Published: Jan 19, 2013 07:00 PM
Modified: Jan 19, 2013 05:06 PM
CHAPEL HILL - Annexation is the price some southern Orange County neighborhoods will have to pay if they want to be included in Chapel Hill’s fire district.
While other county residents have seen lower homeowner’s insurance bills, 112 homeowners off Mt. Carmel Church Road have watched their bills double and triple. The homes would be hard to sell because insurance isn’t guaranteed.
Hunt’s Reserve resident Douglas Longman lives roughly two miles from Chapel Hill’s Fire Station 5 and has a fire hydrant within 150 feet of his property. His insurance premium has risen by a little over $1,000 in less than two years.
Under a mutual aid agreement, Chapel Hill’s Station 5 across from Southern Village usually arrives first in emergencies. However, North Chatham – at more than six miles away – is the official fire service provider, giving the neighbors a Class 10 insurance rating.
“It’s not a matter of someone not receiving the services. It’s purely a financial issue of the insurance companies not getting credit or recognizing that mutual aid situation and giving people credit for that,” Chapel Hill Fire Chief Dan Jones said.
Officials have negotiated a potential solution to the dilemma – putting the homes in Chapel Hill’s fire district.
But the Town Council balked Monday at providing dedicated service to neighborhoods outside town limits that don’t pay local taxes. The county should talk with the affected residents about the benefits of seeking annexation, they said.
That would generate about $1 million in new property taxes for Chapel Hill at the town tax rate of 49 cents for every $100 in value. The residents also would pay a 15-cent fire tax per $100 in property value – 12 cents for operating costs and support services, and three cents for the capital reserve fund.
The total property tax bill for a $200,000 home, including county taxes, would be $3,380, an almost $1,000 increase. .
Council member Jim Ward said the council must act in the town’s best interests.
“This community has lived in the town of Chapel Hill in all ways, except tax-wise,” Ward said. “This provides us an opportunity to bring them formally into town of Chapel Hill as taxpaying residents of Chapel Hill, and they would enjoy the continued services that are part of being part of Chapel Hill and also start paying their fair share of those amenities.”
Longman said his neighbors already pay city schools taxes, so he’s not sure what other amenities they should pay for using. Annexation is not in the residents’ best interests, nor will it be beneficial to the town, he said.
“They saw this as leverage to try to get increased tax revenue,” he said. “They’ll get significant resistance.”
Town Manager Roger Stancil said staff would need at least a month to understand annexation’s costs and benefits.
The homeowners don’t have that long to wait, Assistant County Manager Michael Talbert said. The state Fire Marshal needs the contracts by Feb. 1. If they’re not in place by July 1, the service and insurance ratings will remain the same.
It’s unlikely North Chatham would build a substation in another county’s jurisdiction, he said. Orange County could build one, but “there’s no land and no fire department, so we would be starting from scratch,” he said.