FY21-22 Town Budget Drivers

FY21-22 Budget Drivers

June 5, 2021

Dear Blowing Rock Homeowners

Our challenge is to present the facts for a complex budget in simple terms to inform the homeowners before the Town Council votes to approve the new budget at the Budget Public Hearing on June 8th.

We believe that our role is to educate the homeowners, so they can have a framework to understand the decisions of the Town Council.

The centerpiece of this budget is the Town’s goal to compensate and retain the employees who provide our services in an environment where the County, Boone and University are all moving to raise minimum pay to reach a living wage of at least $15 per hour.

The Town Manager and Finance Director have prepared a comprehensive 129 page budget document that can be viewed on the Town of Blowing Rock website at –
https://www.townofblowingrocknc.gov/home/showpublisheddocument/10499/637572045334330000

We will focus on the General Fund Budget that is principally funded 60% by property taxes and 13% by net sales taxes and not the Water & Sewer Fund that is run like a business enterprise funded by user fees.

A discussion of this budget is complicated by comparing the FY20-21 “COVID” budget to FY21-22 “normal” budget. Fortunately, actual net sales taxes and occupancy taxes far exceed the conservative estimates used for the FY20-21 COVID budget, thereby avoiding dipping into reserves to balance the budget for last fiscal year. Our property tax base of $1.142 billion provided a stable revenue source during the volatile COVID period. See Page 30.

The easiest way to understand the budget and how it impacts property taxes for homeowners is to talk in terms of the property tax rate in “Cents” per $100 of valuation. The propose budget is based the math that 1 Cent equals $120 thousand of revenue for the General Fund. The property tax rate for last year was 39 Cents and the proposed property tax rate for this year is 43 Cents or a 10% increase of 4 Cents. For example, a home valued at $500,000 would pay property taxes of $1,950 in 2020 and $2,150 in 2021. See Page 16.

For FY21-22, Caldwell County revalued all real property that represents about 9% of our $1.175 billion tax base or $107 million The budget does not include a roll back for the 5.8% increase in property values in Caldwell County. See Pages 5 and 30.

The proposed property tax increase is $593 thousand of which $480 thousand is due to a 4 Cents increase in tax rate and the remainder is due to growth in tax base and Caldwell County revaluation.

Watauga County will revalue all real property in Blowing Rock for next fiscal year. The increase is expected to be fairly substantial and the Town will present a roll-back property tax rate for the next year’s budget for comparison.

The Key Drivers for expenditure increases in the General Fund Budget follow:

Compensation – 5.4 Cents
321 Landmark Landscaping Contract – 1.1 Cents
Debt Service of $3.5 million GO Bond – 2.5 Cents
Debt Service for DOT Land on 321 – .4 Cents
Total – 9.5 Cents

The increases are offset by other revenue increases of 5.5 Cents due to a 3.6 Cents increase in net sales taxes, 1 Cent increase in TDA occupancy taxes and .8 Cents from other revenue sources.

A description of Key Drivers follows:

The compensation package for all employees is about 70% base pay and 30% for benefits – 10% for insurance and 20% for retirement. The key goal in this budget is to raise the minimum base pay for 3 levels of employees and adjust the pay ranges for the remaining 12 levels of employees. The average base pay for the 59 General Fund employees will increase from $44.2 thousand to $53.1 thousand. The increase for General Fund employees is $650 thousand per year.

The Town committed to take over a Landmark level landscaping from the DOT after completion of Highway 321 which will start this fiscal year. The goal is to extend the special landscaping look that we enjoy in downtown, so 321 is not just an ugly by-pass. The Town Manager evaluated a contract solution versus permanent staff. The scope is significant with thousands of trees and shrubs and miles of medians and banks. The contract solution allows the Town to avoid adding permanent employees and purchasing a significant about of equipment. A recurring allocation of funds from the TDA Occupancy Taxes will offset 50% of the cost, thereby sharing the total cost of $264 thousand.

The Town issued a third General Obligation Bond of $3.5 million in FY20-21 which increases debt service by $305 thousand per year.
The Town purchased a DOT property at the corner of North Main Street and Highway 321 for $442 thousand adding $48 thousand of debt service per year.

