By Kara Lopp
A Mecklenburg County error led to a $182,785 overpayment from the county coffers to Mint Hill. And the county wants the cash back.
The overage came during payments from the county to distribute tax revenue collected from residents in Mint Hill’s newly-created fire service tax district. The tax, approved last year, affects only residents who live in Mint Hill’s Extraterritorial Jurisdiction, or ETJ, leaving untouched those living within the town limits who already pay for fire services. Unincorporated areas near Cornelius, Davidson, Huntersville and Charlotte also pay the new tax. Matthews doesn’t have an ETJ.
Using property values and tax records, county officials estimated the town would receive about $500,000 from the new tax, set at 7 cents per $100 of taxable property. But by the end of April, only $275,615.15 had been collected – a nearly 45 percent shortfall, according to county records.
County commissioners discussed the error Tuesday, May 21, choosing not to vote on a proposal by county staff to “forgive” the overpayment. Instead, commissioners said they’d like to see the town repay the amount – even in payments spread out over several years. It wasn’t clear at press time how the error occurred, but officials said this week it’s not tied to the county’s flawed revaluation.
“I see it as being unfair,” Commissioner George Dunlap said of the proposal to forgive the overpayment. “The people in Cornelius, Davidson, Huntersville and Charlotte will not only pay the cost of their fire service, but will pay the cost of fire service in Mint Hill. Based on the (fire tax agreement), everybody was supposed to pay their fair share … Sure, we overpaid them. They just need to pay us back.”
Commissioner Trevor Fuller agreed.
“I don’t think it’s really debatable that they need to pay it back,” he said.
The news of the overpayment is a shock to Mint Hill officials. The town has already disbursed the money it’s received from the county to the contracted departments which cover the town’s ETJ: the Mint Hill Volunteer Fire Department, Idlewild Volunteer Fire Department and Midland Volunteer Fire Department. The town, which expected to get $185,000 from the new tax, already hired three additional full-time firefighter/EMTs.
“If we got a demand to repay the full amount, I would have to reach out the individual departments,” Town Manager Brian Welch said. “The town is not in a position to eat that (amount).”
John Phillips, fire chief of the Mint Hill Volunteer Fire Department, took part in the collective effort between the fire departments and the county to make the tax a reality. He joined volunteer board chairman Jerry Mullis and other department members at the May 21 county meeting and said officials “can’t understand” how county-prepared tax revenue estimates “missed the mark that badly.”
“We, of course, were all disappointed that the fire service district funding has taken the turn it has taken,” he said. “We have fought for so many years, and have fought so hard, to get this in place. We certainly didn’t anticipate that there would be errors made and certainly not to this magnitude.”
The volunteer department plans to use the revenue to partially fund a new station to be built on 4 acres at the intersection of Arlington Church and Cabarrus roads. The dip in revenue could mean a delay in getting the station built, he said.
“It’ll affect every aspect of our operation because we intend to wisely spend every dime we get to serve the people,” Phillips said. The loss “will impact everything we do.”
County leaders said they also collected $269,150 less than they’d expected from the Charlotte ETJ fire service district. The board could decide to pull that money from the general fund and suggest it be paid back through a 1-cent property tax increase in that district.
That’s the solution commissioners also could approve to fill the Mint Hill funding gap. It’s an idea Dunlap said he’d like the board to consider.
Before the tax, Mint Hill residents and those living in the town’s ETJ receive the same fire protection, but were paying for it at different rates. The tax, officials say, should ensure all residents pay an equal rate for the services they receive. The county paid $2.5 million annually to provide fire service for areas not within city or town limits prior to the tax.
Mint Hill Town Manager Brian Welch said this week he doesn’t “have a strong opinion one way or the other” about how the county may choose to collect the amount – whether by a tax increase or repayment like a loan.
Mullis, the volunteer board chairman, said while he understands the need to refund the county’s money, he opposes any fire tax increase for Mint Hill’s ETJ residents.
“I would hate for those folks to hear this, for sure,” he said. “It really disappoints me. I hope (county commissioners) use some good reasoning on this. I would hate for those people to see an additional tax.”
Commissioner Bill James, who represents Mint Hill, said he wants to see what Mint Hill commissioners think about the proposed tax increase. The county board plans to further discuss the matter during its May 28 budget workshop, where tax rates are set for the next fiscal year. A public hearing is set for 6 p.m. May 30.
“The (interim county) manager was suggesting forgiveness, which I’m sure Mint Hill loves. But the real question, is what does Mint Hill think about this (tax increase) solution? I think we need to be a little bit more accountable in how we handle this. We ought to take only what we need to run the departments, whatever that is.”
But James said the big question on his mind was: “When is Mint Hill going to have a fire department like Matthews?”
James said he wants the Town of Mint Hill to create a municipal fire department and not rely on the 61-year-old volunteer structure. The department, which includes 23 paid town employees, logged more than 3,300 calls in 2012 – an 11 percent increase over 2011. That’s 535 more calls than Matthews Fire & EMS responded to in 2012, according to department records.
The agency is the only fire department in the county to provide ambulance transport to area hospitals, Phillips said, and does so at no cost to patients. The department’s current structure works well and there’s no push to change that, he said.
“… My big fear when this came up before was without some sort of incentive for the towns to form a fire department to take over these (ETJ) areas … it could go on for a long time and these people are kind of stuck in limbo. They’re in the town, they’re not in the town,” James said. “There needs to be something that says Mint Hill plans on forming a fire department at this date … because that’s a town responsibility. It just concerns me.”