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HomeMy WebLinkAboutJanuary_17_2012_Regular_MinutesIREDELL COUNTY BOARD OF COMMISSIONERS REGULAR MINUTES JANUARY 17, 2012 The Iredell County Board of Commissioners met on Tuesday, January 17, 2012, at 7:00 P.M., in the Iredell County Government Center (Commissioners' Meeting Room), 200 South Center Street, Statesville, NC. Board Members Present Chairman Steve Johnson Vice Chairman Marvin Norman Renee Griffith Frank Mitchell Ken Robertson Staff present: County Manager Ron Smith, County Attorney Bill Pope, Deputy County Manager Tracy Jackson, Fire Marshal Ronny Thompson, Transportation Director Ben Garrison, Emergency Management Director David Martin, and Clerk to the Board Jean Moore. CALL TO ORDER by Chairman Johnson INVOCATION by Chairman Johnson. (Mr. Johnson requested prayers for Judge Chris Collier who was recently hospitalized following a suspected heart attack.) PLEDGE OF ALLEGIANCE ADJUSTMENTS OF THE AGENDA: MOTION by Vice Chairman Norman to approve the agenda as presented. VOTING: Ayes — 5; Nays — 0. PRESENTATION OF SPECIAL RECOGNITIONS AND AWARDS Presentation of Resolutions Honoring Citizens Ashley Belsole & Josh Bryer: Commissioner Frank Mitchell, along with Fire Marshal Ronny Thompson and Fire Tax District Board Member Frank Phillips, presented resolutions to Ashley Belsole and Josh Bryer, two local citizens, who assisted fire units in extinguishing a recent fire. (Belsole and Bryer held the water hoses while firemen rescued a two-year child from a burning structure.) RESOLUTION HONORING ASHLEY BELSOLE WHEREAS, on Monday, October 10, 2011, Ashley Belsole was working for Rent -A - Center in the area of Bethesda Road when she came upon the scene of a working structure fire at 311 Bethesda Road; and WHEREAS, Emma Rae Thompson, the two (2) year old daughter of Robert and Brandy Thompson was trapped inside the burning structure; and WHEREAS, Ashley Belsole and a second citizen assisted a volunteer fireman (Jason Workman) on the scene by pulling the fire hose and holding it steady (up close to the structure) for the fireman; and WHEREAS, without the assistance of Ashley Belsole the outcome for Emma Rae Thompson may have been very different; and WHEREAS, Ashley Belsole's heroic response at the fire scene exemplifies the highest ideals of compassion for others in our community. NOW, THEREFORE, BE IT RESOLVED that the Iredell County Board of Commissioners and the Iredell County Fire Marshal's Office hereby honors ASHLEY BELSOLE for her actions on October 10, 2011, in responding to this emergency situation with professionalism and compassion. RESOLUTION HONORING JOSH BRYER WHEREAS, on Monday, October 10, 2011, Josh Bryer was working for Rent -A -Center in the area of Bethesda Road when he came upon the scene of a working structure fire at 311 Bethesda Road; and WHEREAS, Emma Rae Thompson, the two (2) year old daughter of Robert and Brandy Thompson was trapped inside the burning structure; and WHEREAS, Josh Bryer and a second citizen assisted a volunteer fireman (Jason Workman) on the scene by pulling the fire hose and holding it steady (up close to the structure) for the fireman; and WHEREAS, without the assistance of Josh Bryer the outcome for Emma Rae Thompson may have been very different; and WHEREAS, Josh Bryer's heroic response at the fire scene exemplifies the highest ideals of compassion for others in our community. NOW, THEREFORE, BE IT RESOLVED that the Iredell County Board of Commissioners and the Iredell County Fire Marshal's Office hereby honors JOSH BRYER for his actions on October 10, 2011, in responding to this emergency situation with professionalism and compassion. PUBLIC HEARINGS Chairman Johnson declared the meeting to be in a public hearing. Consideration of a Proposed FY 13 North Carolina Department of Transportation Administrative & Capital Grant Application for the Community Transportation Program: Transportation Director Ben Garrison said the purpose of this grant was to support administrative and capital needs for rural transit. He said the application would include the following funding requests: Administrative: $264,404 (requires a 15% local match that will be derived from mileage surcharges & fares) Capital: $265,404 (requires a 10% match that will be derived from mileage surcharges and fares) No one else desired to speak, and Chairman Johnson adjourned the hearing. OTION by Commissioner Mitchell to approve the FY 13 Administrative and Capital Grant Application as presented. VOTING: Ayes — 5; Nays — 0. Chairman Johnson declared the meeting to be in a public hearing. Consideration of a Proposed North Carolina Department of Transportation FTA Section 5310 Elderly and Disabled Grant Application: ICATS Director Ben Garrison said this 5310 grant would be used to assist disabled individuals in need of kidney dialysis transportation. He said the required 50% local match would be taken from Rural Operating Assistance Program Funds, along with Elderly/Disabled Transportation Funds, and contract revenues from the Iredell County Kidney Dialysis Organization. Garrison said the total amount of the grant was $100,000 ($50,000 federal and $50,000 from the local match). No one else desired to speak, and Chairman Johnson adjourned the hearing. MOTIO by Vice Chairman Norman to approve the Section 5310 Elderly and Disabled grant application as presented. VOTING: Ayes — 5; Nays — 0. Chairman Johnson declared the meeting to be in a public hearing. Consideration of a Proposed North Carolina Department of Transportation FTA Job Access and Reverse Commute (JARC) Grant Application: Transportation Director Ben Garrison requested permission to apply for a JARC grant in the amount of $200,000 ($100,000 2 federal and $100,000 in local/ROAP funds). He said the funding would be used to transport persons with low incomes to -and -from employment sites. No one else desired to speak, and Chairman Johnson adjourned the hearing. OTIO by Commission Griffith to approve the request to apply for a Job Access and Reverse Commute grant. VOTING: Ayes — 5; Nays — 0. ADMINISTRATIVE MATTERS Request for Approval of Budget Amendment # 31 to Allocate $15,000 to Conduct an Aircraft Incident Exercise with Reimbursement from the North Carolina Emergency Management Office Upon Completion of the Exercise & Submittal of Documentation: Emergency Management Director David Martin requested approval of a budget amendment for costs associated with an exercise at the Statesville Airport. He said the $15,000 exercise would be conducted with numerous response agencies, and the North Carolina Emergency Management Office would reimburse the county once the exercise had been held and documentation was submitted. OTIO by Commissioner Griffith to approve Budget Amendment #31. VOTING: Ayes — 5; Nays — 0. Request for Consideration of Survey Entities to be Used in Salary Studies: Deputy County Manager Tracy Jackson said a revision to the entities that were reviewed