City-County Consolidation in North Carolina

Legally, the most common proposed structure in North Carolina for a city-county consolidation has been to dissolve the city as a separate corporate entity and merge it into the county, with the consolidated government a continuation of the existing county government.

Of course, abolishing the separate city government normally does not abolish the need for additional or enhanced services in the geographic area of the abolished city. Take, for example, fire protection. Typically in North Carolina, the central city is served by a full-time professional fire department, while most areas outside the city are served by a network of volunteer fire departments (some of which may employ one or a few full-time professional fire fighters). Upon consolidation, the city’s fire department is not going to be abolished and replaced by a volunteer organization, but neither is the new government likely to extend professional fire protection to the entire county; it would simply be too expensive. Rather, fire protection is likely to continue little changed by consolidation. While the new government could pay for the former city’s fire department through taxes levied countywide, that is politically unlikely. Instead, consolidated governments typically rely on some mechanism by which the cost of the professional fire department is imposed only on taxpayers in the area served by that fire department. In North Carolina that mechanism is a special tax district.

Article V, section 2(4), of the North Carolina state constitution, which was approved by the state’s voters in 1970 and became effective in 1973, provides the constitutional support for the sort of tax district used in city-county consolidations nationally. It reads as follows:

Special tax areas. Subject to the limitations imposed by Section 4 [of Article V of the constitution], the General Assembly may enact general laws authorizing the governing body of any county, city, or town to define territorial areas and to levy taxes within those areas, in addition to those levied throughout the county, city, or town, in order to finance, provide, or maintain services, facilities, and functions in addition to or to a greater extent than those financed, provided, or maintained for the entire county, city, or town.

The usual North Carolina consolidation proposal has anticipated that the new government would establish two basic tax districts. One would be a countywide district – usually called the “general services district” – which would support services provided countywide. The second would be a district comprising the area of the former city – called the “urban services district” or “central services district” in the various proposals – which would support services provided only in the former city or provided at a higher level in the former city. (Two of the proposals – the most recent each for Wilmington-New Hanover and for Charlotte-Mecklenburg – contemplated that the new government would establish a third tax district, one for what might be called the unincorporated area – that portion of the county outside the former city and also not in one of the continuing smaller towns in the county. These proposals anticipated that the government would provide some urban-type services – for example, streets or law enforcement – to this unincorporated area and that it would not want to tax the entire county for those services.)

A careful reader of the various proposed charters set out elsewhere on this website will notice that the charters do not create these tax districts, nor do they even direct the new governments to create them. This is because of the specific wording of the constitutional provision set out above. It authorizes the General Assembly to enact “general laws” “authorizing the governing body” of a county or city to establish these tax districts. The first quoted phrase means that the General Assembly must act through legislation that applies statewide and may not act through a charter that applies only to one county. The second quoted phrase means that the General Assembly may permit local governments to establish these tax districts but may not require them to do so. Therefore, while the proposed charters clearly anticipate that the governing board of the new government will create two or more districts, they do not – because they constitutionally may not – require the governing board to do so.

The Consolidated City-County Act

The first two of the eight North Carolina consolidation proposals included drafts of both the proposed charter for the new government and the general laws that would be necessary for the government to establish the expected tax districts. It was then decided that it made no sense for each charter commission to reinvent that particular wheel, and so the 1973 General Assembly enacted the general laws proposed for the first Wilmington-New Hanover proposal as G.S. Chapter 160B, entitled the Consolidated City-County Act. This act establishes the procedure by which a consolidated city-county might create urban service districts and sets up basic debt authorizations and limitations for such a government. It has served as a framework within which most of the subsequent consolidation proposals have been made, although several of the efforts included proposals to add provisions to Chapter 160B (and some were indeed added in 1995 and 1996 because of the efforts then going on in Wilmington-New Hanover and Charlotte-Mecklenburg.) If future consolidation efforts wish to modify or add provisions to the Consolidated City-County Act, they should feel free to do so. Because this General Statutes chapter does not in fact apply to any government, the General Assembly is likely to treat any changes that are proposed for a particular consolidation effort as local legislation that only applies to that effort, despite the “general law” form of the legislation.

Durham in 1999-2000

The one consolidation effort that did not propose dissolving the city and merging it into the county was that in Durham and Durham county in 1999 and 2000. The problem the charter commission faced in that effort was that the city of Durham had grown beyond the boundaries of Durham county, extending to a few properties in Orange county. If those properties were to be part of any consolidated government, it would not do to simply abolish the city and transfer its powers to the county; the properties were in another county and thus could not be governed by Durham county, consolidated or not. After considerable reflection, the charter commission in this most recent effort proposed that both the city and county continue in existence, as empty shells, and that a new third government be created that would also operate the city and county. The voters of this third government – everyone in Durham county plus the residents of the small Orange-county portion of the city of Durham – would elect a governing board for this new government, and that governing board would act ex-officio as the governing boards for the city and county. (A paper analyzing the legal authority for this proposal is included in the materials for the 1999-2000 Durham effort, and can be read here.) Thus, because of the unique geographical range of the city of Durham, its most recent consolidation proposal would have resulted in three governments rather than one, although two really would have existed on paper only.

Smaller municipalities

Buncombe county, Mecklenburg county, and New Hanover county each include incorporated cities or towns additional to the central city involved in the consolidation process. In addition, a significant part of the Town of Chapel Hill is in Durham county. The basic notion of all the consolidation proposals has been that these other municipalities would not be part of the consolidation but would bear the same relationship to the consolidated government that they currently bear to the county government. (That is the pattern followed in consolidated governments throughout the United States.) Several of the charters included provisions under which the voters of one or more of these smaller cities or towns might choose to become part of the consolidated government, but no one has expected any of them to actually do so.