City Council - Regular Meeting

All right, welcome everyone to the city council work session on policy, finance, and infrastructure. Today is February 24th. It's a Tuesday. All right, I'm going to turn it over to our city manager. Good afternoon, everybody. Um, we'll have several presentations for you today, and Jay Dundis, our assistant city manager, will facilitate. Thank you, Miss Lesley. Uh, Jay Dundis, assistant city manager. Um I am going to not spend a lot of time up here talking because we've got a very full agenda today. Um and the so uh the first item on the council on the policy fin infrastructure agenda is approval of the uh the last meeting's minutes. Do we have a motion to approve the last meeting's minutes?

So moved. Second. All right. We have a motion and a second. All those in favor, please say I. I. Any opposed? All right. Thank you. All right. So second item is again like to get the straight to business is the community development block grant disaster recovery infrastructure implementation. I'm going to hand this over to Bridget Hering to go through this presentation.

Good afternoon members of council. Um as Jade mentioned my name is Bridget Herring. I'm the recovery coordinator with the city of Asheville and I'm here today to talk to you about the infrastructure allocation from the community development block grant disaster recovery funds. This is not to be confused with our steadystate community development block grant funds that we dole out every year. This is specific to um the outcome from tropical storm Helen and it's specific to disaster recovery. So for the remainder of the presentation I'm going to refer to it just as DR because it's quite a mouthful to every time. So, the key takeaways um from this presentation today are that staff is recommending that we utilize the infrastructure allocation to fund three projects. Two of our park projects that are located along the rivers, um the French Broad River Park as well as Aelia Park to be able to both think about increasing our resilience in those spaces as well as the access to recreational amenities that are available to our community. and then as well as a permanent pre-treatment project at the North Reservoir. This would allow us to handle um fluctuation in turbidity out at that reservoir that provides about 80% of our current portable water to our community. Um what drove us to get to these recommendations are really four core principles. One, what we heard through our community engagement, specifically in our recovery priority survey, the desire to want to increase our resilience and make sure that we are less vulnerable going forward to future events to be able to find out where we can build back better, recognizing that some of the recovery funding that's available to us doesn't quite meet the mark on that. And then how do we leverage this resource as well as others to minimize additional costs to our community as we recover from tropical storm Helen? We recognize that based on this recommendation, we're going to need to find additional funding for other

recovery projects and we've heard some feedback on that and are going to go through one of those examples through the presentation. So, there's a lot going on in this slide and in this table, um, I don't want you to get fixated on the numbers that are in there. Um, this table was pulled out directly from the action plan that city council adopted that provides the framework of how these dollars [clears throat] are spent, but what is highlighted is kind of the estimate of the unmet need in relation to how much we have in our current 225 million um, allocation to fund that. And I think the important thing to note is that we have about a tenth of what we estimate we need and that's outside of the recovery funding sources that we kind of guaranteed or know that we have access to mainly through the public assistance program. Um it's also important to note that there are costs associated with making sure these dollars are spent in a compliant manner and so that um those compliance costs come out of the direct allocation. And so that remains about um $122 million in change for project implementation. And so I want to make sure that okay, everybody knows how the numbers add up as we're going through the amounts that we're recommending and that these disaster recovery funds really have to tie back to a national objective mainly um benefiting our low and moderate income community members. it needs to tie back to the storm and the impacts that we felt and that it's funding of last resort, which means that all other federal funding needs to be exhausted before we utilize these dollars. So, this is a refresher slide for a lot of you, but for those of you joining us at home that might not be as intimately familiar with our recovery, there's a number of funding sources that are available to communities following um a

presidential disaster declaration. And I think about this as like a stack, right? So there's like the foundation at the bottom and then you move on towards the top. So FEMA PA, PA stands for public assistance is funding that's available to us through FEMA. That's specific to just what was damage from the storm. We want to take full advantage of that funding. We want that to go as far as it can and then we can see what we can layer on top of that. So the next layer that we see is the hazard mitigation grant program. This is a competitive FEMA funding source. Um, and what's really important here to note is that it has to be coste effective based on those grant parameters. So, examples of things we can do with this funding are like riverbank restoration retention ponds, but it really favors engineered solutions with that cost effectiveness requirement because it's thinking about how much water can we store, how much water can we move. It's not really taking water quality into account. um which is where we see a lot of benefits from like green infrastructure projects then we think of putting CDBGDR on top of that and that's our most flexible funding source um in this realm and that's where we can see the opportunity to both address environmental restoration so getting that green infrastructure in the projects or canopy reforestation um and also you can think about what are the amenities that are being provided you're not specifically tied to what was damaged you can add on to that and that experience. Um, and then there's grant sources on top. And this one can be kind of flipped between CDBDR or on top depending on where it comes into play. But obviously most grants the funding source, the grtor decides what is eligible under those projects and um we think about it as gap funding like what are the community priorities, what's missing and how do we seek those opportunities to fill those gaps.

So this is a little snapshot about how did we get here. So in early January of 2025, we did the Helen recovery priority survey where we asked our community what was important to them in terms of thinking about long-term recovery. We utilized that feedback to then drill down more specifically into the allocation areas of the DR programs to say what does that mean specifically when we talk about infrastructure? What does that mean? We talked about economic revitalization. What does that mean for housing? And that's what really informed again the action plan that you all adopted that said, what's the framework for how these funds can be spent? Then we get into the nerdy side where staff takes that and comes up with the program manuals to make sure we spend the dollars in alignment with both the action plan but also with the federal regulatory requirements. Within that program manual, there's one for each program. There's evaluation criteria about how projects that apply are selected. Within that evaluation criteria, it's also important to note that there's a section called soundness of approach that talks about how community engagement is utilized during your project in alignment with existing plans. So there are points for that within that criteria. So this is just a snapshot of some of what we heard during the recovery priority survey. What I want to draw your attention to specifically is that there was really strong support particularly for water infrastructure projects and a focus on resilience. There was a focus on not just putting things back exactly as they were, but making sure they were safer and in a safer location and a commitment to that environmental restoration. So, making sure we're hitting on some of that when we think about this funding source. So, now I'm going to run through each of the projects that we recommend funding. Just going to orient you to the slide because they all are set up in the same

way. So the graphic on the side with the building blocks shows the funding stack that we're utilizing to fund these projects. Starting with what we consider our base layer and working our way up. So with this project which is French Broad, we're talking about maximizing the public assistance to repair what was damaged. applying for hazard mitigation to figure out how can we make sure the mitigation strategies are comprehensive along that project area knowing that FEMA only pays for the very specific damages. They don't think about the whole like parcel and then recommending that we put CDBGDR on top of that for what can we do to build back better more resilient environmental restoration access to increased recreation. So then in the boxes you can see what the um applicants the project teams requested for funding on the left and then on the right what our team the review team that was comprised of the city manager's office recovery coordination and cost recovery recommend we fund with our allocation and then the check marks are where they got um credit during the evaluation. So, the French Broad um park project came in rated highest during our evaluation and you can see some of the additional pieces of why it kind of rose to the top. Moving on to Aelia again, you can see that stack you have an extra building block in there which is grants. Because this project has already secured 2.4 4 million in state recovery funds. It's also um seeking additional funding from the parks recreation trust fund which I believe you all gave us authority to apply for at your last meeting in January. Um and so we this one asked for 10.2

million. We are recommending funding that at a $10 million. This last slide is slightly different. Um, you can see the stack is slightly different. There's no public assistance at the bottom because it didn't meet the criteria even though we pursued that option. So, we we definitively heard from FEMA that PA is not eligible or are we still in limbo waiting?

So, we were told that for this specific site it was not an option. It's still an option on the table for the B tree reservoir. So, we're still pursuing it to do a similar project there with public assistance. And that's primarily due to the fact that the turbidity dropped back to the pre-torm levels. And so, being able to compare the damage from the pre-torm function is not as strong, but Bri turbidity is still not correct. And Bri had like 30% tree canopy loss and anyway. So, yeah. So it's so our successes in in reducing turbidity might have hurt their chances.

No. Well, it's the natural it it naturally went back to a turbidity level that's not an emergency anymore. So it doesn't get it doesn't trigger a PA, right? And the public assistance program is primarily designed for like human built infrastructure, right? So it really focuses on pipes, buildings, things that someone constructed and then you can clearly see the damage. What we see at our reservoirs is damage to the watershed and the ecosystem and that doesn't fit as squarely into the public assistance program.

While we're interrupting your um presentation, can you confirm if all the debris has been cleared from North Fork? So the debris that was approved by FEMA as eligible debris to be removed um they're wrapping up that project I think this weekend next and then they'll be moving over to Bree and that hasn't had any impact on the turbidity. Um not that we have seen through the reporting that we've been doing.

