Fee simple by David Forbes April 19, 2015

Council moves forward with ‘minor’ fee changes — and ending the downtown fare free bus zone — sparking a debate about transparency

Above: a sign on South French Broad Avenue noting the boundary of the city’s fare free bus zone.

Asheville City Council’s April 14 meeting was another short one — clocking in at about an hour — but there was at least one significant step Council took, moving forward with fees for the coming budget year. In this case, the shortness of that step and the relative lack of discussion over one change in particular ended up sparking another debate afterwards.

As July 1 approaches, the city’s political year is increasingly focused on one of local government’s biggest tasks: passing a budget. Many things the city does — from law enforcement to the bus system — don’t come up for a single up-or-down vote. Instead, they’re part of the budget, discussed over the course of the Spring and eventually passed with a single vote during the Summer.

If you want a look at what the budget the city passed last year does, and some of the enduring debates and dynamics reflected in that, take a look at our breakdown of that budget from last Summer.

On April 14, Council was set to take one of the first major steps in setting a budget, adopting changes to fees and charges. Under North Carolina law, cities only have a few sources of cash that they control. The main one is property taxes, which provide the lion’s share of the city’s revenue. But those can be politically tricky to raise and Council members are historically hesitant to do so, especially as they raised taxes as recently as 2013.

The other major source of revenue the city controls is fees and charges; what the city bills its citizens for everything from water to throwing a block party. Fees provide just over a third of the city’s revenue, though much of that goes directly to fund the systems that generate those sources of cash. Fees are also the first part of the budget that Council votes on and though the new fees aren’t set in stone until the final budget passes in a few months, they generally stay in place.

Staff can, however, bring more fees forward if they feel it necessary when balancing the budget. Indeed, the report on the fee changes noted that changes to solid waste fees would be the subject of a separate Council work session, and that “there may also be additional fee adjustments that are brought forward as part of the budget presentation in May.”

Asheville faces some unique challenges due the fact that an unusually high percentage of the people using its services are tourists who don’t pay those aforementioned property taxes. In this case, staff try push an effort for “cost recovery” to balance this, meaning they want fees to generally get as much money as possible back from members of the public.

News from Raleigh

As a prelude, Council discussed how legislation — proposed and already passed — could hit the city’s finances further. Last year the state replaced business privilege license taxes with a flat fee. That sharply cut the fee amount for larger businesses and, in Asheville, looks to see the city lose $1.5 million annually when the tax expires this July.

“At the time they had said they would come around this year with a fix for cities, I’m wondering if there’s any sign with following through on that?” Council member Gordon Smith asked Mayor Esther Manheimer, who will be traveling to Raleigh shortly to talk with legislators.

“Absolutely none and it is not anticipated that we will see any legislation replacing the privilege license tax or in any way addressing the gap,” Manheimer replied. “That’s a significant hit for us. Nothing’s been introduced; there isn’t even a murmur in the legislature about restoring that or somehow otherwise addressing it.”

Additionally, a proposal to overhaul sales taxes to shift revenue to more rural areas, still working its way through the legislature, could cost the city another major financial hit, she continued.

“The privilege license tax, plus the sales tax, could create a hole of between $2.5 and 3 million dollars in the city’s general fund budget,” Vice Mayor Marc Hunt added. “We’ve got unusual challenges this year.”

“Well, when the leadership in Raleigh said ‘we’ll fix you,’ we know what they meant,” Council member Cecil Bothwell quipped.

The next day, some state House representatives filed a bill that would allow municipalities to add a quarter-cent sales tax increase. According to an Asheville Citizen-Times report, Manheimer notes that such a tax could generate $6 million annually, though it’s unclear if it will pass the legislature.

Short and debatably sweet

According to Budget Manager Tony McDowell, there wasn’t really much news in the fee changes this year.

“I can just quickly introduce the topic and let y’all discuss it,” he told Council. “This year it’s a fairly modest package. In the general fund there are a few minor changes, there are also a few minor changes in the transit fund as well. The most notable changes that I would want to put out to Council are in the water and stormwater funds.”

