OPENPUBLICA · PUBLIC MEETING RECORD
Record of Proceedings

Fayetteville City Council Budget Workshop - November 6, 2025

City Council — Thursday, November 6, 2025
BodyFayetteville, Arkansas
SessionCity Council
DateThursday, November 6, 2025
StatusFILED
Video Record
0:00 / 1:33:06

Transcript — Verbatim
0:00

Okay, everyone.

0:01

This is not a formal business meeting, but this is the beginning of our budget workshop.

0:09

Yeah, so we're gonna let Steven start and thank it away.

0:12

Or take it away.

0:13

Thank you all for being here.

0:15

Also, just to note, I will be leaving promptly at 6 30 for an event I need to be at.

0:23

So just letting you all know.

0:25

Get to ours.

0:25

Thanks.

0:26

Go ahead, Steven.

0:27

Thank you, Mayor and Council.

0:29

I'm gonna start out with a general overview of the city budget in total.

0:33

Before we get into more detailed information in our primary funds, I know you've all been through the budget process before, and some of you experienced this many of times.

0:43

I'd like to go through the presentation and then leave time at the end for uh the most important part, which is council questions.

0:50

And what we're gonna have our department heads available here and at the agenda session and at the council meeting to answer any questions if you think of anything else between the time of this presentation and uh and those later meetings.

1:03

Uh let's see if we can't get uh provide you with an answer to your questions tonight.

1:06

Uh, we'll certainly be happy to get back to you.

1:10

Uh you can feel free to give me a call or send me an email, no problem.

1:14

Either way.

1:15

Um, I also want to point out that we're going to be discussing the operating budget here tonight.

1:20

Um, as a reminder, we also have significant carryovers of programs that are already in in progress from uh other fiscal years.

1:28

And those carryovers include things such as uh capital funded projects, significant grants that might span multiple years, um, CDBG funding, things of that nature.

1:40

And those carryovers can be as much as 200 million dollars.

1:43

And we do discuss those items with council when we bring them forward to you in January, and then again when we bring forward our uh carryover reconciliation reconciliation items to you uh in April.

1:55

And with that, I'll go ahead and jump right in.

1:58

The 2026 total proposed budget is approximately 273.8 million dollars, and that is an increase of 7.7% or roughly 19.5 million dollars over the 2025 budget.

2:12

Go ahead.

2:14

This slide is a visual representation of that uh 274 million dollars.

2:19

And I like to comment on a couple of the uh major items here.

2:23

Approximately 30% of the general of the budget is in general fund, which is the city's largest fund, and that's used to account for for all of the financial resources that are not specifically accounted for in another fund.

2:37

Another 25% of the budget is our water and sewer fund.

2:41

And that's not going to come as a surprise to you.

2:44

You're used to seeing the magnitude of the transactions that we run through for water and sewer purchases.

2:51

Another 12.6% of the budget is our sales tax bond fund, which accounts for the accumulation of resources to run our bond projects.

2:59

We also have recycling and trash up there at 7% and our sales tax capital improvement fund as well.

3:05

Next slide, please.

3:13

Also, Steve, if it would help any members of your budget team to have a surface, if they want to sit at either one of these, y'all are welcome to.

3:19

Just you're fine where you are, but if you need it to be able to follow along, come on up.

3:25

This slide here is a numerical representation of that graph that we just looked at.

3:30

And uh I do want to point out some key information uh on the growth of these funds overall.

3:36

Uh, in the in the general fund, we're projecting an increase of $3.6 million, sales tax bond fund an increase of 1.5 million, water and sewer increase of 7.6, and our shop fund 1.7 million, and stormwater utility, it's our new fund, approximately 3.2 million this year.

3:54

And we'll get into more detail on those when I get to the individual uh fund statements.

3:59

Next slide, please.

4:01

Uh as noted in this slide, 2026 uh projected expenditures by category 35% of the total expenditures uh in all funds are for personnel services, and that's to be expected as the purpose of the city government is to provide services to residents.