We hope that this analysis will help you understand the Town’s General Fund Budget and the key drivers that are impacting the proposed FY21-22 budget.

As we look to future budgets and the timing of the Sustainable Tourism Study scheduled for this summer, we need to begin a discussion of additional sources of funding to cover the increasing costs of managing tourism impacts on the Town. The allocation formula for the TDA occupancy tax was adopted almost 20 years ago in 2003 when the primary goal was to attract tourists compared to the current challenge of managing tourists. Demands on the General Fund Budget is not matching up with business and tourism sources of funding. Examples of increasing costs include operating and infrastructure costs like new bathrooms, park improvements, land acquisition for parking, bathroom attendants, and additional trash management, parking enforcement, additional police, 321 landscaping and three new crosswalks.

You can send comments or questions to the Town Council in advance, attend the Town Council meeting or speak at the Public Hearing scheduled for 6 pm on June 8th.

Regards,

Tim Gupton
President

Memorial Day Event – Saturday – American Legion at 11 AM

May 25, 2021

Dear Blowing Rock Homeowners,

Dr. Anthony (Tony) Zeiss will be the guest speaker at the American Legion’s annual Memorial Day Program in Blowing Rock’s Memorial Park on Saturday May 29, 2021, at 11:00 A.M. The community is invited to attend.

Dr. Zeiss, one of the nation’s most outstanding educators, was the President of Charlotte’s Central Piedmont Community College for 23 years until his retirement in 2016.

During his tenure Dr. Zeiss built CPCC from one campus to six campuses serving 70,000 students per year. Under his leadership CPCC became the nation’s most outstanding educational institution for workplace development. This focus on workplace development enabled Charlotte to attract many international and national firms to locate facilities in the area. This was a major boost to Charlotte and North Carolina’s outstanding economic growth during Dr. Zeiss’ Presidency. Dr. Zeiss’ advice is often sought by national leaders on educational issues.

After retirement from CPCC Dr. Zeiss became the first Executive Director of the Museum of the Bible in Washington, D.C. He successfully led the opening of that outstanding attraction. Returning to North Carolina Dr. Zeiss became the first Executive Director of a special training program for corporate Chief Executive Officers sponsored by Charlotte’s Coca Cola Consolidated.

Along the way Dr. Zeiss has written 20 books on education, leadership, and motivation. He is recognized as one of North Carolina’s most outstanding speakers having addressed numerous groups and organizations. He has led a major effort to recognize notable individuals and events in North Carolina history. He has served on numerous boards of corporations and organizations.

He and his wife Beth have retired but they remain very active in leadership of various organizations. They enjoy spending most of their time now at their Blowing Rock area home.

Blowing Rock Civic Association is pleased to sponsor the event to honor those who have served our country.

Green Hill Traffic Study – Share your Observations

May 19, 2021

Dear Blowing Rock Homeowners,

Our Town Manager, Shane Fox, announced that the Green Hill Traffic Study Survey and Interactive Input Map has been activated.

If you live in a Green Hill neighborhood or drive Green Hill Road, you should take advantage of this opportunity to share your observations. The Town Council recognized and authorized this study to gather input from citizens who have expressed concerns about safety on Green Hill Road.

The Survey and Map will be active for the next 30 days to gather input from our citizens. Please copy and paste these links to your browser.

Public Survey: https://arcg.is/1n8Lm1

Interactive Map: https://rka-inc.maps.arcgis.com/apps/webappviewer/index.html?id=c4d9c57e08bb4252b3afd2b042cf3116

The survey is open and will close midnight on June 16.

The interactive map will always load, but we have restricted the time for when results can be entered.

Currently, if you go to the interactive map, you can see the base map and project study area, but you cannot add any points. The interactive map will allow comments to be placed during the same time frame as the survey.

Ramey Kemp will be onsite the end of June and first of July to gather data in the field.

If you wish to share your observations with Blowing Rock Civic Association, please email us at info@brcvic.org.

Town Government Leader Interviews – Importance of Seasonal Residents

May 17, 2021

Dear Blowing Rock Homeowners,

The BRCA is pleased to present discussions with Blowing Rock neighbors who are serving our community in town government leadership.

Please join us on our BRCA website to become better acquainted with these dedicated folks and their views on major issues impacting our historic village.

