Big project, big debt: Woodfin voters to decide future of greenway project with higher taxes in the balance

The question that may surprise and even confuse some Woodfin residents as they dutifully mark their ballots is: Should the 6,300 residents of the town of Woodfin take on an additional $4.5 million in debt to pay for a greenway, parks and other public works projects along the stretch of the French Broad that flows through the town?

There’s been little discussion in the media about the Woodfin bond. In contrast, voters in Asheville, Woodfin’s much larger neighbor to the south, have been engaged in healthy debate over three proposed bonds amounting to $74 million.

Town Manager Jason Young says he knows of no groups campaigning for or against Woodfin’s bond referendum.

To owe or not to owe?

Woodfin is known for its comparatively low taxes. The town’s nearly $3 million 2016-17 budget is supported by a property tax rate of 30.5 cents per $100 of assessed valuation. By comparison, Weaverville, with just under 4,000 residents, has a much higher tax rate than Woodfin — 44 cents per $100 to support its $7.8 million budget.

If passed, Woodfin’s bond referendum could drive up the tax rate significantly for residents, who would shoulder about $714 each in additional debt burden, and even more than that, considering interest.

Woodfin currently has just over $11 million in public debt, almost all of which is associated with infrastructure improvements in Reynolds Village. But this debt doesn’t show up in the town’s debt accounting because the payments are projected to be covered by the increased tax revenues generated from the development itself over the next two decades or so — using an approach known as tax-increment financing.

Under the tax-increment financing arrangement, if the tax value of the project doesn’t rise quickly enough to cover the debt, Buncombe County will cover the balance due in the short term. But ultimately, Woodfin would still have to pay the debt — in this case, over a longer-than-anticipated time, with property tax revenues. Once the debt is fully repaid, the projected tax revenues from Reynolds Village’s increased tax base would begin to flow into the town’s coffers. Assuming all goes according to plan, tax revenues from Reynolds Village are expected to finish paying off the debt and begin boosting the town’s annual budget by about 2037.

Since the debt from Reynolds Village tax-increment financing doesn’t show up in Woodfin’s regular debt accounting, the town is able to say it is almost debt-free. According to Young, the current municipal debt is $217,509, or just $35 per person. If the bond referendum passes, however, that figure will increase by over 2,000 percent.

“The bond referendum would represent a tax [that] the citizens of Woodfin place upon themselves in addition to their current tax rate,” Young says. But the blow will be spread out over a number of years. “The exact timing of the debt service,” continues Young, “would be dependent upon when the Board [of Aldermen] finalized the bond sale. The board anticipates that the bonds would be sold by the spring of 2017, and the payback would likely begin in 2018.”

What’s it all for?

While Woodfin voters consider taking on a debt of $714 per resident, Asheville voters are also looking at adding a similar debt burden: $828 per person. But Asheville’s proposed debt will cover a much broader range of improvements — transportation, housing, parks and recreation — than Woodfin’s bond, which would go entirely to parks and greenways.

Considering just the greenways, parks and recreation components of Asheville’s proposed bonds, those projects would add a debt of $248 per person.

A key portion of Woodfin’s 2010 Greenways, Sidewalks and Bikeways Master Plan would be implemented with funds from the proposed bond. Aimed at improving residents’ quality of life by providing more space for public recreation, the plan is anchored by a greenway running along the French Broad River. The greenway would stretch “from the south end of Woodfin near the Broadway and Riverside Drive interchange likely going as far as the town limits up to the [Metropolitan Sewerage District] Administrative Building, where it will peel off in two separate lines,” according to the town website. In time, the greenway would connect with Asheville’s greenway system and, beyond that, greenways planned for southern and eastern Buncombe County. The bond will also help fund a 4.5-acre park on land donated by Silver-Line Plastics, which is just to the north of Asheville’s River Arts District.

