Fayetteville staff present FY27 budget that includes 1' tax for operations and investments in public safety

Fayetteville City staff on May 14 presented a recommended FY27 budget that would keep core services intact while asking residents to absorb modest new costs.

Dr. Hewitt, who introduced the transmittal, said the recommended budget totals about $322,000,000 across all funds and "recommends a property tax rate of 45.95," a small increase staff described as necessary to sustain services. The package, staff said, earmarks about $120 million for public safety, including the police and fire budgets, and recommends a $10 annual increase to the solid-waste fee to cover higher fuel and operating costs.

Assistant City Manager Jeff Yates told council the recommended plan relies on a one-cent ad valorem increase for operations and a separate two-cent dedicated capital increase. "To continue the services the council has asked for and continue to provide those services, the recommended budget includes a 1¢ increase in ad valorem tax rate for operations," Yates said, adding that two mental-health response units are included as a service change and that personnel costs are the primary budget driver.

Yates described the staff—s work to close a gap between projected revenues and expenses: vacancy-savings (just under $9 million), use of one-time fund balance (about $1.2 million), and early debt paydown were combined to limit the amount council would need to raise. He said the $227.4 million figure underlying the "cost-to-maintain" discussion represents the estimated expense to provide the same level of services as FY26 given rising costs, and that the recommended 4% across-the-board pay increase for most employees plus a 1% increase in employer retirement contributions are included in that estimate.

Council members repeatedly pressed staff for the line-by-line math behind those totals. One councilmember warned that the presentation labeled the new package as the "same service" but argued the staff assumption of a 4% raise makes it a different package: "4% is a big deal," the member said, and asked staff to put the calculations in the budget book. Yates agreed to provide the supporting workpapers and said staff will supply a searchable transparency tool so council and the public can review budget detail.

On fees and programs, staff recommended the solid-waste fee increase (about $0.83 per month) be implemented to cover the rising cost of collection. Yates also recommended longer-term capital spending on sidewalks (about $2.5 million annually in the CIP recommendation, up from an historical $1.1 million average) and noted the budget keeps the city—s transit and parking subsidies under review.

Several council members stressed competing priorities. "Economic development is what drives us and raises the tax base," one member said, urging attention to projects that grow revenue. Others noted continuing vacancies in public safety and the difficulty of sustaining retention and morale if compensation or other working conditions lag.

Yates said staff will return in follow-up work sessions with more detail on compensation philosophy, the parking fund and transit policy questions before the June 8 target adoption date. The transmittal and presentation materials will guide the council—s public hearing on May 26 and later work sessions.

What happens next: staff will provide supporting calculations for the $227.4M estimate, add budget-detail exports to the online transparency tool and return with targeted follow-ups on compensation, the parking fund, transit policy and the proposed CIP schedule.