Asheville to Pursue $90M in Bonds - TribPapers

Asheville to Pursue $90M in Bonds

CIP expenditures from the city's general fund would only cover maintenance. Screenshot.

Asheville – Asheville City Council is going through the motions to get a bond referendum on the November 2024 ballot. Voters would decide whether or not the city would float general obligation bonds (GOBs) to fund capital projects, which are yet to be determined, as are funding amounts. In the 2016 referendum, voters approved $75 million split among Parks ($17 million), Transportation ($32 million), and Housing ($25 million). A public hearing is scheduled for July 23.

Finance Director Tony McDowell explained that GOBs have the lowest interest rate on debt available because the city pledges its full faith and credit, which is its taxing power, as collateral. Ballot language will be approved at a future council meeting, but new legislation requires it to include an estimate of how much the bond will increase property taxes and cost the city over its life.

Staff recommended pursuing $75 million in GOBs again, as well as $10 million in limited obligation bonds (LOBs) for facility maintenance. Categorized GOB allocations would be: Housing $25 million, Transportation $20 million, Parks and Recreation $15 million, and Public Safety $15 million. This would require a property tax increase of 2.4 cents per $100 valuation. Assuming a 20% average property value increase from the revaluation, McDowell said the average household would pay $101 more in property taxes.

If, instead, council’s request for $90 million in GOBs were approved, along with the $10 million in LOBs, the allocations would be: Housing $20 million, Transportation $25 million, Parks and Recreation $20 million, and Public Safety $25 million. This would require a 3.2-cent tax hike, or $135 more for the average homeowner.

City Manager Debra Campbell wanted the city to get on a recurring $150 million bond cycle because deferred maintenance had racked up overwhelmingly. She said staff was presenting council with a proposal for $90 million because council had requested it, but staff’s recommendation was still for $75 million. “We actually really kind of know that we can manage $75 million. We just don’t want to disappoint you elected officials or the community in terms of our ability to deliver these projects.” 

Mayor Esther Manheimer did not foresee voters rejecting a bond referendum for either amount. They are usually very popular with voters, and the city gained wide support the last time by making sure pragmatic projects were distributed throughout the city.

McDowell said factors limiting how much the city could reasonably spend included complexities in land acquisition and easement procurement, difficulty in hiring project managers, limits to how much staff can do, and a shortage of private contractors. When the subject of leveraging bond revenues was broached, Capital Projects Director Jade Dundas cautioned against creating an administrative nightmare by spreading federal funds among multiple projects. 

The task at hand was to cap the bond amounts for each category. Councilwoman Sage Turner was “excited” and “thrilled” to be having another bond referendum. She kept saying she wanted to go high and hold community conversations before going lower. 

Councilwoman Kim Roney said she was hearing from her low-income constituents that they did not want to pay higher taxes to fund affordable housing. Councilwoman Antanette Mosley wanted to get more money for the Malvern Hills pool at the expense of proposed allocations for other categories, but Manheimer said this would not leave enough for the Municipal Building, where the floor was about ready to give way. 

Manheimer said she had requested decreasing the allocation for Housing because the city had had a lot of trouble spending funds from the 2016 bond’s Housing category. She said that with $25 million in bond revenue, the city leveraged just over 600 units of housing. Turner added that the city had also acquired 32 acres of land. Still, Manheimer said the numbers begged the question of whether it is the role of Asheville City Council to be building affordable housing or if it makes more sense for council to revise the UDO to allow the private sector to build more.

The only person to speak during public comment was Sally Grau. She told of a rally outside city hall with a marching band. People wearing blue T-shirts wanted to call attention to their petition with 2,000 signatures requesting that the city allocate $3 million of the Parks & Recreation bond issue to replacing the Malvern Hills pool by the 2026 swim season.

When council appeared ready to vote, City Attorney Brad Branham nearly instantaneously forwarded members a copy of the language for a motion, numbers included. Turner made a motion to authorize staff to apply to the Local Government Commission for a bond issue with caps in all categories of $20 million, and it was adopted 5-1. Mosley cast the lone dissenting vote, and Councilwoman Maggie Ullman was absent.