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After bitter divorce, Mills River faces big tax increase

County Manager Steve Wyatt makes a point as Mills River Larry Freeman listens in a meeting in April 2015. County Manager Steve Wyatt makes a point as Mills River Larry Freeman listens in a meeting in April 2015.

MILLS RIVER — Mills River taxpayers could face a property tax increase as high as 10 cents per $100 valuation as the Town Council scrambles to provide a “core service” to replace a sheriff's contract the county is terminating.

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Town Manager Jeff Wells and town council members downplay the possibility that the tax rate would go up that much immediately. The town is exploring either starting a police department or getting into the garbage business to meet the core service requirement. Under state law a town that incorporated when Mills River did, 2003, has to provide four services from a menu of eight. The town provides fire service, planning and zoning and street lighting and, until June 30, 2017, police protection.
But in what amounts to an ugly divorce, Henderson County has told Mills River it’s ending a sheriff’s office contract that cost the town $109,000 a year. Now, unless the town and county go back to the negotiating table, Mills River taxpayers could see their tax bills jump by four or five times the current rate of 2.25 cents per $100 valuation.
In interviews with the Hendersonville Lightning, Sheriff Charlie McDonald, County Manager Steve Wyatt and elected commissioners offer a starkly different description of what happened than Mills River officials, who blame the county’s abrupt termination of the contract for the potential expense.
The sheriff’s administration prepared a detailed spreadsheet in color to show that the amount Mills River pays for one deputy covers only a fraction of the law enforcement service the town receives 24 hours a day, 365 days a year.
Ninety-one percent of all calls were answered by other deputies “because that Mills River deputy is only working 8 to 5 Monday through Friday,” said Chief Deputy Jason Brown, who presented statistics when a Lightning reporter met with McDonald, Wyatt and commissioners Bill Lapsley and Grady Hawkins. “We have to catch any calls outside that time frame, also any days he’s off, on vacation or training, or if he’s on a call already and we’ve got one or two other calls. We don’t make them wait.”
Nor does that include work by the detective division, animal control or other functions the Mills River deputy does not handle even when he is on duty.

“So you can see right here, you’re talking about full service outside the scope of that contract. There’s a lot of calls being answered that are not being paid for directly by the Mills River contract,” Brown said.

A full-fledged town police department would also pick up a function the State Highway Patrol currently covers — traffic enforcement and accident investigations.

Ill will dates back years

The ill will between the county and Mills River goes back years, rising more recently from the sheriff’s contract but also rooted in the sales tax the town receives by state law. A year ago, when the county raised the price of the annual contract by $38,000, Mills River council members were vocal in their criticism.
“If the roles were reversed and they didn’t fuss over a $30,000 change for the same service in one year’s time in my opinion there’d be something wrong with them,” said Mills River's mayor pro tem, Shanon Gonce. “I just think it’s my job to get the most bang for the buck.”
Wyatt says the town was already getting plenty of bang for its buck — in fact, nine times more service than the cost.
“You’re getting the entire sheriff’s department for $120,000,” he said. “What’s 7 percent of $14 million. There’s your number. I guarantee you that’s a whole lot more than $120,000.”
Laplsey said it's obvious why the new town chose to go with a sheriff’s contract to meet a core service requirement.
“When they were incorporated they had to pick from this menu of services,” he said. “They went down and said, 'What is each of these going to cost?' And they got to police protection. The answer the town got was that all you have to do is provide an enhanced level of police protection five days a week from 8 to 5. Wow. What a deal.”
Then, last year, commissioners began to question whether the contract amount — then $71,000 — represented the county’s actual cost.
“We asked the managers, ‘Is that a true cost? Are we getting paid what we need to cover expenses?’ And the answer was no,” Lapsley said. “So what is it costing us? So we come up with a number of what it was costing us and Mills River blows up and says, 'You’re screwing us.'”
Mills River’s hostility infuriated Wyatt and the commissioners and rubbed a long festering resentment over what Wyatt described as the town's “defensive incorporation” 13 years ago.
“When they incorporated, they took a big chunk — hundreds of thousands of sales tax money — away from the county taxpayers and concentrated it in Mills River,” Wyatt said. “That cash money we could be paying this stuff with is gone. They’ve taken that money that we could be using to offset this cost. … When you look at from a business standpoint, they’re getting an absolute bargain.”

