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January 25, 2008
Update: Online Travel Litigation
 
On January 14, 2008, Mecklenburg County filed a lawsuit in the Superior Court of Mecklenburg County against 13 on-line travel companies, including Hotwire, Expedia, Orbitz, and Travelocity, seeking to recover for underpayment of hotel occupancy taxes. Similar lawsuits, currently pending in the North Carolina Superior Court, have been brought by Wake County, Buncombe County, and Dare County against on-line travel companies.
 
Mecklenburg County levies an 8% occupancy tax on hotel accommodations. The lawsuit maintains that the on-line travel companies failed to collect or collected and failed to remit the full tax in connection with renting hotel rooms in Mecklenburg County.
 
The lawsuit requests the Court to award Mecklenburg County not only monetary damages and penalties, but also to enter a declaratory judgment requiring the on-line travel companies to collect the County’s full tax from consumers and pay the full tax to the County.
 
The on-line travel companies will be receiving copies of the Complaint and Civil Summons and will have 60 days from service to respond to the Complaint.
 
For additional information, please contact Deputy County Attorney Sandra Bisanar at, sandra.bisanar@mecklenburgcountync.gov, or 704-336-2609.
 

311 Update
 
This past Sunday The Charlotte Observer reported that the City of Charlotte will be requesting additional funding to pay a share of proposed additional spending on the 311 city/county customer service center. In the November 9, 2007 Board Bulletin, the Board was alerted to this possibility, based on the need to address staff turnover and technology issues that have occurred some time after the City launched 311 in July 2005.
 
In the current fiscal year, we budgeted $1.5 million for services from 311. The center handles roughly 285,000 County service calls annually with the majority being related to property assessment and tax collection matters. This equates to approximately $5.26 per call. The additional investment in 311 is intended to build the capacity to increase the number of calls that can be handled by 311. The desired outcome is to reduce the cost per call while improving customer service and satisfaction.
 
The 311 city/county customer service center is a consolidated service that falls within the interlocal agreement between the City and County. This agreement calls for the County to fund 26% of the operational budget for this service, with the City paying the remaining 74%. As we do with any projected cost increase, we will evaluate the choices and consequences associated with the City’s proposal as we develop next year’s budget recommendation.
 
For additional information, please contact eGovernment/Customer Service Director Brian Cox at brian.cox@mecklenburgcountync.gov, or 704-336-2576,
 

Building Permitting Trends
 
Recent media reports regarding building permits in Mecklenburg County have presented only partial information on the rate of construction in our community. The following figures present a full assessment of Mecklenburg’s growth and development trends.
 

Workload Volumes
 
For the six month period between July and December, 2007, construction in Mecklenburg County was down slightly from the previous year (see the table 1). However, construction activity remains at high levels, mostly due to continuing strong commercial market.

 

 
Residential Permit Activity
 
A recent newspaper article reported a decline in residential permits. The decline in residential permits is true only for new construction SF detached permits, which are down 37% from 2006. However, through the first six months of FY08, the total residential permitting activity level remained strong. The overall permitting activity numbers are reported in table 2.
 
 
Workload Volumes
 
As indicated above, overall revenue is down about $500,000 from the projection, and below last year’s total in December 2006. However, there are two key points to acknowledge about the situation:
  1. December 2006 revenue figures were artificially high, driven up by a push to permit projects under the 2002 NC Building Code (before the change to the 2006 NC Code). This is a phenomenon seen before, specifically in December 2002, when the transition period for the 1999 NC Building Code ended.
  2. December 2007 revenue levels ($1,518,884) were comparable to revenue levels in 2005 ($1,611,731) and December 2004 ($1,540,393).
 
Historically, December, January and February have been low revenue months. They are usually more than balanced by strong revenue in March through June. Consequently, December’s figures are not surprising. County staff will continue to monitor revenue versus expenses closely and take the appropriate measures to assure a balanced budget.
 

Future Trends
 
If the downturn in economic growth continues, new construction permits likely will decline and be replaced by an increase in renovation permits, both for residential and commercial permits. In 2001 and 2002, the County noted a trend where a shaky economy caused homeowners to improve, rather than move. Similarly, businesses renovated and added additions, rather than building new structures. If history is a good indicator of the future, we would anticipate a re-occurrence of this dynamic.
 
 
- Harry L. Jones, Sr., County Manager
 


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