Wednesday, April 4, 2018

OFFER MADE TO SETTLE THE $74 MILLION BOND REFERENDA LAWSUIT

April 4, 2018 | Asheville

Offer to Settle
Chris Peterson and Sidney Bach have offered to settle and dismiss their taxpayers' lawsuit filed December 2016 against the City's proposed bond borrowing of $74 million that would have to be guaranteed by City property taxes. As part of the agreement that would be filed into the Court record, the City is being requested to stipulate and agree that it will comply with the NC "Local Government Budget and Fiscal Control Act" which would restrict the City's use the monies from any of the bonds issued to pay only for those capital improvement projects specified in the November 2016 bond referenda and for no  other purposes whatsoever. The City would also have to establish and maintain a separate "debt fund" to in order to account for the bond funds raised and how they are spent.

Bond Use
In the past, City management with Council approval has allowed City taxpayer fund to be liberally transferred from one budgeted purpose to another without any question or accountability, all while increasing City Hall bureaucracy and operational costs by millions and millions of dollars. (Last year Peterson, a former City Council member, was escorted out of a City Council meeting after accusing the City administration and the City Council of running a "Ponzi scheme" on the backs of Asheville's taxpayers.)

Covering City Debt
Peterson and Bach, both Asheville residents and property taxpayers, believed that the City's voters had been unwittingly "led down the primrose path" by former City Manager, Gary Jackson with help from the City Council to buy a $74 million "Trojan Horse" that, in reality, would provide funding for the added millions of dollars in the City's bloated operating expenses. In short, an irresponsible local government"spending-spree" that was being threatened by a looming debt crisis caused by a City administration's uncontrolled "Champagne appetite on a beer budget."

Asheville's financial crisis finally surfaced and "raised its ugly head" at the recent City Council meeting on March 20, 2018 when its Chief Financial Officer, Barbara Whitehorn warned the Council of the City's current budget shortfall that is already many millions in the red. She indicated that the current City deficit will only worsen as City expenditures continue to exceed City income and that such a negative financial scenario would likely prevent the City from issuing any bonds, be they the
November 2016 Referenda bonds or any others. In spite of these dire warnings,the City Council members appeared to be oblivious to their own finance officer's dire warnings as they continued to discuss possible financing for their various "special projects" and "wish lists" .....not too unlike the Roman emperor Nero who is rumored to have "fiddled while Rome was burning ?

Peterson and Bach said that, with interest rates on the rise, they believed it would be in the taxpayers' best interests to attempt to resolve the lawsuit at this time in order to avoid increased property taxes that would be required to meet higher interest payments on the proposed bonds if and when issued by the City.

However, they still believe that the language used by the City on the bond referenda ballots was misleading because it only stated that additional property taxes "may" be levied to pay for interest and principal due on the bond issues even though the City Council's Bond Order Resolution clearly stated that additional property taxes "shall" be levied to pay for the bonds.

"O, What a tangled web we weave when first we practice to deceive."

Sir Walter Scott

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