ROCKINGHAM — It appears the fight between municipalities and the Richmond County government is over after the parties reached an agreement Monday.
According to an interlocal agreement, the county will adjust its budget to shell out a total of $1,457,820 for the current and upcoming fiscal years, providing Hamlet and Rockingam agree to “release all claims of threatened litigation.”
The first payment is due by June 30, the end of the current fiscal year.
The municipalities are set to receive the following amounts per fiscal year:
- Rockingham – $252,070
- Hamlet – $240,234
- Ellerbe – $66,661
- Dobbins Heights – $76,103
- Hoffman – $63,572
- Norman – $30,270
“Like most agreements no party usually gets everything it wants,” Rockingham City Manager Monty Crump said in an email on Tuesday. “I do think however this agreement represents a good opportunity to move forward from all the discourse caused by the decision to change the sales tax and hopefully with regular meetings and discussions between the towns and county as provided for in the agreement those meetings will be productive.”
In April 2020, the Board of Commissioners voted to change the method of sales tax allocation from per capita, which is based on population, to ad valorem, which is based on property values.
Crump didn’t waste time showing his disdain for the decision, sending an email to County Manager Bryan Land.
In a response to Crump’s questions about the change, Land had said it was due to the county absorbing functions from the municipalities over the years.
Land later cited financial burdens being shifted to the county level and increasing costs of mandated expenses, as well as the consolidation of the 911 Center — the latter of which Crump called “an absolute red herring.”
According to the interlocal agreement signed in February of 2015, the center is supposed to be self-sufficient, “financed by 911 fees, grants, and funds provided by the county” and the county will not charge the city for taking over the call-taking and dispatch functions.
County leaders also pointed out that both Rockingham and Hamlet had released portions of their respective extraterritorial jurisdictions back to the county; and that 52 of the state’s 100 counties used the ad valorem method.
Crump said it was “not effective nor responsible leadership to spread the county’s financial troubles to the county’s municipalities (as) a solution to the county’s financial problems.”
On April 29 of 2020, Rockingham Mayor Steve Morris and Hamlet Mayor Bill Bayless went to the county administration building to drop off resolutions from five of the six incorporated municipalities urging commissioners to continue with the per-capita distribution.
Several days later, an analysis from the N.C. Department of Revenue — which matched a similar analysis by the city of Rockingham — estimated that Norman would lose 100% of its sales tax revenue
Likewise, Hoffman would lose more than 85%, Dobbins Heights would be out nearly 79%, and Ellerbe’s share would decrease by more than 55%. Both Rockingham and Hamlet would lose more than a half-million each.
Land said in his email that projections show an increase to the county’s coffers of around 10% or $675,000. But figures from the DOR estimated an increase of more than 25%.
During last month’s budget presentation, Land told commissioners that sales tax revenue is expected to “substantially” exceed what was expected, adding that the “need for these additional funds is great.”
In late May of 2020, then-commissioner Ben Moss proposed that any amount beyond the $675,000 that was pitched to commissioners be returned to the municipalities.
“There are a lot of things to unpack related to the sales tax change and as both predicted and now fully realized a lot of unintended negative consequences,” Crump said. “This agreement is a step in the right direction to address some of them in the short term, particularly the financial viability of the smaller towns.”
County Commissioner Justin Dawkins, who serves as vice chairman, echoed Crump’s sentiments saying he feels the parties are “on the right path to move our county, as a whole, forward.”
“Since the beginning, I have been adamant that we need recurring strategic meetings between representatives from all municipalities and the county,” Dawkins continued in his statement.
Dawkins was appointed to the board in late November to fill the spot vacated by Moss, who was elected to the N.C. House of Representatives. Three other commissioners — Andy Grooms, Toni Maples and Chairman Jeff Smart — were elected to the board in November.
The only current commissioners who were on the board at the time of the decision are Rick Watkins, Tavares Bostic and Don Bryant.
Dawkins said the municipalities’ desire to engage with the county “is a bright sport of this whole ordeal” and gives him hope that the parties can start addressing the following issues:
- Open direct lines of communication
- Reestablish transparency and ultimately trust with each other
- Begin shaping a strategic vision for the county as a whole
- Begin executing that strategy together.
