Despite receiving its first approval by the Finance Committee two weeks ago, the matter of the budget for fiscal year 2025-2026 resurfaced during Tuesday’s Board of Mayor and Aldermen meeting with some prospective changes. One of the two adjustments applied to raises for city employees.
“I was looking over everything, just trying to think of other ways to save some money, and I was kind of curious of what you all thought about the fact that our general fund budget from June 30 of this year to June 30 of next year is projected to drop about $1.5 million, which puts us down around $5 million at the end of next year,” Vice Mayor Steve Harvey said, stating he was operating off of rounded numbers. “Five million is about the mark that we really don’t need to go below.”
City Accountant Samantha Moore pointed out the amount was 24.7% with the board having previously voted to keep its goal of general fund balance at 25%.
Harvey went on to point out the revenue, compared to two budget cycles ago, had begun to slow.
“It has definitely slowed down like you and I talked about,” City Accountant Samantha Moore explained as she presented a graph demonstrating the inching climb in the city’s revenue. “Year-over-year growth has pulled back a little bit.”
This year, the city anticipates it will end with a budget of $17,589,000. Last year’s budget ended at $17,348,000, leaving the city with a growth of $250K across the two of them. The total revenue, as proposed, for budget year 2025-2026 is currently $19,180,000. Expenditures have increased 4% over last year for a total of $939,556 as presently recommended.
“Usually, we were jumping a million or substantially, and we’ve slowed way down,” Moore said.
Of the city’s budget, Harvey tapped the fact payroll occupies 68% of the overall budget, contributing the lion’s share to its composition. Personnel includes wages, overtime and benefits.
The city has 163 employees currently.
“This is in line and not uncommon at all, but unfortunately, there’s not a lot of other places to find it to get money from,” Harvey said. “I just handed out a few options.”
The finance committee previously approved a 2% cost of living adjustment (COLA) and a 3% step increase. All city employees receive the 2% COLA but the 3% step is reserved for employees hired on or prior to April 1, 2025.
“If we only gave the 3% step raise, and again these are really round numbers, that would save about $180K,” Harvey demonstrated. “Another option is there were some grade changes that Libby recommended recently that we could not do if we chose to, that would save about $107K. Not doing the COLA or the step raise would save about $450K.”
Harvey also noted City Administrator Nolan Ming’s raise, which was “very recent and fairly extensive.”
“We should probably not be in favor of doing the step or COLA for that position,” Harvey said, adding he had spoken to Ming prior to making the recommendation. “Regardless of whether or not we do the other three options, we should still do that one or do it along with the others.”
Harvey went on, “None of this is easy. I just feel like we have to get some somewhere, and I don’t know what else to do.”
Moore provided a presentation illustrating the budget’s current breakdown with its ending balance of $5,108,604. This number is a deficit of $1,470,000. Of this, $282K is an operating deficit.
“Whenever we say structurally balanced, are we operating within our means — we’re $282K in the hole whenever you talk operating across the board,” Moore said.
The city has two pieces of debt service which are responsible for repaying loans for the renovation of the Park Theater and Milner Recreation Center.
Annually, the city contributes $653,746 to debt repayment for the Milner Center and $131,022 to Park Theater.
Park Theater is expected to be paid off in 2034 and Milner Center is set to follow five years later, in 2039.
“One thing that hasn’t been discussed yet is the selling of the Pacesetters building,” Mayor Ryle Chastain said. “Even though that is a one-time windfall of cash, that could give us a little cushion going into future budget cycles. I think we’ll get significantly more money than we paid for it. Things are more expensive for us, just like they are for our constituents, and I can’t in good conscience vote to cut out COLA for our employees. They’re the ones that keep the city going and, at this point in time, I can’t in good conscience do that. Not all of it, anyway.”
Harvey stated, of the recommendations offered, he felt the grade changes were very much needed and would not wish to do the previous 5% raise between COLA and step increases. He added he felt better about going with the 3% step.
“I don’t totally get it all, but it works better that way,” Harvey said. “That would be my recommendation of the three, in addition to the administrator [being excluded from step and COLA raises].”
City Human Resources Director Libby Rutledge pointed out the 3% step raise is what the city is committed to per its pay scale.
“We have to do the step because it creates compression. When we hire people in, they come in on a step,” Rutledge explained. “If I’ve got a guy on step two and I hire somebody with a couple years of experience and I put him on a two, but we have a guy who is on three or four, they are now making the same amount and that is the compression thing. We got out of it when we implemented this a couple years ago with the consultant.”
Harvey cautioned, should the city not sell Pacesetters, it would be hurting to figure out how to balance the budget in the next cycle if there are no adjustments made now.
Two positions in admin, one in community development and public works all saw grade changes, which contributed a large part to the increased personnel expenditures. Opting not to proceed with the COLA and grade changes would provide the city with $287K in savings.
“I mean, honestly, we’re all living in this day and time right now. I understand its $180,000. This is what our ending fund balance is, we’re just a little under the 25%,” Alderman Keri Morton said. “It’s hard enough to find employees, especially in fire, police and heavy equipment. IF we don’t have those three things, if we can’t fill those positions, then we’re not really going to have anything. We know what a turnover we’ve had. It’s $180K leaving it like it is, that’s my recommendation. Leaving it like it was gets us to this right here.”
Harvey put the 5% increase into perspective by using property tax raises to illustrate the change in revenue which takes place, adding the city “can’t do a property tax every year.”
“We’ve got to do something different,” Harvey said. “We have to.”
Ultimately, the board opted to pass COLA unanimously, step raises and grade changes as previously recommended and Alderman Sally Brock motioned to exclude Ming’s salary from the step and COLA. Alderman Kara Youngblood was absent from the meeting.
This measure must be approved one final time on the second read, which will be held on June 10.
