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House | April 2, 2013 | Committee Room | House Finance

Full MP3 Audio File

The house committee on finance will come to order, members please take your seats. As always we'd like to extend our gratitude to the pagers who are here to assist us today. If you will, please raise your hand. Lexi All from Johnson county, Lauren Cocker from Wake County, Carson Ellerby from Wake County, Brandon Falls from Culikulah County. Thank you very much for being with us today and of course we acknowledge the assistance of our House Sergeant of Arms Fred Heigns, Regi Seals, John Brandon, Mike Clampett and finally, don't think i've said enough but we appreciate the support from our staff. Ladies and Gentlemen the first bill on the agenda is House bill 224. The chair has been informed there is proposed committee substitute for House Bill 224. The Sergeant of Arms will, if not done so already, distribute the VCS for house bill 224. Representative Setzer moves that the proposed committee substitute for house bill 224 be before the committee for discussion. Without objection it is so ordered and Representative Moffitt and Representative Ramsey are recognized to explain House Bill 224. Representative Moffit you have the floor. [speaker changes] Thank you Mr.Chair. Good morning members of the committee. Can everyone hear me ok? Alright. This bill is fairly straightforward. This is removing the ETJ authority from the city of Asheville. For those of you not familiar with Buncombe County, it's one of the counties in the state that provides for county wide zoning. So we have a jurisdictional overlay issue here so removing the ETJ authority is really not that big of a deal. In talking with the city as well as the county, the original bill provided a 60 day transition period, the county felt that was not sufficient amount of time so we moved that to 120 days. This does allow for voluntary annexation but it also provides for the county appointment authority to planning and zoning and board of adjustment to remain as it is currently. And I'll be glad to answer any questions. [speaker changes] Representative Warren please state your purpose [speaker changes] For a motion at the appropriate time sir. [speaker changes] The general will be so recognized. Is there any other member seeking recognition. Representative Davis please state your purpose [speaker changes] To ask a question [speaker changes] The gentleman is recognized to propose an inquiry. [speaker changes] Thank you Mr.Chairman. If I can ask, when someone wants to voluntary annex will the people in that area get to vote on whether that annexation takes place? [speaker changes] The general is recognized [speaker changes] Thank you Representative Davis. The voluntary annexation statutes are currently unchanged so whatever path they have to move on in order to be voluntarily annexed, I believe 60% of the property owners have to agree and they can do that through a petition process. [speaker changes] Representative Holley please state your purpose [speaker changes] Thank you Mr.Chairman. I have a question. [speaker changes] The lady is recognized to propose an inquiry. [speaker changes] The city of Asheville agrees with this? Are they in concurrence with this about taking away the ETJ? Or is there any opposition to this bill? [speaker changes] Thank you Representative Holly. I notified the city on January 2nd that this legislation is coming. They did take the initiative to go ahead and start working with the county in regards to rolling back the ETJ and working on a transition. This just expedites the process. [speaker changes] Are there any further members seeking recognition if not Representative Warren you are recognized for a motion. [speaker changes] Thank you Mr.Chair. I'd like to make a motion that we make a favorable report to the proposed committee substitute for House Bill 224, Unfavorable to the original. [speaker changes] Representative Warren has moved that the proposed committee substitute for House Bill 224 be given a favorable report and that an unfavorable report be given to the original bill. Further discussion or debate. Seeing none. Those who favor the motion will please signify by saying "Aye". Those who oppose will signify by saying "No". In the opinion of the chair the Ayes have it and the motion carries, the bill will be given a favorable

Will be given a favorable report. House bill 252, there's a proposed committee substitute for this bill. If it's not been done so, the chair directs the sergeant in arms to distribute the proposed committee substitute at this time. Representative Schaffer moves that the proposed committee substitute be before the committee for discussion purposes. Seeing no objection, it is so ordered, and the proposed committee substitute for House bill 252 is before the committee for discussion purposes. Representative Moffitt is recognized to explain the bill. You have the floor, sir. [SPEAKER CHANGES] Thank you mister chair. Members of the committee, this bill actually repeals session law 2009-114, which permitted the city of Asheville to take 5% of the gross revenues from the public enterprise water system that they operate and repurpose those dollars towards sidewalk and street improvement, as long as it's associated with a water related project. And that's about it. [SPEAKER CHANGES] Representative Luebke, please state your purpose. [SPEAKER CHANGES] To see if Representative Moffitt will yield. [SPEAKER CHANGES] I will. [SPEAKER CHANGES] The gentleman is recognized to pose his inquiry. [SPEAKER CHANGES] Thank you mister chairman. Representative Moffitt, can you tell the committee, first of all, how does the city of Asheville feel about this legislation? [SPEAKER CHANGES] Thank you Representative Luebke. I would like to recognize Vice Mayor Esther Manheimer from the city of Asheville is here. She would like to speak in opposition to the bill. Also would like to recognize Ms. Lauren Bradley. She's the Chief Financial Officer from the city of Asheville. She had made the trip last week as well. And we also have in the audience the Mayor of Mills River, who's here, I guess as a spectator, which is Mayor Roger Snyder. Mister chair, if we could recognize Vice Mayor Esther Manheimer to speak in opposition to the bill. [SPEAKER CHANGES] Mister chair, that'd be fine with me. It'd be a good idea actually, I think, but I would like to reserve my right to comment. [SPEAKER CHANGES] Yes sir, we'll return to the gentleman. Without objection, at this