Watauga Commissioners Vote 3-2 To Approve Sales-Tax Change with Two Weeks for Town, County To Negotiate

Published Wednesday, April 17, 2013 at 7:40 pm

By Jesse Wood

April 16, 2013. At Tuesday’s Watauga County Board of Commissioners meeting, the three Republican members – Chair Nathan Miller and Commissioners David Blust and Perry Yates – voted to change the sales-tax distribution from a per capita basis to an ad valorem basis with the stipulation that County Manager Deron Geouque not file the official paperwork until April 30. Commissioners Billy Kennedy and John Welch voted nay. 

Watauga_county_NC_sealBy state law, the Department of Revenue must be notified of any tax switch by the end of April for it to be effective in the successive fiscal year. The April 30 deadline gives the Town of Boone and Watauga County more than two weeks, if the two entities choose to do so, to come to some agreement with the potential sale of the old Watauga High School and the $2 million loss of sales-tax revenues to the Town of Boone with the redistribution of sales taxes. 

Phil Templeton, who put in a $19-million offer on the old high school property, has stated his intention to back out of the sale agreement after the customary inspection period if the Town of Boone doesn’t make certain changes to the multi-family housing ordinance that the Boone Town Council passed after the Watauga County Board of Commissioners accepted Templeton’s offer.

The contentious debate lasted nearly one hour with each member giving a spirited speech to the other board members and members of the community who packed the commissioners board room.

Welch started things off, saying that he felt this was a big enough issue that touched thousands of taxpayers to warrant public input, and he took offense – “really rubbed me a little raw” – that he had to read in the newspaper about Miller discussing the 60/40 split proposal with other members of the Blowing Rock, Seven Devils and Beech Mountain town councils.

“The main issue I have is, obviously, the lack of transparency and openness. To be honest, we’ve heard the threat of the sales tax change for however long here, but for me an issue that touches every taxpayer in this county should be done in the open, transparently with input with the towns in a joint meeting,” Welch said. “If there is an issue with the sales tax, by all means lets have an open and honest discussion, but I can’t be a part of a process that brings personal and professional vendettas that will not only hurt 17,000 county residents within the Town of Boone, but also county residents that own a business in the Town of Boone, does business in the Town of Boone, without having an open and honest discussion.” 

He added that the recent flurry of letters from officials with the Town of Boone and Watauga that were sent to media outlets was ridiculous and embarrassing.

Commissioner Yates, echoing Welch, said that he “ran on honest, open government” and addressed people who have recently questioned his personal ethics and motives because his father-in-law is Phil Templeton.

“I don’t care who buys the property. I don’t want a dime of it. I want the county to get the most it can absolutely get for the property,” Yates said. “If and when it sells, I will vote for 100 percent of the proceeds to go towards paying down the debt.”

He added that he recently spoke with County Attorney Four Eggers as to whether he should recuse himself from the vote on the sales tax. Eggers, on Tuesday night, said that since Yates and his wife were not to receive or expect to receive monies directly from the sales tax switch than a recusal would not be appropriate. Eggers also added that if Yates were to abstain from the vote, his non-vote would still be counted as a yes vote because of the makeup of the board and past votes, which according to Eggers, has already set a precedent.

After addressing his integrity, Yates took direct aim at past and present regulatory actions of the Town of Boone. He talked about the steep slope/view shed ordinance – which Templeton also requested as an exemption for the old high school property – that was passed in 2006 in the wake of the apartment complexes sprouting above Wal-Mart. At a meeting before that regulation was passed more than 400 people attended and those that spoke were overwhelmingly in opposition.  Yates said that after those people spoke, the town read a prepared statement.

“Why even have a three-hour meeting and waste people’s time,” Yates said.

He talked about the recent changes to the “Supplementary Standards for Multi-Family Housing Development” section in the revised Unified Development Ordinance (UDO), which Republican commissioners have said would effectively kill Templeton’s offer on the old high school.

Referring to the .5 ration of outdoor-livability space in the UDO, Yates said it will raise the price of land.

“50-percent green space – that means whoever buys the high school. They bought 75 acres. What’s 50-percent green space? You just lost half of your acreage,” Yates said.

Then Yates turned to the part of the UDO addressing financial assurances that are required for a developer to do work in the Town of Boone. He mentioned the letter of credit for 125 percent of the value of the commercial part of the development. Yates said that would add an extra $3 million expense on a $60-million bond over five years that would never be recouped.

“Donald Trump doesn’t even do that,” Yates quipped.

(However in a letter from the Town of Boone released after the sales tax vote passed, the town said this figure has been misrepresented: “Although the ordinance mentions this as one type of financial guarantee that will always be acceptable, it allows the developer to propose whatever guarantee the developer thinks is adequate, and it allows the Town Council to negotiate with the developer.” See full letter here.)

He also took another shot at the financial commitment, which requires the development to be completed in a timeframe no longer than 5 years. He mentioned that the shopping center where Harris Teeter exists has just recently added a Five Guys.

“Five years is unacceptable. How long has it been since Harris Teeter was put up at Shoppes at the Shadowline,” Yates said. “A minimum of 15 years it has taken to develop a nice Shoppes at the Shadowline.”

But, Yates, added that the “most obtrusive of all” of the new regulations was that “two unrelated parties can’t live in the same apartment.

“I think you went from public regulation to dictating personal lives. It is my right to live with who I want to live with as long as my rent is paid,” Yates said.

