Here’s what rural community advocate Bonnie Hauser has to say about Town Council’s proposal to annex some neighborhoods on the southern edge of town:
After a year of deliberation, the County’s Emergency Services Workgroup recommended forming a new fire service district in the area just south of town off Mount Carmel Church Road. The workgroup recommended that Chapel Hill provide fire protection in exchange for a fire tax. Had council members said yes, the town would have enjoyed a windfall of nearly $300,000 in tax revenue for services that it now provides for free. Rather than take the money and run, Town Council decided to explore annexation – using fire protection as the carrot.
Of course, annexation raises nearly a million dollars in town taxes – but there are offsetting costs for services and infrastructure for a community that has shown no interest in them. These neighborhoods handle their own sidewalks, streetlights and garbage collection and are quite happy with the responsive service from the county sheriff. They already pay for Chapel Hill-Carrboro schools. The annexation discussion wasn’t new. It’s just that the citizens weren’t interested. Maybe they didn’t see much benefit for the 49.5 cent tax increase.
Sound complicated? It is, but it doesn’t have to be. Here’s what’s going on.
The area in question is in the ETJ and part of a fire protection district known as the Southern Triangle. Today, fire protection service is provided by the North Chatham fire department with mutual aid from Chapel Hill. Mutual aid is a win-win where Chapel Hill and Chatham fire departments help each other out in the event of fire. Today, all the taxes go to North Chatham, even though in the northern part of the fire district, the Chapel Hill Fire Department is usually the first on the scene.
Except for the tax equity, the system worked fine until the N.C. Department of Insurance decided that the neighbors could no longer get credit for Chapel Hill’s response. In this northern area of the fire district, fire insurance premiums doubled or tripled, and some policies were cancelled.
So after a year of discussion among county leaders, the fire chiefs from Chapel Hill and North Chatham, and members of the community, the county asked council to create a new fire service district for the northern end of the district. Chapel Hill would control the tax rate.
There were no questions when town staff proposed a fire tax of 15 cents per $100 of property valuation, even though it’s double the fire tax paid to North Chatham. It works because the tax increase is offset by a reduction in homeowner’s insurance premiums. It’s a true win-win for the town, North Chatham, the county and residents. An unusual case of turf-free decision-making – until council members got their hands on it.
Nothing’s happened yet – and maybe council will see the light. After all, annexation is no longer their right, and it’s going to be difficult to make the case to the citizens. Bigger may be better, but after costs, maybe not so much. Plus, it’s all a distraction from pressing issues, including 2020, economic development and affordable housing. Let’s not forget the public service benefit of fixing fire protection and insurance for everyone – including the town.
Hopefully, council will quickly decide to take the money and run. Isn’t that better than holding the neighbors hostage?
— Bonnie Hauser
George C
/ January 18, 2013Bonnie,
So you’re saying that the folks who live in the ETJ should be able to pick and choose from a list of Chapel Hill TOWN services which services they might like and would be willing to pay for while the citizens who live in Chapel Hill don’t get that same luxury of being able to pick and choose? I guess I don’t see the fairness in that approach. I think the all in or all out approach has been retained over the years because it is the only way to effectively fund and deliver municipal services when the interest in and demand for each of those services is not going to be evenly distributed amongst the citizens.
Bonnie Hauser
/ January 18, 2013The issue is not annexation -its fire protection. Through an action of the DOI, there’s a need to change the fire protection structure- countywide. In the process, Chapel Hill will get paid for sevices that it already provides. There is NO CHANGE IN SERVICE. (and by the way, eventhough the fire taxes would now go to Chapel Hill, the town will continue to benefit from mutual aid with North chatham and others)
You can make this about cherrypicking town services – but its not. Nor is it the entire ETJ. Its simply about Chapel Hill’s willingness to be a cooperative partner in a countywide (actually statewide) restructuring of fire protection. Every one else is doing their part,
George C
/ January 18, 2013Bonnie,
You’ll have to excuse me if I, and perhaps others, are somewhat skeptical as to who gets the better deal when it comes to negotiating the provision of Chapel Hill town services to County residents. For example, Chapel Hill contributes about $40 for each of its residents to the operations of the Chapel Hill Public Library while the County contributes about $3 for each of its residents to the operations of the Chapel Hill Public Library. Approximately 28% of Chapel Hill residents use (i.e., have Library cards) its Library and approximately 30% of the County’s residents use the Chapel Hill Public Library. The Town got into this deal years ago (why, I don’t know) but Chapel Hill residents have been paying more than their fair share for years. So if Town Council members appear reluctant to provide Town services to non-Chapel Hill taxpayers at a time when budgets are being cut it shouldn’t be of too great a surprise. Look what happened this last time.
