City exploring possible bond referendum

The roof of Asheville City Hall.

At its meeting on Monday, June 13, Asheville City Council’s Governance Committee agreed to move forward on considering a possible bond referendum to appear on the November general election ballot. The discussion revolved around two major issues: the schedule of public meetings required by law to get the measure on the ballot and the annual payments associated with different levels of bond funding.

More notable than what was discussed, perhaps, was what wasn’t: how much money Council will seek and for what purposes.

Asheville Mayor Esther Manheimer introduced the topic, saying:

Since I’ve been on Council for six and a half years now, there’s been interest in exploring the idea of using GO [general obligation] bonds, which would have to be voted on by the people, to fund different things in the city, mostly related to capital but some devoted to other ideas. We have advanced that from the ‘mulling over’ stage now to learning more specifically about the process and what would be involved in a bond referendum. Other communities do this pretty routinely; Asheville has not done it routinely, but we want to learn more about how to do this because we think it could be a good tool to fill in some areas that are lacking.

Vice Mayor Gwen Wisler and Council member Keith Young also sit on the Governance Committee.

City Finance Director Barbara Whitehorn introduced finance consultant Doug Carter of DEC Associates  and Don Ubell of Parker Poe, who she said is the city’s bond attorney. Both Carter and Ubell have offices in Charlotte.

According to Carter, the city must hold two public work sessions and discuss the bond issue at three meetings of City Council in order to meet legislative requirements for public input for placing a bond measure on November’s general election ballot.

The first work session is scheduled for Monday, June 20 at 3 p.m. in room 623 of City Hall. City Clerk Maggie Burleson said the schedule for the second work session is being finalized. *See update below post.

If City Council decides to proceed with the matter, the bond referendum will be discussed at City Council regular meetings on July 5, July 26 and August 9. The August 9 meeting had previously been canceled; Burleson said she expects City Council to reinstate that date and to cancel its meeting of August 23.

Although the soft-spoken Ubell was difficult to hear from the audience, he explained that the next step in the process is to go through the city’s capital plan to determine which items Council wishes to present to the voters. State law allows municipalities to group related items into categories, but it does not permit combining unrelated items. He suggested that the city start with the maximum amount it would hope to achieve through the bond referendum, explaining, “Then you can go down if you want to after you have public input. You can’t go up.” Some categories Ubell mentioned as possible areas for consideration included streets, sidewalks, fire stations and affordable housing.

Carter showed slides detailing the increased revenue that would be needed to pay for servicing bond debt of $30 million, $40 million and $50 million. The upcoming revaluation of Buncombe County property tax values also will play a role in determining how much property taxes would need to increase to pay for the bonds, since a higher rate of growth in tax values (generally associated with new construction) would require a smaller tax increase to support the bond spending, Carter said.

Slide presented by Doug Carter of DEC Associates showing ad valorem tax increases associated with different levels of bond spending. Photo by Virginia Daffron
Slide presented by Doug Carter of DEC Associates showing ad valorem tax increases associated with different levels of bond spending. Photo by Virginia Daffron

Carter’s remarks also touched on the potential impact of the bond funding on individual home owners’ property taxes. “Your average house price in the city is $275,000. For that value, if you raise taxes one penny [above the current city rate of 47.5 cents per $100,000 of assessed value], it’s $27.50 per year. Basically, one penny is an increase of $10 per $100,000 of assessed value.”

City taxpayers also pay Buncombe County property taxes of 60.4 cents per $100,000 of assessed value in addition to the city rate.

Burleson said the June 20 work session will include a review of the purpose and scope of the possible bond referendum (which has not yet been proposed) and a discussion of the public engagement process that the city will undertake.

Acknowledging that the time frame for getting the ground work in place for a possible bond referendum is tight, Manheimer nonetheless said, “If we can pull this together, it’s worth pursuing. I’m willing to go to the next step.” Manheimer said she will depend on city staff to look at existing plans to identify projects that are a high priority. “I would hope that staff would be able to think about this strategically and bring to us two or three packages that you think would match the interests of Council and of our community. I hope you will be able to give us some options and let us know where the interests are in community.”

*UPDATE June 15, 2016, 12:33 p.m.: City Clerk Maggie Burleson has announced the schedule for the second bond referendum work session. The session will take place Tuesday, June 28 at 10 a.m. in the fourth floor training room of the Municipal Building (Police and Fire Station on Pack Square Park downtown).


About Virginia Daffron
Managing editor, lover of mountains, native of WNC. Follow me @virginiadaffron

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3 thoughts on “City exploring possible bond referendum

  1. Tim Peck

    Can the litigation-happy City of Asheville afford bond repayments, the loss of its cash-cow water system, and pending eminent domain lawsuits? Well, the new district-elected city council will be saddled with that decision and will have to sort all of that out in the coming years. Welcome to Progressive Land.

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