when conducting salary comparison studies was requested. He suggested that the following entities be used by the compensation study consultants when comparing the salaries. Counties: Burke, Alexander, Cabarrus, Catawba, Gaston, Rowan, Mecklenburg, Lincoln, Alamance, Randolph, Union, Orange, Johnston, Cleveland, Forsyth, Davidson, and Henderson (Robeson, Pitt, Wayne, Craven and Nash were removed.) Cities: Hickory, Salisbury, Winston-Salem, Statesville, Morganton, City Charlotte, City of Concord, and Town of Mooresville (City of Lenoir was removed.) State: State of North Carolina Hospitals: Baptist, Iredell Memorial, Davis Regional Medical Center, Presbyterian, Frye, Lake Norman, and Catawba Memorial (Removed Caldwell Memorial) Private Sector: Survey information available through the Employment Security Commission and the Department of Labor To appropriate funds from North Carolina Emergency Management to conduct an exercise at the Statesville Airport. BA#31 1/17/2012 Account # Current Chane Amended General Fund 104546 438000 14551 NCEM Airport Exercise (15,000) (15,000) 105546 510004 14551 Overtime 1,500 1,500 105546 535000 14551 Supplies 5,000 5,000 105546 577301 14551 Grant Purchase - Other Agency 1,000 1,000 105546 537508 14551 Contracted Services 7,500 7,500 Request for Consideration of Survey Entities to be Used in Salary Studies: Deputy County Manager Tracy Jackson said a revision to the entities that were reviewed when conducting salary comparison studies was requested. He suggested that the following entities be used by the compensation study consultants when comparing the salaries. Counties: Burke, Alexander, Cabarrus, Catawba, Gaston, Rowan, Mecklenburg, Lincoln, Alamance, Randolph, Union, Orange, Johnston, Cleveland, Forsyth, Davidson, and Henderson (Robeson, Pitt, Wayne, Craven and Nash were removed.) Cities: Hickory, Salisbury, Winston-Salem, Statesville, Morganton, City Charlotte, City of Concord, and Town of Mooresville (City of Lenoir was removed.) State: State of North Carolina Hospitals: Baptist, Iredell Memorial, Davis Regional Medical Center, Presbyterian, Frye, Lake Norman, and Catawba Memorial (Removed Caldwell Memorial) Private Sector: Survey information available through the Employment Security Commission and the Department of Labor OTION by Commissioner Mitchell to approve the Salary Survey Entities as requested. VOTING: Ayes — 5; Nays — 0. Request for Approval of the December 2011 Refunds and Releases: OTIO by Vice Chairman Norman to approve the December refunds and releases as presented. VOTING: Ayes — 5; Nays — 0. Releases for the Month of December 2011 Refunds for the Month of December 2011 Breakdown of Releases: County $ 229,832.27 Solid Waste Fees $ 118.50 E. Alex. Co. Fire #1 $ 4.40 Shepherd's Fire #2 $ 1,111.45 Mt. Mourne Fire #3 $ 1,768.90 All County Fire #4 $ 3,590.96 B&F Fire #5 $ 719.29 Statesville City $ 51,982.20 Statesville Downtown $ 130.32 Mooresville Town $ 129,306.15 Mooresville Downtown $ - Mooresville School $ 16,331.73 Love Valley $ - Harmony $ - Troutman $ 5,397.11 Davidson $ 25.00 Refunds for the Month of December 2011 Monthly Total $ 440,318.28 Monthly Total $ 32,254.64 Discussion/Decision Regarding the Red Line Rail Project: Chairman Johnson said that at a previous meeting, the county attorney was given several questions regarding the Red Line Rail Project. Johnson said the attorney was requested to provide the responses at an upcoming meeting. Attorney Pope provided the following information about the four questions. 1. Who votes to be in the district? If the owner is a corporation, who votes? "It's important to understand that what is being proposed is actually two kinds of districts, and they are created in different ways. One kind of district is called a special assessment district, 4 Breakdown of Refunds: County $ 17,226.58 Solid Waste Fees $ - E. Alex. Co. Fire #1 $ - Shepherd's Fire #2 $ 885.28 Mt. Mourne Fire #3 $ - All County Fire #4 $ 15.87 B&F Fire #5 $ 78.72 Statesville City $ 1,758.15 Statesville Downtown $ - Mooresville Town $ 9,716.80 Mooresville Downtown $ 446.27 Mooresville School $ 1,468.55 Love Valley $ - Harmony $ - Troutman $ 658.42 Davidson $ - Monthly Total $ 440,318.28 Monthly Total $ 32,254.64 Discussion/Decision Regarding the Red Line Rail Project: Chairman Johnson said that at a previous meeting, the county attorney was given several questions regarding the Red Line Rail Project. Johnson said the attorney was requested to provide the responses at an upcoming meeting. Attorney Pope provided the following information about the four questions. 1. Who votes to be in the district? If the owner is a corporation, who votes? "It's important to understand that what is being proposed is actually two kinds of districts, and they are created in different ways. One kind of district is called a special assessment district, 4 sometimes called a special improvement district. These districts are created by a vote of the property owner in the district. For the district to be created, 50% of the property owners in the district representing 66% or more of the value have to sign a petition requesting to be included in the district. For the tax increment financing district, that's created by the joint authority, whoever the municipality is that is issuing the bonds would create that. You would have whatever input in that -- you wanted in that. As to who votes in the corporate context where the property owner is an individual versus a tenant, the owner would vote -- not the tenant. Where the property owner is a corporation, the board of the corporation is charged by law with setting the policy for the corporation and approving who has what authority to do what. Generally, corporations authorize the president, and in the president's absence, executive vice presidents, or other officers, to execute documents and they would be required to vote in this situation. In the absence of specific authority, 1 would believe the president would have the inherent authority to execute that vote. It would be my opinion that in most situations, it would be the president of the corporation. The corporation board could, however, authorize the janitor, or somebody else to vote if they wanted to. " 2. Is the voting weighted by_parcel size, or pin number, or by value? "The answer to that question is no. The way I understood the question, I think I was being asked if one person had 200 acres and another person has one acre, does the person with 200 acres get 200 votes and the person with one acre get one vote? The answer to that question is no. They each get one vote. Another way of asking it is: Is voting weighted by value? If one person had $100,000 worth of value and another person had $1,000 worth of value, would they have disproportionate voting? The answer is no. 1 didn't see anything that indicated there was any, kind of weighted voting." 