Tuesday, December 20, 2016

CITIZENS FILE LAWSUIT TO PROHIBIT CITY FROM ISSUING BONDS

Action claims ballot language was misleading, so November approval is invalid
By Roger McCredie
Two Asheville property owners have filed a lawsuit seeking to prevent the City of Asheville from issuing $74 million worth of general obligation bonds that were approved by the public on election day.
The suit was brought by retired attorney Sidney Bach and local businessman and former vice mayor Chris Peterson.
The plaintiffs are asking the court to declare the voting results invalid.  Voters approved the three-bond bond package -- $17 million for parks and recreation, $25 million for affordable housing and $32 million for transportation – by a margin of approximately 70% - 30%.
Bach and Peterson charge that the language of the bond questions, as approved by city council and presented to voters on the Nov. 8 ballot, was “defective,” resulting in “an unfair misrepresentation of material facts” that made all three bond questions “inaccurate, prejudicial and misleading.”
Two defects in the wording of the bond questions render them no good, the plaintiffs say.  One is the apparently inadvertent use of the word “Charlotte” instead of “Asheville” in the authorization resolution approved by city council on August 9; the other is a shift in verbs that alters the meaning of an important clause.
The August 9 resolution calls for a public hearing “to consider the issuance of bonds by the city of Charlotte … ,”  an obvious mistake made as the result of “boilerplating” language from another city’s resolution and not caught by any subsequent proofreading – seemingly a small thing but sufficient to render the entire resolution bad, the lawsuit says.
“As it stands on the books right now, the authorization to vote on those bonds still stands in the name of the city of Charlotte,” Bach said Tuesday.
Also, public notices advertising the city’s intent said the city “shall” or “will” levy new taxes in an amount sufficient to pay for the bonds.  But the August 9 resolution backed off that language and substituted the phrase “may be levied,” making it sound as though there were a possibility issuing the bonds might not, after all, result in a tax increase.
But, the suit alleges, the city was always fully aware that the bonds, if passed, would raise taxes.  To change the wording to “may” on voter ballots rendered the entire statement false and constituted a misrepresentation, the suit says.
Bach said he was aware that his and Peterson’s attorney, Albert Sneed, personally pointed out the language inconsistencies to Mayor Esther Manheimer when there was still ample time to correct them before ballots were printed, but no changes were ever made.
Sneed and Manheimer are partners in the same law firm.
“This is all about due process of law,” Bach said.  “You can’t issue bonds, which represent money, based on faulty language.  
“Nobody is saying they can’t have a bond referendum but do it right,” he said.
Records show the suit was filed at 3:20 Tuesday afternoon.  Bach said he understands a copy was delivered to Manheimer prior to city council’s regular 5:00 p.m. meeting

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Sunday, December 11, 2016

The Tax Man Cometh

And if thou livest in the city, he just mayeth be back.
By Roger McCredie

The good news is, there’ll be no increase in the county tax rate this year.

The bad news is, that will make little difference to most Buncombe taxpayers because the property revaluation that’s now in the works will increase most properties’ value and result in higher taxes for 2018 anyway.

Those were the tidings county tax officers Gary Roberts and Keith Miller brought to members of the Council of Independent Business Owners at their breakfast meeting last week.

Noting that the county’s last across-the-board property revaluation took place in 2013, County Tax Director Gary Roberts told the CIBO audience, “It’s up to the Board [county commissioners] as to when we should do reappraisals but I think it’s wise to do it about every four years and that seems to be the consensus.”

Roberts noted that the county tax rate remains unchanged at 60.40 cents per $100 of assessed property value (up from 52 cents in 2013).  But yes, he said, given the current bullish housing market and four years’ worth of inflation, most property owners will notice an increase – in some cases a substantial one – when they receive their fiscal year 2018 tax bills.  The new valuations are scheduled to be in the mail by January 31.

“Of course,” Roberts added, “the values we set are only as good as the data we collect.  And we want to talk about the appeal process, not that anybody would appeal.”

(Polite laughter)

And at that point Roberts handed off to County Real Estate Assistant, who elaborated.

“We’re in the process of gathering data from 2400 different neighborhoods – 90,000 properties – and that’s a huge undertaking,” Miller said by way of explaining that the county uses a “package” approach, which involves calculating average land and structure values in a given area and applying them throughout that area, adjusting for size and specific location.

“In a situation like that,” he said, “you’re always going to have some highs and you’re always going to have some lows.  We don’t often hear [appeals] from people who think we’ve valued them too low.”

(More polite laughter)

“So no,” Miller said, “we don’t always end up with the best possible information.  We need input.  That’s why we encourage property owners to talk to us. Call us or e-mail us, follow us on social media or come by our office so we can discuss it face to face.

“Of course,” he added, “there’s a possibility that according to what other information we get, the valuation could go up instead of down, so there’s that.”

