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2022-02-24 Special Meeting NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 35 SPECIAL MEETING, FEBRUARY 24, 2022 PAGE 344 ASSEMBLY The New Hanover County Board of Commissioners met for a Joint Special Meeting with the Wilmington City Council on Thursday, February 24, 2022, at 9:08 a.m. at the Wilmington Convention Center, 10 Convention Center Dr., Wilmington, North Carolina. Members present: Chair Julia Olson-Boseman; Vice-Chair Deb Hays; Commissioner Jonathan Barfield, Jr.; Commissioner Bill Rivenbark; and Commissioner Rob Zapple. Staff present: County Manager Chris Coudriet; County Attorney Wanda Copley; and Clerk to the Board Kymberleigh G. Crowell. City of Wilmington Council present: Mayor Bill Saffo; Mayor Pro-Tem Margaret Haynes; Councilmembers Neal Anderson; Clifford Barnett, Sr.; Kevin O’Grady; Charlie Rivenbark; and Kevin Spears (remote). City of Wilmington staff present: City Manager Tony Caudle; City Attorney John Joye; and City Clerk Penny Spicer-Sidbury. Chair Olson-Boseman and Mayor Saffo called their respective Boards to order for the Joint Special Meeting reporting that the purpose of the meeting is to discuss priorities and possible partnerships to include the possibility of a public transportation, multi-modal quarter-cent sales tax ballot referendum in November 2022, and funding strategies to address maintaining existing inventory and growing inventory aimed at workforce housing. DISCUSSION AND DECISION ABOUT FUNDING TO ADDRESS AFFORDABLE HOUSING Chair Olson-Boseman stated that is clear that affordable housing is a priority for all. Both elected bodies want families to have a safe, affordable home to lay their heads at night, for children to have the stability that comes with affordable housing, and for every resident to be able to live in the same county where they work. However, she does not feel that a county-wide housing bond is the route the County needs to take at this time. She knows that many other cities in North Carolina have passed housing bonds, but the only county to pass one is Orange County, and that was for $5 million in 2016. The circumstances for Orange County are different because it receives HOME funds and had a structure already at work and in place for housing programs in advance of the bond. There is no community appetite here for higher property taxes to pay for affordable housing, which was clear in the recent polling and the UNC-Greensboro survey. She believes that are ways the County and City can work together, along with other private entities that have expressed interest in being part of the solution, to help fund needed initiatives without asking the property owners to shoulder that burden through a tax increase. The County already has been, and will continue to, focus on affordable and workforce housing. In just the past few years, the County has invested approximately $35 million in housing with the help of federal and American Rescue Plan (ARP) funds. That includes providing the infrastructure for the creation of affordable housing, the nonprofit programs funded each year in the County budget, or the housing programs it has created that have aided residents with rent, gap financing, and mortgage assistance. The County has also donated 11 properties to Habitat for Humanity for the creation of affordable homes (including 14 acres of land in Wrightsboro). She knows the City has also committed funding to the issue and has a successful housing program in place that does a lot of good for city residents. All of that is significant, but the Board also recognizes that more must be done, and there needs to be a specific strategy to address the affordable housing issues in this community. Commissioner Zapple stated that he would like to bring forward during this meeting a community plan that is supported by a majority of the County Commissioners, County Manager Coudriet and key administrative and financial staff for the County to pledge existing revenues at a minimum of $3 million a year for the next five years for a total commitment of $15 million. The funds will be dedicated to programs and initiatives that will address solutions to affordable housing in the County. The overwhelming need for action on this issue is clear and the County is ready to step up to supply these dedicated funds on top of its ongoing commitment to a variety of programs, including $28 million for emergency rental assistance and $3 million for mortgage assistance. The County also has a clear commitment to hire new personnel for the creation of a new department solely focused on affordable housing to identify evidence-based programs, provide financial accountability, and report outcomes. The $50 million that the County is pledging would be increased significantly with a similar commitment from the City and financial commitments from the private sector. The revenue that the County is pledging is money that is available now to fund direct action and will be fully available on July 1, 2022 with the adoption of the County budget. The community, as a whole, cannot continue to kick the can down the road. He then asked County Manager Coudriet to provide more details about the community plan. County Manager Coudriet stated it is important to note that from a County staff perspective, it has been listening to the Board's discussions, having discussions with the Board, with the private sector, and other philanthropic supporters in the community. He would not suggest that what Senior Long Range Planner Rachel LaCoe will be presenting is in fact a baked plan. It is in response to the discussions that the Board has had, and staff has had as well as being informed by the Workforce Housing Advisory Committee and the program that the committee would recommend if there were $50 million available over the course of time. The $15 million, at a minimum to achieve $50 million or more, can be leveraged in a more compressed time schedule. He then asked Ms. LaCoe to outline how $15 million would be spent and what $3 million in action would look like just with County proceeds which does not include the leverage or other appropriations that are made. Ms. LaCoe presented the following on the community plan: NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 35 SPECIAL MEETING, FEBRUARY 24, 2022 PAGE 345  Original Housing Framework:  Workforce Housing Service Program (HSP):  Housing Division staff will advertise a request for proposals (RFP) in Q1 and Q3 to solicit project applications from qualified entities and organizations to administer and deliver HSP supported affordable housing projects including Affordable Housing Development Program; Gap Financing Program; Infrastructure Financing Program; Emergency Repair Program; Owner-Occupied Rehabilitation Program; Down Payment Assistance Program; Tenant-Based Rental Assistance Program.  