Thank you. Um so differences on this slide. One you see that HMGP is the bottom. Um the state revolving fund is second. That's a state a mix of state and federal funding that DEEQ um has distributed. We've received 10 million for that and we're dedicating five million towards this project. That's a loan. So there's some principal forgiveness but there is also some repayment involved with that. Um, and then here you have the check marks again for where they scored in the criteria, but then you have the pluses, which I think is just additional information that's important to know about this project, right? So, we have applied to fund this project in its entirety through the hazard mitigation grant program. However, that's a competitive program. they it is historically taken quite a long time to make it through that program to construction and we're seeing additional complexity introduced with the um the administration and the how FEMA is approving projects. Um additionally if we aren't we don't have another funding source and we have to put that into our rate model that would increase our rates significantly and that's not something that we want to put on anyone in our community businesses residential alike. And then the third thing that I think is important is that if the hazard mitigation grant program comes through either partially or wholly, then we'd be able to release these funds if they weren't needed and be able to prioritize them towards other recovery projects. Um, so this one's a little bit of a different animal, but is a very foundational project to our long-term recovery. We I mean we've had good meetings with the state on this for HMGP, but we just don't know yet,

right? I mean, we've been working extremely closely with both North Carolina Emergency Management as well as FEMA as much as we can. Um, and how that program works is that the state is actually the applicant. We are a sub applicant and they move it through on our behalf. So, this is just a table that shows you our recommended funding levels. It puts in there those compliant costs so that you can see it total out at the 125 million that's listed in the action plan and on our website. And we did bring this to the infrastructure recovery board. We didn't ask them to like vote up or down, but we did have a really robust conversation with them. If anybody hasn't had a chance to watch it, I recommend it. It was a very supportive conversation of the direction that we were moving. We did ask them about pros and cons. So some of the stuff that really rose to the top was really seeing that direct link to the damages we sustained from tropical storm Helen, a direct link and fit into how this disaster recovery funding what it's meant to be utilized for in the infrastructure realm and seeing this as a protective measure that would make us more resilient in the future for all three of these projects. I think um some of the cons that we heard with this approach was a concern about what are the other water projects that continue to have vulnerabilities that we're not thinking about if we're thinking about pre-treatment. Um the timing of both when we would be able to activate and move on these funds or if we release them and put them towards something else. As you all know, we have six years to spend this money and so we really need to be thinking mindfully about how we activate it and get it out the door. Um, and then lastly, a recognition that other um recovery projects would need to find other funding and not really understanding kind of what the universe of those projects were. So, a specific

project didn't rise to the top during that conversation, but that that um concern was noted and we also heard from council that there was an interest in resilience hubs and so I wanted to bring in some of the information about what we're doing and what we know on those right now. So, as we walk through this slide kind of talks about what is the current fiscal year work that we're doing in this space and some of the deliverables and outcomes we're hoping to get from that. Um, and what really excites me about this is if you look at those project components on the right hand side of your screen, those are individual projects that all have project leads in different departments. And so what we see is that we know there's complexity in how we as a city need to support this work and that it can't just live in one place, right? And so we need more people thinking about it and kind of figuring out how do we row in the same direction. And some of that is like what is the policy framework that we can use to support both private and public resilience going forward and those investments. How do we come together with shared language? Um, if you watch the most recent people and environment committee meeting, there was a conversation about the mapping project that we have going on and just listening to the board talk about their experience and what they think of a resilience hub. We're talking about a lot of different things and like that's okay. That's a beautiful thing about this concept. But what it makes it hard to is nail down who's responsible for what and what does it mean if we say we want to invest in this concept, right? Because it can look a lot of different ways. um and really understanding what our role is both in the development of it and the maintenance of it so that we set ourselves up for success and we have a clear vision of how to move forward as a city and not get in the way of the community-led work that's happening because that's the last thing we want to

do. So what do we know? We know that a robust network of hubs that is very unique where there are different services to address the the needs of whatever community that is serving whether that's a small group of blocks that's a large area of our city like it can be different in all of those different places and having that strong network will make us the most responsive when a disaster happens. So we believe that requires a dual investment strategy thinking both in how we invest in city facilities and city assets as well as supporting the community-based facilities, right, that are privately owned by some of our community-based organizations. Really important that we understand what's our lane, right, and how we support each other so that we don't duplicate what we're doing or compete and we're like spreading those resources out. um thinking about where we're making those investments, right? So thinking about what is the role of the city, what's the role of the community, where do we know our vulnerabilities are, where are the gaps in terms of where services are provided. It might not be the same everywhere, right? Doesn't necessarily mean that we need a hub located in X miles away from one another because it depends on the infrastructure within those neighborhoods. Um, and then how do we sustain this network over time? Um, recognizing that if it doesn't work in blue skies times, it's not going to work in a time of response. And then thinking about the capacity to deploy resources, whether those be general fund dollars or CDBGDR dollars, and thinking about those requirements to access those funds and supporting the [cough] people we want to access those funds with intention to make sure they have the capacity to do so, and that that's a positive experience.

while maintaining compliance. [cough] So I think those are all things we think about as we think about making this investment going forward. And with that um just wrapping up what would what will happen as we move forward to be able to deploy these funds we need to have contingent awards with each of the projects. Um, want to make sure we lift up that this Saturday there is an opportunity to provide input on the parks projects at ABTE. I think from 11 to 2. um the infrastructure recovery board and you all are going to have a chance to provide input on what those park projects look like at the March 3rd and March 10th meeting as well as there'll be a budget amendment on there to um accept that $10 million in state revolving funds that'll support water projects. And then the resilience hub mapping project is slated to come towards um both the people and environment recovery board and the planning economic development and environment council committee in the first quarter of the fiscal year which would be right after July. So we'd love to hear your feedback and discussion and I'll be here for any questions um that might come up.

Can you go back to that last slide? I was going to read what you had for February February 25th. Can you explain the first thing about administrators draft contingent awards?

Right. So we have our CDBGDR staff that you've seen many times um then we have them in the audience here. So the mechanism to move forward with funding these projects would be to say to write anou basically that says here are the things the requirements here's the amount of funding and here are the things that you would need to do and how you need to prove that other funding sources have been secured before you can access those dollars because it's funding of last resort. So that's kind of the next step to try and start administering and getting these dollars out. But to back you up, [clears throat] so HUD requires that to administer CDBGDR funds that we adopt a policy that's in compliance with HUD. So

that's a lot of jargon, but isn't that one of those policy steps we're required to do per our own policy that HUD made us adopt? Yes. So it might be helpful watching the jargon because you all know it internally, but like on the outside, we're like, what in the heck does that mean? you know, so it's like anou with ourselves to be like this is what we're going to do which is in compliance with our internal policy that we had to adopt per HUD anyway. Okay. Thank you. Yeah, no problem.

Um uh uh we had a robust discussion about resilience hubs at the last peed meeting. Um, and so I just want to bring some of what I shared then and Kim I welcome you to as well because I know that we are both singing similar things um about an eagerness to pursue resilience hub funding sooner and aotted. I think that one of the bizarre silver linings of this whole tragedy was to see the profound and powerful community organizing and community support that happened to take care of each other. Um, I haven't talked to a single person who walked away unimpacted by that. And I think that they all did that. We all did that on the shoestrings of our community love and our community personal networks. And so I continue to really think that this that type of community infrastructure is essential to recovery and community building going forward. And so I really um would love to see us maybe adjust some of these numbers to allocate some towards resilience hubs. Now um I know that we're still working on the mapping and figuring out what that's going to mean, but you know, we allocated 30 million to commercially flooded corridor economic recovery and we don't really know what that means yet either. You know, we just said it's important. It's important to us. it's our values and to me the value of supporting community members who organized and then um just calling it out now and I think during peed I was saying $10 million. So I I kind of would love to hear maybe from my peers andor from um from DK thoughts on if we were to reallocate or move some of these numbers around. The the second thing I'd say well yeah I'll

leave it at that for now and under what under what bucket could well mayor from which offer

a question on that. Um so first I wanted to say thank you to Chenica for bringing resilience hubs to the council conversation in 2021. Um it made me look up what that is and I realized it's what our community already does [snorts] because people's crisis sometimes is tonight being able to feed their kids and keep a roof over their heads. Um so that blue skies that we talked about earlier um isn't it's not the bluest sky for everybody today. Um so second thing community just identified what worked well during emergency response at the neighborhood level and where the gaps are. Um when I was watching the recovery board conversation, um it was pretty clear to me that we're talking and planning, which we've been doing for five years or so, um but there were no implementation funds. And I think that's the expectation of our community. In fact, when um we were doing that massive outreach around the vulnerability index scores and what our planning should look like around it, I heard folks say, "Don't come to us again with more talking and planning. Come to us with implementation. come with the money. Um and so um because we moved in our council retreat, we were talking about infrastructure and environment together, but then with the recovery boards, we moved environment out of infrastructure to people. We didn't give them a budget to recommend on. I don't think that was the intention, but we only have three buckets of funds and we have four recovery boards. So, I don't think we intentionally left out resilience hub funding. Um, but based on our peed conversation and my conversation with the city manager, I don't think we should pull funds from Northport. I think it we need to look at the park funding and see if park staff has some recommendation. Um, tying it to the vulnerability index scores will help with the LMI and focusing on the

neighborhood plans. Um, with 6,900 survey respondents, over 70% named food security as a top priority, that's not a surprise to me. So, if we can layer in um pulling something from this pool of funding, I think it'll go a long way to building public trust, but I would kind of be curious where staff lands on that. Yeah, I'm happy. I don't know if anyone else wants to speak before I

Oh, I was just saying I I agree. Um, I followed the conversation during peed and was grateful for it. Um, but looking at the funding we've already allocated, I threw some ideas out to DK about how in my mind we could shift some money around so we'll have enough to seed into the efforts of implementation. Um, but I'll I'll be interested in hearing from staff because I think you all would have a better idea of where it is most feasible to trim. $10 million is a great start. Um, and if we can get at or a little under 10 million, I think that's a good seed to move forward.

