Orange County NC Website
Browse       Search
1 <br /> ORANGE COUNTY <br /> BOARD OF COMMISSIONERS <br /> ACTION AGENDA ITEM ABSTRACT <br /> Meeting Date: June 2, 2026 <br /> Action Agenda <br /> Item No. 6-c <br /> SUBJECT: Update on Interlocal Agreement between County and Towns for Tax Collection <br /> DEPARTMENT: Tax Administration <br /> ATTACHMENT(S): INFORMATION CONTACT: <br /> Current Interlocal Agreement and Kirk Vaughn, (919) 245-2153 <br /> Addendum <br /> Presentation <br /> PURPOSE: To receive an update on the discussions with the towns on the current Tax Collections <br /> Interlocal Agreement (ILA) and provide direction to staff on potential action to terminate the ILA. <br /> BACKGROUND: In 1979 the County entered into an agreement with Chapel Hill, Carrboro, and <br /> Hillsborough whereby the Orange County Tax Collector would, on behalf of the Towns, bill and <br /> collect the towns' tax levies in accordance with North Carolina General Statute 160A-461. <br /> In 2006 the agreement was updated, and the municipal tax collection rate was set at 0.5% of the <br /> annual amount collected for each of the towns. The expiration was set not to exceed 99 years <br /> from July 1, 2006. The agreement requires unanimous agreement from all three (3)towns to make <br /> amendments and requires a one-year notice for termination. <br /> Research by Tax Office staff indicates that the current 0.5% municipal tax collection rate is below <br /> the state average. In a survey of over 25 county collection fees, the average and most common <br /> fee from counties is 1.5% of municipal tax collection. Orange County's tax collection fee was the <br /> lowest in the survey group. <br /> The Board of County Commissioners has entered into an agreement with GAR Associates to <br /> make recommendations on enhancements to the Assessment Division of the Tax Office. These <br /> enhancements will be targeted to ensure a more equitable and better communicated revaluation <br /> in 2029. The County would be able to utilize additional municipal funding to support the <br /> recommendations made by the consultant and other tax office divisions enhancements. <br /> County staff provided this information to the Board of County Commissioners in February 2026, <br /> and received direction to communicate with staff from the three (3) entities. The County had staff- <br /> level conversations with Carrboro and Hillsborough, as well as manager-level conversations with <br /> Chapel Hill. <br /> Given the limitations of the current agreement — the unanimous agreement requirement for <br /> amendment, the 99-year term, and the one-year termination notice — County staff believe that the <br />