District reports healthier fund balance; board discusses $1,000 one-time retention bonus to offset lost supplemental pay and higher insurance premiums

Asheville City Schools business staff reported a stronger-than-expected fiscal close for 2024–25 and proposed a one-time retention/retention-style bonus for employees to soften a likely decline in take-home pay this year.

Chief business officer Heidi presented draft audit results showing the district ended FY25 with about $14.2 million in fund balance, roughly $284,000 above the prior year. She said several revenue lines came in better than projected and the district reduced costs through staffing allotment reviews, supply reductions and other savings. “I’m very delighted to report tonight that most of those projections did not come out nearly as dismal as we anticipated,” Heidi said.

Heidi told the board the state did not include the usual supplemental PRC-71 teacher allotment for this year through a separate legislative action that several districts had previously received. That supplemental payment has historically been distributed to teachers and in prior years averaged about $826 per eligible teacher; for Asheville City Schools that allotment would have been approximately $399,000 this cycle. In addition, Heidi said the State Health Plan is changing premium structure, producing employee premium increases that will be taken beginning in December (effective Jan. 1 coverage). To address the combined effects, staff proposed a one-time, nonrecurring retention bonus of $1,000 per eligible employee (gross), estimated to cost roughly $826,000 to $850,000 depending on final counts.

Board members debated the timing, equity and distribution. Several members favored a December pay date so employees would have funds available when the premium increases begin to affect net pay. Others urged the board to consider targeting funds to lower‑paid staff; Heidi and other board members explained that the state supplemental shortfall largely affected certified (teacher) staff while the premium increases affect a wider set of employees but vary by salary tiers. The board discussed tax and retirement implications — the payment would be taxable and subject to retirement/withholdings, so net checks would be less than the gross $1,000.

No final vote was recorded; board members asked staff to prepare the recommendation for a formal vote and/or placement on the consent agenda at the next regular meeting, with multiple members expressing comfort moving the matter forward. Heidi said the district could delay the exact distribution until later in the year if necessary to ensure it does not unintentionally complicate any future legislative raise that might be made retroactive.

If approved on a future consent agenda, the proposal is intended as a one-time, nonrecurring payment to ease employee financial pressure in a year with higher health insurance costs and the absence of the supplemental teacher allotment; it is explicitly proposed as a bonus rather than a recurring raise to avoid new recurring budget obligations.