City officials deadlock on budget

Opinions split on pay hike

By Tom Joyce -

Mount Airy officials hammer out details of the proposed 2016-2017 city budget Wednesday, including, from left, Commissioner Jon Cawley, Mayor David Rowe and commissioners Jim Armbrister and Shirley Brinkley.

Tom Joyce | The News

Despite an intense discussion spanning more than five hours Wednesday, Mount Airy officials were unable to reach an agreement on the city’s budget for the next fiscal year.

In gathering for an annual workshop, council members, City Manager Barbara Jones, heads of municipal department heads and other personnel continued a practice that usually leads to a consensus on expenditures and revenues and the budget’s passage.

That was not the case with Wednesday’s meeting, which ended with an impasse on the 2016-2017 budget that goes into effect on July 1. With no breakthrough apparent, officials did agree to recess the session until Monday morning in the hopes a decision can be reached then.

Wednesday’s discussion mainly centered on a proposed salary hike for municipal workers, who are underpaid based on a statewide salary survey, and a proposed new $15 tax on every registered vehicle in the city to help fund local street needs. Those two items have been heavily discussed since the preliminary budget was released last month.

No increase in property taxes is included in the spending plan, but water and sewer rates are proposed to grow by 4 percent.

Revenue concerns

Led by Mayor David Rowe, the five city commissioners debated each of those highlights and initially agreed by consensus that the $15 tax should be eliminated from the equation. That was due to concerns over the impact on residents with fixed incomes and business that have fleets of vehicles.

Support was split for the employee raises, which would contribute to an overall personnel increase of 8 percent for 2016-2017 compared to this fiscal year, representing an additional budget expense of about $800,000.

However, there was disagreement over the size of the raise and whether it could be sustained in the coming years in the face of increasing demands on city revenues. There also was concern that many workers in the private sector don’t enjoy such hikes, and in some cases have had schedules reduced by employers seeking to avoid insurance requirements for Obamacare.

Mount Airy has a fund balance, or “savings,” of around $12 million. But $2.2 million of that was earmarked to balance the present fiscal year’s general fund budget, although the city manager isn’t sure how much of that finally will be required, with another $3.1 million allocated for 2016-2017.

“This is not sustainable,” Commissioner Jon Cawley said Wednesday of the revenue outlook for the coming years, when the city government will face major expenditures such as up-front costs to revitalize the former Spencer’s Inc. industrial property it now owns.

Cawley said he supported using the fund balance for such capital needs, relating to facilities or equipment, but that having to support the pay raises from year to year would contribute to the fund balance being depleted eventually.

“If we’re going to give that kind of raise,” he said of the 8-percent increase in personnel expenses, “we need to cut some services.” One suggestion was charging residents for sanitation crews to pick up tree limbs and other yard waste, which is now free — but officials were hard-pressed to identify reductions overall.

Also discussed Wednesday was a possible hike in property taxes for next year, which hasn’t been proposed, but which officials say might be needed to balance the budget and get city finances on a solid footing.

“At some point, you’re going to have to raise taxes if you don’t cut services,” Commissioner Steve Yokeley said.

Other options discussed toward the end of Wednesday’s workshop included implementing the new vehicle tax after all, possibly at a figure lower than $15, and scaling back the proposed pay raise or spreading it out over multiple years.

The bottom line was that no agreement could be reached on the various issues to allow passage of the 2016-2017 budget.

At one juncture, Commissioner Jim Armbrister made a motion to approve the package minus the vehicle tax — but no other commissioner would second it in order to bring the matter to a vote.

Salary debate

The salary proposal was triggered by a 2015 statewide survey of the North Carolina League of Municipalities. It showed that about an 11-percent increase would be needed to bring Mount Airy’s 170-member payroll up to the average for cities of comparable size.

Becky McCann, city human resources director, who revealed that study earlier this year, offered some examples Wednesday of where Mount Airy was lagging.

The starting pay for Mount Airy police officers is $28,109, tcompared 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.

All members of those three departments in Mount Airy collectively earn less on average than their counterparts elsewhere, including $33,214 for local police compared to the $38,246 average. For firefighters this ratio is $28,457 to $32,537 and sanitation personnel, $25,865 locally compared to the average elsewhere of $28,500.

After hearing such statistics, Mayor Rowe said he believes the key to setting the pay levels for municipal workers is providing a “living wage” for employees and their families.

“And we’re not paying living wages,” he said.

In some cases, full-time city employees qualify for public assistance benefits because their earnings are so low, according to Wednesday’s discussion.

For 2016-2017 budget purposes, half of the sum needed to make up the 11-percent average shortfall is proposed to be included and half in the next fiscal year’s budget.

The percentage increase would vary among employees, the city manager said, from a low of 3 percent to a high of about 20 percent for personnel on the low end of the salary scale earning only about $25,000 annually and on the job for 10 years.

In addition to ensuring certain personnel earn a living wage, McCann and other officials said Wednesday the low pay is making it hard to retain employees and recruit new ones.

The police department alone lost 14 of its members in two years, 2014 and 2015, which represented a 23-percent turnover rate for 2014.

Under the proposed hike, the starting pay for city officers would rise to $29,655.

“I support it,” Armbrister, a retired city policeman, said of the pay increase for municipal employees, charging that the present scale keeps people from earning a living in their chosen field.

“You can’t rely on your career to support you at the rate we have now,” Armbrister said.

But Commissioner Shirley Brinkley joined Cawley in expressing concern for the raises.

“It is not our responsibility to get people’s checkbooks bigger,” said Brinkley, who added that it is up to each person to meet their individual financial needs.

“That’s not our job,” Brinkley reiterated, also saying that tough economic times persist. “I want to say ‘make it easier on everybody,’ but that’s not America anymore.”

Brinkley called the proposed 8-percent increase in personnel costs “not realistic.” She also pointed out that Mount Airy employees enjoy much better benefits overall than private-sector workers, but did express support for paying more to those on the lower end of the scale.

“I can’t support it,” Cawley said of the raise as proposed.

At the end of Wednesday’s workshop, the commissioners agreed they were getting nowhere and hoped to make more headway when meeting again Monday — as the clock ticks down.

“We legally must have a budget adopted by June 30,” the city manager reminded.

Tom Joyce may be reached at 336-415-4693 or on Twitter @Me_Reporter.

Mount Airy officials hammer out details of the proposed 2016-2017 city budget Wednesday, including, from left, Commissioner Jon Cawley, Mayor David Rowe and commissioners Jim Armbrister and Shirley Brinkley. Airy officials hammer out details of the proposed 2016-2017 city budget Wednesday, including, from left, Commissioner Jon Cawley, Mayor David Rowe and commissioners Jim Armbrister and Shirley Brinkley. Tom Joyce | The News
Opinions split on pay hike

By Tom Joyce

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