LAURINBURG — Following more than an hour of discussion, the Laurinburg City Council approved a $1,000 bonus payment to each of the city’s employees during the 2014-2015 fiscal year at a budget meeting on Tuesday.
As the council requested at a prior meeting, City Manager Charles Nichols presented the cost of giving employees a two, 2.5, and three percent cost of living adjustment next year. The two percent increase to the city’s 154 employees would cost $113,680, with $142,625 for 2.5 percent and $171,150 for three percent.
Noting that percent increases mean vastly different dollar amounts to employees at the opposite end of the pay spectrum, council member Curtis Leak expressed a preference for a flat bonus.
“A loaf of bread to a $60,000 man and a loaf of bread to a $25,000 man is still the same,” Leak said. “A two percent, if I’m at the top of the scale, I’ll smile, but I’m at the bottom of the scale, I won’t smile.”
Mayor Tommy Parker disagreed, stating that cost of living raises should reflect employees’ base salary.
“You’re rewarding people who haven’t paid the price as far as expertise or education and advancement and showing leadership,” Parker said. “I don’t think you need to reward people who have just met the minimal level.”
Council member J.D. Willis made the motion to grant an equal raise to each employee during next year’s budget talks.
“From what I’m hearing, we’re going to look at merit pay and COLA strongly at our retreat, and this just buys us a little time until you do that,” he said.
The city will use $100,000 in fund balance to provide the $1,000 bonus payments. Though the motion was approved unanimously, council member Dee Hammond cautioned against making a habit of simply granting bonus payments.
“All of our employees are on the local government retirement system, and if they get a bonus that doesn’t help them out any in the long run with their retirement whatsoever, because it’s based on their last four years of their highest-paid salaries,” she said. “A person that’s making $25,000, if they were to retire and they’ve only gotten bonuses every year, there’s no benefit for them to stay 30 years and retire.”
The budget Nichols presented delegated $529,507 in general fund balance to balance the general fund, which is projected to receive $6.8 million in revenue and spend $7.3 million. At the end of the month, the general fund balance is projected to be at $3.4 million, or 46 percent of annual operating costs.
Fund balance will also be used to balance the city’s wastewater fund — with a projected $4.6 million in revenue and $7.4 million in expenditures — with the solid waste fund also using $163,646 in fund balance. On June 30, the wastewater fund balance is expected to be at $27.5 million.
In light of legislation signed by Gov. Pat McCrory on May 29 which caps municipal privilege licenses at $100, the city budgeted $25,000 in privilege licensing fees, $40,000 less than it would have otherwise.
City staff budgeted revenues conservatively due to uncertainty related to the operation status of FCC’s paper plant on U.S. 401, which is expected to be a major consumer of city utilities.
“They’re going to be testing until the fall of this year and right now they only have one line in with two more supposed to come on in future years, so we just didn’t want to budget,” Nichols said. “If everything gets up and running and they’re using their 600,000 gallons a day, that’s fine, then we won’t use the fund balance as projected here.
“We really just cut expenditures this year to set our budget, and next year that won’t be an option. We’re going to have to add a treatment plant eventually and a lot of big-ticket items coming up that we’ll have to address.”
Mary Katherine Murphy can be reached at 910-276-2311, ext. 17. Follow her on Twitter @emkaylbg.