Increase Stock:  Affordable Housing Development: Provide targeted gap financing or infrastructure investments to directly support the development of affordable units (such as tax credit projects or permanent supportive housing). This type of fund would be able to support housing developments for seniors, working families, and disabled persons. It would allow the county to respond to opportunities initiated by the private sector and would provide a flexible source to respond to changing market conditions. Estimated $15,000 per unit.  Improve Stock:  NOAH Preservation: This strategy type would assist with the preservation and retention of Naturally Occurring Affordable Housing (NOAH). Activities include both the acquisition and rehabilitation of existing units to maintain affordability for those units. Housing units could then be sold, with deed restrictions in place to ensure owner-occupancy or rented at an affordable rent under the management of the private partner. The partnership agreement could be structured as a short-term loan or allow the partner to continue revolving the proceeds into other projects over the term of the agreement. Revenue from sales could be used to seed a trust fund to be used for other affordable housing initiatives. Rental proceeds could also be used as a recurring funding source (with $500 net monthly rents resulting in $6,000 per unit annually). Estimated $200,000 per unit, including rehabilitation costs.  Improve Stock, Increase Access:  Emergency Repair Program/Owner-Occupied Rehabilitation Program: This program would assist with minor repairs, such as a new roof, air conditioner repair, paint, or aging in place modifications. Funds for repairs can also be made available to non-profits providing these services. Estimated $10,000 per unit for emergency/minor repairs; $50,000 - $100,000 for major rehabilitation.  Increase Access:  Down Payment Assistance Program: This program funds down payment assistance for first- time homeowners along with financial and homeownership education for program participants. This funding could be designed as a grant or 0% interest loan payable upon transfer of the property. Estimated $25,000 per unit.  Tenant-Based Rental Assistance Program: Rental subsidy to help individual households afford housing costs such as rent and security deposits. Households with a tenant-based voucher choose and lease safe, decent, and affordable privately-owned rental housing. The county currently implements the GAP Rental Assistance Pilot Program targeted for moderate income households. Estimated $3,600 per unit for workforce housing.  Program Roll-Out: Commissioner Barfield expressed concerns about the ability to increase housing stock where there is no stock. In response to questions, Ms. LaCoe stated as part of the process there is the potential for an organization to acquire properties to supply more housing stock. Under the new rental acquisition preservation build program would NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 35 SPECIAL MEETING, FEBRUARY 24, 2022 PAGE 346 be where an organization would be acquiring properties. If the organization only wanted to apply for the RFP, that would be one of the right programs that would be in the process. There being no inventory is why one of the highest priorities is increasing the stock. With some of the RFPs, the desire may be to focus on that first as far as keeping prices low and would be the opportunity afforded with the program. There are a lot of models to keep housing affordable whether it is the land trust maintaining the land, or just keeping deed restrictions to keep it owner occupied. There is more opportunity than for just being a rental. While the housing market is expensive and not able to be controlled, opportunities can be provided to try to help bridge the gap. However, it is a lot easier to look at rentals with some of the long-term housing tax credit projects. Again, staff will be looking through the proposals to see the best way organizations can offer housing. Also, one of the potentials of a public-private partnership would be if someone came forward with a mixed use-mixed income development and was able to put together a proposal that would have this kind of community that they could build. She understands there are a lot of people who have stated there is no way to build out of this issue, and she thinks that is true, but she also thinks there is a need to look at how to increase the stock across the board at all price points to ensure that people who could qualify for higher priced houses have those available so they do not take up the lower price inventory. The programs will not be held in-house for that type of process and that is why the RFP is being put out to see what the market can provide. Currently, she does not have an answer on how to increase housing stock. In response to additional questions, Ms. LaCoe confirmed that there are a host of opportunities such as, but not limited to, rehab or infill development or renovating a hotel to make one-bedroom apartments affordable for people. The rental assistance program could provide a subsidy of $300 per month to help offset an $1,800 per month rental which would be a positive impact and make a difference for people. Commissioner Zapple thanked Ms. LaCoe for the presentation and stated that he thinks the major and minor rehab portions of the plan represent the lowest number of new units being brought online and are simply not available. He has seen less than 100 to 150 units maximum per year. He agrees that the core issue is the creation of new units, and it is going to boil down to some sort of incentive that will attract the building community, make that community realize that they can