time, we will temporarily leave the committee discussion and invite our guest from Asheville to speak. If the first of the speakers will please approach the mic. The sergeant in arms would please turn the mic on. If you would ma'am, please state your name and your title for the record. And you have the floor. [SPEAKER CHANGES] Thank you mister chairman. My name is Esther Manheimer. I'm the Vice Mayor of the city of Asheville. Members of the committee, thank you. It's my honor to be able to address you this morning and I thank you for this opportunity to speak. I am here with Lauren Bradley, our chief financial officer, who is also prepared to make remarks. And of course, Mr. Roger Snyder, the Mayor of Mills River who lives in, whose town is in Northern Henderson county and whose sewer system is part of the King Creek system which is the subject of House bill 488 which is not before you this morning. House bill 252 impacts the 5% of revenue that the city of Asheville is allowed to use for, essentially transportation or infrastructure improvements and that amounts to between 1.65 million to 1.9 million a year in capital investment. I want to talk about the broader issue for the Asheville regional area and the impact of this bill. But let me give you some context. From January 2012 to January 2013, the Asheville metro area led the state with 3.6% in job growth and in that time Asheville had the third largest share of the state's employment growth, 10.3%. We brought in New Belgium, a huge beer manufacturing company

[0:00:00.0] …Which replaced the Volvo Company who left and these companies I have talked to these companies they came to Ashville because they like Ashville, their employees wanna live there, they wanna enjoy the mountains and they were looking for not just anyplace to locate their company. In other words, Ashville is doing pretty well even though we have a restrained budget, we don’t enjoy some of the tax bases so the other cities enjoy such as the food and beverage tax or the hotel tax which might be typical for tours town like Ashville but we operate well within our means on a restrictive budget without that tax base. Turning to the bill before you, this is a local bill off course that was put in place in 2009 by Ashville’s Delegation, well actually really Bunkum County, Representative and Senators at that time and the reason it was put in place is because Sullivan Acts 2 and 3 were enact and believe it was in 2005 which change the way Ashville could operate it’s water system to make it different in the way other cities can operate their water system. Number one, Ashville cannot charge differential rates, other cities by statue or allowed to charge different rates for customers inside versus outside. Number two, Ashville cannot require annexation of developers that develop subdivisions on the outskirts of the city but tap on to the water system. Again, that’s different than other cities, other cities can say, “Okay, you wanna build your subdivision, you wanna tap into our water system. Well, you gotta come into the city.” This money is used for improvements such as the following: It’s only been in place since 2009 and you can’t just turn around and do a capital project the next day. So, we have done a lot of planning and the money right now that we have accumulated will be used for we call the ‘Azalea Road Project’ which leads to a whole bunch of soccer fields. There is only one road to get out there and 5,000 moms including me get in their main events and drive out there every Saturday so we can watch our kids play soccer. And the road is terrible and it runs along a creek and it needs massive improvement and it’s a costly project but it benefits the whole region because I will tell you moms and dads from all over the place come to these soccer fields every Saturday. So, this project will also provide storm mitigation, it’s going to do improvements to a river that runs in that area that will stop or hopefully greatly mitigate the flooding that occurs down in the Biltmore village area, some of you might be familiar with it’s right outside the entrance to the famous Biltmore House, there are lots of shops and restaurants down there and you might have seen footage from the hurricane where the whole area flooded. So, this is an example to great project we have brought in other revenue sources as well, we felt like we have done a good blend for a good project and that’s the kind of thing we are using this money for. As a city, we are trying to make investments that set the stage or compliment future private investment in Ashville which means jobs and job growth and economic development and this bill affects our ability to do that, thank you. [SPEAKER CHANGES] Thank you mam. Representative Moffitt you are recognized, Sir. [SPEAKER CHANGES] Thank you Mr. Chairman, I appreciate the comments from Vice Mayor Manheimer, I would like to point out for the committee the Sullivan Acts of 2005 and 2006 were really 2 and 3 regarding Sullivan Acts, the initial Sullivan Act was passed in 1933 because the water system within the city of Ashville and Bunkum County is more unique than any other system throughout the entire state. I don’t wanna go through the history but there is a vast history in regards to this being a public water utility that’s operated by the city. It is been recognized by the Supreme Court or by the Appellate Court that this is a community system not the system for the purpose of the city of Ashville to use anyway they choose to. The 5% allowable use in 2009 essentially circumvented the Sullivan Act of 1933, this is a different way to impose differential water rates on people outside of the city of Ashville so the city can repurpose those dollars in a manner that they feel is consistent with 2009-114 and I disagree the project that Vice Mayor Manheimer mentioned has a $189,000 price tag to… [0:04:59.8] [End of file…]

