No longer legal for PAC to receive free utilities from Town

The construction schedule for the Performing Arts Center expansion has not gone as planned. The cost of construction and finding a company willing to take on the project, as well as fundraising hurdles have caused delays.

At the April Town Board Zoom meeting, the last item on the agenda was PAC’s request  that town utilities at PAC continue to be waived.

According to Finance Director Rebecca Shuler, the town supplies electric, water/sewer, garbage and also pays for PAC’s propane, which amounts to an average of $13,500 per year.

The town’s relationship with the PAC has been long and has involved negotiated contracts over the years.
In 2010, when the town owned the building and the land, a contract agreement was approved by the board in which utility payments would be waived for the length of the contract.

Back in July of 2018, PAC presented its plans to expand the center which included purchasing property on either side of the existing building. To do that, they needed the property in their name.

“So, on July 30, 2018 an agreement was entered into to transfer the property from the town of Highlands to PAC, Inc.,” said Town Manager Josh Ward. “That occurred and included in that agreement was a continuation of the free utilities until March 21, 2020.”

That date was when the PAC board hoped the expanded center would be completed.

“As we know at this point, they have had some issues with the cost of the construction and have not started construction on the building expansion. They have done the parking lot but not the building,” said Ward. “At this point, according to the agreement, the free utilities are null and void.”

This, and the COVID-19 ills that have befallen businesses in town, spurred the town to ask the School of Government if the town could in fact, give free utilities to entities in town.

“The School of Government has said that we are not allowed to give utilities away for free,” said Shuler. “It’s not legal, unless we offer free utilities to a whole group of a particular rate class like all commercial electric, or all commercial garbage clients. We are not allowed to give away utilities to one or two picked individuals.”
Shuler said the only reason the town was able to get away with it with PAC is because the town owned the property.

“Since we no longer own the property, it really isn’t legal,” she said.

Years ago, the town gave free utilities to churches and some nonprofits like Highlands Playhouse and Mountain Findings but the town determined it was on thin ice as to who got free utilities and who didn’t so, it stopped the practice except where a contract was concerned as with the PAC.

“It was Commissioner Calloway’s position at the time that ‘we don’t break contracts’ and that’s how we got to this point,” said the Mayor.

Member of the PAC board, Cindy Trevathan chimed in when asked to do so during the Zoom meeting saying she understood the legal implications and appreciated the town even discussing this given the other critical issues it was dealing with right now.

She said work is continuing on the renovation of the PAC but like some of the town projects, a step back had to be taken because costs came in higher than they could afford. Alternative designs for the project are being considered which they still hope will be a “wonderful opportunity for the town,” she said.

“I guess we could possibly pursue this other ways; we would like the opportunity for the town to partner with us in some capacity. So maybe down the road, if it turns out it truly isn’t legal for the town to provide utilities, maybe there is some other way the town could possibly help us with this endeavor, assuming the town is supportive of what we are doing,” said Trevathan.

Town Manager Ward suggested this might be a good time to discuss the occupancy tax funds with the Chamber of Commerce “since that’s basically what that tax is for,” he said. “There may be some funding there to support the PAC.”

Mayor Taylor has long held the position that occupancy tax money could be used in broader ways.

“We were looking at the occupancy tax before this, and reviewing how that money could be spent,” he said. “The way the legislation is written, some people interpret that very strictly – that it can only be spent on promoting tourism. My views and my concern is that really the arts –along with the culinary arts – all attract tourism in this community. They are part of the hospitality, entertainment and cultural arts community so, I think there should be a hard look at how some of that money can be directed toward supporting things like the PAC.”

Chamber Director Kaye McHan said last year during its grant cycle PAC recieved $10,000 so it does and has supported PAC. A number of nonprofits apply for and are granted grants through the Chamber’s grant program.

Since it’s not legal for the town to give away utilities, commissioners voted unanimously to begin charging the PAC monthly like it does other businesses in town.

By Kim Lewicki, Highlands Newspaper


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