City Needs Bond Money – Fast

Untitled, 5/4/05, 3:01 PM, 16C, 4562x5914 (645+1571), 100%, Better Push 6, 1/100 s, R66.4, G58.4, B79.9

By Leslee Kulba- June 13, out of the blue to the average observer, the City of Asheville swung into hypermode, setting up a flurry of meetings to push a bond referendum in time for the November 8 election. A schedule was approved by city council June 14, and council got down to business at a worksession the following Monday.

At the meeting, City Manager Gary Jackson presented council with a list of projects council could consider putting on the referendum. It would be unfair to say the projects must not have been necessary if they were so optional. It is traditionally “best practice” for cities to expand their budget beyond the capacity of its existing tax base, and then, banking on the public’s lack of economic savvy, put the most critical items on the chopping block to ensure public approval.

Jackson said the list was necessarily large to allow council to whittle. Even with a 4.1-cent property tax increase, it would be difficult to complete all items within time limits advisable for projects funded by bonds. A degree of specificity is required in proposals submitted to the North Carolina Local Government Commission, the body being formed after the Great Depression to protect municipalities from reckless overextension. And so city staff grouped projects into four categories.

$17 million was proposed for parks and recreation projects. This included $4.7 million for a gym, classrooms, outdoor facilities, and programming at the Dr. Wesley Grant, Sr. Southside Center; $4.1 million for parking, bleachers, and trails at Memorial Stadium; and $2 million for upgrading other recreational grounds throughout the city.

$30 million was proposed for infrastructure improvements. Specifically, $16 million would resurface twenty-two roads, Vice Mayor Gwen Wisler noting the city is about 50 years behind on street maintenance. $9.9 million would repair twenty-five sections of sidewalk, and $4.6 million would add connectivity to the city’s greenway system.

Another $30 million was proposed for affordable housing projects. $15 million was proposed to raze the Taj Magraj on South Charlotte Street to create “locationally efficient” housing. $14 million of that amount would go toward buying land and constructing a new Public Works center; another $500,000 would fund site remediation of the brownfield. About $7 million would be spent directly on building homes, and $5 million would supplement the city’s Housing Trust Fund, which is currently scheduled to receive only one-tenth that from the general fund.

Lastly, $13 million was proposed for capital improvement projects for the city’s public safety departments. $8 million would go toward expansion and refurbishment of the Municipal Building, which serves as headquarters for the police and fire departments. Another $5 million would support improvements to police substations throughout the city.

Feedback provided by council led to the elimination of funding for city facilities. Mayor Esther Manheimer led the charge, saying of those who would be voting, “I think they think public safety is something that their money is already supposed to be buying them.”

Manheimer also challenged the idea of the city getting too deep in the real estate business. Competing with established, private-sector jobs would be a “tough sell.” When Councilman Gordon Smith shared that Charlotte had just approved a $15 million bond for its affordable housing trust fund, Manheimer said Asheville would have to be “super-specific” on how housing funds would be applied if it wanted the bond to pass.

Councilman Cecil Bothwell thought all items should be on the referendum, giving power to the people through more choices. Citizens will, after all, be able to choose, cafeteria style, which projects they want. Manheimer hoped by so allowing, voters would walk the bond amount below $60 million. Even so, council directed staff to see what transit projects could be added to the list.

So, at their last public meeting, which lasted only fifteen minutes and was convened for the sole purpose of moving the bond issue along, council approved applying to the LGC for approval to hold a referendum asking citizen support for the floating of $74 million in general obligation bonds.

The Municipal Building upgrades had been scrapped, and funding for parks and recreation remained untouched. The infrastructure category, now renamed “Transportation,” was increased to $32 million to include multimodal projects like planning and design, crosswalks and lights, landscaping and lighting, bus shelters, speed bumps, and rights-of-way acquisition for greenways.

The affordable housing category, however, was reduced to $25 million. Language in the official documents is vague, approving “projects for the benefit of persons of low income, or moderate income, or low and moderate income, including without limitation . . . .” But when staff last made a presentation on the subject, they suggested three other projects, in addition to the destruction of functional city facilities for the creation of locationally-efficient housing. One would be to avail $7 million in public funding as construction loans for the building of 400 residences. The Housing Trust Fund would receive an infusion, and another $3 million would support a nonprofit land trust.

Land trusts are tracts owned by private corporations that rent parcels for homes, often built through a charitable partnership. Resale prices are formulaically controlled to allow owners to cash in some equity while keeping the housing values affordable in perpetuity. The land trust proposed, with support from Councilmen Smith and Keith Young, would offer 100 units.

The only member of the public to speak at Tuesday’s meeting was Attorney Sidney Bach. He asked how much citizens can expect property taxes to increase to service the debt. While council and staff did not get into it at the meeting, all other factors equal, the debt would represent a four-cent increase to the current 47.5 cent/$100 valuation. The degree to which retiring debt would defray this was not discussed, either.

Seeing the city intended to use a portion of the bond revenue to pay incentives to developers, who used to be anathema for their deep pockets; Bach challenged the appropriateness of using public funds to, “finance private equity.” He further suggested there might be a problem with the city’s noticing schedule – a technicality often used to kill a bad idea in today’s legal system, which often appears to be operating without a moral compass.

This year, the city didn’t raise taxes when it adopted its $161,361,816 budget. Instead, it increased vehicle fees from $10 to $30, increased garbage collection fees from $10.50 to $14/month, increased water rates 1.5 to 5 percent, and increased various parks and recreation fees. Now, it is going to try to float bonds, payable over 5-10 years, valued at up to $74 million plus interest.

Council also approved spending $5000-$10,000 on a survey. Campaign Research and Strategy of Columbia, South Carolina, was contracted for $8000 to interview 400 citizens to gauge which items would have the highest probability of guaranteeing a “Yes” outcome on the bond referendum.

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