BusinessGovernmentNewsOpinion

Kapoor: We Can Cut, We Can Cut

By Leslie Kulba- “Senator Mayfield,” repeated regular public commenter Jonathan Wainscott as he made his way to the door. Normally in business attire when speaking before Asheville City Council, Wainscott was dressed more to keep Asheville weird.

While he had no hat dipped strategically below one eye, his scarf, it was apricot.
Wainscott had used his three minutes to give members of council his unsolicited, unprofessional legal opinion that, in light of political ambitions, they would do well to make peace with the state legislature over district elections. This followed Councilor Julie Mayfield announcing her run to replace Terry Van Duyn in District 49 of the state senate.

Van Duyn, incidentally, is running for lieutenant governor, and Lieutenant Governor Dan Forest has launched his first ad for a 2020 governorship bid. In retort, attack ads have aired on social media attempting to tie Forest into the indictments against former NCGOP Chair Robin Hayes, et al. A grand jury found the four guilty of offering and accepting millions of dollars in bribes to influence policy. According to the published charges, a PAC for an unindicted coconspirator, [Public Official A], was to receive $150,000 as part of the scheme. The smear campaign is insinuating Forest could be [Public Official A] just because he is on record for congenially sharing kind words about the indictees at some point or other.

Property Taxes?
Back to Mayfield, she committed another mysterious political move during council’s worksession, advocating for a tax increase. “We have not had a conversation about increasing revenue this time around. I’m happy to put that on the table,” she said euphemistically. She pointed out council was $850,000 short for funding a list of eight items, none of which she wished to deselect. She said the $850,000 represented only “super-duper priorities,” and another fifty, some of which would be a higher priority to many, likely didn’t make the cut.
Mayfield said council kept talking about lobbying the state to approve a food and beverage tax, or perhaps a transit tax, when the legislature might never take action. A property tax increase, however, would be a surefire way to get the money the city needs to address its structural budget gap and hire enough staff to fulfill council priorities.

Councilor Vijay Kapoor objected on three grounds. First, he said the newly-appointed city manager, Debra Campbell, has not time to analyze the city’s finances, and so she referred to the proposed budget for this year as merely a “bridge.” Secondly, before council considered raising taxes, somebody needed to examine the budget to identify deadwood. For example, previous councils’ priorities could be carried forward in continuation budgets, when the current council has other values. Lastly, he thought council should be safeguarding against the current shortage of investor confidence. But rather than looking after private-sector wealth, he advocated for building a stronger municipal fund balance.

Councilor Keith Young echoed Kapoor’s sentiments, asking management to evaluate the utility to the city of outside agencies receiving what amount to automatically-renewing grants. He thought instituting a selection process would be more prudent, even though the $320,000 at-stake represented only a small portion of the city budget. As for Mayfield’s suggestion that others on council might support a property tax increase, he said, “I wouldn’t be one of those people that you’re looking for.”

In response to repeated suggestions from Mayfield and Kapoor that the city increase revenue or decrease expenditures, respectively; City Manager Debra Campbell said staff had been negotiating with contractors and, “looking under every rock, every pillow, everywhere we can find to look to see if we can do as much and as many of those things as possible…. We’ve been scrubbing. I mean, we really, really have.”

Mayor Esther Manheimer, who was actually wringing her hands as Mayfield spoke, said she, ‘didn’t have the appetite” for raising taxes this year. Doing so to close an $850,000 gap, a portion of which comprised nonrecurring expenditures, would be analogous to applying a sledgehammer. It was for council, as elected leaders, to make difficult decisions. “We have a tendency to get very excited as a council and want to fund every project that we can possibly think of,” she said before reminding her peers of times council had gotten over-excited and budgeted beyond staff’s powers to execute.

At different times during the work session, members of staff told how, in the real world, programs do not just appear at the decree of council. Transportation Director Ken Putnam explained the city could not just meter more spaces without spending more on enforcement staff; in other words, the collection area had to be large enough to cover new personnel costs.

