In 2011, Buncombe County voters OK'd a quarter-cent sales tax to cover construction at A-B Tech.

Opponents argued there was no guarantee the money wouldn't be shifted to pay for other things.

The Citizen Times found the county started transferring sales tax revenue to general fund by 2014.

ASHEVILLE — More than $15 million in tax revenue intended to pay for construction at Asheville-Buncombe Technical Community College has instead been used to balance the county's own budget.

That's about 20 percent of all money generated by a quarter-cent sales tax narrowly approved by Buncombe County voters in a 2011 referendum.

To ease concern over a tax increase amid an economic downturn, officials at the time promised the money would pay for a proposed $130 million building plan at A-B Tech — and nothing else.

Supporters pitched a need to help a vital community asset with more than 20,000 students.

SEE: A timeline of A-B Tech's quarter-cent sales tax

The extra money could expand the school’s much-needed training and workforce programs, supporters said, including a new building that would prepare students for high-demand jobs in health care.

Opponents worried the money wouldn’t go toward A-B Tech building projects and instead would be used to offset the county’s existing appropriation to the college.

Both sides used robo-calls, yard signs and mailings to sway voters. The tax saw high-profile endorsements, including school boards and the Asheville Area Chamber of Commerce.

But despite promises it wouldn't happen, Buncombe's financial reports and annual budget amendments show commissioners are taking advantage of a detail opponents flagged years ago: There's no legal requirement that the money must go toward A-B Tech construction.

"Basically, the stuff we said would come true, came true," said Robert Malt, who led efforts against the tax proposal in 2011.

"The frustrating thing is no matter how many times we’re right, we never get listened to."

The college’s $37.9 million Allied Health building opened in 2016. But as the county siphons from the added sales tax to put millions in its own coffers, A-B Tech now is grappling with an estimated $25 million backlog of maintenance projects.

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At this rate, the county won’t have the money to pay for them. Despite generating millions of dollars of revenue each year, staff projects the quarter-cent sales tax fund will be in the red within five years — and the practice of shifting money to the general fund is partly to blame.

Fryar: ‘It was a slush fund’

A Citizen Times analysis of Buncombe’s annual financial reports show the county began transferring quarter-cent sales tax revenue to its general fund as early as the 2013-14 fiscal year, about a year after the tax was authorized.

Its first transfer was about $249,000, though the budget amendment allowed for more than $500,000 to be moved. The county made it an annual practice, records show.

Buncombe more than doubled its transfer two years later. By 2018, commissioners approved an annual budget that included transferring $6.5 million to the general fund, an all-time high.

"You've been balancing your budget by doing things like this," interim county manager George Wood told commissioners last month. "And that's not sustainable."

The general fund pays for most county services, including public safety, schools and economic development efforts. That includes its contribution to A-B Tech, which helps pay for operations and some maintenance.

State money makes up most of the community college’s funding.

Reports show the county slashed its annual appropriation to the school after the tax was passed. During the 2012-13 year, commissioners gave nearly $8.1 million. The next year, they cut it by $2 million, a roughly 25 percent decrease.

This year’s $6.5 million appropriation matches the amount of tax revenue transferred to Buncombe’s general fund — meaning it’s a wash, argued Board of Commissioners Vice Chairman Mike Fryar, once an opponent of the tax and a current A-B Tech board member.

Buncombe is "not giving one dime" of its own money to the college this year, he said. He’s placed some blame on former employees.

Ex-Buncombe manager Wanda Greene and assistant managers Jon Creighton and Mandy Stone were indicted by a federal grand jury in August. Prosecutors said the trio for years took gifts from Georgia-based engineer Joe Wiseman in exchange for county contracts. They have pleaded not guilty to wire fraud and receipt of kickback charges.

Contracts obtained through a public records request show Wiseman worked on A-B Tech projects, including commissioning services for a public safety training center, the Allied Health building and a new parking garage.

Wiseman has not been charged. Any outstanding contracts he and his previous employers had with the county since have been terminated.