BRCA Board member and Blowing Rock resident Jean Kitchin, an experienced community leader and broadcaster, talks with Town Manager Shane Fox, Council Members David Harwood and Virginia Powell, and Blowing Rock Mayor Charlie Sellers. We wish to thank these leaders who agreed to an interview to share their views about our future.

We hope you enjoyed the first three videos to learn about the Town’s governing structure and their personal stories about why our elected leaders chose to run for office, the positive aspects of Blowing Rock and the major needs of Blowing Rock.

This week we are rolling out the fourth of five videos talking about the The Importance of Seasonal Residents The final interview will be released next week:

Introduction of Blowing Rock Town Officials
Discussion of Positive Aspects of Blowing Rock
Discussion of Major Needs in Blowing Rock
Discussion of the Importance of Seasonal Residents
Discussion of the Issues resulting from the Rising Numbers of Tourists

You can view the video interviews on our website at
https://www.brcivic.org/videos

The videos were produced and funded by the Blowing Rock Civic Association with a matching grant from the Mariam & Robert Hayes Charitable Trust.

Pine Street Townhouse Project – Density, Parking & Height?

May 6, 2021

Dear Mayor Sellers, Council Members Harwood, Matheson, Powell, Sweeting & Yount,

In advance of the next council meeting, we wanted to share the key points I plan to raise about your approval of the Pine Street project. My goal in sending now is to give you some time to evaluate the points in advance of the meeting.

I will be speaking as the president of the Civic Association. As you know, the Civic Association does not endorse or oppose projects. Our goal is to make sure all of the facts are on the table for you and the community to make an informed decision.

This project like the projects presented by developers over the last few years, points out the need to update our land use code for the downtown business districts to meet current market realities and to reconcile the code with the Comprehensive Plan. While each project technically stands alone, each sets precedents for the next project until the code is updated.

We hope that you recognize this need and will approve a Downtown Vision process similar to the Valley Boulevard Vision process to achieve these goals and to clean-up certain ordinances as needed. We should not delay.

Following are the project variances for you to consider:

1. Density – 16-12.2
a. The developer has asked for a variance to build 8 STR townhouses on .39 of an acre which is the equivalent of 20 units per acre.
b. The code allows 5 units per acre and the Comprehensive Plan suggests at least 8 per acre.
c. A variance of this magnitude is a significant deviation from any expectation set by the code or Comprehensive Plan.
d. This variance is in the staff report and was approved by the Planning Board.
2. Parking – 16-20-3- 1.310 & 1.330
a. STR units place an especially high demand on parking. The code requires on-site parking to match the use and to avoid placing additional burdens on public parking spaces.
b. The developer stated that the number of units proposed were based on the limitations of the parking calculation based on 6 units with 1 bedroom and 2 units with 2 bedrooms.
c. The developer’s calculation hinges on the number of bedrooms plus 1 space for each set of 4 units – 1.5 spaces for 1 bedroom, 2 spaces for 2 bedrooms and 2.5 spaces for 3 bedrooms.
d. To achieve this assertion, the floorplans should be evaluated since the only difference in the floorplans is to move a closet in the second bedroom to the adjacent front bedroom and labeling the room as an office. All units in substance have at least two rooms and baths that will be used as bedrooms and 6 of the units have an additional bonus room that could be used as a bedroom and a screened in porch.
e. The actual number of spaces required would be 18 spaces for 8 units with 2 bedrooms or 21 spaces for 3 bedrooms. Ignoring the common sense use of these rooms is a “Form over Substance” argument by the developer. To solve this problem the density should be reduce to insure that the occupants of the STR units will not place an additional burden on the scare public parking spaces.
f. Please review the floorplans in the attached Planning Board package. This variance is not in the staff report, was not discussed in the Planning Board meeting and was not cited as a variance in the Planning Board approval. Attached and below is a calculation table.
3. Height – 16-1-6.5.4
a. The code limits the height of a building based on the setback from the primary entrance. The limit reads as a limit for each building.
b. A building with a 15 foot setback has a 30 feet height limit.
c. This building height actually varies from 28 feet (1 unit on each end), then 34 feet ( 2 units on either side of the 2 center units) and then 40 feet (2 units in the center).
d. Since there is only one building to be sold in 8 fee simple units, it appears that the staff made an interpretation that the setback and height restrictions can vary for one building.
e. Please review the building elevation in the attached Planning Board package. This potential variance is not in the staff report and was cited not as a variance in the Planning Board approval.