be a major player, and can make money along with it. That will be when there is a sustainable program. Traction will be gained on the problem once the incentive amount is identified. Mayor Saffo stated that most know the City has been in the affordable housing business since 2001. To date, the City has spent $42 million, averaging $2 million a year from the City's taxpayers, to help in affordable housing, which has translated into about 713 affordable housing units that have been purchased. The City has also leveraged an additional $9 million for several other programs, including rental assistance. He thinks the City has spent about $3.4 million in rental assistance, which translates into about 538 affordable rental units. The City is leveraging the tax dollars. He hopes the private sector will step up to help. Under the City’s new land development code, an additional 57 units have been added since October 2021 due to giving bonuses for people that are bringing affordable housing units online. The City is at an additional $2 million and he thinks from the private sector that Cape Fear Collective is at $10.2 million, in addition to other organizations that are within the community. He hopes other organizations would be approached to discuss the possibility of matching and putting additional money forward because between the City and County it is $5 million a year in affordable housing units. Additionally, one of the things that has not been clear to him is that there are substantial amounts of property in the County’s unincorporated areas. There is some concept that the local governments are going to go out there, buy the property, and then develop it into a subdivision like a developer would do. That is not in the City and County’s forte, but what can be done is to leverage the money and insist on affordable units being included. For example, if a developer wants to come forward to build a subdivision and wants to incorporate 20% or 30% of affordable units in the subdivision, the City and County by pooling funds can incentivize by taking part in utilities, which helps reduce the cost of the lot which is where the dramatic increase in cost is coming from housing, in addition to inflation. He thinks inflation will be adjusted as the Federal Reserve starts adjusting its rates this year. However, the cost of that lot continues to increase each year because of the limited availability. With being the second smallest county in the state, there is only so much land and the landowners will decide, or dictate in many cases, whether they want affordable units included as part of the developments. He does see a large contingent of tax credit developers coming into the area because they have heard this discussion and how important this issue is to both elected bodies. He expressed appreciation for the County’s effort as it helps both entities use the funds and thinks things are starting to move in the right direction. In response to questions, County Manager Coudriet stated that the $15 million the County is pledging is coming from the existing growth in its revenues on an annual basis. What staff has talked about is where would those sources be. He thinks staff needs to look at a variety of revenues to give the Board maximum flexibility to carry out this, plus its other priorities. Some of those revenues include organic growth in the property tax and top line growth on sales tax. The Board has also given staff the permission to look at interest revenues from the County’s escrows as well as consideration of principal. He does not know if from a staff perspective, whether staff would recommend any one source of revenue at this point. Staff does believe that $3 million a year, at a minimum, is attainable for the next five years. It will come out of the general fund but will come from growth in the County’s revenue sources and/or interest out of the escrows that came about as part of the sale of New Hanover Regional Medical Center in the amount of $350 million. Those escrows are going to generate a defined amount of interest on an annual basis and the Board has been willing to look at using interest from that or tapping into the principle of either the $300 million portion or the $50 million portion for the right projects. Chair Olson-Boseman stated that what is being talked about is leveraging the dollars and staff is talking with the New Hanover Community Endowment (NHCE) about its interest in affordable housing as NHCE has indicated NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 35 SPECIAL MEETING, FEBRUARY 24, 2022 PAGE 347 that as one of its top priorities. Staff is also speaking with various private builders to try leverage it and make it more. County Manager Coudriet added for further clarification that with the sale of the hospital the NHCE was created and controls the $1.25 billion. As part of the transaction, $350 million was also put into two escrows that are owned and controlled by the County. The County has full discretion with a supermajority of the Board to control how those county-specific owned revenues are used. The $350 million will generate some amount of interest annually and the Board is willing to look at some of the principal of that, which is unrelated to the NHCE itself. In response to questions, County Manager Coudriet stated the Board cannot speak for the NHCE as to why it is or is not willing to contribute the balance needed to reach $50 million. However, the NHCE has expressed interest in the topic. County staff has had the discussions but has also met with the private sector about their interest to know if there is $3 million per year, how do they take that and turn it into added capacity with low-income tax credits or if they take it $15,000 per unit and how does that drive down overall costs. Councilmember Rivenbark stated that he understood Commissioner Zapple to say in addition to the $15 million the City would be encouraged to make a life match. If that is the case, then the City residents are paying twice when considering that a sizable portion of the money is coming out the general fund, which the City residents also pay into. There are still people in this County that do not fully understand that the City of Wilmington is within New Hanover County. He thinks it is inordinately unfair. The City