3-2 split over tentative millage rate
BY MARK J. CRAWFORD
Telegraph Editor
STARKE — Discussing their budget dilemma last week, Starke commissioners ultimately cut spending while simultaneously proposing a tax increase.
These were split decisions that most affect the police and fire departments next year. Jobs were cut from both department, but the additional tax revenue means the budget cut won’t be quite as deep.
The decisions, however, did not address the city manager’s concerns about infrastructure spending or his projections about funding deficits beginning in Fiscal Year 2024-25.
City Manager Drew Mullins pared down the budget from his previous presentation, eliminating 5% increases on sewer and water rates. This and the cost of the city’s tank maintenance contract left only $100,000 to transfer from utilities to the general fund unless the commission voted to raise customer rates or property taxes.
That decision was in the commission’s hands, but City Clerk Jimmy Crosby said they needed a decision on the tentative tax rate so they could inform the state by Aug. 1.
Chief Jeff Johnson voluntarily cut another half-million dollars from the police department, leaving the tentative budget at $1.1 million, down from $2.08 million. The fire department would be funded at $1.05 million, down from $1.59 million.
Johnson said this was the bare minimum it would take to run his department.
“There are going to be some services that are lost, I can promise you, but I’m going to put it together with my guys, and we’re going to try to not lose as many services as we can. We’re going to still be a police department. We’re still going to protect you all. We’re going to still answer calls, but there will be some sacrifices,” he said.
Mullins once again presented projections for the coming fiscal cycles, and the news was not good. The year after next, the city could be facing a $677,000 deficit with increases in expenses, including debt repayments, pushing the city’s budget (without grants) to more than $14.8 million. Two years later, the deficit could be $1.3 million without additional revenue or spending cuts.
Some pointed out the projections don’t take growth into account. A voter referendum early next year could potentially eliminate the police department, reducing public safety costs. Crosby said the budget cannot be based on speculation about what might happen.
While Commissioner Danny Nugent said it was up to the city manager to “think outside of the box” and present solutions, Mullins was seeking direction from the commission.
Commissioner Andy Redding wanted to know why the city shouldn’t move forward with sewer and water rate increases if there was only $100,000 surplus, and it is being transferred from the enterprise to the general fund. The city needs the revenue and a spending plan to go with it, he said.
“I don’t want my water bill to go up. I don’t want my taxes to go up. But this is a business for the people,” he said.
Chief Johnson’s budget cuts made it possible to eliminate the sewer and rate increases, according to Mullins. At least some of the additional utility revenue would have been needed to pay for public safety services in the commission’s general budget without further cuts. Utility fees have supplemented funding on the general side, because $1.2 million in property tax revenue doesn’t come close to paying for both departments.
Commissioner Shannon Smith wanted the business side of the city’s finances to stand on its own and earn money that can be reinvested in infrastructure, which has also been Mullins’ goal.
“Enterprise has got to be a standalone, money making enterprise. If not, we all need to be gone, you need to be gone, and we got to start all over because that has to make money, period,” Smith said. “Like Commissioner Redding said, I hate taxes, but numbers don’t lie.”
Mullins said he was caught in the middle and need the clear direction of the commission. As presented, his proposal allows the enterprise fund to stand on its own, with the cuts to police and fire resulting from the underfunding of the general side of the budget. Or, the commission could raise sewer and water rates and transfer the profit to the general fund, raise taxes and continue spending as before.
“The hard part that we’re all wrestling with — even the ones out there and ones up here — is when do we stop?” Mayor Scott Roberts asked. The commission could raises taxes and fees to fund services, but other needs are still being “painfully” underfunded. “I’m not here just to cut. I’m here to get the city back on its feet,” he said.
“We can just go ahead and kick the can down the road and put a million here and a million there, and we all smile and go home. We’re in trouble guys. The numbers don’t lie,” Roberts said.
