On May 22, their last formal meeting, Council members had responded sympathetically to demands from police and firefighters who wanted more than the 1 percent cost-of-living increase currently in the proposed budget. But personnel costs make up about 65 percent of the city's expenditures, and for every percentage point raise, the city has to find roughly $500,000 in the budget, city staff estimated.
Devoting a greater share of potential sales tax revenue to an increase and paying for some one-time capital improvements out of reserve funds, staff suggested, could free up enough funds to provide staff with a 2 percent pay increase, along with a $600 bonus for those making below the median income — if sales-tax revenues turn out better than expected. Staff also presented Council with an option for a 3 percent raise, but that would require delaying more projects and using more reserve funds.
Council member Marc Hunt pointed out that Asheville taxpayers already bear the costs for services and infrastructure that benefit an unusually large population of visitors and that regional and state governments should recognize the city's role as a "regional enterprise" and help fund it. Resolving the city's long-term budget challenges, he said, is essential to avoid becoming "a hollowed-out city, unable to provide services."
Manheimer noted that because city salaries are a recurring expense, maintaining higher salaries would require the city would "have to do something more drastic, like raise taxes."
"Or more rational," said Council member Cecil Bothwell, a longtime advocate of a property tax increase to meet the city's needs. A tax increase narrowly failed at the last Council meeting.
Mayor Terry Bellamy was particularly vocal about wanting a higher increase for staff, suggesting the city delay as many infrastructure and capital projects as necessary to do it. She called it "deplorable" that the budget brought forward by staff didn't include a more substantial pay increase for city employees.
Her assertion led to a tense moment with City Manager Gary Jackson, who replied, "We don't have any fat in this budget." He said that staff have repeatedly done the best they can in the teeth of the recession. He added that operations are already affected by delays in items like equipment and infrastructure.
Council member Gordon Smith was absent from the discussion due to a family funeral, Manheimer reported that he favored a 2 percent increase along with a possible bonus.
"He's not here," Bellamy replied.
After the meeting, Lauren Bradley, the city's director of administration and finance, told Xpress that staff would likely draft up two budget outlines, one with a 2 percent pay increase, and alternate with 3 percent. During the meeting Bradley noted that neither city salaries or infrastructure are at the level they need to be.
"At the end of the day there's just not enough to go around," she said.