All right. Thank you, council members. Um, I think Bridget was pretty intentional in her presentation and walking back so we can see the journey that we took to get here. You know, at the beginning there was a lot of listening and that's how the the consolidated plan was developed. That's how the um the program manual was was developed and also how the criteria was developed to make the selection for this for these fundings. Um and so we committed to listening. Um criteria was used to make the funding um recommendations and then we took it to the recovery board and we listened some more, right? Um we listened to the feedback from that board and what we heard is a concern that there were other recovery projects that might not be funded if we allocate all these funds. And then we're here today to listen some more to you all. And so what I heard loud and clear even before this meeting was a great majority of the council members actually want to reserve some funding for resilience hubs. Um we don't know what they look like. They can take a variety of forms and there's a process underway now to try to help us as a city make some decisions about that. And so in talking to staff, I think we feel pretty comfortable that resilience hubs does fit squarely into um our infrastructure recovery pro progress. Um we did not have an application for resiliency hubs because there's so much planning that needs to happen. So, I would ask that you uh allow staff to consider your feedback. Uh take that feedback and take it through another uh objective process to figure out where what where funding can be pulled to support this. Um I know $10 million was a number that was suggested, but um I want to make sure that we are being clear that we need to make a seed allocation for resilience hubs. and we feel feel pretty strongly that there's going to be some funds that come forward

from HMGP and at that point we can make uh an increase in that allocation. So I don't want to necessarily say 10 million or two to three million but let us go back from listening to you all and consider what that reservation allocation should be and and submit that to you all. So if there's a dependency on HMGP, does that mean that we have to wait the full years or potentially two years until we know that funding is available?

Well, we don't. The timeline is is unknown for HMGP, so it may take some time. So my suggestion is that we allocate some funding for resilience hubs now, but also continue to leave on the table if there's a need to increase that. I feel like we'll be further along in our planning process if we do that and we'll have a better idea of what the right number will be.

I think my other concern is that there have been lots of conversations and and a lot of planning and um depending on who who you're asking somebody might give you a different definition of what a resilience hub is. And I think our aim um is to do our best, but I I believe sometimes we get too sophisticated and we continue to build and build and then we have um analysis paralysis and that what that's what it feels like to me because this conversation has gone on for a very long time. But what was essential to our community, I think we can come down to what is essential for right now and we can continue to add on as we phase the project into our big dream. But right now, I would love to see something happen with what we know is a basic need type assessment.

Yeah. And I I don't disagree. I think there's an opportunity to check in as we go through the process and we may learn more sooner rather than later and we'll have those funds reserved to be able to move quickly. I appreciate the idea of um that I'm hearing from the council that and that staff sees and agrees to come back to us with a suggestion of a seed amount from this initial 125. Um I don't just also want to say, you know, it'd be also great if we said we're going to fund 10 million. some of it will come from this seed and resilience hubs will be the first project to get funded if we get any from HMGP then then it really says we are committed and it's just a matter of how things move forward um and if you know we don't get any HMGP that's very sad for many many reasons but um

oh we will yeah I I think we will [clears throat] too so yeah I just want to keep that northstar that um yeah so Yeah, I'll just offer that to the group. And do you have a sense of Yeah, Jade or or timing of when So would you know there's dates on the last slide that Bridget prepared, we'd update that timeline and y'all wouldn't proceed without looping back to us. Yeah. So the timeline is tentative. Um based on if you all determine that this works and we can move forward with the awards that we have recommended. Again, based on our conversation, we we believed we needed to have some additional conversations. So, we we created the timeline so we can update it. Yeah.

And and I love the display of the funding stacks for from each one of our projects. And I'm wondering in all of our um digging and getting understanding about how to actually actually execute. I'm wondering are there some funding potentials that we can consider? I'm sure there are. Absolutely. We'll continue to look into those. Um so, yeah, we appreciate the feedback. will certainly take this um and start to build the program uh and then also update timelines. Like I said, we've got a really packed agenda and I hate to cut off any conversation. So um well, I wanted to be really clear. You said you wanted to make sure that these funding recommendations were good to go and I thought we were kind of saying they're not.

So what I heard that they're not right and so we can adjust the timeline. So I want to be clear about like what you want staff to do going forward. So, we will um make a recommendation on a current res allocation to reserve today. And it sounds like there's an there's a a desire to commit to 10 million and that 10 million gap between like let's for example if we look at $3 million from reservation and the next 7 million will come from any funds that we get from we get released through the H&GP process.

Okay. All right. Thank you. So yeah, I mean you're Thank you, DK. I I will say I always I love this council. I always worry a little bit when we come up with the number because we we don't know how to estimate costs for the project. So if you come back to us in a while and say now it's all mapped out and it's only 7.2 million or whatever, that could happen. or you come back and say if you want to do you know platinum level it's going to be 22 million or you know we're so 10 million is kind of like our just checking the

yeah and and there's no required action from you all on this so I I'll uh communicate with you all as soon as possible on what staff's recommendation is and if there's support for it we can move forward.

Yeah. And and you know, I'm feeling comfortable with this because um resilience hubs are really important. Our water system is a priority because we don't trigger the need for a resilience hub in some cases if our water system is working all the time. So that that is a top priority. And I personally have met with Mr. McGugan or whatever his name is. I always get it messed up. who runs the HMG pre program for the state and he has walked us through the total allocation for North Carolina is supposed to be around 1.4 billion that's already been funded by Congress but we've only now just seen $44 million of that released last month. That was the first time they released any of the money and it took

honestly me and the governor and a bunch of other people going up there and walking in the door and they handed us the press release and said, "Okay, now it's been released." So, we're going to have to keep up that pressure. The other thing though that the state said is they had kind of a rough estimate of how many individuals were applying to this fund for um buyouts and for elevations and then how many things they were expecting to see on the project side like our water system and other things and how well those would score. and they were pretty supportive of the idea of our water system requests that they liked those projects for this fund that they hoped and thought there was going to be funding available. There were some other projects that they were get telling us about that were coming from other communities that weren't really a good fit. They were just sort of saying that as an example that's why they thought this money would be available, but it was too, you know, too soon to tell. So knowing that we're a strong applicant for for those other projects for that funding through HMGP, I feel good this is all going to land in the right place personally. So, I'm committed to keep working on that and go get all the money so we can do all the things.

I just want to let the public know that on Friday, uh, the 27th at 8:30 a.m., there's a Western North Carolina Resilience Hub Network Summit at Harris Cherokee that we can attend and um, you can give your feedback. And that is a partnership with Thrive and the city of Asheville to to do recovery. Are they leading it? Uh, Thrive is leading up in partnership with us. So, um, contractor. Yeah, they're our contractor in doing that work. So, the first half of the day is Dawa's mouthing it at me, but I can't. The first half is like all the like tons of resilience.

Okay, so the first half of the day for those who aren't is thrivled and then the second half of the day is our okay is part of our work, but but it's all focused around resilience huds and the public is invited to attend. Okay. Hi Tony. Hello y'all. How you doing? here awkwardly standing there. Okay, ready, go.

Okay. Uh, next item on the agenda is the uh presentation of of the fiscal year 2025 single audit. I'm Tony McDall. I'm the finance director. I'm going to quickly introduce this item. Then then I'm going to turn it over to Daniel Gity from Cherry Beckard who's going to present uh the findings from that result from that uh audit and then we also have folks from our community economic development department here as well to respond. So, uh, you all may recall that, uh, we came to you all on December 9th and presented the fiscal year 2025 year-end financial statements, uh, as completed by Cherry Beckard, our external auditors. Um, those, uh, financial statements were completed in November and presented to you all in in December. Uh, the audit opinion that Cherry Becker issued on those financial statements was the unmodified or clean opinion, which is the highest level of assurance. Again, this is just a reminder of things we shared with y'all in December. We also shared with y'all in December that completion of the single audit portion of the of the audit, which focuses on our grants, was delayed this year due to the federal government shutdown, um, which led to our auditors not being able to get the required information they need to complete that audit. Uh, they did eventually get that information and they completed our single audit on January 23rd, 2026. Uh and so they're here today to present uh the results of that. Uh there were two findings uh in that audit. Uh one related to our home investment partnership program and the other to our community development block grant program and uh Dan Gity from from uh Cherry Becker's going to go over that with you all. And then we have folks from CD here to answer questions as well. So the interest of time, I'm going to go ahead and turn it over to Dan, let him run through his slides quickly and then um we'll come back up and answer any questions. Thank you for having me here again today to talk about the single audit piece of

the audit. So just as Tony mentioned, we did issue our financial statement audit November 14th uh and which we audit uh audited the the financial statements with an unmodified opinion, also known as a clean opinion. We did uh complete our audit as it relates to your uniform grant guidance and state single audit implementation. So this is all your federal and state funds that you monitor and look over. Uh we issued unmodified opinion on financial statements, but we did have and we did have an unmodified opinion on uh majority of our single audit procedures, but we did have one qualified opinion as it relates uh to the suburbs have been monitoring in the home grant. I'll go over that in a few slides here. But just to give you a little bit about that is just we when we mo when we modify our opinion, it could be a qualified opinion, an adverse opinion or disclaimer of opinion. Qualified opinion means we found something that needs to be corrected to make this uh it's a material non-compliance in our determination. An adverse opinion is the program as a whole is a material non-compliance. There's there's rampant in terms of pervasive issues throughout the whole program. and disclaimers we just don't have enough information to even give an opinion on.

