- Asheville City Council March 9, 2010
- Council wrestles with $5 million budget deficit
- Vote on transit improvements postponed
Asheville's City Building is synonymous with the city itself: Designed by acclaimed architect Douglas Ellington, its octagonal "wedding cake" roof is now the city's official logo. The historic landmark (completed in 1928) is also the center of city government.
Now, however, it's falling apart. There's moss beneath the terra-cotta tiles of its unique roof, and the top two stories are unusable except as storage space. Some of the windows can no longer be opened; others are extremely loose (some so bad they can easily be removed by hand). Water damage is also a significant problem.
"There's numerous, extensive cracks in several locations," Building Safety Director Robert Griffin told Asheville City Council members during their March 9 meeting. "Most designers, even back then, assumed that a government building will last 50 years without some pretty major renovations, both to the interior and exterior. The fact we've got 82 years out of the building is impressive."
Spread over several years, the renovations will cost an estimated $5.5 million, in part because the building's status as a designated historic landmark means many of the components will have to be handmade. On March 9 Council voted 6-1 to begin that process by allocating $19,842 to hire a project director and soliciting proposals from companies qualified to undertake such an extensive project. Last month, City Council asked Rep. Heath Shuler for assistance with seeking federal funding to help pay for the renovations.
The news couldn't have come at a worse time: In a work session earlier that day, city staff had spent nearly two hours spelling out the gory details of Asheville's estimated $5 million budget deficit — and the session was continued to March 23.
As a result, Mayor Terry Bellamy, who cast the lone dissenting vote, was reluctant to begin the expensive renovations just yet.
"This is a nearly $6 million endeavor, and as the years go by, it will probably be over that amount," she said. "What's the difference between doing this tonight and doing it with the rest of the budget? We can do it when we take into consideration all our debt and our situation."
But City Manager Gary Jackson replied that staff had recommended proceeding as quickly as possible.
"We feel a sense of urgency," said Jackson. "We really think the sooner we get someone on board who's handling this, the sooner we can get the proposals out, start applying for federal and state funds. The manager will bring a level of expertise we're going to need over the next four years. Putting this off puts off our ability to recruit."
The other Council members found that argument persuasive.
"We're not saying tonight that we're putting $5.5 million dollars out," noted Esther Manheimer. "I think, in this economy, there are some real gems to be had that are probably more than happy to handle this project at the price we're asking. I think two years ago you would have been hard-pressed to find someone to handle something of this size at this price."
Empty coffers, looming tax increase?
The fiscal tension that hung over the remainder of the meeting began at that day's 3 p.m. work session.
"We're at a financial crossroads: we're in the middle of a great recession, we have few new sources of revenue, it's difficult for us to pursue growth," Chief Financial Officer Ben Durant told Council. "The impact of these trends is that, for the past few years, we've had about a 5 percent budget gap. That requires structural change: It's difficult balancing that using normal methods. … I've seen research indicating we're in the 'new normal' due to changes in the economy."
For Asheville, staffers say, that new norm includes health-care costs that have more than doubled since 2004, a transit system that runs a considerable deficit, restrictions on water revenues and growth imposed by the Sullivan Acts — and, driving the whole situation, declining property- and sales-tax revenues. A further limitation is the fact that the city's fund balance (a rainy-day fund municipalities maintain for just this kind of situation) stands at 14.5 percent of the total budget — less than the city's target 15 percent figure. Over the course of the work session, Council members were adamant that no further money be taken from the fund balance.
On the bright side, Durant noted that departmental budget cuts could slice $2 million from the projected deficit. And though they'll create more work for staff, those cuts shouldn't negatively impact the level of services the city delivers, he reported.
Council also plans to act on staff's suggestion that funding for local nonprofits be reduced by 4 to 8 percent (and perhaps significantly more). "I don't think that's nearly enough," observed Bellamy, and Vice Mayor Brownie Newman agreed.
One option suggested by Durant that is on the table is a property-tax increase. Long politically taboo, the idea now seemed to be finding some support on Council.
"I've been on record saying I'm not against an increase in the property tax," said Bothwell. "I think it's the most progressive tax we can levy."
Council member Jan Davis agreed, though with some caveats: "I don't want to raise taxes, but if it's what we need to operate the city, I can do that.
"It's hard for me say, 'Yes, I want to increase taxes,'" noted Manheimer. "If it's a matter of keeping the lights on and the streets drivable, then we have no choice."
Newman, meanwhile, said, "I certainly don't think we should reduce the fund balance, and I'm going to be committed to working really hard to not raise the property-tax rate."
Council member Bill Russell concurred, saying he wouldn't support a tax increase.
