After once again being unable to finalize the 2016-2017 budget for Mount Airy, the board of commissioners told City Manager Barbara Jones Monday to break out the ax.
Jones was instructed to cut the proposed budget for the next fiscal year by $750,000, in order to use less money from the municipality’s general fund balance, or surplus, than projected and help it achieve solid financial footing for the future.
That was agreed to Monday after the commissioners held a budget workshop at City Hall lasting more than three hours, on the heels of another discussion Wednesday which spanned five hours-plus. Jones and her staff will now rework the budget package and return for another discussion Thursday afternoon.
“We want her to come back with some different numbers,” summed-up Mayor David Rowe.
The issue is the city now isn’t generating enough revenue through property taxes and other means to meet its operational costs — including covering a projected 8 percent in personnel expenses linked to employee raises — without dipping heavily into the fund balance.
That seems to especially bother Commissioner Jon Cawley, who is concerned that at the present rate the fund balance — now at about $12 million — will be depleted and cause major problems for the city in the future.
“It is a mistake to use your fund balance for operational expenses that are recurring,” he added of costs such as the across-the-board pay raise proposed in the budget that would go into effect on July 1.
“I’d rather the fund balance be spent on capital improvements,” Cawley said of one-time, major expenditures, as opposed to operating funds.
Cawley said he generally doesn’t object to city workers being paid adequately, but doesn’t think the money for that should come from the fund balance.
If the raises are approved for next year’s budget — averaging 4 to 5 percent across the board for about 170 employees — it will require a spending increase of around $800,000. And Cawley pointed out that the raises would be an every-year cost after that.
For the present, 2015-2016 fiscal year, $2.2 million of the fund balance was allocated to meet city budget expenditures. However, Monday’s discussion indicated that only about $230,000 has actually been used at this point, due to unexpected higher revenues in areas such as sales taxes. The final outcome won’t be known for several months.
Meanwhile, Jones initially has projected that $3,120,006 be allocated from the fund balance for the 2016-2017 budget.
The directive from the commissioners to the city manager on Monday was to reduce that by $750,000 so that a fund balance appropriation in the $2.5 million range results. The thinking is that similar approaches over time will help bring operational costs in line with revenues without depleting the fund balance.
The city manager said she would explore personnel, capital expenditures (related to buildings and equipment) and operational costs in seeking reductions.
Jones is to show exactly where cuts would come from, while also examining a combination of reductions and revenue adjustments to achieve the desired result or leave the budget as is and show where $750,000 in extra revenues might be realized.
“The only thing we can do is raise property taxes,” Cawley said, pointing out that a 31-cent hike would be required for the budget without using fund balance revenues. “If anybody wants to vote for that, go ahead.”
Yet there was support Monday for some degree of property tax increase.
“I’d rather raise taxes than cut services,” said Commissioner Steve Yokeley, who also is favor of the raises for employees, said to be paid about 11 percent less on average than their counterparts across the state.
A proposed $15 vehicle tax for next year is not supported by the majority of the commissioners, but hasn’t officially been taken off the table, and based on Monday’s discussion is still alive as part of the revenue considerations.
Also eyed for 2016-2017 is a 4 percent water-sewer hike.
Across the board?
The fact that the proposed raises are across the board bothers Cawley, along with commissioners Shirley Brinkley and Jim Armbrister, based on comments Monday.
They favor the idea of increasing the pay of lower-paid personnel, namely in the police, fire and sanitation departments.
Survey results presented last week show starting pay for Mount Airy police officers is $28,109, compared to the average among other localities of $34,096; starting firefighters earn $25,495 compared to the average elsewhere of $30,700; and sanitation workers locally receive $19,976 to start, compared to the $25,383 average.
“I’m just really concerned about the safety of our town,” Brinkley said of ensuring that public safety personnel are adequately compensated to stay on the job. “I want to live in a safe town.”
But she and others oppose across-the-board increases, since high-salaried personnel also would get more.
“I think this is unfair — it’s unrealistic,” Brinkley said.
Cawley said he also could not back the across-the-board increases unless the budget is balanced.
Armbrister believes the main objective should be ensuring city employees at the lower end of the scale are paid a “living wage.”
“I think a system with the right people getting the right amounts needs to be done,” he said, even if it means higher-ups see subordinates closing the wage gap with them.
Yet Cawley also said many people in the private sector don’t have it as good as even the lowest-paid municipal employees. And they haven’t seen their incomes grow over the past 10 years or so — a period in which city workers have had some cost-of-living adjustments.
“I don’t think $27,000 is bad starting pay,” Cawley said of the survey findings regarding lower starting salaries here. Cawley also mentioned how fellow city officials seem fixated on raising entry-level pay “for people who are not even here yet.”
He further questioned an oft-cited notion that Mount Airy must substantially raise its salaries to keep employees from going elsewhere.
“If our goal is to make sure no one wants to leave, we’re going to dig a hole we get buried in,” Cawley said.
Tom Joyce may be reached at 336-415-4693 or on Twitter @Me_Reporter.