Hefty DNC Tab Could Land In County’s Lap
Mayor Anthony Foxx has assured that city finances and taxpayers won’t be pinched by bringing the Democratic National Convention to Charlotte next year. Mecklenburg County, though, might be a different story.
“There’s likely to be some additional cost associated with our planning for the DNC,” County Manager Harry Jones related as part of a budget discussion during Tuesday night’s board of commissioners meeting.
By way of example, Jones said the county was already working closely with the court system on remodeling the county’s arrest-processing center in preparation for the DNC hitting town. Just gives you a warm and fuzzy feeling about what’s in store, doesn’t it. Jones said he also anticipates other expenses, on top of creating more jail space for DNC protestors and the like.
“There may be some additional opportunity costs that might be suggested in terms of our assistance to the city, in terms of staging areas or other facilities completions,” Jones said, without providing any estimates.
“Opportunity costs” – how’s that for a world-class euphemism.
There’s already talk about expediting the completion of uptown’s Little Sugar Creek greenway, in anticipation of The One’s arrival. And last week, at a Charlotte Regional Visitors Authority meeting, parks and recreation director Jim Garges let drop that his department still thinks its construction schedule allows for uptown’s Romare Bearden Park to be completed before the DNC arrives, if funding were available, despite an ostensible moratorium on county capital projects.
“The park is our top priority and it has not replaced any projects,” Garges wrote in an email this week. “Funding would have to be recommended by the Manager’s office and approved by the BOCC (board of county commissioners).”
Meanwhile, county staff on Tuesday night informed commissioners that early projections point toward the county starting budget discussions for the new fiscal year facing only a $500,000 shortfall, compared to the whopping $95 million budget gap faced at this time last year.
The projections are based on expected revenues to include 1 percent growth in the county’s property tax base ($8.8 million, not accounting for any potential increase because of revaluation) and a 3 percent growth in sales tax ($3.3 million), offset by a $22.7 million hit to fund balance for debt service and $19.6 million in anticipated funding reductions from the state to include about $10 million lost revenue money. All told, the county expects total revenues to be $30.2 million less next year than they were this year, said Budget Director Hyong Yi.
The drop in revenue, however, is tempered by an anticipated plunge in expenses that show the county spending $29.7 million less next year. The expense changes assume flat funding for education services, decreasing debt service because the county hasn’t borrowed any money for new capital project during the last two years, overall county cost reductions, and cuts the county could make if it doesn’t have to match state services that are anticipated to be lost.
Bottom line: a projected budget gap of $500,000 leading into the new fiscal year.
“We would not be here today talking about a half-million-dollar budget gap,” Yi told commissioners, “had it not been for the difficult choices that the manager recommended to you [last year] and ultimately that you all adopted.”
That’s one way to look at it. Another: the board’s previous Democrat majorities had taxed-and-spent the county into such a deep hole that the current board had no choice but to trim a small percentage of the county’s massive $1 billion-plus budget to stay afloat.
Even still, while Yi was praising the projected budget gap’s diminutive size, he cautioned that the forecast was subject to change. The projections, for example, don’t include the creation of a debt service savings account and reinstating pay hikes for county employees. Jones has already said he plans to include the debt service account his budget recommendation, due out in March, and has hinted that he will also recommend merit pay raises for employees. Those two initiatives alone could add upwards of $10 million in expenses not included in Tuesday’s rosy projections.
The county also still has a $10 million unaddressed liability in post employment benefits due former employees, and faces the possibility of the state dropping a $30 million tab into Mecklenburg’s budget lap as part of the state’s effort to close what most recently was projected to be its own $2.7 billion shortfall.
Those potential revenue and expense busters, in other words, could possibly turn the county’s projected half-million-dollar budget gap into a $52 million chasm.
And, oh yeah, there’s also those “opportunity costs” that could start piling up for the DNC.
UPDATE: The Bearden Park price tag rolls in at $10M-plus, a bargain according to uptown lunch bunch chieftain Michael Smith, who offers this luscious rationale for the expenditure to the uptown paper: “We’ve got an opportunity, where we’re going to have 15,000 to 20,000 media credentials issued for this convention, (for) Charlotte … to introduce itself to the world. Urban parks are the building blocks of great urban places.”
Here’s an idea, if Smith wants to play urban Lego land, let him take his $300K-plus salary and his cheerleading group’s multi-million-dollar budget to do it.
Catching up to the story we broke, TCO also tosses two new projects into the pre-DNC frenzy – one planned for First Ward as part of developer Daniel Levine’s mixed-use project, price tag about $11 million with taxpayers reimbursing the initial cost; and a pedestrian walkway to connect the empty race car museum with TWC Arena, price tag about $10M.
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