Unicoi board authorizes $900,000 capital outlay financing

Sue Guinn Legg • Feb 20, 2017 at 10:08 PM

UNICOI - The Unicoi Board of Mayor and Aldermen on Monday authorized a more than $900,000 in capital outlay note for town projects after a long and sometimes contentious debate of a financing resolution Alderwoman Kathy Bullen said opens the door for a town property tax.

Approval of the resolution came in a split vote of three to two with Bullen and Alderman Roger Cooper opposed. Dissatisfaction with the resolution was also expressed by several of the more than 50 people who packed the small town hall building beyond capacity to witness its consideration by the board.

Town recorder Mike Housewright began the discussion with a disclaimer of what he described as “a lot of bad information out there” regarding the capital outlay note.

Housewright’s opening statement was an apparent reference to a social media post in which Bullen set out her concerns with the resolution and encouraged Unicoi residents to “gather your concerned neighbors and friends and please be in attendance at the meeting Monday night.”

“Just as I said in my campaign for mayor, this town and (Mayor) Johnny Lynch are concerned about Johnny Lynch, not the citizens,” Bullen wrote in the social media post shared with the Facebook chat group, The Erwin Watchhawg. “Please don't be fooled. We will be paying the price for this for at least four more years. But let's not pay the price with a property tax that could extend many years beyond what will hopefully be his last term as mayor.”

Concerns expressed by Bullen on social media and again at Monday’s meeting included language in the resolution that states the town will level a property tax if it is unable to repay the capital outlay note otherwise.

Town Attorney Lois Shults-Davis said the language is a part of a “Full Faith Credit Pledge” that is standard in municipal financing agreements and will be looked to by lending institutions to ensure the town’s ability to repay the loan.

Shults-Davis noted that the same pledge was included in a bond issue authorized by the board in 2005 to build a sewer system and that no property tax was ever been implemented or proposed for the repayment of the bonds. “The town has been in existence for 20 years without that and I don’t know anyone in town who proposes a property tax,” Shults-Davis said. “What we are doing is paying our bills with what we have coming in.”

Lynch noted the town has approximately $4 million in assets that, if needed, could be sold to meet the debt without the implementing a property tax.

In her social media post and again at Monday’s meeting, Bullen also questioned the resolution’s failure to specify what the capital outlay note will be used for.

Housewright said $450,000 of the funding will be used for the town’s new Mountain Harvest Kitchen, a farm-to-table agri-business incubator being built primarily through grant funding at a total estimated cost of $3 million. About $50,000 will be used for the town’s new snow removal truck and the remainder for town projects over the next several years, Housewright said.

He said none of the funding is designated for the Tanasi Arts Center, a free-standing building for a gallery of local art work currently housed in the town’s visitors center that has previously been discussed by the board and was referenced by Bullen in her social media post.

Bullen wrote in the post, “The mayor is opening the door to a property tax. Why? Because he is dead set on the Mountain Harvest Kitchen and still dreaming of the Tanasi Arts Center.”

“This is reaching for the stars and holding the citizens of the Town of Unicoi hostage in order for the mayor to pursue his personal dreams and agendas.

“To expect the citizens of the Town of Unicoi to pay off his unrealistic plans is ludicrous. The vast majority of citizens won't be using or participating in either of his projects,” Bullen wrote on social media.

At Monday’s meeting Bullen said, “It’s an incredible amount of money and too vague to be committed...It’s holding the the citizens of this town hostage to pay something that doesn’t have commitment...It opens a door to a property tax.”

Cooper said his main problem was the resolution was a concluding clause that states the resolution will be honored in disregard to any conflicting resolutions or other actions taken by the board.

“Here we are saying if we don’t get the money coming in, we’ll have to sell property or (implement) a property tax

“Anything in our codes or anything we’ve approved in conflict to the resolution,” is null, Cooper said.

Cooper also said the resolution’s description of what the funds will be used for should be more clear. “It would be so much easier for everyone’s sake to be a little more clear so everyone can see where it’s going,” he said.

Finally Cooper noted the town has existing debt of about $2 million and can expect to be approached for significant funding to help establish a county operated ambulance service.

Housewright said while the town could pay for the community kitchen, the snow removal truck and other capital projects from its fund balance it is not good business management to deplete its reserve funding for projects that will be used for many years.

In other business, the board unanimously approved a resolution to commit nearly $134,000 in match funding for a $450,000 coal-impacted communities grant awarded to the town by the Appalachian Regional Commission for equipment and entrepreneurial programming for Mountain Harvest Kitchen.

Email Sue Guinn Legg at slegg@johnsoncitypress.com. Follow her on Twitter @sueleggjcpress. Like her on Facebook at facebook.com/sueleggjcpress.