Manager One-On-One
Monday, I talked briefly with the town manager as part of our weekly one-on-one. Mostly we talked about the 2024 bonds and the reprioritization of capital projects in February.
Thanksgiving!
I was blessed to be with my wife, daughters, grandson, son-in-law, and granddog on Thanksgiving. It was a great time reflecting on all my blessings. I am hoping your Thanksgiving was a blessing for you.
Cary #13 Cutest Christmas Town in Southern US
On Wednesday I was notified that Southern Living ranked Cary as the 13th cutest Christmas town in the South. Here is what they said:
“They say there’s no place like home for the holidays, but if you’re in the mood for a little end-of-year travel, there’s no place that will feel more like home than one of the South’s many charming Christmas towns. These holiday havens go all out for the season, breaking out their festive best with thousands upon thousands of twinkling lights, impressive window displays, and garland galore. And if that wasn’t enough to put you in the spirit, their last two months of the year are jam-packed with all kinds of events, parades, and gatherings to further spread cheer. From candlelight tours to ballets and concerts to outdoor markets, there’s a way to celebrate the season almost every day. Keep reading to hear more about the incredible workings of the South’s cutest Christmas towns.
A testament to the city’s enthusiasm for the holidays, each year, Cary doubles its number of oversize ornaments—these decorations champion its diverse population, with nods to Christmas, Hanukkah, Kwanzaa, and secular celebrations. Start at The Mayton, a boutique hotel where giant nutcrackers flank the front door, the halls are carefully decked, and a special guest package means that no one misses out on Santa’s cookies. People gather for the lighting of a 40-foot tree, a gingerbread house competition, and a parade (now in its 43rd year). Enjoy a synchronized light show at the iconic downtown fountain, and in January, join Cary’s Latino community at the Three Kings’ Day Parade.”
If you haven’t seen downtown Cary during the holiday season now is the time. Everything is lit up except the Christmas tree which will be lit at the ceremony on December 7th.
Bonds & Taxes Questions
There has been a lot of confusion (and misinformation) about three separate issues that were linked together by time and taxes. Those were 2024 property reevaluations by Wake County, the fiscal year 2025 tax rate which started on July 1st, and the 2024 Cary parks bond. In addition, there is now misinformation about the 2019 remaining bond projects. I will attempt to address these below with my thoughts and understanding. These include my opinions which may not necessarily represent the town’s position.
Property Reevaluation
Property revaluation occurs every four years and is set by Wake County. Revaluations used to occur every eight years, but Wake County changed because property values were increasing very rapidly. I have heard that the county is now considering revaluation every two years, but I don’t know that for a fact. I believe that if the next revaluation isn’t for four years we will have another significant increase in property values.
It is important to understand why property values are increasing rapidly. The Raleigh Metro Area, which includes Cary, is one of the most desirable places to live, work, and play in the nation which drives up demand. When something is in high demand people are willing to pay more and that in turn drives up costs. I believe Cary is the most desirable out of all the municipalities in the Raleigh Metro Area. That means the demand is even higher in Cary. And if the demand is high and housing is in short supply, which is true for Cary, then the costs go up even more. That is why I believe there was a significant increase in property values in Cary. My property value went up by 63% in the last four years. BTW, high property value increases were true with all municipalities across Wake County.
Tax Rate for FY 2025 that started on July 1st
As of July 1st, the Cary Tax Rate moved to 32.5 cents per $100 of value from 34.5 cents. However, the revenue neutral rate would have been 24.5 cents. A revenue neutral rate is the rate where the municipality takes in the same amount of revenue as the previous year.
So why 8 cents above revenue neutral? 3 cents due to inflation, 2 cents to program expansion (parks and environment), 2 cents to debt service, and 1 cent due to General Fund replenishment. Also, in past years we have been able to subsidize taxes with growth. We are now a mature community, and that kind of growth is basically over.
What are some examples of inflation? Project bids are coming in about 50% above estimates, some with one bid, or sometimes we get no bids. Materials have skyrocketed. For example, sidewalk costs have doubled in the last four years and asphalt has increased by 40% in the same amount of time.
What are some examples of Parks and environment? Downtown Cary Park was one of the biggest additions to operating costs. Also, the McCrimmon Park and the Carpenter Fire Station Park. Miles of greenways were also added. Some environmental initiatives included electric vehicles such as one of the first electric fire trucks in the nation, one of the first electric garbage trucks in the nation. These initiatives have capital and operational costs. The good news is that these are investments.
