Nelson County Government: Board of Supervisors Meeting Minutes-October 31, 2007

Board of Supervisors Meeting Minutes-October 31, 2007

Virginia:

AT A CALLED MEETING of the Nelson County Board of Supervisors at 2:00 P. M. in the Board of Supervisors Meeting Room located in the Nelson County Courthouse.

Present:     Thomas H. Bruguiere, Chair
       Harry S. Harris, South District Supervisor
       Allen M. Hale, East District Supervisor
       Constance Brennan, Central District Supervisor
       Thomas D. Harvey, North District Supervisor
       Stephen A. Carter, County Administrator
       Philip D. Payne, IV, County Attorney
       Candice W. McGarry, Administrative Assistant/Deputy Clerk
       Debbie McCann, Director of Finance and Human Resources
       Maureen Corum, Director of Tourism & Economic Development


I.   Call Meeting to Order

Mr. Bruguiere, Chair, called the meeting to order at 2:05 P. M. with all members present to establish a quorum.

II.   Appointment of County’s Professional Assessor (R2007-099)

Mr. Carter stated that Mr. Thomas had taken Mr. Blaire’s place as Senior Appraiser and has been with Wingate Appraisal Services for ten (10) plus years and participated in the 2003 re-assessment. He noted that due to the change in personnel, the designation of the County’s Professional Assessor was required by the Code of Virginia. He also stated that Mr. Thomas had met the requirements for certification by the Virginia Department of Taxation and they recommended his appointment.

Mr. Hale moved to approve Resolution R2007-099 Appointment of Professional Assessor, Nelson County, Virginia and Mr. Harris seconded the motion. There being no further discussion, Supervisors voted unanimously (5-0) by roll call vote to approve the motion and the following Resolution was adopted:
RESOLUTION-R2007-099
NELSON COUNTY BOARD OF SUPERVISORS
APPOINTMENT OF PROFESSIONAL ASSESSOR, NELSON COUNTY VIRGINIA

WHEREAS, pursuant to §58.1-3275 of the Code of Virginia, the Board of Supervisors must in the year immediately preceding the year in which a general reassessment of real estate is made, appoint a Professional Assessor who has been certified by the Virginia Department of Taxation and;

WHEREAS, at the recommendation of Wingate Appraisal Services and the request of the County Administrator, Mr. Donald K. Thomas of Wingate Appraisal Services, having fully met the requirements established by the Department, has been certified by the Virginia Department of Taxation to serve as the County’s Professional Assessor for the 2008 General Reassessment of real estate;

NOW THEREFORE BE IT RESOLVED, by the Nelson County Board of Supervisors that pursuant to §58.1-3275 of the Code of Virginia that Mr. Donald K. Thomas of Wingate Appraisal Services is hereby appointed by said Board to serve as the County’s Professional Assessor for the 2008 General Reassessment of real estate.

III.   Joint Meeting with the EDA – Wintergreen Economic Stimulus Grant

Mr. Carter noted that Mr. Payne would review the latest version of the ESG Agreement; staff would present eleven (11) points of consideration and an abbreviated spreadsheet detailing the financial aspects to consider, and then discuss next steps with both Boards.

Mr. Payne’s comments included noting that the definition of “hotel property” includes “complete or partial hotel condominium”, which needs clarification, the addition of the Crawford’s Knob property to the agreement, and the provisions for the property transfer triggering the start of the rebate period. Mr. Payne also noted that references to increasing the Transient Occupancy Tax no longer apply and to compensate for that, Wintergreen is proposing to lengthen the rebate period from fifty-four (54) to sixty-six (66) months.

Mr. Payne outlined the following eleven (11) points of consideration as follows:

1.   Establish a term for the validity of the overall agreement, including a date for the commencement of construction, and possible extension provisions if agreed upon.

2.   Include provisions for a sliding scale for the tax rebate based on an annual comparison of actual new tax revenues and projected new tax revenues.

3.   Revise and clarify the effective date of the Grant Item 2 (b) on page 4 of the Agreement. As presently formulated, the 100% phase of the Grant can begin with the Land Transfer, but the 30 month limit does not begin to run until the Hotel’s opening.

4.   Include as an attachment to the Agreement a definitive project description and a description of the land to be included as “Hotel Property. Item 1c on page 2 of the Agreement. Also revise WPI’s commitment accordingly in Item 4(b) on page 5 of the Agreement.

5.   Remove “or complete or partial hotel condominium” from the “Hotel Property” definition Item 1c on page 2 of the Agreement and from the definition of “Opening” Item 1(g) on page 3 of the Agreement.

6.   Remove all references to the Crawford’s Knob land transfer from the Agreement.

7.   Establish the actual Grant period term, 54 months (original proposal) or 66 months (current proposal). Item 2(b) on page 4 of the Agreement.

8.   Request the over-all project financing strategy including potential CDA creation and     utilization of a Conservation Easement.

