City Council FY2027 Budget Work Session – March 24, 2026

City Council Grapples with Budget Gap, Considers Compensation & Parking Changes

On March 24th, 2026, the City Council held a work session to delve into the proposed FY2027 budget. The meeting, attended by City Council members, key city staff including City Manager DK Wesley, Finance Director Tony McDowell, HR Director Emily Probiance, and Transportation Assistant Director Jessica Morris, focused on addressing a significant budget gap of approximately $16.8 million and exploring strategies to balance the city’s finances for the upcoming fiscal year. This session was primarily focused on discussion and analysis, laying the groundwork for future budget decisions impacting residents and local businesses.

A major portion of the discussion centered on how to close this budget gap, which stems from rising costs like inflation and healthcare expenses, the ongoing 2024 GEO bond referendum for infrastructure improvements, and increased staffing needs within the Asheville Police Department. Staff presented several options, including eliminating vacant positions, potentially reducing services like community center hours and pausing funding for the AVL Arts Grant Program and contributions to the Housing Trust Fund, and temporarily reallocating funds from other city accounts. While these options were discussed, a significant portion of the meeting was dedicated to exploring employee compensation adjustments. After considering four scenarios – ranging from a uniform 3.3% increase to a targeted approach based on market study findings – the Council leaned towards a hybrid approach (Scenario 4): a smaller immediate increase of 2.5% coupled with future allocation of funds to address pay disparities identified through a forthcoming market study. This approach aims to provide immediate relief while addressing long-term compensation equity concerns.

Beyond personnel, the Council also explored potential revenue enhancements and service adjustments related to parking. Jessica Morris presented a plan to optimize parking services, proposing adjusted rates in garages and lots to encourage demand shifting, expansion of metered parking into areas like South Slope (with community engagement), and potential adjustments to the "first hour free" parking policy. Concerns were raised about the impact of these changes on South Slope businesses, particularly in light of ongoing stormwater project concerns. While no formal public comment period was held, Council members reflected community anxieties about the potential effects of these changes.

What's Next & Why It Matters:

The Council’s work is far from over. Several key action items emerged from the session, directly impacting residents and businesses:

• More Detailed Analysis: City staff will provide a more in-depth analysis of the financial implications of various scenarios, including detailed cost and revenue projections.
• Compensation Study: A market study will be conducted to inform compensation decisions and address pay disparities, ensuring fair wages for city employees.
• South Slope Engagement: The city will actively engage with South Slope businesses and residents to gather feedback on proposed parking changes, ensuring a collaborative approach.
• Upcoming Work Session: The Council will reconvene on April 14th to discuss enterprise funds, the business improvement district, and the capital improvement plan (CIP), along with updated information on property tax rates.
• Budget Adoption: A proposed budget will be presented in May, followed by a public hearing and final adoption in June.

This work session marked the beginning of a crucial process that will shape the city's financial landscape for FY2027. Residents are encouraged to stay informed by reviewing meeting minutes and attending future sessions as the Council works towards a balanced budget that addresses community needs while navigating financial challenges. The decisions made in these upcoming months will directly impact city services, employee compensation, and the overall economic vitality of Asheville.