PRESENT: Chair Owens, Vice-Chair Gage, Commissioner Gasperson, Commissioner Holbert and Commissioner Pack. Also in attendance were Interim County Manager Pittman, County Attorney Berg, Clerk to the Board Fehrmann, staff, media and citizens.
Call to Order – Chair Owens called the meeting to order.
Invocation – Pastor Peter McDonald of Midway Baptist Church gave the invocation.
Pledge of Allegiance – Tryon Mountain Troopers Pathfinder Club led the pledge.
National Anthem – A brief video on the national anthem was presented. Polk County High School students Lauren Ketwitz and Reagan Waddell sang the Star-Spangled Banner in honor of its bicentennial.
Approval of Minutes – Commissioner Holbert moved to approve the March 3, 2008, special meeting minutes, and the September 8, 2014, regular meeting minutes, seconded by Commissioner Pack. Commissioner Pack asked that the following portion of the meeting be transcribed verbatim:
Gasperson: First, the minutes from March 3, 2008, go back six and a half years, and I’d like to review these minutes. I was alerted to take a look at these minutes, and it was an interesting odyssey to find out. And it turned out that somehow careful notes had been taken, but they were missed on being typed up and approved six and a half years ago. And I wanted to note that at the time the Chair was Melton and Vice-Chair was Denton, and we had Commissioners Owens and Pack and Watson. Also at this meeting was County Manager Whitson, County Attorney Hix. We had a representative from the NC Department of Revenue, Greg Martin, our Tax Assessor at the time John Bridgers, Acting Clerk Angé High. There was some media and staff and citizens here. There was a petition to compromise and settle or adjust the county’s claim for taxes arising from the discovery of property and penalties, and the first one was Calvert’s Kitchen. John Bridgers read from his memorandum about Calvert’s Kitchen. A copy of the memo and corresponding information is there included. And in the memorandum, which was included in that meeting from John Bridgers to Mr. Calvert, was corrected taxes for the tax years 2002-2007. Based on the depreciation schedules for those years, these bills are the result of the discovery of business personal property for your business that was not listed for those years. That was the main part of that letter. Mr. Calvert asked the Commissioners to take the penalties off, and said that he was willing to pay the taxes certainly for the values of the equipment for those years 2002-2007. A motion was made by Commissioner Pack to have Calvert’s Kitchen pay the taxes owed, but to remove the penalties. It was seconded by Commissioner Owens. The motion failed. Denton, Melton and Watson opposed. And then it goes on to some other explanations in her minutes. And then the Advent Internal Medicine. Basically, what happened there, apparently their accountant had failed to make a notation of listing their business personal taxes. I think it’s important to go back and look at this. This has been a long time ago. This has been six and a half years ago. I just wish to make a statement that I want to thank Commissioners Denton, Melton and Watson, for doing the right thing in that meeting. It would have perhaps been easy to have voted with Commissioners Owens and Pack but, frankly, that would have created, in my opinion, a nightmare for our Tax Administrator. If Randall Calvert and Dr. Kim had received what they wanted - the removal of these discovered taxes and the penalties - it would have been a green light I think, perhaps, for many taxpayers to simply ignore listing their business and personal property on their tax forms knowing that, if they got caught, all they had to do was go before the Commissioners in order to get the penalties removed. Again, I want to thank you, Commissioners Denton and Melton and Watson for doing the right thing in that. Also, I’ve done a lot of research on this. And in that meeting there was reference made to an article written by William Campbell with the Institute of Government, and it’s titled “Compromising Taxes on Discovered Property: An Unconstitutional Statute?” (A copy of this article is hereby incorporated by reference into these minutes.) And, basically what this article wrote about . . . and Dr. Campbell in this article . . . if I summarize it very briefly, he stated, if challenged, GS 105-312(k), which is this statute related to discovered property taxes . . . and I want the audience to realize that discovered property taxes, if penalties and interest are applied to them, the only place a taxpayer can go back and ask for relief is to a Board of Commissioners. That’s the only place they can go. Now, however, Campbell puts in his article, “If challenged, this statute would most likely be found unconstitutional because the power to compromise a tax claim must not be exercised arbitrarily.” And I’ve had discussions with our attorney, Jana Berg and, please, could you tell me, tell the Board and the audience, our discussion on your opinion about how should a Board conduct themselves if this should ever come before us again.
