's not regular, that would be on that second page in that second total. Thank you. Do we have um sheets that show how our projections, past projections and the actuals compared to each other? like how good were our projections for the last several years. I can do that for you.

I think it would be useful to see how, you know, are we consistently high or low on something just for the last couple years. I think the two things I mentioned this a little bit. I'm glad you asked that, mayor. The two big things that we saw that really three big things were investment earnings. That was much higher than expected. Um why was it much higher? Uh the investments went well, we were investing them well. Um the returns were well and we have more cash on hand frankly.

Um sales and use tax that came in much higher than we were thinking. Um and advorum was was steady as well. So So if we are consistently high on say the sales and use tax comes in higher than expected and maybe we're a little too conservative on our projection. Well, or how did it past performance? Why else would it be that high over a trending high over several years? Well, I'd say this is uh past performance does not guarantee future performance.

Uh it's fine until we have another recession, right? Um, so the reason we're being more conservative, right, if the economy, if we knew the economy weren't going to go into a recession, um, I I think we could we could go into this and do higher numbers. Um, in fact, if if we knew the economy was in a recession, uh, I think we'd do a disservice to our community to not do so. I think the challenge we've got is that budgeting on the revenue side, it's it's forecasting. And if if you go uh too low and come back high, it's like, okay, that's great. We're in this situation. We've got this extra money. We know we've got it in hand and we can put it towards things. We can save it towards a rainy day. But if you are go a bit too aggressive and the bottom falls out, then you're in a big hole. And that's what keeps me awake at night at times is going too high and doing that. Especially, and that's one of the reasons I went over the um the economist data that we heard uh that thanks to you, mayor, we got access to um the economy. Hey, there's some good things, but there's some also things that we should be concerned about. So, that's why we were more conservative in those projections.

All right. The other thing about sales tax is that that calculation is based on the tax levy. So, the reval that just happened that we saw on the tax revenue side in the 26 budget is not going to impact sales tax until 27. So, we could, you know, the percentage that we're receiving could increase or even decrease depending on where we end up in that total tax levy. Good. That's a great question. Let's get that together and and we need to kind of look back and see, hey, we

like to know how well we guessed. I wish the weatherman could do that and we'd quit paying attention to them if we could. That's right. No, great question. Next question. Um, Max is I think it's Max probably is the permits by year with projected 2026 projected 695. I don't have the exact but 2025 we grew 30% permits but the thing is to keep in mind is that we're using I work or some permitting software for more

what ex what are we seeing permit permits for oh there's all different types of permits I know there's probably from the little construction accessory structures pools fences um We can minor and major submitted. Every one of those counts as a as a as a

Yeah, because our our permit uh bridge and Katie there are separate but let's say use bridge for an example has to look at see what's submitted and then distribute it out as well. There's not just like a it doesn't just automatically do it. So for example, we get retaining wall permit bridge is receiving that and She's going to engineering and sending it out. Okay. So, these aren't projects. These are bits of a project. Some of them, some of them are projects, but most of them by far probably bits. Yeah. But there's like a point. All these are going to our planning text and they're

we, you know, Max has got some more data. I I asked them just to kind of keep it simple with permits so you could see the trend. Um but we can get you some more in-depth information because the believe the number of projects that are that are happening um conditional zonings, things like that, those are increasing as well. Um and uh it it's not just the stuff you you you don't see, it's the stuff you see that's a huge time commitment for our staff as well. The conditional zonings, right? y'all are being so thoughtful about the way you um you don't make decisions on the first night really um looking at these projects and talking to people. Uh but the the really intensive council involvement projects from a staff perspective running those processes it is a a significant workload commitment as well. So, I think that plus the permits and projects going up um it we're in a spot where uh we need it, but we can get you some other information, too. Uh that's not just those kind of frontline, you know, fence permits, job permits as well. So, you can see that as well.

Did somebody say something? No, I was Oh, are we seeing a delay or a decrease or a slackening of the increase in major projects because of the lack of sewer? Shouldn't we? I would think so. Yes. Are stilling and people are also getting capacity. Some projects been just got the Willows that's about to start. Is that the one off of uh Blackberry forever?

Yeah. Uh and I wouldn't doubt that like uh Stelling Farms, Jensen Farms, um they're coming just

we're growing so fast. It's a constant dance I think with the you know that the town manager makes in that in a growing place you want to have the staff in place so that you can effectively manage and serve and process people's permits and things like that and handle it in a timely fashion. On the flip side of that, you don't want to grow too fast because if the bottom drop falls out, right, with development, then all of a sudden you're over staff, but you don't have the development fees coming in to do that, which is one of the reasons until now I haven't added development staff for the most part. I've tried to get creative, hybrid positions, things like that. Um, but I feel like we're at the point where it's going up. so much that we need to do it. We need to add the position. And you ask a good question, David, which is, well, isn't the sewer capacity going to cause an issue? And is that going to stop? I think we'll have a little bit of runway to see that coming because the projects take so long down the pipe, right? If we stop getting projects, that gives us the runway to know, okay, this is do it. We're seeing a little bit, but just the number of projects that are being submitted,

it's not stopping. Yeah. Last few conditional zonings probably last six or seven or so taken over a year and some of them five. Well, I'm sorry. Um, for sewer capacity, five years, but for like conditional zoning processes, taking staff time over a year. Oh, just to reach us, you're saying to get to council? Yes. Yeah. That can't go over well with the development community. Ken, um they would like I know we are what we are. Are we um raising our fees?

