Budget breakdown

by David Forbes June 10, 2016

The city of Asheville is set to pass a $161 million budget. Here’s what’s in it — and just as important — what isn’t

It’s that time of year again, as Asheville City Council will, next week, vote to pass an annual budget, specifically $161 million in this case. You can read it here.

Now, aside from us urban policy masochists, “annual budget!” doesn’t exactly get the blood flowing when one hears it. But there’s a lot behind that, because this one vote affects pretty much everything the city will do for the next 12 months (and in many cases a good deal longer than that).

If this year’s budget goes through as written, for example, Asheville will take the first steps towards far heavier policing in the core of the city, later transit hours on some routes, overhauling Asheville’s oldest public housing project, studying in-depth racial equity (or lack thereof) in the way the city operates and hike what you pay on everything from trash to registering your car. Also: there are a lot of studies.

Just as important are some of the projects that didn’t get funded and some of the events that didn’t come to pass. All this emerged from the depths of City Hall, along with some Council deliberation and a public hearing a few weeks ago.

So here’s a look at exactly what’s going on with this year’s pot of money.

What isn’t happening — One of the biggest stories this year is what didn’t come to pass. Twice in the last three years, including last year, a majority of Council’s voted to raise property taxes, which are the lion’s share of how it gets its general fund (and importantly, one of the main things it can raise or lower without needing approval from the legislature). Each time, Council’s claimed that this was a necessary step in the face of declining revenues from the state, both to maintain current services and to have any hope of accomplishing the “aspirational” projects that the majority believes might blunt the affordable housing crisis. At the time of the first hike, in 2013, this was unusual — Council had typically been incredibly reluctant to raise taxes — but the members who supported it sailed to re-election later that year. Even though incumbents and their supporters didn’t fare as well last year, conservatives running against the tax increases also fell short, failing to muster enough votes to make it past the primary.

This year, however, there’s no tax hike. While the general assembly is still in session and there was some earlier discussion that Powell Bill funds (dedicated to municipalities improving their streets) might end up on the chopping block, this year’s budget keeps the tax rate the same (the fees, as we’ll get into in a moment, are a very different story) as before.

Also, what was expected to be one of the most controversial fee changes — a hike in bus fares across the board — didn’t emerge. While seriously considered by staff and discussed earlier this year, it didn’t end up in the budget and staff explicitly made clear at the last Transit Committee meeting that it wouldn’t be going forward.

The fees climb up — What did change, however, were many of the other fees, to the extent that for the first time in several years, the city’s technically bringing in a bit more from fees than property taxes (though the latter still make up most of its general fund, as many fees are put directly back into the services they’re tied to).

One of the major changes — a sharp increase in the vehicle registration fee, from $10 to $30 — is intended to deal with Asheville’s major infrastructure issues, something that’s vexed successive Council administrations. The hope is that increased road funds will result in better road conditions (over half of Asheville’s roads are rated in “poor” or “very poor” condition) and sidewalks in a rapidly growing city that struggles with the impact of tourism traffic to boot. Another, a hike in the trash fee from $11.50 to $14 a month, is intended to make locals pay for more of the system’s costs through their fees rather than taxes.

Indeed, some of the fee hikes are a matter of political belief too, in this case baked into the governing philosophy City Manager Gary Jackson and upper city staff use in what they require departments to present and pursue. In this case there’s something called “full-cost recovery” when it comes to fees, which goes something like this:

3. Regulatory fees shall be set at a level that strives to recover full costs (direct and indirect
costs, such as depreciation or usage costs associated with capital assets) of providing
the service, unless statutory restrictions limit the fee amount.

4. Non-regulatory fees are charged for a wide variety of services with the primary purpose
for non-regulatory fees being to: 1) influence the use of the service and 2) increase

5. Non-regulatory fees shall be set at a level that is competitive in the marketplace and
strives to recover full costs (direct and indirect costs, such as depreciation or usage costs
associated with capital assets) except when:
• free or subsidized service provides a significant public benefit;
• the City has determined that it should influence personal choice to achieve
community- wide public benefits;
• full cost recovery would result in reduced use of the service or limit access to
intended users thereby not achieving community-wide public benefits;
• the cost of collecting the user fees would be excessively high;
• ensuring the users pay the fees would require extreme measures.

