Managers to Asheville City Council: City’s at ‘financial crossroads’

Managers to Asheville City Council: City’s at ‘financial crossroads’-attachment0

Asheville City Council began its annual planning process Friday afternoon with a stark assessment from the city’s top management: The recession has exposed “structural weaknesses in the city’s financial foundation” that will require a long-term City Council strategy to repair.

In a white paper titled “Asheville, NC 2010: A Financial Crossroads,” City Manager Gary Jackson and the city’s top managers lay out the city’s history. The report, drawn up last October, explains how factors such as annexation, population growth and state and local tax structures have impacted city finances. The managers’ aim was to detail the disparity between the city’s goals and the funding it has to execute those goals. The seven-member City Council, which includes three new first-time members, plans to discuss the report on Saturday as part of its retreat meeting.

The report shows that the city has lived off ever-increasing sales-tax revenues driven by population growth and the city’s status as a tourist town, as well as steadily rising property-tax revenues, the result of the city’s reputation as a desirable place to live.

The recent recession knocked those revenues down to historic lows, the report adds, noting that Asheville’s slow pace of annexation is also now a factor in its financial weakness. City Council resorted to short-term fixes last year, including cutting positions and spending $2 million of taxpayers’ money normally held in reserve to balance the budget.

“Unprecedented economic conditions certainly necessitated some short-term approaches to balancing the city’s budget; however, at the same time, they exposed structural weaknesses in the city’s financial foundation that were previously compensated for by strong growth in property values,” the report states.

“Now that the country has experienced a significant correction in real estate values and a slowdown in new construction, and the revenue picture shows no signs of improvement in FY 2010-11, Asheville must explore alternative approaches to balancing its revenues with the needs and expectations of its citizens.”

The report also highlights the fact that Asheville has a highly engaged citizenry, which has led to significant strategic-planning efforts and an expectation from residents that plans adopted by City Council be executed. City Council would have to spend an estimated $10 million a year over the next 20 years to fully implement all the priorities identified as the community’s priorities in the 16 plans Council has adopted over the years, according to the report. The plans focus on everything from river redevelopment and affordable housing to sustainability and combating homelessness.

City Council now faces a revenue shortfall of more than $5 million in the coming year if it plans to maintain the current level of services. The city must adopt a balanced budget for the 2010-11 fiscal year by July 1.

In their report, the city’s management offers up two possible solutions. The first is “to choose to be a low-tax, low-service community, cutting expenditures, programs and services as necessary to maintain balanced budgets each year.”

The other alternative, according to the report, is “to embark on an aggressive legislative and community process to build a diverse and balanced mix of revenues.” First steps could include an extension of the quarter-cent sales tax approved by the state, and exploring a bond program “combined with access to other revenues that tap the regional and tourism population as a means of bringing tax equity to Asheville citizens,” the report states.

Go to the Xpress Files to read the white paper and a related document showing the city’s strategic plans and their estimated cost.

— Jason Sandford and Brian Postelle

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25 thoughts on “Managers to Asheville City Council: City’s at ‘financial crossroads’

  1. Barry Summers

    I’m curious why the report offers two starkly different options: “choose to be a low-tax, low-service community” OR raise taxes.

    This strikes me as a false dichotomy, and it will lead to a polarizing debate rather than a creative mix of ideas.

  2. KAREN CRAGNOLIN

    IN THIS DISCUSSION I HAVE NOT NOTICE ANY MENTION OF EVALUATIONG PROJECTS BASED ON ROI – RETURN ON INVESTMENT — BUT MAYBE I MISSED THAT?

  3. Barry Summers

    After reading the report, I find some fault in the way it’s been summarized here by Jason & Brian – (although this could just be the way I interpreted their interpretation.)

    I see the case that Gary Jackson has made here as not an either/or between equally valid alternatives, as suggested in the article. I believe he is making a strong case to reject the “low-tax, low-service” alternative, and embark on the quest to broaden and refocus the city’s funding mechanisms. The trends that he spells out here that have led to the budgetary shortfall will only continue and worsen. If the city simply chooses to cut services to meet falling revenue, it will quickly become a place that no one wants to live in, or bring jobs to, and the downward spiral will continue. I agree that it’s time to seriously address the funding inequities, while at the same time restrain spending and looking for efficiencies in city services.

    I recommend reading this report.

  4. The only proper course is deregulation and tax relief. The city has already been embarking on a path of trimming the UDO for the purpose of stimulating local economy. Keep it up.

    Finding a so-called new tax “mix” is simply a form of tax gauging to fund boondoggle projects that will ultimately exacerbate the problem, not mitigate it. We already have a robust “mix” and look where it’s got us.