In terms of internal controls, if we find something that be deemed to be material error, uh we need to deem that as a material weakness. And then anything below a material weakness, but still important for us to make you aware of would be deemed a significant deficiency. So these are the federal and state programs that we looked at this year. Uh we looked at the community developed block grant. We looked at the federal transit authority cluster, the home grant, uh the disaster grants that you had received this year, um and then PAL bill and state cash flow loans.

So out of our testing for that, we had two uh two of the programs where we had findings. The first one being the home program which resulted in the qualified opinion. Uh this was related to sub monitoring. Um so for your home grant about se 25% of that grant is uh passed through to a subreient to uh fulfill the the program. The other 75% is inhouse and what you do as a city with that grant. For the subreient monitoring uh there was no monitoring that took place during the year. So because there was no monitoring we could not assess if there was or wasn't any non-compliance for the given year. Uh this isn't to say that you had non-compliance. This isn't to say the subreient spent those monies in any uh way that would be questionable. But in terms of our audit of the city, we can only look at it from that perspective and we can say that because the monitoring didn't take place, we have to identify them as question costs. It will then be you to go with the federal agency to determine if you have any money to pay back or if it determined that there was no payback required. But as a result of this, we determined we had to give a qualified opinion as it relates to the subment monitoring. And it's our understanding that really what happened here is this has been done in the past in previous years submit monitoring but it had kind of fallen through the cracks in the given year uh with also staff turnover. The next finding we have here is related to community development block grants. The last one here, uh, this is more related to reporting of subreients, uh, uh, items that you've received. You, there's a a report that you need to file with the federal government that says how much you passed through to a subreient. Uh, it's really just more of a check the box uh, report that needs to be done. There's no real uh, financial information on that report other than you just pass through the funds. You're reporting that to be clear and transparent with the federal government

who's getting those funds. Um but so we deem that to be a significant deficiency but not uh material non-compliance. With that I'll questions or actually I think let me run through our followup slides then we can have Dan back up for additional questions as well.

Okay. So later uh so city responses to those audit fighting audit findings that Dan mentioned uh management agrees with both the home and CDBG findings and are implementing procedures to correct both in the current fiscal year. Uh those corrective action plans are linked uh to our presentation today for you all to review. Uh we also have staff from community and econ economic development and of course finance here as well to answer any questions that you all may have about either of these findings. Um and CED has actually identified some next steps that they're going to um implement related to these findings. I think I'm going to turn it over to Nikki Reid to walk you all through the bullet points on this slide.

Thank you, Nikki Reid with the Community and Economic Development Department. I really appreciate the opportunity to speak with you about this finding. Um, and of course we take our role very seriously with respect to stewardship of these funds. And we recognize that our oversight of home monitoring and CDBG reporting did not meet standards for this fiscal year 2425. And we want to just share monitoring is a key step where we document that agencies who receive the funding from the city maintain proper records and maintain compliance. And one example of that is income verification standards. and we have developed a clear corrective action plan to update our process so that this finding can be um mitigated for next year. We also provide several reports to HUD, our financial reports to HUD and the oversight with respect to the reporting of the FFTA into SAMS.gov. Again, we've developed a corrective action plan to address that. Um good news is that um James has a very close relationship. That's James Shelton who's our community development division manager with our HUD partners. And so when we discovered that this finding came about, we made sure to communicate that very clearly to HUD. Um and we have verified that these proposed corrective actions meet their standards. And so again, we just really acknowledge that last year was certainly an extraordinary year as we undertook um our recovery initiatives. Um but now that we are um at capacity with our staff, we can ensure that monitoring and timely reporting are completed. So I'm happy to answer any particulars, but um again, I'm committed to really resolving this for our next fiscal year. Thank you. And so that's uh all the slides that staff have today. Okay, I'll come back to the key takeaways. I won't read through those again [clears throat] in

the interest of time, but happy to answer any questions you all might have. No questions, but um general congratulations outside the two small issues which have already been corrected on another great audit. Okay. Well, thank you very much. Thanks everyone. Good afternoon.

Lindsay Spangler. I'm the budget and performance manager. Nice to see you all today and I have brought you a brief update on uh the FY27 budget process. Um, just to give everyone an update since we last spoke in January, uh, we're going to start with a little bit of history for FY26. So, we're going to talk about last year's budget process to develop the budget that we're in right now and talk about some of the struggles that we had during that process and what caused those and what kind of continues to into the into the following year. We'll also talk about the work that we're doing to uh look at the gap that we're projecting for na next year's budget and talk about some um progress that we've made uh on those numbers and then go through kind of what the next few months is going to look like in terms of coming to you and what my our staff is doing to um firm up numbers and get information and um do decision- making throughout the process. Um, and through all that, you know, we're going to talk a little bit about goal setting for everyone. Um, we're going to talk about how one of the goals that we are looking towards next year is to create a budget that ensures that we have some long-term stability. Um, and of course continuing to provide services to our community. [snorts] So, just a really quick recap on the last year's budget process. So, uh, the budget was adopted in June unanimously. Um what went into that budget is um there was a small property tax rate increase of 3.26 cents um and that went towards funding some compensation adjustments for employees of around 3% uh and restoring our fund balance to make sure that we had financial stability. Um other things that happened last year um obviously this was our first last year was our first budget passed after tropical storm Helen. So a few things related to that

were going on during the budget process. Uh the county delayed the property reval process which is ongoing now and going to be put in place for next year. Uh we also you know face some sluggish economic impacts from tropical storm Helen also continue to face healthcare and retirement increases which we continue to do to this day. um not necessarily related to Helen but kind of a national issue and because of some of these things we're we were seeing on the revenue and expense sides last year we as much as possible tried to hold operating budgets flat so while we saw some increases on the personnel side operating budgets were held flat and um lastly of course as you all remember in November of 2024 uh the voters passed about $8 million in general obligation bonds Um and we uh along with that came a tax rate increase to cover the debt service on those bonds which was um delayed as a part of last year's budget to minimize impacts on residents after the storm. Uh but something that's upcoming that we'll have to to deal with. So the next few slides I'll go through some economic indicators that we typically like to share with council as part of this process. Um, normally when we share these, we look at a year-over-year comparison. So, we usually compare last year to the current year. However, uh, last year is a little, uh, crazy looking. So, uh, for these slides, we decided to look at three years. So, you'll see the blue is FY24. So, that's a look at preheline numbers. And then you'll see um, the red is 25. That's during Helen. And then FY26, you'll see there in gold, that's today. You'll notice there's a big gap in the FY26 number, and that's due to

those numbers are from the Bureau of Labor Statistics, and so we did not receive any data so far for um the month of October. So, um that's a bummer. But anyways, you can kind of see the trend here. Start to fill in that gap. Just Yeah, you can see the trend. Yeah,

you can you can imagine what might be there. Um but I think the main thing to take away from this slide besides the awkward gap is um you can see that our unemployment before Helen was pretty low. They're around hovering around 3%. Right now we're above that. So our ju this is just to show that our employment is still above preheline levels. Uh next we'll look at occupancy tax collection. So this um you know this is the taxes that the county receives from uh hotels and short-term rentals. So um this is kind of just an economic indicator of our tourism industry. So we like to take a look at it. You'll see here that again we're not quite keeping up with preheline levels. That blue line is preheline and the gold line is us today. So we're kind of hovering below FY24. And um lastly to take a look at sales tax collections. Um so you can kind of see here in FY26 we are at this point trending above where we were in 24. Um but I think compared to the growth that we're used to seeing in sales tax, we would typically anticipate that the gap between the yellow and the the gold and the blue would be usually a lot greater. And so it kind of shows that while while we are growing um in our sales tax, it is pretty minimal growth. And right now our estimates are that we'll end the year um below our budget for sales tax. Right. And in addition to the challenges we're facing on the uh e economics of our community, we also wanted to just um remind everyone about our fund balance. So um you all probably remember this slide from previous presentations but essentially our target for the city our

policy is um to get to a 15% unassigned fund balance and as of the last uh closed fiscal year FY25 we dipped slightly below that to 14%. So, I think the point of this slide is just to um emphasize that we should shouldn't be utilizing this one-term funding source of fund balance to pay for our recurring costs uh going forward. All right, taking a look ahead to next year. All right, so here's the slide uh that was presented at the January 13th council meeting showing uh the budget gap that we're estimating at the time of $30 million. Um, at that presentation, we went into some detail about all of these items. So, anyone who is seeing this for the first time, I encourage you, if you're interested in looking into any of these to go back to the presentations that are publicly available, um, to look into these, um, for more information. But in general, um, these were some expected increases for next year that we knew were going to hit us, um, in the upcoming budget year that we wanted to make council aware of sooner rather than later. This is all subject to change and in fact today I'll provide kind of an update at least a preliminary update for some of these. So we'll kind of talk through some of the changes that we've made so far. So so as part of this first number here, the one-time fixes for FY26. Um we took about $5 million in this year's budget of savings. And so, uh, my staff has taken a look at which of those savings we can, um, move forward into the next fiscal year and which we have to put back into the budget. And so, um, the good news is that some of those cuts we can bring forward to next year. So, um, I'll show you what the number looks like for that. We have to we we can't take the full 5 million, but some of it we'll be able to

put back. Um, we also have some new numbers for health care and retirement. So, the healthcare number, um, I think we still have kind of a similar estimate for how much we're anticipating to spend over this year's budget, but we've kind of taken that estimate and distributed it across all of our funds. And so, the impact to the general fund is going to be different. And for uh retire for our retirement fund, um, the state has released uh what we're required to contribute into that. we have a better number for for that number. And so here is kind of where we are as of today. Um down about 4 million to 26.4 million. Um we were able to take we're able to take about 3.1 million in savings out of that save 5 million of savings that we took last year. Um you can see that health num healthcare number came down slightly and the retirement number went up slightly. The rest of these are also subject to change. Um we're just still kind of waiting on information in some cases and refining our estimates. So definitely in future council meetings, uh we will be bringing updates as we go every single time.