[0:00:00.0] …improvements but it has an over two million dollar price tag for road improvement and I just don’t think in the spirit of that session law that those types of differences between the water line cost and the ancillary improvement outside of that should be that significantly different and lastly this is a public policy issue and I discuss this in the committee on government, we as a body the General Assembly have significant responsibilities to all of our tax payers state wide, should we allow cities to take monies from the public enterprises that they are essentially charged with oversize repurpose those monies but at the same time floating revenue bonds, putting the public enterprises into that and failing to meet their CIP requirements because they are taking dollars away from the public enterprise. I would say that is not a good public policy and this is what this repeal means. Mr. Chairman I’m open for any questions. [SPEAKER CHANGES] Representative Luke please state your purpose? [SPEAKER CHANGES] Continuing, thank you Representative Moffitt for having ___[01:06] from city speak. I guess this is a question for Ms. Griffin for staff, the Vice Mayor indicated that Ashville can may not charge double the way Durham does for those areas outside of the city limits that use city water. Why is that the case? Why it seems unfair to the city having made those investments and not getting city property taxes? Can you tell me why Ashville’s situation is different from Durham’s? [SPEAKER CHANGES] Representative Luke I’m gonna look and we have got a guest staff here today because the primary staff person who is handling this bill is out today but Erica ___[01:46] is here and she might be able to show some light on your question. [SPEAKER CHANGES] Mr. Chairman I believe the answer that Representative Luke in the original 2005 session law where Ashville was restricted and what it could charge users outside of its system. [SPEAKER CHANGES] A follow up for Ms. Erica ___[02:04]. So, you are saying that unless there is a specific provision part which happen in the Ashville Area, it is okay for cities that Durham does, it’s okay except when you get a provision such as the 2005. [SPEAKER CHANGES] The lady is recognized. [SPEAKER CHANGES] Yes Sir, the general law would allow for a desperate charge between in the jurisdiction and outside of the jurisdiction but Ashville has been restricted by session law. [SPEAKER CHANGES] May I…? [SPEAKER CHANGES] Yes sir. [SPEAKER CHANGES] Well, Representative Moffitt once you dive into fight and I do not understand this exactly? If you could, you kind of have to explain. [SPEAKER CHANGES] Thank you Representative Luke, could you expand on your question? [SPEAKER CHANGES] Well, the phrase dive into fight, why and I don’t mean the impolite but medaling, I mean this is a policy the city of Ashville has, the Vice Mayor has talked about how it’s directly related economic development, they are public services, water supply, it’s basically all related to infrastructure. So, I guess my question is, why wouldn’t you keep going dogs, let sleeping dogs like, I’m sorry. [SPEAKER CHANGES] Well, I think I can handle it, thank you. [SPEAKER CHANGES] The gentleman is recognized to bark. [Laughter] [SPEAKER CHANGES] Thank you Mr. Chairman. Probably my bite is worst than my bark but… [Laughter] …But the real fact here is that this goes back 80 or 90 years where the public water utility which is operated by the city as unlike any other water utility in the state and it was so recognized that differences were so recognized that in 1933 Representative Billy Sullivan pass the Sullivan Act, which basically protected the interest of people outside of the corporate limits of Ashville recognizing the fact that the county tax payers and the county residents were very involved in the development of a water system as noted 1927 of House Bill 894 which was passed by this General Assembly authorize in the county of Bunkum to develop a water system. Short time later, House Bill 892 was adopted which allow the city of Ashville and the county of Bunkum to jointly develop water system. So, we have got this rich history but the simple fact is the Sullivan Act protected folks outside the county from the overreach of the folks in the city and using water for strategic purposes and charging differential water rates. [0:04:58.7] [End of file…]

House Bill 252 essentially is an end run of that history. And it allows the city to take 5% of this public enterprise, re-purpose those dollars, and use them for city related projects. Does that answer the question? [SPEAKER CHANGES] If I might, Mr. Chairman. [SPEAKER CHANGES] The gentleman is recognized for inquiry. [SPEAKER CHANGES] Yes. About 90% I’m going to try to stop thinking about dogs, even though I started it. I would say, members of the committee, when the city comes down here and tells us that things are just fine with this, that it’s facilitating economic development in the area. I truly don’t see why we have this bill. Cities are important engines of economic development, we all know that. It seems like a relatively minor transfer of funds towards a specific purpose that the city can currently do, and so, members, I’m going to vote against the bill, and I hope you would to. Thank you. [SPEAKER CHANGES] Representative Hager, please state your purpose. [SPEAKER CHANGES] Thank you, Mr. Chairman. For a motion at the proper time. [SPEAKER CHANGES] The gentleman will be recognized accordingly. Representative Ross of Wake, please state your purpose. [SPEAKER CHANGES] To ask a question of Miss Churchill and then to ask a question to the bill’s sponsors. [SPEAKER CHANGES] The lady may pose her inquiries. [SPEAKER CHANGES] Miss Churchill, are there any other statutes that restrict cities in the way that this statute proposes to restrict cities? I understand that there’s generally…cities are allowed to do what Asheville’s been doing, but has the General Assembly ever come in and put a similar restriction on. And I apologize if that was discussed earlier. [SPEAKER CHANGES] Representative Ross, I think what you’re asking, are there any other local acts of a similar nature? I’m not aware of any off the top of my head, but I’ll be glad to look. There are multiple times where the General Assembly, through a local act, will tell a city they cannot do something or they specifically can do something. [SPEAKER CHANGES] May I follow up? [SPEAKER CHANGES] The lady is recognized. [SPEAKER CHANGES] Thank you. When you look, could you see whether there’s any that have to do with water resources or infrastructure in this particular way. I know that we do things for cities, but I’d like to know about that. And, Mr. Chairman, for the bill sponsors, two questions? [SPEAKER CHANGES] Yes, ma’am. You’re recognized. [SPEAKER CHANGES] Do either of the bill’s sponsors know of similar local acts? [SPEAKER CHANGES] Thank you, Representative Ross. I’m not aware of similar local acts. Nor am I aware of any other area in the state that has the same history regarding water as we do. [SPEAKER CHANGES] And a follow up, Mr. Chairman. [SPEAKER CHANGES] Yes, ma’am, you’re recognized. [SPEAKER