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County financial staff report sales-tax dip, outline debt and PAYGO tradeoffs
Summary
Finance staff reported year-to-date sales-tax receipts down about 6% after a large October decline, projected a 3.5–4% drop for the fiscal year, and warned the commission that issuing $58 million in debt would raise annual debt service roughly $5 million beginning FY27.
Buncombe County finance staff laid out recent sales-tax performance and how that revenue, along with bond proceeds, affects the capital fund used for schools.
Finance presenter Matt told commissioners the county saw a sharp one-month hit in October and that year-to-date collections were about 6% below the prior year. "We were down. We had a pretty sizable hit in October, which is where we collect a lot of our money... when something like 21% or 20% down in one month, it really has an impact on the rest of the year," Matt said. He said staff now project a 3.5% to 4% decline for the fiscal year after observing small month-to-month recovery.
Matt summarized the fund's primary outflows: annual debt service and project cash flows. He said annual debt service for fiscal 2026 is about $24 million and that the county currently has 93 active projects funded through the capital program. "We have $58,000,000 in projects that still need to be reimbursed by debt where we need to cash we just need to pay for it with cash," Matt said.
Using staff scenarios, Matt told the commission that issuing the full $58 million in new bonds would increase annual debt service by about $5 million, and that the additional payments would not start until FY27. "If we were to issue debt for the full $58,000,000, annual debt service would increase by about $5,000,000... and that wouldn't start until FY27," he said.
Why it matters: The county's capital fund shows large spikes when bond proceeds are added, Matt explained; those spikes are then drawn down to pay projects. Staff urged the commission to consider a balance between issuing debt and "pay-go" financing, arguing that issuing debt speeds delivery of projects but increases long-term interest costs and relies on future revenue.
Staff recommendation and next steps: Matt said he planned a deeper scenario analysis for the next meeting comparing multiple debt sizes, amortization terms and PAYGO amounts. He said the administration had used $10 million as a PAYGO placeholder for next year in initial planning and would present a range of alternatives at the follow-up meeting.
Ending: Commissioners asked staff for clearer, scenario-based options to weigh near-term needs against long-term fiscal sustainability. No formal vote on finance policy occurred; staff will return with modeled scenarios.