Bonnie Hauser
/ January 18, 2013George
Rather than thinking of this as cherrypicking town services, think of it as the county contracting with the town to provide fire services to a small community on its southern border (a couple of hundred familes). That’s how fire protection is handled throughout the county.
Chapel Hill has complete control over the fire tax rate. They set it at 15 cents – so you’ll have to ask the manager if it covers their costs. If it doesn’t, they can raise it. Its not tied to the town tax rate and doesn’t affect any other families.
Terri Buckner
/ January 18, 2013I have a column coming out Sunday in the CH News on this same issue. So all I’ll say right now is that if the Town Council chose to expand the library and absorb that debt and operating expenses, knowing full well that it was used more by county residents than city residents, it’s not really the fault of county residents.
George C
/ January 18, 2013Bonnie,
Before the Chapel Hill Town Council ever considers doing anything for these residents of the ETJ (who, I suspect, are reasonably well off and could afford to put sprinkler systems in their homes as our own Fire Chief has done at his Chatham County home) I would hope that they would do right by the Rogers Road community for the services that were long ago promised (agreed upon?).
Terri,
The imbalance in funding of the Library existed long before it was decided to expand the Library and, it appears, will continue even after the Library reopens (although the County has upped its contribution by 60% it still falls far short of its fair share). The fact of the matter is that citizens, whether they be residents of the Town or of the County, should be willing to pay for those services they use or that the municipality deems necessary to maintain the general good. But you cannot allow citizens to pick and choose – it is not a viable model for municipal government of any sort. Otherwise a large portion of CH residents would opt out of the school system either because their children are home-schooled, in private schools, or grown and fled the nest.
Terri Buckner
/ January 18, 2013George,
No one is talking about letting people pick and choose. The town was offered a business deal that would give them more money for the same service. Then some of the council members reacted by wanting even more. I understand they need revenue, but as the manager pointed out to them, it would be better to analyze the real costs to the town of annexation before pursuing it.
When Carrboro decided to annex the neighborhoods along Homestead, they had to build a new fire station and take over management of the neighborhood roads. There are costs to annexation for the town–it’s not free money. Even doing the analysis of the costs is going to cost.
As far as the library goes, I have always said I would prefer to purchase a library card but the council didn’t want to do that because it would leave low-income non-residents dependent on the Orange County system. Personally, I don’t know why that is a problem. Regardless, it’s still nice of them to want to make sure everyone has access to a library. But to then turn around and demand the county pay for their generous gesture, while also expanding their facility, kind of flies in the face of their own generosity.
George C
/ January 18, 2013Bonnie,
One more thing. You say “Chapel Hill has complete control over the fire tax rate. They set it at 15 cents – so you’ll have to ask the manager if it covers their costs. If it doesn’t, they can raise it. Its not tied to the town tax rate and doesn’t affect any other families.”
The fact that the Chapel Hill Fire Department’s services are even available is because the taxpayers of Chapel Hill have, over many years, invested their tax dollars in building the infrastructure of a fire department. You can’t dismiss the costs that have been expended over the years to acquire equipment, to build facilities and to acquire and develop personnel. It’s easy to forget about those sunken costs but it’s those expended costs that even allow for the scenario for the ETJ and County to ask for this coverage. Is there a fair price that County residents can/should/might pay? Maybe, but I don’t think the Town should jump at the first offer.
In all honesty, if I lived in that area I would seriously consider sprinklers. The cost of retrofitting a home might be cheaper in the long run than what the homeowner would pay for this coverage from CH. And a working sprinkler system should provide for insurability and, I would think, enhance re-sale value. I’m betting that Chief Dan Jones will tell you that sprinklers will put out a fire much quicker than any response by ANY fire department can. I’ve seen two many homes in the Triangle are engulfed in flames within 4-5 minutes which is not a bad response by most fire departments.
George C
/ January 18, 2013Terri,
Regarding the Library issue you said ” the council didn’t want to do that because it would leave low-income non-residents dependent on the Orange County system.” I think that situation reflects the title of this thread: “Taking Citizens Hostage”. I think the Town Council (and many citizens, myself included) felt that forcing the County to provide its fair share of the use of the Library by County residents might result in the loss of Library services by those who need these services the most.
Unfortunately politics often seems to have the upper hand in many of these issues.