Both, he noted, were in line with the policies staff have pursued for some time. On the water front, that meant adjusting fees so larger businesses and manufacturing pay more while most other users, especially residents, bear less of a burden. On the stormwater front, that means raising enough revenue from fees to improve the city’s infrastructure and try to avoid issues like the landslides that happened over the past few years.

Unusually for presentations on the budget (or any other matter) McDowell gave few specifics — though he did note the anticipated impact of the stormwater and water fees on the average user — and had no graphics or charts detailing the changes. While he noted that “I have some slides if Council would like to see them” at the beginning of the presentation, none indicated that they did.

The report prepared by staff for the meeting shows a 1.5 percent increase in water fees for single-family, multi-family and small business/light manufacturing users, a 3.5 percent increase for large commercial users and manufacturers and a 5 percent hike for users buying water wholesale or for irrigation. This would raise $239,600 more for the city’s water system.

There was also a 5 percent increase to the city’s stormwater fee. The new fees would raise $465,130 for the city’s stormwater fund.

The report put the cost of both fee changes as $6.60 more a year to the average user.

Also, under efforts at making it so “the person or entity receiving the benefit of a service pays for the service,” as the report put it, there are a bevy of new proposed fees for events and transactions. A real estate transaction, for example, will see a fee hike from $170 to $270. Instead of a $25 charge for groups applying to run a public event, there will be a range of new, higher charges depending on the type of event, from $50 for a block party or 5K race to $100 for a parade. Sidewalk cleaning charges jump from $80 an hour to the city straight out billing for the whole cost of the cleaning.

Smith noted that the changes in water fees were in line with the city’s multi-year course to ease the burden on residential water users. There was no other Council discussion about the fees and no member of the public spoke (“you’re a lively bunch,” Manheimer quipped) before a unanimous vote approved the changes. The whole process took about four minutes.

Unmentioned by McDowell or any member of Council, and nestled down at the very end of the appendices, was a single item under transit fees, estimated to have no financial impact: the Downtown Fare Free Zone changed from “Free” to “Eliminate (charge regular fare).”

Not so fast

But during the meeting’s open public comment time, Sabrah n’haRaven, an activist and member of the city’s Homeless Initiative Advisory Committee, took to the podium to express surprise and dismay at the end of the fare free zone, which waives the usual fee for riding the bus if a person begins and ends the trip within part of the core of the city.

“I’m sorry I didn’t speak on this before you voted on the fees and charges, it took me by surprise and I was busy looking up the information quickly,” n’haRaven said, adding that at the last meeting of the city’s Transit Committee the members had agreed to table any move to end the fare free zone pending further public discussion.

“The elimination of the fare free zone affects people and at this point there’s been effectively no time for real public discussion of it,” she continued. “If that has gone through without consideration of what the Transit Committee recommended I will be very disappointed.”

Smith replied that “part of what happens with the fees and charges getting into the budget cycle is us trying to get through these various items on a calendar so we can pass the budget by the date required by law.”

He added that “when we reviewed the fees at the Finance Committee I had the same question around the downtown fare free zone. Staff replied that one, chiefly, this had become a very difficult problem for the drivers to monitor when people would get on and off, who got on during fare free and who didn’t. I think this was something bubbling up from the drivers and from the management company around that.”

The other reason staff provided for eliminating the zone, he added, was the limited number of people who use it.

“I’m sorry we weren’t able to align our calendars with the Transit Committee in regard to that conversation,” Smith concluded.

When n’haRaven tried to respond to Smith during his comments, Manheimer stopped her and said “we’re not doing a conversation, he’s just responding.”

Since the meeting, n’haRaven has raised the matter with HIAC and elaborated on her issues with Council’s move to end the fare free zone in an open letter, calling the move rushed, sloppy and un-transparent and noting that the zone helps some of the city’s disabled and low-income residents.

David Nash, chair of the HIAC, replied in an email to the Blade that the group is still considering a response to the proposed end of the fare free zone.

On Friday the Blade tried to contact Transit Projects Coordinator Yuri Koslen, for further information about the proposal to end the zone, but received no reply.

—

The Asheville Blade is entirely funded by its readers. If you like our work, donate directly to us on Patreon. Questions? Comments? Email us.