3. If the property owners vote to create a district, can the General Assembly, after the fact, exclude certain property "The answer to that question is probably. Basically, the answer is yes. There are qualifications to it though. What I mean by that is the General Assembly and acting tax measures must do so by general law. They can't say, `Bill Pope doesn't have to pay his tax.' They have to say that all people over the age of 50 who live on a certain side of the street, or have a certain disability, or who are losing their hair do not have to pay their tax. It has to be based on a law of general application. There are some Constitutional restraints associated with it. You can't violate the equal protection clauses. I think it is important to point out as well that local governments cannot exempt property f ant taxation; only the General Assembly can do that and they, can only do it by general application. Then they face some Constitutional restraints in doing so. " 4. If the revenues fall short, is the county on the hook for the deficit? "The answer to that question is no. I don't think the county is on the hook. I would like to read yon a couple of things. I have based my answer on the assumption that both of these bonds, and it's important to keep in mind there are two kinds of bonds. The TIF bonds and the SAD bonds. I've assumed that both are revenue bonds. It's been represented to me that that's what they are and what's intended. The legislature specifically says that for revenue bonds that they don't constitute a legal or equitable pledge, charge, lien or encumbrance on any of the municipality's property or its income, revenues, or receipts except the funds which are pledged under the bond order authorizing the bonds and neither the credit nor the taxing power of the state or the municipality as the case may, be are pledged for the payment of the principal or interest of the revenue bonds and no holder of any revenue bonds has the right to compel the exercise of the taxing power by the state or the municipality. I assume these are revenue bonds but I'm not 100% that they are. The statutes define revenue bonds as one where the project is owned by the issuing unit. The issuing unit here would be the joint powers authority. I don't know what the project would be that would be owned by them. I believe the lines will be owned by whoever owns the track. I don't know who will own the station and all that kinds of stuff: Perhaps there are answers to those questions. I've assumed that there are answers and that these in fact are revenue bonds for the purpose of answering the question. The question is a technical question, and that is: Does the county have legal obligations on the bonds? I believe the answer to that is no, if these in fact, are revenue bonds. Again, I believe it is contemplated that they would be revenue bonds. I don't know what obligation the county hos other than legal obligations. If you recall, we looked into these matters on a couple of other occasions. Specifically in regards to the Langtree project and concluded at that time that there would some reputational taint associated with a default. We were not able to quantify that. We spoke to a number of people in the industry and got no specific answer, but concluded that there would be some possibility of a k, reputational taint even though you had no legal obligation to pay the bonds. You might, nevertheless want to because it is possible that the pricing of the next bond issue would somehow be impacted if you didn't. The only situation of which I'm aware of in North Carolina in which there has been a TIF bond is in Roanoke Rapids. The Town of Roanoke Rapids is using its tax revenues to scotch the bonds. Why, 1 really don't know. 1 don't know if there was some particular wording in the documents when the bonds were issued, or they,just felt they had a moral obligation to do it, or if someone said they better or they would never issue anymore bonds. 1 really do not know the answer. It might be worth trying to get an answer if you are considering this. That raises a question along the lines of reputational taint in my mind. In my attempts to quantify that, which frankly, and again, I was unsuccessful in doing. In describing the special assessment bonds or the tax increment financing bonds, my, own conclusion is that it's far less likely to be a default in SAD bonds than in the TIF bonds. The SAD bonds are going to be supported by a special assessment on all property in the district which is proposed at a rate (Y'75 cents per hundred that's going to be paid whether there are any improvements. Whether the rail line gets build, whether it gets used, that will be a tax to be paid. I don't think there's too much likelihood of a default in that context because it will not be that much different from other property taxes. There maybe a question of collectability of the tax as we have from time to time in collecting our taxes, but the probability of a default is not likely, in my mind as it is in the TIF situation. In the TIF, if the anticipated development doesn't happen, you don't have the revenue. There would be a default, or the possibility (Y'a default Then the question becomes: What do you do about it? Again, from a technical perspective, I don't think you have a legal obligation do anything about it. You may have some other obligation, but I don't think it's a legal one." Commissioner Mitchell said he understood that with the special assessments 50% had to vote for them, and they had to represent some 60% of the properties. Attorney Pope said yes, they would have to petition to create the district. Mitchell said that would mean the others, who didn't vote for the district, would be hit with a 75 -cent tax regardless of whether they wanted it. Pope said this was correct. Robertson asked if the same rule applied for the TIF district. Pope said the TIFs were co -terminus with the SAD districts. He said, "I was told there would be a special assessment district created around each stop of the train. That would be, I don't know exactly something like a half a mile, or mile, in each direction around the stop. The TIF bond is not a tax increase. You wouldn't increase the tax to retire the bonds. What you would do is agree that everything over the base goes to pay the bonds. if you adopted this in 2012, the base would probably be whatever the property was worth on January 1, 2012. Any increase in taxation over that baseline would be applied to reduce the bonds. The business proposal that I saw would reallocate 25% of that back to the county. They are saying they would use 75% of the increase to retire the bonds and not 100%. They let you keep 25%. The question the people who don't live in the district would have is: Why are the people in the district only paying 25% of the cost of the sheriff, register of deeds, or DSS, or whatever you have to fund, rather than 100% as everyone else does? There is some possibility of tweaking that increment some. So if that is something you are interested in, I think there would be some room to define the increment more narrowly and to contractually agree on what amount and when. It doesn't actually increase the tax of the people in the district. It just reallocates a portion of it to pay the bonds." Mitchell said, "After the vote is taken for the special assessment district bond, assuming the vote passes and construction takes a given amount of years, do you think the taxation would start immediately or before the project was completed?" Pope said, "I believe it would be effective immediately and on the first tax year following enactment. It makes sense that they would need the revenue to start retiring the bonds, even before the project was completed." 