City of New Bern recommends new MSD Advisory Committee for downtown planning

The Board of Aldermen have agreed to seek a reformed advisory committee to make recommendations for the use of the city's Municipal Service District funds in downtown New Bern. Photo by Todd Wetherington.
The Board of Aldermen have agreed to seek a reformed advisory committee to make recommendations for the use of the city’s Municipal Service District funds in downtown New Bern. Photo by Todd Wetherington.

City staff have recommended the formation of a new advisory committee for New Bern’s $1.6 million Municipal Service District fund for renovations and other projects downtown.

During a presentation at the New Bern Board of Aldermen’s Feb. 27 work session, City Manager Foster Hughes said city staff were recommending the establishment of an MSD advisory committee that would consist of 30% residents and 70% commercial property owners. He said the committee could be broken down further to include representatives from the district’s restaurant, retail, lodging and entertainment businesses.

Staff also recommended that the MSD advisory committee include at least three ex-officio members — the city manager, finance officer, and the executive director of Swiss Bear, New Bern’s Main Street organization that is responsible for leading the economic development of the greater downtown area.

Established in 1978, New Bern’s Municipal Service District encompasses most of the city’s downtown area, running from the north side of Broad Street to the west side of Hancock Street and to the edge of the Neuse and Trent rivers. The area is made up of approximately 30% residential and 70% commercial properties.

In addition to city and county property taxes, property owners within the MSD agreed to have an additional tax imposed on them that would go toward improvements in the area. New Bern’s current MSD tax rate is $0.1375 per $100 in value. While the MSD also encompasses nonprofit and government organizations, those entities do not contribute to the MSD tax.

According to Hughes, the MSD tax brings in an average of $195,000 annually.

In 1985, New Bern appointed a seven-member Municipal Service District Advisory Committee to work with the city to reach a consensus on public projects to undertake within the district to be financed with MSD tax money. However, after the first board was seated it was never reconstituted and is currently inactive.

Downtown improvements that have been financed through the MSD tax include streetscape projects, sidewalk replacements, landscaping and the purchase of both the property at the corner of Hancock and South Front Streets and the Talbots Lots on South Front Street.

The city recently sold the Talbots Lots to a private citizen for $825,000, which has been placed in the MSD fund that now totals $1,670,665.

Hughes told the board there are currently 74 MSDs established throughout the state, with Morrisville, Statesville, Sanford, Goldsboro, and Salisbury being comparable in terms of New Bern’s population. Of those MSDs, Hughes said Goldsboro charges the highest tax rate at $0.235 and Morrisville and Statesville the lowest at $0.10.

Hughes said historically, MSDs are managed three different ways: through advisory boards; with no advisory board; or with recommendations coming through the governing board on how to spend the funds.

“So what we’ve seen with a lot of our comparable cities is they contracted out with the Main Street groups to operate this,” Hughes said.

Hughes said Wilmington’s MSD has an advisory board of 14 members that is broken down into residents, property owners, real estate developers, and restaurant and retail representatives along with the city manager.

By comparison, Morrisville has no board and maintains the collected taxes for future use through their budget office.

The board agreed unanimously that some manner of MSD committee needs to be established but differed on how that should be accomplished.

Alderwoman Barbara Best said she was leaning towards an MSD advisory board.

“Those are basically the citizens that pay the additional MSD tax and I think there should be a board comprised of those taxpayers,” she commented.

Alderman Bobby Aster said he would be in favor of Swiss Bear serving as the MSD advisory committee.

“It would just be simple for them to make the recommendations involving the MSD residents and commercial owners and then make their recommendations to this board,” Aster explained.

Alderman Rick Prill, whose Ward 1 encompasses the MSD, said he would expect pushback from residential property owners if the responsibility fell to Swiss Bear, which is commercially focused.

“I think there would be concern from residential property owners if this was turned over to Swiss Bear,” Prill commented.

The board unanimously agreed to consider two different proposals. They will allow Swiss Bear to put together a proposal on how the organization would proceed given the opportunity to act as the MSD advisory committee. The board also instructed city staff to come back with a proposal for something similar to Wilmington’s existing MSD committee.

Mayor Jeffrey Odham stressed that, whatever the ultimate makeup of the MSD group, it would be an advisory committee only, with responsibilities similar to the city’s planning and zoning board.

“I think we need to make sure that if we move forward in whatever direction or capacity we do, that folks understand that this is just an advisory committee, that if they pack the courtroom and say, ‘We want to do this,” and that advisory committee agrees or disagrees with them, ultimately it’s this board that’s going to have to make those decisions,” Odham said.

By Todd Wetherington, co-editor. Send an email with questions or comments.