Decatur officials expect the city to take a $3.9 million hit to revenues due to the coronavirus pandemic, money they plan to recoup in fiscal 2021 with across-the-board departmental cuts of 5%.
City employees will get a planned 2.5% pay increase and merit raises, but a cost-of-living increase is not in the proposed budget. At a work session Monday, Councilman Billy Jackson asked Chief Financial Officer John Andrzejewski to look at the cost of a one-time bonus for employees.
Andrzejewski presented a proposed $65 million budget that forces city departments to make 5% reductions, with the Police Department taking the largest hit at close to $1 million.
“We made the reductions in anticipation of the coronavirus’s impact on revenues,” Andrzejewski said.
Andrzejewski predicted the biggest revenue hit, roughly $1.5 million, would come when business licenses are renewed in January. Business licenses are based on a business’s revenue from the previous calendar year.
The pandemic forced many businesses to close for almost three months beginning in March and have suppressed sales at some businesses since then.
Andrzejewski said he projected a $1.2 million drop in sales tax revenue, $600,000 reduction in rental tax revenue and $300,000 less from the sales and use tax in the police jurisdiction.
The Police Department's effort to cut its budget by $1 million included removing $500,000 in vehicle purchases. The rest came from cuts to training, travel and other discretionary spending Police Chief Nate Allen felt his department could do without in the fiscal year that begins Oct. 1.
Mayor Tab Bowling said the cuts would not impact the Police Department’s ability to serve and protect the city.
“We’re definitely not defunding police,” Bowling said.
Council President Paige Bibbee said she wants to make sure the department can receive any support it needs, especially with the protests and accusations of police abuse in other areas of the country.
Councilman Chuck Ard said he supports the reduction in purchases of police vehicles. In recent years, the city annually bought $1 million in police vehicles, so the plan is to cut this in half.
“I just want to make sure we don’t take new police vehicles totally out of the budget after we’ve made so much progress in recent years,” Ard said.
Allen said he’s OK with the budget cuts that drop his budget to $14 million because “if something comes up that we need I’m sure we can find the money.”
The budget includes a proposed $4.92 annual per-customer increase to garbage rates for residential customers after Decatur Utilities discovered it was not covering its costs for handling billing of the city's garbage customers.
The council got DU General Manager Ray Hardin and CFO Steve Pirkle to call in and explain the proposal that increases the city’s cost, which would likely be added to residents’ garbage rates, by $72,000.
Hardin said they realized during the change to a new computer program the utility was only charging 1% of the billing clerk’s time on the bills to the city.
“We are under-billing for labor,” Hardin said.
Ard said he doesn’t understand how Hardin and Pirkle can justify an increase from $6,000 to $78,000. He questioned how they could justify the time a billing clerk spends on a garbage bill when he or she still has to send out bills for its four utilities.
“That's a heck of an increase,” Ard said. “They need to rethink their method of how they came to this increase.”
Pirkle said he thinks “this is a fair allocation of resources.”
Hardin said this is the utility’s cost for the service, and he invited city officials to explore other billing options.
“I think you will find they are $2 or $3 more and you’re receiving a significant discount with us,” Hardin said.
Hardin offered to increase the billing rates incrementally over the next two years.
Councilwoman Kristi Hill said she prefers one single increase.
However, Bibbee said she favors the incremental increases because she’s concerned the utility is also considering a rate increase to pay for accelerating the pace of replacing aging sewer pipes, which have contributed to millions of gallons of sewage overflows in recent years.
“With the poverty level of our city, some people need time to figure out how to absorb the increases,” Bibbee said.
The council did not make a decision on how it will proceed on the DU proposal.