6 Commissioner Griffith said, "I was looking at some national figures. The Norfolk rail was proposed at $232 million, but it came in 72% over its estimated costs. It cost $338 million. I was looking at the LYNX line out of Raleigh, and it was proposed at $227 million and came in at 130% over budget at $522 million. Looking at a line in Denver, it was proposed at $450 million, and before they broke ground it was $850 million. By the time they broke ground, it was at one billion dollars. The national average for rail is 104% over the cost that is presented. The overage averages nationally are 104% more than what is presented. If you take those figures and just look at what we are given, the overages could run, if it follows the national average, from $113 million more to close to a billion dollars. It reduces traffic by 4%. A big concern is traffic on I-77. By the numbers we are given, they are estimating that 5,000 people will ride the train, and that's less than I% of the traffic on I-77. If we sign on with this project, and it moves into Iredell County -- when the project was presented they wanted to go all the way to 40 -- so if the commissioners sign on to this and the project comes to Iredell County, when its time to extend that project from Mt. Mourne to Interstate 40, and the project solely lies in Iredell County, I would like to know what other counties will come on board and help us cover the cost. I would venture to say there will be none. There would be no other counties when this project lies solely in Iredell County. The expansion of 25 miles -- will it cost us another $452 million? The State of North Carolina is broke. We need to live in reality. We have to look at this as a business, and the business model is flawed. Everywhere you look the commuter rails are over budget. LA is over budget, Sacramento is over budget, Vancouver is over budget, Norfolk is over budget, Raleigh is over budget, and Charlotte is over budget. We're to believe that this will not go over budget. I'm going to sound like Chairman Johnson. My Mama always said that actions speak louder than words and I sound just like you, and I don't mean to. If you look at the actions of the rail projects all across the country, and not just rail projects, any projects that the government is in charge of starting and finishing. They never come in on or under budget. They are always over budget. I cannot in good conscience sign the paperwork that will hold the taxpayers of Iredell County hostage to a tax bill that potentially could exceed the numbers we are given. Then, when the project is to be extended, we will solely be holding the bill. These are serious issues that I don't take lightly. I am not anti -progress. In the economic times that we live in I cannot see this as a good investment." Commissioner Robertson had the following remarks: "Let me go through and kind of list out some of the objections and concerns that we as a board have and explain it so that hopefully you can see kind of the other side of the pancake. You've heard a little of it already, and I'll try not to repeat too much. First of all, I want to say something so that it can be out, and we can accept it. We understand that there will be some people who would love to ride the train to work from Mooresville. That it would be a benefit. It would help them. It would make their life easier. We understand that for the people who want to ride the train that it would be a benefit. We understand that. I also believe that there would be some number of people who want to live close to the train. We accept the fact that there are positives involved. So that's done. Let's talk about the things that give us reason to be concerned. "The historic cost overruns that we see nationally -- you know sometimes you can just say, `Well, gee whiz, these guys are cooking the books.' I don't think we are saying that. What I will say is that based upon what's happening nationally, I would make the assumption that estimating rail cost must be extremely difficult. I'll give them that -- assuming they are not trying to make a rosy projection. In Seattle, they estimated 25 miles of rail would cost $1.8 billion, and they ended up building only 17 miles for $2.6 billion. Right now they're looking at making it go a total of 21 miles, and they believe it will be about $15 billion before it's over with. In Denver, the original cost estimate was $4.7 billion. The cost ended up being $7.9 billion. In New Mexico, in Albuquerque, and Santa Fee, the train ended up requiring about $10 million in government funding annually, and you've already talked about Norfolk. There are plenty of other examples of where good intentioned people just flat missed the cost estimates by huge margins of money. In Charlotte, let's go closer to home. Let's go back and think. The Nascar Museum, the convention center, the rail that's already been built. Have you heard that any of those came in under budget? I would say that if you narrowed it down from a national perspective and just looked at it from a Charlotte regional perspective I would say that those folks have difficulty coming up with accurate figures on what things will cost and also the revenue stream and number of visitors. We asked a very specific question when this was presented to us. We asked, `What happens if the cost ends up being higher than what is estimated, or if the revenues from either the tax districts or ticket sales, or for whatever reason, if the revenues come in lower, what happens?' We did not get an answer. They said it won't VA happen. We won't let that happen. I am quite positive that every single one of these other cities had people just like you and me, and they all agreed that just won't happen. But it did, and none of them quit. They ended up coughing up the money. They never could say, `No it won't,' when I asked the question: Will that 75¢ tax be raised to 80? Will the tax districts be expanded? `No, they won't.' If your costs go up 20, 30, or 40% and you don't expand your revenue base, and you're still going to complete the train, something has to give. It just didn't pass the smell test. Let me tell you what can happen. If you noticed that when these systems run out of money, the way they deal with the shortfall of funds is they don't complete the track. We are at the end of the track. If they run out of money, we still get to pay. If we don't get the railroad track it might not be until somehow somebody coughs up the money. Now, who do you think they are going to expect to cough up the money, if let's say they are only 30 or 40 million dollars short in Iredell County? 