The situation presented to Asheville City Council at its Feb. 12 budget briefing by Barbara Whitehorn, the city’s chief financial officer, was “not really a new story,” according to Mayor Esther Manheimer. Asheville’s government, she said, has long recognized that its capital spending was not keeping pace with its needs. “We’re just putting it all on slides right now,” she explained.
But the $270 million difference between Asheville’s capital improvement plan through fiscal year 2023 — roughly $60 million — and the $330 million requested by city departments through fiscal 2024 came as a wake-up call to at least one Council member. “It’s a little bit of a new story for me, in terms of the overall numbers,” said Vijay Kapoor.
That story, Whitehorn explained, consists of multiple interwoven threads. First is Asheville’s unusually conservative approach to issuing bonds, the legacy of massive municipal debt accrued in the 1920s that wasn’t fully repaid until 1976. Many cities, she said, conduct general obligation bond referendums every two to four years, but Asheville had a 17-year gap between its most recent bond issue in 2016 and a previous, unsuccessful referendum in 1999.
The last successful bond referendum, Whitehorn added, took place in 1986 — earning a laugh from Council when she accompanied that date with the record cover to “How Will I Know” by Whitney Houston. “The impact of that on our community is that meeting services and being able to keep the infrastructure in a good place is really challenging,” she said.
The second contributor to the funding gap, Whitehorn said, is the skyrocketing cost of construction in a competitive economy. Planned projects with a $7.5 million budget are now estimated to cost $15.7 million, or more than double the original projection.
“That’s a little scary,” Whitehorn acknowledged. “When you have your finance person, who’s going to be the most conservative person in the room, saying, ‘Let’s add a million dollars to that,’ and then you’re still $3 million short — it’s a bit of a crazy environment.”
Finally, Whitehorn noted that annual maintenance spending on the city’s existing infrastructure was nearly $5 million below needed levels. Even without adding any new projects, she explained, Asheville should be spending $7.4 million per year on roofs, facilities, sidewalks, traffic signals and parks by fiscal 2024.
Council’s largest unsupported capital project is the Transit Master Plan, which calls for a new $50 million bus maintenance facility and $12 million to expand service. Answering a question by Council member Brian Haynes, Whitehorn said staff “has no current plan in place” to fund the facility but is evaluating options.
Council member Julie Mayfield, who has championed the transit plan, noted that the exact details of the maintenance facility would be worked out through a future study and that federal grant money might defray a significant portion of the cost. However, Whitehorn confirmed that the city’s proposed transportation budget for next year contains no money to conduct that initial facility study.
At the end of the meeting, Kapoor expressed his concerns about the city’s financial circumstances. “It shocks me, in terms of just looking at the lack of debt,” he said. “It’s penny-wise, pound-foolish. … I’m not trying to blame other councils before us, but that is the issue we are dealing with right now, is how to basically fund what wasn’t funded in years past.”
City Manager Debra Campbell called the briefing “food for thought” as she encouraged Council members to focus and prioritize their objectives. “This is why we’re presenting this information,” she said. “We’ve got some tough decisions that we need to make over the next several years.”