Vijay's Budget Thoughts

Vijay's Budget Thoughts

Read Vijay's thoughts on the upcoming City of Asheville budget.

Asheville City Council must pass a balanced budget by June 30th and I want to explain how I’m approaching this process.  Many of you know that my company helps local governments with budget issues, but this is my first experience crafting a budget as an elected official.  The following is some background, my general thoughts and my views on two specific items.

Background
As context, the City projects a roughly $2 million operating deficit in the general fund on an approximately $128 million budget for the next fiscal year.  (The City’s fiscal year runs from July 1st – June 30th).  This projected deficit isn’t a fiscal crisis.  Many cities face projected deficits because their costs to provide services, which are mostly personnel related, grow faster than revenues.  Because local governments mostly provide direct services (police, fire, public works, parks & recreation, planning, etc.), it’s not unusual for 60% to 80% of their general fund budgets to be personnel related.  Personnel costs such as salary increases, health care for active and retired employees, and pension payments grow faster than tax revenues which results in overall costs growing faster than overall revenues.  That’s not fiscal mismanagement – it’s simply math.

That said, some of the projected operating deficit for next year is self-inflicted.  In last year’s budget (which remains in effect until June 30, 2018), City Council funded several items including increased transit service, more police officers, and a firefighter retirement enhancement, but only did so for part of the year because the items would not be fully implemented in that year.  Of course, that means that in the next budget (i.e., the one we are considering) the cost impact will be greater because they must be funded for the full year, not just part of the year.  This results in a budget gap.  I don’t mean to suggest that these items aren’t important, but rather that their costs weren’t fully recognized in future years.  This is why I strongly believe in looking at budget projections over several years.
  
Time to Make Long-Term Investments in Asheville
With that background, here is my approach to next year’s budget.  First, this is right time to be making long-term investments our city.  The local economy is still strong, we are seeing rapid change in the area both in the physical environment and with our residents, and we have not kept up with that change.  Additionally, we need to address issues that have simmered for years.  We must take a long-term view of what we want Asheville to be and we have a narrow window to implement that vision before the next recession.  The budget is where that happens.  It will take everybody in the City pulling together to contribute and, if I believe it to be unavoidable, I would consider supporting a property tax increase to fund this vision.  I realize that floating the idea of a property tax increase is not a popular move, but I want to be honest with taxpayers and responsible about being able to pay for what we say we want to do.  I will not support budget gimmicks that push costs onto future councils.

Second, City staff has an extraordinary number of complicated projects on their plate and we need to make sure that we prioritize what we want them to do and ensure that they have capacity to get those things done.  In my experience, many local governments of Asheville’s size just focus on the traditional core city services – police, fire, public works, parks & recreation and planning/permitting.  In Asheville, however, we have an office of sustainability, are setting up an office of equity, oversee a transit system, and assist with funding of some non-profits.  That costs money and time.  Additionally, we have ongoing massive capital projects in the form of RADTIP and the voter-approved $74 million bond projects, not to mention implementing the new Comprehensive Plan.  Any one of these projects by itself is significant – we have them going on all at the same time.

Because there is only so much that we can reasonably expect staff to do and for taxpayers to fund, the budget process requires City Council to make hard decisions.  That may mean reprioritizing or eliminating things that we’ve been doing or funding and/or shifting internal resources to ensure that these priority projects get done.  We’ve asked staff to help identify options.

Employee Wage Increases
Third, in light of what we are asking of staff, I am supporting a 3% wage increase for City employees.  Cities deliver services and our greatest resource are the people who work for us.  Wages are going up across the region including in other municipalities, unemployment is extremely low and, as everyone knows, this area has a high cost of living.  We need to attract and retain the best employees that we can and I believe that a 3% wage increase is a wise, long-term investment.   

Police Staffing
Finally, I want to directly address the issue of police staffing.  The base budget continues the funding for more police officers enacted in the last budget so that officers can be freed up to better serve all parts of the City.  Currently, the City is set up in three districts for police patrol – A which is West Asheville, B which is North Asheville and Downtown, and C which is East and South Asheville.  Due to the number of service calls, especially in District B where approximately 40% of calls for service occur (most of which are for Downtown), officers have difficulty serving all parts of the City.  Because they have little “discretionary time” since they are on calls, officers cannot do things like enforce traffic violations, catch speeders, or walk a beat. 

To better allocate police officers to serve the entire city, Chief Hooper proposed creating a Downtown district and reorganizing the others so that there would be four districts.  This would result in faster response times throughout the City, overtime savings and likely lower turnover.  Of course, it also requires more officers and equipment.  City Council approved this plan last year and the department has already hired police officers who are going through training now.
   
I support continuing to implement Chief Hooper’s plan.  I have met with Chief Hooper to hear from her directly and I am persuaded by several facts.  First, Downtown itself represents a significant portion of all service calls in the City.  Rather than drawing officers from other parts of the City to serve Downtown, as happens now, it simply makes sense to have a district there.  Second, Part 1 violent crimes (homicide, rape, robbery and aggravated assault) in Asheville have increased 10% from 2016 to 2017 and are up 33% year to date through March over the same time period in 2017.  (Notably, around one-third of violent crime victims are African American.)  Third, because of the number of calls for service, officers cannot spend time enforcing traffic violations, catching speeders or walking beats.  Residents expect police officers to provide those services and we simply don’t have the police staffing to do that now.

I do not link this staffing plan to former APD officer Chris Hickman’s actions against Johnnie Rush.  Hickman’s actions were heinous, hurt his victim, and the delay in City Council and the community learning of the incident undermined public safety and public trust.  We have directed an outside review of what happened and proposed a slate of policy changes that include funding an external attorney to help citizens navigate the police complaint process.  Despite this incident, however, police use of force incidents have decreased and the Chief has already made policy changes including treating excessive use of force complaints as criminal matters from the start.  There’s no doubt we have more to do, but I do not see how laying off police officers – which will need to happen if the police department funding is cut to 2017 levels - helps us get there. 

The question for me is whether this staffing plan is in City residents’ best interests.  I ran on ensuring that all residents go to sleep each night feeling safe, fed, healthy and valued and I believe that the police staffing plan is necessary given our growing City and the demands on the police department.

A colleague of mine is fond of saying that people don’t choose to live in a city just because it has a balanced budget.  I agree with him.  In this budget, we have the opportunity to invest in our City in projects that position it well for both the short-term and the long-term.  That requires us to be both bold and responsible and to make some hard decisions. 

I welcome your thoughts and reactions to what you’ve read here.  Thanks for being engaged.