Community and Economic Development Director Sam Powers said staff had not moved forward on procuring more minority-owned business contracts because the application process is complex enough to warrant training, for which it would be cost-effective to contract for the training of local trainers. Also, staff wanted to create a resource panel. It could tap talent from big businesses, but difficulties in getting struggling entrepreneurs to give up one afternoon a week to participate would leave that demographic underrepresented, unless the city could somehow pay stipends, for which staff was working with the city’s legal department to identify guidelines.
Or Debt Service?

Manheimer agreed with CFO Barbara Whitehorn that a better way to balance budgets would be for the city to get on a regular schedule for floating bonds. Whitehorn had explained why other North Carolina municipalities hold a bond referendum every two to six years. For one thing, it allows them to fund their capital needs, avoiding greater expenses from dealing with deferred maintenance. For another, by taking on more debt as old debt is retired, it reduces the occurrence of spiking annual budget needs, which are often funded with tax increases. By paying more for debt service, taxpayers would be getting expanded, reliable infrastructure while decreasing elements of surprise from the city in their own financial planning.

Whitehorn said in FY 2009-2010, the city’s capital improvement plan funded $8.6 million in projects, $8.4 million of which were pay-as-you-go. In the current fiscal year, the city intends to spend $33.6 million, all with debt and matching grants. Whitehorn shared a list of already-completed projects from the current CIP and longer lists of items in the design and planning stages. The city’s current, “robust” capital plan, however, was still inadequate. It assumes the city will be allocating $60,000,000 for projects to be completed by 2023; but city staff has identified an additional $330,000,000 in capital needs.

One reason for the 450% difference was construction bids coming in way over estimates. Following the format, “line item (budgeted amount, bid amount),” staff’s recommended priorities were: Five Points fire station ($3,400,000, $11,400,000), Jake Rusher Park ($1,300,000, $3,200,000), Wesley Grant Center ($4,600,000, $6,200,000), Walton Street Park/Pool ($2,100,000, $3,700,000), and Richmond Hill Park ($500,000, $700,000).
Fire Chief Scott Burnette explained the fire station underestimate had been based on the per-square-foot cost of building the city’s last fire station, which is 12 years old. In addition, the scope of the project had expanded to include a police substation and an emergency command-and-control center, making it a hub for addressing “social determinants of health,” aligning verbatim with the focus of the grant-awarding Dogwood Health Trust.

City management had already recommended expanding the CIP to accommodate recurring costs, like computer replacement ($500,000), facilities upgrades ($300,000), fleet replacement ($3,100,000), roof replacement ($150,000), police radio replacement ($711,000), parks facilities maintenance ($530,000), turf replacement ($250,000), new sidewalks ($380,000) and street maintenance ($3,000,000). Whitehorn assured staff was value-engineering to make sure the functional needs of citizens were being met with right-sized, quality investments.
Whitehorn recommended regularly floating general obligation bonds because they are approved by a vote and they have the lowest interest rates. In addition, GO bonds are structured such that they give cities authority to borrow up to 2/3 their amount again without voter approval.

Manheimer noted new statutes only allow municipalities to hold bond referenda in even-numbered years. Her preferred course of action, then, was to assess total capital needs and “prepare folks for voting on” the bonds in 2020, presumably with unbalanced education and outreach. She also advocated for continuing the city’s current practice of growing its fund balance with savings realized throughout the fiscal year.

In Other Matters –
Now that council has dispersed its important business to committees meeting on various days of the week, it spent a long hour discussing a matter added to the agenda without public notice. People were in the audience wanting to speak to the issue, following council’s practice of airing one side without giving the opposing side a fighting chance to even make it to the meeting, let alone organize their opposition.

The subject was parking on Asheville Tourists’ game nights. People were parking their cars on fields and, if not displacing league play, tearing up the turf for later games. The sense of urgency was understandable, as the first home game would be April 18. Parks and Recreation Director Roderick Simmons added that when renovations to Memorial Stadium were complete, there would be no in-stadium parking, so Tourists’ organization employee vehicles would spill into the already overcrowded fields and residential side streets.

The impromptu panel discussion on a surprise topic seemed more appropriate for 35below. One could only wonder. Perhaps council, unable to find a developer able to convince a financial institution to give him a loan to build rent-controlled, deeply-affordable housing at a loss on the Taj Magraj prime real estate; has found a hotelier willing to build with community benefits, like a parking deck.

Facebook Comments

Tags
Show More

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Close