Without raises, city likely to see surplus at end of fiscal year

By Emily Ford

eford@salisburypost.com

SALISBURY — After City Council members were surprised last year during a planning retreat by a $2.7 million budget gap, they were relieved Friday to learn Salisbury could have a small surplus next year.

Without adding any new programs, employees or pay raises, the city would have a surplus of $100,000 for the next fiscal year, which begins July 1.

“Last year came with a $2.7 million hole we had to fill, and this year we are looking at a sliver of a surplus,” interim City Manager Doug Paris said.

However, a budget with a surplus would not include:

• Raises for city employees.

Cost if added to the budget: One percent raise is roughly $200,000.

• Four police officers already on staff, whose salaries and benefits have been paid until now by a federal grant. The city must keep the employees and pick up the tab or refund the grant money.

Cost: Roughly $134,000 in the coming fiscal year and $204,000 annually after that.

• Additional street lighting, deferred for several years.

Cost: $32,000

• Compost site for the city’s leaves and limbs.

Cost: $450,000

• School central office parking lot, which the city has promised to provide.

Cost: undetermined.

• Retail recruiter for economic development.

Cost: undetermined.

• Storm water management.

Cost: undetermined.

The city will finish the current fiscal year, which ends June 30, with a positive fund balance, Assistant City Manager John Sofley told the City Council.

Last year, the city had a deficit because the federal government had not reimbursed roughly $500,000 for greenway and sidewalk projects, he said.

Sofley said he anticipates $750,000 in additional revenue next year, beyond what the city will collect this year. That will help offset price hikes in gasoline, power and health insurance, he said.

“I think we are going to end this year pretty strong,” he said.

The city took drastic cost-cutting measures this year to close the budget gap, including eliminating 36 full-time and 11 part-time positions.

“We really cut to the bone,” said Teresa Harris, budget and performance manager.

City staff members are grappling with other financial issues.

The city still owes money on some of the land it will donate to the school system for the new central office in the 300 block of South Main Street, Sofley said. The note comes due next year, and the city may need to refinance, he said.

Paris said he may recommend a lump sum amount for merit raises, rather than a percentage increase, which would help employees at the lower end of the pay scale.

“We are working on a way to help those at the bottom in a way that is more equitable than we have done in the past,” he said.

Mayor Paul Woodson asked staff to keep council members abreast of any large expenditures as they become known, rather that presenting them at budget time.

The council was caught off guard last year by the large budget gap, prompting members to request quarterly financial updates this year from staff.

“Don’t surprise us,” Woodson said.

Contact reporter Emily Ford at 704-797-4264.