Asheville City Council is facing up to hard choices about the city’s budget for fiscal year 2020-21, albeit virtually. At a May 12 work session — Council’s first meeting to be conducted entirely online, under new rules enacted as part of the N.C. General Assembly’s COVID-19 relief package — elected officials heard a plan for the city to spend less and delay new initiatives in light of the pandemic’s impact.
A conservative approach was warranted, said city Chief Financial Officer Barbara Whitehorn, due to the tremendous economic unknowns created by the coronavirus. She pointed to national data on retail sales, which were down 6.2% in March compared with the same month in 2019; previously, the country’s largest recorded year-over-year drop was 4.3% from November 2007 compared with the same month in 2008, at the nadir of the Great Recession.
“We really don’t have an idea of how bad things could get or how quickly or slowly we will recover, and that’s why we are emphasizing that we have major uncertainty in all of our numbers,” Whitehorn explained. “We’re sort of in uncharted territory right now.”
Debra Campbell, Asheville’s city manager, said she was recommending no new spending for projects that Council had previously explored, such as renewable energy on city buildings and an urban forest master plan. All departments, she added, had also been asked to cut their budgets as much as possible “with a focus on minimizing operational impacts.”
In contrast with the city’s April budget session, Campbell did not provide a specific target for government expenditures. At that time, she had projected a general fund budget of $135.7 million, up roughly 2.5% from the $132.3 million budget adopted for the current fiscal year.
Although the city has no immediate plans to lay off or furlough existing employees, Whitehorn said a current freeze on hiring would be extended through at least December. And while some of Asheville’s lowest-paid workers will see their wages increased to the equivalent of $15 per hour, there will be no citywide cost-of-living raise.
Council member Brian Haynes noted that the pay increases omitted 35 city firefighters who had been identified by the nonprofit Just Economics as earning less than a living wage. He estimated the annual cost of bringing those employees to $12.15 per hour as roughly $37,000 and said such an increase would be “the least we could do.” Campbell, however, expressed concerns that bumping the salaries of early-career firefighters would comparatively devalue the wages of those who had been with the city for several years.
The only new projects in the budget proposal, at a total cost of $78,000, are extended hours for city community centers and an after-school program coordinator for Asheville City Schools. That money would come out of the city’s $242,000 Strategic Partnership Fund allocation, leaving just $164,000 for competitive grants to other community initiatives.
Council member Vijay Kapoor, who works as a financial consultant for other governments, said Asheville wasn’t alone in its dire budgetary straits — and that its leaders should be prepared for even rougher times ahead. “I know we’re talking about what would happen if things got better,” he said. “I think the more likely situation is that we’re going to have to be talking about if things are actually worse here.”
Campbell will present a formal budget recommendation to Council on Tuesday, May 26. A public hearing will follow on Tuesday, June 9, and Council’s vote on budget adoption is scheduled for Tuesday, June 23.
Updated May 14 at 10:50 a.m. to correctly reflect proposed firefighter pay increases.
If it weren’t so sad this piece would be humorous. Constituents are laid off, have few hours and are taking pay cuts.
City revenues are going to be an issue. The bold initial plan—no staff increases, deferring an energy project of questionable payback over any horizon and somehow trying to get by without an urban forest manager.
Give me a break. Give every department head a 10-15% cost reduction target. Don’t ask if –tell them need a plan on how to do it. If they won’t/can’t there’s a quick 200k savings with the department head firing.
And speaking of 200k, there’s some easy money we pee’d away on the hotel court case the council knew would be a loser. What point were we making? Wasn’t worth 200k.