9.   Remove “assist Nelson County in her efforts to obtain legislation allowing for equalization of the local transient occupancy condominium tax and the transient occupancy room tax” from 3rd paragraph on page 2.of Agreement.

10.   Remove “Occupancy Tax” definition, item (f) on page 3.of the Agreement as WPI is no longer seeking rebate of the increase in occupancy tax rate.

11.   Proposed Wintergreen Tax Payments to Nelson County use a Real Estate tax rate of $.0072; changes to this rate related to the upcoming re-assessment will have an effect on these numbers.

Mr. Carter noted that item #11 was more of a point of information such that any change to the real estate tax rate will adjust the numbers accordingly. Additionally he noted that any agreed upon rebate would be subject to annual appropriation by the Board.

Mr. Payne also noted that the Recital sections of the Agreement are non-binding and are merely a statement of the facts.

Crawford’s Knob and its development rights, was discussed with some consideration being given to requiring a provision in the agreement to prevent its development.

The EDA then called their meeting to order, established a quorum, and then members Steve Crandall, Barbara Powell, Erwin Berry and Stu Armstrong recused themselves being Wintergreen property owners and WPI members. Mr. Nat Hall noted that he is a property owner, but not WPI member so he will participate in the meeting. Mr. Payne noted concurrence with the EDA’s attorney that a conflict of interest for the WPI members exists.

The EDA noted its concern that the incremental revenue increases shown in the spreadsheet includes revenue shifted from existing facilities.

The relevancy of the inclusion of Crawford’s Knob in the Agreement was discussed with it being noted that it has taxation implications and can be part of the land transfer that triggers the commencement of the rebate. Mr. Payne noted that the conservation easement part of the “hotel property” can be taxed; however it is devalued so that the tax revenue is deminimus or tax neutral. Mr. Carter added that the property could be transferred from WPI to WHP and then to the Nature Foundation, which would make it tax exempt. Mr. Payne noted that it is unclear who the land should be conveyed to in order to create the tax credits.

Mr. Rob Sullivan, Vice President and CFO of WPI, was recognized by the Chairman. Mr. Sullivan thanked Mr. Carter and the Boards for meeting and gave a recap of the hotel project status. He noted that Wintergreen desires to expand on its dependence on the ski resort, to diversify and add a new inventory of rooms to the 14-30 year old existing condominiums; in order to achieve some revenue consistency.

He described escalating yearly losses in winter since 2004 and noted that a net loss of $2.9 million was to be reported for 2007.

He noted that $1.5 million had been invested thus far in the hotel project for schematics and legal fees. He described the hotel/mountain village plan as having hotel/retail space with a skating rink and a conference center; the result of a $100 million dollar investment over a 3-4 year period. He stated that a consultant had been hired to identify developers interested in investing in the project, three (3) had been identified and a deal could be finalized in forty-five (45) to sixty (60) days. He said that the general financing strategy included an equity investor (developer partner), construction debt financing (bank), possible CDA bond issuance, internal cash flow and a Crawford’s Knob Conservation Easement. Mr. Sullivan also stated that the project should reach stabilized occupancy within three (3) years and that the economic stimulus grant from the County would allow higher revenue levels during the early years of the project, when the risk is highest. The extended rebate period was requested due to the increase in construction costs increasing the debt load that would be required, with Mr. Sullivan noting that this would provide a sense of confidence with investors.

When asked about how the Conservation Easement fits into the project, Mr. Sullivan began by explaining that WHP is a financing structure that is 100% owned by WPI as a development vehicle to shield WPI members from the risk of the project. The hotel would be constructed on what are now Lot 1 and Lot 2, approximately 2 acres. He stated that at some point, probably right after signing with an investor, the hotel acreage and Crawford’s Knob acreage would be transferred from WPI to WHP and would become taxable. The Nature Conservancy would then be given the Conservation Easement with the difference between the appraised value and diminished value after the easement being a tax deduction. The tax deduction could then be transferred to another entity in exchange for a tax credit with the intent being to protect a subsequent deed holder from property taxes (approximately $10,000).

Mr. Sullivan noted that the hotel would have approximately 190 rooms and that the management of the hotel is under discussion with investors and not yet decided.

The effect of the hotel on condominium rentals was discussed, with Mr. Sullivan noting that the revenue model projects a decrease in condominium rentals during the first year. He also noted that it was unsure how the value of the condominiums will be affected and that there are approximately 285 in the rental market now.

Mr. Sullivan explained that the hotel property definition stems from the consideration of a hotel/condominium hybrid with pent-house units being a possibility. He also noted that a January 1, 2010 opening date is planned.

The Board discussed having Mr. Payne work on a revised draft agreement incorporating language addressing the concerns discussed and then presenting the new draft for further consideration.

Mr. Hale noted that the start date of the rebate and a definitive project description were important and the consensus of the Board and the EDA was support for addressing all of the items noted as concerns.