Terri Buckner
/ January 18, 2013George,
You say that ETJ residents shouldn’t be able to pick and choose what town services they want access to, but the town wants to pick and choose which sections of the ETJ they want to annex based on revenue generation. They want this section along Mt. Carmel Church because those residents already have water and sewer and sidewalks, can get those property taxes without spending anything on services. But they don’t want Dogwood Acres because that would cost them too much even though they want to retain their planning control, In my book, that is called disenfranchisement.
To be clear, the folks in Dogwood Acres don’t want to be annexed. They can’t afford it–but neither can the town. Both sides, residents and town, are trying to pick and choose.
Many
/ January 18, 2013Instead of bickering town vs rural politics, no one has asked the obvious question; “why is this happening?”
Despite Bonnie’s true statement that structure fire response has not changed with 4 department mutual aid contracts that have been in place for years, in fact *other things have indeed changed*:
1) insurance companies are enforcing the 5 & 6 mile limits to the fire station in the homeowners insurance district while ignoring a closer station if it is in a neighboring district. This whole mess is nothing but a (so far) successful way to create revenue out of thin air by the insurance companies. As mentioned above, there are mutual aid agreements; the three or four closest fire departments are dispatched to any structure fire virtually simultaneously. This has been in effect for a long time, Therefore the actuarial risk associated with fire insurance policies has not changed, just the cost.
2) county leadership has failed to take the battle to the state insurance commissioner and insurance companies. Remember; this is happening state wide and in fact countywide. Every jurisdiction is dealing with this creative revenue enhancement by the insurance companies. In effect the insurance companies are sucking dollars out of local communities for no added value. If the counties banded together (e.g council of governments) I suspect there are different solutions more equitable for the homeowner.
Once again, leadership has failed to fight the battle uphill and instead has allowed the effects of bad policy to “trickle down” and create false tensions.
Bonnie’s other point is also valid that from a community perspective at least part (if not all) of the extra money spent on insurance would be far better spent in the community on fire protection.
Bonnie
/ January 18, 2013George I’m sure the residents would be happy to install sprinklers but they still wont have fire protection if they live over six miles from the their primary fire station. This is insurance bureaucracy at work.
Why shouldnt the town jump at the offer? It’s their offer. I can appreciate that it’s complicated. I wish they’d open channel to more discussion with the county instead of rushing into an annexation discussion. There’s a real problem here and it needs cooperation to solve it. Honestly I wish there had been more discussion among elected officials beforehand, but that’s not how we work.
Please don’t confuse this issue with Rogers Road, the library shortfalls or anything else. No one is asking the town for money. Who knows, since forced annexation is off the table, maybe this kind of fee for service model has broader applicability for the ETJ.
And while I hate to morph into the town’s broader finance issues, I agree fully with Terri on the library and am now looking forward to reading her column
Mark Marcoplos
/ January 19, 2013Sounds like a lot of hair is fire. If I understand this correctly, the Town Council wants to “explore annexation”. Then, after much gnashing of keyboard, we learn that “Nothing’s happened yet.” Please tell me more and help me get properly outraged like I want to be.
Nancy
/ January 19, 2013The question of whether annexation is a good idea aside, I was heartened to see Jim Ward recognize that the high insurance premiums were an incentive for homeowners to consider annexation. Usually that sort of insight comes from one of the business brains on council. I was pleased to see council learning to negotiate rather than removing the financial pressure before exploring the impact of annexation on the town budget.
Bonnie Hauser
/ January 20, 2013you’re right Nancy – its encouraging to see the council seek the whole picture and asking for facts before they decide. It will be interesting to see, on a net basis whether annexation pays at all – especially given the risk that the neighbors could say “no”. – and force the county to create a fire department and build a new station right next to the Southern Village fire station.
I wish t there were a process for open discussion on the topic. Maybe some of the council members could attend an ES Workgroup meeting.
Many
/ January 20, 2013No outcome forces the county to create a fire department. That would be up to the residents in the Southern Triangle Fire district, What ever solution must service *both* a hydrant served area and areas that do not have hydrants. It would not make any sense what-so-ever to “build a station right next to Southern Village”, so that’s just a false flag.
Consideration also should be given to the fact that the bulk of the tax base is in the area with hydrants. There is probably an insufficient tax base in the remaining area to support an independent fire department. If annexation happens, the area without hydrants would likely be stuck paying taxes to an area where they cannot vote in perpetuity.
anonymous
/ January 20, 2013The CH Town Council really should not give away free services like the library. The County will not every pay their fair share of the library until their citizens lose the service and the residents of carrboro and ETJ revolt… but until that day the County will gladly take the tax subsidy from the CH town council.