(Not-as-hearty polite laughter)

Earlier this year Roberts told the Asheville Citizen-Times that the county tax office believes some Buncombe neighborhoods are only being taxed at about what they should be, based on market value.  He named several outlying communities, such as Montreat and Enka, as well as several in-town locations including Montford, Kimberly, Beaver Lake, parts of South Asheville and the River Arts District.   

Property owners inside Asheville’s city limits will thus be facing a double whammy in the near future.  The countywide revaluation follows hard on the heels of city voters’ election-day approval of the issue of $74 million worth of city general obligation bonds.

The three-bond package comprises $37 million earmarked for transportation, $25 million for affordable housing and $17 million for parks and recreation.  The city has a seven-year window in which to issue the bonds themselves.

Once all the bonds have been issued, the resulting tax on them would raise the city of Asheville’s per capita debt to $1,748, nearly double the 2016 per-person burden of $947.

That figure will, of course, be in addition to whatever each taxpayer’s new county tax bill turns out to be.

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Sunday, December 4, 2016

Vice Mayor hedges on how Housing bond money will be spent

Calls South Charlotte Street development “just a possibility”
By Roger McCredie
Asheville’s vice mayor told local business leaders on Friday that the city has not made any definite plans to spend $15 million in recently-approved bond money to repurpose and redevelop South Charlotte Street.
In fact, City Councilor Gwen Wisler told members of the Council of Independent Business Owners, “we have no formalized plan” in place for exactly how or where that three-fifths of the $25 million “affordable housing bond” approved by Asheville voters last month will be spent.
That revelation came in response to an attendee’s question as to when taxpayers could expect to see “a brick and mortar startup” on affordable housing.
Wisler, who had been summarizing the approach the city intends to take in using proceeds from the other two bonds approved -- $32 million for transportation and $17 million for parks and recreation – seemed momentarily taken aback by the affordable housing question.  

She pointed out that $10 million of the $25 million housing bond money is earmarked for the city’s affordable housing trust fund, which can be tapped as loans by private developers who promise to make a portion of their construction projects “affordable.”  

But as for the remaining $15 million, she said, “Hopefully it will be associated with some development of city-owned property for affordable housing.
“Specific projects we have not defined as yet, but we are looking at expanding what we may be doing around affordable housing,” she said.  “Right now, as you know, we have focused primarily on rental property and there’s talk in the future of home ownership and we’re figuring out what that model might be and, you know, we want to coordinate with the county, but I don’t know if we have a formalized plan set up yet.”
At that point, Asheville Unreported pointed out that development of the “South Charlotte Street Corridor” had been the city’s sole stated purpose for that $15 million all during the run-up to the bond vote. Printed material, the city’s own website and city officials discussing the matter all stated flatly that South Charlotte Street “repurposing” was a key element of the housing bond allocation.
Moreover, all city sources agreed that a central feature of the redevelopment would be the demolition of the Wolcott city garage and public works building – the “Taj-ma-Garage” – to make room for up to 400 affordable housing units, provided a developer could be found to make that happen.  The city, it said, would then construct a new garage facility, most likely further down South Charlotte Street, at a cost of about $5 million.   
The City of Asheville website said:
“The proposed $25 million in housing affordability bonds would provide additional support for the Housing Trust Fund, a program that assists in creating diverse and affordable housing choices. It would also enable the City to re-purpose city-owned land for development that supports housing affordability with the South Charlotte Street Corridor as a primary project.”
And an accompanying table showed:
PROJECT
AREA 
 INVESTMENT

Funding to re-purpose city-owned land for affordable housing
Primary Project: South Charlotte Street Corridor

$15,000,000

Housing Trust Fund
 Citywide    
$10,000,000



 But, Wisler told her audience on Friday that “South Charlotte Street was really just the first area that city staff identified that we could look at, but that is just very preliminary.
“The work just really hasn’t been done to conclude that the $15 million would be spent there.  Again what we are hoping is that the $1`5 million would go towards some aspect of affordable housing,” she said.
Apparently Councilor Cecil Bothwell considered the South Charlotte Street development a given because, during the early voting period, he announced that it had been a major factor in his decision not to vote for the affordable housing bond.
“I know the housing bond is well intentioned, but deeply question both the success of Asheville in boosting affordability, and a proposal that accounts for a big chunk of the housing bond,” Bothwell said in a Facebook post.
“An estimated $14-15 million to relocate seems like an enormous cost, both financially and environmentally. I think this idea was cooked up too quickly and with too little analysis. So I voted no,” Bothwell said.
Among those who followed the city’s pro-bond campaign, Wisler’s vagueness served as a reminder that, despite its name the bond offers no clear pathway to relief of Asheville’s affordable housing crisis, in terms of either homes or rental units.
It also underscored a principal objection of anti-bond forces: namely, that the city is in no way bound to spend the bond moneys on any of the specific projects it  mentioned it might use the money for.  So long as a given project can be made to “fit” into one of the three bond categories, money from that category may be used to fund it.

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