Council asks staff to cut 1/2 cent off of tax hike


Cut would bring ad valorum tax increase to 1.5 cents per hundred dollars of valuation

The Finance and Intergovernmental Relations (FAIR) Committee of the Henderson City Council adjourned their last scheduled budget meeting before Monday’s budget vote in quasi-consensus.

With six council members present (Bernard Alston was absent and Mike Rainey was forty-five minutes late), the council attempted to find common ground within the budget that was presented by City Manager Ed Wyatt and Assistant Finance Director Sandra Wilkerson on Monday, June 16, 2008.

The latest version of the budget sports a 2 rather than 4 cent tax hike, a 3% cost-of-living adjustment for employees along with an average 2.5% merit raise, a 5% rise in water rates, a 10% raise in sewer rates, and growth in the unrestricted fund balance to 10%. Also, key positions will be frozen for four months, and any vacancies will be held for 30 days before the job is advertised.

In asking the city staff to find the additional 1/2 cent reduction, council member Garry Daeke advocated keeping the rise in the 911 Emergency budget to 5% for a savings of approximately $22,000. He also recommended that the merit increase be kept at 2% rather than 2.5%.

At Monday’s FAIR meeting, Daeke suggested dropping the average merit increase to 1.5%.

The combined amounts, according to Daeke, would be about 1/2 cent on the tax rate.

With the new revaluations, a cent of the tax rate equals about $85,000 of city revenue. During the last valuation, a cent amounted to $67,000.

In opening remarks, Wyatt characterized the tax reduction as being “done on the backs of key city employees”.

Wyatt defended the merit raise program, saying that past merit increases have been distributed fairly among all demographics of city employees.

Council member Mary Emma evens took exception to the merit raise program, telling members that she knows favoritism is widespread. She asked how she could vote to give merit raises when she does not know if there is going to be favoritism shown.

Wyatt responded that the council has a right to ask questions and that he would appreciate the opportunity to answer.

Member Mike Inscoe stressed a need for the council to come to a consensus on the budget, especially as members strayed into discussions of collecting delinquent water bills.

Regarding tax cuts, Wyatt stressed to members that they should not “strangle-hold” themselves any more than they already have. He said that employee pay increases are annualized and indicated that the city should anticipate the expense.

Wyatt also cautioned the council regarding action on the Emergency 911 budget increase. Stating that he was “disappointed and deflated” on the issue after progress had been made in relations with the county, he suggested that the county might retaliate on the issue of the old library purchase.

The acting city manager also said that the city has not been engaged in 911 meetings. He noted that members of the city council are part of an advisory group that has to make recommendations regarding the 911 budget.

“Maybe we need to think about it,” Inscoe said.

The FAIR Committee then went into closed session on a personnel matter.