Fayetteville council receives financial update showing strong reserves; staff urges citywide compensation study

FAYETTEVILLE — The Fayetteville City Council on April 13 received a financial report from CFO Tiffany Murray showing the city ended fiscal 2025 with a total fund balance just over $102 million and an adjusted unassigned fund balance of roughly 16% before recent appropriations.

Murray told the council that, after accounting for nonspendables, restrictions and assignments, the city had "an unassigned fund balance just almost $27 million" and that overall the "city is in a strong financial position." She said revenues are trending comparable to the prior year and that about $11 million of the year-over-year increase was driven by property-tax collections tied to seasonal timing.

The presentation flagged several items for council attention. Murray said the city has a 10% vacancy rate (about 192 unfilled positions), creating an estimated $9.5 million in vacancy savings to date. She also noted the city issued $40 million of geo-bonds from a voter-authorized $97 million authorization and that staff is preparing to implement GASB 103 changes to how budgetary information appears in financial statements.

Murray asked the council to consider a compensation study covering non-public-safety employees, saying the last comprehensive study was done about five years ago and "we are five years behind" current market ranges. In response to council questions, Murray and City Manager Hewett said selective, position-specific studies have occurred for hard-to-fill roles and that the city has provided annual increases (4% plus a 1% 401(k) contribution in recent years) to remain competitive.

Councilmembers pressed staff for additional breakdowns. Councilmember Jones asked how much new county property valuations produced in revenue for the city; staff said that precise figure would require more analysis but confirmed growth is driven by valuation changes and tax rates. Mr. Yates, who answered technical tax questions during the briefing, said projected impacts from the county methodology change could be roughly $4 million in the unrestricted intergovernmental revenue category but that a three-month lag in sales-tax reporting means final figures will be known later in the year.

At the end of the discussion Councilmember Davis moved and Councilmember McNair seconded a motion to receive the report; the motion carried. Staff said the next formal financial report will come at the close of the fourth quarter with the audited financial statements.

The report included no request for immediate budget action beyond recommending further study of pay competitiveness; council members indicated they expect the compensation discussion during the upcoming budget process.