The process leading up to the city’s proposed budget for the 2016-2017 fiscal year, which starts on July 1, began over eight months ago in September 2015, the city’s finance director noted at City Council’s meeting on May 10. “This has been a very collaborative process this year with Council and staff,” said Barbara Whitehorn, “and we’ve tried to involve Council at every step along the way.”
The city expects to receive $110.7 million in general fund revenues, $36 million in water utility funds and $23.7 million from other city funds, for a total, Whitehorn said, of around $170 million. When interfund transactions are removed from the numbers, the total city budget will be around $161 million.
The city’s largest revenue source is property taxes. The property tax rate will remain unchanged, at 47.5 cents per $100 of assessed value. Some city fees and charges have increased; in accordance with Council’s direction, fee increases are focused on services that are used by only some of the city’s residents, such as user fees at the Aston Park tennis courts and motor vehicle registration fees. Solid waste collection fees, which are charged to homeowners, will increase across the board, however.
Some financial trends that could have a negative impact on the city’s budget in the coming year, Whitehorn explained, include low unemployment – which makes retaining and attracting high quality employees more difficult – rising healthcare costs and rising labor and construction costs.
At 4.4 percent, Asheville’s unemployment rate is the lowest in the state, Whitehorn said, meaning the city must ensure that salaries and benefits remain competitive. City employees will see their healthcare contributions increase for the first time in several years.
Another major cost for the city is the cost of construction for the many capital improvement projects underway or due to begin soon. Nationally, Whitehorn said, construction costs have risen 14 percent since last year, though costs in Asheville may have risen even more.
Vice Mayor Gwen Wisler pointed out that the expected unassigned fund balance projected in the documents presented during the meeting was higher than previous projections. Whitehorn confirmed the higher figure, saying that it’s difficult to know for sure how the year will end up. Councilmember Julie Mayfield asked that any higher-than-expected revenue be directed toward offsetting Community Development Block Grant funds dedicated to the redevelopment of the Lee Walker Heights public housing neighborhood. Replacing those funds, Mayfield said, would free up money for other community development organizations and projects. The larger Council indicated agreement with Mayfield’s suggestion.
After Whitehorn concluded her presentation, Councilmember Gordon Smith expressed mixed feelings about the solid waste fee increases included in the budget. “What we are trying to do this year is to increase cost recovery,” Smith said. Going forward, he continued, he hoped people who reduce the volume of the trash they throw away will save money when a new “pay as you throw” program goes into effect.
Mayor Esther Manheimer asked Whitehorn to clarify the easiest way for the public to access the proposed budget. City Director of Communications and Public Engagement Dawa Hitch said there is a budget button right on the city’s homepage which links to the budget document.
For more information on the proposed budget, see Budget takes center stage at City Council on May 10.
A public hearing on the proposed budget will be held at City Council’s next public meeting on May 17 at 5 p.m.
Public hearing on limited obligation bond anticipation notes
Whitehorn remained at the podium to introduce a public hearing on the city’s plans to issue up to $46 million in limited obligation bond anticipation notes. The notes, which will be used to finance spending for the city’s capital improvement projects, are a form of short-term financing which allows the city to take out smaller amounts of debt and to only pay interest on money it has actually withdrawn to pay for projects. If the city took out long-term financing to cover the expected $107 million in capital spending planned for the next five years, she explained, interest charges on the entire amount would begin immediately. Thus, the short-term, variable-rate financing offers savings on interest.
The short-term bonds will be used to finance projects while they are under construction. Once a project is complete, the short-term financing will be converted into long-term, fixed-rate bonds.
A number of capital improvement projects will be financed through the short-term debt. 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.
No member of the public commented on the proposed financing mechanism. Council will vote on adopting the mechanism at its next meeting on May 17.
Boards and commissions
Wisler reported on the recommendations of Council’s Boards and Commissions Committee, which had met earlier in the afternoon. The committee considered candidates for two openings on the Civic Center Commission, one of which is available immediately. The second begins on July 1. Corey Atkins was recommended for the first opening and Joe Greene for the second. Council unanimously voted to appoint the two.
Wisler said the selection of a new Chair for the Civil Service Board has been deferred until June 28.
For three openings on the Haywood Street Advisory Team, Council will interview Gary Anderson, Richard Fort, David Nutter, Susan Andrew, Geronimo Owen and Leslie LeBlanc on May 17.
A group of Reynolds High School students and their advisors presented a request to extend city bus routes to serve Reynolds Middle School and Reynolds High School. Cindy Oak, a retired school counselor from Reynolds Middle, explained that the closest connection to the city transit system is at River Ridge Marketplace, 1.9 miles from the school. Students needing transportation for after-school activities, athletics, credit recovery classes and employment have no public options. Also, students who miss the school bus in the morning or who become sick during the school day cannot access transportation.
The students have previously presented their case to the Buncombe County School Board and to the Buncombe County Board of Commissioners.
After the presentation, Mayfield commented that she has been working with the group for about two years. Since the city buses don’t usually run in the county, she said, Buncombe County needs to pitch in to help fund the service. Not having access to transit connections, she continued, “limits opportunity for many students: to graduate, to participate in activities.” She urged Council to work to find ways to lift those barriers, which disproportionately impact students from economically disadvantaged families, whose parents may lack personal transportation themselves or whose work schedules prevent them from providing transportation during afternoon hours for their children.
Manheimer asked City Manager Gary Jackson to add the item to the agenda for his regular meetings with Buncombe County Manager Wanda Greene. Jackson said he would report back to Council on the issue.
Smith noted that there had been a long history of cooperation between the city and the county on transit, but the effort waned during the recession. Mayfield concluded the discussion by saying she had asked the Multimodal Commission to include a study of the costs for service to the Reynolds campuses in the upcoming Transportation Master Plan update.
YMCA part-time swimming instructor Maureen Quinn asked Council to consider a new aquatic center. The pools at Recreation Park and the Zeugner Center, she added, “are on their last legs.” Swimming skills prevent accidents over a person’s lifetime and create a healthier community, she said.
An Asheville resident said the board of the Asheville City Schools lacks accountability. He asked Council to dissolve the city school system and merge it with the Buncombe County system.
Smith noted recent media coverage of affordable housing issues in Asheville. Since the city commissioned a report on housing affordability last year (known as the “Bowen Report”), the situation has become even more acute, he said. The people of the city, Smith concluded, demand that Council address the issue in a substantial way and as quickly as possible.
Mayfield briefly reported on a trip she and Cathy Ball, the city’s executive director for multimodal transportation and planning, took to Utah to participate in a workshop as part of the joint Energy Innovation Task Force with Duke Energy and Buncombe County. As a result of work done at the training, Mayfield said, the task force will present its first foundational plan for reducing the growth in energy demand in Western North Carolina at its first meeting on Friday, May 13. The meeting is open to the public and will be held from 10 a.m-noon at the city’s Public Works building on Charlotte Street.
Council adjourned at 6:30 to go into closed session.
Council’s next meeting will take place on at 5 p.m. on May 17 in Council chambers on the second floor of City Hall.