  5. Roman Circus
    Leslie Kulba
    http://western.johnlocke.org/blog/?p=1993

    […] Overall, the meeting left a bad taste in the mouth. Christmas week, yours truly had to run through a foot of snow in the woods carrying computer parts and boxes of assembly pieces in twelve-minute round trips to a vehicle parked as close as possible, in order to satisfy customers. Mechanics with knobby, scarred knuckles working three jobs to buy their kids shabby second-hand clothes are also taxpayers. Government does not have to satisfy customers. It need only sit around a grand table and say the people want glorious gateways and other expensive community identity designations and tender them the bill to pay or go to prison. Government thinks nothing of asking the mechanic to take a fourth job to pay for the greenways he will never have time to see. And yet, elected officials deny they are making anybody dependent on government.

  6. Barry Summers

    I find Leslie Kulba’s sarcasm and vitriol difficult to wade through.

    “The free market has, no doubt, failed, and the seven members on city council have the knowledge and power to employ people better than capitalists trying to provide goods and services the community demands. We do, after all, have czars. It is aggravating that three people who do not know the Supreme Law of the Land can get elected and start enacting socialist policies, and everybody else is supposed to be polite and uphold decorum by keeping their mouth shut.”

    Are there conservative voices out there that can weigh in without this sense of victimized righteousness?

  7. ThePhan

    It continues to disappoint me that the one very obvious (albeit difficult) solution to these problems is city/county consolidation, yet no one ever wants to talk about it.

  8. Barry Summers

    I admit I’m fairly uninformed about this, although I’ve heard it talked about a little – how would consolidation help?

  9. ThePhan

    As Gary Jackson’s report points out, the city is just not growing relative to other cities in NC, and to the county. If one of the problems is that (1) large numbers of workers come into the city from elsewhere, (2) the county is growing faster than the city, and (3) the city is unable to annex, placing more of a burden on city residents and businesses is not going to help. Eliminating duplication between county and city governments (and school districts) would create considerable savings.

  10. Don Yelton

    just maybe we need government to tell us where we park, where we live, how much water to use, how much fuel to burn and just let them take our pay check and give us what we need to live. But them we give free housing and let those people deal in drugs and prostitution and welcome illegals and give regular benefits to same sex partners and oh crap that means we have no freedom but in the area of sex and drugs if we have the money to pay for it. Will the goverment tell us how much to spend on prostitution and drugs. Do we need free will in anything?

  11. Don Yelton

    just maybe we need government to tell us where we park, where we live, how much water to use, how much fuel to burn and just let them take our pay check and give us what we need to live. But them we give free housing and let those people deal in drugs and prostitution and welcome illegals and give regular benefits to same sex partners and oh crap that means we have no freedom but in the area of sex and drugs if we have the money to pay for it. Will the goverment tell us how much to spend on prostitution and drugs. Do we need free will in anything?

  12. Barry Summers

    I hate to break this to you Don, but the government already tells you where to park, and where not to. I have the tickets to prove it.

  13. Don Yelton

    just got a real wise post back and it said that they hated to break it to me but the government already told him where to park, he had the tickets to prove it. Well let me ask you why you are driving a car. You should be green and be walking or riding a bicycle, or using the bus. We do not want cars down town—read the proposals would you….

  14. Don Yelton

    Karen how much return did we get on the 23 plus million for the Pack Square Conservancy?

    How are we going to replace the money that went with the disapearance of the race track?

    When the economy goes flat who buys art?

    What has river link done about the CTS problem and the poisons that run down dingle creek through the Rambles?

    Answer those questions please.

  15. Piffy!

    [b]How are we going to replace the money that went with the disappearance of the race track?[/b]

    Was there money buried under it?

  16. jefflink

    Was there money buried under it? Your kidding right? Common sense will tell you there was more money coming in to the local economy from the Asheville Speedway then Biltmore Estate is putting in. property taxes, sales taxes, advertising on cars of local let me shout that LOCAL sponsors. Then the fans would patronize local business’s and local business’s. Would then employ locals. Not to mention with Asheville’s racing history. We might have been able to get a once a year race that would bring in more money for the local economy.

    Also the property was valued at one million dollars which is now off the cities books as taxable so I guess you are right there is money buried there. Just imagine the property taxes on a million dollar property. Just like always the city was not thinking ahead just wonting to please the Biltmore Estate.

  17. ThePhan

    That’s funny…I thought the speedway (which was closed OVER 10 YEARS AGO) was privately owned and purchased by private entities as well. Didn’t realize the city should have forced it to stay in business…seems like an infringment on private property rights, huh?

