There will be no tax increases or utility rate hikes in the 2011-12 Commerce budget, it appears. There will also be no employee pay raises or Christmas bonuses.
Following its regular meeting Monday night (see separate story), the council wrestled to close a $113,000 revenue gap in the general fund, all that remained to balance the budget for the fiscal year starting July 1. After mulling over a couple of budget balancing scenarios presented by city manager Clarence Bryant, the council closed the gap by eliminating Christmas bonuses again ($79,000) and by reducing capital spending in the gas department by $16,000 and in the electric department by $15,000.
“We got the direction,” Bryant said. “We’ll put it together and present it at the next work session.”
Presumably, the council would approve the budget at its June 13 meeting.
Bryant tried hard to convince the council to give city employees, who have not had a pay increase for over three years, a Christmas bonus, but the council would have no part of it.
“I don’t know how we can go back after a year like this and give raises or bonuses,” said Clark Hill, who pointed out that few businesses and no governments have given raises this year. “It doesn’t feel right.”
Mayor pro tem Keith Burchett and Ward 5 councilman Johnny Eubanks both backed Hill’s position.
“Not getting a raise is not restricted to the city of Commerce,” Burchett said, adding that, “I know those guys work hard, and we appreciate what they do.”
Eubanks floated the proposition of revisiting the raise/bonus issue sometime during the year.
“If things look better a few months down the road, could we do this later in the year?” he asked.
Hill liked that proposal, and Mayor Charles L. Hardy Jr. did too, but Bryant predicted that it would be difficult to do by Christmas.
“I don’t think the November financial statement is going to look like you can do anything,” he said.
Hill couched his motivation as a desire to preserve the city’s dwindling reserves, which he said have been depleted by $3 million over the past few years. He reminded the group that Jackson County officials are projecting a 10-percent drop in the county tax digest.
“That’s what scares me,” he said, “so many unknowns.”
“We built the reserves by not spending what we budgeted,” Bryant said, noting that the city used to transfer about $1 million a year from the gas fund into the general fund. That is down to $349,000 in the proposed budget.
Other options the council discussed but did not accept included delaying the hiring of a police officer for seven months ($28,723), deferring the vacation payouts to retiring employees into the next budget year ($39,966), reducing the Downtown Development Authority’s community promotions budget ($9,000), and delaying the purchase of a truck for the water distribution department ($35,000).
The council appeared to understand the fact that the budget has no room for error.
“If we spend every penny we’ve got and we have trouble, it’s going to be disastrous,” Eubanks commented.
All of the discussion was over the $5.1 million general fund budget. Counting the utility funds, which were already balanced, the 2011-12 budget will amount to around $24 million.