1 think you're looking at the folks up here, or the Town of Mooresville. That's who they're going to look at. That's who will have to choke it up. I believe you're exactly right. You know who your friends are when the times are tough. It will be when it's time to get our track and station, that's when they'll run out of money. We will then find that we stand alone. "My next concern and this is the most important concern that 1 have, because 1 will explain why all of this stuff that we've heard -- about why this will not cause a tax increase. I will explain to you why that's not true. I'll be honest with you. I hate seeing stories that say, `Homeowners won't see a tax hike.' You got a free lunch. There's no free lunch. It's just that some people are going to tell you who is paying and some people won't. Let me describe what I mean by that. First of all, there's going to be a special assessment of 75¢ per $100 valuation. To give people an order of the magnitude here, our county tax rate, that we build schools, run the sheriff's department, run EMS, Mapping, Inspections, Health, DSS, all of that we do for 48.5¢ per $100 valuation. This train is going to be an additional 75¢. Now, that is to the businesses that are in the district -- it's not to the homeowners. So, that is correct. Homeowners will not have to pay an additional tax, but the tax increment financing is where it gets messy. Because they take 75% of our 48.5¢ tax rate and that goes to the train. One of the problems that I have is that there is already an exemption on this 75¢ tax rate. Let me go back to the special assessment district. There's already an exemption that not everybody has to pay the 75¢ tax rate. Once you open the can of worms on who gets exempted, even though it may not be easy from the General Assembly's perspective. You can suspend rules. You can do stuff. I am very suspicious when government officials start choosing winners and losers. Because when it's all said and done, we will end up being the losers. That's the way it always ends up working. Anyway, back to the tax increment financing. The tax increment financing says that the tax value that people are paying on their property now, we will get all of that even if the train comes. But, if we sign on to this, any improvements to those properties, that 48.5¢ tax rate that is Iredell County's, the train gets 75% of that. You go, `Well, that's okay because that's development you normally wouldn't have.' But if that were a factory, you could say, `Well, we do that all the time. We give an 80% rebate if they come and build a big factory.' The development that is being projected around the rail stations; however, are not big factories that make hundreds of thousands of widgets an hour. It is transit oriented development -- high density development. In Iredell County, we call those condos and apartments. If they have two bedrooms, we know what will be in that second bedroom. It will be a kid, a child, and they have to go to school in Iredell County. Now that 48.5¢ is how we run the county. Fifty percent of our tax rate goes to the schools. Fifty percent! Well, they're taking 75% right off the bat. So the taxes that we collect from housing units that are in these development zones or districts -- we won't have any money to educate those kids. The only way for us to get money to pay for the kids that come in those areas is if we raise taxes on everybody else in the county. That's the only way. Manna will not fall from heaven. Children will have to be educated, and they've got to be paid for. Now, if we assume that people want to ride the train to work, and I believe there will be a lot of people who work in downtown Charlotte, near the rail station there, and they will want to ride the train there. I totally agree. People want to argue about the ridership numbers, I don't. I believe a lot of people will want to ride the train to work. Who is going to be the people who want to come and live here and ride the train to work? It will be people who already work in Mecklenburg County. They live in Mecklenburg County, and they have children in the Mecklenburg County schools. We know how popular that school system is. When they look at Iredell County taxes and they look at the Mooresville Graded School District, which is the number two district in the state by one measure, and number three by another. Iredell-Statesville Schools is lower on the list, but they are still seen as a good school system. I think that we will see an exodus of people from Mecklenburg County, with children, moving into Iredell County. When they move, they will 8 have to go to school somewhere. The business will get to stay in Mecklenburg County, and businesses are cheap. They pay a lot of taxes, and they don't cost us a lot of money. When the kids come here, we will only have 25% of the normal taxes to pay for them if they are in the TIF. In the past five years, we've gotten rid of most of our trailers in the school system. It took years and years of GO bonds, COPS bonds, and we finally built enough classrooms to take care of the kids. But already, the Mooresville Schools are overcrowded. if they get an influx of new students into their system, they have to build more new schools. The Iredell-Statesville School System has zero empty seats south of Troutman. None! If they get an influx of children into their school system in the southern end of the county, the only way we can deal with it is either to bus them a long way or we have to get back to building schools again. Just to give you an idea as to how much a school costs -- to build a high school to house 100 children, right now the estimates are between $50 million to $60 million. For a middle school, that handles less than a 100 students, about $35 million. For an elementary school, handles again a good bit less than a 100 students, $30 million. You don't need to add that many students to Iredell County for us to very quickly approach $100 million of school construction that will be related to the very positive benefit that many parents will see, because they can live here and work in Mecklenburg County, which by the way, every single study that we do says that the citizens of Iredell County do not want to be a bedroom community of Charlotte. We're going to have it, and when it is time to build the $100 million worth of schools, or more, we will have to borrow $100 million. I promise you that this board will never put a $100 million bond on a COPS. It would be a GO bond, and all of the schools will be in the southern end of the county. What is the likelihood that a GO bond will pass if the only