City holds first public hearing on budget, brings general fund into balance

Administration within the City of Calhoun has put in a lot of hard work the past couple of weeks, crunching numbers to the city’s General Fund budget to overcome what was initially a shortfall of approximately $ 457,000. According to officials in Monday night’s Council meeting, many cuts have been made over the past two weeks, overcoming the shortfall and giving the general fund a surplus.

To start the meeting, Dr. Michele Taylor, superintendent of Calhoun City Schools, gave a presentation to the Council of the proposed City Schools budget, which is still being reviewed and tweaked. The proposed Fiscal Year 2018 General Fund for the school system revenues are estimated at $ 32,325,879, with estimated expenditures coming in at $ 32,438,541, up $ 1.1 million over last year.

“The main increase in expenditures is due to mandated increases by the State,” said Taylor. “The governor has approved a two percent increase to the salary scale of certified employees. This budget shows a two percent increase for all Calhoun City Schools employees, which totals approximately $ 543,000.”

Other major expense increases to the school system this year included the employer portion of Teacher’s Retirement System increasing from 14.27 percent to 16.81 percent, or $ 455,000, and the employer portion of health insurance for classified employees increased a total of $ 71,000.

City Schools reiterated they are continuing to look at the budget and will continue to make changes before approval.

Paul Worley, assistant City administrator, then addressed the Council on changes made in the past two weeks to help balance the City of Calhoun’s general fund for Fiscal Year 2018.

Worley told the Council that the challenge has been overcoming the $ 456,000 - $ 457,000 budget deficit without dipping into reserves or increasing the mileage rate.

“We had a budget work session two weeks ago and had a lengthy discussion on putting this budget together,” said Worley, noting they’ve been working on the budget since February.

He told the Council there were a lot of changes to the General Fund since those talks. Some of the changes made to the General Fund to tackle the $ 457,000 shortfall include:

- Eliminating the salary portion of the City Planner position, which will save $ 68,000;

-Reduce the Mayor and Council Contingency Fund from $100,000 to $ 10,000, which will save $ 90,000;

- Cut a position in Court Services, which will save $ 58,000;

- Proposed increase in franchise fees and transfers from water and sewer: $ 57,000;

- Decrease in Downtown Development Authority advertising budget: $ 3,000;

-Local Option Sales Tax revenue increase: $ 30,000;

- Anticipated back tax increase: $ 20,000;

- Five- percent decrease in property and liability insurance: $ 5,000;

- Proposed increase of 10 percent in all building permit fees: $ 11,000;

-Proposal to remove contributions to local non- profit agencies including Voluntary Action Center, Harris Arts Center, Winner’s Club, Boys & Girls Club of Gordon County and Domestic Violence: $ 26,500;

- An additional decrease in health insurance coverage. Coverage, which had originally increased by 10 percent has been renegotiated to only a 7.25 percent increase, which adds $ 44,000 back to the general fund;

- Maintaining current levels of staffing: $ 43,000

- Reducing transfer to recreation: $ 2,300

- Decreasing transfer to Fields Ferry golf: $ 75,000. The proposal is to increase green fees by $ 2 and cart fees by $ 1.

-Proposed decrease in overtime for fire department, street department and police department: $ 30,000. To make this realistic, the City will probably have to cut some of the festivals and downtown activities, such as the Fall Festival, to make sure these departments do not incur overtime;

- Decrease in street patching: $ 5,000; - Decrease in fuel cost: $ 5,400. “( These changes) not only eliminate the $ 456,000 deficit that we had two weeks ago, but it gives us a $ 138,000 surplus,” said Worley.

Worley mentioned that by completely doing away with the Mayor and Council’s Contingency Fund, which would give the general budget an additional $ 10,000, it could make a way to include a two-

percent cost of living adjustment for City employees.

“This is a work in progress,” said Councilman David Hammond. “The department heads and executive staff are still working on this. We are struggling with insurance. The increase of 10 percent is $ 300,000, so we are looking at what is reasonable for the percentages that our staff pay for employee coverage and for family.”

At this time, for single coverage, employees pay $ 50 per month; with family coverage costing $ 211.

“So we are going to have to make some moves, just like in industry, that are not going to be comfortable but we’ve got to do it,” said Hammond. “But we want to be reasonable; we want to be fair, and we want to give a cost of living raise just like the state gave to the educators. But we’ve got to get a handle on healthcare. It’s starting to eat up the vast majority ( of the budget).”

“I’m afraid we are going to have to face some tough cuts, so we will be talking about that in the next few weeks before the next budget meeting, to come up with some reasonable numbers” said Hammond. “Hopefully, we can certainly turn in a balanced budget and the pain will not be as severe.”

“I’ve been pushing for the past several years, probably four or five years, to try to get the ( insurance) ratios better, to no avail,” said Councilman Matt Barton, of the current 88/ 12 plan of insurance, where the City pays 88 percent of health benefits and employees pay 12 percent. “I haven’t done anything yet, I want to do it in steps so it wouldn’t be quite the hit for employees. We are still being mindful of the employees on any changes we do on those things. If we are able to do raises and increase their fair share; their fair share helps pay for some of the deficit that we have. We are trying to be fair to the employees but also mainly fair to the tax payers.”

“We talk about three communities 20 miles around us,” said Hammond. “They are bigger, but Rome, Dalton and Cartersville; all three of those are at 25/ 75 on the family plan, which is what we see in industry and what we see in education. That’s a big move; I’m fairly certain we won’t be able to make that big of a move. But we need to get going toward that direction. I think the average of those three is about 18 to 20 percent on employee coverage, and we are at eight ( percent). So again, it’s a movement that we will sharpen our pencils and look at it and we will be as fair to everybody as we possibly can and make it work for everybody.”

“I hope we don’t have all the cuts that they suggested,” said Barton, “like ending overtime to not having the festivals or not helping the organizations we’ve helped.”

“I think we’re all concerned by insurance,” said Mayor Jimmy Palmer. “We were all concerned earlier this year; the first proposal this year was a 26 percent increase. But we various changes, we were able to lower that to 10 ( percent increase), and then there were additional changes to lower that to 7.25 ( percent increase). I think there are several things for us to consider when looking at these things. When we talk about plans, the plans vary. We don’t know what the ( insurance) plan structures are in Rome or Dalton or Cartersville as mentioned. When you take those, Cartersville has a $ 1,500 deductible, where I think ours is $ 2,500. Rome and their plan, they are self- funded. In that plan, they also have, what I call a Minute Clinic. They also have an opportunity for drug purchases. When you look at these in any community, too, we don’t know what their formularies are for drugs. A lot of those are very restrictive. So it’s kind of hard to compare where we are to where somebody else is. Also, when we look at Rome and Dalton and Cartersville, we also need to look a block and a half down from City Hall, at the County. The County is 7 percent employee and 7 percent family coverage. I think that needs to be considered as well.”

“Another consideration is employee wages,” continued Palmer. “Mr. ( Eddie) Peterson ( City administrator) put out something about two weeks ago on employee wages. It was put out by DCA ( Georgia Department of Community Affairs). It looked at cities with populations between 10,000 and 20,000. In those employee wages, we are well under that average in comparison. What I would like to see is, if we are going to look at Cartersville, Dalton and Rome on health insurance, it would also be good to get a comparison of where they are salary- wise compared to where we are salary-wise, because that should be considered when you are looking at increasing employee contributions.”

The City will continue to hold budget talks over the next few weeks, and expects to continue to tweak the general fund budget.

The next public hearing for the 2018 Fiscal Year budget will be held at 7 p.m. on Monday, June 12 in the Conference Room of the downtown Depot. The public is invited to attend.