While Morristown City Council members said Tuesday they were unprepared for a deep dive into City Administrator Tony Cox’s proposed $41.4 million, no-new-taxes budget, councilmembers floated two pay-related modifications that could have a significant impact on the 2020-21 spending plan and test councilmembers fiscal discipline.
Councilmembers will convene at 3 p.m. Tuesday to discuss the proposed budget in greater detail.
For the first time in nine years – for reasons largely owing to the anticipated coronavirus-related economic downturn – Cox is not recommending a raise for city employees.
Cox told councilmembers Tuesday a 2% cost-of-living pay increase would move the budget $351,500 out of balance.
The other trial balloon councilmembers floated involves implementing the recommendations of a recently completed salary study.
Prior to this fiscal year, councilmembers declined to fund the classification-and-compensation study.
If councilmembers accept the recommended pay increases it would cost city government $367,500.
In a year in which city revenues are projected to fall by 6.3%, coming up with the funding to cover the $700,000-plus cost could present a challenge for city administrative staff.
Cox’s proposed budget already includes using a one-time $700,000 state grant and depleting reserves by about $1.26 million to avoid raising taxes, which leads to the issue of fiscal discipline.
City government has enough money to fund the $700,000-plus in raises for city employees. After the $1.26 million drawdown, Morristown’s reserves will total about $8 million, according to city budget staff.
Several years ago, after subsisting through a couple of years in which city government had a zero or negative fund balance, councilmembers resolved to keep at least 15% of one year’s budget in reserve. Cox’s proposed budget takes city government to the floor of council’s self-imposed savings goal.
Apart from the fact that spending one-time money on recurring expenses – in this case employees’ salaries – is widely considered a mistake in budgeting, funding the 2% cost-of-living raise and implementing the recommendations of the salary study would put reserves below 15% of one years budget.
Two big-ticket items mentioned as possible gap-closers are garbage trucks that can be operated by one worker. The two trucks, which are in the city administrator’s proposed budget, will cost about $590,000. Postponing the purchase, officials say, will guarantee a higher price in the future and eliminate savings realized through cutting a sanitation crew in half.
While Cox’s proposed budget does not include a pay increase for city employees, it does provide that no city workers will lose their jobs, unlike many other municipalities across the country. Also, Cox’s spending plan includes no increase for city employees’ health insurance.