The fledgling communications company, co-owned by Davidson and Mooresville, ultimately divided a non-partisan board along party lines Tuesday when the three Republican commissioners voted to dip into Davidson’s rainy-day fund for more than a half-million dollars, after shooting down Town Manager Leamon Brice’s recommended tax rate for the fiscal year beginning July 1.
Republican commissioners Tim Dreffer, Brian Jenest and Laurie Venzon voted to approve a $9.033 million budget funded through a tax rate of 35 cents per $100 of the town’s newly revalued property. That’s down from the current rate of 36.5 cents but, because the town’s property value increased by nearly 20 percent, the new rate will mean a tax increase for most Davidson property owners (a “revenue-neutral” levy would have been about 33 cents). But the new rate will be less of a hit than the 36-cent rate proposed by Brice and supported by the board’s two Democrats, Connie Wessner and Margo Williams.
Brice hinted at the coming split vote in brief remarks supporting his proposal.
“I regret that I haven’t been able to put a budget before you that you could all vote for,” Brice told commissioners
But Mayor John Woods insisted it was Brice’s job to make a recommendation he thought was best for the town, not one that every commissioner could live with.
“It’s not the staff’s role to circumvent” the Town Board’s responsibility to set a budget, or to influence the difficult choices that effort requires, Woods said. Still, he called Brice’s recommendation “a solid, manageable and fundable budget ... and a reasonable compromise among the positions stated” by commissioners in earlier discussions.
Dreffer, Venzon and Jenest — as part of the motion to pass the budget package — directed the $551,145 being plucked from the town’s reserve fund to MI-Connection. But it’s money the three-year-old company would have gotten anyway. In fact, the approved budget sends about $2 million in bailout funds to the town-owned company, so the targeted allocation amounts to taking the money from a different pocket in the same pair of pants.
And therein lies the ideological difference that divided the typically congruous board. Next year’s allocation to MI-Connection puts Davidson’s investment in the TV, Internet and phone company above the $35 million mark, nearly four times the amount of the town’s operating budget. The three Republicans said they’re confident that MI-Connection will cut significantly into its debt-driven deficit next year — enough to cover that one-half million dollars in reserve funds.
Wessner, on the other hand, was not so sure.
“I’m opposed to using fund balance to pay for expenses that will be ongoing,” Wessner insisted, in an argument echoed by Williams.
MI-Connection is projected to continue losing money beyond next year which, in Wessner and Williams’ view, makes its bailout an ongoing expense. With its share of MI-Connection’s long term debt at more than $30 million (also about the company’s estimated current value) and Mooresville’s obligation at about $60 million, both towns are likely to continue dipping into their operational budgets to support the company.
For Davidson, that means about 20 percent of its budget is going directly to MI-Connection next year, down slightly from this year, when Brice overhauled the town’s administration to cut costs, and commissioners approved a $201 annual fee for residential trash pickup to cover Davidson’s share of the company’s loss. The trash fee remains unchanged in the new budget.
For his part, Dreffer expressed optimism about MI-Connection’s future.
“I choose to think more positively that we won’t have that ($2 million) number next year for MI-Connection,” Dreffer explained.
For at least one year, though, MI-Connection will eat up about 7 cents of that new 35 cent tax rate — and a largely unquantifiable amount of the town’s time and energy.
