City Council Budget Work Session – March 26, 2024
March 26, 2024 at 2:20 PM
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Event Recap
City Council Grapples with Budget Challenges at March 26th Work Session
On March 26, 2024, the Asheville City Council convened a comprehensive work session to begin shaping the city’s budget for the upcoming fiscal year. The meeting, attended by all council members and City Manager Deborah Campbell, focused on addressing current financial pressures, prioritizing community needs, and exploring potential solutions to ensure the city can continue providing essential services. While no formal votes were taken during this work session, the discussions laid the groundwork for upcoming decisions that will directly impact residents.
A central theme throughout the session was acknowledging the growing financial headwinds facing Asheville. City Manager Campbell highlighted that rising costs across various departments are outpacing revenue growth, necessitating a potential draw from the city's fund balance – essentially its savings. The council reaffirmed their commitment to core priorities identified by residents, including workforce recruitment and retention, maintaining essential services, and improving infrastructure. A recent online budget survey, which garnered nearly 1,000 responses, revealed that residents prioritized affordable housing and addressing homelessness, community safety, and facilities maintenance. While valuable, Campbell noted that the survey respondents didn't perfectly reflect Asheville’s diverse population, with a higher proportion of white and middle-income households participating.
The discussion then turned to the city’s revenue streams, with a particular focus on the slowing growth of sales tax. This trend, mirroring statewide observations, poses a significant challenge given that sales tax is a major income source for the city. Property taxes remain the largest revenue stream, but council members explored options to address staffing and compensation challenges within city departments. A key debate centered on how best to ensure competitive wages for employees, with discussion revolving around the potential benefits of a flat-rate increase versus percentage-based raises to address salary compression. The Transit system also faces a $2.7 million funding gap, requiring additional support from the general fund due to expiring American Rescue Plan Act (ARPA) funding and rising operating costs.
Looking ahead, the council engaged in a preliminary discussion about addressing over $300 million in identified capital needs – encompassing facilities, fleet upgrades, parks improvements, and street resurfacing. A potential solution being considered is the issuance of General Obligation (GO) bonds, with a proposal for two bond votes: one in November 2024 and another in 2028. Council members favored a phased approach to issuing these bonds, allowing for more manageable debt and demonstrating tangible progress to voters. Finally, modest adjustments to various fees were reviewed, including small increases for water, stormwater, and solid waste services (estimated at approximately $20 per year for a typical household) and potential adjustments to parking fees, although the extension of enforcement hours is currently under review.
What’s Next for Asheville Residents?
The March 26th work session was a critical first step in the budget process. Residents can expect to see further analysis from city staff on several key areas, including: the financial implications of different compensation strategies for city employees; opportunities to leverage affordable housing initiatives; potential revenue generation from expanding parking meter areas; and a detailed breakdown of the county’s property tax assessment practices. The council will continue this discussion at another work session on April 9th, focusing specifically on the Geo Bond plan. The proposed budget will be presented to the City Council on May 14th, followed by a public hearing and final budget adoption in June. Residents are encouraged to stay informed and participate in these upcoming opportunities to provide input on the city’s financial future.