We believe that the Council should vote to :

1. Ask the developer to re-consider the proposal or grant variances for Density and Parking
2. Clarify if the variable height restrictions for one building meets code that allows for a maximum height of 40 feet for buildings with a 65 foot setback.

Respectfully,

Tim C. Gupton

Tim C. Gupton
President
Blowing Rock Civic Association, Inc.
235 Meadow Lane
Blowing Rock, NC
28605

CIVIC ASSOCIATION INTERVIEWS TOWN GOVERNMENT LEADERS

May 3, 2021

Dear Blowing Rock Homeowners,

The BRCA is pleased to present discussions with Blowing Rock neighbors who are serving our community in town government leadership.

Please join us on our BRCA website to become better acquainted with these dedicated folks and their views on major issues impacting our historic village.

BRCA Board member and Blowing Rock resident Jean Kitchin, an experienced community leader and broadcaster, talks with Town Manager Shane Fox, Council Members David Harwood and Virginia Powell, and Blowing Rock Mayor Charlie Sellers. We wish to thank these leaders who agreed to an interview to share their views about our future.

We hope you enjoyed the first video to learn about the Town’s governing structure and the personal stories of why our elected leaders chose to run for office. All commented on their love of Blowing Rock for different reasons.

This week we are rolling out the second of five videos talking about the Positive Aspects of Blowing Rock. The others will be rolled out over the coming weeks:

Introduction of Blowing Rock Town Officials
Discussion of Positive Aspects of Blowing Rock
Discussion of Major Needs in Blowing Rock
Discussion of the Importance of Seasonal Residents
Discussion of the Issues resulting from the Rising Numbers of Tourists

You can view the first video interviews on our website at
https://www.brcivic.org/videos

The video was produced and funded by the Blowing Rock Civic Association with a matching grant from the Mariam & Robert Hayes Charitable Trust.

2020 Retreat Priorities – Source Of Funding

February 21, 2021

Dear Blowing Rock Homeowners

To understand the Town budget, you need to understand the sources available to the Town Council to fund the general operating budget. The devil is in the details!

Let’s look at the “Numbers”.

Funding Sources
Property Taxes – 63%
Consumer Sales taxes – 14%
User Taxes collected by NC – 6%
Tourism Occupancy Tax – 6%
Other – 11%
Property Taxes Base
Residential Home Owners- 85%
Commercial Property Owners – 15%
Downtown Property Owners (TC&CB) – 9%

Population Data
Census – 1,400 – 33%
Seasonal – 2,900 – 67%
Registered Voters – 1,250 – 29%

The W&S operating budget is funded separately from W&S fees – 80% residential and 20% commercial customers. The W&S budget is not part of this discussion.

The Town does a great job of preparing and documenting the budget. You can read the details on the Town’s website https://www.townofblowingrocknc.gov/residents/town-budget/fy-2019-2020-proposed-budget.

We used the FY19-20 Budget since the FY20-21 budget was significantly affected by the risks of reductions in revenue due to the pandemic. Actual results have positively exceeded the conservative estimates.

Funding sources that are available to the Town Council is less that the gross general operating budget because gross revenue includes funding that is not controlled by the Town Council . For FY19-20 the reduction was 17% of the gross operating budget – 47% of sales tax revenue returned to Watauga County by agreement, 67% of occupancy tax retained and controlled by the Tourism Development Authority to promote tourism, Caldwell County reimbursement the Town for Fire & Rescue services and fund balance reserves and debt proceeds counted as revenue. Our calculations reflect these reductions to match the economics to the decisions available to the Town Council.

The Town maintains a Fund Balance Reserve “Rainy-Day Fund” of at least 50% of the general operating budget. Excess funds above the target is used to supplement the general operating budget as needed. This factor positively affects our bond rating.

Property taxes provide 63% of the general operating budget available to the Town Council. Our property tax rate is $0.39 per $100 of our property tax valuation for FY21-20. One cent of property taxes produces $117K of revenue. Our average property valuation is over $900K because the calculation is based on census data. These factors positively affects our bond rating.

