Salisbury manager lays out upcoming budget challenges
By Liz Moomey
SALISBURY — City Manager Lane Bailey on Thursday said it will be a difficult budget year ahead and that he was discouraged.
The city council and staff had a wide-ranging budget discussion at the City Council Planning Retreat.
Because of a state mandate, the city will have to increase its payment to its pensions. Bailey said the city will need to increase pay as well, especially for public services. The city has struggled with filling those positions as the unemployment rate decreases, he said.
The personnel cost budgeted for fiscal year 2020 is $25.65 million and is projected to be $25.64 million at the end of this fiscal year. In the 2021 fiscal year, the personnel cost is expected to increase by $1.18 million.
Members of city council spoke at length about the second-highest component of personnel costs: health insurance. The projected cost of health insurance is $3.19 million in fiscal year 2020. Salaries are the highest cost.
Finance Director Shannon Moore said health insurance has not increased in cost for employees or for the city in the last three years.
Human Relations Director Ruth Kennerly said the city has implemented programs to encourage its employees to take care of their health, mentioning a drinking water challenge and step challenge in which employees can participate and receive awards.
Councilman Brian Miller said the city should evaluate creative ways to lower personnel costs and not get trapped into one way of doing something.
Bailey said some capital improvement plan projects may need to be delayed one year, like the construction of Fire Station No. 3 on Mahaley Avenue.
Councilman David Post said that would be risky because in a year there could be higher interest rates and costs.
Mayor Karen Alexander said the delay could also impact the insurance rates.
Moving to the Transit Department, Moore said there was an increase in transit’s general fund this year after being flat for three or four years. For the upcoming year, the transit department may need more funding from the city’s general fund to ensure the department doesn’t significantly dip into its fund balance. Transit Director Rodney Harrison said the city has invested in large capital expenses this year, like replacing aging buses.
Mayor Pro Tem Al Heggins asked if there were other groups that could pay into the transportation system. The routes go into neighboring towns of Spencer and East Spencer, though those towns do not fund Salisbury Transit. The service is also used by students at Rowan-Cabarrus Community College, Livingstone College and Catawba College.
Heggins said the city should open the conversation to those who benefit from the services.
Alexander said she spoke to Spencer Mayor Jonathan Williams. Teaming the three municipalities may create more opportunities for federal money. She said they heard the community wanted more routes. She said she was for creating a coalition with all the players.
Bailey said in the Fibrant fund, the numbers were closer to what the city wants to see. The lease revenues from fiscal year 2019 was $306,706. In the first quarter of fiscal year 2020, the revenue was $190,4848. Moore said the city encourages residents to use the Hotwire service to help reduce their taxes.
Moore said the overall goal of the upcoming budget is to stabilize the city’s fund balance to ensure it doesn’t drop too fast.
In other business:
The council circled back to economic development and the city’s role. Pete Teague, special assistant to the president for community development at Livingstone College, talked about last year’s Salisbury Economic Charrette. He said there has been no progress since they met in March and wanted some guidance on what’s next for economic development in the city.
Economic leaders identified Hotwire, downtown, proximity to Charlotte, minority business development, a culture of innovation, growing health care industry and opportunity zones as issues.
The council agreed that groups were in place that could progress with Hotwire, downtown and minority business development and the city assisted in some way — Hotwire being leased by the city, the city providing funding for the chamber’s Minority Business Council and the city department, Downtown Salisbury Inc.
Alexander said supporting and advocating would be the best role for the city, such as writing a letter of support for a grant.
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