What's more, Commissioner Grady Hawkins said, the two most recent incorporations — Flat Rock and Mills River — have shifted sales tax money from the county to the towns and helped the towns keep property taxes low. Flat Rock “built up a tremendous amount of sales tax money and banked it out there as has Mills River," Hawkins said.

While Wyatt and the commissioners say the contract in its current form is no longer available, McDonald suggests that the town should continue to use the sheriff’s office for its law enforcement. He doesn’t give a price.
“I’m fine with whatever Mills River does. I live there,” McDonald said. But he adds: “I believe that for citizens in this community, something that’s rural and agrarian, to divest themselves from a sheriff’s department and adopt a city police department does not appear to be a very good use of fiscal resources.
“I just hope that the taxpayers, who are paying more money for the increase in service, would say, ‘You know what? We have one of the best sheriff’s offices anywhere in Western North Carolina… and to be giving all that for a small town city police force, I don’t understand how that’s happening.’ I think that really is coming from a rather uninformed town council more than it is the will of the people.”

Garbage service: $1 million a year

Wells, the town manager, said the town could contract for garbage service — at a cost of $712,000 to $950,000 a year. If it did, he said, it would award a contract to a hauler to provide the service and pay for it through a property tax increase.
Under a “displacement process” set out in state law, Mills River would have to give haulers a 15-month notice, “which gives them time to prepare for losing those customers basically,” Wells said. There are 18 to 20 haulers in the county, most of whom have customers in Mills River. Providing garbage service could mean a 7- to 10-cent tax increase.
“Yes, our hope would be that the estimates are a little high,” Wells said. “We could just do garbage” and not recycling.
At Thursday’s town council meeting, Wells will also recommend the board hire a consultant to evaluate the cost and report on the process for starting a police department. That, too, has the potential for high cost and a big tax increase.

“I think we really need expertise in the field of law enforcement to give a good handle on what those costs would be,” Wells said. “I think that’s vital to know. The study would include a full force” covering the town 24 hours a day. “We need to know what it would cost to have a full force police department.”
If the town went that route, it could build the department, and the budget, gradually.
“With police, we wouldn’t necessarily overnight have a full-force department,” he said. “It would be something we could implement over a two- or three-year period.”

Back to the table?

In the Mills River v. Henderson County divorce drama, the question remains whether the differences are irreconcilable, or whether there’s a chance for restarting talks over the sheriff’s contract.
“I think they would like to have that option, yes,” Wells said of the town council.
Mayor Larry Freeman said he would be in favor of talks.
“We’ve always been willing to negotiate,” he said. “The cutoff came from the county. We are really grateful, too, to chairman Thompson for giving us another year on the contract because whatever option we settle on is going to take time to put in place.”
No thanks, Commissioner Lapsley, who lives in Mills River, says of restarting talks.
“My answer is no, because the county has gone way beyond what it should have years ago by offering this service,” Lapsley said. “Mills River, I’m sorry but I think you need to step up and do it yourself, like Fletcher, Hendersonville and Laurel Park have, and if you decide that’s one of the things on the menu then you need to step up and do it yourself.”
Freeman was asked, Do Mills River’s leaders bear some of the blame for making demands and publicly fussing about the price increase? “I’m not sure exactly where the whole thing came from or what got it started,” he said. “That’s still just pretty much up in the air. What we’re trying to do is deal with the situation we’ve got in hand. We’re just trying to find a core service the taxpayers of Mills River want and are willing to pay for, that will be the least expensive to the taxpayer.” In a survey the town posted on line, police protection was ahead of garbage service by about 60 to 40 percent, Freeman said.
Gonce, the mayor pro tem, said he’s not given up on renewed negotiations.
“I still think deep down there’s still a window of opportunity between us and the county,” he said. “I’m sure they’re mad at us for arguing but it’s my job to argue over big expenses.”