    And if you think the speedway had a greater economic impact than Biltmore, you must be joking. It’s not even close.

  18. ThePhan

    Consolidation of city and county government (and school districts) would directly address some of the primary causes of revenue shortfall identified by the city manager, and would save both city and county taxpayers millions by eliminating service duplication.

    Of course, it will never happen. It makes too much sense.

  19. HKUSP

    Careful what you ask for, Phan. If City and County government were consolidated (which isnt’t really feasible given the fact that there are a number of other municipalities in Buncombe County), Asheville’s “Progressive” agenda wouldn’t be nearly as “fast moving”.

  20. Gary Kallback

    Below is a quote taken from your January 8, 2009, article titled, Managers to Asheville City Council: City’s at ‘financial crossroads’

    ” . . . the result of the city’s reputation as a desirable place to live . . .”

    Someone must be smoking something, which probably isn’t hard to do in Asheville.

    It is not Asheville that may be the desirable place to live, but instead most places outside of Asheville, the 23 counties in WNC and what they offer from Cashiers to the Highlands. They are places most retiring Americans would expect to find in the mountains, not a city center with a reputation that enables the homeless, hippies, and pot.

    Of all the Web sites on Western North Carolina I had researched in 2002 before moving here from New Jersey, not one mentioned Asheville and its city center.

    We only discovered Asheville was called the Freakiest City in America, (or to us Boulder East), after we moved here, later disturbed by a hippie progressive environment that made fun of our young son in uniform. We quickly understood why those retirement sites had ignored Asheville.

    Sick of the hypocrisy, I posted the URL below on the Web in 2006 that included a report that Money/CNN in 2006 had not listed Asheville as its 20 best places to live in North Carolina.

    http://www.freedomisknowledge.com/news/prestinemountainsofwnc.html

    It wasn’t hard to understand why. When looking at the stats listed for all cities, one of the important negative items was Asheville’s documented high crime rate that kept it off the list as a desirable place to live.

    I wonder now if Asheville city stats will only grow worse as a newly elected city council member looks to legalizing drugs, growing marijuana for profit, pushing abortions, backing off going after prostitution, and telling city services they may have their gasoline rationed.

    But this is the change city Democrat voters must have wanted for Asheville last November when they stood in their voting booths across the city and pushed those levers, obviously no gun held to their heads. It reminds me of the damning statement that warns, “Sometimes voters get the government they richly deserve.”

    Note that MONEY/CNN rates a city based on where Americans want to retire to for their safety, the safety of their families, and the safety of their possessions. This is not something progressives of the Democrat party understand while pushing their dictator-like leadership on the people, an oxymoron of our constitutional guarantee of self-determination.

  21. Barry Summers

    As a longtime (12 years) resident of WNC, I’m disturbed at the unhealthy influence exerted by recent transplants (10 years or less) who come down here from places like New Jersey, and don’t respect the traditions of liberalism, progressivism and community that we’ve built up here. Why do these fascists move here and ruin things for those of us who have lived here a year or two longer than them?

    I thought that our KGB-like tactics of exorcising the name ‘Asheville’ from national publications like MONEY would decrease the number of these people who move here, but a few always sneak in.

  22. J

    Barry,

    The pot’s over there. It’s calling the kettle black. Maybe you could go straighten it out?

    What’s the magic number of years one has to live here to be able to comment about what they’d like to see from the area? 6?, 7? 8.5? 9.34?

  23. jefflink

    The Phan, Please clarify you’re statement Biltmore as in everything with the Biltmore name because Biltmore Farms is a separate entity from the Biltmore Estate.

  24. Barry Summers

    Barry,
    The pot’s over there. It’s calling the kettle black. Maybe you could go straighten it out?

    I was being ironical. Look at the post from Carl. Here’s someone who’s only lived here for 7-8 years griping about how people who moved here from somewhere else having ruined Asheville. From his blog post up there, he mourns:

    “…liberals moving into the area and bullying their secular-progressive values onto the everyday people who used to own the surrounding green mountains”

    This, from someone who just recently moved here. Get a clue, Mr. Kallback. There has always been a alternative/counter culture aspect to Asheville, going back to the days of the spas and the TB clinics featuring alternative-healing methods. There have been generations of ‘secular progressives’ here – they didn’t all just show up on a Soviet cargo plane from Havana one day, pre-ruining things before the arrival of the ‘real’ everyday wealthy retirees…

  25. ThePhan

    jefflink, I am referring to Biltmore Estate only. Their economic impact was and is far, far greater than the speedway that closed 10+ years ago.

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