Asheville City Manager Debra Campbell presented her first budget proposal to Council members during the body’s May 14 meeting in City Hall. The net proposed operating budget stands at $190.31 million, a 5.4% increase over the adopted budget prepared last year by then-interim City Manager Cathy Ball. She said the spending plan aligned with the priorities outlined by Council members in March during their annual retreat, which focused on transit, affordable housing and expanding partnership opportunities with Asheville City Schools.
Tony McDowell, the city’s budget and financial reporting manager, said implementing phase one of the Transit Master Plan remains the top budget priority. An additional $1.2 million from Asheville’s general fund, he said, would add an additional 20,400 annual hours of service to increase the frequency of existing bus routes, boost staffing to improve customer experience, provide vehicle maintenance and fund a maintenance facility study.
The budget also included a 2.5% cost-of-living pay raise for all city employees, which would take effect in July. Additionally, Campbell allocated $150,000 to fund a compensation and classification study, which would examine employee pay and the current labor market to guide the 2020-21 budget cycle.
Despite the proposed raise, around 140 city employees would continue to make less than $15 per hour. Council member Keith Young suggested that funds allocated for the 2.5% pay raise instead be used to first bring all city employees up to that salary level, with the remainder used to provide a modest increase for other employees. “I would really like to see that done this budget cycle and not wait for a study,” he said.
While Campbell agreed with the need to boost wages, she noted that increasing the minimum pay without first providing raises for long-term city staff could cause employee dissatisfaction.
“We definitely want to adjust staff salaries but we want to do it in a much more holistic way that looks at all benefits in addition to salaries,” Campbell said. “I just want to do it in a much more holistic way so that I don’t have the issue of a trainee who is coming in making $15 an hour with somebody who has been employed for five or 10 years at $15.03. I’m just saying in terms of morale, it’s a significant issue for me.”
As the debate continued, Mayor Esther Manheimer accused Young of “grandstanding” and reminded Council members that they could discuss the issue during a future hearing on the budget.
“I’m a little bit concerned that we’re not listening to our city manager talk to us about the HR aspects of this,” Manheimer said. “We need to give her the opportunity to work through this in a way that is best for the city and best for her ability to manage the staff. I don’t want to undermine her in her first year; this is her first budget.”
One of the biggest factors influencing the proposed budget, noted McDowell, is the sale of the Mission Health hospital system to Nashville-based HCA Healthcare. As a result of that purchase, the city stands to earn an additional $3.1 million in combined property and sales taxes in fiscal year 2019-20. That tax revenue is then projected to increase by another $2.2 million in fiscal year 2020-21, bringing the total to $5.3 million; previous county estimates had set that annual revenue at approximately $8 million.
The city’s general fund budget of $132.26 million, a nearly $8 million increase from last year, reflects higher costs for fuel and fleet maintenance for city operated vehicles, higher monthly payments for economic incentive contracts, purchase and maintenance of Asheville Police Department cameras and outreach services for Asheville’s homeless population.
The budget also includes additions to the city’s Capital Improvement Program, including an additional $8 million to fund the construction of a new fire station on Broadway Avenue, $225,000 to replace computers used by city staff and a yet-to-be-determined amount for the interconnected Grant Center and Walton Street Pool in Southside.
The consent agenda, which Council approved during the meeting, confirmed that the public hearing on the budget will take place at 5 p.m. on Tuesday, May 28, at Council chambers in City Hall.