The devil, of course, is in the details. What services provide a “significant public benefit”? This “run a city like a business” philosophy is a hallmark of centrist (and center-right) politics, and it’s not without controversy.

After all, traditionally one of the purposes of government is traditionally to collect taxes to provide public services at a reduced or a lower cost to said public than the private market would. At the same time, city governments are also under pressure to keep costs low, so where they decide to balance those needs, and at whose expense, is a political decision. There’s also the fact that fees are often regressive: in many cases people pay the same or similar amount regardless of whether they’re a Montford millionaire or a working-class Southside resident. The trash fee, for example, isn’t going to vary that much and the less wealthy end up paying a higher share of their income for the same service.

Obviously, the criteria above look to blunt those impacts and balance those concerns, but the trash hike has been controversial because it’s fairly steep; Council opinion on its passage was not unanimous. If this philosophy towards revenue continues, expect to see a lot more fee hikes, and a lot more controversies over how far they should go.

Ramping up the police — One of the most controversial parts of the budget is a single position: an additional crime analyst for the Asheville Police Department. At the budget hearing, several community members and activists said they feared it would mean more surveillance and crackdowns on marginalized communities like minorities and the homeless, and that the money would be far better spent elsewhere, in housing, transit or mental health services.

But the debate isn’t just about the analyst, the tip of the spear of a much-larger ramp-up in policing in the core of the city, particularly in downtown, South Slope and the River Arts District. Embedded in the budget summary is this key paragraph:


Chief Tammy Hooper asserted early in the budget process that crime, including violent crime, has risen as downtown’s increasingly become a tourist destination, straining the city’s existing downtown unit. That, she claims, requires that the center of the city have its own policing district, meaning more cops in the area a lot more often.

The APD has its own recent tangled history, and Hooper’s the third chief in a decade, with two resigning amid major public controversies. While citizen complaints have overall gone down, there does remain considerable racial disparity both in the complaints and in the composition of the police force, which has less people of color than a decade ago as well. Hooper’s spoken about these concerns at some community forums, but as the debate about the crime analyst position shows, they’re not likely to go anywhere for a long time to come.

It’s also going to come with a big price tag. Public safety (police and fire) are already the biggest single part of the city’s service budget, at $47.9 million, and it’s risen considerably over the last few years, up from $42.7 million back in 2013. Police, at $25.5 million, are most of that. According to city budget officials’ projections earlier in the year, the new police district would cost about $750,000 a year. When combined with the similar costs to new fire stations and crews to improve response time, the amount would be enough that local government will have to raise property taxes or find another source of revenue.

The equity move — It’s not just debates about the impacts of policing, either. Asheville remains a deeply segregated city, as the State of Black Asheville project has documented extensively.

The equity study will focus specifically on city government, specifically how equitable it is both internally (who gets hired, their pay rates, the composition of the city’s boards and commissions) and externally (e.g. which neighborhoods get money and attention). This is the product of a major shift at Council’s retreat where racial equity became one of the city’s main goals. At the time, Council decided to carry out the study along lines set up by the Government Alliance on Racial Equity and fund a staffer to oversee any reforms it might suggest (for a total of $500,000).

At the same time, many of the outcomes measured in the State of Black Asheville have worsened over the last decade, and so far local government efforts haven’t made a considerable dent in the city’s segregation. The same period has seen rising political activism among Asheville’s African-American community. Black voter turnout was up in the last election, which also marked the end of two years of an all-white Council. So expect a lot of scrutiny both on what the equity study finds and what the city does (or doesn’t) do about it.

Studies, studies, studies — The equity study doesn’t come as particular surprise; Council members broached this topic at the retreat, discussed it, and staff put it in the budget at their direction. But there are a lot of other studies the city’s conducting — usually involving the hiring of an outside consultant to assess a given part of the city’s operations — that haven’t received as much attention, and most of them come at the direction of staff rather than Council.

For example, though the city finished a major pay and compensation study last year at a cost of $200,000 (some of the increase in this year’s budget is adjusting salaries based on those recommendations), there’s another $90,000 set aside for a “payroll and benefits audit.”

There’s also $375,000 for the city to study the property and facilities it already owns and how they might be used.