And and important to note, we haven't yet started looking at the revenue side. So if we have if we see increases in revenue um it I assume the gap is is based on I mean I don't know what it's based on. I don't know if it's based on last year's revenues or what where we think revenues will land.

Yeah. I think the revenue picture that we're seeing right now isn't drastically different next year than it is this year because of kind of some of the factors we were talking about such as sales tax being slow and um you know many conversations to be had about property tax and where we want to set that rate. Um so but I you're you're correct in that next time we come to you we're going to start really um weaving revenue into this gap number a little bit more so you can kind of see more of the full picture. Is this a good time for a suggestion around that or a question? Sure. Or do you want us to wait till the end? Well, I was curious. One thing that came to me when we were looking at the charts of um sales tax, occupancy tax, you know, these are really good, useful tools to measure things that are hard for us to touch or manipulate. But I wonder um if there is some way to collect and organize and portray information around the things that we do impact. Did we see any major multifamily complexes come online that are producing new property tax revenue or you know I'm just trying to help tell the picture of what the city does do that we have control of that increases our revenue and add that to the story somehow

just something to ponder instead of just the external

and that really builds off our last peed meeting. We got a quarterly update uh from development services and we're starting to look at really a bunch of indicators to help us as we prepare for strategic planning to figure out what type of metrics we want to be following. And that was some of the conversation of, you know, if we're trying to incentivize affordable housing and we're trying to incentivize infill development, does that have a revenue impact? Is it beyond just the great community benefit of our goals, but what is what is the impact to us as an organization? So, I just um support us thinking towards that direction, especially because I know that you know the TDA does a good job with their data and so it's available data to show us the tourism impact. Got it. Um but really tying our policy decisions to the impact on our budget um can be really helpful for us as leaders. One of the things that came up at peed when we were looking at the permitting um and kind of starting to dig into the conversation around vacancies and why projects get stuck um after our conversation about what it might look like to expedite some of the projects that have already been through technical review, design review, zoning review, how can we come in better and more efficiently as a partner to get some of those projects across the finish line could also be a factor. And I have been talking with um local partners to see what the barriers are as far as CDBGDR funds versus say the housing bond funds. Um but I am curious about a couple things. At the ABC board meeting this morning, staff let us know that they're helping businesses to wind down that are preparing to close. What wasn't clear is how many bars and restaurants will be closing that don't make it through this winter. What was clear is that the economic recovery funds didn't come out in time to help. Um,

but I was wondering because some of my colleagues are talking about one-time revenue options. Um, how are we looking at the legislative agenda for this year? I know we don't have a state budget and everything's kind of jammed up over in Raleigh, but um what is our legislative agenda looking like as far as advocating for revenue? And are we having a staffto staff conversation with the county about um something like getting dedicated transit funding on the ballot? Because that would make sense to me if we're going to have one-time revenue, then we should have a long-term strategy because one time doesn't help us with ongoing expenses. [clears throat] Uh thank you for the question. What I can say uh to preface this is that we are currently in a bit of an odd time for the general assembly. They really should be completed with their u current session uh which generally happens uh once the adoption of a budget has occurred as you have stated correctly. That has not occurred. Uh I suspect it won't occur anytime soon. So the end of the session is really up in the air. Um what is coming next is going to be a short session of the general assembly. Um there is always an allowance for some bills either general or local bills during the short session, but they're often very restricted in terms of what we can put forward. Historically, we have occasionally done legislative agendas in short sessions. Um but oftentimes we feel it's may not be worth our time since we have such a limited scope of the kind of bills that can go forward. Um, but we are already beginning to talk amongst staff about what some of the items would be, including items uh that would enable new revenue sources for the next available legislative agenda. What we can't yet say is whether or not that would be appropriate for the short session or the upcoming long session that would follow. Uh, in fact, I've had meetings today uh

on transit funding, on transportation funding, and that staff is already looking and thinking about some creative options to bring forward. Um I met last week uh had the benefit of an invitation to go to Raleigh. So I took it upon myself to speak to some of our local delegation uh specifically about uh reinitiating some of the conversations that were taking place around dedicated transit funding as well. So a lot of those talks are taking place and we plan on uh beginning to coordinate both with staff with our delegation and with council to formulate its next legislative agenda when those uh allowances are made available to us by Raleigh. That's really helpful because I know that the for example the transit contract going up three million that's because we have a for-profit model. So if we in conversations with community advocates were looking at moving to it back to a transit authority, does that number change and should we next month be looking at a multi-year contract or a one-year contract while we make changes? So this is both on the revenue side and the expense side especially because it was close to 10% of the gap.

Yeah. The good news is that um that contract has the ability for amendment. So if we move forward we can make amendments if new revenue sources become available. Um I think that's well within the capacity of the agreement that we're putting together for that. So we're going to reserve that right and continue to see what options are available through the legislative process. Thank you, Brad. I remember last year when I was advocating for um variable revenue sources from Raleigh um and I met with the lobbyists, they said that we can only do that every other year. Is that what you mean by like the short session and the long session?

That that's probably a more articulate way to say it. Council member has Yes. So, the general assembly rotates between having what they call a short session and a long session. Um the long session generally is what it sounds like. it's much longer than the short session and it allows for a much wider um availability or spectrum of kinds of bills that you can advocate for. Oftentimes in the short session they will only say we're only dealing with budgetary fixes or a few minor things like annexations. Um uh but in a long session we don't have those limitations. So that's often when we put forward the most robust legislative agenda. And then on the transit side, I know I met with staff in December about our advertising and maybe working with Linamar and um revisiting the um idea that they had of uh getting easier ticketing, getting some digital billboards around those ticket spaces um so we can get some revenue for our transit system. Where are we in that process? um not very far along in that process. I will say that we are looking at opportunities to diversify our revenue in all those different spaces including that staff did share that there was some appetite to consider that. So we'll continue to look into that. Um you know oftent times it takes some time to get some new revenue generated may not necessarily help us for FY27 but we need to be looking ahead and coming up with some strategies that go further than right one fiscal year. So,

I know the price tag for um digital ticketing was over $900,000 to get it started last time, but that doesn't even begin to cover the cost for three years of revenue. So, we would need some massive grants that we're going to move in that direction.

All right, thanks everyone for the feedback. All right, so obviously this is the beginning. Um we still have 26.4 four million that we have to make up. And so my team is working really hard to figure out the next steps and we'll we'll be coming to you over the next couple of months um with options for you to consider. So we've been working with all departments to evaluate spending reductions. Um this may have service impacts. We are trying to look at lower priority programs to see if there's efficiencies that could be made there. Um we are looking really closely at position management because that is such a large part of the city's budget. Um looking at vacancies that have been open for a long time. Maybe um looking into why those might be vacant for so long. Also looking to determine if there's places where resources can be shared either across functions or across departments. So, we're um looking wherever we can in to find efficiencies. Um but I think you know with the the size that we're looking at, we don't believe it's possible to balance the budget just with budget reductions. And so that means we will ultimately need to bring council options for revenue increases as well, including fees and charges and property tax increases. But we want to assure council and the public that um staff is truly exhausting all avenues to find efficiencies. Um we want to make sure that we're limiting the impact to the community as much as possible. So we're digging as much as we can, leaving no stone unturned. So we'll again this is beginning of the process. We'll bring you lots of new um information and opportunities and and options throughout the rest of the process. and want to

talk about what the rest of the process looks like. So, first we kind of wanted to bring this slide to council uh to show what some of our objectives are going forward as we create next year's budget. So, we want to ensure that we are not just balancing the budget, but that we're creating a budget that is structurally balanced and has long-term fiscal stability. So, we want to be avoiding those short-term fixes, looking at opportunities to do advanced multi-year planning and look at some long-term options. Of course, we want to make sure that we're focusing on providing reliable core services to our community and making sure that we're keeping quality of life in mind as well. Uh we also want to make sure we're prioritizing employees and that's not necessarily just for employees sake but really for the whole community's sake because if you have employees for the city that can be dedicated and great public servants that is a benefit to the whole community. And um of course last but not least Helen Recovery always at top of mind for us so we can focus on building back as resiliently as possible. I'm gonna jump in on that one. Um, I see that we're calling out core services, but I'm not seeing that we're talking about core infrastructure and that just gives me a little bit of a pause. Um, we've had budget years that are hard. I mean, we're southern Appalachia. We've never been flush. And historically, the culture has been to defer maintenance, to defer maintenance, to defer maintenance, to defer maintenance, and to defer investment, and to defer investment. And we as a council have had countless capital conversations where projects come to us that once could have

been 1 million or 10 million and are now 50 million or 100 million. And um I think that's a really essential objective for us to be looking at in this budget as well because it could be very pennywise and pound foolish to do this again and then eventually someone's going to have to pay. And so I also acknowledge that adding an additional objective doesn't prioritize what's here. Um, but we deliver our core services through our employees. And so there might be a way to just kind of look at this and see where infrastructure lives. Um, because I could look at these objectives and anticipate you come back saying, "All right, we're not doing any capital this year." And I think that would be uh

you're going on and on about this, but I I baked into this to me is capital. So I and I think what's a service? Yeah, I'm just waiting for the headline tomorrow to be they're ditching capital. So [laughter] okay. Yes, thank you for those comments. Uh council member Olman, I was going to say something similar to what the mayor was uh referring to. So for us, for me, what core services mean, we need the infrastructure to be able to provide core services, right? And so it's included in that. So it's not an omission and I don't think you will be adding and we can just extend on that there. Great. Lindsay, I have a question for you. When we're looking at the list of expense increases that we're facing,

what kind of um additional information can I expect from staff? For example, when I see transit contract 3 million, you know, we've been saying each year that we don't we don't have the funds to keep maintaining the plans that we have. And I'm not suggesting we cut transit or anything, but how how will I know what the impact of that $3 million not being funded is? Will you be able to deliver that? Like it means cutting this route or is that information we'll get or is this just are we in a bucket choosing to continue transit as is and therefore we must fund it?