CHANGES] And this 5% that you no longer want to go for these projects. These projects all have to be water related, correct? [SPEAKER CHANGES] That’s correct. [SPEAKER CHANGES] For a comment, Mr. Chairman. [SPEAKER CHANGES] The lady is recognized to speak on the bill. [SPEAKER CHANGES] Thank you, Mr. Chairman. It just seems to me that since there’s a nexus between what the money is being used for and the water system, that this isn’t the kind of abuses that we’ve heard of where people take revenues from some kind of infrastructure project and then use it for something wholly unrelated or to supplant tax dollars. This seems to be directly related and directly related to the consumers of the water system. It not only seems...it seems to be what goes on around the state, but it seems to be entirely proper and it’s already limited in its amount. I’m having a really hard time understanding how this is an abuse of local control. [SPEAKER CHANGES] Thank you. Representative Ramsey, did you wish to address that? [SPEAKER CHANGES] I can, Mr. Chairman. [SPEAKER CHANGES] The gentleman is recognized [SPEAKER CHANGES] Representative Ross, I think what we’re missing is, Representative Moffitt had indicated, the unique history of this system. The reality is the city of Asheville operates a system that is not entirely owned by the city of Asheville. It’d be just like Wake County. If Wake County, over the years, had invested tens of millions of dollars into a water system. It was a joint system. The courts in North Carolina had determined that it was a joint system from that regard. This General Assembly in 2005 thought it was good policy that all their water revenues would be reinvested into the system because of the history of Asheville and Buncombe County. We have one of the highest water leakage rates of any community in the state because we have a very old system. And partly that’s because of trying to dig ourselves out of the Great Depression. Water funds were diverted...

for other purposes to pay off debts and other things. I think from a long term policy standpoint, it does make sense that the water revenues are reinvested in the water system to repair lines and to avoid leakages and other things. I think city council will stipulate, in a perfect world, that would be the world they would like to live in. What we’re doing with the 5% is really a local issue that the city would like other revenues to help offset a decision the city made in 2005 to terminate a water agreement that they had with Buncombe County that cost the city around $3 million. That wasn’t the General Assembly’s decision to terminate that water agreement. It wasn’t the county’s decision to terminate the water agreement. If the city would so choose, the city could re-enter negotiations with Buncombe County and reconstitute that water agreement to deal with some of the tax equity issues that the city is concerned about. [SPEAKER CHANGES] Senator Ross. [SPEAKER CHANGES] Just a final comment. Well, it appears to me that this is kind of payback for that. The 5% is still going to water related infrastructure and so it seems to me like this is just payback. [SPEAKER CHANGES] Mr. Chair, clarification. [SPEAKER CHANGES] Senator Moffitt. [SPEAKER CHANGES] The 5% is going to water related in regards to streets and sidewalks, not in regards to the water distribution system itself. I think that that’s a decision that we as policy makers need to make. If you’re looking at repairing and patching roads and sidewalks from the cuts that have to happen when you’re upgrading the system, that’s one cost. Those are already directly billed to the system. But these are loosely connected improvements that are being associated to a waterline improvement and it’s just from this policy maker’s perspective, just not good policy. Water revenues need to stay in the system. [SPEAKER CHANGES] Representative Collins, please state your purpose. [SPEAKER CHANGES] I just have a couple of questions I’d like to ask. [SPEAKER CHANGES] The gentleman is recognized for inquiries. [SPEAKER CHANGES] I think I understand from what you and Representative Ramsey have said that this is a system that was not built completely by the city of Asheville. There’s been a lot of investment by the county as well as the city. Is that correct? [SPEAKER CHANGES] That’s correct. [SPEAKER CHANGES] The second question I have is that if this bill passes, I think from what I heard you say, things like leaking pipes and that kind of things and even cuts to streets and all will still be able to be repaired by money that’s in this enterprise fund. Is that correct? [SPEAKER CHANGES] That’s correct. [SPEAKER CHANGES] And my third question and final one, if I may, Mr. Chairman. I’m having a hard time understanding how a road to a soccer field is somehow related to a water system. Could you explain that to me? [SPEAKER CHANGES] That’s a good question. This is a project, and I’m a soccer dad and a soccer coach and I’ve been down Azalia Road many, many times wishing that the road would be improved. The city has taken the opportunity to take these dollars and accumulate them in a separate fund to work on this road project and as I mentioned earlier in my comments, the water line extensions to the field house are $189,000. The road construction is over $2 million. That’s a huge differential between a waterline improvement project and what would be considered an improvement. This is an entirely new that’s going to be constructed. I think that….this bill does not affect that road, does not affect that project. This is prospective dollars that the city has taken under this particular permissible local act. They’ll be able to retain and this becomes effective at the end of their fiscal which is June 30th. [SPEAKER CHANGES] Just make one comment and I’ll be done. [SPEAKER CHANGES] The gentleman is recognized. [SPEAKER CHANGES] As one who’s lived in an area that suffered from diversion of electric utility funds to other purposes for a long time by my city and other cities in our area, I understand where you’re coming from. We were already paying extremely high electric rates and you add that surcharge on there that they’re diverting and it makes it even worse. Fortunately, in our case, just shining the light of day on it once the press began to cover it very well, those cities began to drop their diversions down due to public backlash. Of course, eventually we codified that last year, most of you remember in the electric cities groups, how they can’t continue to divert...

