A $420 million investment
When leaders from the Town of Forest City began developing its 2013-14 fiscal year budget one of the positive factors for town residents is the result of social media giant Facebook locating in Forest City.
Nearly three years since Facebook’s selection of Forest City and Rutherford County as the location for its second data center in the United States, the impact on the communities has been substantial, said Kevin McCammon, general manager.
Town Manager John Condrey and Finance Officer Julie Scherer presented the town’s $29,838,899 proposed budget last Monday that reflects a 3 percent reduction from the previous year’s budget and is proposed to be balanced with a $.29 cent property valuation, that reflects no tax increase.
“There are four ways Facebook effects the town’s budget regarding incoming revenues — Electric Utilities Franchise, Sales Tax, Water and Sewer Revenues,” Condrey said. “A lot of other towns have not seen an increase in sales taxes, but Facebook has been effective for us in the way the county distributes the sales tax, that is a positive for us.”
Sales tax revenues have increased from $665,000 in 2012-13 to an estimated $729,596 in 2013-14. The $64,596 increase is attributable to the impact of Facebook’s property value based on Rutherford County use of ad valorem levy for sales tax distributions, Condrey explained.
Facebook also accounts for $1.26 million of the total ad valorem levy, but it also reflects on the expenditure side as an incentive grant. The estimated increase of $946,144 in property values will be returned to Facebook as a part of the incentive grant the town provided the company to locate in Forest City.
The town has a 20-year agreement with Facebook on the incentive.
The Electric Utility Franchise Tax has increased by $145,000 in a year, largely because of Facebook, Condrey reported.
Property values excluding Facebook would have decreased -3.11 percent for the fiscal year 2013-14.
As of Jan. 1, Facebook has made a $420 million investment to the town and county and the investment continues to increase.
The second facility is half-way to completion and construction has also started on a third smaller building, which is 40,000 square feet.
“There are other positives benefits,” Condrey said. “You can imagine how many dollars have been spent locally.”
With more than 2.2 million construction hours recorded, employees use the local restaurants, the facility itself provided lunch every day through a caterer and Facebook is the second-largest taxpayer in the county after Duke Energy.
“The people who work on the building are staying in hotel and motels and are also paying taxes,” Condrey said.