KEY TAKEAWAYS
- Drexel rates remain among region’s lowest
- Budget prioritizes recreation and public safety
- Officials cite rising costs, slowing revenues
Drexel residents could soon pay more in property taxes, garbage fees, and utility bills under a proposed $5.3 million budget that town leaders say is needed to prioritize recreation, economic development, infrastructure, and employee recruitment and retention.
Under the proposal, residents would see:
- A property tax increase from 35 cents to 39 cents per $100 valuation
- A $24 annual solid waste fee increase
- A 4% electric rate increase
- A $4.99 monthly minimum water and sewer rate increase
Even with the increases, town officials say Drexel would still have some of the lowest property tax and utility rates among full-service municipalities in the Western Piedmont region.
Overall, the proposed budget is a slight 0.2% decrease from the current amended budget. It would provide a 4.5% cost of living adjustment for town employees, with about 37% of the budget, $1.9 million, dedicated to salary and benefits costs.
The town’s general fund, which funds day-to-day services like public safety, public works, and administration, would be about $1.88 million. The new property tax rate would increase by 4 cents, bringing the tax bill of a property with $250,000 of assessed value from $875 to $975.
The raise would cover contributions for two officers who retired this year, which will increase by nearly $50,000 in the next fiscal year, along with rising costs for investments in recreation facilities and programming, which have increased by about $176,000.
Originally, during the board of aldermen’s March budget workshop with town staff, Town Manager Bill Carroll proposed a 3-cent property tax increase, but he said the extra cent would allow more funding for recreation maintenance and capital projects at the R.O. Huffman Center. The extra cent will bump funding from $60,000 to $80,000.
The only full-service town in the region that currently has a lower tax rate than what’s being proposed is Maiden, which also has about 2,000 more residents than Drexel and a Google data center adding to the tax base. Three years ago, Drexel’s tax rate was 38 cents per $100 of valuation.
“Tax rates have been a big discussion this year, legislative actions aside,” Carroll said. “This is a common theme that expenses, the COVID boon from sales tax revenue, which jumped like 30% in one year, that boon is kind of starting to plateau now, so we’re having to land the plane.”
Drexel relies heavily on sales tax revenue, Carroll said, which, as the largest revenue in the general fund, is expected to be about $769,000 in the next fiscal year. However, property taxes are the only form of revenue that the town can control.
“We want to make sure we’re building for the future, and we have enough revenue outside of sales tax that we’re saving,” Carroll said.
For the town’s general fund expenses, 50% is expected to be dedicated to public safety, which is not unusual for any municipality. About $80,000 will go toward firearms, PPE, radios, and body cameras, along with recreation projects.
“Good public safety and quality public safety is not cheap,” Carroll said.
Large equipment, like a police SUV, grapple truck, leaf vacuum truck, and sewer trailer, would be financed at the beginning of the fiscal year, which starts on July 1, and would be a debt service payment. The town does not currently have any debt in the general fund.
The budget also includes a new full-time recreation position at $51,000, which includes benefits. The new role is expected to help with the workload at the R.O. Huffman Center.
UTILITIES
Drexel’s electric fund has a proposed $2.4 million budget, which will include new large equipment financing and a 3% increase in the rate the town pays to ElectriCities for wholesale power. In turn, Carroll said he’s proposing a 4% electric increase for Drexel customers, which would bring the average monthly bill from $135 to $140.
The rate increase would still put Drexel at a lower rate than other providers, including Rutherford Electric, Duke Energy, and Blue Ridge Energy.
The water and sewer fund includes a proposed $1 million budget, which includes $138,000 in capital projects and savings, new large equipment financed through loan, and the $4.99 minimum rate increase to Drexel customers, which was recommended by McGill Associates.
The average monthly bill would increase from about $45.43 to $50.42, which is lower than Valdese, Granite Falls, Hickory, Newton, and the North Carolina average, which is $64.60 per month. The only municipality with a lower rate is Morganton, though city staff have not presented their proposed budget yet.
HOW TO WEIGH IN
The board of aldermen will welcome feedback at a public hearing, scheduled for 6 p.m. June 2, which is the town’s next regularly scheduled meeting and when the town plans to adopt the proposed budget. The budget presentation is available on the town’s website for residents to review.
“I welcome any feedback, questions, changes, alterations,” Carroll said.