Most Council members, however, balked at a proposed 9 percent hike in water rates, worrying that it would drastically affect residents and businesses in the middle of a recession; instead, Council favored a 4 percent increase. Staff had originally proposed a 4 percent increase but then recommended tacking on an additional 5 percent (about $1.6 million) to replace water revenues the city plans to siphon off to repair sidewalks and roads affected by water-infrastructure work.
"I've got a problem with adding 5 percent on top of 4 percent, frankly, at a time like this; we may not need that," said Davis. "I've got calls from members of the community: This is a tough time, and 9 percent is a lot of money."
Bellamy and Newman agreed, and Council member Gordon Smith voiced concern about the impact on small businesses (though he later noted his support for a 4 percent increase).
"$1.6 million would be nice right now, but unless we can do it without costing our community jobs, I think we're going to have to put [the road repairs] on hold," Smith said.
Council members voted to continue the work session until March 23, when they'll discuss possible budget cuts.
Budget uncertainty also prompted Council members to delay action on a package of proposed transit-system changes for a month.
The changes would include improved marketing, new maps and more frequent buses along major thoroughfares such as Biltmore Avenue and Haywood Road. They would be paid for by a mix of higher fares, federal grants and a $30,000 jump-start from the city's general fund (to get the changes up and running until increased fare revenues kicked in).
But some on Council voiced concerns about committing that money before so much else in the budget was decided. Russell, in particular, said he opposed the changes, as currently configured, due to the $30,000 cost to the city.
The federal funds, noted staff, would finance a marketing push to inform transit system users about the changes. And Smith called the measure "money well spent" considering the increased quality of service.
Newman, however, was leery of such a move, despite staff's contention that Asheville's rates — $1 for a ride and $15 for a normal monthly pass — are far below those in many other cities. Keeping rates low, he argued, "encourages regular riders. A lot of low-income people ride the bus; I'm wary of raising rates on them."
And Manheimer said some of the marketing dollars should go toward making the system more comprehensible to new riders — a major obstacle, in her view. "You shouldn't have to have an A in algebra just to get on the bus," she observed.
Bellamy and other Council members urged transit staff to confer with other departments on ways to avoid taking the $30,000 from the general fund.
What's the plan?
City Council also heard criticism on the Feb. 23 appointment of Holly Shriner — a developer's wife with no formal qualifications — to the Planning and Zoning Commission. Her husband, Asheville accountant Foster Shriner, is a co-developer of the former Deal Buick site on Merrimon Avenue, and because some Council members weren't aware of this when they voted on the appointment, Council decided that, in the future, it will ask future board-and-commission applicants to disclose potential conflicts of interest.
"It's not unusual for people to have those conflicts, and we have a process for them recusing themselves. But we do think it would be beneficial to ask people to disclose them," noted Newman. (Shriner has said she'll recuse herself from any consideration of the Deal site's fate.)
In an e-mail earlier in the day, Bothwell had proposed dissolving and re-forming the commission, so Council could reconsider the appointments of Shriner and engineer Mark Brooks. But because P&Z includes two members who would have to be reappointed by the Buncombe County Board of Commissioners, Bothwell backed off.
"My concern is that the process denies each of us the chance to discuss the applicants' strong points in public," he explained. "I'd like to see that [discussion] made more public."
Asheville resident Barry Summers criticized both Shriner's appointment and the process that led to it.
"I hope this isn't where you're going to leave it, just saying 'Oops,'" he observed. "To those of us watching development issues in the city and county, 'oops' seems to happen a lot. Oops, we didn't mean to sell off this parkland. Oops, we didn't mean for Greenlife, for Staples, for the Grove Park Inn. It's always a 'Well, this is against the rules, but we'll let it go anyway.' I believe Mrs. Shriner wasn't entirely honest. Failing to disclose things that important approaches hoping not to be asked. … I think it sends a terrible signal, and I hope you revisit it "
Russell, however, defended Shriner's appointment, saying, "I don't think it was an 'oops.' We had a good discussion, and a lot of people in our community are heavily involved in a lot of things."
On other fronts, Council members:
• endorsed (on a 6-1 vote) a push by the Mountain Area Information Network to apply for federal funds to develop a community cloud-computing network that would give local agencies access to enhanced computing power and more advanced applications. Russell cast the lone opposing vote, saying he wanted more information.
• unanimously backed a Public Art Board proposal to install a new work of art at the Reed Creek Greenway gateway at Broadway and Cauble Street; the project would be funded by a National Endowment for the Arts grant the city is applying for. An alternate proposal from the Downtown Master Plan called for using the grant money to create a cultural search engine that could easily link artists, potential customers and the community at large. Smith suggested seeking a grant from the Tourism Product Development Fund to implement the search-engine project.