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Asheville Publishes Glowing CAFR

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By Leslee Kulba- The City of Asheville continues to receive awards for its financial reporting. Its Comprehensive Annual Financial Report for the fiscal year ending June 30, 2016 received a Certificate of Achievement for Excellence in Financial Reporting from the Governmental Finance Officers Association for the thirty-sixth year. Asheville also received a Distinguished Budget Presentation Award from the same organization. The North Carolina City and County Communicators awarded the city first place in the Communication Technology – Intranet category for One Asheville, and second place for Communication Technology – Other for its news blog. Most importantly, the city has the highest bond ratings possible, Moody’s Aa1 and Standard & Poor’s AAA. The water system’s rating was increased from AA to AA+.

Under City Manager Gary Jackson, city departments have been streamlined. The CAFR reports, “actual budget performance in expenditures has come in under adopted budget consistently over the past few years, while at the same time, budget planning has become more restrictive.” At $91,725,049, general fund expenditures finished $13 million underbudget. $3.7 million in savings was reassigned for the city’s sustainability program, building maintenance, police equipment and programs, and traffic calming. Another highlight of FY ’05-’06 was the launch of a hotline for city personnel to report waste, fraud, and abuse. Funds were set aside to reward strategic participants.

The city finished FY ’05-’06 with a net financial position of $416 million, $29 million higher than the previous year. The city’s combined fund balances totaled $76 million, with $28 million more than the previous year’s budget. That left city council $18 million unassigned in the general fund balance.

The city’s long-term liabilities totaled $116.6 million, an increase of $22.4 million over the previous year. Of this amount, only $470,000 is backed by the taxing power of the city. The remainder is secured by bonds or collateralized by the projects funded. Major changes to debt included the issuance of $45 million in Limited Obligation Bonds, approved by the voters, to fund “various projects in the city for affordable housing, public safety, transportation, economic development, parks and recreation, and repair and renovation to city facilities.” Installment financing valued at $5.52 million was obtained for the purchase of vehicles and equipment, and $50,625,000 in Water System Revenue Bonds were re-funded at better interest rates to realize full-term savings of $8.8 million.

The city is invested in an aggressive capital improvement program. Over the next five years, it intends to spend $142 million using $107 million in new debt. The Craven Street Complete Street project was a major accomplishment for 2016. In partnership with New Belgium, the city remediated a greenfield; improved the existing street; and added bike lanes, sidewalks, and a greenway. Other capital expenditures funded street, sidewalk, and greenway maintenance elsewhere in the city; new vehicles; and improvements to the city’s radio system.

Water Resources has its own capital improvement program totaling $110.3 million to be spent over five years. It is funded in part through water utility bills that increased 1.5, 3.5, or 5.0 percent, depending on consumption volumes, and a capital maintenance fee that increased 1.5 percent. Expenditures last year included upgrades for a maintenance facility, improvements to the North Fork dam and water treatment plant; and replacement of deteriorating water lines.

As for other funds, the Stormwater Fund’s budget is now over $5 million. Highlighted expenditures last year supported improvements on Craven Street, Azalea Road, Victoria Road and the Biltmore Avenue Bridge; greenway creation; sinkhole repair; and debris cleanup. Parking Services always generates enough revenue to transfer surpluses to other initiatives, like transit. The Mass Transit Fund remains highly subsidized, collecting $786,488 in fares and making up the difference with $2,406,992 from interfund transfers and $2,726,603 in state and federal funding. The US Cellular Center required a $1,049,711 transfer from the general fund this year. It continues to undergo major renovations, including over $11 million invested in upgrades for Southern Conference events.

In recent years, the city has gotten out of the festivals and golf business. In 2012, the General Assembly relieved the city of its controlling and financial interest in the Asheville Regional Airport. The city would presumably be compensated for affected real estate, but the Federal Aviation Administration has yet to recognize the new authority or approve any land transfers.

The city offers healthcare, prescription, vision, and other post-employment benefits for persons retired with at least five years of creditable service and no other insurance available. To contain costs, the city made the decision not to avail these benefits to persons hired after June 30, 2012, and to transfer retirees to Medicare on their 65th birthday. Police and firefighters have different plans, as do members of the ABC Board. The ABC Board does not fund its pensions, deeming the shortfalls “immaterial.” The other city liabilities are within statutory requirements and considered payable.

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