Above, what the counsel government said suggested, so I understand what you're fighting and I plan on backing your bill. [speaker changes] Representative Waddell please state your purpose [speaker changes] Thank you Mr.Chairman I think my questions have been answered. [speaker changes] Thank you representative. Representative Brawley of Iredell. Please state your purpose [speaker changes] Ask a question [speaker changes] The gentlemen may pose his inquiry. [speaker changes] Representative Moffitt, am I correct that, this is a Buncombe county water system, for which Buncombe county has paid over 37 million dollars to the city of Asheville? And this 5% is just an ongoing offer to the city of Asheville that just because the water system is being kind to the city of Asheville. [speaker changes] Thank you Representative R. Brawley. I would say mostly correct. [speaker changes] Representative Brawley of Mecklenburg please state your purpose [speaker changes] To debate the bill [speaker changes] The gentleman may speak on the bill [speaker changes] Thank you Mr.Chairman. Representative collins made a reference to a bill earlier with electro cities which were diverting money rather than paying off the debt for their generation capacity, so they're now having rates that are significantly higher than the surrounding territory because they actually owe more for the generation capacity then when it was built, while progress energy, which own the rest of the capacity had completely paid off their debt at which divergence of funds was for other purposes. We had severe difficulty with water and sewer along the union county Mecklenburg line because the union/county system which was built with property tax money originally, was used as a source of funds to reduce property taxes in union county. So we ended up with a situation where homes on sewer lines could not connect because it was not sewer treatment capacity. Homes on water lines could not connect because there was not water production capacity. And Union county, rather than accepting what they had done tried to put in adequate public facilities ordinances or impact fees which were overturned by the court and they're still continuing to work that their way out. Mecklenburg county has a utility that does not operate differential rates. The shrawley Mecklenburg utility department was formed by the merger of several water utilities within Mecklenburg County, they are agnostic as to which town in which you are located, they give water service regardless. It's primarily based on need, the rates are the same. It is a completely a revenue based system and does contract for some service with the city of Charlotte, for personnel and some management but does not divert money into other projects. Now, representative Ramsey shared an email with me which came from Gary Jackson with the Asheville NC government and it listed off some of the information: The 5% fee which Asheville collects to be used for whatever purposes but that is in addition to service fees which Asheville charges for things like city mangers time, personell service and what have you. And as one who has a tendency to kinda run the math I figured out that roughly 10.83% of water revenue is going to the city of Asheville. Either for services that Asheville provides or for uses as described earlier today: Water related street improvements. That makes good sense except when you think about "we've got a 2 million dollar road with a 200 thousand dollar water system improvement." It's almost as if there's a way to, I don't know if you want to call it launder money, but to use money from water revenues for things that don't produce more water. And I think that's an issue that's what we're really discussing today. Charlotte Mecklenburg Utilities was formed with interlocal agreements that required rates that be the same, service be the same. When Charlotte took over water utilities that had been built by other towns or by Mecklenburg county, apparently we didn't have the same kind of contract protections here, it was what was done, but to come back now and say "Look, if you've got a water utility that was created out of county water systems, town water systems, city water systems, you just have to be agnostic.

it's not something that you get an extra premium to use within your corporate borders to lower your property tax rate, then turn to the other towns and say, "Tax your people to build your roads. We're going to build some roads up here." I appreciate the benefits of economic growth. I can not believe a corporation would relocate to Asheville because a two million dollar road improvement to a soccer field made Asheville just irresistable. I intend to support this bill. Thank you, Mr. Chairman. [SPEAKER CHANGES] Thank you, Representative. Representative Alexander of Mecklenburg, please state your purpose. Representative Luebke, please state your purpose. [SPEAKER CHANGES] Thank you, Mr. Chairman. And just to comment on some of the comments. [SPEAKER CHANGES] The gentleman is recognized to speak on the bill. [SPEAKER CHANGES] Thank you. I think the point that I was making and I think Representative Ross was making, is that these are infrastructure improvements that are in current legislation, that what Representatives Moffitt and Ramsey are trying to do in this bill essentially is deny the city a right to invest in and around infrastructure issues. Whether the soccer field is the best use of the money is a decision the city council made and the voters of the city of Asheville can decide by throwing the bums out or keeping them in the next municipal election. It seems to me what we're doing here is meddling in that kind of process. If people in the city don't like the soccer field, or the expenditure of that much money for the road to the soccer field, then they'll vote those people out who made that choice. And that's how it's supposed to work. And what's happening here is that we once again, with this bill, are doing what the majority seems committed to do, which is restrict once again local control. And I think then, the biggest difference between infrastructure projects which a city may currently do and which will be prohibited in the future under this legislation, and what Representative Brawley I think and Collins have said, is that this is not about cities not doing the job with electors' cities' revenue and using it to play with property tax. I understand what each of you was talking about, and I agree that that was wrong. But that's not what this is about. This is about infrastructure-related issues, and I think it's really different from the elector cities' situation. So again, I think this is meddling, and I hope people will, hope at least a few of us will vote against the bill, thank you. [SPEAKER CHANGES] Mr. Chairman, would Representative Luebke yield for a question about his comment? [SPEAKER CHANGES] I will. [SPEAKER