New Bern’s Municipal Service District fund balance was over $2 million in October, according to finance officer.
The chairman of the Municipal Service District Advisory Committee asked if excess funds were being invested during Oct. 17, 2024 Advisory Committee meeting in New Bern, NC.
The New Bern Board of Aldermen re-established an MSD Advisory Committee to advise them how to spend the special property tax money in October 2023 and members were appointed in December. Three of the members terms of office have expired. The BOA will consider filling the seats during Tonight’s meeting.
People who own property within the New Bern’s Municipal Service District pay an additional tax each year, which is determined by the Board of Aldermen. The current tax rate is $0.1375. The district’s boundary runs from Hancock Street to the Neuse River and Broad Street to the Trent River.
The city established a Municipal Service District in 1978 and created an advisory committee in 1985. The committee disbanded in 2016 after Susan Moffat-Thomas retired as the executive director of Swiss Bear Downtown Corporation.
The law was changed in 2015, according to the “Changes to Municipal Service District (MSD) Authority” article by Kara Millonzi.
“In the state budget bill, S.L. 2015-241, the legislature made a few changes to municipal service district authority. An MSD is a defined area within a municipality in which the unit’s governing board levies an additional property tax in order to provide projects or extra services that benefit the properties in the district,” the article said.
The law limits the city “to setting a (MSD) tax rate such that there is ‘no accumulation of excess funds beyond that necessary to meet current needs, fund long-range plans and goals, and maintain a reasonable fund balance,’” the article said.
After Susan Moffat-Thomas retired, Sabrina Bengel advised the Board of Aldermen on how to spend the MSD taxpayer dollars and they approved it.
While debating Rick Prill in 2022, then Alderman Bengel told a group of MSD property owners that the district was established to help main street communities get additional funds that they can’t get from the city government. She said the downtown area was dying and property owners asked the city’s fathers to help them upgrade. She said they were worried about bad businesses coming to town and they used the money to buy light poles, infrastructure, banners, benches and sidewalks. The video can be found here.
She said they bought the Talbots lots and demolished buildings that were on the lots. The Board of Aldermen were planning on giving the Talbots lots and a portion of Union Point Park to the Kessler Collection as incentives for the developer to rehabilitate the Elks Temple building, but the deal fell apart after the public spoke. The Talbots lots were purchased for $825,000 and donated to the Tryon Palace Foundation as reported here. A year later, the Kessler Collection abandoned the project as reported here.
Bengel said the Board of Aldermen bought the land at the corner of Hancock and South Front Streets from the North Carolina Railroad Company hoping it would be “the site of the future Pepsi Museum if we can get PepsiCo back in New Bern.” She directed $227,000 to be taken from the MSD fund and voted on the matter while she was the managing partner of The Birthplace of Pepsi and a Pepsi shareholder.
Rick Prill said he felt the MSD taxpayers should have a voice on how they want the taxes to be used. He won election and the Board of Aldermen reestablished the Municipal Service District Advisory Committee a year ago, as reported here.
It looks like the BOA is appointing people who applied to the advisory board in 2023 as reported here.
Two weeks ago, a citizen asked the Board of Aldermen what the process was to fill the open residential seat on the MSD Advisory Committee.
Mayor Jeffrey Odham said the only vacancy was an ex-officio seat, which would be filled by a member of the Board of Aldermen.
The terms for the residential member, restaurant member and professional member expired in December 2024. The BOA will consider filling the three seats during tonight’s meeting at city hall that starts at 6 p.m., according to the meeting agenda and packet here.
During the Oct. 17 meeting, MSD Advisory Board Chairman Sabrina Bengel said the restaurant member resigned from the board and the appointment “will go back to the Board of Aldermen and they will choose from the list of restaurant owners who had applied.”
She said her husband, Steve Bengel, was on the list but he didn’t want to serve. She said Mike Lentz was also on the list. A week later the Board of Aldermen appointed him to fill the seat. His term expired a month later. Gretchen DuPeza’s residential seat and Michael Raines’s professional services seat also expired in December.
Kim Ostrom, the city’s finance officer, told the advisory committee that they had over $2 million in the account.
“Healthy, healthy, I remember the days when we might have had $80,000,” Sabrina Bengel said.
She asked if the extra funds were invested, and New Bern’s Finance Officer Kimberly Ostrom said the money was invested in North Carolina CLASS and North Carolina Capital Management Trust.
The MSD property owners are paying off $585,438 in loans.
Is the MSD tax reasonable or excessive?
Video recordings of official city meetings are available on City 3 TV here and are later available on the city’s YouTube channel here.
By Wendy Card, Editor. Send an email with questions or comments.