4:17

Um we in turn uh would see uh corresponding personnel uh charge increase as well.

4:25

Other main categories of these city expenditures include services and charges, purchased water, debt service, and capital expenditures.

4:34

If you were to compare this same slide to to the same slide we looked at last year during the budget workshop, you're gonna see very little change in the total percentage of of these expenditures by category.

4:46

It doesn't tend to fluctuate much year to year.

4:49

Next slide, please.

4:52

And here's a numerical representation of that same information we just looked at.

5:00

Now, your primary increases are in personnel services, and part of this difference you're seeing it does relate to the addition of 18 personnel that we did add mid-year in 2025.

5:09

So they would not be in the adopted 2025 budget, but they are certainly reflected in the 2026 proposed budget that you see before you now.

5:18

And you can find a discussion of those 18 FTEs on page 230 of your budget document.

5:27

One of the other key differences you're going to notice is the increase in purchased water cost.

5:32

And we'll talk about that a little bit more when we get to the water and sewer fund.

5:37

Next slide, please.

5:43

This slide highlights the total citywide proposed budgeted expenditures by operating activity for 2026, which does include 28% for water and sewer expenditures, another 27% total for fire and police activity, recycling and trash is at another 9%, and then transportation and parking at 8%.

6:05

And although the dollar amounts, like I said before, the dollar amounts in these categories will change to reflect the overall additions to the budget.

6:13

The percentages that you see here really don't change all that much, with the exception of that new fund, the stormwater utility.

6:31

From this slide, you can see that our total FTE count in 2025 was 968.3 and is proposed at 968.1 in 2026, which actually represents a decrease of approximately 0.2 FTE.

Discussion Breakdown — Share of Meeting
Budget Equity Analysis████████████████████████24%
Water And Wastewater Management██████████████14%
Fiscal Sustainability██████████10%
Public Safety█████████9%
Public Facilities██████6%
Parks and Recreation██████6%
Technology and Innovation█████5%
Economic Development████4%
Personnel Matters███3%
Summary of Proceedings

Fayetteville City Council Budget Workshop - November 6, 2025

This meeting served as a budget workshop for the proposed 2026 fiscal year, focusing on the overall financial outlook, departmental breakdowns, and council-member questions. Budget Director Steven presented a proposed total budget of approximately $273.8 million, representing a 7.7% increase over 2025. The administration emphasized that this year was a "reset" to address a prior budgetary deficit and achieve a balanced budget, prioritizing fiscal stability over new personnel additions while maintaining essential services and addressing significant cost escalations in purchasing and capital maintenance.

Consent Calendar

  • No formal consensus actions were taken, as this session is designated as a work meeting to discuss budget details rather than a formal legislative session for voting on ordinances or resolutions.

Public Comments & Testimony

  • Councilmember Turk: Expressed appreciation for the comprehensive budget document but inquired about the methodology for historical budget comparisons (2022-2025) to contextualize growth. She noted the department heads' cooperation in balancing the budget without layoffs and commended the effort to involve staff more in the process, while asking for future discussions on participatory budgeting.
  • Councilmember Moore: Highlighted the need to accelerate the Unified Development Code (UDC) rewrite and land use efficiency. She praised the department's performance regarding the ACIC audit and questioned the double-counting of investigative cases in the police metrics. She also asked about the feasibility of reducing police headcount to fund other safety initiatives, which Chief Reynolds declined, citing understaffing ratios compared to surrounding cities.
  • Councilmember Whitaker: Questioned the significant increase in district court fines revenue projections and inquired about the inclusion of "court reminder" software in the courts budget to address failure-to-appear rates. She also asked if the police department would offset the cost of new School Resource Officers (SROs) by reducing other staff, which the Chief clarified was not possible due to current understaffing levels.
  • Councilmember Berna: Asked about the location of the "Pick Me Up" program and the Green Space Fund within the budget. She also requested clarification on the expansion of the Pick Me Up program and the specific cost allocation for the Stormwater fund.
  • Councilmember Sarah (Turk/Whitaker/other): Asked about the decrease in projected building permits despite city growth, clarifying that permit fees have increased and multifamily units are now captured under fewer, broader permits. She also inquired about the decrease in contracted tree plantings and the return on investment for the Gully Park concert series.