thing on it is some brand new schools in the southern end of the county for people who just moved here. If that bond fails, then what do we do? It's very difficult for this board to go issue a hundred million worth of COPS debt after the voters just said, `Don't do it.' This is going to be a tough sell, and right now, I feel that we may fix a transportation problem for some people, but we will create a massive school problem that we just got finished fixing. I cannot support any train activity if part of their component is to divert money from schools to the train. Until that part is fixed, I'm totally out." Continuing, Mr. Robertson said, "I agree, Mrs. Griffith, the state is broke. I-77 needs to be widened. If you want relief congestion, then widen I-77. I would stand up and cheer. I-77 needs to be widened. If that's want we want to do to make it easier to get to work, then widen the interstate. We all know that needs to happen. What I really don't want to happen is for us to get the train and then the Department of Transportation say, `Well, we've already spent hundreds of millions of dollars helping you to get a train. You have to wait for the road.' We shouldn't do anything that's going to divert state money from widening I-77. "Philosophically, the parents made a choice to live in Charlotte. That was a choice. Everybody that bought a house that lives in our county, but works in Charlotte, made a choice to commute. This is a half a billion dollar solution to some of the consequences of that decision. I understand that they would not have to live with the consequences of that decision. What I can't do is find a solution that relieves them of those consequences and forces the kids in the crowded classrooms. It's just something I can't support. "Let's talk about economic incentives for a minute. We cannot get businesses to locate in Iredell County -- I'm talking about big businesses -- without providing economic incentives. Whether you think they are good ideas or bad ideas. It doesn't matter. If you don't offer economic incentives to big businesses they don't come. Period! Typically, the economic incentive that we offer is that we give an 80% rebate on the county tax bill for up to five years. Well, I can do that if I get all of the taxes. What happens when I don't get all of the taxes? I'll only get 75% of the taxes. I can't rebate much. What about that 75¢ on top of our tax rate that the train will ask for? Do you think that businesses, when they expect us to give 80% back on a 48.5¢ tax rate -- what do you think that they will ask for when there is a 75¢ train tax on top of it? That's not a rebate, that's a transfer from the taxpayers of Iredell County's treasury. That's a direct subsidy. 1 promise when they come, they'll say, `If I were going to build in the XYZ location,' and they don't have the train tax, you'll have to take that off the table. They'll expect us to do that. I think that by virtue of having the train and special tax districts you've just made our cost of corporate recruiting go way up. You go, `Wait a minute. The train is supposed to attract businesses here.' Go do an Internet search and what you find is that in order to get businesses, not apartment complexes and not condos, but to get businesses to locate in rail corridors that have extra taxes, you have to give incentives anyway. We've seen that locally. The City of Statesville and the County of Iredell have gone in together to do improvements at 9 our airport. This was done so we could get corporate jets to help attract industry. Having jets at a local and convenient airport is a good thing, and I'm glad we did it. But when industry came, we still had to do economic incentives on the aircraft. Even if you layout all of the infrastructure that's supposed to bring businesses here, before they come, they still ask for that incentive. These are tough issues. Whenever someone tries to get you to do something, they always appeal to your greed. When people say you can get a half a billion dollar railroad, and it's not going to cost you anything, it's no risk to you, we should all be suspicious. Not because anyone is trying to swindle us, but there's another side of that pancake that we all need to look at pretty darn hard. Some of the ramifications that I've talked about are quite expensive. Just picture after a half a billion is expended, and that rail is almost to Mooresville, and if we just come up with $30 million we get the train, but if we don't, `Well ya'll got to wait another 15 years.' What's going to happen? That's that reputational taint. We will look like idiots. You spend a half a billion dollars now, and for $30 million, you're not going to finish it? When people say, `You can't lose man! The economics are great.' Go ask the Town of Mooresville commissioners, who were told, `Man, we've got a tight deal' by MI -Connection, the cable company. `Man, you're going to make money. It's going to help you, and it's not going to cost anything.' Every year they're writing checks. I just ask that we have some honesty and openness about the risk that we're being asked to take. Those are the concerns that 1 have. Until we address those concerns, 1 can't fully support the rail plan as it's written." Commissioner Mitchell mentioned the other board members had been involved with the rail project for many years. He said Mr. Robertson's comments were appreciated. Mitchell asked how much the single-family homes would be taxed. Robertson said, "The 75¢ on top of the 48 cents will only be for businesses. For income producing property, which if you have an apartment complex, that's income producing property, as I understand it." Mitchell asked about rental houses. Robertson said single-family dwellings, even if they were rented, would not be taxed. Mitchell asked about vacant land zoned commercial. Robertson said it would be 75¢. He said the single-family homes would become involved with the tax increment financing, where 75% of the tax revenue went to pay for the train. Robertson said they wouldn't have to pay a higher tax, so to speak, but the county would be educating their kids. He said, "Everybody in the county will have to make up the difference. That's where we get forced to raise taxes. We are raising taxes for the schools, not for the train. That's the bait and switch that we would have to deal with." Chairman Johnson said, "I've got a file in my parts store that's probably about two feet thick on light rail. I've studied this subject for years -- more than any other subject that I've ever studied in my 17 years plus as a county commissioner. I won't recite all of the statistics, but if you want the best study that I've ever seen, you need to go to the Cato Institute's website and look at its study of light rail in America. I'll just point out the major points. There're a large number of examples in the study. There're probably more statistics than you care to read. The study shows there is no rail transit