Loading...
1991-05-28 Special Meeting ~0-c-o;. '!' ". ~ 489 " MINUTES OF SPECIAL MEETING FOR DISCUSSION OF LAND TRANSFER TAX, MAY 28, 1991 ASSEMBLY The New Hanover County Board of Commissioners met in Special Session on Tuesday, May 28, 1991, at 7:00 o'clock P.M. in the First Floor Assembly Room of the County Administration Building, 320 Chestnut Street, Wilmington, N. C. . Members present were: Commissioners Jonathan Barfield, Sr.; Robert G. Greer; William H. Sutton; Vice-Chairman E. L. Mathews, Jr.; Chairman Fred Retchin; County Attorney, Robert W. Pope; County Manager, Allen O'Neal; Clerk to the Board, Lucie F. Harrell. PLEDGE OF ALLEGIANCE Chairman Retchin led the audience in the Pledge of Allegiance to the Flag. Chairman Retchin called the meeting to order and welcomed all persons present. He stated the meeting was changed due to a malfunctioning air conditioner in the Courthouse. ADOPTION OF PROCLAMATION DECLARING MAY 29, 1991, AS "GI NURSING DAY. IN NEW HANOVER COUNTY Before beginning the Special Session, Chairman Retchin requested adoption of a proclamation declaring May A9, 1991, as "GI Nursing Day" in New Hanover County. Motion: Chairman Retchin read the proclamation and MOVED, SECONDED by Commissioner Sutton to adopt the proclamation as presented. Upon vote, the MOTION CARRIED UNANIMOUSLY. . A copy of the proclamation is hereby incorporated as a part of the minutes and is contained in Exhibit Book XIX, Page 7. < Chairman Retchin stated the purpose of the Special Meeting is to discuss the possible implementation of a land transfer tax. Background information was presented on local bills presented to the local legislative delegation in an effort to find additional revenue sources other than the ad valorem property tax. He requested the County Staff to present an overview of the proposed land transfer tax, after which public comments will be received. Chairman Retchin introduced Mr. Bill Wheeler, a realtor from Dare County, and stated he has graciously volunteered to speak later in the meeting with reference to the success of the land transfer tax in Dare County. OVERVIEW OF PROPOSED LAND TRANSFER TAX Assistant County Manager, Dave Weaver, stated implementation of a land transfer tax would generate approximately $3 million of revenue per year. The proposed legislation specifically states that monies collected from the tax will have to be used in New Hanover County for expansion of the sewer system and the possible purchase of water systems. Passage of this local bill by the General Assembly does not mean that the tax will be imposed; however, it will allow the County to consider imposing a land transfer tax if so desired. . The following major items were presented and discussed: 1. Need for Expansion of the Sewer System: - Declining availability of land suitable for conventional septic tanks. Emphasis was placed on the shortage of buildable land and the need to reduce the negative impact of septic tanks on drinking well water throughout the county. 2. Need to provide sewer to accommodate affordable housing: ~ ( I MINUTES [490 ~ OF SPECIAL MEETING, MAY 28, 1991 1 - Due to the shortage of buildable land, the cost of land has increased which negatively impacts on affordable housing. Providing sewer service to the unincorpor- ated areas of the county will provide more buildable land, reduce the size of lots due to septic tanks not being required and in the long term reduce affordable housing. () - Providing sewer service to the unincorpor- ated areas of the county will also control the location and rate of growth. Funding Mechanism for Financing the Sewer System Implementation of the land transfer tax is a method of financing the expansion of the sewer system. At the current time bonds, user fees, and 1/2 cent sales tax monies have been utilized to construct the sewer system to date. In order to continue construction, more revenues must be received than expenditures. Currently, revenue is generated in the amount of $5.6 million dollars with expenditures of $4.2 million dollars for a balance of $1.4 million dollars which is utilized for operating expenses. without additional revenue the sewer system cannot be completed. The land transfer tax would be an ideal method for financing the completion of this project. Mechanics of the Land Transfer Tax The collection of the land transfer tax would be handled by the New Hanover County Tax Department before recording could occur. The 1% land transfer tax would apply to all instruments conveying certain interests in real property with the following exclusions: (1) sales in government; (2) leases with a 10-year term or less; (3) real estate transfers with no consideration of pay (4) land transfers that would occur by operation of law or a will; and (5) foreclosure transactions. Appeals for implementing the tax can be presented to the Board of County Commissioners. The distribution of the monies collected will be to New Hanover County and the municipalities based on the proportions of the ad valorem tax base. Municipalities can use the revenue generated for any type of capital project; however, New Hanover County must use the revenue for water and sewer projects for the first ten years; thereafter, the monies can be used by the county for any type of capital project. The land transfer tax can be repealed by the Board of County Commissioners at any time. () Mr. Bill Wheeler, a realtor from Dare County, commented on the l% land transfer tax implemented in 1985. At that time, he was president of the Board of Realtors and was violently opposed to the implementation of a 3% land transfer tax due to the negative impact on the real estate market. The Dare County Board of Commissioners imposed a building moratorium since the central water system could not be expanded without additional revenue. After discussion with the Board of Real tors and Home Builders Association, a compromise was reached for implementation of a 1% land . transfer tax. In the beginning, some complications were experienced; however, after four months, the real estate market adjusted with little impact and as the County expanded the water system new areas were opened for development and the real estate market soared. The land transfer tax proved to be quite beneficial to realtors and home builders as well to the County coffers with the following revenues generated: (1) in 1986, $2,600,000; in 1987, $2,500,000; 1988, $3,467,000; 1989, $3,200,000; and 1990, $2,300,000. Mr. Wheeler stated due to imposing the land transfer tax more property was developed and sold due to funds being available to complete the central water system. () PUBLIC COMMENTS Chairman Retchin asked if anyone from the general public would like to comment. . . . IS" ...'\..~ i;'..c 1', :'Jo~ ".~ ~..~;,.~:J. MINUTES OF SPECIAL MEETING, MAY 28, 1991 491 .~i- ~1 ~f \ The following persons commented strongly opposing implementation of a land transfer tax and expressing concern for the negative impact of this tax on the real estate market, home builders, and affordable housing as well as having no assurance that the percentage of the tax will not be increased in the future. It was generally agreed that the sewer system should be completed; however, another revenue source should be identified to complete the system. A majority of persons present were in favor of raising the ad valorem property tax. Mr. Kenneth Parker Mr. Nick Nicolaysen Mr. Carlton Fisher Mr. Bobby Harrelson Mr. Jim Sandy Mr. Frank Link, Kure Beach Councilman Mr. Slim Wallace Mr. Nello Filippini Chairman Retchin expressed appreciation to the persons present for their comments and challenged them to work with the Board of County Commissioners in identifying an acceptable method of generating revenue to complete the sewer system. Motion: After further discussion, commissioner Sutton MOVED, SECONDED by Commissioner Greer to discontinue the proposal to seek authority to implement a land transfer tax. Upon vote, the MOTION CARRIED UNANIMOUSLY. ADJOURNMENT Motion: Commissioner Barfield MOVED, SECONDED by Commissioner Greer to adjourn. Upon vote, the MOTION CARRIED UNANIMOUSLY. Chairman Retchin adjourned the meeting at 8:59 o'clock P.M. ~~ct~~d, ~~F. Harrell Clerk to the Board ~