No. So thank you for the question. So the 3 million is again a ballpark early estimate. We don't I don't have the information from the bids right now, but that would be the estimate to continue service as usual. And so if this council said we can't afford to do that, how will I be able to gauge the impact? So in one of the future work sessions, we will talk to you about savings.

Um and that will certainly be something that comes up in that conversation um since the general fund gives money to the transit fund. So that is something that we've asked staff to look at because we've asked staff to look at everything. So it's hard to know. We're hoping to get to the place where we can bring concrete things for you to look at. It's hard to know right now because we don't know the cost of the new contract. It's hard to know like if you cut 1 million then this is the service impact. But once things kind of firm up a little bit more, once we get a little further into the process and we see what council's appetite is to make changes to services, then um we're happy to work with you to see what that looks like.

Thank you. But are we still on track for March approving a transit management RFP? So, we will have some numbers, right? In a couple weeks.

Yeah. But before you go further, the these are our budget objectives and what we're going to be working towards with you all. But I the slide is here so you can tell us if something is missing. So think about that as we go forward. Um and at the end of the presentation, you can provide us with some feedback. We want to be sure that this these are the things that from my perspective, these are the things that I'm hearing from you all and what I'm seeing that we need to focus on, but happy to hear more about if there's something missing or to your point earlier, we need to be clear that infrastructure is going to be a part of I think that for me that would do it.

Yeah, I I kind of agree with with what Councilman Alman said just because infrastructure is like such a key word right now in everything we're doing to see something without it, even if it's baked in. Let's call it out. Well, I mean, this can get pretty philosophical, but like what is a core service? If we all wrote down our top three core services, we might list different things, you know? So, I think when I think of a service, I think of fire and police, that's a service. I think of garbage hauling. When I think of infrastructure, I think of storm water, water. So, it might be splitting hairs, but if these are your objectives, that is the the the top line that our leader is going to take to guide this, I do think the language matters. So I think if infrastructure is added to core services that assuage is a concern that I hear from the community.

Brad by North Carolina General Assembly what do they say are the city functions that must stay in place? Well just zoning right it's very sparse. Uh in fact the only required service is that we have a building inspector. Then we have a building inspector. Just one that's there have been times where there's even discussed getting rid of our charter. [laughter] That's been a long time. We're good now. We're good now. Oh, you know, technically it count.

All right, we're almost done here. Okay. So, next steps, we will be I will be back later tonight for the public comment and then over the next couple of months, we'll go through a few different work sessions where we'll bring a lot of more details to council and to the public on um many different topics um which I'll go over a little bit in the next slide. Um, we will also be adopting the fees and charges in March. And then by May, we'll have a proposed budget for everyone to review leading to public hearing uh at the end of May and budget adopt adoption on June 9th. And so here's a preliminary look on what we plan to discuss in the upcoming work sessions. And this is subject to change. Um, but want to make sure that y'all are aware of all the things that we're planning to talk to you about, perhaps in a different order, and get your thoughts about what might need to be added here. Um, so you'll notice that for all these work sessions, we will bring an update on general fund projections. So, you should expect to get that at every meeting. Um, we'll be discussing fees and charges at an upcoming work session and any changes that are requested to those. We'll also be discussing some budget reduction options. um we'll need to go through um bid uh the sorry enterprise funds make sure those are balanced uh and also the business improvement district's budget. We'll also provide some compensation strategies for council to take a look at and of course uh oh she's not here but we'll talk about capital um infrastructure and all that good stuff and then um kind of finish up April with anything further that needs to happen. I'll also note that at some point in here we will um have a deeper conversation about Reval. That's kind of dependent on when we get the information

from the county. So that's all from me. Um would love to get your thoughts on if we're missing anything, if there's anything that seems important or pressing and any information you might need to know before the next work session on March 10th. Thank you. I mean, I'm just really looking for that potential revenue. Insert myself. She's like, can I walk away?

Uh, we we have uh two more topics on the agenda. Uh, the Parkside uh land hold is the next one. Chris Cor will present. We also have boards commissions information that we can kind of truncate that a little bit. Um, but certainly want to also recognize the council may need a break between this meeting and a regular meeting. So Chris,

good afternoon. Hopefully everybody's doing okay. I'm Chris Coral, community and economic or community and reg. [laughter] Um, all right, let me get going. Uh, this is a pretty short one as far as slides goes. It's only 10. So maybe let's hold questions till the end just for the sake of time to help make sure you guys get between the meetings. So, uh, key takeaways to take away from this presentation. Um, the city- owned property known as Parkside, which we'll show in the presentation later, was has been targeted for a mixeduse development for about 20 years. The initial assembly of the land, which was completed around 2006, was done so with the intent to develop a performing arts center. uh staff previously has come to this group uh well full council excuse me um identifying the site as a potential development site for public safety stations uh staff offices and parking. We're also identifying this site now as a place for a mixeduse public private partnership development which would include an arts and entertainment facility, parking garage and public safety station potentially. So quick history um we're going to go back to 2006 and get to present. Uh in 2006 we finished securing all the parcels to give them all one block under city ownership and at that point evaluated the feasibility of a location of a performing a performance hall at the time within a mixeduse development. Um we then rolled into 2008 after council approved a concept design that a nonprofit had presented to hold the land for five years for that nonprofit to raise funds to then try to develop something on the property. Uh five years came, the nonprofit asked for an extension. We gave them another extension. Ultimately, 10 total years we held the site, no development came together in large part due to the financial crisis that was happening at the time. They just weren't able to get

their funding together. Um so that project stalled with the nonprofit 2009 to 2019. We staff continued working on process to try to raise some funds for seed money for a renovation of Thomas Wolf Auditorium. uh numerous different attempts um none really came to fruition. Uh we had multiple consultant estimates during that time and some concepts that ranged from 15 million to 40 million for Thomas Wolf renovation. All of those numbers not including Broadway scope. This was truly just like fix what's there and keep the exact same scope of the type of programming. In 2019, um, we used some of our capital funding to hire a design team to do a conceptual design, a costing exercise, and initial construction documents for what we call Broadway light in the Thomas Wolves. So, this was to be able to do some of the smaller Broadway shows that are out there, but not like at the time Phantom or um, Wicked or Lion King, those bigger, higher production value Broadway shows. So, just kind of like a scale down version. That project came in with a project estimate and a proposed funding scheme at hund00 million. We rolled it out in February of 2020 and then two weeks later COVID killed the project. Um we put all pumps all grump all brakes pumped on that project and by the time we were coming back around to it the world had changed so much that we moved on to other things. Then came 2023. Um, you may remember in the summer we had a full HVAC system failure at the Thomas Wolf which ended up causing us to be closed for nine months while we repaired that. Simultaneously in less public about a month into that HVAC repair, we had a major plumbing system failure. So all of our exit piping um basically got too old and fell apart underneath the building and we had to dig these trenches under the 1930s venue

to replace over half of our plumbing system. Uh so that would have caused a public closure but it just didn't because it was already inside another infrastructure failure that caused a public closure of the Thomas Wolf. We have repaired both of those been reopened for some time now since. So in that same time frame in the fall of 2023 the arts council arts created the Thomas Wolf task force which was a non- city entity but designed to try to come up with a realistic plan to renovate the Thomas Wolf or replace the Thomas Wolf depending on the scope and scale and what came out of that group's work. So 2023 into 2024 um we continued some discovery in September of 2023 around the same time the arts council created their group uh we came to council at a work session and gave some general ideas of what costs would be for different levels of upfit to the Thomas Wolf ranging from code only to the biggest best thing we could have. Uh this group asked us to look at multiple renovation off options both of them between $ 105 and $150 million was the ballpark estimate we were working on at the time. We kept working with the task force that Arts AVL had brought together and brought in multiple architects, engineers, consultants from other cities, other markets. Um, and we kept getting that same question of is the Thomas Wolf really worth the investment that you would need to put into it to get what you want out of the building? And consistently that answer was no. The the number that we needed to put in was just so high to get to the return on investment that we started looking at opportunities to for a new build. We were another layer of simultaneousness. Uh we began working again with ATG Entertainment, which is a company that I started working with in the late 201s as

a potential programming partner. In the five years since, they've grown significantly. And in 2024, we're in the P place where they were actually helping fund building renovations, funding new builds, and programming venues throughout the world. They currently operate a little over 70 venues worldwide. It's uh close to 30 in the States. and we reinvigorated that relationship. ATG was really interested in the new build opportunity after evaluating the Thomas Wolf. Even a renovation there couldn't make their model work. Their model and a lot of theater operators requires Broadway. The funds that come with Broadway are what help support the rest of the programming in theater typically. So, we worked on a draft letter of intent with ATG Entertainment. We had it lined up um ready to sign in September of 2024. We were actually planning to bring it to council in October of 2024 and announce it publicly. We all know it happened at the end of September. Hit pause on that. I'm getting really good at right before big big problems being ready for things.

