By Connie Leinbach
After five years of holding back, Hyde County Manager Bill Rich has proposed to the county commissioners that they raise the property taxes on July 1.
Rich made this announcement in his budget address May 7 and recommended a five-cent increase, which would be voted on at the June 4 commissioners meeting.
The current tax rate is $0.73 per $100,000 of property value. With the commissioners’ approval, this rate would rise to $0.78.
By comparison, Dare County’s tax rate is $0.43, Beaufort’s is $0.55 and Tyrrell’s tax rate is $0.69, but each of these counties have municipalities with additional taxes.
Although Rich said his administration has trimmed the expense budget, the tax hike is necessary to avoid continued raiding of the fund balance, Rich said.
“We can’t go on using the fund balance before we lose the fund balance,” he said at the commissioners meeting. “We need to be fiscally responsible now rather than later.”
Rich will retire June 30 as county manager, but he still will work for the county as an independent contractor on economic development.
Assistant Hyde County Manager Kristen Cahoon Noble will become the county manager July 1, and the commissioners on Monday approved both Rich’s two-year contract and a one-year contract for Noble.
All North Carolina counties are required by law to have a fund balance, or a contingency, of no lower than 8 percent of the total spending budget.
“Twenty percent would be looking for trouble,” Rich said in a subsequent interview, because this reserve is for emergencies such as hurricanes. “You need at least $3 million to fund emergencies.” About 30 percent is a “good, healthy fund balance to maintain,” he said. “It will protect you through any emergency.”
Since he became county manager five years ago, Rich built up the fund balance while also using some of it to fund the approximately $15 million yearly spending plan. About $2.7 million of that pays for state- and federally-mandated expenses for the Departments of Social Services and Health that the county has no control over.
Last year, the county was about $484,000 short of revenues, he said, and that difference was taken out of the fund balance making it $3.697 in 2016, or 30.09 percent.
Although the fund balance is at $4.278 million, or 32.7 percent of the budget and the county is on-budget in expenses, its revenue expectations are off.
“This is one of the most challenging years because of depressed revenues,” he said.
One of the lost revenue sources he cited was that the N.C. General Assembly cut Medicaid payments to all counties resulting in about a $300,000 revenue shortfall for Hyde. He also said a request of $100,000 from the Ocracoke Occupancy Tax Board to supplement the island EMS operations was declined.
But the tax base is the big concern.
The county’s overall property valuation “dropped tremendously in 2017,” Rich said. “(The tax re-evaluation and assessment) dropped overall property values by $56 million to below $1 billion for the first time ever. We really got hurt by it.”
Moreover, the tax collection rate is about 95 percent, Rich said, and the county’s legal costs of collecting delinquent taxes is “tremendous.”
“You wouldn’t believe the number of people who don’t pay their taxes until the third or fourth letter is sent,” he said. More residents were delinquent with their tax payments this year equaling about $500,000 outstanding, he said, which adds to the aggregate arrears.
“There’s about $6.5 million people owe us in history,” he said.
With the implementation of a new Farragut system that links county departments, Rich hopes the tax collection rate can be boosted by 3 percent to a 98 percent collection rate, which is the average of all the counties statewide and which would add about $300,000.
Nevertheless, Rich said 2017 was the strongest rental year and Occupancy Tax collection yet. An explosion in new building on the island will also help the tax base.
In compliance with the commissioners’ request at a recent retreat, Rich proposes that county employees be given a 3 percent raise, something they haven’t had for several years.
Among the accomplishments Rich pointed out in his budget message are the following:
- Hyde County successfully joined with Dare and Tyrrell counties in a $9 million consolidated 911 facility in Dare County;
- A new health insurance plan for county employees will save the county $120,000 next year.
- Along with the purchase on May 7 of the Island Inn by the Ocracoke Preservation Society, Hyde County purchased a parcel of land across the street on which to build a new EMS office.
Rich’s complete budget message can be read soon in the administration section on the Hyde County website. The budget will be online on Monday, he said, and the commissioners will conduct budget meetings and Monday and Tuesday nights (May 14 and 15).
After the Tax Board Equalization and Review hearing Monday at 5 p.m., the commissioners will hold the first of two public budget hearings at 5:15 p.m. in which all county departments will convene with the commissioners to make changes. Both meetings will be teleconferenced in the Ocracoke Community Center. Tuesday’s hearing begins at 6 p.m.
After the budget is completed, a public hearing on it will be the first item on the regular commissioners’ meeting at 6 p.m. Monday, June 4.