Berg: Well, as you and I discussed, the enabling statute that allows . . . if you recall I told you there are very limited circumstances in which a Commissioner can compromise taxes, and this is one of those circumstances. There’s a particular statute, it’s 105-312, and it’s only applicable to discovered property. And the statue essentially says what Commissioner Gasperson says, in that it allows the Board of Commissioners in its sole discretion to waive taxes, penalties and interest, but only in the case of discovered property, and only when a taxpayer petitions the Board of Commissioners to do so. My concern with that particular statute . . . I have read the article that you referred to authored by Dr. Campbell, and it was in Popular Government Magazine, and in that he discussed the constitutionality of that particular statute. And it was his opinion that - and of course this isn’t the law because it has not been heard yet - but it was his opinion that this statute may be unconstitutional because it’s the only place in the Machinery Act that allows for a Board of Commissioners to compromise taxes. Contrast that with the section I referred you to last time, where it says where a governing body can be personally liable for compromising taxes and you shouldn’t ever do that. But this is one particular instance where the general statute on the surface allows you to do so. That statute has never been challenged in court, so the North Carolina court system has yet to weigh in on it. And I don’t know if it will. I’m not aware of any cases pending in front of the Court of Appeals or the North Carolina Supreme Court challenging this particular statute. But the professor’s opinion, and he’s a well educated lawyer, was that in his view the statute may be unconstitutional. So, if it came up before me, I would advise you of that. I would tell you that, yes, the general statute enables you to do so. However, I would caution you that it’s possible somebody could challenge it in court, and it’s possible you could lose that particular case. That, of course, didn’t happen here, so that point is really moot.
Gasperson: So, in your opinion, you feel like it would be wise for a Board of Commissioners to really avoid ever granting this type of relief on property tax because of the precedent it would likely set, and the potential legal liability if we were challenged in court.
Berg: Well, the statute allows you to unilaterally compromise taxes. You can pick and choose which taxpayer you’re going to give relief to and which you’re not. And therein lies, in my view, the problem with the constitutionality of it. It allows a Board of Commissioners unfettered discretion in this particular instance. It doesn’t set forth any standards for you to follow. So, you know, it lends itself to a constitutional challenge. And, should that come up, I would advise you that, you know, it’s within your discretion to do it according to the statute. However, I would offer that it could be challenged and, with respect to setting a precedent, that’s up to you whether or not one decision is impacted by another or another or another, because the statute does have in it your discretion as to who you’re going to do this to, or no one. I could see where a taxpayer might make that argument, however.
Gasperson: Okay. Well, I would hope that this Board, or any Board, would avoid doing that. I think it puts our Tax Administrator in a very awkward position not knowing if the Board of Commissioners would do it, yet in a much stronger position knowing she can tell a taxpayer, “Look, this Board doesn’t really go there.” Secondly, Mr. Chairman, on the second set of minutes, I do wish to . . . because of what happened at the last meeting . . . it happened so quickly. Well, quickly, not, but it was maybe a 35-40 minute section on the disputed part of the other closed session minutes that were discussed. I do wish to have in the record a statement from myself related to all that. In many ways what happened in the BOC meeting of September 8th in my opinion is more serious than the issues that occurred six and a half years ago on the previous minutes. And, for the record, I want it to be noted that, in my opinion, statements made by Commissioner Gage when he said, to me, he said, “There is no doubt in my mind they were considering breaking the law”, and when Commissioner Pack stated, “The Board made the decision to accept the $100,000”, to me both of these statements were slanderous, and made with legal malice. Also, Chair Owens, I was very concerned, and I want it to be noted that, in my opinion, during the same agenda item, there was really a complete breakdown of rules of decorum. And, you seemed to have difficulty controlling the meeting, especially when you took direction from Commissioner Pack and then had former Commissioner McDermott removed from the meeting. Thank you for allowing me to make these statements.
Holbert: You know, I wasn’t here when this came about as far as being on this Board. I was present. Just to make the rest of the story make sense, I was caught in this thing as well. Business personal tax forms were not mailed out at that time so, unless you make a habit of going out and hunting some way to pay taxes, which most business people don’t, you wouldn’t have been aware of it. And that was the other side of the story. The decision was made. I don’t have a problem with that as far as them paying it off. I paid my penalty and interest, as others in this room did as well. So that might make a little bit of difference. I don’t think they were intentionally avoiding their taxes, but it was just something they didn’t go out and hunt.
Gage: Same thing Commissioner Holbert just said. They had meetings here. I sat in the front row here. They were trying to educate the businesses in Polk County of what this tax was about. Most people were very confused. I imagine there was a lot of people that probably were wanting to get in here and talk about why are they being penalized for something they didn’t know. Most people didn’t know about this thing. Even though it was in the Machinery Act and it was perfectly legal for the county to do it, most people in the county did not even know about it. So, it was a rough time, and it’s unfortunate that it all came down to all this.
Pack: One thing I think is strange here that I want to point out. I think we’re talking about two things. One is, these minutes from March 2008 were in open session, not in closed session out of the public eye. We tried to relieve the penalties and interest on taxpayers, which is allowed by State statute. We didn’t go behind closed doors out of the public eye and try to do something that’s not allowed by State statute for a business. We did it in open session. Gasperson and McDermott did it in closed session. Out of the public’s eye – not allowed. We did it in open session - what was allowed - so the public could see what we were doing. Now, if Mr. Gasperson has a problem with that, I call him a hypocrite. Thank you.
With a motion and second on the floor, the motion carried unanimously.
Approval of Agenda – Commissioner Pack moved to approve the agenda, seconded by Vice-Chair Gage and the motion carried unanimously.