CHANGES] He does yield. The gentleman may state his inquiry. [SPEAKER CHANGES] Representative Luebke, people in south Buncombe County that are not within the city of Asheville, people outside the city of Asheville to the west, the north, the east, people in Henderson County, who are paying for that two million dollar road to a soccer field. How do they vote the bums out, on the Asheville city council? Because the Asheville city council is the one that's levying that five percent and then spending it for the benefit of the citizens of Asheville. [SPEAKER CHANGES] Mr. Chair, and I was about to call you Mr. Speaker, and if you'd like that, I think it's ?? [SPEAKER CHANGES] No, sir. He's much more thin than I am. [SPEAKER CHANGES] Mr. Chairman, if I may reply. [SPEAKER CHANGES] Yes, sir, you may. [SPEAKER CHANGES] I think the difference is that as staff ?? Churchill indicated, virtually anywhere in the state, the city can charge double for those who are outside the city limits. And in Durham, those people live in Durham County. Do not pay city taxes, they pay double to the city for their water supply, their water/sewer. And they're happy to have the water/sewer. So in the Durham case, this city can get the revenue that it needs. Now, if somebody out in the county who thinks, gosh, I don't want to pay double, this is not fair to me, that person doesn't get a vote on city council. So I mean, the idea of those who've invested, the city having control of a water system, and deciding whether it can or can not charge double, seems to be very, very reasonable. Asheville is really restricted. That seems like an outlier, and I just don't think we need this bill. [SPEAKER CHANGES] Mr. Chair. [SPEAKER CHANGES] The Chair recognizes the Bill's sponsor, Representative Moffitt. [SPEAKER CHANGES] Thank you. Representative Luebke, I appreciate the comparisons to your experiences in Durham, but the history of the system in our county and in my home town is vastly different. And this General Assembly has been actively involved in the checks and balances of the city and county since the Great Depression. Secondly, this bill does not prohibit

But the city from doing infrastructure work. This just prohibits them from using water revenues as, as a funding source for those, that infrastructure. [SPEAKER CHANGES] Representative Waddell, please state your purpose. [SPEAKER CHANGES] Thank you mister chairman. For a question to the Vice Mayor. [SPEAKER CHANGES] Chair is going to ask if the Vice Mayor would come forward and then would yield to one inquiry from the, it appears she, it appears she does. You may state your, you may state your inquiry. [SPEAKER CHANGES] Thank you mister chairman, and I'll be brief. I was a former mayor of a small town and I understand some of those issues about local control. But my question is, you mentioned in your remarks a while ago that you did not have an occupancy tax. Is there a reason for that? [SPEAKER CHANGES] We have an occupancy tax but it is not remitted to the city. It is remitted to the, towards the development authority and the reason is, it's created by a local bill. [SPEAKER CHANGES] Follow up, mister chairman? [SPEAKER CHANGES] The gentleman is recognized. [SPEAKER CHANGES] So you're saying that your occupancy tax is not revenue for the city but for the county of, of Buncombe? [SPEAKER CHANGES] Well, it doesn't even go to the county. It goes to the tourism development authority, which is an independent authority. [SPEAKER CHANGES] But it does do some, excuse me, mister chairman, follow up. [SPEAKER CHANGES] Yes sir. [SPEAKER CHANGES] But it does do some projects inside of Asheville. It does do some things inside the town of Asheville. [SPEAKER CHANGES] Tourism development authorities, it's my understanding are, there's specific statutes that govern what they can spend their money on. And they, in our area, our tourism development authority does have some funds that they can award to projects based on an application process, and the city participates along with other private companies to apply to the TDA every year for various projects that we hope to get funded, and sometimes we do. But there are other cities, of course, many in North Carolina that actually receive a direct allocation of that hotel/motel tax. [SPEAKER CHANGES] Thank you mister chairman. Thank you Representative. Representative Moffitt, did you have something to add to that? [SPEAKER CHANGES] Yeah, thank you mister chair. I would like to add that the soccer field at the end of Azalea Road has been a topic of discussion, was partially funded by the TDA, and the city of Asheville just received an $800,000 grant from the TDA for lobby ?? to our civic center, which is the US Cellular Center. [SPEAKER CHANGES] Madam Mayor, if you will, I believe the lady from Wake wishes to pose an inquiry of you if you would return to the mic and with that, Representative Ross, please state your, please state your inquiry. [SPEAKER CHANGES] Thank you very much mister chairman and Representative Moffitt. I just want to know whether, when you expend this 5% of the money, well first of all, whether you ever get up the maximum of the 5%, and then second, when you decide to make those expenditures, is it explicit the connection between those expenditures and the water system? Do you state, we are expended this amount of money and it is related to water projects in this way. [SPEAKER CHANGES] Representative Ross, those are excellent questions, and I might yield to our Chief Financial Officer who is here who has that actual information for you if, with the chair's indulgence. [SPEAKER CHANGES] The chair will indulge. If you will ma'am, please state your name and your title for the record. [SPEAKER CHANGES] Thank you chair. My name is Lauren Bradley, I work as the chief financial officer for the city of Asheville, and in response to your question the answer is yes, that we do distinguish what the projects, what the money will be used for, that they are used in conjunction for regional infrastructure projects along with water line construction. So for example, in Azalea Road, the project that we have talked about here today, there's been some talk about the cost of the water line versus the cost of the road. Well, that water line can't be fiscally replaced in the current roadway infrastructure, so the road infrastructure is tied to that water line replacement. So they're not usually exclusive. Another point I would make about Azalea road is there's not potable water to the soccer fields at this point, and so that the water component of that project is integral to the facility. [SPEAKER CHANGES] Thank you ma'am. Do you have additional follow ups, Representative Ross? [SPEAKER CHANGES] My only, well it was the second, I guess the first part of my question, which is has Asheville ever completely used the entire amount of the 5%, or are there just discrete projects that go on?

