Wilmington Council Trims Tax Rate Hike Ahead Of Budget Passage, Rejects Anti-camping Ordinance | Old North State Wealth News
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Wilmington council trims tax rate hike ahead of budget passage, rejects anti-camping ordinance



The City of Wilmington’s Skyline Center. (Port City Daily/Amy Passaretti)

WILMINGTON — Wilmingtonians will pay a little less in property taxes than council planned leading up to Tuesday’s approval of the city’s fiscal year 2024-2025 budget. 

READ MORE: As the city and county develop a homeless strategy, what can they learn from the success of Houston?

Since last fall and up until the budget’s first reading on June 4, budget discussions have revolved around a 2.75-cent property-tax increase. Council reduced that increase to 2.5 cents, which would bump up the overall tax rate from 39.5 to 42 cents per $100 valuation at Tuesday’s second reading in a 4-3 vote. Council members Luke Waddell, Salette Andrews, and David Joyner voted against the general fund appropriations.

Several council members advocated for a reduction in taxes or fees, including Waddell and Kevin Spears.

“The sentiment is that the proposed 7% tax increase equates to a few more dollars from our taxpayer a month,” Waddell said. “But I can tell you, you’re gonna notice it.”

However, the council members had different ideas on how to achieve a decrease. 

Waddell presented some ideas to shore up more money for the city’s capital improvement plan, which the majority of the tax hike will fund. Waddell suggested the city redirect 0.75 cents from the 1 cent it dedicated to affordable housing back into the general fund, an amended position from his advocacy against spending any money at all on affordable housing last month.

Waddell also advocated cutting the following: 

  • Council contingency proceeds
  • New positions being added in finance, engineering and transportation
  • A new traffic calming program and its two supervisory positions 

The latter would use $20 from the newly increased $25 motor vehicle tax for traffic calming initiatives in neighborhoods, but Waddell has advocated against creating a new program in favor of using those $1.8 million in funds for capital projects.

The city has a backlog of smaller infrastructure maintenance projects that have been passed over for more expensive initiatives; the city doesn’t have the debt-capacity to fund the much-needed maintenance due to its money still owed on the Skyline Center. 

The city purchased the former PPD building at 929 N. Front for $68 million, a move criticized by people from the community all the way to the state treasurer’s office. At the time, council swore the purchase would not result in higher taxes; council members David Joyner and Kevin Spears have expressed their disapproval of this year’s tax increases because of this promise. 

Joyner asked city staff if any revenue from the sale of the city’s surplus properties — now that it’s moved into the Skyline Center — and leases of the building were factored into the budget. City manager Tony Caudle said neither revenue source was guaranteed at this point.

“We’re looking at potentially eight figures in income,” Joyner said. “What should be coming in from the sale of those properties and the lease of those properties, it’s not factored into the budget because we don’t have expressed interest and contracts in hand …I think that deserves to be said publicly.”

The city has already sold properties at 302 Willard St., 1536 S. Front St., and 222/226 S. Front St. to go toward reducing the Skyline Center’s debt issuance. 

Current leases in the Skyline Center include Thermo Fisher, former owners of the building now occupying two floors, the Local Government Federal Credit Union, Leading Into New Communities, and the Wilmington and Beaches Convention and Visitors Bureau. Rent from the tenants goes to offset the operating costs of the building.

Waddell asked if a “conservative” amount of $2 million could be budgeted this year with anticipation that the lease or sale revenue would come in; staff advised against it.

Spears was also in favor of exploring that option, as he advocated against increasing the motor vehicle registration fee from $5 to $25, despite the move putting the city on par with what other North Carolina locales’ are charging.

Mayor pro tem Clifford Barnette asked staff about the city’s financial position if council were to reject a tax increase, namely what would happen to the city’s bond rating. 

Earlier this week, Port City Daily reported Fitch, a prominent financial research firm, downgraded the City of Wilmington’s general and limited obligation bond rating from AAA to AA+. General obligation bonds are in reference to a municipality’s general revenue availability and limited bonds allow municipalities to raise property taxes to pay off debt. A Fitch representative told PCD Tuesday that Wilmington’s bond issuance used for purchase of the Skyline Center was a factor in the new rating. 

