Wyatt proposes budget cuts, smaller tax hike


Interim City Manager Ed Wyatt began the latest installment of the Henderson City Council’s Finance and Intergovernmental Relations (FAIR) Committee’s budget deliberations by telling members that it is a critical year for the city.

He said that if there is any adjustment of the tax rate, it should be this year. He said that a tax hike won’t take place next year.

Wyatt was most likely referring to the fact that 2009 is a city council election year.

The interim manager took note of what he termed an “exodus” of “talented management personnel” in the last year. He acknowledged, however, that not all departures were due to salary. He stressed a need to retain employees, especially those with licenses, accreditations, and other documented professional skills.

Wyatt said that he was told by Henderson Police Chief Keith Sidwell that it is more difficult to recruit officers with the county’s new pay plan.

Citing a previously reported 22% increase in the county’s Emergency 911 budget, Wyatt noted the city’s lack of participation in the budgeting process for that department. He encouraged members to attend a 911 meeting scheduled for June 27.

“Silence is consent,” Wyatt said.

Recommending that the Cost of Living Adjustment (COLA) and merit increases (an average of 2.5% per employee) be kept intact, Wyatt went on to suggest a tax rate of 57 cents, two cents over “revenue neutral”.

To facilitate the more modest tax increase, Wyatt recommended the following measures:

  • Take $20,000 out of retirement fund and put into general fund.
  • Increase Recreation Department participation fees by 5%.
  • Appropriate $14,000 from the fund balance. This would keep the fund balance at 10%, 2% over the minimum required by the state’s Local Government Commission.
  • Freeze the positions of city clerk, financial director, planning director, two police department positions, a firefighter position, and a city engineer position for four months.
  • Hold any position that comes open for 30 days before it is even processed.
  • Cut $15,000 from the Henderson Fire Department by eliminating a new parking lot and moving the funds for a parking lot for the new city hall
  • Eliminate seven positions from sanitation. Wyatt emphasized that no one would lose their job, but rather these positions were freed by the changes in sanitation service.
  • Put a proposed Recreation Department vehicle on schedule for next year and limit cost to $21,000.
  • Cut $100 from Crime Stoppers.
  • Eliminate a leak detector.
  • Keep sewer rate at present amount.
  • 5% raise in water rate.
  • A document listed the budget changes proposed by Wyatt can be viewed here.

    Council member Garry Daeke expressed dissatisfaction with the increase in the Emergency 911 budget. He recommended that the city not pay for two proposed positions within that department.

    Member Michael Inscoe suggested that a proposed excavator purchase be deferred until next year when other vehicles are paid off.

    Daeke suggested lowering the merit raise average from 2.5% to 1.5%. City Attorney Billy Strickland noted that department heads get the average of the merit increase.

    If the merit raise average were lowered to 1.5%, the highest merit raise an employee could receive would be 3%.

    Member Mary Emma Evans expressed her perennial concerns about water rates and the $12 late fee as well as a $40 cutoff fee for accounts more than 40 days delinquent. She said she could not support a budget that has a 5% water rate increase in it.

    Daeke noted that the city has lost $4 million in uncollected water bills. Member Mike Rainey expressed a desire to outsource collections on the unpaid bills.

    Assistant City Manager Frank Frazier explained that the cost of water was being increased by 5% by the Kerr Lake Regional Water System. He also noted that Progress Energy has asked for a 16% increase. He also called the Special Order of Consent the city is under to repair the sewer system.

    “If we don’t do them, we’ll be in very serious trouble,” Frazier said.

    Strickland called the city an organization that “justifies something more than revenue-neutral”. He said the council has a “bunch of good workers” working for “peanuts” compared to other places where raises are 5 to 15%.

    Inscoe stressed that everyone on the council believes that employees should get a raise. He also said that these are “unusual economic times” and that he feels obligated to make sure that citizens are treated fairly. He said he felt he should explore every possibility.

    The meeting was continued until Friday, June 20, at 3:00 p.m. in council chambers at city hall.