An $801,000 road maintenance shortfall could be defrayed by a $20 annual license plate fee for Mooresville drivers.
By a slim margin, the Mooresville Board of Commissioners opted to move forward with pursuing this proposed fee over two other options during an informal poll taken at Thursday’s daylong board retreat held at Langtree Plantation.
The poll was not an official vote for an additional tax but merely a method for town staff to determine future funding sources for the road paving program, Mayor Miles Atkins said during the meeting.
“Whatever the final outcome will be in terms of how we’re going to make up the gap in funding for our road maintenance and resurfacing program will be outlined when the manager presents his budget,” Atkins said.
This $20 annual vehicle fee was Assistant Town Manager Ryan Rase’s recommendation to the board to cover the $800,000 funding gap needed to maintain the town’s current and future roadways. The town has until April 1 to notify Iredell County that the board would like to add the fee on the tax scroll and until June 1 to approve the fee or a capital investment fund contribution as a source of funding to be included in the town’s fiscal year 2021-22 budget, he said.
The fee will be discussed in upcoming budget workshops in mid-May, said Chief Financial Officer Deborah Hockett.
“The real reason I’m before you this morning is in order to maintain our paving program, we’ve got to find a new sustainable funding source,” said Rase.
Asphalt has a lifespan of about 20 years and the town needs to upkeep about 8.6 miles out of the town’s 152.5 miles of roads annually, he said. The town spends $184,567 per mile to maintain and pave, he said. Including an additional 20 miles of roads expected to be built over the next two decades, the annual road program cost will total about $1.6 million, Rase said.
Funding from the Powell Bill — legislation allocating state funding to be used on road and street maintenance — provides about $785,882, leaving a shortfall of $801,880 in the $1.6 million program, Rase said.
To raise this money, Rase recommended charging $20 per registered vehicle as a license plate fee. A North Carolina General Assembly bill passed in 2016 allows a city or town to levy an annual municipal vehicle tax up to $30 per vehicle, Rase said. The proceeds may be used for general purpose, public transportation or public streets, according to the bill.
Rase called this annual vehicle license plate fee “commonplace” and said the average vehicle fee of 11 neighboring municipalities, including Huntersville, Cornelius, Charlotte, Concord and Kannapolis, is $20. He said he believes municipalities have turned to these type fees because the state allows Powell Bill funding to be reduced during funding shortages.
The town of Mooresville has a total of 40,094 vehicles within its corporation limits, Rase said, and this count includes vehicles “garaged” at apartments. The term “garaged” is used when vehicles are registered with a Mooresville address, he said.
Three thousand apartments have been approved in Mooresville in the last five years with 1,300 currently built and lived in, Rase said. There are 500-600 more apartment units currently being built, he said.
“Not only does this hit the single family-dwelling units, it’s also going to hit our apartments,” Rase said. “Anybody who lives in the town of Mooresville corporation limits will have the exact same fee.”
Rase also provided two other alternatives to commissioners. A second option included a $10 license plate fee bringing in an annual revenue of $400,940 with the same Powell Bill funding of $785,882 and a $400,940 contribution from the town’s General Fund.
The third option included the same Powell Bill funding of $785,882 and $801,880 from the town’s General Fund which would be close to one penny on the town’s sales tax, he said.
Rase said he supported the $20 fee option because it is sustainable as more people and their vehicles move to Mooresville. It also doesn’t tie up General Fund monies which could instead be used for town expenditures like the purchase of police vehicles and the construction of fire stations.
The Board of Commissioners was then asked to rank their preferred options.
Board members Thurman Houston, Bobby Compton and Barbara Whittington ranked the $20 license plate fee as their number one option while Board Members Lisa Qualls and Gary West supported the combined $10 license plate fee and $400,940 General Fund contribution option. Board member Eddie Dingler supported the third option with the full $801,990 coming from the General Fund.
Atkins said he also supported the $20 license plate fee option.
Dingler said his constituents already pay high taxes in the Mooresville Graded School District and didn’t support the $20 fee. Qualls and West were concerned with the ongoing effect of the COVID-19 pandemic on people’s livelihoods.
“We have a lot of people that are struggling and that are going to continue to struggle this year,” Qualls said. “I know $20 to most of us in this room is not a lot of money. But, $20 to those that are struggling is a lot and they need their tag, they need their transportation to get to work, hopefully when their jobs open back up. But, we have a 58 cents tax rate. We spend four pennies for the number one complaint in our town. I really struggle with the fact that we’re just going to dump this back onto the vehicle owner and we’re not looking at how do we cut that portion of our tax rate into the number one complaint that we have.”
Pre-COVID-19, West said he would probably have a different stance on the $20 fee. But with today’s climate, “I don’t see really us getting out of this pandemic for at least another year by the time we’re stable again, and in that time, I think this is going to impact a lot of people,” West said. “Twenty dollars, to Commissioner Qualls’ point, is a lot.”
Qualls asked if they could delay the fee another year but Compton said he saw no need to delay it. “Twenty dollars is not a whole lot of money …” Compton said. “It’s $20. I don’t see what the problem is. I understand y’all's point with COVID and all that, but I can swing 20 bucks. All I have to do is not go to a restaurant one time or something.”