is the one that people really look to for affordable housing because most of the need is within the City limits. While he understands it, the issue is spreading out outside the corporate limits and into the unincorporated areas. He expects the County to do its fair share and the City will do its fair share but not a penny more as far as he is concerned. County Manager Coudriet stated that he understood and did not interpret what Commissioner Zapple stated as an ask of the City to do more than it is already doing which is $2 million in leveraging its Community Development Block Grant. Councilmember Rivenbark further stated that the group is back to square one. He is disappointed that this seems so complicated and all that seems to have been done is to look at what others are doing. He wants both groups to set the precedent to lead the way and for everyone look to this community to see what has been done to address the issue. Commissioner Zapple stated that he disagreed with Councilmember Rivenbark as the County is stepping up and committing to $15 million over five years. This is a pledge of revenue as described by County Manager Coudriet of where it will be coming from and it is not hope, it is real. It is money that is here now and that is a game changer and puts the County squarely into it. The thought of the City jumping in was merely a statement that was there, and he thinks it is wonderful that the City is putting in $2 million. The issue is a City and County problem that both will solve together. In addition to the $15 million, the County is also committing to creating a department focused on affordable housing. There is no clear solution to this issue. There are multiple ideas and initiatives out there that over a five-year period with the work of all involved information will be compiled as well as the ability to direct the funds to where they really need to be and center the efforts around how to create new units. Councilmember Rivenbark stated that the ad hoc committee appointed by both groups, spent a great deal of time and effort to return with what he felt was a very comprehensive report. That report will collect dust like all the other reports have over the years. Commissioner Zapple responded that he thinks the work the ad hoc committee did was incredibly important that brought together a wealth of information that help educate him and others. However, there was still no clear solution or path that came out of that committee. There were recommendations and he thinks that is where the County is moving forward from by making the pledge of revenues. Mayor Pro-Tem Haynes stated that she is pleased the County is making this commitment. However, over the last 20 years, the City has invested more than $40 million in affordable housing. She does not think there is a way to build out of the deficit of affordable housing. Money will be needed for rehabbing some existing places and communities as well as doing several things other than building new housing. The City committed $5 million to the Starway project in addition to a variety of things to make the property workable for the developers. She thinks it is an excellent location on Carolina Beach Road. She also believes the City has set aside another several million out of the budget to put towards it, in addition to the programs that the County is now going to institute. The City does not have land so this is going to have to be solved in some major way outside the municipal limits. Councilmember Spears stated that he agrees with Councilmember Rivenbark’s comments. There is a need to be more concerned about what can be done. There are no specifics about where the money will come from. It is known there is a housing issue, and the citizens understand that. He wants to know what both groups are going to do as there is no way to build out of the issue. There is also no reason to continually meet and have nothing come about. There needs to be action. The group is not any further today than when the discussions first started. He wants the groups to be accountable for what is being done in the community and as of now, it does not look like the groups are being accountable. Councilmember Waddell commended the County for what he thinks is a successful way forward and a legitimate plan without raising taxes. The County understands that the City has already made significant investments to this same end, and that was his understanding of the discussions that have been held thus far. The use of the term affordable housing is a nebulous term. It really encompasses everything from 80% to 30% average median income, which is a broad spectrum of vastly different sectors of affordability. He would advocate in the plan that it NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 35 SPECIAL MEETING, FEBRUARY 24, 2022 PAGE 348 would be prudent to produce some sort of benchmark key performance indicators (KPI) that show clear and direct goals of where the intended allocations of the concerted efforts of these funds are going to go. Then perhaps integrating some of the trade associations that have the tools to not only track the progress in the success and tally those successes but aid in communicating that with the community. He thinks the education part of all of this is important for the citizens to understand the entirety of affordable housing. He looks forward to working with the County and appreciates that it is understood the significant investments already made by the City. Vice-Chair Hays thanked the City for its $40 million commitment over the past 20 years and its continued commitment of a minimum $2 million a year. The County has also committed $35 million and spent $35 million over the past 30 months, so the County is in it, and this is the commitment to the community from the County. She further stated that she would make a motion that the Board of Commissioners directs County staff to develop a framework that utilizes no less than $15 million over the next five years with revenue that is already coming into the County to develop programs and initiatives that increase access to affordable housing opportunities and increase and improve the stock of affordable homes in New Hanover County. As part of her motion, she would ask that an affordable housing framework be brought