The City of Fayetteville’s fiscal year 2020 budget was approved in a 5 to 1 vote Tuesday, but only after concerns were raised by the former city mayor and an alderman.
The approved budget includes $12.2 million in general fund expenditures and sets the city’s new property tax rate at $1.50 per $100 of assessed valuation, less than the current rate of $1.65 due to increased valuations resulting from reappraisals earlier this year.
Former city mayor Jon Law touched on a number of concerns as the public hearing on the 2020 budget got underway Tuesday. The first of those focused on the Board of Mayor and Aldermen’s decision earlier this year to purchase 12 new police vehicles, including 10 fully-equipped Tahoes, as Law asked how the cost of those vehicles is addressed in the new budget.
City Administrator Scott Collins answered that the cost is being funded out of debt service. Acquisition of the vehicles at a cost of $508,884, was approved in February, with the board voting to take out a low-interest loan that will be repaid over three years.
His second question focused on the $467,000 shortfall in the 2020 budget, which is being pulled from city reserves – “Have you taken any measures to rectify that or did you just decide to take that out of the reserves,” asked Law.
“What we have done over the past few years is build up the fund balance in anticipation of the grant program,” said Collins, adding that both Phase I and Phase II of the Greenway projects, as well as the William D. Jones Boulevard improvement project, will all begin this year.
Also expected to begin this year is construction of the new soccer complex on property expected to be donated by Daikin/Goodman – while the local match comes in the form of the donation of the property, the projects altogether represent $587,191 in local match dollars to the state’s grant awards of over $2.8 million.
Law went on to question the anticipated purchase of a tractor when the city had purchased another tractor this past year. Eddie Plunkett, director of public works, noted that the two pieces of equipment are different and will be used for different purposes. Questions about this purchase, however, would also be raised by Alderman Donna Hartman in the City Board meeting as officials considered action on the budget.
The former city mayor’s questions then turned to whether the budget sufficiently allocates resources for repairs relating to sidewalk improvements and drainage repairs, in particular repairs to Norris Street, which Law said is caving in again and projects like the repairs that were made last year to drainage tiles in the roadway in front of the museum.
Collins answered that he believed he had budgeted sufficiently for studies to be conducted, but that adequate funding may not be budgeted for all of the work that needs to be done. He added that while funds had been earmarked for some of the work in the current budget, the funds weren’t spent as the city had applied for Community Development Block Grant (CDBG) funding for the work – the city, however, was unsuccessful in securing grant funding on those projects.
“Since then, we’ve had engineers look at some of the more concerning areas and are working to repair them, such as Bagley Drive and Third Avenue and there are a couple more we’re studying, and Norris Street is a big one, but we’ve got to coordinate with the state on that,” Collins said.
Law also voiced concerns relating to whether funds are adequately provided in the budget for compensated absences accrual as well as the city’s policy of paying for an individual’s health insurance after retirement with 30 years of service until they are Medicare eligible.
“During the last term, we had seven employees who retired,” he noted. “Two of them received a full year’s pay, based on what I understand, that included pay raises and holidays, and their insurance paid at the rate for the individual coverage ... My question is, if you have a $467,000 shortfall and you’re covering that with a fund transfer ... then you’re still going to be short, just based on this.
“I know there’s another employee that’s got a year and a half that left recently that’s on full pay,” he said. “I understand that the board has dealt with part of that issue ... but I still think it’s something you all ought to look at, because that’s going to effect your cash.”
Add to that the fact that the city could potentially be paying for insurance for a retiree for 15 years, and the issue of sustainability becomes increasingly important, he said.
“There are several issues being reviewed there,” said Collins, adding that a meeting has been scheduled with the Tennessee Consolidated Retirement System (TCRS) to address some concerns and that a recent restructuring of city staff and human resources will also assist in addressing the issues.
“The main reason I am here is to ask questions,” said Law. “... But another reason is that for four years, I sat in that chair, and we had budget hearings and they lasted a minute and a half. Nobody came and nobody asked any questions, and then they would complain ... I didn’t want to be hypocritical. I appreciate your answers and I hope everything works out.”
Another resident also took the podium during the public hearing.
David Mingia praised the Board of Mayor and Aldermen, saying, “I’ve been following you guys, and I’ve done other budgets before. All in all, it looks pretty dad gum solid. I’m impressed with what I’ve seen. Your budget was presented to you beautifully ... It looks like your budget is addressing your priorities that you’ve set. You’re investing money into looking toward the future and setting plans so that you can then have other goals.”
As the 2020 budget was considered during the regular session of the board, held just after the hearing, Collins addressed a $90,000 mistake in the capital budget – the tractor and bush hog planned for purchase in the coming year was to have been budgeted at a cost of $100,000, but due to a typo, it was entered at a cost of $10,000.
“Alderman Hartman and I had a meeting this morning with the finance director, and there was a typo,” Collin said. “We had budgeted for a public works mower for $100,000, which you all had approved during the budget work session; however, when it made it from the worksheet to the budget document, it was at $10,000. So with that mistake, and thank you again, alderman, for pointing it out, I’d like to recommend that we still approve the budget, so we can get it into the comptroller’s hands and be ready to go July 1st.”
The city administrator said public works could do without the equipment this mowing season but that he might propose that the matter revisited this winter.
Officials ultimate voted 5 to 1 to approve the budget, leaving the $10,000 for the tractor and bush hog in but omitting the $90,000 that was not included as a result of the mistake.
“I’m not sure that we met enough to tweak this budget enough,” said Hartman prior to the vote. “We are short $467,057. Had we not made this amendment tonight, that would have been an additional $90,000, which would have put us at roughly $567,000 short ... We met one time on a $12 million budget, and I’m not sure that we have put the time into this that we should have, so I would have to vote no on this budget.”
“We didn’t meet as many times as we normally do – we normally meet twice,” said Alderman Danny Bryant, adding that board members had given instructions to staff that they wanted a more reasonable budget on the front end of the process. “As it happens, they did what they were asked to do.”
“The previous board had voted and committed to these grants, and if you say no or if you back out of a grant, good luck on trying to get another one in the future, especially with the state,” said Whisenant.
“We also knew moving forward with these grants and these projects that we would have to pull the money from our rainy day fund when it came down to it,” said Vice Mayor Dorothy Small.