Asheville to get another layer of audit oversight

ASHEVILLE — At a quick, sparsely attended meeting of Asheville City Council on Dec. 19, members unanimously approved the creation of an audit committee. The committee will be charged with reviewing the city’s internal audit reports and financial statements audit and sharing with Council any audit-related recommendations and issues.

Five members will sit on the audit committee: one Council member and four outside members appointed by City Council. Each member must have a minimum of five years of experience in the management of accounting, finance or auditing, and the committee must include at least two certified public accountants or certified internal auditors. The committee will meet at least four times a year, and members will serve three-year staggered terms. 

Mayor Esther Manheimer said the impetus for establishing an audit committee was recent concern about local governments’ fiscal management. “This was a product of the city’s review of its processes and procedures around financial matters given that that’s a very timely conversation right now in our community,” she said. “What we found was that we have good practices, but we thought that this structure of an audit committee would be an improvement on what we’re doing already.”

Manheimer asked the city’s internal auditor, Patricia Rosenberg, what would be the procedure if someone found  something irregular and wanted to report it. Rosenberg said city employees can call a hotline to give reports anonymously. “Those reports come to me, the internal auditor, as well as Jade Dundas, the assistant city manager. Any reports that come in, we would take to the audit committee,” Rosenberg said. “[The audit committee] just creates more of a pipeline between the internal auditor, the external auditors and Council.”

Council member Julie Mayfield asked if the Council member who serves on the audit committee would be someone who’s on the finance committee or if it should be someone who is specifically not on that committee. Rosenberg said it could be either. City attorney Robin Currin said once the committee is up and running, it can discuss such procedural questions.

Buncombe County set up an audit committee 17 years ago to oversee the county’s annual audit process. (See “Buncombe County Commission,” Sept. 27, 2000, Xpress)

In other business

Council heard a report from interim Water Resources Director David Melton on a new program where the city is doing courtesy calls for late water account payments. In the five months that the program has been in operation, it has produced a 40-50 percent reduction in disconnections for nonpayment. “It’s my pleasure tonight to be the bearer of some really good news for once,” Melton said.

The consent agenda received unanimous approval. For more information on those items, see “City Could Create Audit Committee,” Dec. 18, Xpress.

With no public hearings, no proclamations and no public comments, the meeting finished in 15 minutes — close to the record in recent memory of 10 minutes, according to City Clerk Maggie Burleson.

Council then went into closed session on the basis of attorney-client privilege for the case of PHG LLC v. the city of Asheville (see sidebar).

STRs in spotlight at next meeting

The next City Council meeting will take place on Jan. 9, at which Council is scheduled to hold two public hearings. In one, it will discuss conditional zoning for a renovation of an Ingles-anchored shopping center at 153 Smokey Park Highway.

In the second public hearing on Jan. 9, Council will consider an amendment to the Code of Ordinances that would define different lodging types, add special requirements for certain lodging types, and identify in which districts particular types of lodging may be located.

The lodging amendment proposal stems from Council’s request that staff to look into the number of whole-unit short-term rentals across the city. Currently, such rentals are not allowed in residential districts, but they are permitted in commercial areas. Some worry that whole-house rentals of fewer than 30 days, such as those offered on Airbnb and VRBO, hollow out neighborhoods and take up housing stock that could be used by long-term residents. On the other hand, property owners have argued that it’s their right to collect extra income from their own real estate, and some business organizations have supported short-term rentals in bringing tourists and revenue to areas of the city that could use revitalization.

At the Dec. 19 meeting of the city’s planning and economic development committee, staff reported that their research “shows a rapidly increasing popularity of converting residential units located in commercial areas to lodging, and for new residential development being constructed for the purpose of providing short-term lodging instead of long-term housing,” according to a memo from Planning Director Todd Okolichany.

According to materials from the PED meeting, city planning staff has been preparing an amendment to the city’s code that separates and defines the various types of lodging, including short-term rentals, to allow for separate — and potentially expanded — regulation of those uses.