before the Board during the budget process over the coming months and that staff begin building the capacity and positions needed so the County can be ready to start this specific housing support and funding on July 1, 2022, the start of the County’s fiscal Year. Chair Olson-Boseman asked if there was a second to the motion. Commissioner Zapple seconded the motion. MOTION: Vice-Chair Hays MOVED, SECONDED by Commissioner Zapple to direct County staff to develop a framework that utilizes no less than $15 million over the next five years with revenue that is already coming into the County to develop programs and initiatives that increase access to affordable housing opportunities and increase and improve the stock of affordable homes in New Hanover County. County staff is also to bring before the Board an affordable housing framework during the budget process over the coming months and begin building the capacity and positions needed so the County can be ready to start this specific housing support and funding on July 1, 2022, the start of the County’s fiscal Year. Upon vote, the MOTION CARRIED UNANIMOUSLY. Chair Olson-Boseman asked that County Manager Coudriet explain the difference between the $50 million bond, what the County is doing, and why this will potentially be more money put into affordable housing. County Manager Coudriet stated that $50 million has been framed as the amount of money needed to start solving the problem. However, there is the idea that if the bond passed, or that if the County said to spend/raise $50 million that that would happen in one step. What would occur is that the County’s chief financial officer (CFO) would sell that debt over the course of five to seven years. As such, it is not $50 million that would come to the County to be disbursed on a monthly or annual basis. The $50 million would be sold over time because the CFO must sell it when there are identified projects to spend it on, and it has to cash flow and accomplish things in near term. The money cannot be sat on to enjoy the interest and enrich the taxpayers. A $50 million commitment by the County is not $50 million available on July 1 of this year, January 1, 2023, or July 1, 2023. Those dollars would come over time and so the proposal is to put in, as the Board has suggested, not less than $3 million which will be $15 million over five years, and leverage that in year one, year two, year three, year four, and year five to take $15 million and turn it into $50 million or $65 million. County staff knows that is attainable based on the conversations with the private sector, the building community, and other philanthropic organizations. There is interest in using some public money to solve the problem, but not to use public money exclusively. He thinks, and unfortunately and it is staff’s fault, that the County has not educated that the $50 million would not be available on day one, or even one year after the passing of a bond, if in fact, it passed. Either way there is going to need to be cash flow. The scale of the program that Ms. LaCoe outlined is in keeping with the work of the Workforce Housing Advisory Committee. While not exactly what was identified, it is in the lanes where they identified the expenditures would need to go so it is not hypothetical. It is a plan that can be refined and seeded annually with not less than $3 million. Councilmember Anderson commended the County for what it has developed. He never thought either group was going to go into the housing business but instead use incentives, down payments, and bridging money. It was also going to be a way to work with the private sector to make it happen. It is exciting to him for the County and City to be working together on this issue. He noted the projects the City has started this year and acknowledged the stock being built is not keeping up. He is not sure the local governments will be able to catch up as an overwhelming number of units are needed. Councilmember Barnett commended the County for putting funds towards affordable housing. He hears what everyone is saying, and it concerns him that there is no available housing stock. It is going to be a challenge. He is ready to get to work on the matter. Commissioner Rivenbark stated that the County spent $1.89 million on the Starway project as well. As to the bond, a survey of approximately 1,500 people was positive for it while the Wilmington Chamber conducted two surveys of 250 to 300 people each and tried to convince all that there was no way a bond would pass. The County understands how the City feels and is in it with the City. Commissioner Barfield stated that he is optimistic that the two groups will get to where they need to be on this issue. He provided an overview of what he learned on a Wilmington Chamber trip to Charleston, SC where companies were coming in and providing jobs, but the cost of housing was so high the employees had to live up to 45 minutes outside of the city. This is not a new topic. This community is there now, and he keeps seeing a lack of NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 35 SPECIAL MEETING, FEBRUARY 24, 2022 PAGE 349 housing. Private landowners are looking out for what is in their best interest and their pocketbook. Developers are now taking bids on homes in the community, which never happened before. He hopes a way can be found to provide the right rentals. He feels homeownership is the way to go because it increases opportunity for generational wealth. In most cases, it is what happens within the African American communities. He is cautiously optimistic and hopes that the Board will allocate the right resources to tackle the issue. Commissioner Zapple stated that as to the new County department there will be a minimum of three if not four employees, which is beyond the $15 million pledged over five years. It is correct that the amount is a minimum of $3 million per year and will not go below that amount. If there continues to be a strong sales tax, the number will be higher. The Starway project is a wonderful example of the County and City working together. He looks forward to replicating that joint effort in other projects as that is where the creation of new housing units can come from. Mayor Pro-Tem Haynes stated she has seen a lot of progress during the meeting, and