I’m sorry, I missed that part of the question. So, to date, we have expended about $140,000 in funds for repaving….resurfacing of roadways in conjunction with waterline projects which is far below the 5% threshold that we’ve been allowed up to this point. [SPEAKER CHANGES] Representative Setzer is recognized for a motion. [SPEAKER CHANGES] Thank you, Mr. Chairman. I move for a favorable report to the proposed committee substitute, unfavorable to the original bill. [SPEAKER CHANGES] Representative Setzer has moved that House Bill 252 be….the chair apologizes. Representative Setzer has moved the the proposed Committee Substitute for House Bill 252 be given a favorable report and an unfavorable report be given to the original bill. Is there further discussion or debate? Seeing none, those who favor the motion will please signifying by saying aye. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Those who oppose will please signify by saying no. [SPEAKER CHANGES] No. [SPEAKER CHANGES] In the opinion of the chair, the ayes have it and the motion carries. [SPEAKER CHANGES] Thank you, Mr. Chair. [SPEAKER CHANGES] Thank you, Representative. House Bill 254, Zoning Changes Notice to Military Bases. The chair has been made aware this is also a proposed committee substitute to this bill. The chair directs that that bill...that the proposed committee substitute to House Bill 254 be distributed and Representative Glazier, if you’ll be….just a moment for the staff and then you can explain the bill. Representative stone that the proposed Committee Substitute for House Bill 254 do be before the committee for discussion. Seeing no objection, it is so order. Representative Glazier, you are recognized to explain the proposed Committee Substitute for House Bill 254. [SPEAKER CHANGES] Thank you, Mr. Chairman and thank you members of the committee. Members, this is a bill that’s brought by the chair, Representative Lewis, Representative Szoka, Representative Lucas and myself. It’s on a request from actually Department of Defense representatives as well as Rule Act which is the regional land use planning group that combines both military and non-military institution and entities in our area and also has equivalent surround Camp Lejeune and other bases. This is a, actually an amendment, really to a bill that was passed in the early part of the last decade as part of our BRAC preparation procedures. All it really does is two major, two minor things really. Number one, it adds some areas that within five miles of a base, if they are to occur, the local governmental units are to give notice to the base so that if the base has any comments about its impact on the military function of the base, they can let the county commissioners know that before they vote on it and you’ll see those listed on lines 21 through 26. 21 and 22 are already existing law. This adds any changes relating to telecommunication towers or windmills or major new subdivision preliminary plats and any substantial increase in size, more than 50% of a subdivision’s total land area. All this in relating to any area within 5 miles of the base. The other two changes, one is to allow the commander of the base who receives the notice of this to designate someone, in case the commander’s deployed, so we don’t have a notice problem. And the other is simply to allow, as a request of the home builders, and I think a correct one, that there be some time frame put on the military comment time so that if they choose not to comment, it ends and waves their comment time of 30 days. I know of no opposition at all. This has been worked out actually with some good amendments by the homebuilders and unanimously passed the homeland security committee. [SPEAKER CHANGES] Representative Stone, please state your purpose. [SPEAKER CHANGES] Mr. Chair, at the appropriate time, I’d like to enter a motion. [SPEAKER CHANGES] Yes, sir. The gentleman will be recognized. Representative Starnes, please state your purpose. [SPEAKER CHANGES] For a question. [SPEAKER CHANGES] The gentleman may pose his inquiry. [SPEAKER CHANGES] Representative Glazier, what’s the effect of the change where it says they can notify them by certified mail and before it had return receipt requested, but now you can do certified mail, but you just don’t have the return receipts? [SPEAKER CHANGES] This is to allow any method that’s reasonable...

