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One major dilemma is facing Starkville officials as they prepare the municipal government budget for the 2010-2011 fiscal year: Do they try to move forward with projects identified in their strategic plan or tow the line in keeping expenses down?
Thatâ€™s something the full Board of Aldermen will have to weigh when it convenes for a budget work session in the coming weeks.
Members of the cityâ€™s Budget Committee â€” Ward 2 Alderwoman Sandra Sistrunk, Ward 3 Alderman Eric Parker, Ward 6 Alderman Roy A. Perkins and Mayor Parker Wiseman â€” met early Tuesday afternoon to discuss needs identified by city department heads and how they might fit into the cityâ€™s revenue picture for the upcoming fiscal year, which begins Oct. 1.
A decision on a date for the budget work session will be on the agenda for the next meeting of the full Board of Aldermen at 5:30 p.m. this Tuesday at City Hall.
Sistrunk, who serves as Budget Committee chair, said Tuesday that the projected city budget for the next fiscal year will see expenses on a level comparable to that of the 2007-2008 fiscal year. Current figures project the cityâ€™s general fund budget at $15,285,713, which is $36,070 higher than the 2007-2008 budget.
â€śI was reading on the National League of Cities website and learned that municipalities trail the effect of the general economy by a couple of years. That means that 2011 and 2012 may be tough years financially for us, though the national economy may be improving,â€ť said Sistrunk.
With that in mind, the cityâ€™s department heads have been asked to project their 2010-2011 budgets â€śbased on what they have now,â€ť and any additional expenses will have to be appropriated based on available funding, Sistrunk said.
But several items will weigh into the budgeting process, including a list of specific department needs, some departmental reorganization as proposed during the strategic planning process and city employee pay equity. Those will have to be considered, as well as the maintenance of an ending fund balance within the budget to allow city officials a financial cushion in case of emergencies.
â€śTo be a city without an ending fund balance is to be a family without a savings account,â€ť Sistrunk said.
Wiseman said he would like to see serious discussion by the Budget Committee and full Board of Aldermen on increasing city employee salaries to a level where they are comparable to employees in other municipalities similar in size to Starkville.
Wiseman said he has Personnel Director Randy Boyd researching â€śhow far behind the average of our peer group municipalities as far as compensation for our employees.â€ť
â€śRandy has indicated that it is in the ball park of 10 percent,â€ť Wiseman said.
Bringing the salaries of the cityâ€™s work force up to the average of peer municipalities would require about $750,000, but he sees â€śno way to build an additional three quarters of a million dollars into the budget,â€ť Wiseman said.
City officials are proposing a 1.75 percent pay increase to offset a mandatory increase in employee contributions to the Public Employees Retirement System (PERS).
Employee pay is a morale issue and â€śgoes in line with the goal of improving customer serviceâ€ť for city residents, Wiseman said.
In its strategic planning sessions, the Board of Aldermen has also identified needs to realign and expand some city departments.
This includes hiring an assistant city planner to examine long-range planning issues and hiring an additional building inspector in the current Building, Codes and Planning Department, creating a full Information Technology Department (which would require hiring an additional employee) and reorganizing the Sanitation Department into an Environmental Services Department to handle increasing demand for environment-friendly services like recycling in addition to garbage collection.
Projected costs for all three initiatives would cost a combined $300,000 in new expenses.
Other needs include outfitting and staffing the new Fire Station No. 5, including refurbishing an existing fire engine. Purchasing equipment, refurbishing the fire engine and staffing for the new fire station will cost a combined $280,000.
Options for infusing additional money into the general fund that were discussed Tuesday included increases in ad valorem taxes (which would generate around $365,000), increases in ad valorem tax revenue due to reassessment of all properties in the city, using the cityâ€™s 10 percent share of the 2 percent hotel/restaurant tax to help fund the cityâ€™s parks system instead of transferring money directly from the general fund, projecting an increase in sales tax revenue, reducing contributions to outside agencies other than those that are obligated.
Sistrunk noted that city officials were limited to no more than a 10 percent increase in ad valorem taxes by statute, which amounts to less than 2 mills of revenue.
For those who own homes valued at $100,000, it would mean an additional $5 a year if age 65 or above or an less than $20 year if under 65. For those with a $250,000 home, it would mean an additional $36 a year if age 65 or over or an additional $48 a year if under age 65, Sistrunk said.
â€śWeâ€™re not talking about a draconian increase in city taxes,â€ť Sistrunk said, noting that tax bills had already increased due to the municipal school district and OCH Regional Medical Center bond issues and a tax hike by county supervisors last year.
Perkins, who remained quiet for much of Tuesdayâ€™s Budget Committee meeting, said he did not favor any type of ad valorem tax increase and wanted to see continued efforts to reduce spending. Perkins said he did not favor any reorganization in city departments that would see spending increase.
Perkins offered three suggestions for infusing money into the cityâ€™s general fund:
â€˘ Reducing contributions to outside agencies, including the Mississippi Horse Park.
â€śWe have been funding these agencies and the Horse Park for a long time, and every year, it continues to grow. While we appreciate the contributions they have made to the community, we have to watch out for the money that belongs to the taxpayers.â€ť
â€˘ Selling the old Starkville Electric Department building to generate a one-time infusion of revenue.
Some Budget Committee members favored holding off until the question of whether city leaders will move forward with a new municipal complex is answered. Parker noted that the old SED building could be refurbished to allow for some new office space.
â€˘ Petitioning the state Legislature to reallocate the revenues from the 2 percent hotel/restaurant tax to allow the municipal government to receive a larger share. Currently, 40 percent goes to the Parks and Recreation Department, 20 percent goes to Mississippi State University, 15 percent goes to the Starkville Convention and Visitors Bureau, 15 percent goes to the Oktibbeha County Economic Development Authority and 10 percent goes to the city.
Wiseman expressed concern over trying to factor a reallocation of the 2 percent funds into the budget process, especially since it would take months for a proposal to work its way through the Legislature and such a proposal may not be successful.
â€śI donâ€™t think itâ€™s advisable to go that route,â€ť Wiseman said.