Downtown Cary Park has been the catalyst for downtown development generating millions of dollars in economic benefit. That is, new businesses and residents generate more tax base which keeps your taxes lower. The electric vehicles save money on fuel costs and after two or three years the additional costs have been recovered. I believe these are good investments in addition to fulfilling a need.
Why did debt service increase? The biggest reason is the sale of a portion of the 2019 GO (General Obligation) bonds. GO bonds, which are voter approved, are debt at the lowest interest rate possible. This is possible because we have the highest rating of all bond rating agencies. A good portion of the 2019 bonds have not been sold yet so that debt has not occurred. The future sales of the remaining portion of the bonds will also increase debt service.
Why was money from the general fund spent? It was a strategic move to use extra reserves rather than debt. It should be noted that our General Fund balance is well above requirements, and we want to keep it that way because it helps keep our highest rating with the bond rating agencies. So, we need to replenish the General Fund.
What is the issue with sales tax revenue? Since Covid, sales tax revenue has been increasing by 8% to 9% annually. Last year, however, the increase was less than 1%. This is significant since sales tax is the second largest revenue source at 21.1%. Our biggest source of revenue is property tax at 59%.
2024 Parks Bond
The 2024 parks bond was about funding parks for the next ten to fifteen years. Since the bond was close to property revaluation and the new tax rate, a lot of people viewed this as a funding question for now. I believe that is one of the main reasons the bond failed.
It is important to understand that the council and the staff heard everyone loud and clear about the bonds. We have stopped all bond projects due to lack of funding. While I can’t predict what future council will do, I believe some of them, like the center at South Hills, will never happen. What does this mean? The following is my best guestimate:
The Center
The community center, senior center, and competitive space will not be built. The $75 million promised by Wake County will be rescinded. The $30 million annual increase in economic benefit, which would help keep our taxes low, will not happen.
Mills Park Community Center
This community center and senior center project has also been stopped. We have been planning on having a community center and senior center at this location for about a decade. IMHO, it would be almost another decade IF it was ever built. Why? Historically bonds are at least five years apart. With large projects taking two years of planning/design and two years of construction that is another four years added to the five years IF everything is on schedule.
It is important to understand that we will now need to spend significant resources to maintain our existing community and senior centers, which are all over twenty years old. IMHO, expanding programs will be difficult due to lack of space. A future bond to build a center would be a question for a future council.
Tennis and Pickleball Expansion
I don’t believe the pickleball courts will be built at the tennis center. That expansion would have allowed more recreational opportunities for sports in high demand and more professional tennis and pickleball tournaments. This is a loss of millions of dollars in economic benefit, which again keeps our taxes low. The NC Tennis Hall of Fame will probably not be located here.
Walnut Street Greenway
The Walnut Creek Greenway from downtown to Fenton, to WakeMed Soccer Park, Triangle Aquatic Center, and the new South Hills redevelopment has been stopped. If future councils decide to do this, it might have to be funded with another bond. Again, I think that is years away. Not connecting all these destinations is a huge, missed opportunity not only for recreation but for quality of life.
Nature Park Master Plan
Cary has 217 acres of farmland that it is maintaining. Unfortunately, there are no trails, restrooms, or parking. It will be up to a council in the future to decide what to do with this property. For now, nothing will happen.
Asian Garden Master Plan
This idea of a one-to-two-acre Asian garden is stopped. I doubt it will ever be considered again.
What was this bond vote significant? Even if you don’t use a facility, it creates value for you. Like the 911 center, fire, and police, you may not ever use it. Hopefully, you won’t. But having the best of the best in services enhances the quality of life for everyone in our community. Great municipal services make your property in Cary more valuable.
2019 Bond Projects
Cary has moved into “maintenance mode” in this current period of the fiscal year 2025 budget (which began on July 1, 2024) for the following reasons:
- Unprecedented Construction Cost Climate
- Downward Pressure on Sales Tax Receipts
- A desire by the Town Council to minimize any potential fiscal year 2026 Budget Property Tax Increase
This is causing a pause on the 2019 bond projects. The pause on these projects is not because of the 2024 bond vote. Here is a list of remaining projects:
- Carpenter Fire Station Road Widening
- Louis Stephens Drive
- Veterans Freedom Park
- Tryon Road Park
- Walnut Creek Greenway
- Dutchman’s Branch Greenway
- Green Level Church Road Widening
- NC 55 Pedestrian Grade Separation
- O’Kelly Chapel Road Widening
- Action Sports Park
The length of time for the “maintenance period” is currently unknown. Staff are currently re-estimating projects for council reprioritization at our annual meeting in February.
