Budget takes center stage at City Council on May 10

Financial matters dominate City Council’s meeting agenda for its May 10 regular meeting. Barbara Whitehorn, the city’s finance director, will present a proposed budget for Fiscal Year 2016-2017, which begins on July 1, 2016 and runs through June 30, 2017. The $110 million in spending represents a 4.5 percent increase over the current budget. If approved, city employees will get an average 3.5 percent raise, while citywide operating costs will increase 8.4 percent. Whitehorn’s presentation will be for the purposes of information; a public hearing on the proposed budget is set for May 17 at the Council’s next regular meeting.

The largest single category in the city’s budget is public safety, which accounts for over 40 percent of the city’s spending with a proposed budget of nearly $48 million. Salary and benefit increases for police and fire employees, along with a new crime analyst position funded for the police department, account for a $1.4 million increase in the public safety budget over the current year.

The city’s next largest expenditure category is general government, which will get $19.4 million in the upcoming year. In a summary, City Manager Gary Jackson explains increases in this category:

The increase in General Government expenses is due to several factors including: 1) the addition of $250,000 as one-time seed money for the potential development of a community fund loan program for small businesses; 2) the addition of the Equity Program Manager and Deputy City Clerk in Administrative Services and the addition of a Project Manager in Information Technology Services; 3) the inclusion of $375,000 in one-time funding for a contracted facilities and real estate diagnostic study; and 4) the inclusion of $90,000 to fund an external payroll and benefits audit. The General Government increase is also partially due to the fact that funding for citywide market pay adjustments, as well as contingency funds for inflationary increases, are currently being presented in this service area. The budgetary change most directly impacting the Culture and Recreation service area is the proposal to begin paying all temporary/seasonal staff a salary that meets the living wage guidelines for Buncombe County. This change has the biggest effect in Parks & Recreation and at the US Cellular Center, which are both large users of non-benefitted labor. In Parks & Recreation, the estimated impact is $150,000 and at the US Cellular Center it is $90,000.

Spending on environment and transportation, which accounts for 15 percent of the budget, will increase $1.1 million to $16 million. The increase is driven primarily by the expansion of transit services scheduled to begin in January 2017. The service enhancements include the addition of one bus on the S3 route to the airport and an extension of service hours (eight hours between morning and night, depending on ridership).

Culture and recreation will be funded at $11 million, while community development will receive nearly $6 million.

On the revenue side, property tax is the largest single source of revenue to the city’s coffers. Projected property tax revenues for the coming year are $55.5 million, a two percent increase over the current year. The city tax rate will remain the same at 47.5 cents per $100 of assessed value.

Though charges for city services like water and trash collection bring in a slightly higher amount than property taxes (almost $57 million), they come with significant costs to offset the revenue they generate.

Sales tax revenue, which will account for nearly $22 million, is expected to increase 5.4 percent in the current fiscal year and another 5 percent next year.

The city projects over $161 million in revenue during the year, up from $154 million in the current year. Whitehorn will also present a financial update for the third quarter of the current fiscal year.

Additionally, Council will hear a report on 2015 operations from the Asheville Regional Airport.

Public Hearing

Finance Director Whitehorn also will introduce the meeting’s single public hearing item, the issuance of 2016 Limited Obligation Bond anticipation notes as a financing mechanism for current Capital Improvement Projects (CIP). This financing method has been used several times in the past by the city, including in 2012 to repair and renovate City Hall and in 1997 for the construction and renovation of the Municipal and Water Maintenance Buildings and Grove Arcade.

According to a memo from Whitehorn, limited obligation bond repayments are “payable solely from currently budgeted appropriations of the City.” When the projects are complete or nearly complete, the city will take out long-term bonds to finance their repayment.

The current CIP budget represents $149 million in spending from 2014 to 2020. The largest single project is the River Arts District Transportation Improvement Project at $14.8 million. Craven Street improvements, budgeted for $8 million, are underway. Greenway projects including the Beaucatcher, Clingman Forest, Town Branch and French Broad River West greenways account for a budgeted total of $6.5 million (though current construction estimates are higher). A radio infrastructure project will get $6 million. Ongoing renovations at City Hall have a budget of nearly $6 million. One category of street and sidewalk construction will get nearly $4 million, with Hendersonville Road sidewalks receiving a separate $4 million. $2.4 million is budgeted for city fire station #14, though estimates are considerably higher at nearly $4 million.

Consent agenda

In its consent agenda, Council will vote to accept a $12 million grant from the Federal Aviation Administration for runway rehabilitation. Two franchise agreements, one to Catherine Hunter for operating a carriage horse business in downtown Asheville and another for a low-speed vehicle service, are included. Council will vote on a $300,000 contract for rehabilitation of the Carrier Park sports court and recreational facilities, as well as alcohol licenses for upcoming outdoor events.

Proclamations

City Council will announce the following proclamations:

• May as “Motorcycle Awareness Month”
• May 15-21, 2016, as “National Public Works Week”
• June 6-12, 2016 as “Hemp History Week”
• May as “Lyme Disease Awareness Month”

Boards and Commissions

Council will consider candidates for city boards and commissions including the Civic Center Commission, the Civil Service Board and the Haywood Street Advisory Team.

Next meeting

City Council will meet again on May 17. Council meetings are held at 5 p.m. in Council chambers on the second floor of City Hall.