line in the United States that comes close to covering its operational costs. None! It's never existed in the history of the United States. The closest being the New York urban area at about two-thirds. The average is 30%. The Charlotte area transportation system is far below the average. In the United States, fares have never contributed one red cent for the recovery of the initial capital cost of a rail project in the last 60 years. The rail line project is not a new plan, but a revision of a flawed rail plan that had languished in the discussion for several years. What is new is the DOT involvement in the freight component. What has not changed is that the flaw is fundamentally flawed. Norfolk Southern was contacted late in the process. I do not know why, they operate freight lines for a living. But they were not. Up to that point they had not shown an interest earlier in this project. Perhaps because they saw no freight market potential to embark upon such an endeavor. Only government dares to tread where the free market knows better. In regards to freight customers, who are they? Where are they? What do they do? Apparently they do not exist. If they had, someone would know who they are and would have a list of them. Any sound business plan that I've ever seen has a defined market with potential customers targeted and an estimate of market penetration which results in revenue 10 projections. These revenue projections are then compared to the total of the fixed and variable costs to determine if the venture will be profitable. This plan has none of that. The proponents put forth the argument that developers will build out properties along the rail line resulting in tax revenues to fund the project. Who are they? Where are they? Have they made commitments to invest in these properties? What are the total projected investments, and what are the total projected revenues resulting from these developments? Financing in the current economic climate will prove to be difficult to obtain with approximately two thirds of properties selling at slightly below tax value, at or slightly below tax value. Appreciating values will be almost nonexistent which will make investors question risking capital. In addition, the Sarbanes-Oxley requirement will require financial institutions to require substantially larger upfront cash by borrowers which will deter investors in making decisions to borrow. Proponents of this rail line also demonstrate a lack of understanding as Mr. Robertson said of economic development processes at the local level. The industrial and commercial development along the line will require economic incentives by the various jurisdictions. The incentives paid out to the new company will be approximately 80% of the taxes that they will pay per year for five to six years. The result being that the full amount of tax revenues will not come in until year six or seven. The amount of tax base created on the project will have to be a minimum of five to six times larger than what they believe it to be if they've even bothered to contemplate the numbers at all. Iredell County adopted the 2030 land use plan. This is a product of intense deliberation resulting in the best use of property while maintaining the property rights. The Red Line cuts through communities across huge areas and contradicts our land plan that had input from communities in the impacted area. I quote the Cato Institute Study again which says, `Light rail that goes across less urbanized areas creates land czars who determine land use rather than the owners of those properties.' Another concern for everyone should be the historical performance of CATS. Folks, it's ugly. You only have to look at their history. They have an abysmal record of estimating construction costs and managing operational costs. Yet, they will be a part of this partnership. The consideration of this project should involve asking questions if we personally invest in a business where the business consistently under estimates construction and capital costs by huge amounts. Once the capital costs and debt are incurred they cannot be paid by profit resulting from operations because the company has consistently lost money. You will never recover the capital costs. Commuter rail and light freight rail owed by governments today remain in existence because any first semester business student, like myself 30 years ago, learned this formula. If your total of the variable and fixed costs are less than your loss, it's cheaper to remain in business. That, plus the fact that a bunch of stupid politicians are afraid to admit they are wrong and bail out. Now those are just the facts by any study that you want to conduct. Come down to my store, and I'll open up a file cabinet. I'll lay it out on a desk and you can spend a week reading it. We are told there is a cap on construction costs of $452 million. Why should we believe that? Why should we believe anything CATS says? Whose cap is this? Does this mean that once the DOT has reached their cap, they are gone and it's someone else's problem? If a development is not performed, how will the debt be repaid? One answer given in one meeting was, `Well, they will loan us some more money.' Ladies and Gentlemen, there's a difference in two world views here. There's the difference between the world viewed in Iredell County, and the way it is viewed in the great State of Mecklenburg. In Iredell County, we believe it when we see it. In Mecklenburg, they see it when they believe it. They sit around and come up with another cockamamie plan, and they believe it will work. It sounds coherent; therefore, it must be true. But, it has no semblance to the real world. I've been told by a number of people over the last few days that they can't stand me because of the stand I took on commuter rail. You know what, it's more important to be respected than it is to be liked. It is more important to be responsible than to get along with folks. I will not subject our citizens of this county to insanity like this. I will not do it. You know what, if the collective wisdom of the county is that we should do this, they will vote me out of office. That's okay. Mama says she doesn't see enough of me anyway. I enjoy being your county commissioner. My desire every time I hear the sound of this gavel is to do what I feel is in the best interest of the people of this county. I'm doing that here tonight. I'm not here to pick a fight, but I'm going to do that regardless of who likes it. Thank you." Commissioner Robertson said the only item that had been presented was the draft business plan. He said a statement for the record might be helpful and suggested the following: The Iredell County Board of Commissioners does not support the current draft business/finance plan as presented to this board during our December meeting. We believe this draft plan, as written, will lead to higher taxes for all taxpayers despite claims contrary. We will reject