Citizen Comments – Dick Shaughnessy, speaking on behalf of the Sons of Liberty Riders, expressed gratitude to local law enforcement for their escort support during the recent 9/11-Benghazi Memorial Ride, expressed disappointment in the turnout for the event, and criticized the manner in which the 9/11/12 Benghazi, Libya, attack was handled by the administration and media. Terri Owens complained about the appearance of the Sheriff Department’s impound lot, and asked that it be cleaned up and maintained, or fenced in. Debbie Arceneaux urged appropriate citizen decorum, and asked the Board to require that cell phones and tablets be turned off during BOC meetings. Former Commissioner Warren Watson told Vice-Chair Gage he accepted his apology regarding a statement made by Vice-Chair Gage during the September 8, 2014, BOC meeting, and stated the 2010 Board of Commissioners did not intend to break any laws. Mr. Watson also urged the Commissioners to show respect for their constituents by listening to them. Former Commissioner Tommy Melton said that as a serving Commissioner in 2010 he never intended to break the law, and asked for and received an apology from Chair-Owens, Vice-Chair Gage, Commissioner Holbert and Commissioner Pack regarding a statement made by Vice-Chair Gage during the September 8, 2014, meeting. Michael Veatch urged the Chair to set stricter rules of decorum for interactions between Commissioners during meetings.
August 2014 Refund Request – Melissa Bowlin, Tax Administrator, presented the request. Commissioner Pack moved to approve the request in the amount of $9,857.62, seconded by Vice-Chair Gage and the motion carried unanimously.
Budget Amendment – Sandra Hughes, Finance Director, presented the amendment. Vice-Chair Gage moved to approve BA #3, The Meeting Place, Addition, $2,997 – To increase revenues and expenditures for a donation from the Meeting Place Donation Fund for the purchase of a desktop and notebook computer, seconded by Commissioner Gasperson and the motion carried unanimously.
NC Hunting Season – Toby Jenkins, NC Wildlife Resources Commission Officer, announced that the State recently approved a two-week extension of the existing three-week gun deer hunting season in Polk County.
A Resolution Calling for the Release of Sergeant Andrew Tahmooressi by the Government Of Mexico – Vice-Chair Gage moved to approve the resolution, seconded by Commissioner Pack and the motion carried unanimously.
DSS Building Update – Commissioner Holbert reported that repair of an improperly installed section of sewage line at the DSS building has been completed, and HVAC repairs are ongoing. Interim County Manager said sewage drainage will be monitored to determine whether the plumbing underneath the bathroom is also in need of repair.
Schedule Two Public Hearings, FY 2015 Rural Operating Assistance Program (ROAP) Application to the NC Department of Transportation and the FY 2016 Section 5311 Community Transportation Program Grant Application to the US Department of Transportation Federal Transit Administration – Dianne Timberlake, Transportation Director, presented the public hearing requests. Commissioner Pack moved to schedule a public hearing for the FY 2015 Rural Operating Assistance Program (ROAP) Application to the NC Department of Transportation on October 6, 2014, at 7:00 P.M., seconded by Commissioner Gasperson and the motion carried unanimously. Commissioner Pack moved to schedule a public hearing for the FY 2016 Section 5311 Community Transportation Program Grant Application to the US Department of Transportation Federal Transit Administration on October 20, 2014, at 7:00 P.M., seconded by Commissioner Gasperson and the motion carried unanimously.
Schedule a Public Hearing to Amend and Re-Enact the Watershed Protection Ordinance of Polk County and the Map of the Green River (Lake Adger) Segment Reclassified by the Environmental Management Commission – Cathy Ruth, Planner, presented the public hearing request. Vice-Chair Gage moved to schedule a public hearing to Amend and Re-Enact the Watershed Protection Ordinance of Polk County and the Map of the Green River (Lake Adger) Segment Reclassified by the Environmental Management Commission on October 6, 2014, at 6:00 P.M., seconded by Commissioner Pack and the motion carried unanimously.
Economic Development Status Update – Robert Williamson, Interim Economic Development Director, presented the update. A copy of his PowerPoint presentation is hereby incorporated by reference into these minutes.
Volunteer Boards for Review – There were none.
Commissioner Comments – Commissioner Gasperson said the Unified Development Ordinance (UDO) is a “dead” issue. Commissioner Pack thanked everyone for coming out, and said he thinks the UDO is still being brought up by some people. Commissioner Holbert said the local drivers license office should be open within the next six months. Vice-Chair Gage thanked everyone for coming out, and agreed with Commissioner Pack regarding the UDO. Chair Owens said the Interim County Manager position was not created for Mr. Pittman, but became necessary when previous County Manager Whitson was called up for active military duty. Chair Owens also thanked the Daffy-Jills Garden Club for landscaping improvements at the Travel & Tourism/EDC building.
Closed Session – Commissioner Holbert moved to go into closed session for the purpose of personnel, G.S. 143-318.11(a)(6), seconded by Vice-Chair Gage and the motion carried unanimously.
Return to Open Session – Commissioner Pack moved to return to open session, seconded by Vice-Chair Gage and the motion carried unanimously.
Adjournment – Commissioner Pack moved to adjourn the meeting, seconded by Commissioner Gasperson and the motion carried unanimously.