There will be no property tax increase in the city.

McMinnville’s Board of Mayor and Aldermen gave final approval for a 2019-20 fiscal year budget Tuesday night. It passed without a property tax increase, despite previous discussions to include one.

City officials voted 6-1 in favor of the budget. 

Mayor Ben Newman, Vice Mayor Ryle Chastain and Aldermen Everett Brock, Steve Harvey, Kate Alsbrook and Rachel Kirby voted in favor of the financial plan, which included more than $1 million in cuts. Alderman Mike Neal voted against it.

McMinnville’s property tax rate remains $2.08.

“I voted against it because it authorized the spending of $2.2 million more than we had revenue to cover,” said Neal. “The board is content on funding more debt than funding essentials like our streets. I offered up three amendments to try and make up some of the difference. Only one passed. Others on the board have expressed the same concerns as I about the ongoing deficits, yet they failed to support the amendments I offered and offered none of their own. That’s not leadership.” 

Neal continued, “Some are afraid to tax, others are afraid to cut, and others are looking out for their friends and special interest groups instead of the city as a whole. I am amazed at the hypocrisy and/ or indifference expressed about the current financial situation the city is in by this board.”

Neal proposed eliminating a COLA (cost of living adjustment) for city employees, freezing employee step raises for one year, and removing $75,000 allocated for the Tourism Development Board. Removing the pay increases would add approximately $306,000 back into the budget: $156,000 for COLA and $150,000 for step raises. 

“Information from the Social Security Administration shows that we are about 2.9 percent over the last 10 years above what the federal government had recognized as cost of living adjustments,” said Neal. “I don’t feel like our employees are underpaid as far as cost of living raises. I think we are ahead right now.” 

Step raises are given to employees across the board and not based on performance. Neal suggested the city consider establishing merit pay, also known as pay-for-performance, and is defined as a raise in pay based on a set of criteria set by the employer.

Within the budget is $75,000 to cover administrative costs associated with the McMinnville-Warren County Chamber of Commerce overseeing the city’s Tourism Development Board. That board also receives the city’s hotel tax revenue and that amount is approximately $75,000 a year. 

Neal reminded the board the city’s original intent was to supply the Tourism Development Board with $75,000 a year until the tax revenue was received and then allow that revenue to fund tourism efforts. 

“I think we need to not burden local taxpayers with this to let the TDB operate off those funds of the hotel tax,” Neal said. 

Board members unanimously approved a motion to freeze employee step raises for one year, but rejected the remaining two motions:

Members voted 4-3 against removal of the cost of living adjustment. Newman, Kirby, Harvey and Alsbrook voted to leave the $156,000 COLA in the budget, while Neal, Chastain and Brock voted to remove it.

Members voted 5-2 against removal of TDB’s allocation of $75,000. Newman, Kirby, Alsbrook, Harvey and Chastain voted to leave those funds intact, while Neal and Brock voted to remove funding.