Not this year. Why not? We raised our fees last year to match all because this Yeah, that's when I guess more. Yes, I would think so. The developers I think that's a if there's a supply and demand indicator and that demand hasn't stopped

and the price is elastic, then why not just keep going up? Yeah. Kurt, what's your experience with development fees and rapid growth? Any Sorry to put you on the spot there. Um, the developers are never happy and so um I think the elasticity is a good good point because it you would see I think when fees started to be a hindrance, but I don't think that's likely. Um in Charlotte there was a um user fee model and anything direct like that was 100% recovery. Other things there was a public private ratio that you might it might be 50/50 but development fees were were pretty much whatever it cost was whatever was passed along to the developer in the fee structure.

Could you please explain what you meant by 100% recovery? that if if um on the average, not per development, but the fees would be set if if it took Max and his staff um if it cost them $5,000 just to pick a number in the pre-development review, then that's what the fee was. So that planning was pretty close to a 100% full fee recovery for the development portion, not the long range planning pieces, but the development portions were pretty well 100%.

And is it standard practice just to go for 100% or is it advisable to shoot for over 100%. Um well, first of all, it it varies a lot from town to town as to what percentage they use, and some uh just set nominal fee. Some places would rather have the growth and would eat the cost. So, uh you're not one of those. And so, um I don't know of any that capture more than 100%, but there's nothing to stop you from doing that. Well, if developers all want to come here, we're not, you know, losing any developers now. We could I don't see why we couldn't raise fees. I don't even I'm just talking off the top of my head. I don't know where

Max Max said he would charge or take a higher salary and and let you lift it as high as you want. Yeah. 100% capture there. It seems like there would is something that you're looking for individual permits there lot. So, for example, a fence permit construction documents $2,000 for there's lots of fees. I don't know. I'd have to think about

we you and I can get what I'm hearing is there's an openness in the board charge higher fees. Not I judge by the body language there, not by the uh not for the normal residents or mom and pops like I'm I'm getting a fence fee or some of the smaller fees. It's more the conditional zonings, the high time sucks that are taking up a lot of our team's time. Okay. And Max and I can get together and work on that. seems like would there be a limiting factor that it seems like if you got too high could it be seen legally as a quasi you know impact fee or there is a legal limit. Okay. I've talked to attorney but I don't know what that is.

Okay. Um yeah let us look into Okay. Charlotte and Meckllinburgg also did an expedited fee that you if you were willing to pay way more you could get on the expedited bus. M and almost everybody got on the expedited bus to the point that it wasn't expedited anymore. So, um express lane. Express lane toll lane. Yeah.

Thank you for that. That's that's good to know. But so if Alex, if you would please explore that option as well. Um because I think it's akin to the hotel tax, right? That the way that we help people understand that was it's on people who don't live here. And that's why it's good for us because we're receiving revenue from people that are not we're not taxing our own citizens. Yeah. And I I think we need to make sure we're cut we're covering our costs, you know, at least, you know, the way we're looking at it was uh I I think a rational intelligent way in a sense in that is it market rate, right? But I think the perhaps the next question to ask on top of that is is the market rate and are we recovering our calls

and are we leaving anything on the table? Yeah. What was your question? I said, "And are we leaving anything on the table?" Meaning, could our cost be higher and the demand would still remain the same? Yeah, I think so. Well, let us uh let us go back and and look at that. Really good thought, good feedback. Let us see. Let us do some research. Yeah. Just just out of curiosity, what you said that the expedite was a large fee. Was that twice as much or three times? Uh yeah. Well, as I remember, it was two two and a half times. Wow.

What the normal because for them the the value was in the m the time which equated to the money. So you if they could cut six months or three months off of the process then then they could make that work in the cash flow and just add the staff for that. So I was saying this well that's what I was going to ask. It's just been done in a place our size, you know. Yeah. Yeah. You'd have to prepare for it and you know, you don't know up front what it's going to be. But

and would that I mean I guess what I I mean it takes as long as it takes now because we've we've got the work that has to happen to to meet those dates. So, does that mean that in the expedite it was just congratulations, you're just going to work 24 hours a day? No. Or was it or was it there were pieces of the process that were uh effectively cut so that you could meet an expedited? No, it wasn't that either. There was almost like a set aside staff, a mere staff that worked only on expedited uh projects.