any future proposals that fail to address the concerns that were made public tonight. Johnson said the concerns might need to be mentioned. He said an obligation might exist if the plan was turned down in order for the proponents to have something to target. Johnson said the proponents kept saying wait for the details, but the details would not save the plan. He said the major components of the plan were flawed, and the details would never rescue the plan. Johnson said that when commercial development along the rail was discussed, that names of people and companies would have to be supplied along with something to show the commitment along the rail. In addition, he said they would need to show estimated tax value created by the establishment of that company. Johnson said they would need to show the projected revenues as a result of the taxation. Mr. Johnson said this was a lot of work, but that was their problem, as the project was not his idea. Johnson said that he had to make a decision as to whether he was going to subject the people of this county to a business plan. He said his vote would be contingent upon the ability of the proponents to do this. He said that when it was mentioned that developers would locate along the rail that he wanted to know who they were and what type of commitment they had. Johnson said, "Are they willing to enter into a contractual relationship to do so? What is the total amount of that taxable value of the property and what are the projected revenues? The best way to insulate the taxpayers against them being responsible for the repayment of this debt is not by some commitment by CATS, because I don't believe a darn thing they say. Why should I? The best way to insulate the people of this county is with a sound business plan based upon hard numbers. If anybody worked for a US corporation and went into a management office with a business plan like this, I'd be surprised if they had a job. It's no plan at all. It's just a fairy tale of what we hope it will be. There are not hard numbers here. Those are the qualifications they have to meet." Robertson said the statement would be written including the requirement for a listing of specific commercial development commitments and also residential. Johnson said it could be development of any type. He said this was nothing more than what had been requested for over a decade. Johnson said he had asked for this information for years. Robertson read the combined statement as follows: The Iredell County Board of Commissioners does not support the current draft business/finance plan as presented to this board during our December meeting. We believe this draft plan, as written, will lead to higher taxes for all county taxpayers despite claims to the contrary. We will reject any future proposals that fail to address the concerns that were made public tonight. Specifically, we want to see a list of firm commitments for both commercial and residential development within the special tax district. Commissioner Mitchell suggested that a stipulation be added where there would be a commitment from the state to pick up any overruns. MOTIO by Commissioner Robertson as follows: The Iredell County Board of Commissioners does not support the current draft business/finance plan as presented to this board during our December meeting. We believe this draft plan, as written, will lead to higher taxes for all county taxpayers despite claims to the contrary. We will reject any future proposals that fail to address the concerns that were made public tonight. Specifically, we would like to see a list of firm commitments for both commercial and residential development within the special tax district. In addition, we would like to see that the state makes a commitment to pick up any overruns. VOTING: Ayes — 5; Nays — 0. Request for Approval of the January 3, 2012 Minutes: OTION by Commissioner Griffith to approve the minutes as presented. VOTING: Ayes — 5; Nays — 0. 12 ANNOUNCEMENT OF VACANCIES OCCURRING ON BOARDS & COMMISSIONS Board of Equalization & Review (6 announcements) Animal Grievance Committee (1 announcement) Juvenile Crime Prevention Council (1 announcement) Nursing Home Advisory Committee (1 announcement) APPOINTMENTS TO BOARDS AND COMMISSIONS Adult Care Home Community Advisory Committee (1 appointment): No nominations were submitted, and Commissioner Mitchell made a motion to postpone the appointment. VOTING: Ayes — 5; Nays — 0. No nominations were submitted, and Commissioner Griffith made a motion to postpone the appointment until the next meeting. VOTING: Ayes — 5; Nays — 0. Nursing Home Advisory Committee (1 appointment): Vice Chairman Norman nominated Brian Griffith. OTION by Chairman Johnson to close the nominations and to appoint Mr. Griffith by acclamation. VOTING: Ayes — 5; Nays — 0. PUBLIC COMMENT PERIOD Bryan Shoemaker (opponent of Red Line Project): Referenced the children's book entitled, The Little Engine that Could and said the Red Line project should be known as the big, expensive engine that should not. Mentioned that tax increment financing was risky. Matt McCall (opponent of Red Line Project): Offered support of the board's vote. Mentioned that Peter Rogoff, the Administrator of the Federal Transit Administration, stated that the projected ridership of the Red Line didn't pass the federal government's effective cost criteria to receive federal funding for commuter rail. Buddy Hemric (opponent of Red Line Project: Asked the question, "If the Red Line Rail is such a good project, why isn't someone with a name like Vanderbilt down here trying to build a railroad?" He requested that in the future, a complete no vote be given. Rhonda Kontos: Thanked the board for voting earlier in the meeting in favor of the state transportation grants. Expressed appreciation for the transportation being provided by the ICATS program for the disabled. Rob Guerity (proponent of Red Line Project: Mentioned the county commissioners should not be comparing this project to others in the US due to the comparison not being "apples to apples." Requested the board members to start thinking about the future. Jim Bensman (opponent of Red Line Project: Mentioned that recently a business owned by him was sold, and the site was in the proposed rail district. Indicated the new owner might be subjected to the increased taxes. Noted the board had left the door open on the project, but a high bar had been created in order to gain support for the rail line. CLOSED SESSION: Pursuant to Economic Development - G.S. 143-318.11 (a) (4), Chairman Johnson at 8:40 P.M., made a kotioril to enter into closed session. VOTING: Ayes — 5; Nays — 0. (RETURN TO OPEN SESSION AT 8:59 P.M.) 13 ADJOURNMENT: OTIO by Chairman Johnson at 9 P.M. to adjourn the meeting. (Next meeting: Tuesday, February 7, 2012, at 7 P.M., in the Iredell County Government Center, 200 South Center Street, Statesville, NC.) VOTING: Ayes — 5; Nays — 0. Approval: 14 Clerk to the Board