City expects $1.5 million surplus in current budget, ability to raise some wages for police, public works
By Natalie Anderson
SALISBURY — City Manager Lane Bailey provided council members Tuesday with a “30,000-foot view” of the upcoming 2021-22 fiscal year budget, which he predicts won’t be “as scary-looking” as it was at the onset of the pandemic.
Bailey, who is tasked with preparing and recommending a budget before June 30 each year, expects to end the fiscal year on with a budget surplus ranging from $1.5 million to $1.7 million based on projections from financial information in the third quarter. He credits that to the unexpected $1.5 million to $2 million surplus in sales tax revenue and a nearly $300,000 surplus in property tax collections.
Savings include nearly $850,000 due to vacancies within the Salisbury Police Department and Public Works Department as well as $1 million from expenditures such as projects that have moved into the 2021-22 fiscal year.
“We’re actually going to finish in the black, which is a conservative estimate by our Finance Director (Shannon Moore) and (Finance Manager) Wade Furches,” Bailey said.
But the two departments’ “savings” is also the 2021-22 budget’s biggest challenge.
In March, the SPD and Public Works Department both reported issues with recruiting and retaining employees due to better, more competitive compensation and benefits in surrounding municipalities. Both departments requested city council members consider pay increases for its employees.
In the 2020-21 fiscal year budget, $17.12 million is allocated for public safety, with $10.2 million of that directed to police operations, administration and service.
The police department received a 15% pay raise in the 2017-2018 fiscal year. This raise allowed the department to raise its starting salary for an officer from $34,223 to $39,357 where it remains. After the pay raise, only Charlotte reported a higher annual salary.
Now, nine other nearby agencies provide higher starting salaries, including Mooresville, Concord, High Point and the Cabarrus County Sheriff’s Office. The starting pay for officers at the Concord Police Department will rise to $41,368 on June 1.
Salisbury Police Chief Jerry Stokes has reported its patrol division is currently understaffed by 18 positions. Additionally, he anticipates up to four more officers separating from the department by May 31, leaving just 83% of its staff filled. Stokes is tasked with retaining a staff level of at least 95%.
“To fill those positions and to have officers on the street on patrol, we’re taking investigating officers off and putting them on patrol to cover that need,” Bailey said. “The challenge is they should be doing investigatory work.”
Bailey said another challenge with retention is the overall decline in people desiring a career in law enforcement, making the demand even greater.
In the Public Works Department, Bailey reports eight vacancies, two unfilled positions for a part-time job at Bell Tower Green and a need for more part-time employees. He said 24 employees have left within the past two years, and no new employees were hired in 2020. He attributes the difficulty to retain and hire employees to strong competition from the private sector and higher salaries in neighboring municipalities.
The city of Kannapolis reports a starting pay for entry positions 9 percentage points higher than the rate in Salisbury, while Albemarle reports a rate that’s more than 17 percentage points higher.
Bailey said included in the 2021-22 budget will be a 5% across-the-board pay increase for sworn police positions as of July 1, and 5%-15% for certain public works employees. Additionally, a 2% cost-of-living adjustment would be given to all city employees on Jan. 1, 2022.
However, additional pay raises, including a base pay increase for new officers, in SPD would not be included because they would require a tax rate increase. New capital projects would also be excluded in order to keep the current tax rate.
Bailey said he plans to meet with each department again to discuss cuts as well as the opportunity for some to purchase their necessities in the 2021-22 budget year and not in 2022-23.
Bailey said the city can safely appropriate the 2020-21 budget surplus to balance the 2021-22 budget, but he would like more insight from department heads and council members. Council member David Post said a challenge with using savings to fund next year’s budget is that it can “come back to bite you” in the following year.
“It’s a potentially hazardous road to go down,” he said.
From the American Rescue Plan passed by federal lawmakers in March, the city expects to receive $7.16 million. But Bailey said no guidance regarding how those funds can be spent has been issued to local governments. He anticipates the city will receive that guidance by the end of the month or beginning of May.
But if Bailey “had to choose” on how to spend those funds, he suggested allocating that federal share toward the construction of Fire Station No. 3 on Mahaley Avenue. This would also allow the city to take that project off the next capital improvement projects list to make room for another priority. Construction of the station was among the city’s goals for 2021 following its goal-setting session in March.
Additionally, Bailey said three fire trucks will be needed within the next three years and that federal COVID-19 relief funds could help cover that cost. He also suggested using the funds toward the city’s telecommunication system, which needs an upgrade around 2024.
Bailey said infrastructure, including the creation and expansion of broadband services, seems to be among the primary uses for the federal funding. However, it remains unclear if those relief funds could be allocated toward the city’s remaining debt in its lease with Hotwire. About $19.5 million remains, and the city is set to pay off that debt in 2029.
Council members Brian Miller and Post suggested continuing to look into the option of being reimbursed to some extent for “being ahead of the curve” with its broadband lease. Doing so could help the city refinance the debt, have more money for other budget items in future years or cut a few years from its expected payoff.
Contact reporter Natalie Anderson at 704-797-4246.
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