Caudle said Barnett’s question was hard to answer as staff have not calculated a no-tax-hike scenario, but he said the capital improvement plan would be obsolete and the city would have to find other ways to fund its most critical projects, like the Fourth Street bridge replacement.

Ultimately, Mayor Saffo proposed the city redirect $3.1 million from the Carolina Beach Road infrastructure and landscaping project, not slated for construction until 2029, back to the capital plan and the remaining $1 million from that project to the South Front Street project. He supported cutting the traffic calming program and diverting those funds to the plan as well, though the two positions to run the program would still be added. 

This plan, which would allow a reduction in the tax rate to a 2.5-cent increase instead of 2.75 cents, ultimately came out the winner. Wadell’s dissent indicated he did not think the cuts were enough, while Joyner and Andrews were not in favor of cutting the traffic calming program or Carolina Beach Road project. 

The capital improvement plan also passed 5-2, with Waddell and Joyner dissenting.

Anti-camping ordinance 

Council also struck down Waddell’s long-advertised ordinance that would ban sleeping, camping or otherwise loitering on public property, a move aimed at reducing the presence of unsheltered individuals downtown.

Waddell modeled the ordinance off the one passed by the New Hanover County commissioners last year and introduced it to council earlier this month. 

“I’ve heard from numerous business owners when I went to a public meeting and told them that I would bring this forward because they are escorting owners of these businesses that close after dark, or escorting their employees to their vehicles, because they’re being harassed,” Waddell said. 

The ordinance prohibits sleeping and camping on county-owned properties from 10 p.m. to 7 a.m. and states parking decks and lots are for parking and associated activities only. It also says personal items cannot be left unattended and entrances to city facilities are for ingress and egress only. 

The city largely already prohibits the activity in the ordinance in various parts of its code, though the county does go further in banning sleeping in cars, either in surface lots or in parking decks. Current city code does not address this.

Barnett said he wasn’t aware of any complaints surrounding people sleeping in their cars and said he wanted that provision removed. He also questioned if putting the prohibitions — already part of the code – all together would appear as targeting homeless individuals. 

City attorney Meredith Everhart explained this issue was being sorted in the U.S. Supreme Court after several municipalities’ ordinances were challenged. She said a decision from the court was imminent and thus, recommended the council stay its decision until they received further guidance. 

Saffo motioned to do this, but it failed 3-4; only he, Barnett and Waddell voted for it.

Waddell then made a motion to approve the ordinance, which failed 2-5. Council member Charlie Rivenbark was the only other supporter.

“There’s a huge percentage of our population that are being affected by [homeless individuals], and they’ve all got their heart in the right place, but, you know, it’s a balancing act,” Rivebark said. “We’re trying to take care of that and trying to take care of the other citizens who have to deal with it day and night.” 

Andrews argued the city should be focusing on providing more housing to ease homelessness.

“I understand that people in businesses want a solution for the real problems that surround homelessness, but anti-public camping laws effectively criminalize homelessness,” Andrews said. “It is far more costly to the taxpayers our public safety officers and our healthcare providers to house people in jail cells or emergency rooms than it is to provide permanent supportive housing.” 

Waddell offered a rebuttal.  

“By all means, if you want to become San Francisco, Portland, Oregon, or some of those folks that have completely lost control of their cities, and those are the policies that we should back full, full force…I would argue that we do a lot because I believe we are a compassionate community, but we do need to set boundaries. We do need to put public safety of our community first, and that’s what I aim to do, no matter what names may be hurled at me. I think leading sometimes is having these difficult conversations.” 

Joyner pointed out the City of Houston — PCD interviewed the leader of the successful homelessness coalition earlier this month — cleared homeless people from their encampments, but only after workers found a permanent place for the unsheltered to live. 

To Waddell’s point, San Francisco, Portland and Houston have all uniformly adopted the Housing First model — which Waddell disfavors; what sets Houston apart is its availability of low-cost housing.

Waddell hailed Houston’s response, which has cut its homeless population in half over the last decade, at a meeting earlier this year, though did not indicate his support for the city’s approach in Tuesday’s conversation.

Tips or comments? Email journalist Brenna Flanagan at brenna@localdailymedia.com.

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