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City Council OKs 3-cent tax increase, 10 percent pay raise

Chart shows monthly cost of increases in the 2021-22 budget for homeowners and businesses in the city. [CITY OF HENDERSONVILLE] Chart shows monthly cost of increases in the 2021-22 budget for homeowners and businesses in the city. [CITY OF HENDERSONVILLE]

The Hendersonville City Council on Thursday night adopted a $45.2 million budget that raises the property tax by 3 cents in order to fund a 10 percent pay raise for city employees, buy first responder and public works vehicles and pay for major capital projects including the new police station and a new Seventh Avenue streetscape and in the coming years a new fire station, City Hall renovation and Edwards Park and Dogwood lot park improvements.

The council unanimously adopted the budget after a public hearing in which no one objected.

In his budget presentation, City Manager John Connet said the increase in the property tax rate to 52 cents per $100 valuation leaves the city at a lower tax rate than many similar-sized municipalities in North Carolina.

The budget funds a 10 percent cost-of-living adjustment and merit pay increase, improved health care coverage, short-term disability and paid family leave and increased contributions to employees' retirement accounts. The City Council, which has been discussing the pay and benefits increases for months, is awaiting the results of a consultant's study that city officials predict will recommend a sizable boost in city pay and benefits.

"We are seeing our well-trained, high-quality employees being recruited away from Hendersonville to go to work for these other jurisdictions," Connet said.

In addition to the property tax increase, the budget adds a new commercial property stormwater fee schedule based on the amount of impervious surface on the land and increases the residential garbage collection fee. The property tax and fee increases add up to $189 more a year for the owner of a home valued at $250,000, $218 for a home valued at $350,000, and $377 for a home valued at $500,000.

The 3-cent property tax increase is the first of three projected increases as the city allocates money for 12 new firefighters, higher pay based on the study’s upcoming recommendation and capital projects. City administrators have recommended another 3-cent property tax increase next year then a third increase of a penny in fiscal year 2023-24.

Among the projects in the works or on the drawing board are:
• The $11.5 million police headquarters on Ashe Street, currently under construction.
• Fire engine 3, purchased this year for $800,000.
• Seventh Avenue streetscape, $1.5 million, this year.
• Eight marked and one unmarked police vehicles, two fire department vehicles and four public works vehicles, $572,000, this year.
• Renovation at City Hall and the City Operations Center, $3 million, 2023.
• Edwards Park and Dogwood Park development, $1.5 million, 2023.
• New Fire Station 1, $9.5 million, 2023.
• New Fire Engine 1, $800,000, 2023.
• New Fire Ladder 1, $1.5 million, 2025.
• Annual vehicle replacement, ranging from $511,000 to $660,000 a year through 2030.