Nugent said the city manager was picturing a “dark cloud” in the city’s future. Commissioner Janice Mortimer said any “doom and gloom” is reflected in the numbers.
“That’s not his fault. Regardless of how long we’ve served, we’ve kicked the can down the road for too many years,” she said. “Are we going to raise the rates? We’ve got to do something, because we can’t keep doing what we’ve been doing for the last how many years. Now we see the hard numbers. We are in or will be in dire straits.”
Mortimer moved to accept the changes proposed by the city manager, which was based on the current tax rate, yielding a projected $75,000 increase revenue. Redding supported the motion for further discussion. Nugent said he supported a higher tax rate that would bring in more for both police and fire, but voted with Mortimer, Redding and Roberts to proceed with the city manager’s budget..
Smith supported the cuts for the police department but not cutting the fire department to two-person shifts, so he voted against the motion.
Then the commission took up the tentative millage rate. Mortimer moved to retain the current tax rate. Mayor Roberts turned the gavel over to Smith as vice mayor so Roberts could second the motion, but the vote failed.
Smith moved to raise the tentative millage rate to 5.4935 from 4.8754 in order to bring in an additional $230,542. Redding seconded the motion, and the vote was again 3-2, with Smith, Redding and Nugent voting for the tax increase, and Roberts and Mortimer voting against it.
This was a tentative decision that could still be reversed at the first public budget hearing, which will take place on Sept. 7. The commission will have an opportunity to lower the millage rate or continue to the final hearing with the proposed budget.
Crosby said the board would have to vote again on moving forward with the plan presented by the city manager, so the additional funding could be placed in the budget. The commission would have to decide where to spend the funding, otherwise the clerk said he would place the money in reserves.
That placed Roberts and Mortimer in an awkward position, since they did not vote in favor of the tax increase. Mortimer moved to place the additional revenue in reserves, which would not impact the spending cuts she and three others had previously approved. Roberts again relinquished control of the meeting to the vice mayor so he could second Mortimer’s motion. Only they voted in favor of the motion, which failed 3-2.
Nugent wanted the money to be split between the police and fire departments to lessen the severity of the funding cuts. Redding said the money would preserve some jobs.
“Nobody wants higher taxes. Nobody wants higher water rates, and I might go home and tell my wife, and she says I got to sleep on the couch because I raised her taxes,” Redding said, making a motion to split the additional revenue between police and fire. Nugent seconded the motion. The vote was 4-1, with Smith dissenting. He wanted the funding for the fire department.
Roberts and Mortimer offered clarification later, saying they did not support the tax increase. Mortimer said she was “totally floored” by the decision and called the nearly 20% increase in tax revenue unfair and contradictory to the direction the city should be headed.
According to information shared with the commission, including taxes, retirement and insurance, the least expensive employee in the fire department cost more than $77,000 ($47,752 in take home pay). The highest was nearly $125,000 (almost $81,000 in take home pay). The average cost per firefighter was just under $96,956. The chief’s total cost was $99,999 ($80,870 in take home pay).
The lowest cost per police officer was $51,583 ($33,019 in take home pay). The highest was $83,649 ($57,741 in take home pay). The average cost per police officer was $67,395. As for police administration, the least costly position was $80,070 ($54,982 in take home pay). The costliest was $110,785 ($78,662 in take home pay). The average cost to the city was $93,136 per administrator, including the police chief.
Sheriff Gordon Smith’s prediction that officers would begin leaving the police department have come true. Chief Johnson said the has lost both officers and administrators to multiple agencies. He anticipates losing more. Some are earning $4 to $5 more an hour, he said. Meanwhile, he has no applications to fill any vacancies.
Johnson said following the budget cuts would have 13 or 14 positions, including his own and his front office employee, down from 16.
The fire department has not lost employees yet. In fact, Chief Wise said there had been zero turnover during his administration outside of retirements. Positions will be lost to budget cuts, however. Two firefighters per shift would mean cutting positions from 12 to six, excluding the chief.