Discussion Items

  • General Fund Overview: Director Steven outlined a balanced budget with $80.9 million in revenues and expenses. He noted a projected $4.7 million deficit at the end of 2025 due to mid-year reappropriations, pay plan studies, and the Fayetteville Housing Authority donation, leaving an estimated ending fund balance of $32 million (with $13 million reserved). Key revenue increases include $1.9 million in sales tax, $1.1 million in property tax, and $1.4 million in licenses and permits. A transfer of $867,000 from the sales tax capital fund to the general fund was discussed to support operations.
  • Personnel and FTEs: The total workforce (FTE) is proposed to decrease slightly from 968.3 in 2025 to 968.1 in 2026. This includes adding 2 SROs (covered by grants), 0.5 FTEs in media services, and 0.2 FTEs in animal services to convert part-time roles to full-time. No new personnel were added generally due to the prior deficit. Director Steven noted a significant staff increase over the last five years compared to the previous five years.
  • Street and Transit Fund: A major increase of 40% ($1.77 million) was budgeted for transit agencies ORT and Razorback Transit, aiming to double Fayetteville's investment in transit services relative to other Northwest Arkansas cities. This includes a projected operational loss of $504,000.
  • Water and Sewer Fund: Director Steven highlighted that increased costs for purchased water from the Beaver Water District, which are not yet reflected in current rates, are the primary driver for the need of a 2026 sales tax bond issue. Without this bond, water and sewer rates are projected to double over the next five years. The Nolan plant costs are also a factor in this discussion.
  • Stormwater Fund: This new fund is projected to operate without a loss, with minimal borrowing required from the general fund ($60,000). Costs are allocated from the general fund for shared services like billing and GIS, which the stormwater fund reimburses.
  • Departmental Budgets and Performance:
    • Police: Chief Reynolds defended the addition of SROs and new patrol shifts, citing understaffing (1.31 officers per 1,000 residents vs. an FBI recommendation of 2.0 and a regional average of 2.26). He noted the need for leadership training due to a less experienced incoming workforce.
    • Parks and Recreation: The projected number of contracted tree plantings is down, excluding community giveaways. The Gully Park concert attendance is projected to increase for its 30th anniversary.
    • Development Services: Officials discussed the transition to a new long-range planning communications role and the potential acceleration of the UDC rewrite. Building permit numbers are projected down due to higher fees and multifamily permit consolidation.
    • Solid Waste/Recycling: Budgeted for a flat operation with a $1.1 million budgeted gain before capital, matching capital expenditures. The "Pick Me Up" program was moved to the miscellaneous account but remains intact.
    • Airport Fund: Projected a loss of $116,000 due to capital expenditures outpacing gains, though the fund is expected to remain solvent.
    • Shop Fund: Projected a gain of $3.4 million despite rising costs for vehicles and equipment due to tariffs and long lead times.

Key Outcomes

  • Budget Presentation: The proposed 2026 budget of $273.8 million (a 7.7% increase) was presented as a balanced plan designed to address a 2025 deficit while maintaining service levels. No final votes were taken as this was a workshop.
  • Data Corrections: The Police Department acknowledged a clerical error where the "investigative cases assigned" metric was double-entered for the Drug Task Force; this number (498 for 2025, 513 for 2026) will be corrected.
  • Follow-Up Actions:
    • Staff will provide historical budget comparison data (2022-2025) and the specific breakdown of costs for the 13 current SROs fully funded by the city.
    • Staff will provide a detailed breakdown of licensed business types by sector (retail, office, restaurant) to Councilmember Moore.
    • Staff will follow up on the district court fines revenue spike and the inclusion of court reminder software.
    • The Parks Department will provide the annual work plan detailing all tree planting sources.
    • A slide summarizing year-over-year revenue projection methodologies will be prepared for Councilmember Turk.
  • Strategic Directives: The administration reaffirmed the intent to fund the Nolan plant via a 2026 sales tax bond to avoid a rate doubling and committed to continuing the SRO program expansion while addressing long-term staffing ratios and cost escalations.