it is based on the information received from the ad hoc committee as well as feedback from the community. It is certainly not a panacea to the problem. There is forward movement, and nothing happens overnight. She is also happy to see both groups come together to work to address and possibly solve the issue. Councilmember Rivenbark hopes that future County Commissioners have the same zeal as the current Board. There must be some political will of the Board to look past the people who state that they do not want these projects in or near their neighborhoods. It will happen to the City as well. It recently occurred in the next county over where a project was defeated when someone wanted to build single family houses in a sea of mobile homes all because the residents did not want it in their backyards. Chair Olson-Boseman stated she agrees with Councilmember Anderson about the need to find something to do about the downtown properties and how to keep people in them. She does not know how the County helps the City do that as it is such a big issue, but she does agree with him. Mayor Saffo stated that while there is commitment by the City and County, he wondered if another $25 million could be found from within the community. He does not want the discussion to stop and understands the County does not want to raise taxes. He knows there are people from the community in attendance that could provide the other $25 million. There has already been a private sector business that has spent approximately $10 million dollars to purchase properties within the incorporated city limits for affordable housing, which is why he thinks it is doable. He further expressed appreciation for the partnership between the City and County on the Starway project. Affordable housing is already going into Brunswick and Pender counties and some of the people who live in those homes work over here for the City and County, which is why the issue must be spoken about in a regional sense. Transportation is also going to be a big part of access in the form of access to public transportation. While there are a lot of people from all over the country moving here and buying high end homes, there is a lot of affordability in the other counties due to the greater availability of land and it is cheaper the further out a person goes from here. There is more work to do, but what has been discussed today is a good start. Councilmember Spears stated that he wants to hear input from the community people in the room. Chair Olson-Boseman and Mayor Saffo stated that there was no time allotted for public comment on the agenda. Commissioner Zapple stated that the $50 million is not the final goal, just the minimum goal. His hope is to see $60 million or more as he thinks that is achievable with participation and input of the private sector and philanthropic organizations. He expressed appreciation for the City’s support. Vice-Chair Hays expressed appreciation for City’s support and for everyone working together for the betterment of the citizens. While she cannot speak for her fellow Commissioners, she thinks they have made a bold statement today and she is personally committed to making sure the team does the work to reach the additional $25 million or more. Conversations have already started with the community partners to make sure the best plan possible is put forth and she likes the current plan because it is doable right now and can be adapted when the market changes. Chair Olson-Boseman expressed appreciation to everyone for their work and stated that she believes this is a measured approach, it starts by funding specific strategies almost immediately after a plan is in place, and it shows that the discussion is not just about affordable housing, everyone is committed to doing something about it. Her hope is for everyone to do this together, as a County, City, and community. DISCUSSION AND DECISION ON A SALES TAX FOR PUBLIC TRANSPORTATION REFERENDUM IN NOVEMBER 2022 County Manager Coudriet stated that staff, from its perspective, does not have a readymade presentation on the sales tax for a public transportation referendum in November 2022, but can answer questions or put one on if that is the will of the elected officials. Staff was present to simply staff the subcommittee discussion. There were five elected officials on the subcommittee and there may be a report out from them, but he cannot speak to it. Mayor Saffo stated that he understands there has been some discussion about putting the matter before the citizens. Chair Olson-Boseman stated that she knows it has been discussed but feels that the events of yesterday have changed everything. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 35 SPECIAL MEETING, FEBRUARY 24, 2022 PAGE 350 Mayor Pro-Tem Haynes stated the subcommittee made up of the five elected officials, two from the County and three from the City, did discuss this matter as well as the housing issue. She along with Commissioners Barfield and Zapple and City Councilmembers Barnett and Spears served on the subcommittee. The subcommittee’s consensus was to move forward with trying to place the referendum on the ballot in November. Commissioner Zapple concurred with Mayor Pro-Tem Haynes that the subcommittee’s recommendation was to move forward with the referendum. However, there is more internal debate that is happening with the County Commissioners on this issue, and he does not know that the Board is ready to proceed at this time. In response to questions, County Manager Coudriet confirmed that the decision to put the question on the ballot is a county decision. The legislature only gives the authority to a county to run the countywide consideration and there would be associated times so that it could be on the ballot this November. His understanding in listening to the Board today is the desire to continue the conversation and at some point, decide about whether to calendar in November 2022 or not. From a staff perspective, they will take direction from the Board, but it is a county only consideration. Chair Olson-Boseman stated that Commissioner Zapple has indicated he desires more information and further discussion with staff before the Board proceeds on any type of sales tax referendum. She thinks all are very conscious of what is going on