Uh so we told ATG, hey, we're going to have to wait on this for a couple years. Come spring of 2025, economic development association announced the de disaster supplemental opportunities which this project could very well um apply for and be granted funds from. So we reinvigorated ATG. They were ready to go at the table. We got a draft memorandum of understanding put together. Our then city manager Deborah signed it in late July of 2025. We announced that in August of 2025 and began moving forward on a pre-development process with them. So that was a total of $160,000 commitment. 80,000 from us, 80,000 from ATG to do this discovery work. Uh so that steps of discovery sound diplomacy is a consultant group that was hired. They're doing a cultural and economic impact report and we used a volunteer architecture firm to help us with some site selection uh that donated their time to help with the project. Now we've moved into 2026 and we're anticipating our impact study from Sound Diplomacy to be delivered in the next couple of weeks. Should be next week or the week after. And we've identified a target site. And how we got to that site was we asked this u architecture firm. We said, "Hey, find us four sites downtown." The only parameter that ATG had was it must be walkable to hotel, retail, restaurant. That was their big thing. So made the river arts district challenging because there's not a lot of overnight stay opportunity there. And South Asheville works, but they really liked the walkability of downtown. So we asked that group to look at four sites downtown. So, we got to this site, which we've known as Parkside. Uh, it's total of seven parcels, about 2.4 acres, give or take. Um, this site rose to the top because of the four that they found in

downtown that would fit a 2500ish seat theater. It's the only one the city already owns and operates. The other two were private, and one of them was actually already under development with the mixeduse um project. The other was owned mostly by uh the county and they have some plans for that parcel long term. Um as this group probably knows the parcel is not directly associated with urban renewal but it's directly adjacent like right across the road and therefore it's in an area that's been impacted by urban renewal. So we understand that we ex we are sensitive to that and have started loose conversations with leaders in the affected areas around the parcel. But true community engagement plan wasn't set to start until May might be June at this point like I mentioned on the agenda briefing last week. Uh, but that's when we would really dig into like what the next steps are, what this project could be, how it could affect the areas, and how we can adjust it and fit what that neighborhood wants and desires out of that parcel. So, potential space use for what this project could be. And these are all other than the 2500 seat main performance hall, like everything is kind of like can be, should be, could be, but isn't for sure yet. Too early at this point. Um, we would need to create a parking structure as part of this project. Um, so we've baked in a 300 plus space parking garage in the footprint, space for a public safety station being fire, a 2500ish mains, uh, performance hall, rehearsal and education centers, um, which are really important. One for the Asheville Symphony as a main tenant of the facility, but also to free up dates. A challenge we have at the Thomas Wolf, if the symphony has a show on Saturday, they eat the entire week up because they have to come in here and rehearse for four or five days because we don't have a separate space. Whereas, if they have a separate space, we can do shows

Wednesday, Thursday, Friday, then bring the symphony in, which helps generate more revenue and more economic impact. Um, plaza entry and foyer space is really important in venues like this. If you've ever come to one of our shows, you know how our plaza and entry space is too small. you need more space to fit all the people as they come and go. Uh loading access is really important. And then we're hoping to work in retail gallery space and then other as just what could be because we're at that point of it's the what could be not what it is yet. So to show some concepts, this is again from that u volunteer architecture firm for clarity. This is not like this is what we want to do. This is just to show that these structures can fit on the parcel. And so there's two different concepts in here that show the space ability to have a fire station. The the one requirement we gave them when they were looking at this site was we need that fire station to have quick access for the fire trucks to get out. So it was a line so they could quickly get to Charlotte Street. That's why you'll see the fire station in the bottom right each time. Parking garage and then the auditorium. Um, the interesting thing to note with both of these is this is actually very similar to the concept designs put together by the nonprofit group back in the early 2000s. So, architecturally two completely different groups that had nothing to do with each other's projects, but came to the same general conclusion on how they would design the site and lay it out. So, our next steps, um, right now we're ready to receive that impact report. Like I mentioned, we would be coming back to full counsel at the end of March requesting a landhold. Um, we would then be completing and submitting our grant application to the EDA once we have that impact report. We would be starting up our comms and engagement opportunities. And a really important one here is the consider second and third private partner. So this is a PPP, right? A public private partnership, but it can

be a 4P and it can be a 5P. and it might be necessary for that to be the case in order to make the financing work for this project. So having um a third or a second private partner being the third P to help us develop either a portion of the parking garage or retail or whatever that mixeduse space is and I'm not counting the symphony in that they're a partner in this and that they would have to help fund that rehearsal and education center space but some other partner. And then even a third, um, something we learned that was really important from the folks in Charlotte that helped get the Blumenthal put together was that if you try to make the project too simple, it is actually harder. And the more complex you make the project, the better opportunity you have to actually get across the finish line because if one partner backs out, you still have all these other partners that can help keep it together. So adding complexity is a good thing, which is weird for me to say in my own [laughter] mind. So then steps after that or in concurrence with is maybe we're denied by the ADA grant and then at that point we have to decide if this project's worth going forward or if we need to step back and only look at the Thomas Wolf and dealing with our challenges there because we'll still have those challenges regardless of whether or not we build a new facility or maybe we are awarded the EDA grant at which time it would make sense to start the definitive agreement draft framework with ATG the symphony and whoever our other private partners are and extend our current with ATG to complete that timeline. It currently expires in summer of 2027. So, as we're going through this, if we're awarded that EDA grant, we're going to need a longer runway. And then we would start site discovery with utilities, geotech, etc. with that EDA funding. And then we would going be going at that point into a deep dive of the financing and development. Um because again, [clears throat] once we have those extra private partners in there, that's how we figure out what the funding is. And the goal, my my main charge is how do we do this project for

the cost of the parking garage? Like hopefully we can piece together all the other partners to make the actual entertainment facility funded through public private or private nonprofit private sector public coming in as like hotel tax authority hopefully. And then we're helping fund the infrastructure beside it for parking. So with that, the the next steps um and the why. So the importance of holding the land is to really make that EDA grant like strong, right? That that's going to show the EDA that like we're serious about trying to put something like this together, like we're even holding a parcel to make this happen if we can. And it will help us continue a process with ATG and show that we truly are interested. We're not the only market they're talking to. They're in talks with many other markets, but they are specifically in talks with a market that is like a direct competitor of ours right now. So, we want to make sure we don't get left behind in that process. And again, that expires in July or June of 2027. We'd be coming back to this group next month for that landfold request. So, I'm back to key takeaways. For the sake of time, I'll go through them again and open to any questions, thoughts, Maybe an easy one, the one that shows all the steps. Any idea of what kind of if everything went our way, what kind of timeline we're looking at?

At least two years. The the comms and engagements at least a six to ninemonth process alone. And then the pre-development work is going to be another year. And if we get to the point that we're doing concept design and rolling to construction, concept design is going to be six months alone. And then as you work through construction documents, so we're So that even really sounds hopeful. So it's Try more than two. It's definitely It's a runway. Yeah. Yeah. Okay.

So, um I guess the symphony will have to tune to the very dissonant on purpose but key of a flat. Um I was a little curious because when we were talking about the bond funds a couple of years ago, um there was a conversation about a police training facility at this location. So, is staff already re-reource mapping where that would go instead? Um what we're what I guess I'm saying here is that we have an opportunity of a signific significant amount of funding from the private sector to help put this together. We don't have funding yet for the public safety training station. So we should continue down this path to follow the opportunity and if that doesn't come together the parcel is still there and ready for these other things that are still currently under unfunded but can be working down the same pathway.

Okay. when I'm resource mapping the number of public and private facilities like just to name a few um the 6,000 capacity that UNCCA is talking about the 5,000 capacity that Orange Peel is building our McCormick field's going to have new uses um and then if we're keeping the civic center and the Thomas will be building a new performing arts center and Salvage Station is coming back. This is a lot for our community to keep up. So, I'm thinking ahead to maintenance for the next 20 years. And it's really common for cities to provide the supportive infrastructure for our arts and culture economy and ecosystem.

Um, so what does it look like for workforce housing and parking and a downtown circulator to connect residents, workers, and visitors? Um, sidewalks, because you brought up the walkability, I wondered, is this city still at the table with UNCCA? Because Broadway on Broadway was a conversation and if it's not still a conversation, how do we continue that conversation? Because the walkability, the greenway, the existing land, our comprehensive plans mentioned Broadway.

Uh UNCCA currently isn't [clears throat] working towards a performance center anymore at the moment. I shouldn't say anymore. I'm sure they're long term. They want to get back into that space. Uh but more importantly, our private partner ATG is not interested in that site. for the again the walkability to restaurant, retail, hotel uh to existing businesses. Okay. And then the um term of agreement for ATG I've heard 40 to 50 years. They are willing to sign a long-term lease and operating agreement up to 50 years. Yes.

Okay. I'm I can imagine supporting keeping the conversation going as far as the land just from my position. Um but I want to ensure that our economic development partners in the neighborhood at the blocker decisionmaking tables um including around displacement risk assessment, economic development, education opportunities and parking demands because when I was meeting with the symphony and talking about their parking issues, there's existing parking issues in the block already. Um, so if we're not building not just for the capacity of what we have now, but also growth, then I I don't want to stand up behind because ultimately we're not ready with the downtown circulator yet. So people are going to have doesn't have a place to park.

