Drexel considers tax increase to handle rising recurring costs

Drexel residents could see a three-cent property tax increase, aimed to cover rising recurring costs, while allowing the town to continue investing in services and infrastructure.

The proposed increase from 35 cents to 38 increase per $100 of valuation, is a move Town Manager Bill Carroll said is necessary to keep up with growing recurring expenses.

“I wouldn’t bring something like this up unless we had to,” Carroll said. “I’m a very conservative person. I only do this because I feel like it’s necessary.”

Even with the increase, Carroll said Drexel would still have the lowest property tax rate among full-service municipalities in Burke, Caldwell, and Catawba counties. The proposed rate is also not new. Drexel maintained a 38-cent rate for about a decade before lowering it in 2023.

For residents, the proposal could mean higher annual tax bills. The proposed budget also includes higher rates for water and sewer, along with electricity.

The increases are not set, as the Drexel Board of Aldermen does not have a final vote until June, after the proposed budget is presented May 5, at the board’s regular meeting, where community members will get to share their thoughts.

At the town’s budget workshop on Tuesday, Carroll shared that police retirement contributions are expected to increase significantly due to recent retirements, creating a recurring expense for the town over the next decade. The cost is expected to increase from $32,105 in the current fiscal year to $81,600 in the next fiscal year, which starts on July 1.

At the same time, Carroll said investments in recreation facilities and programming have increased operating costs. The recreation budget is expected to grow from $155,355 in fiscal year 2022 to 2023, to $312,826 in the upcoming year.

He also pointed to long term investments in aging utility infrastructure, including plans to replace older galvanized water lines within the next decade. Per engineer advice, Carroll said Drexel residents could see an 11% increase in water and sewer services, bringing the average monthly bill from $45.43 to $50.42.

“Once we can get all the galvanized switched out to more modern plastic or iron, getting all that replaced, at that point you’ll be able to kind of take a breath,” Carroll said, adding engineers proposed an increase for three years, and then smaller increases over time.

A 6% electric increase is also proposed for Drexel customers, he said. For an average monthly bill, the cost is expected to increase from $135 to $143, based on an analysis from ElectriCities.

Town leaders also discussed possible changes to rental fees for town facilities, including the R.O. Huffman Center’s Cranford Room and the Drexel Fairgrounds. Drexel Alderman David Harmon suggested lowering the fees, which go up to $100 per hour, to a reduced rate for nonprofit organizations’ events that would directly benefit the community.

President of Grow With Drexel Dan Hoyle spoke up about the fees, and how the nonprofit has been able to fundraise and funnel money back into projects that directly benefit the town. He added that having to pay constant fees would put a strain on the organization’s ability to afford the other projects they do.

“We’re six people, and maybe a handful of other folks,” Hoyle said. “We can’t spend all our time raising money just so we can turn it right back into the town for fees, and then make a difference in Drexel.”

Grow With Drexel acquired $75,000 in grant funding from Jim Rostan and Maxine McCall’s foundations for the renovation of the Cranford Room. From candidate forums to public art projects, the nonprofit regularly fundraises and applies for grant funding for projects that will improve the town.

As the current facility policy allows, nonprofits are allowed one free use of the Cranford Room per month, with one additional use per year free of charge. While board members that the town isn’t looking to make a hefty profit on the facilities, they’re at least looking to break even.

“We want to reinvest it,” Carroll said. “We don’t want to just balloon expenses and not have any revenues.”

The board didn’t make any official decisions on fee reductions, but explored the possibility of giving nonprofits that directly benefit the town an allowance based on the value their organization brings in, or the possibility of getting free uses from volunteering.