Meeting Transcript

Okay, everyone. This is not a formal business meeting, but this is the beginning of our budget workshop. Yeah, so we're gonna let Steven start and thank it away. Or take it away. Thank you all for being here. Also, just to note, I will be leaving promptly at 6 30 for an event I need to be at. So just letting you all know. Get to ours. Thanks. Go ahead, Steven. Thank you, Mayor and Council. I'm gonna start out with a general overview of the city budget in total. Before we get into more detailed information in our primary funds, I know you've all been through the budget process before, and some of you experienced this many of times. I'd like to go through the presentation and then leave time at the end for uh the most important part, which is council questions. And what we're gonna have our department heads available here and at the agenda session and at the council meeting to answer any questions if you think of anything else between the time of this presentation and uh and those later meetings. Uh let's see if we can't get uh provide you with an answer to your questions tonight. Uh, we'll certainly be happy to get back to you. Uh you can feel free to give me a call or send me an email, no problem. Either way. Um, I also want to point out that we're going to be discussing the operating budget here tonight. Um, as a reminder, we also have significant carryovers of programs that are already in in progress from uh other fiscal years. And those carryovers include things such as uh capital funded projects, significant grants that might span multiple years, um, CDBG funding, things of that nature. And those carryovers can be as much as 200 million dollars. And we do discuss those items with council when we bring them forward to you in January, and then again when we bring forward our uh carryover reconciliation reconciliation items to you uh in April. And with that, I'll go ahead and jump right in. The 2026 total proposed budget is approximately 273.8 million dollars, and that is an increase of 7.7% or roughly 19.5 million dollars over the 2025 budget. Go ahead. This slide is a visual representation of that uh 274 million dollars. And I like to comment on a couple of the uh major items here. Approximately 30% of the general of the budget is in general fund, which is the city's largest fund, and that's used to account for for all of the financial resources that are not specifically accounted for in another fund. Another 25% of the budget is our water and sewer fund. And that's not going to come as a surprise to you. You're used to seeing the magnitude of the transactions that we run through for water and sewer purchases. Another 12.6% of the budget is our sales tax bond fund, which accounts for the accumulation of resources to run our bond projects. We also have recycling and trash up there at 7% and our sales tax capital improvement fund as well. Next slide, please. Also, Steve, if it would help any members of your budget team to have a surface, if they want to sit at either one of these, y'all are welcome to. Just you're fine where you are, but if you need it to be able to follow along, come on up. This slide here is a numerical representation of that graph that we just looked at. And uh I do want to point out some key information uh on the growth of these funds overall. Uh, in the in the general fund, we're projecting an increase of $3.6 million, sales tax bond fund an increase of 1.5 million, water and sewer increase of 7.6, and our shop fund 1.7 million, and stormwater utility, it's our new fund, approximately 3.2 million this year. And we'll get into more detail on those when I get to the individual uh fund statements. Next slide, please. Uh as noted in this slide, 2026 uh projected expenditures by category 35% of the total expenditures uh in all funds are for personnel services, and that's to be expected as the purpose of the city government is to provide services to residents. Um we in turn uh would see uh corresponding personnel uh charge increase as well. Other main categories of these city expenditures include services and charges, purchased water, debt service, and capital expenditures. If you were to compare this same slide to to the same slide we looked at last year during the budget workshop, you're gonna see very little change in the total percentage of of these expenditures by category. It doesn't tend to fluctuate much year to year. Next slide, please. And here's a numerical representation of that same information we just looked at.

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