- Asheville facing $5.1 million budget shortfall next year
- Asheville City Council Nov. 24
- Council contemplates living-wage requirement for city contractors
- Council members approve federal-stimulus-backed infrastructure projects
- City signs off on parts of Woodfin annexation deal
For the Asheville City Council, Nov. 24 was a day of transition. It marked the last meeting for Kelly Miller, Robin Cape and Carl Mumpower. Awareness of that fact loomed large, both through various Council members' expressions of gratitude and through a repeated reluctance to cast decisive votes on important issues. Among the items deferred were reducing Council's authority over downtown development, requiring companies the city hires to pay a living wage and renovating the municipal golf course.
Meanwhile, a picture also emerged of what incoming Council members Esther Manheimer, Cecil Bothwell and Gordon Smith may encounter. Staff projections show Asheville facing a $5.1 million budget shortfall in the next fiscal year, which begins July 1, 2010. That grim news will mean still more cuts — 4 to 8 percent in every department — in a city government that has already seen plenty of them.
"We've tried everything we could to balance the budget, and operating budgets are already tight," Chief Financial Officer Ben Durant told Council.
On top of that, he added, the costs of transit, operations and particularly health care are continuing to rise. That last matter is especially vexing: health-care expenditures exceeded premiums collected by $1 million this year, and costs have been climbing 10 to 15 percent annually over the past four years.
To make matters worse, due to declining sales-tax revenues, the city fell another $699,000 short, leaving its fund balance at just 15.1 percent of the city's budget. That's a major decline from the 30.2 percent reserve fund the city had as recently as 2005.
Foreseeing dire days ahead, Mumpower repeated his oft-heard rebuke about Council approving projects that he believes are frivolous. "This comes from not living within our means," declared Mumpower. "We've been able to get away with spending this kind of money because of constant growth, and if that growth doesn't continue, we will have a serious train wreck."
Cape, however, defended Council's record over the past four years, asserting that they've tackled much-needed capital improvements, such as repairing the water system and the Civic Center roof. "Fund balances can be too low, but they can also be too high," she maintained. "There's no point in having this massive pot of money while the citizens go hurting."
Miller, meanwhile, saw difficulties ahead as Asheville's normal seasonal tourism slowdown combines with continuing economic troubles, predicting, "It's going to be a long, cold winter."
The wages of Asheville
Amid the city's stretched financial situation, the new Council will also confront the question of extending its in-house living-wage policy to city contractors. Over the past few years, the Asheville-Buncombe Living Wage Campaign, a coalition of local nonprofits and other groups, has been pushing for a living wage for local workers, currently defined as $9.85 an hour with benefits or $11.35 without. City Council formally adopted a living-wage policy for city employees in 2007; the campaign has asked Asheville to require all companies signing city contracts to meet the same standard.
Some Council members seemed to be on board with that idea. "It's worth talking about the reality here: There are janitorial workers on city contracts who haven't seen a raise in 10 years," said Cape. "There's also benefits to better pay: People spend more money and help stimulate the economy."
Others were less impressed, however. Mumpower hit the proposal with one of his favorite epithets, dubbing it "socialism." And Vice Mayor Jan Davis, who owns a local tire business, noted that while he does pay a living wage, he felt uncomfortable having the city tell contractors that they must also do so. Miller, meanwhile, voiced doubts about "forcible wages. That sort of thing didn't work in the Soviet Union; there's a big difference between a living wage and a forcible one that harms the free market." But he also said the proposal is worth studying, and even made a motion directing city staff to gather data on what the ordinance would truly cost before coming back to Council in June.
City staff said they'd analyzed a similar ordinance in Durham, but they worried that some parts of a living-wage requirement could conflict with state rules governing municipal contracts. Staff recommended looking into implementing a living-wage requirement for smaller contracts before applying it more broadly. Staff also noted that monitoring the living-wage rule could require up to $15,000 for an auditor.
Members of the public also weighed in.
"There was a 20-city survey done looking at effects of living-wage laws on contractors; they found that the costs were less than one-tenth of 1 percent of their overall budget," Sarah Osmer, coordinator of the advocacy group Just Economics, told Council. "The cost is not as much of an issue as you might think."
Just Economics member James Sheeler criticized the city for what he viewed as overly long delays in addressing the matter. "It's nothing but stall, stall and stall," he charged. "There is no necessity to wait until June of 2010 to get information; there's plenty of information here. It's not as hard as it's being made out," asserted Sheeler. "We're talking about people in this city that work but aren't getting enough to live here; we have a responsibility to them."
But Laura Copeland, representing the Asheville Area Chamber of Commerce, urged caution. "The Chamber would like to thank the city for working very carefully on this issue," she said. "There's a lot of things that haven't been covered."
Cape didn't think the outgoing Council should constrain the new one by insisting that they wait until June to discuss the matter. After some discussion, Miller agreed to withdraw his motion and let the next Council decide what it wants to do.
City staff reported on the cost of running water lines to people living along Chapel Hill Church Road in the Mills Gap Road area, where a recent test showed high amounts of tricholoroethylene in a homeowner's well. Staff had researched the question in response to a request from residents of the neighborhood, which adjoins the contaminated former CTS of Asheville site.
The area in question sits just 1,000 feet outside the city limits. Tricholoroethylene is considered a probable carcinogen, and while other wells have not tested positive, residents fear the contamination may spread.
Buncombe County has balked at installing new lines, however, asserting that there's no imminent danger. According to city staff, it would cost $277,000 to connect all the road's residents to city water. "We recommend passing this information on to the county: This is their jurisdiction," said water engineer Blake Esselton.
Council unanimously agreed, adding that the county should continue to work on ways to tackle the contamination in the area.
On four 6-1 votes, City Council approved a bundle of infrastructure improvements to be entirely paid for by federal stimulus funds, including re-paving Coxe Avenue and improving sidewalks on Kimberly Avenue. Mumpower cast the dissenting votes on all the measures, saying, "We're leaving a terrible burden on future generations by incurring this federal deficit."
In that spirit, Council declined to approve spending $238,000 to upgrade the water system on the back nine holes at the municipal golf course. Council member Brownie Newman and Mumpower both cited the need to keep spending under control, though Council did agree to revisit the matter once they have clearer projections for next year's budget. Only Davis and Council member Bill Russell supported the measure, which was defeated 5-2.
The city also signed off on most parts of an annexation agreement with neighboring Woodfin. They defined several boundary areas and agreed that neither would annex any portion of Leicester Township for the next two years. However, Davis, Mayor Terry Bellamy and city staff are still negotiating the western boundary between the two municipalities.
On another front, Council members postponed voting on a resolution requesting the state Department of Transportation to speed up completion of the proposed Interstate 26 connector until after the new City Council meets with the Buncombe County commissioners in January. Although the statement endorses no particular design for the controversial road, it does ask the DOT to accelerate the construction process. Newman proposed that Asheville, "as the community most affected by this," add language to the resolution requesting that its land planning be respected during the process.
While individual governing bodies have approved resolutions on I-26 before, this one is intended as an expression of unity on the part of the county commissioners and all municipalities in Buncombe.