I’m actually glad they decided against the fire service maybe someday they’ll stop giving away free library service too… And I’m guessing the rate the ETJ residents are being charged does not include the true costs of fire station construction, investment in vehicles, and the retirement plans for the firefighters. It’s probably just the annual operation costs…
Bonnie
/ January 21, 2013You should ask the manager but from what I know the 15 cent fire tax is all in, including capital, allocated overheads and accrued liabilities.
Deborah Fulghieri
/ January 24, 2013I am sorry I didn’t read this earlier. The Chapel Hill Fire Department informed me that Chapel Hill provides fire coverage for the university as well as the Town, in return for an unofficial contribution of about $900,000 per year, but that the University cut the contribution last fiscal year, claiming budget pressures. So taxes must rise among the taxable to compensate. I’m surprised that Mayor and Council don’t keep themselves informed about this issue. C.H. Fire Department must also upgrade equipment ($1,000,000 for a truck suitable for hi-rise events, plus 15 additional firefighters to staff 3 shifts on it), in order to keep response time below 4 minutes.
Bringing the C.H. library’s user profile to the fore is a non sequitur having nothing to do with fire coverage. Since Orange County, Chapel Hill, and Carrboro are breaking out more and more fees and taxes on our tax bills for separate services (e.g. stormwater, recycling), it may better serve all residents to have separate line items on their tax bills showing, each year, tax apportionment for fire, library, road maintenance, garbage collection, etc.
anonymous
/ January 24, 2013it’s not a non-sequitur. Residents of chapel hill don’t get line item tax bills (nor will they ever). Also, not all city residents have sidewalks etc…. Real estate agents sell living in the ETJ school district as “city schools but county taxes”… So in many respects those folks get most of the benefits of “city” living without the tax rate.. the council made the correct decision. If they want to be annexed than ask council to be annexed for it otherwise don’t expect more city perks. The library is just another perk that non-Chapel hill taxpayers get for nearly free.
Bonnie Hauser
/ January 24, 2013I thought only the government was getting this backward. If we are going to have an informed decision about taxes, services and even annexation – we have to start with good facts- starting with the ETJ gets no sidewalks, police, or garbage collection and they even maintain their own roads. The library discussion applies ot the whole county not just the ETJ. and its been had.
Thank you Deborah for asking the right question. One has to wonder whether the ETJ is the fall guy for the growing impact that tax exempt UNC is having on town and county services (and budgets) – especially since the state is cutting their funding. I’d add, what’s the impact of UNCHealthcare. How much reali estate are they buying that’s coming off the tax rolls.
Inquiring citizens want to know…
Many
/ January 24, 2013I believe that people in the ETJ whose children go to Chapel Hill Carrboro schools pay an extra school tax, I also think that that option is available to families outside the ETJ.
I suspect UNC pays taxes on their property acquisitions (e.g. the old Borders Books on 15-501), but I do not know for sure. Duke Health care does pay taxes on it’s property in Durham.
The county owns a lot of land that is “off the tax roles” as well. Is Duke Forest on the tax roles? Is the land owned by the TLC? How about the OWASA land?
Bonnie Hauser
/ January 25, 2013oh – yeah – forgot about OWASA and Duke Forest. Great points.
On UNC Healthcare – the answer is “sometimes” So for example, they’re not paying taxes for the new Hosptial in HIllsborough, they are paying taxes on the Eastowne properties on 15-501 North (not sure if that includes Borders). .
George C
/ January 25, 2013UNC doesn’t own the old Borders building. They lease it from the same company that leases the building to Lowes. So property taxes are paid on both. Of course, losing Borders did mean a loss of sales taxes to both the County and the Town.
The issue of non-profits (UNC, Duke, religious organizations) not paying taxes on property has been around for years. Does anyone think the state is ever going to tackle this one?
Deborah Fulghieri
/ January 25, 2013I honestly believe people don’t read their own tax bills, or else there are anonymous commenters who don’t live within Orange County, Chapel Hill, Carrboro or the CHCCS (i.e. Chapel Hill-Carrboro City Schools) district. THESE JURISDICTIONS DO NOT HAVE IDENTICAL BORDERS. If you do live in O.C. and one or two more of these jurisdictions, and you pay real estate taxes, look at your tax bill and you will see separate taxes for Orange County, CHCCS school tax, and (if you live in Carrboro or Chapel Hill) a separate Town tax. There are also separate fees for stormwater, recycling (either rural or urban), and another that I think relates to landfill costs.