The Blowing Rock property tax base is approximately $1.1B – 85% residential property and 15% commercial property. As noted in our last posting, the Downtown (Town Center & Central Business District) tax base is relatively low compared to the total property tax base.

Sales taxes and occupancy taxes are paid by consumers not business owners. The Town relies heavily on homeowners to fund both the general operating and W&S budgets. Sales taxes are based on sales in the County, not the Town, and are allocated to the Town by the County based on an valorem formula reduced by an interlocal agreement. The Town does benefit from a 33% allocation of occupancy taxes to fund infrastructure investments related to tourism.

The challenge for the Town Council is to maintain a fair balance between cost of services to property owners versus tourists. The costs of supporting our tourists particularly in Downtown has been growing as have sales taxes and occupancy taxes, so we recommend that the Town Manager and Town Council objectively match tourism expenses to funding sources. The need for adequate and clean bathrooms, more frequent trash pick-ups, parking enforcement, event management, wayfinding, enhanced tourist park infrastructure to attract tourists and cross walks are examples of costs driven by the impact on the Town to attract and host tourists. The upcoming budget process using 2021 retreat priority to set up a Special Downtown Tax District are opportunities to address the fairness challenge and reset the decision framework.

CIVIC ASSOCIATION INTERVIEWS TOWN GOVERNMENT LEADERS

April 26, 2021

Dear Blowing Rock Homeowners,

The BRCA is pleased to present discussions with Blowing Rock neighbors who are serving our community in town government leadership.

Please join us on our BRCA website to become better acquainted with these dedicated folks and their views on major issues impacting our historic village.

BRCA Board member and Blowing Rock resident Jean Kitchin, an experienced community leader and broadcaster, talks with Town Manager Shane Fox, Council Members David Harwood and Virginia Powell, and Blowing Rock Mayor Charlie Sellers. We wish to thank these leaders who agreed to an interview to share their views about our future.

We will roll out these five videos individually over the coming weeks:

1. Introduction of Blowing Rock Town Officials
2. Discussion of Positive Aspects of Blowing Rock
3. Discussion of Major Needs in Blowing Rock
4. Discussion of the Importance of Seasonal Residents
5. Discussion of the Issues resulting from the Rising Numbers of Tourists

You can view the first video interviews on our website at
https://www.brcivic.org/videos

The video was produced and funded by the Blowing Rock Civic Association with a matching grant from the Mariam & Robert Hayes Charitable Trust.

Sweeping Bill impacting Single-Family Neighborhoods

March 27, 2021

Dear Blowing Rock Homeowners

ALERT – THIS NC BILL PROPOSES SWEEPING CHANGES FOR RESIDENTIAL ZONING!

Please see below for an NCLM article on a proposed joint NC House and Senate Bill from late Wednesday. This will severely limit our ability to control residential zoning.

Please feel free to reach out our local elected NC legislators – Rep. Pickett and Sen. Ballard.

Ballardla@ncleg.net
Ray.Pickett@ncleg.gov

You can also contact Governor Cooper’s office using the following link. https://governor.nc.gov/contact/contact-governor-cooper

In a sweeping proposal that would implement a de facto statewide residential zoning code, legislators this week proposed eliminating single family-only zoning along with a dozen other land use changes. HB 401/SB 349 Increase Housing Opportunities was introduced Wednesday in both chambers with bipartisan support and the backing of the state’s homebuilding interests.

The bill seeks to allow duplexes, triplexes, quadplexes and townhomes in all zones that also include single-family homes, with a few exceptions for places such as registered historic districts.

The bill would also mandate that local governments allow at least one accessory dwelling unit (ADU) per lot in every single-family residential zone, giving all single-family landowners the right to build ADUs, if they conformed with established property line setbacks.

In other changes to the state’s zoning laws, the proposal would freeze zoning codes in place with respect to downzoning any property from a high-intensity use to a lesser-intense use, unless there was a change of circumstances related to public health, safety, and welfare.

It also would severely restrict the use of conditional zoning, a tool used to tailor development projects to fit a community’s specific needs. The bill then makes over a dozen changes that would disfavor local government interests when litigating land use matters.

We need to learn more and will update you as we can.

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