Current Capital Projects
The following is a memo from the town manager about current capital projects:
“To clarify the discussion from last week’s Council Quarterly meeting, all capital projects that are not yet under construction are paused while staff updates cost estimates to reflect escalating construction costs. This pause allows time for the Council to prioritize projects based on current and projected construction costs over the next year.
As mentioned during the meeting, construction cost inflation has outpaced budgets, with costs reaching record highs, including in some cases an escalation of over 200% in the last few years. Staff will re-estimate all active capital projects based on recent construction prices and will apply best estimates of additional potential escalation over the next few years. This information will be prepared for Council evaluation, including a prioritization exercise at the February annual meeting. A similar exercise was done with the Council in 2009 when budgetary pressures and cost escalations were also high.
There are currently 377 active general capital projects within the Downtown, Fire, General Government, PRCR, and Transportation categories. A total of $768 million has been budgeted for these projects. Their current available balance is $265 million.
On the utility side, there are 222 active water and sewer projects with a total budget of $462 million and a combined available balance of $128 million.
Between February and June as part of the annual budget process, our focus will be on refining the capital improvements program to align with the current economic climate while remaining flexible to accommodate future financial and priority changes. Below are examples of projects that have been paused in preparation for the February discussion. These were shared during last week’s Quarterly meeting.
Sidewalks:
Chatham Street 
Small Segments
Old Apex Rd west of W Chatham Roundabout (Bid Rejected 11/14/2024)
Old Apex Road north of Young Landing Ct
Louis Stephens Drive
Green Level Church Rd Streetside Trail
Jenks Carpenter Rd Streetside Trail
Roberts Road
Norwell Blvd
Johnson St east of Harrison Ave
Johnson St (E) north of Chapel Hill
Sorrell Street
Nottingham Drive
Cary Pkwy (NW) at Sheldon Dr
Highfield Avenue
Maynard Rd north of Chapel Hill
Laura Duncan Road
Cary Parkway (NW) at Norwell
Chatham Street
Lake Pine Drive (Phase 1)
Ryan Road
Lake Pine Drive (Phase 2)
2019 Bond Projects:
Carpenter Fire Station Road Widening
Louis Stephens Drive
Veterans Freedom Park
Tryon Road Park
Walnut Creek Greenway
Dutchman’s Branch Greenway
Green Level Church Rd Widening
NC55 Pedestrian Grade Separation
O’Kelly Chapel Road Widening
Action Sports Park
Examples of Other Budgeted Capital Projects:
Street Improvements FY25
Optimist Farm Greenway
Lake Grove Dam Maintenance
Cary Tennis Park Improvements
Western Cary Community Facility
Parking Deck Technology
Highcroft Drive Extension
South Hills Community Center
Sidewalks FY25
Downtown Ped Improvements
Mobility Study
Cary Tennis Park Clubhouse Design
We remain focused on preparing for the February Annual Meeting and the FY 2026 budget and will provide you with timely updates as we move forward with our work.”
Mayor’s Mailbox
- A complaint about bicycle safety in Cary. “… this does not seem to be a high priority for the town.” (Not true. Safety always comes first!)
- A complaint that recycling should be weekly (Recycling materials should not include anything that should smell or spoil. Collecting every two weeks should be fine. Collecting more frequently would require more people, more equipment, and more taxes. If you need additional space, you can call and ask for an additional cart.)
Next Week
Next week’s activities include staff meetings, a HRID meeting, a First Responders breakfast, a Farmington Woods Elementary visit, a Joint MPO Rail Subcommittee meeting, and the Cary Christmas Tree Lighting event.
Well, that is all for this week. My next post will be on Sunday, December 8th, 2024. Although I have Facebook and Twitter accounts, those are not the best means of communication with me. Please send all Town of Cary questions or comments to Harold.Weinbrecht@carync.gov and email personal comments to augustanat@mindspring.com.
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