Shawn Daley
Editor
Apex
officials take a great deal of pride in maintaining the second lowest tax
rate among all municipalities in Wake County.
Now, after taking a
closer look at the numbers, at least one town commissioner believes the
tax rate could be even lower.
Commissioner Bryan
Gossage proposed the idea of lowering taxes Friday during the annual
"retreat" for Apex department managers and elected officials.
Gossage pointed out that
during the past three years Apex has collected an average of $482,000 per
year above the annual estimate for property taxes.
The town's general fund
has grown to almost $10 million, which is about 60 percent of Apex's $16
million annual budget.
The state only requires
municipalities to save 8 percent of their annual budget in reserves.
"If we were saving up
for some big project I could understand," said Gossage. "Instead,
we've built up a bank account balance that is nearing $10 million.
I've asked the town manager to look ahead five years to see what major
infrastructure projects we have and the board of commissioners may decided
to go forward on some important projects that will draw down that balance.
"But anytime we have a
fund balance that is 50 percent ahead of what the state requires and
annual tax revenues that regularly exceed expectations by $500,000, at the
very least we should consider returning some of that to the taxpayer."
But Mayor Keith
Weatherly is quick to note that numbers can sometimes be deceiving.
While the nearly $10
million might appear to be just sitting unused in the town's general fund
it is actually benefiting Apex's financial rating.
"It is good, smart financial management to have a hefty fund balance,"
said Weatherly. "When we borrow money and have bond issues we are
one of just two towns of our size that have a preferential rating.
"That's because we have low debt, we have the ability to pay as you go,
and we have a healthy fund balance. We have the best rate of any
town our size in North Carolina."
With an ad valorem tax rate of 40 cents per $100 of property value, Apex
has the second lowest tax rate in the county. Raleigh has the lowest
rate at $39.5 cents.
Weatherly said he would be very happy to see Apex overtake Raleigh as the
lowest tax rate but not at the expense of lowering town services.
"Nobody is more fiscally conservative than I am," said Weatherly.
"If we had money not being used I would be all for giving it back to the
residents of Apex. But that money is not just sitting there.
It is earmarked for several upcoming projects.
"We are planning new recreational programs, sidewalks, a new public safety
center and several other projects. Yes, we could lower taxes but it
would mean a reduction in the level of services that the citizens of Apex
have come to expect."
Commissioner Bill Jensen agreed, saying town services are more important
than having the lowest tax rate.
"We could charge 10 cents per 100 dollars if we wanted and just not do
anything in terms of services," said Jensen. "People would be very
upset with that.
"The most important thing is the value you give your citizens for the
money you ask them for."
Town manager Bruce Radford said the town is also faced with unforeseen
expenses each year and has had to work hard to maintain the present tax
rate.
"Just last year we saw a $300,000 increase in employee benefits," said
Radford. "That is a cost that we ate and it wasn't passed on to the
consumer. We also see price in creases in numerous other areas.
"Although they may not all come from the general fund, the chemicals for
the wastewater treatment plant are very expensive and the price for pipe
has also increased."
Radford also said the town believes strongly in its "pay-as-you-go"
philosophy.
"When we built the community center we were able to write a check for it,"
said Radford. "If a piece of land we are interested in acquiring
becomes available we have the ability to pay for it.
"The tow likes to know it has the ability to purchase things of
significant need."
Commissioner Gene Schulze said more analysis of the numbers should be done
before any decisions are made.
"If we can afford to give some type of rebate I'm for it," said Schulze.
"The money belongs to the citizens of Apex. But I don't want to get
into a situation where we lower our tax rate and in a couple of years we
find we're short and we need to raise it.
"I think there has to be some type of compromise we can agree on. Lowering
it two cents might be a bit too much. Maybe we should look at
lowering it one cent. But again, we need to study this a lot more
before we do anything."
Gossage said lowering the tax rate is simply one option for the town.
"We don't have to lower it two cents," said Gossage. "Maybe we could
have a tax moratorium for a year or give citizens a tax rebate.
"Apex is in a very healthy financial position right now. With all
the recent and ongoing growth that money will continue to come into town.
I think we just need to take a look at giving some of it back."
Weatherly said he has spoken to Radford about the 2005-06 budget and that
the town manager has no plans to propose a tax cut.
"Obviously, we always make sure the town manager justifies everything in
the budget," said Weatherly. "It's all part of the budget process.
"But here we are with the second lowest tax rate in the county at 40 cents
while some towns are up around 60 cents. I think we are squeezing that
turnip pretty well."
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