now with the war and for now, the Board is taking a step back on the matter. Discussion was held about the matter not being discussed during the meeting. Commissioner Barfield stated that he served for 11 years on the Cape Fear Public Transportation Authority (WAVE) board and currently serves on the National Association of Counties (NACo) Transportation Steering Committee. During the NACo Transportation Steering Committee meeting last week about transportation bonds around the country, it was indicated that roughly 80% of the questions put on a ballot passed, which means citizens recognize the need for affordable options for public transportation. He does not know why there would not be a conversation about continuing with a quarter cent sales tax. It is good for citizens to decide whether they want it or not just like they did for the approved quarter cent sales tax for the parks and recreation bond. He does not understand the hesitation in deciding about placing the question on the ballot. Councilmember Anderson stated that his understanding was the hospital project was voted down the first time it was on the ballot in 1960 and had to go back through a referendum a second time. He would say for the Board to not be afraid to put the question on the ballot because if it fails the first time it does not mean it will not pass at some point. Failing is not the end all be all in his opinion and it would be good to get a pulse check from the citizens about it. Councilmember Waddell stated that it is not the correct time to consider how to increase taxes on citizens. A quarter cent sales tax on top of the ad valorem sales tax increase last year has not helped with affordability. Additionally, the 7.5% inflation this last year has seriously impeded citizens’ purchasing power. It is not fair nor is it right and the discussion is about people who are struggling to afford housing, and then the increasing costs of everything across the board. He knows is it is not his decision on whether to put the question on the ballot, but this group knows how he would vote if it were on the ballot. Mayor Pro-Tem Haynes stated that as she commented in the subcommittee meetings, she does think the realization is that this is the main way to raise resources to address the transportation challenges and raise that money from everyone that comes and goes from this community rather than just the property owners. No tax is great, but it would raise some money from tourists and people in surrounding counties. She thinks Mayor Saffo speaks often about the 60,000 vehicles coming through the city every day and she feels that is a traffic issue. If those people are coming to shop, she thinks they should help offset some of the expense in providing a better transportation system. As to WAVE, she knows over the years both elected bodies have had difficult meetings about trying to figure out how to find a funding source for the public bus system. When discussing affordable housing, the bus system is something that is going to be vital to make public housing effective in being able to get people to work, shopping areas, and the grocery store. She feels they go hand in hand, and it seems like the County has a plan for housing. She would like to see the question move forward. Although she does not want to pay any more tax than anybody else, the sales tax here compared to other areas is low. She hopes the Board will give more consideration to trying to raise some funds from people other than the property owners. Vice-Chair Hays stated that as the only elected official that currently sits on the WAVE board, she understands exactly where they are financially. Further, she thinks Executive Director Marie Parker is absolutely the right person in place to transform WAVE. She believes in Ms. Parker, her vision and ideas, and the team she is building. What Ms. Parker has already done and brought to the table is truly transformational. She is not sure enough is being done to show what Ms. Parker has and will do and a better job needs to be done on that front. She agrees with Mayor Pro-Tem Haynes that these matters go hand in hand. However, her concern is the current inflation rate and now the war in Europe. While she realizes this is Wilmington, North Carolina, there are concerns about how and what kind of effect it will have here locally, and the question becomes whether taxes should be raised during that time. She does understand it could be included on the ballot and pass, but she has some reservations about it. It might be that Ms. Parker needs to be given more time to be more obvious in the transformation of WAVE or just develop a plan and put it out there. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 35 SPECIAL MEETING, FEBRUARY 24, 2022 PAGE 351 As to if WAVE right now is financially sustainable enough without coming back to the City and County for additional funds for the next two to three years, County Manager Coudriet stated that would be correct in his opinion but would need to defer to Ms. Parker on that. While he knows the conversation is about WAVE, the package on the quarter cent sales tax was inclusive of more than support for WAVE. WAVE was about 50% of the estimated $145 million over 10 years. Vice-Chair Hays stated that she does like the fact of it not being on the property owners or one segment of the local citizens but a blanket that is covering everyone that comes into the City, County, or beach towns. It is much more of a pervasive opportunity. Councilmember Barnett stated he supports the sales tax question being on the ballot and wants to make sure that there is not a lot of backpedaling on it. In two or three years from now this situation is going to bite even harder than it is now. In response to questions, County Manager Coudriet stated that the use of the funds received from the quarter cent sales tax, if passed by referendum, is in the context of the legislation not limited to the public transportation authorities. He thinks in the original proposals the outline collectively, with the City and County, included 50% to WAVE, a part to rail realignment, a part to the multimodal bike trail, and embedded within WAVE but a bit separate was bus rapid transit. The authorization in the statute allows funding in that course of things and what was