Fayetteville staff says budget is balanced after council's "parking lot" funding choices; council to consider adoption

Fayetteville assistant city manager Jeff Yates told the City Council at a June work session that staff has balanced the 2025-26 budget while including the items on the council'created "parking lot." Yates said the staff'recommended budget uses about $7.3 million of the city's fund balance for one-time items and assumes roughly $3.2 million in additional sales-tax receipts tied to a recent sales-tax agreement change.

The city estimates an ending fund balance of about $24.3 million, Yates said, noting that figure is about $34,000 over the council'set 12% fund-balance goal after the parking-lot allocations. "The balance the budget is balanced," Yates said during the presentation as he walked council through revenue and vacancy assumptions.

Yates told council staff increased the vacancy savings estimate from the prior range to about 12.2% so the budget factored a higher vacancy-related savings number (roughly $9.2 million in salary/benefit dollars across the organization). He said the $7.3 million of one-time fund-balance use covers items on the parking-lot list and capital recommendations, and that the single largest one-time allocation already included in the recommended budget is roughly $3.3 million for a museum-related item on the packet.

Council members pressed staff on which items are ongoing and which are one-time. Yates said the $7.3 million is being applied to one-time items, while items that require ongoing dollars (police and fire pay and staffing, for example) will need separate decisions in future budgets. He told council that the budget includes a $1.5 million increment aimed at addressing public-safety pay compression in addition to planned step increases.

Council members repeatedly asked for more detail about the police budget and vehicle replacement plans tied to filling vacancies. Yates said fleet and staffing timing limit how many new officers can be put through the academy in a single year and that staff restored some police vehicle replacement funding this year to maintain an adequate fleet for expected recruits.

Other parking-lot priorities discussed include neighborhood micro-grants, neighborhood signs, and support for boards and commissions. Yates said staff recommends microgrant funding in two tranches to total about $200,000 and indicated the city wants to help local nonprofits build capacity to obtain outside grants, not rely on recurring microgrants.

Process and next steps: Yates told council staff will place the recommended budget on the agenda for possible adoption at the next regular council meeting unless council directs otherwise. Council scheduled an optional work session later in the week if members want more time to review the packet.

Speakers quoted in this article include Assistant City Manager Jeff Yates and several council members who asked questions during the presentation. The session included follow-up staff commitments to provide: a census-tract breakdown of assessed values (a multi-month task), a deeper staffing and vacancy analysis for individual departments, and a line-item breakdown of the police replacement-vehicle plan.

Ending: City staff recommended that council consider the recommended budget for formal adoption at the next council meeting after the work-session review. Any council action to adopt the budget will be recorded in the official meeting minutes and agenda packet.