Kannapolis officials are proposing a budget that will raise spending by more than 10 percent and taxes by 5 percent, primarily to fund the purchase of a large swath of downtown property that the town plans to redevelop.
The proposed budget calls for an increase of $5.6 million for the 2015-16 fiscal year, which starts July 1, from $53.9 million this year to $59.5 million. The proposed tax rate is 63 cents per $100 valuation, compared to this year’s rate of 60 cents.
With the new tax rate, a home valued at $200,000 would have an annual tax of $1,260, compared to the $1,200 they paid this year.
The bulk of the increase in spending would go to pay for the city’s purchase of 49 acres of property in the downtown area, most from Kannapolis native David Murdock, billionaire Dole Food Co. owner and founder of the North Carolina Research Campus. The purchase makes up $8.1 million or the proposed budget, but will also be funded through debt financing in the city’s sale of 15-year special obligation bonds. The proposed .03 cent tax rate increase in the general fund covers all debt service for fiscal year 2015-16, totaling roughly $910,000.
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The land being purchased from Murdock includes eight blocks of buildings on Oak Avenue, West Avenue, South Main Street and West First Street. Other acreage being purchased includes vacant land or land with single family homes that will likely be removed. The total purchase price is $6.75 million and the transaction could be closed in late summer or fall.
“It’s the driving force behind the entire budget, really,” said City Manager Mike Legg, and will be the city’s major capital improvement project for the year.
The town hopes to find private investors who will buy the properties and transform them into a mix of residential apartments, offices, retail stores and restaurants. The city is working on that project, expecting to finish it in roughly eight months, said Legg.
Although the plan spans more than 10 years, residents should begin to notice improvements far sooner.
“We feel pretty confident the community will see some improvements within the first year, but it’s a slow process – it won’t happen overnight,” Legg said.
The budget also includes funding to pay debt on the city’s new police station, opening in late 2015, and to increase the police force by three new officers. Salaries for 16 firefighters are included in the budget as well. In 2012, the city received a federal grant of $661,882 to cover the salaries, which has since expired. This will be the first year the city is responsible for covering the salaries.
In addition, the budget includes an increase in stormwater fees. The average household can expect a $3.60 to $4.50 monthly increase, the last of four increases expected to cover debt from past stormwater projects.
The city will hold a public hearing 6 p.m. June 8 at the Kannapolis Train Station, and plans to have city council consider the proposed budget at a June 22 meeting. For details visit www.kannapolisnc.gov/city-government/departments/finance-department/budgets-audit/