Okay. And and then there was the mainstream staff that did the normal process. So it was all in the staffing, not in the decrease of regulations or anything like that. Okay. Interesting. And I guess you could also say we can we have capacity for one two expedited projects at a time and then the limit is reached. So not everybody thinks that that's going to be the case. Yeah, we need to be thoughtful about it. It almost seems like a I like the idea conceptually, right? It almost seems like an idea more so for a larger place. I have a question more. What's that? A bidding war. I have a question. Oh, we've already got two,

Jesse. About the tax rate change impact to taxpayer document. Um for um items A and B where it's the average home value per Union County reval. is that tax value. Um, and that's like per parcel land and and structure. That's the the reval. Yeah. That came out last year that they said this is the new average. So that's the average for that's for the town, not for the county. That's for the town. Okay. Right. Great. Thank you.

And the other one is exactly what it says. I pulled it off of realtor.com. The the median rate sale rate for March. So, if if we went with the 1 cent tax increase, just to make sure I'm reading this right, for the average home, uh, and that's that's our most extreme option, right? Is option four is the 1% tax increase. Sure. Thanks, man. That I've given you 1 cent annually. So, for the average home in our town, that property owner would pay 44.65 additional for the entire year. Correct. Okay. Thank you. $10. Um, one cent is $10 for every hundred,000 valuation. The final number makes it easiest for

$44.65. That's it for the entire year. Okay. Alex, do you have what you need for Are we going to go over the scenarios? We're running out of time. Oh, we are. Well, we need a little bit of time between this and the next one. Yeah. What what I'm sensing is um and two guys aren't able to make it, so they apologize. But

yeah, no, no offense. Uh the no offense taken. Uh so what I'm hearing is a lot of really good questions thoughts. We can take those as we craft the budget. Um but the board because uh there's some folks not here doesn't want to make a commitment on which scenario to go with. And so what I'll take that as meaning as me as the manager will go back, we'll create a budget and make it the manager's recommended budget. Come back, give that to you by the 30th of April. And uh then uh y'all can say uh we love it. It's perfect. Nothing will change. Or you can say we hate it. We're going to burn it. Um and flush our eyes after reading it or something in between. Right? Uh

imagination. Uh the only scenario that makes any sense to me is four because the other ones were, you know, by 2028. We're going to be in the hole, you know, with our expenditures, our revenues by 27. And it's excuse me said in every other scenario by 2027 net we're in the in the red. Right. Yeah. Right. In the red or and I know Alex is going to present one that does that. So yeah it just it seems like the scenarios that were requested. Yeah.

Right. It does seem like the just not involving the solid waste fee makes it simpler to just focus on that fourth scenario that's just the tax and especially looking at like just you know 44 bucks that's it's not overwhelming. I don't think it's we don't need to split that over multiple line items. It just seems simpler you know I don't know if anybody else would want to What are you saying? I'm just say I'm agreeing with you that it seems like it'll be simpler and easier for staff to focus on if we just look at doing this, you know, with the tax rather than trying to split it between taxes and solid waste fee collections. I I concur. I like item four or option four.

Yeah. I I did the tax rate impact for you just so you could see because the words tax increase are just popular. on the map um just so you could see what the reality is. So and for every scenario um that you do bring forward in the future, this chart uh at least for me was like the best thing that there was sorry uh the this was super helpful to be able to say at the end of the day

if somebody asked what is we have all these items in a spreadsheet what does it mean to me? It means $44.72 or whatever the case might be. Yeah. So, just to kind of summarize, uh, leaning more away from the solid waste fee, more towards just aum tax potential rate adjustment if if I'm going to do anything. Um, let's look at uh zoning fees uh and uh we'll come back to you uh in April. Later in April. Yeah. What is it?

I I do have a Remind me again why we keep the cop cars on the capital expense even though we have to do it each year. It seems like that would just fold I know you tell me every year but I for accounting purposes they are a capital expense. They qualify for that capitalization depreciation threshold. Okay. Okay. But I think that's where and each one is used over a period of time even though we buy new ones every year but they have a useful life of three or five. Right. Right. And that we'd appreciate them over that time period.

Right. And you're not replacing, you know, you're replacing three this year and then next year you're replacing a different three. So it's not the same ones. We're just keeping it going to make sure that that the police department always has reliable vehicles. It just seem sometimes it seems like it throws it off a little bit because it makes it sound like it's an almost an optional thing, right? So, I don't know. It was just Well, I guess it is optional, right? I don't want a 9-year-old car coming to my house. Horses. Yeah. Then you don't think it's optional? Yeah, I don't think it's optional. All right. Motion to adjurnn. Yes. Motion. Second. All fame. All I I

Yeah. Should I do my sock drawer?