Mr. Bruguiere noted that although he would like to be cooperative, his constituents were not in favor of it and he could not support an Economic Stimulus Grant (tax rebate) to Wintergreen.

In conclusion, WPI and the County staff were directed to work together to draft a revised agreement for subsequent discussion. The Board briefly discussed the merits of voting to support or not support the Economic Stimulus Grant (tax rebate) in principle, with no action being taken. Mr. Payne noted that the property should stay taxable no matter who owns it; and the hotel property definition is too ambiguous as is.

The EDA adjourned at 3:40 pm and the Board took a short break.

IV.   Courthouse Project

Mr. Randy Vaughan of Wiley & Wilson noted to the Board that the schematics of the Courts building from the interactive design were okay with all involved; satisfying the Courts’ needs.

He noted having investigated a remodel/layout of the current building but would need the judge’s buy-in on a new administrative building; noting the judge’s letter suggested moving the County Administration functions to another building when it is affordable. He noted the preliminary budget for the Courts facility and site work to be ten (10) to eleven and a half (11.5) million dollars. The second budget utilizes the Health Department building with an addition for the County Administration offices, freeing up the lower floor of the current building for use by the Circuit Court.

Renovating the Health Department building and moving the Health Department off-site was discussed as well as the space needs of the Circuit Court. Ms Judy Smythers, Circuit Court Clerk noted that they are in need of office and storage space, stating that the next judge may locate here, instead of in Amherst County. She stated that there is also a need for office space for probation, a law clerk and judge’s secretary.

The affordability of the project was discussed with Mr. Carter referring to the debt capacity sheet provided by Davenport that shows corresponding debt capacity relative to the percentage increase in real estate values retained from the re-assessment. Mr. Carter reiterated that the analysis shows a retained value of 30%-50% necessary to afford the debt service on the project under consideration. Additionally, he noted that Mr. Thomas, of Wingate Appraisal Service had related an overall increase in real estate values of 60% thus far.

The Board discussed proceeding with the new General District and J&D Courts building and the need for some level of renovation of the existing Courthouse to incorporate security upgrades and address ADA accessibility issues. The judge’s letter was noted to include provisions for securing the building every day of operations, not just when Court is in session. Mr. Vaughan suggested and the Board concurred that they meet with Judge Gamble and Clerk Smythers with the proposal of addressing the security and accessibility issues in the current building and their utilization of the vacated space on the second floor.

Using the Health Department site for a County Administration building in the future was discussed as favorable as opposed to building it across the creek.

V.   Closed Session as permitted by Virginia State Code §2.2-3711(A) (7) Consultation with Legal Counsel, regarding actual litigation pertaining to the Nelson Circuit Court Case Decision, Lois Bennett v. Nelson County Board of Supervisors, CL06000039.

Mr. Carter noted that Jim Guynn was not available, but that Mr. Payne thought that the closed session was still necessary.

Mr. Payne noted to the Board that the Judges decision had not yet been ordered and that the appeal clock was not yet running. He noted that Mr. Guynn would like some direction from the Board and that he needed a framework for options to be discussed with him.

Mr. Hale made the following motion: I move that the Nelson County Board of Supervisors convene in closed session to discuss as permitted by Virginia State Code §2.2-3711(A) (7) Consultation with Legal Counsel, actual litigation requiring the advice of Counsel pertaining to the Nelson Circuit Court Case Decision, Lois Bennett v. Nelson County Board of Supervisors, CL06000039, whereby such consultation in open meeting would adversely affect the litigating posture of the County.

Mr. Harris seconded the motion and Supervisors voted unanimously (5-0) by roll call vote to approve the motion and enter into closed session for the purpose as stated in the motion.

Following the closed session, Mr. Hale made the following motion: I move that the Nelson County Board of Supervisors come out of closed session and reconvene in public session. Mr. Harris seconded the motion and Supervisors voted unanimously (5-0) by roll call vote to approve the motion and come out of closed session.

Mr. Hale made the following motion: I move that the Nelson County Board of Supervisors certify that, in the closed session just concluded, nothing was either discussed or considered except public business matters lawfully exempted from open meeting requirements under the Virginia Freedom of Information Act, Virginia State Code §2.2-3711(A) (7), and which were identified in the motion by which the closed meeting was convened. Mr. Harris seconded the motion and Supervisors voted unanimously (5-0) by roll call vote to approve the motion and certify the closed session as stated.

VI.   Other Business (As May be Presented only if all Members are Present)

Upon reconvening in public session, there was no Other Business presented.

VII.   Adjournment

At   5:45 P. M., on a motion by Mr. Harris and seconded by Mr. Hale, Supervisors voted unanimously (5-0), to adjourn until 2:00 PM on November 15, 2007 at the Nelson County Courthouse, Lovingston, Virginia for the regular re-scheduled meeting.