In the end, Yates said he was going to vote “Perry Yates’ convictions” and said the Town of Boone would have to live with the consequences of its actions: “That’s how I feel about it. I think you have to live with the consequences of your decisions. I think there has been some poor decisions made over the past 25 years.”

Commissioner Kennedy began his speech by saying, like Welch, that he was “disturbed” with how the sales tax situation evolved “without my knowledge.” Then he said that resolutions aren’t legally binding but statement of intents. He then asked County Attorney Eggers if the resolutions that Blowing Rock, Seven Devils and Beech Mountain passed were binding.

“That’s correct,” Eggers said. “They aren’t required to give back the money.”

“That worries me,” Kennedy said.

Kennedy then wondered how much sales tax is collected in Boone and the other municipalities and how much of that revenue goes back to those municipalities. He said he was never provided that information and that the due diligence to make this vote is lacking. 

(The aforementioned letter from the Town of Boone notes that Boone generates, according to 2008-09 figures, two-thirds of the sales tax in the county, although it only receives 25 percent of those revenues under the per capita basis. With the change to ad valorem basis, the Town of Boone would receive only 12 percent of those revenues, which are garnered in town limits.)

Kennedy then said, “Also, I thought we were talking about tax issues. All of a sudden, we are back to talking about the high school sale. To me I am kind of confused – or maybe not- as to what’s the motive behind this, whether it is good fiscal governance or just payback.”

(Miller told High Country Press the potential sales-tax switch was politically motivated on March 26 and was an attempt to gain leverage with the Town of Boone in hopes to see the sale of the old high school.)

Again Kennedy went back to him being left out of any prior discussions about this matter. Tuesday night was the first time the five commissioners addressed the topic of the sales tax at its regularly scheduled meetings.

“The facts were kept from me this time,” Kennedy said. “I think, as John said, a public and open discussion is important. It’s a big matter, and I am worried that personal vendettas are getting mixed up with county business. I am worried about this. I am worried. When people in the county are fighting each other, we are failing.”

During is round, Commissioner Blust came straight out and said that the board has reached out on many occasions to the Town of Boone in trying to resolve the potential sale of the old high school.

“They’ve just ignored us,” Blust said, adding that the Town of Boone is costing the taxpayers and county millions of dollars and that the extended closed-session mediation is unacceptable. 

He chimed in on the past and present regulations that Yates mentioned, too, adding that the steep slope/view shed ordinance, in particular, also devalued the old Watauga High School property.

He reiterated the town’s reluctance to meet out in the open, citing specifically the potential meeting last weekend that fell through.

“I am fine with this,” Blust said.

Chairman Miller commended Council Member Lynne Mason has the only member of the Boone Town Council that met personally with Miller to discuss the issues at hand. He also said it was unfortunate that “the mayor insinuated that I was a bully.”

Miller said that Templeton would withdraw his bid if the “Supplementary Standards for Multi-Family Housing Development” section in the UDO wasn’t withdrawn.

“We need this shot in the arm to help tax revenues,” Miller said, adding that this has been a “high stakes game of poker” recently.

He contended that the private session mediation that the Town of Boone has offered is illegal. (However, counsel with the Town of Boone disagrees. See aforementioned letter.)

He also contested what the Town of Boone said after both sides realized the Sunday meeting wasn’t going to happen. Last Friday, the Town of Boone released a letter, which stated: “We are very disappointed. Although the County says it is relying on the opinion of the County Attorney, we think it is ironic that mediation in parallel closed sessions was exactly the way the Town and County settled their differences over the landfill when Stacy Eggers, Jr. was County Attorney. The Town disagrees with the County’s legal analysis.”

On Tuesday, Miller read an old letter from the county chair to the town mayor dated Jan 17, 1996, that stated: “We respectfully decline. We are concerned that attendance of the meeting would violate open meeting laws and are inconsistent with the open community involvement process for which the county is commended.”

As for his meetings with other council members at the other municipalities, Miller again stated that he acted within the confines of the law because he didn’t meet with the majority of the three councils.

“No facts were kept from any commissioners. When I have conversations, they are my conversations,” Miller said. “Any facts on paper, they were sent to all of the commissioners.”

As for Kennedy and Welch’s request for a public hearing, Miller said, “We are not required to have a public hearing.”

Miller admitted that the redistribution would hurt the citizens of Boone.

“Will this hurt the Town of Boone? Yes it will. That is unfortunate. The citizens of Boone elect their leaders. Their leaders have made a decision for the citizens of Boone,” Miller said. “It’s unfortunate the leaders made the decision they did … Their citizens have an election coming up this year.” 

As for the steep slope/view shed ordinance, Miller mentioned that, too. But he added that Templeton entered into an agreement to purchase the old WHS with those ordinances already in place – unlike the  “Supplementary Standards for Multi-Family Housing Development” section that was approved in February, months after Templeton’s offer was accepted by the commissioners. 

“That’s what changed the game. It’s unfair the way he is treated. Again, he is a big boy, he can take care of himself, but where it is unfair for everybody else, it now affects the town and the pocket book of every citizen with one section [in the UDO].”

Before the resolution went to a vote, Miller said that he would direct County Manager Deron Geouque not to deliver the resolution off to N.C. Department of Revenue in Raliegh until the very end of April, thereby giving the two entities two more weeks to negotiate.

He added that the Town of Boone knew this could happen for weeks and that the media reported on the situation, yet no meeting could be scheduled with the Town of Boone. 

Welch said, “This situation requires more than 40 seconds of prepared speeches. Why didn’t we start this process three weeks ago.”

And Blust responded, “We did.” 

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