City dedicated to ‘investing in our future, embracing opportunities, and meeting the challenges our community faces head-on’
The Fayetteville City Council will spend much of the next few weeks working to finalize its operating budget for the coming fiscal year, which begins July 1. City Manager Doug Hewett’s $319.9 million proposal to the city council represents a 2.83% increase over the current year’s budget and seeks a 5-cent property tax increase to help fund it.
In his budget message, Hewett said his recommended budget “reflects our continued commitment to a vibrant, thriving city,” and represents “investing in our future, embracing opportunities, and meeting the challenges our community faces head-on.”
CityView spoke with Hewett about a number of aspects of the budget, including a plan for pay increases, tax and fee hikes, allowances for inflation and infrastructure, and more. In this extended Q&A, Hewett discussed his approach to assembling the budget and working to align it with the city’s previously stated goals and priorities.
Hewett has served as Fayetteville’s city manager — the city’s top executive and administrative leader — since 2016.
A native of Supply, Hewett was previously the interim director of Fayetteville’s permitting and inspections department. He also worked as the city’s management service director and its assistant city manager, part of a career that’s seen him devote more than two decades of work in government service in North Carolina, Virginia and Florida.
He earned his Bachelor of Arts and Masters of Public Administration degrees from N.C. State.
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CITYVIEW: Let’s start with the 5-cent ad valorem tax increase you’ve proposed. You wrote in your budget message that the increase is “dedicated entirely to addressing public safety personnel who keep our community safe and secure.” Can you share how the “step-pay” plan the city has for police, fire and emergency service personnel will work, and how this will position Fayetteville to retain existing, and attract new, staff in positions in those departments?
DOUG HEWETT: The proposed $0.05 ad valorem tax rate increase is dedicated to supporting the step-pay plan for our police, fire, and emergency services personnel. This is really to move our public safety team members to a competitive market rate for recruitment and retention.
Additionally, this step-pay plan is designed to offer structured, predictable salary increases based on tenure and rank, ensuring that compensation remains competitive over time. By addressing pay compression and aligning salaries with market rates, the plan aims to improve retention by providing clear, attainable financial growth for existing officers and staff.
Regarding attracting new staff, competitive and transparent pay structures help fill these critical positions, enhancing the city’s ability to maintain our professional workforce. Investing in our people demonstrates Fayetteville’s commitment to community safety and excellent service.
How will the city’s pay scale for police officers and firefighters compare (assuming the council approves your request) to departments you’ve been losing personnel to — especially knowing other municipalities are taking similar measures?
Being an “Employer of Choice” is a goal of ours, which ultimately is investing in the people who invest in our community.
We currently find ourselves in a competitive job market and we know we have to be aggressive to attract and retain the best. Compensation is just one way we do that. The proposed 4% of midpoint for non-step employees is comparable to the step plan increases for public safety employees.
And what about retention and recruitment for staff in other departments? Does your budget plan allow you to do all you’d like to accomplish there?
Yes, the budget includes a 4% of midpoint salary increase for all non-step employees and a plan to get 401k contribution to a total of 5%, adding 1% each year. The city’s prior measures as a result of the compensation study completed and implemented over the last two budget years addressed compression and retention among employees. This year’s 4% of midpoint is consistent with the city’s ongoing commitment to investing in employees through compensation and creating a workplace environment where people can grow, thrive and feel supported as professionals and people.
You also proposed an 11-cent increase for the Downtown Municipal Service District. What enhanced services would funds from that tax provide for downtown, and why are those important?
By making this increase, it allows for the Downtown Municipal Service District to be self-sustaining.
This district enjoys extra services above and beyond the rest of the businesses throughout the city. This proposal will maintain the exceptional services they receive while not levying this cost on other taxpaying citizens in our community. These services included litter pickup, an ambassador program, and graffiti clean-up as needed, in addition to others.
The budget recommendation also includes $4 million for the Office of Community Safety, including $1.5 to get it going.
