The City of Manchester’s Board of Mayor and Aldermen voted to move forward with their proposed 2018-19 budget during their Tuesday, July 3 meeting. The reading passed with a vote of 4-2 with Aldermen Lana Sain and Bob Bellamy dissenting. They will be meeting on July 30 to give a final vote on the document.
The revised budget, which will not be put into effect until BOMA has a final vote on it during the July 30 meeting, featured a reduced tax rate and a larger deficit. Previous iterations called for nearly $619,000 to be taken out of the reserve funds to balance the budget; the current plan is to take out $799,153. This means the city plans to spend nearly $800,000 more than what it plans on earning in 2018-19.
“Having a budget go that far into deficit is not fiscally responsible,” said Sain. “There are ways to reduce the budget and no one wants to do it.”
Aldermen Cheryl Swan added that the budget and finance committee looked over each department and tried to make cuts as needed, but it was a long process. They met on July 2 to make said cuts and the meeting lasted just over two hours.
Vice Mayor Ryan French reminded the board that the city is still within recommended funds for their reserves. At the end of the 2018-19 year, they expect to have $4.5 million in the fund, which is above the recommended $3.2M.
He blamed the large dip into the fund balance on previous administrations.
“Money wasn’t spent in the past when it was needed to be,” French said. He added the large purchases, such as nearly $500,000 on new firetrucks, should have been purchases 15-20 years ago.
Past budgets have relied on the reserves to balance the budget as well. The 2017-18 document called for just over $993,000 to be spent from reserves. In reality, the loss was around $855,000.
As of June 29, the working budget document lists the total budgeted amount for the city around $13.37M.
New tax rate
The tax rate went down as well. Previous copies of the budget kept the tax rate the same at 2.29 percent, however now that the state property reassessment is completed, BOMA altered the tax rate appropriately.
The new rate is 1.93 percent.
Assessment values and taxes go hand-in-hand. Typically, when assessment values rise like they have in Coffee County, tax rates are lowered.
According to the State Comptroller office, the tax is based on a percentage of the fair market value of property determined as of January 1 of the tax year. The percentage of value, known as assessed value, varies according to whether the property is farm/residential property (25 percent of fair market value), commercial/industrial property (40 percent) or public utility property (55 percent).
For example: a home has an appraised value in 2014 at $100,000. Of that, taxes are based on 25 percent of that amount, or $25,000. In 2017, the hypothetical tax rate was 2.29 percent. This means the owner pays $725 in taxes.
In 2018, the same hypothetical home was valued at $125,000. With new tax rate of 1.93, the homeowner would pay about $603 in taxes.
The tax rate decrease is designed to be “revenue neutral,” granting relief to property owners whose recently reassessed property value increased. By lowering the rate to match reassessments, property owners can expect to pay close to what they paid last year in property taxes.
In the June 29 working document, the city planned to take nearly $1.02M out of the reserves to balance the budget. This wasn’t going to work with BOMA. Mayor Lonnie Norman asked department heads to take a look at their finances and make cuts, up to 10 percent, of their current ask.
After one hour of July 2’s meeting, BOMA members cut $29,000 - $19,000 from the Coffee County Conference Center and added $10,000 to the revenues. The workshop lasted just over two hours.
Manchester’s Finance Director Bridget Anderson explained during the workshop that a majority of each department’s budget was personnel costs, therefore it was difficult to make cuts. She was able to cut about 3 percent out of the finance department, the codes department was able to cut 2.5 percent and buildings department did not make any cuts.
“Buildings, we weren’t able to cut anything because of the HVAC we need to put in for the police department and then the roof, we’ve got some problems,” Anderson said.
She later added that every department cut about 3-4 percent, with the exception of the BOMA budget, which cut 22 percent. They cut a job position to make this happen.
French reminded BOMA that they would still have a healthy reserve fund if they didn’t choose to cut anything more.
“I’m not saying that for the budget; we can’t keep passing a budget $1 million out every year — three years from now, that’s going to be gone,” French said. “But we are in really good shape.
“If we’re going to cut this budget anymore, you’re going to have to start cutting into personnel.”
Student resource officers
The board negotiated with Chief Mark Yother of the Manchester Police Department about the three student resource officer (SRO) positions. BOMA wanted to cut it down, while Yother did not.
At a previous board of education meeting, the board budgeted $126,820 for three officers’ salaries. At prior meetings, representatives from the Manchester Police Department had discussed providing patrol cars, training, benefits and related expenses.
Sain said nitpicking Yother over an SRO is not going to do them any good.
“I don’t think $114,000 counts as nitpicking,” Bellamy responded. “I think that’s a pretty good chunk of change.”
No aldermen said they were against the SROs, but they all agreed they needed to find the money and decide what a feasible amount for the city to pay is.
Yother said he refuses to take anyone off the street to become an SRO.
“We’re going to continue to talk through the schools and I’m going to make everything possible for the schools to be safe,” Yother said. “I’m not taking people off the street. If we’re not hiring anybody, then we’ll just continue like we’re doing, obviously, and I’ll feel good about it. I really will.”
French pointed out that SRO or no SRO, they may not be able to stop something from happening in the schools.
“I’m just going to say it,” the vice mayor said. “I know that we all want to think that putting an SRO officer in a school is going to make us all feel better about the possibility of something happening. SRO officer, five SRO officers in a school, something could still happen. So, I know people want to get emotional about that, that’s where I’m coming from with the two.
He agreed the middle school should have one, but more may be excessive.
BOMA decided they needed to make cuts, but this was not the place to do it.
Instead of matching the county and paying $126,00o to cover the Coffee County Conference Center’s losses, Anderson raised the total the city would potentially spend to $135,000.
“I didn’t feel comfortable with it being at $126K,” Anderson said. The added amount would cover for any additional losses they may have to cover throughout the year, she explained.
Swan reminded her that the city and county are legally obligated to evenly split the losses.
“The city and the county should come together and talk about this more,” Swan said. “Ryan spoke at our last meeting and said ‘it’s an unrealistic number.’ If it’s an unrealistic number, why is the county sticking to that?”
French responded by saying the county is playing politics.
“It’s less than 1 percent of their entire budget and they’re acting like it’s going to solve the world if they sh**-can it,” he said.
Swan said she is not for closing the center, but wants to enter a discussion with a third party about taking over the building and its operations to save money.
“It’s just not fair to the general public,” Swan said. “Everybody is taking these hits about the conference center, constant, and nobody’s speaking up about it.”
French pointed out that a third party running it would not stop the county and city from owning the building. They would cover building maintenance and losses to the private entity. He said the conference isn’t a profitable venture, it is an impact venture. He claimed the center is the reason over 5,000 hotel rooms were booked in the city.
“There is math that exists already that shows what a private entity would do with that,” French said.
Swan didn’t back down and explained she does not want to have to turn around and sue the county if the city ends up paying more on their 50/50 venture.
“Those numbers need to match,” she said. “If the conference center has to come back to us and do another budget amendment, then they will have to go to [the county] too. And it happens every year. So I just rather, right now, even though we all know it’s not quite fitting the right number, have it matching, just because in the legal agreement, it says it’s 50/50.”
BOMA sided with Swan and matched the county’s $126,000.