The council’s finance committee – Vice Mayor Gwen Wisler and council members Vijay Kapoor and Julie Mayfield – met Thursday to continue work on its new spending plan. The council’s first budget workshop on March 20 showed that despite steady growth, city revenues aren’t keeping up with spending. The city has until the end of June to pass a balanced budget for FY 2018/2019.
City staffers detailed their list of new budget cuts and savings, most of which Wisler, Kapoor and Mayfield appeared to agree with, though the committee didn’t take votes on any of the proposals. Here’s a quick look:
-Reduce a planned 3 percent pay increase for city government workers to 2.5 percent, for a $300,000 savings. Wisler suggested looking at ways to cut that 2.5 percent increase for the city’s highest-paid workers. Wisler added that she thought Asheville City Council members, who are also paid by taxpayers, should forgo any pay increase in the upcoming fiscal year.
-Take $700,000 in projects like sidewalk improvements out of the city’s operating budget and move it into a separate pot, the city’s capital improvements budget. This budget is paid for by bond financing (though not the $74 million in bonds that city residents approved in a 2016 referendum.)
-Cut the next Asheville Police Department officer training academy class from 20 officers to 15 officers, for a $200,000 savings. (Each officer costs the city about $40,000.) The graduates of these classes go on to fill vacancies in the Police Department each year.
-Reduce the employer health insurance contribution to the tune of $255,000 by making changes to the city’s drug prescription benefit. The city also expects only a very small increase in its health care costs.
-Increase parking deck fees. This item is still be in flux, with no specific increases mentioned.
The one item that council members did disagree on was a a proposal to move $300,000 out of the city’s fund balance reserve. That idea “gives me heartburn,” Kapoor said. “I can’t support it.”
Kapoor said the city should be growing its fund balance during good financial times. He added that the city should be planning to pay out a settlement in a lawsuit filed by an Asheville resident who was beaten by an Asheville Police Department officer last August.
Mayfield said she thought the city’s liability in a possible settlement was capped at $500,000, but Kapoor said that wasn’t necessarily so. “It depends on how the settlement is reached,” he said.
There was no discussion Thursday of cutting the $1 million in new funding that was allocated to the Asheville Police Department last year for new downtown officers.
For new initiatives in the coming fiscal year, the council members were in agreement on funding a new Equity and Inclusion Office of city government, an effort that will cost about $340,000 a year. City officials last year hired an equity and inclusion manager, Kimberlee Archie, and plan to hire two or three employees to work in her department.
Mayfield said she would also continue to look for ways to fund an expansion of the city’s bus service. “I’m not going to give that up until the very last day.”
Council members discussed a potential windfall in the form of increased property tax revenues connected to for-profit HCA Healthcare’s pending acquisition of not-for-profit Mission Health. A sale would bring the city of Asheville an estimated $6.8 million in new property tax revenue, money that won’t be available until the 2019/2020 fiscal year, city staffers said. Mayfield said Mission Health appears “very committed” to the acquisition, which may be approved by the fall.
At the end of the discussion, council members talked about the need for a long-range approach to the budget process. Kapoor said his guiding question was, what are the core services the city should provide, and does staffing fit that need. City staffers said they agreed with taking a multi-year approach on crafting a city spending plan, but that effort would likely begin after the adoption of the upcoming budget.
In wrapping everything up, Wisler said that, unlike Kapoor, “there’s nothing here that gives me heartburn.” She tempered that by adding the city “will be in a crisis” if the Mission Health sale falls through.
Note: The property tax rate in city of Asheville is 42.89 cents per $100 of property valuation. One penny on the tax rate is equal to about $1.47 million. So the city of Asheville’s budget deficit of $3.5 million is equal to about 2 cents on the tax rate.