Yeah. The concept parking garage that's in the model we're working on is a little over 300 spaces, which is about two and a two and two/3 the number of spaces that currently exist on the parcel. So it does increase it, but you're also bringing a lot more people into the area. 2500 seats, but how many parking spaces? 350 or up to 350 in the one on the parcel, but you also have parking garage uh county. And if you think about it at the arena, we have about 800 parking spaces and a five block radius for 7,000 seats. Yeah.

So, when I'm attending Symphony, I'm looking at the the demographics are folks who don't walk long distances and they're also talking about youth programming. Um, so a lot of folks end up parking in the private deck and it's really expensive when they're visiting the block. Yeah. So I think that'll come up. Um, if we have our partners at the table, then they'll be able to shine a light on what the lived experience and professional experience is like.

Yeah. And I had a great conversation with someone the other day, but again, one of those second, third private partners can certainly be one of the groups in the block or another group that represents similar interests, right? Like there's a lot of opportunity on that land. It's, you know, it's it's open, right? It can be built in any way, shape, or forms. And how we've treated it with the symphony is like, yeah, everyone has influence on what this project could be, but if you want to have like development influence on what would actually be built, like square footage influence if you can help bring funding to the table, like let's talk. There's no reason that we can't add on to the project as long as we can help find funding together. The

the only thing I'd or say to that is um I have a lot of thoughts. How do I compartmentalize them? Um yes. Yes. If there's partners who can help us fund raise, that adds some complexity and therefore a little bit more the resilience. And um we've been investing in rebuilding building the block, a project that we've been committed to for multiple years. And so, um, I just don't want to make sure I want to make sure we're not lumping that effort into like, um, they're going to need to be the same as a private partner because I think it's very different. We have established council and community priorities and support of the economic livelihood of that block. And I think that's a different thing than a private partner.

Yeah, I would agree. Do we have two concurrent? Um, this cultural and economic impact report, does it include conversations with the block in the neighborhoods? No. When when it says cultural, it's more like the needs from an art space need as far as like the missing what programming in the art space is missing. Uh, so it does not it's not cultural in the sense of like diversity and who and like um different ethnic groups. This is like there's a lot of potters, there's performance music, there's some performing arts, but only small like it's hitting that space. So there they're definitely

there's more study to come which would need to happen as part of that community engagement plan. This is more the economic case and we specifically gave them the EDA grant application and said help us write something that looks really good for this. So, so in order to be competitive in an EDA grant application, you've got to have a supporting study that shows an economic impact on a community. So, that's specifically it's kind of focused narrowly on that the full comm community. I I it just is supposed to I think it's sort of a gen generic in the sense that it looks at what's the economic impact of a performing arts center in a community or specifically ours. It looks to the county county lines specifically. Okay. [snorts]

kind of run out of time. Um, so I like how you jazz this up like this up. I'm using the wrong word with your splats. That's good for timelines. But um, you for next steps the for us would be on March 24th there will be a a resolution orou or I don't I don't know what the form of the document is. It would be a resolution similar to what council did in the past and it it really is non-binding. It's more symbolic than anything to show that we're holding it, but a future council would have to agree for any contracts that happen on the land or any actual transfers or anything. There'll be more steps. Yeah.

Okay. So, but terms of our next opportunity to weigh in on it, it'll be March 24th. Correct. Yes.

I just want to say one more thing on this. You know, I've talked to various folks in the community and heard concerns about um if this comes to fruition, it's just such a a really big change in use in experience in this part of town. Um and [clears throat] again given that the city and staff and community members have really been focused on the rebuilding the block program and really fortifying the growth of that area and supporting that area. I just would like to know more when we see this again about what is being dovetailed between that project which I think is mostly in the planning department and this project which is in yours. we have such a big organization. I understand, you know, everyone can't be in every meeting or what have you, but it feels a little disconnected right now. And so, I know that we're committed to that support. And so, I just lift the question of like, what an opportunity

if we were to do this and we know the goals we have with rebuilding the block, what would this effort do to enhance those goals and support that? And so, it's more a question at this point. I know that there'll be lots of community engagement, a lot of different design components yet into the future, but I've been hearing a concern from neighbors that they're disconnected and a fear that this could dwarf the other efforts and and impact them negatively. And um so I just would love to know more about how we're thinking about integrating so that those goals can move forward together.

Yeah. And I think we can easily work with planning and maybe re-engage Melon who helped with the visioning plan to see what would what this could do and how this can work together. And I think what's important is to not push away the potential investment from the private partner yet. And if it doesn't work out and it's not going to be at this parcel in the future, like that's fine. But we need to keep that door open while we work through the process and the community engagement plan. I think that's like the important step right now is [clears throat] to like keep them at the table so they don't go go look at other markets.

And totally unrelated to this, but maybe this might be an opportunity, Ben. Um, this might be a good one for displacement analysis. Um, before it comes back to us on the 24th, are we going to engage with those folks on the block? Because there's some concern that I'm hearing the community of even just before we even hold the land. people feel left out of the conversation about what's actually happening.

I think we can have more like one-on-one meetings with individual leaders. Like a full public engagement between now and then is probably not realistic. Um just have like 30 events between now and then. Um just I don't know how I would manage that in between, but we can definitely get some good one-on-one meetings or small group meetings together. I'm happy to meet with anybody in the community, talk about it, and take your PowerPoint and just do as much listening to so that we can all be rowing in the same direction. That was a good segue just to my appreciations that we have you at the helm on this project. Thank you, Chris. Thank you, Chris. Thank you. Okay, our one-hour meeting is We're not done.

We have another item. feel like it's we conclude very quickly with Alex just explaining breakthrough. That's right. She kind of pre you predicted that this was going to happen

and I will try to um very quick y'all. Alex Smith, assistant city clerk. I'm just going to quickly try to run through some of our boarding commission appointments. I'll try to be brief since I know we need a break between meetings. So, starting off, we have uh affordable housing advisory committee. There are currently two vacancies on that board. Uh and we have recommendations from the staff and the chair for Mike Holmes and Mike Pant. The Ashabunkham Riverfront Commission, that seat is reserved for a housing authority either recipient or staff um or a voucher recipient. Unfortunately, we did not any receive any applications that met that criteria. Uh so the clerk's office is going to readvertise for that seat.

Can I interrupt you just um in the interest of time? Yes. So it looks like all of them except for maybe two align with the number of vacancies and the recommendations. So I think we could probably figure those out. Looks like there are two that might be of interest. That's the TDA and the neighborhood advisory committee. Can we go over those?

That's correct. Yeah. So, the the Bunkan County TDA um that we do need council direction on whether or not we were going to conduct interviews uh for the potential applicants. The TDA uh board development committee did provide a recommendation for Kyle Hyberg. Um but we would need to direction about whether or not we would want to interview the all three applicants. Uh you'll see there's a note about one of the applicants um status in terms of where they're I'll just chime in and say I'd be willing to appoint and not do an interview for TDA for TDA. So yeah, I second that to appoint not interview. Yeah. Any reason why?

Just because the person that was recommended has been vetted by the board pretty substantially. I'm the exeicia. But just a thought, keep that in mind for the the meeting. I mean, yeah, the business meeting. Go ahead.

Okay. And then um for the neighborhood advisory committee, the chair provided a list of considerations rather than a specific recommendation for um the potential applicants. So that would be the other um potential conversation that needs to be had by council about whether or not um or which which of these applicants you would want to choose for those different seats. A lot of those seats for the neighborhood advisory committee are reserved for members of specific zip codes. Um, so you'll see noted on their applications that we uh you have access to which which sheet they applied for as well as what where they live and reside and what zip code they reside within.

The notes were pretty extensive and because MAC isn't meeting regularly, I wondered if council might consider leaving this vacancy open so we can continue to do recruitment where there's not neighborhood representation. Which vacancy? Neck. I agree. The there are four vacancies. Well, they're not meeting regularly. And so when they're talking about like we still have a lot of areas that aren't covered in the applications, um we could leave them open because they're not meeting right now. I have my two picks for that committee, but there are four picks. Oh, there are currently four vacant seats on that board. Oh, I only have

And then there there are um there's Some are by zip code, too. So, I was going to suggest we look at those um between now and a couple of minutes. So, for like 284, there's one application and one open seat. And then a couple of the people applied for um the zip code and the full seat. So, you get the the same people. So, for example, we could appoint for the 2805 and 2804, but leave the atlarge open because, for example, we already have representation pretty strongly from Oakley.

Yeah. So, it looks like Lucas and Lindsay applied for both seats for the ATL large seats. So you could get the same people at the You want to leave the at large open. Is that what you're saying? That would be my recommendation. I'm fine with that. I'm good with that. Okay. So I think there are two at largest. So leave two, point two, and leave two. Okay. So it sounds like we have a plan for tonight. Yeah. So it looks like by virtue of elimination which are Wallace for the vacant 284 seat,

right? And then the vacant 2805 seat, you have three people who actually I think all but one applied for the at large. Okay. Okay. You got that all for tonight, Vice Mayor? Yep, we got it. Any other additional questions? No, I think we're just organizing our thoughts. Thank you. That's the last none item on the policy, finance, and infrastructure agenda. And so we can adjourn. Thank you. Thank you. Thank you. We're journed.