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Buncombe County managers outline tight margins, rising long-term obligations at FY27 budget retreat
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Summary
County staff told commissioners a mix of one-time disaster funds and stronger ambulance and investment revenue produced a small FY25 surplus, but structural pressures — a fund balance just below policy, growing OPEB obligations, and rising debt service — will shape FY27 choices.
Buncombe County officials outlined the financial picture shaping preparation of the fiscal year 2027 recommended budget at a Nov. 11 retreat, saying a combination of one-time disaster aid and higher ambulance and investment receipts produced a modest surplus for FY25 while long-term obligations and policy goals constrain future flexibility.
John, the county's budget presenter, told commissioners that intergovernmental disaster funding brought roughly $3.4 million into FY25 and that ambulance revenues and investment earnings exceeded expectations, contributing about $5.2 million more revenue than last projected even as property and sales taxes remained roughly $4 million under earlier forecasts. "That left us with a small surplus and we're returning $1.6 million to fund balance," he said.
County staff emphasized the budget's structural-balance philosophy: recurring revenues should fund recurring expenses. Property taxes remain the largest revenue source, budgeted at $287.2 million (about 66% of general fund revenue); sales tax is the next-largest unrestricted source at $49.6 million. Finance staff reminded the board that available general-fund balance, on preliminary unaudited figures, sits at about 14.6% of general-fund expenditures, about $1.6 million short of the county's 15% policy floor. Finance staff said the final audited figures could shift components of restricted vs. unassigned balances and that any drop below policy would require a board plan to replenish the reserve.
Officials also flagged other multi-year fiscal obligations. The county's other post-employment benefits (OPEB) liability is roughly $123 million; the OPEB trust holds about $54.6 million. Staff said Buncombe has paid PAYGO (current retirees) in recent years and has skipped trust contributions three times in the past decade, including FY25 and the current fiscal year. "Paying PAYGO helps short-term budgets but increases long-term cost," a finance presenter said.
Debt service is another constraint. General-fund supported debt service in FY26 is budgeted at $18.3 million; staff said modeling shows debt service rising in future years as previously approved capital projects and possible additional GO bond issuances are funded. The finance team used an example showing a $10 million general obligation issuance at an assumed 4.5% over 20 years would add roughly $4.7 million in interest and nearly $1 million in average annual debt service, with larger issuances raising that amount proportionally.
Commissioners asked staff for additional detail on how potential bond issuances would interact with Helene recovery projects and school needs, and for early capital-level detail at the January capital planning work session. Staff said they will refine numbers as audits and project-level spending are clarified and will return with recommendations as the FY27 cycle progresses.