Designed to give them notice for example the words or by any other reasonable means, means facts, email, and this was designed to cut the cost of the counties and the notice provisions and the back and forth communication and was requested by all of the parties involved. Simply their speeds, to expedite the communication process. [speaker changes] Follow-up [speaker changes] The General may follow [speaker changes] I understand that and I agree. I was just curious I guess I just have a lack of understanding, we distract language, return receipt requested, I just thought certified mail had a return receipt. [speaker changes] I think it was more just that the certified mail has its distinct meaning and we were adding in other written means reasonably designated. I actually defer that to stay, I don't view that it changes it. Probably was language that we always used and don't need anymore. [speaker changes] Representative Starnes does that address your concern? Are there further inquires, if not Representative Stone is recognized for motion [speaker changes] Yes Mr. chair I move for favor report on house bill 254 proposed committee substitute. [speaker changes] Representative Stone has moved that the proposed committee substitute for house bill 254 be given a favor report and an unfavorable report be given to the original bill is our further discussion to debate. Seeing those who favor the non motion will signify by saying "Aye" those who oppose will signify by saying "No" in the opinion of the chair, the Aye's have it and the motion carries. [speaker changes] Thank you Mr.Chair and members. [speaker changes] Thank you Representative Glazier. House bill 261 Conopilus D annexation, Representative Ford. The chair also believes there is also a PCS for this bill the chair would direct that the PCS for this bill would be distributed this time. Ladies and Gentlemen if I can have your attention please, before we being in discussion in House bill 261 the chair would like to refer the following bill. House bill 205 "correct technical error in Bergal Occupancy Tax" is referred to the occupancy tax subcommittee. I think the bill is being passed out. With that, representative Samuelson moves that the proposed committee substitute for house bill 261 be before the committee for discussion. Seeing no objection, it is so ordered and Representative Ford is recognized to explain the proposed committee substitute. [speaker changes] Thank you Mr. Chairman. This is 261 between Kannapolis and land. This is less than 2 acres of land and this gentlemen is Gary and Anita Moss, just asked us that they wanted to be in one town or the other their property is divided and so they asked to be moved totally into the town of Landis and the town of Canapolis is absolutely fine with it and Landis is fine. The mayors of both towns, city managers and everything. [speaker changes] Thank you Representative. Representative Setzer please state your purpose [speaker changes] Thats a perfect time I'd like to make a motion. [speaker changes] The gentleman is recognized for that purpose. [speaker changes] Mr. Chairman, i'd like to move that a favorable motion for house bill 261 the proposed committee substitute. [speaker changes] Thank you. Further discussion and debate Representative Brawley of Mecklenburg please state your purpose [speaker changes] Thank you Mr. Chairman. A question for the bills sponsor. I did one of these where I took properties out of the town of Matthews and attached them to the town of Stalins and I noticed here that we're removing them from the limits of Canapolis but are we attaching them to Landis? [speaker changes] Yes [speaker changes] Where does it say that? [speaker changes] That's a good question [speaker changes] Representative Brawley, perhaps you could direct that to staff. [speaker changes] The bill does not specifically say that but if it needs to we can certainly check on that and certainly prepare an amendment for the floor if thats the case. [speaker changes] Mr. Chairman my answer, I think, and being a freshman, I assume because their is no ETJ in Landis and the town was, the property partially was in Landis

And this already and just a little bit in Kannapolis, so they just wanted to go totally into the one town, so I guess my assumption was in build drafting that, that would be taken care of . Thank you for the good question. [SPEAKER CHANGES] Representative Brawley, do you have a follow up? [SPEAKER CHANGES] I wonder if the bill sponsor would be willing to bring forth an amendment or a PCS that would transfer the property from one town to another rather than just leaving it hanging? Could we do an amendment now on the. [SPEAKER CHANGES] Hold that just a minute, Representative Ford, Representative Brawley. The gentleman may state his inquiry. [SPEAKER CHANGES] Is that really, is what we're doing really necessary to accomplish the purpose of the bill? Because if they want to be in Landis after their deannex, they can go through the appropriate procedure of their own accord. [SPEAKER CHANGES] Representative Blust, if you'll yield for just a moment. At the request of the bill sponsor, Representative Setzer has withdrawn his motion, and at the request of the bill sponsor, the proposed committee substitute for House bill 261 will be removed from today's calendar and be reconsidered at a later date. House bill 302? Repeal Kannapolis annexation. Is there a PCS for this? House bill 302, repeal Kannapolis annexation. There is no PCS. The bill should be in your packet, and Representative Ford is recognized to explain the bill. You have the floor, sir. [SPEAKER CHANGES] Thank you mister chair. On 302 here, this repeals session law 2009-113 and session law 2011-124. This is an area northeast of Kannapolis that was going to be taken in by the city. An agreeable deal here, the whole nine yards was worked out with water, sewer, none of that has been done now. The development has not taken place because the new interchange on the interstate also has not happened, so all parties in agreement here that this was set to take place this fall, and we want to stop it before it does, and the city's in agreement, and as well as the developers, approximately 750 acres next to I-85. [SPEAKER CHANGES] Thank you Representative. Is there discussion on the bill? Representative Waddell, please state your purpose. [SPEAKER CHANGES] For a motion at the appropriate time. [SPEAKER CHANGES] The gentleman will be recognized in just a moment. Is there discussion on the bill. Representative Waddell, you are recognized for a motion. [SPEAKER CHANGES] Thank you mister chairman. I move that we find the House bill 302, give it a favorable report. [SPEAKER CHANGES] Representative Waddell has moved that House bill 302 be given a favorable report. Is there further discussion or debate. Representative Howard, please state your purpose. [SPEAKER CHANGES] Mister chairman, those of us on this row are just looking at the way the bill is drafted. That you are repealing session law, but it doesn't describe the property. Was there anything else in that session law other than this one, this one track? [SPEAKER CHANGES] No. And it's on East and West of I-85. [SPEAKER CHANGES] Does that address your concern Representative, or should I post that to staff? Is there further discussion or debate? Seeing none, Representative Waddell has moved that House bill 302 be given a favorable report. Those who favor the motion will please signify by saying aye. Those who oppose will please signify by saying no. In the opinion of the chair, the ayes have it and the motion carries so be able to give it a favorable report. There being no further business, this committee stands adjourned.