By Kevin Cooley

Mayor of Lake Lure, NC

I’ve been a property tax payer (continuously) since buying my first home in South Florida in 1978, 40 years ago! Paying property taxes for me has been just a normal part of life. For most of those 40 years, I’ve paid property taxes to/through my mortgage company as part of the monthly PITI mortgage loan payment. If/when property taxes changed, there would typically be a small adjustment to the monthly mortgage payment. I spent little/no time researching why the annual property tax had changed. I didn’t like to pay these taxes, but I did appreciate having done so once a year when I deducted them from the income on our federal tax return.

As I began acquiring some additional properties besides our primary residence, property taxes became a more “visible” and important financial issue for me. I began paying the annual tax bill for those properties “out of pocket”. I paid much more attention to the amounts that I was paying and I questioned what services I was receiving from the folks to whom I paid the taxes. I’m reasonably certain that those closest to me, including my family and close friends, would describe me as “fiscally-conservative” (aka “Frugal”). Government efficiency has become much more than just a slogan for me, it is a major “issue” that I’m constantly reminded to take seriously, especially every time I write another property tax check.

Today, my wife and I own five properties in the Town of Lake Lure. I write five personal checks every year to the Rutherford County Tax Assessor to pay the taxes for these properties. The majority (69%) of these property taxes were kept by Rutherford County, the remainder (29%) went to the Town of Lake Lure. In return, the county and the town spent my tax payments to provide a myriad of municipal services to operate and maintain the County and the Town.

Since becoming Mayor in December 2017, I’ve continued to be a property taxpayer,but now I am also a “tax spender”. It causes me to think long and hard about “must haves” versus “nice to haves” in our Town Budget. I’ve realized that making these decisions for the town is not unlike the same types of financial decisions I’ve made throughout my personal and business life. It is in this context that I participated in the process of developing and approving our 2018-19 Town Budget that was adopted by Town Council on June 26th and became effective July 1st, the beginning of our town’s fiscal year.

I learned first-hand that our town’s annual budget is rigorous and lengthy. Our “little” town provides virtually all basic government services (i.e. police, fire, streets & roads, water, sewer, parks & rec, planning & zoning…). However, in addition we own and operate a 800 acre recreational lake, the largest (1,527-acre) municipal park in NC, a 110 foot tall – 480 foot wide high-hazard concrete dam, a 3,400 KW hydro-electric power generation station, a 40-slip public marina, and a public beach with a water park. These “public assets” would be considered “extraordinary” even in municipalities and cities much, much larger than our town. For a small, resort town like ours they pose enormous budgetary challenges (and opportunities).

Even before the 2018-19 Budget process began, we knew we were facing some extraordinary financial challenges to renovate our 92 year old dam and sewer collection/treatment system and that there was a strong likelihood that we would need to increase property taxes to pay for these major infrastructure projects. This likelihood quickly became a reality as we plunged into the budgeting process. Initially, the required tax increase looked like it could be as high as $0.121 per $100 of assed value. With some whittling it down further to the must haves, the final property tax rate was increased from $0.276 to $0.36 per $100 of assessed value… a $0.084 (8.4 “cents”) increase.

So why was this increase needed, what expenses changed and why? Rather than getting down to a “line” item analysis of the 2018-19 Town Budget… it makes more sense to me to simply contrast it with the 2017-18 budget to explain what’s changed and what things will the property tax rate increase pay for. So, here are some things that changed and how our tax increase is being used to pay for them:

  • $336,800 / 4 cents: funding for anticipated debt service to finance the design and construction of the dam repairs and renovations over 30-40 years
  • $118,000 / 1.4 cents: funding increase for (additional) critical road repairs and re-surfacing projects as recommended by the 2018 Pavement Condition Survey
  • $45,000 / 0.5 cents: ½-year funding for a new full-time Parks & Recreation Director position (salary & benefits) to manage all Town parks and recreational land and facilities
  • $150,000 / 1.8 cents: engineering design for the proposed new Marina-Boardwalk Project (50% funded in 2018-19)
  • $62,000 / 0.75 cents: an additional full-time staff position (salary & benefits) in the Public Works Dept. for maintenance and repair of Town land and facilities

Notably, there is no tax increase allocation for anticipated debt service to finance the replacement of our sewer collection and treatment system because this system must be fully expensed and paid for by customer charges under the water and sewer enterprise fund. Based on conceptual cost estimates for the design and construction of a new low-pressure sewage and treatment system, the current sewer rates appear to be sufficient to cover projected future expenses of the new system. However, as this project evolves, these cost estimates will be refined and the rates could change.

As we move forward into our 2018-19 Budget Year, Town staff and officials are focused on finding ways to “accomplish more for less” and supplementing our income sources including finding grants and assistance programs to help pay for our major capital investment projects and increasing electric generation revenue at our hydro-electric plant.