Asheville City Council tentatively endorses budget plan, uncertainties remain

While noting that much of its fate remains in the hands of the state legislature, at a special meeting this morning Asheville City Council gave staff the go-ahead to start drafting a budget based on a plan that assumes the city and county may consolidate their parks and recreation operations by January.

The plan also includes a 1 cent per $100 property tax increase — from 42 cents to 43 cents — to maintain the same level of revenue. While decreases in local revenue due to a state overhaul aren’t as dire as originally predicted, city staff still anticipate a $1 million loss. A parks and recreation authority would save the city $5 million. The plan also calls for increased infrastructure spending beginning in the summer of 2014, either using those savings or a 3 cents per $100 tax increase.

“There’s a lot still unknown and unpredictable about this,” Finance and Management Services Director Lauren Bradley told Council.

To make up the gap in the near term and deal with increased costs in healthcare, fuel, transit, and other areas, the city will freeze positions. The budget anticipates the city keeping its water system for at least another year (the matter is currently in court) and includes a three percent raise for city employees.

Some other plans proposed by staff called for sharper increases in taxes to pay for infrastructure or operating costs, especially if the proposed parks and recreation authority doesn’t go through. Currently, the legislation enabling the city and county to voluntarily merge their cultural operations is in committee in the state senate. If the merger doesn’t happen, Bradley noted the city will need to look for additional savings by deferring expenses, but “we’ll have some flexibility” if the city still has control of the water system by January.

“If the recreation authority doesn’t happen and we lose the water system, you would have a serious challenge,” she said. “We’ll have some tough decisions to make.”

“I know we have a staff of wizards, but so much of this hinges on what happens in the legislature,” Council member Cecil Bothwell said, wondering if Council could pass two budgets in June. Bradley noted that while not preferable, the city could modify the budget at the last minute to deal with changes coming from Raleigh.

“Asheville in particular is under attack in a lot of ways, and taxes are shifting from the state to the local level,” Council member Gordon Smith said, warning that if the city didn’t invest in infrastructure one way or another, it would decline. But he added that he likes the idea of a recreation authority, especially as — unlike the proposed water merger — it’s voluntary and the city retains ownership of its assets.

Staff will present its recommended budget May 28, though Council member Marc Hunt noted the city might need another scenario “ready to go… I don’t think any of us will go on vacation in June.”