By Emily Le Coz/NEMS Daily Journal
TUPELO – A bare-bones municipal budget could face further cuts in areas like staff raises and street maintenance before city leaders adopt it.
The City Council on Wednesday met for the second time this week to haggle over the $31 million spending plan, which goes into effect Oct. 1.
They had been set to approve it Tuesday but will postpone the vote due to a lack of consensus at the work session.
Members want to toss a $500,000 request for a proposed college-tuition assistance program, and they discussed reducing or eliminating a desired 3 percent raise for all city employees – the first raise in three years.
They also called for cuts in the proposed $30 million capital projects plan, which shifts major, one-time purchases from the operating budget to a separate spending plan. It would be funded by municipal bonds. The operating budget, by contrast, is funded mainly through sales and property tax collections.
It’s the first capital projects plan Tupelo has had in years, and some council members questioned its expenses.
“There are routine maintenance things in there,” said Ward 3 Councilman Jim Newell. “Repairing a fence, overlaying a road, these aren’t capital projects.”
Among the proposed items are $30,000 for a new softball field fence, $20,000 for a new dog park and $500,000 in street overlays. These expenses normally would have come from city departments’ individual budgets, which are part of the overall operating plan.
But it also includes larger purchases like a $12 million aquatic center and $1.5 million for fire engines.
Newell also alleged the capital projects plan serves partly to hide the city’s general fund deficits.
“We need to be honest with the public when we talk about having a balanced budget,” Newell said. “I’d rather say we cannot balance the budget than to move it from one balance sheet to another. I think it confuses citizens.”
Tupelo had $17.6 million in reserves as of July 31, said City Clerk Kim Hanna. That’s down from about $23 million five or six years ago.
Chief Financial Officer Lynn Norris cautioned the city against dipping into reserves again, as it had the past several years to cover shortfalls.
“We need to stop that,” Norris said. “We need to fund capital, which includes (street) overlay in my opinion. There’s no money for any major capital improvements” in the operating budget next year.
The operating – or general fund – budget pays for daily expenses like staff salaries, office supplies, fuel, equipment and insurance. The current general fund budget was set at $34 million – nearly 9 percent higher than the one envisioned for the upcoming fiscal year.
“The budget is bare to the bone, and I’d like to commend the mayor and others for that,” said Ward 6 Councilman Mike Bryan. But “once you start using bonds to cover operational costs, you’re living beyond your means.”
All council members agreed to get rid of the half-million-dollar tuition program in the budget, but they disagreed on whether to replace it with street overlay from the capital plan or whether to hire more code enforcement officers with it.
Some also suggested cutting or reducing a proposed staff pay hike. Mayor Jack Reed Jr. also said the council could require employees to pay a portion of the city’s annual health insurance bill to save money.
“We can cut overlay in half and cut the raises or have the employees pay 20 percent of the $3 million health insurance cost and have the city pay 80 percent to balance the budget,” Reed told the council. “It’s up to you.”