presented by staff last summer was comprehensive on that front. Also, those are the same things that the subcommittee discussed with staff input. Mayor Saffo stated that the rail realignment project is important, and the port is talking about deepening the channel here to 47 feet like Savannah, GA. The deepening of the channel brings in more containers and bigger ships and with the port only sitting on about 107+ acres, one aspect of transportation is the logistics on how to get the containers out of the city. This port does not have the luxury of stacking like Savannah or other ports where they have large tracts of land. Moving all the traffic out by truck can create a tremendous amount of havoc for the community. He hopes the Board will seriously consider all of this in making its decision about the putting the question on the ballot. He thinks the citizens in this community feel that public transportation and other initiatives are important to them. In 2014 when City’s the $55 million transportation bond was on the ballot it got more votes than the school bond question. Of that $55 million, $20 million went to bike-ped. He thinks there is some support for it. He thought there would be some sort of answer today, but he understands if the Board needs to have further discussion. Again, he hopes the Board would support moving forward with it because it is the citizens’ decision, and they will either vote for it or against it. If it fails, then everyone must come back to the table to figure out a game plan to try to help these people. He does think public transportation moving forward is going to be important to move people around in a very congested and very heavily populated city and urban county that also has a growing university. There is a need for a good public transportation system. Councilmember Anderson stated that he is glad County Manager Coudriet brought up how the funds would be used. He sits on the Wilmington Metropolitan Planning Organization (WMPO) with Councilmember Rivenbark, Vice-Chair Hays, and Commissioner Barfield and there have been many discussions and presentations about a litany of federal and state projects and how they are not going to get funded. This referendum is a tool in the County’s toolbox, and he thinks if it was marketed properly and explained well to citizens it may pass. He thinks it does have a chance of passing. While he does not want to have do the job the state has been doing forever and should do, he wants to live in a community where those amenities are available, whether it is by public transportation, bike, or on foot. He will be glad to be one of the cheerleaders for it. Commissioner Barfield stated that he is glad the conversation has expanded to other topics. He lives a quarter to half mile from James E. L. Wade Park and uses the Gary Shell Cross-City Trail to bike from his home to other parts of town. By being able to utilize the trail, he has gotten to see pretty areas of this community that otherwise he would not normally see from a vehicle. Other counties and municipalities in the state such as High Point, Guildford County, and Raleigh have greenway systems where people can bike, walk, and ride. He thinks those things are fundamental to a city and county where people are getting out a bit more and exposing themselves to cycling, roller skating, and other activities. He thinks it is also important to look at other ways to provide connectivity. Councilmember Spears stated that he wants both groups to be cognitive about defining taxes and does not want to see them misrepresented. It needs to be clear to all citizens about how taxes are used and help them understand that taxes are a huge part of how local governments handle business. Everybody in the community pays taxes in some shape, form, or fashion. Everybody should have a say in whether to pass this referendum. Not everyone will ride a bus but may ride their bike or walk to work or to wherever and they are trying to figure out how to safely do it. If the idea is to compete with other cities, then there is a need to offer some of the same things that are being offered in those communities. Commissioner Zapple stated that the subcommittee heard a lot of testimony on this front and there was a unanimous recommendation for the referendum. When he refers to there being internal debate, there is also education happening, some of which just happened now about the importance of it. He respects the fact that this will be a county decision and he would like to see a full consensus on it. He recognizes the need to move forward and understands the quarter cent sales tax will be across the entire community including the tourism industry and visitors from the neighboring counties. This is a way to equitably spread a little bit of pain throughout and have a significant impact not only with WAVE, but rail realignment and all the other projects being discussed today. NEW HANOVER COUNTY BOARD OF COMMISSIONERS BOOK 35 SPECIAL MEETING, FEBRUARY 24, 2022 PAGE 352 Mayor Pro-Tem Haynes stated that if people are looking for something that will affect everyone, and she agrees that WAVE is just a part of it and needs a long-term sustainable funding mechanism, rail realignment will affect everyone. People need to understand that the length of the trains is going to double so if a person is sitting at a railroad crossing and currently waiting 10 minutes, it is going to increase to 20 or 25 minutes. Additionally, the rail cars will be allowed to double stack. What is being discussed is a tremendous amount of freight coming through the City. She believes the rail line crosses 28 intersections within the City and if that can be eliminated, that will go a long way towards improving the flow of traffic within the City. Mayor Saffo stated the Board has heard where the City Council stands on this matter. While it is understood it is the Board’s decision, he hopes the Board will support it. ADJOURNMENT Hearing no further discussion, Chair Olson-Boseman and Mayor Saffo adjourned the meeting at 10:42 a.m. Respectfully submitted, Kymberleigh G. Crowell Clerk to the Board Please note that the above minutes are not a verbatim record of the Special Meeting of the New Hanover County Board of Commissioners. The entire proceedings are available online at www.nhcgov.com.