RE FIRE: If you live outside Chapel Hill or Carrboro, you pay a separate fire tax. Chapel Hill and Carrboro include fire coverage in their tax, which in Chapel Hill’s case also covers the University, which made contributions to the Chapel Hill fire department in the past. The article above suggests having residents outside Town limits pay their fire tax to the Chapel Hill fire department, and Council wants to see if they can get more than just fire tax. By the way, the .15 fier tax rate recommended by town staff is 3X the North Chatham fire tax of .05, which is suggestive of the burden the Town carries for University fire coverage.
RE SCHOOLS: Chapel Hill extends its jurisdiction into Durham County, but this part of Chapel Hill sends its children to Durham public schools. Otherwise, Chapel Hill and Carrboro within Orange County send their children to CHCCS schools– and please note that the CHCCS, which taxes residents within the district, is larger than Chapel Hill and Carrboro alone. It extends into Orange County beyond the ETJ, but not into Durham or Chatham Counties.
Many
/ January 25, 2013Chapel Hill has an excellent fire department and the statement is not in any way meant to diminish that fact. Chapel Hill is not equipped for and therefore does not fight fire as a primary fire department in a area where water needs to be trucked in. They can, and do provide excellent support to the rural departments in mutual aid situations.
Both Hillsborough and Carrboro have rural coverage (i.e. they both haul water and collect a separate fire tax) and are equipped to fight fire in both rural and areas with hydrants.
Chatham county just raised their per hundred rate to 8.8 cents. This was due to the realization they were charging Orange County less than they were charging their own taxpayers and that situation is not allowed per NC GS 69.
The 6.2 cent difference is *by far* less than the difference in home owner insurance rates currently being experienced by homeowners in areas with hydrants outside of the six mile distance from the North Chatham station and within five of the Chapel Hill Station on 15-501. This is especially true when you take into account Chapel Hills lower ISO rating.
The questions that remain are
1) Is annexation a condition of this coverage?
2) What are the effects on the rest of the Southern Triangle district, since it is likely unable to muster the tax revenue to support it’s own fire department?
3) Would it be better to keep the Southern Triangle district whole and create their own fire department or continue to farm out the coverage for the remainder of the Southern Triangle to North Chatham?
anonymous
/ January 25, 2013I’ll keep it simple – Cities that have city taxes should only provide their services to city residents.. end of point… otherwise why can’t city residents that have no sidewalks and live on state maintained roads get a discount?
adjacent residents can petition to be annexed if they want extra services and pay the extra tax…
Terri Buckner
/ January 25, 2013So per anonymous, the town should annex this area and assume the responsibility for providing police and fire service, maintain the roads and sidewalks, and absorb responsibility for their stormwater runoff and HOPE those new costs don’t cost more than they take in for property taxes. Keeping in mind of course that past research has shown that residential property taxes do NOT pay for the full complement of city services.
OR the town could earn $300,000 for doing nothing they aren’t already doing.
Bonnie
/ January 25, 2013How thrilling to see a debate on taxes. I hope elected officials are listening.
Deborah raises a good point about itemizing line items. It coulhove a way to get NFPs to pay for some of the services they use especially fire and police. It would be interesting to hear what other communities do,
BTW – There are three solid waste fees on your tax bill – two for recycling and one for convenience centers. Thats in addition to curbside trash and yard waste collection ( buried in town taxes) and convenience centers (buried in county taxes.
Deborah Fulghieri
/ January 26, 2013I’m looking at my Dad’s property tax bill from out-of-state. Listed separately are:
School district
Library district
County general fund
County police
General town
Town excluding villages
Combined highway
State real property tax law
Out of county tuition
Street lighting district
Ambulance
Town water
Garbage district
Federal EPA Clean Air Mand.
Sewer district
Sewer district benefit fee
Mass transit tax
It might save a lot of time arguing if our local tax bills were issued thus.
Bonnie Hauser
/ February 12, 2013just to put an end to this discussion, last night the council agreed to provide fire service to the Southern Triangle – as a first goodwill gesture. Its a positive step foward toward a fee for service model – regardless of whether or not annexation ever occurs
Kudos to the CHTC.
Deborah Fulghieri
/ November 11, 2013Interestingly, although ETJ residents have by now paid the Chapel Hill fire tax of .15/100 for 13-14, the state Insurance Service Ratings (ISO) remain unchanged, so that the ETJ residents pay the homeowners rates for ISO 10 ratings. Fiscally, it’s like being annexed, but without relief from the Town Beraters.
many
/ November 12, 2013Yep. The state DoI (who created this problem years ago by failing to negotiate closest fire station as the criteria for determining fire insurance rates) is constipated with the mess they created. Call the DoI and ask them: http://www.ncdoi.com/OSFM/Contacts/