Fryar said A-B Tech’s tax revenue is being used to cover debt for unrelated projects.

While a majority of commissioners has approved annual budget amendments that include transfers from the A-B Tech fund, Fryar said commissioners didn’t know until recently that it was being used to balance the county’s budget.

"It was a slush fund," he said during a Sept. 17 commissioners meeting.

Chairman Brownie Newman, an Asheville city councilman at the time of the referendum, said he didn't endorse the tax but ultimately voted for it. He said opponents' concerns were valid and he thinks that as a commissioner, he wants to invest the revenue in the highest priorities.

"I don't personally feel bound to spend the dollars (the way) that someone said before I was ever on the commission," he said Thursday. "And I never committed to using it for just that one purpose, new buildings at A-B Tech."

Commissioners Robert Pressley, Jasmine Beach-Ferrara, Joe Belcher, Al Whitesides and Ellen Frost did not return a request for comment. None of them, nor Fryar, was on the board when the tax was approved.

A-B Tech wants answers.

The college requested "a full accounting" of all county expenses funded by tax, according to an Aug. 13 letter obtained by the Citizen Times. It has asked officials whether the tax was used to cover debt for noncollege projects.

The letter from board Chairwoman Mary Ann Rice said "proceeds may have been used for purposes other than capital needs at the college."

"The board is certainly aware of the current difficulties faced by the commission regarding past actions of certain employees and this request is not intended as a criticism of the current Board of Commissioners or the county staff," she said.

"To the contrary, the trustees wish to work hand-in-hand with your board to ensure that the sales tax proceeds are used as promised and benefit the thousands of county residents served by the college each day."

A controversial tax

More than a year before the referendum, officials began to explore a local-option sales tax for A-B Tech.

That was a tough sell in 2011, when taxpayers were still reeling from the recession.

A quarter-cent sales tax would amount to 2.5 cents on every $10 purchase in Buncombe. Officials said each resident, assuming no population growth and equal spending habits, would pay $20 a year. About 30 percent of the revenue was projected to come from county visitors.

School officials touted A-B Tech’s growing student population and workforce contributions. They pitched to county voters a plan that included a $55 million health-and-workforce development building, a new $27 million classroom building on the main campus and a county training facility for law enforcement and emergency responders already under construction in Woodfin.

Opponents raised concerns the tax would be used to cover the county’s existing appropriation to A-B Tech. Despite a resolution that proceeds would go to the college, they argued, any decisions otherwise by future commissioners couldn’t be stopped.

The Sales Tax Opposition Partnership formed. It was led by Malt, a former Buncombe County Republican Party chairman and an Arden business consultant.

“You’re putting A-B Tech’s fate in the hands of … future county commissioners that we don’t even know,” Malt said in a November 2011 article.

Referendum supporters launched a political action committee, too: Join Our Buncombe Solutions. Its message tried to reassure voters the money would go toward the college’s planned projects. Then-President Hank Dunn said the proceeds would be needed to pay off borrowed money to fund new construction.

“The truth is the quarter-penny will go to A-B Tech, and anyone who says differently is just wrong,” Dunn said at the time.

Voters approved the tax by a less than 500-vote margin. Countywide turnout was less than 20 percent.

State lawmakers subsequently passed a law that gave the county control of all A-B Tech construction projects funded by the quarter-cent sales tax.

Kit Cramer, now nearing her eighth year as the Asheville chamber's president and CEO, said in an interview Tuesday that the referendum was passed "on the basis of trust."

"It makes no sense to me that we would instead be balancing the county’s budget with it," she said.

Delivering campaign promises?

Founded in 1959, A-B Tech serves roughly 23,000 students. Its main 145-acre campus has 27 buildings, and its Enka campus has two buildings and 37 acres.

The college has additional facilities throughout the region.

With construction projects and tax collection handled by the county, A-B Tech has little say over the quarter-cent sales tax.

College President Dennis King said Thursday that Greene made unilateral decisions for A-B Tech's building plan, including projects that were not desired by the college. It has not been a collaborative process, he said.