“Depending on how far the money goes,” says Woodfin Mayor Jerry Vehaun, “we’re also looking at a whitewater wave,” an in-river device that can shape the flow of the water into boat-friendly hydraulic features. Former Asheville Vice Mayor Marc Hunt and other whitewater recreation enthusiasts are pushing to include the whitewater feature in Woodfin’s greenway and park improvement plan.

While the first phase of the greenway plan is estimated to cost up to $10 million, Young says the town will seek other funding to make up the difference between the $4.5 million bond funding and the project total. In addition to the general obligation bonds, he explains, the town will seek grants, private donations, corporate sponsorships and other budgetary methods to complete the funding package.

For or against

While the notion of investing in a significant greenway project has been on the table for the better part of a decade, the move to put the question of funding to the people has been quick and fairly quiet. Young explains that the Woodfin board weighed moving forward with piecemeal, pay-as-you-go projects versus a larger single project with at least a portion of the cost financed through a bond.

“Over the last year, discussion has increasingly turned toward exploring the bond issuance,” he says, “in order to leverage outside funding sources, reduce construction and mobilization costs, and present a completed project to the people of Woodfin that they can begin to use and enjoy in the near future rather than over the course of decades.” Vehaun agrees that the bond referendum represents a chance to get a big section of the plan completed with a single package rather than whittling away at the project year after year.

Although Woodfin has placed a priority on keeping taxes low, the mayor says, “We realized whichever way we went, we’d have to raise taxes.” So the Board of Aldermen opted to seek the voters’ approval for a bond and spread out the cost over a number of years. Doing it this way, Vehaun says, the town will be able to keep the increase to a 5.6 cents per $100 of property value.

Woodfin residents would still enjoy the lowest taxes of any municipality in the county.

A key reason that Woodfin voters are seeing the bond question on this particular ballot, Young says, is a 2013 state law restricting bond referendums to even-year elections.

However, the recent state law is less restrictive than Young seems to believe. It allows a bond referendum to be placed on a ballot in any primary or general election pertaining to the same voters considering the bond referendum. For instance, according to Trena Parker, director of the Buncombe County Board of Elections, the Woodfin municipal election in fall 2017 would also be a legal time to hold the referendum. So, the decision to pose the bond question this year may have been artificially rushed by Young’s understanding of the requirement.

At the same time, the aldermen of Woodfin do seem ready to take action. In July, the board took up the question of the referendum at its monthly meeting. During a public hearing that lasted just five minutes, only one attendee spoke up: Resident Bill Neireemer said he was in favor of putting the measure on the ballot this year. The board adopted the resolution, with four members voting in favor and two against.

“The bond is an opportunity to allow the citizens of Woodfin to always have walking and biking trails in undeveloped land, to have an additional park on the banks of the river and to have access to the French Broad River in a way that has never been visualized in the past,” says Debbie Giezentanner, the alderwoman who proposed the resolution. To her, the town’s six miles of riverbank are an underutilized resource, and creating the section of greenway with parks and other green features amounts to a positive investment in the future of the town. “[The] greenway bond will ensure that our citizens will continue to enjoy and benefit from access to the river and the woodlands that have always been part of living in the town of Woodfin.”

She points to the rapid growth in the county as a sign that the time is right for such an investment. “Many people want to live in Woodfin, and residential developments are being brought before the Board of Aldermen frequently,” she says. The bond can bring more prosperity, she continues, citing studies that show greenways attract new businesses and increase property values.

It stands to reason that some town residents must oppose the bond measure. After all, two aldermen, Don Hensley and Ronnie Lunsford, voted against placing it on the ballot. However, neither responded to Xpress’ requests for comments on the issue, and no groups seem to have organized in opposition to the measure.

Vehaun says he is optimistic about the bond’s chances: “I think it’ll pass. I haven’t heard any opposition to it.” At a previous town hall meeting about parks and greenways, Vehaun recalls, residents seemed largely in favor of adding the new amenities. “Everything that I’ve heard from the public out there has been positive.”