And then there’s $60,000 for an assessment of the performance of Parks and Recreation, a department that Council’s made more of a focus starting at this year’s retreat.

Such studies are a pretty typical aspect of how the current city government does business, but this year’s particularly rife with them.

Transit gets a nod — The city’s bus system has also been a topic of some scrutiny, as last year saw major concerns about mismanagement, as well as ongoing questions about a lack of resources.

Staff had originally proposed just using funds to add an additional bus on one route in South Asheville to drastically improve its transit time at a cost of $385,000 a year. But on this front Council chose to go a good bit farther, also directing staff to provide funds for later hours on a few routes (hours were cut in 2012 as part of an effort to overhaul the system) for a cost of $250,000 a year and an additional transit planner for $73,000.

Activists, especially the rider group People’s Voice on Transportation Equality, have pushed hard for later hours and improved bus service, noting that in a service economy-based city, the fact many buses stop in the early evening means that people can’t get rides home or even lose jobs. All bus routes used to run until 10 p.m. before a 2012 overhaul of the bus system shortened operating hours.

The run on housing — Another key problem facing Asheville — and historically, one tied up at points with the city’s segregation — is the housing crisis and the skyrocketing cost of keeping a roof over one’s head in Asheville. The problem is exacerbated by the city’s notoriously low and stagnant wages, to the extent that Asheville repeatedly makes lists of one of the most unaffordable areas in the country.

Now city leaders are dubbing it a crisis as well, and admitted last year that the city’s current measures — grants, public-private partnerships and the affordable housing trust fund — aren’t enough to stem the bleeding.

This year’s budget starts spending on $4.2 million towards overhauling the city’s oldest public housing development, Lee Walker Heights, a proposal that’s attracted its own share of debate. That money, a combination of federal grants and city housing funds, is intended to prove a model for the overhaul of the rest of the city’s sizable public housing system, giving residents far-improved homes while creating more affordable units. But city officials have also noted that expense leaves them with a lot less flexibility for other projects. That makes it more likely that rather through shifting existing funds around or raising new money through something like a bond referendum, a possibility that Council discussed both at the annual retreat and during its budget planning sessions.

In addition to housing, this budget also marks the start of a fund intended to back small business start-up efforts. Historically, economic development incentives have, with some notable exceptions, gone to larger companies like Linamar or GE Aviation, and the demand for the city to back more small businesses was raised during last year’s election. Also initially proposed at the retreat, the city’s putting $250,000 towards Buncombe Community Capital in the budget.

Das Capital (Improvement Projects) — Pardon the pun, but this is another major area of the budget that doesn’t get a huge amount of attention, mainly because the city projects them years out.

Still, despite the bad Marxism pun, Asheville’s government isn’t exactly going the whole Soviet route. The largest projects are in a more capitalistic vein, intended to spur private development, tourism and business, especially in the River Arts District (that hasn’t prevented them from attracting strident denunciations from some business owners and conservatives as well, asserting that they take too much property for too little benfit). These projects are often funded by loans, sometimes helped by grants or city revenues from sources like parking or water. This year, $4.1 million is going towards the overhaul of roads and infrastructure in the area, with another $3.6 million to improvements in the Craven Street area near the New Belgium brewery,

Some of the other matters are less sweeping and more nuts-and-bolts. There’s $3.9 million to update the city’s radio infrastructure, $2.6 million to Hendersonville Road sidewalks, $2 million for neighborhood sidewalks throughout the city and $1 million for improved breathing equipment for firefighters.

Importantly, the budget does lay out a timeline for updating the city’s pools, with over $2 million spent over the next three years to renovate and improve the Malvern Hills, Recreation Park and Walton Street pools, though only a small portion of that is set to happen this year. The Walton Street pool in particular has been the topic of a major public push for its renovation, citing its historic importance to the Southside area.

But some caution is also advisable here. Especially when it comes to capital projects, since the spending is projected so far out, successive Councils or staff can change their minds and alter or nix a project entirely. Or, as the budget puts it, “the plan will be revisited annually, at which point project timelines may shift and priorities realign.”

That’s a city jargon-filled way of saying something that’s worth keeping in mind about the entire budget: “things always change.”

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