From a sustainability standpoint, what do you anticipate the operating budget for the OCS to be in the coming few years? And though the cost/benefit equation in dollar terms is probably impossible to calculate, how would you characterize your expectations for the ROI on the OCS?
Various types of Community Safety models to traditional police interactions offer a range of benefits for individuals, communities, and law enforcement. My recommended budget took into account many of the services and activities that are already established and taking place throughout the city.
Knowing that, and looking at these models, we are looking at ways to continue to leverage the existing services and hire the expertise of mental health professionals, social workers, and other specialists to handle situations that may not require police intervention. Implementing and funding a more robust model can yield multiple benefits, including reducing violence and trauma, improving health outcomes, enhancing officer safety, and optimizing the use of community resources.
Based on conversations had with Dr. Gerard Tate [the director of state’s new Office of Violence Prevention], these models promote a more effective and compassionate approach to public safety, addressing the root causes of many issues that communities face nationwide. However, it is ultimately up to the City Council to decide on how to best implement OCS for our community. The recommended budget simply provides the funds.
The city faces a net loss of $9 million from the change in the county’s sales tax distribution calculation. Can you speak to that?
Since the annexation in 2005, the sales tax distribution in Cumberland County was based on the per capita method, which favored municipalities experiencing population growth through annexation. Cumberland County made the decision in 2022 to change back to the ad valorem method. This method allocates funds based on the proportion of property tax levies, which could be less favorable to municipalities if their property tax base or rates are lower relative to the county’s. Every municipality in Cumberland County had budget adjustments based on this change by the county.
With Fayetteville having the largest population, it affected our community the most. The shift has led to the city facing a significant reduction in its share of sales tax revenues, resulting in a net loss of $9 million. This loss may stem from a recalibration of funds that more heavily favors areas with higher property tax contributions, often aligning with less densely populated or unincorporated areas.
No one likes fee increases, and there are some in this budget. Can you walk through your thought process in proposing those?
Every year, the budget considers offsetting tax revenues with fees for services, in order to pay for services where it is appropriate for the direct beneficiaries to carry some or all of the cost burden. Solid Waste and Stormwater fees are recommended to increase, as are some fees in Parks & Recreation and Development Services. In the cases of the former, the increases are calculated using financial multi-year modeling. Parks & Recreation Development Services and other city fees are analyzed on a regular basis to ensure that we continue to account for rising costs.
You and your staff found some significant savings in this budget. Can you outline those, and talk about how those savings affect this budget?
The FY 2024-25 budget reflects our commitment to maintaining core services for residents while achieving significant savings. Our staff was able to determine what the core functions was for each department. Through a process similar to zero-based budgeting, we were able to distill down what our residents expect with a budget we could maintain. Once this services list was compiled, leadership came back with additional services that our residents expect by providing them in a fiscally responsible manner. These savings have resulted in over $8.1 million, which allow us to balance the budget with a $0.05 ad valorem tax rate increase for Public Safety salary increases, resulting in a $0.5895 tax rate.
Some indicators say inflation seems to be easing, but probably not many of us think about how inflation and cost pressures affect a city’s operations. Can you give us a couple of examples of pressures inflation has created for the city of Fayetteville?
One of the most significant examples is in the cost of construction projects that have, in some cases, seen increases as high as 40%. This new reality has led to difficult decisions in refining project scope and finding additional dollars for projects through grants or other funding streams.
Another, not related to cost pressures directly to the city, is employee salaries. To maintain the level of professionalism we have in the staff requires salaries to be not only competitive with our surrounding communities, but also take inflation into account when determining what to recommend to council for a pay increase.
What’s the city’s ARPA funding picture looking like?
The city received $40 million, and council has allocated all $40 million in three primary focus areas along with administrative tasks and functions. (See the fayettevillenc.gov/arpa page for the program and spending details.) It’s also worth noting that we are expending ahead of schedule and fully in line with federal guidelines.