Records show commissioners expanded the tax’s use around the time Greene was retiring and handing over the top administrator role to Stone. A June 6, 2017, resolution said the tax also would cover "major maintenance and operational needs as deemed appropriate by a majority of the Board of Commissioners."

King said while he supports using tax revenue for maintenance costs — it's currently underfunded by the county — school officials didn't learn about the resolution until this year. Wood had already taken over daily operations following Stone's abrupt retirement.

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"We would not have paid for the referendum to go on the ballot. We would not have argued for it," King said, "had we known at the time that a large portion of the money was going to go toward our operating budget. We simply would not have done that."

A Sept. 6 memo from PFA Architects estimates about $24.8 million in deferred maintenance needs at A-B Tech. The college is undergoing a new facilities assessment — six of the 61 buildings had been reviewed as of mid-September — that's expected to be completed by the end of the year. Wood said when including inflation, it’s likely close to $25 million.

Meanwhile, the county is budgeting just $2 million annually for capital plan maintenance. Wood expects commissioners will have to increase that expense to $3 million a year to get the projects done.

If the county continues to transfer $6.5 million annually, A-B Tech's tax fund will have a negative balance by the 2024 fiscal year.

Newman said he's in support of increasing maintenance costs for the college. He wants a professional assessment to guide the college's upkeep planning — and a more thorough plan on how to spend the tax revenue.

"I'm open to the idea that we look at some of the new building project ideas (A-B Tech has) as well," Newman said. "But I think until we're sure we're taking care of the facilities we have, I think we have to get a good handle on that before we buy new projects."

King said county officials have informed the college there is no money for a new facility after the demolition of its Rhododendron building, which once held A-B Tech's allied health programs.

He's more optimistic with Wood's leadership.

"But there is still some lingering dissatisfaction," King said, "which I'm afraid are going to linger so long as our operating budget is coming from the quarter-cent sales tax. That is not what the voters approved."

Wood said he will recommend plans to reduce the amount transferred to the general fund. He’s also proposing county and college officials make an agreement on how much tax revenue will be used on operating expenses and how much should be reserved for capital projects.

"We’ve got to do something about stabilizing the fund," Wood said.

Cramer agrees. She said when the chamber launched a committee to decide whether to back the referendum, members were convinced of the need for renovations and construction at A-B Tech.

Cramer said the college was a partner in serving business needs and workforce training. Today, she said, they’re needed more than ever.

"I think it’s super important that what is promised during a campaign is delivered upon," she said. "And I think in this case, for whatever reasons, I think the interim county manager is absolutely right that we should be looking at how those dollars are being spent.

"And they should be spent on what they promised they would spend it for, which is capital projects at A-B Tech."

Malt said he’s not surprised by the county’s actions. He still casts doubt on whether the tax will ever expire and what he called a "just-trust-us" mechanism.

He’s no longer involved in local politics.

"I learned a valuable lesson when I was involved and the lesson was that people don’t really care," Malt said. "They’ll elect the same corrupt (politicians) every year. Which is sad but it’s not surprising at all."

By the numbers

By July 2019, the quarter-cent sales tax will have generated nearly $79.3 million. Buncombe's financial reports show $15.9 million has been transferred to the county's general fund during that time.

2012-13

General fund transfer: $0

County's A-B Tech appropriation: $8,063,999

Sales tax revenue: $8,661,975

2013-14

General fund transfer: $248,842

County's A-B Tech appropriation: $6,063,999

Sales tax revenue: $9,115,928

2014-15

General fund transfer: $378,543

County's A-B Tech appropriation: $6,063,999

Sales tax revenue: $10,406,350

2015-16

General fund transfer: $689,215

County's A-B Tech appropriation: $6,063,999

Sales tax revenue: $11,328,970

2016-17

General fund transfer: $2,329,654

County's A-B Tech appropriation: $6,000,000

Sales tax revenue: $12,227,096

2017-18

General fund transfer: $5,800,000

County's A-B Tech appropriation: $7,800,000

Sales tax revenue: $12,438,915

2018-19