The decay of turbulence kinetic energy (TKE) and its budget in the afternoon period from midday until zero-buoyancy flux at the surface is studied in a two-part paper by means of measurements from the Boundary Layer Late Afternoon and Sunset Turbulence (BLLAST) field campaign for 10 intensive observation period days. Here, in Part 1, near-surface measurements from a small tower are used to estimate a TKE budget. The overall boundary layer characteristics and mesoscale situation at the site are also described based upon taller tower measurements, radiosoundings and remote sensing instrumentation. Analysis of the TKE budget during the afternoon transition reveals a variety of different surface layer dynamics in terms of TKE and TKE decay. This is largely attributed to variations in the 8 m wind speed, which is responsible for different amounts of near-surface shear production on different afternoons and variations within some of the afternoon periods. The partitioning of near-surface production into local dissipation and transport in neutral and unstably stratified conditions was investigated. Although variations exist both between and within afternoons, as a rule of thumb, our results suggest that about 50 % of the near-surface production of TKE is compensated for by local dissipation near the surface, leaving about 50 % available for transport. This result indicates that it is important to also consider TKE transport as a factor influencing the near-surface TKE decay rate, which in many earlier studies has mainly been linked with the production terms of TKE by buoyancy and wind shear. We also conclude that the TKE tendency is smaller than the other budget terms, indicating a quasi-stationary evolution of TKE in the afternoon transition. Even though the TKE tendency was observed to be small, a strong correlation to mean buoyancy production of -0.69 was found for the afternoon period. For comparison with previous results, the TKE budget terms are normalized with friction velocity and measurement height and discussed in the framework of Monin-Obukhov similarity theory. Empirically fitted expressions are presented. Alternatively, we also suggest a non-local parametrization of dissipation using a TKE-length scale model which takes into account the boundary layer depth in addition to distance above the ground. The non-local formulation is shown to give a better description of dissipation compared to a local parametrization.