When it comes to the city’s infrastructure, what does this budget allow you to do — and what infrastructure work does it leave untouched?
We have investments which are critical for supporting the city’s growth, addressing aging infrastructure, and ensuring that Fayetteville remains a vibrant, attractive place to live, work, and recreate. The recommended budget prioritizes critical investments in our city’s infrastructure to ensure long-term sustainability and enhance the quality of life for our residents.
These investments include our Street and Sidewalk Maintenance and improving the city’s 751 miles of streets, as well as expanding sidewalk networks to ensure safe walkability for our residents; a $1 increase in the monthly stormwater rate to support the capital Stormwater Program needed to address the city’s stormwater management and infrastructure needs; our ongoing Facility Maintenance, replacement, and renewal of essential facilities, including 122 parks and recreation facilities, 17 fire stations, 4 police facilities, and other key buildings; and funding for projects at the Fayetteville Regional Airport to support Airport Expansion, enhancing connectivity and economic opportunities.
Can we get an update on the city’s General Obligation Bond with regards to the projects, and how the voter-approved initiative has translated over to the tax rate?
Fayetteville voters overwhelmingly approved the “Fayetteville Forward” bond package, securing up to $97 million for public safety, infrastructure, and housing improvements, reflecting strong community support for these transformative investments. We are on year two of seven. The general update:
Public Safety – $60 Million. There are currently four proposed projects: 1. 911 Dispatch facility (currently being programmed); 2. Fire Station 16 (property obtained and negotiating with an architect for a design); 3. Fire Station 9 (currently being programmed); 4. Fire Station 2 (currently being programmed).
Infrastructure – $25 Million. We have more than $25 million in projects and will expense $25 million back to us. There are several ongoing and completed infrastructure projects: 1. Approximately $8 million in sidewalk projects are under design. We have 24 sidewalk projects approved. 2. Nearing completion of $7 million in street resurfacing. 3. Approximately $4 million in street resurfacing for council to approve in June (post-budget approval). Approximately $3 million in street resurfacing is planned for FY 2025-26. 5. Approximately $500,000 in bike lanes are planned for FY 2024-25. 6. Additionally, there is funding set aside to match the Safe Streets for All grant and to update the overall Fayetteville Pedestrian Plan.
Housing Opportunity Bond – $12 Million. $6 million has been obligated to the Murchison Road Choice Plan. The remaining $6 million is intended for affordable housing programs across Fayetteville.
In FY2023-24, the city council approved 2.5 cents for the 2022 GO Bonds, or about $3.1 million. This leaves a potential 1.5 cents, which is approximately $2.25 million.
And lastly, can you talk about how you’ve worked to ensure that your budget plan aligns with the city’s overall strategic plan — and why that’s important?
The careful alignment of the budget with the strategic plan is fundamental to driving our city’s growth, improving residents’ quality of life, and ensuring we meet the expectations of our community effectively and efficiently. As the City Manager, I worked diligently with the leadership team to create a budget that reflects our strategic priorities and supports our community’s needs.
First and foremost, we examined the strategic plan’s goals to ensure each budget allocation directly contributes to these objectives. For instance, our first goal is to ensure a safe and secure community. Therefore, we prioritized funding for the Office of Community Safety (OCS) and significant investments in public safety personnel recruitment and retention.
Aligning the budget with the strategic plan is essential because it ensures that our financial resources are being used efficiently to achieve our desired outcomes. It promotes transparency, accountability, and a clear direction for the city’s future. By aligning our budget with the strategic plan, we ensure that every dollar spent is a step towards making Fayetteville a better place to live, work, and recreate.
This alignment also allows us to measure our success more effectively. Performance measures and key performance indicators (KPIs) set out in the strategic plan help us track our progress and adjust our strategies as needed. It ensures we are responsive to emerging challenges and opportunities while remaining committed to our long-term goals.
