Olson proposing $800K for city staff pay raises
By Jon Hawley
Wednesday, February 20, 2019
City Manager Rich Olson is proposing almost $800,000 in raises for Elizabeth City employees next budget year, arguing that amount is needed to offer competitive salaries and fill vital positions.
Olson presented that and other recommendations during city council’s first of many work sessions on the city’s 2019-20 budget year, which starts July 1. The $800,000 figure includes a 3-percent raise for all city employees, plus additional raises for police officers, firefighters, and electrical personnel.
Olson did not propose increasing property taxes or other rates and fees to pay for the raises, but he told councilors the city is expecting only about $100,000 in additional revenue next year, based on growth in sales taxes.
The $797,000 Olson is proposing in spending would be spread among different funds; payroll in the general fund would grow by about $551,000 next year, based on Olson proposal. The general fund is supported by property taxes, and Olson said every 1 cent of the city’s property tax rate, now 65.5 cents per $100 of property valuation, would generate $129,000. That means the raises for police, fire, and other general fund employees is roughly equivalent to more than 4 cents of the city’s tax rate.
Olson had already told council he intended to propose raises. In a meeting earlier this month, he explained the city is facing a shortage of police and firefighters, and is struggling to fill key positions in other departments. That includes the electrical department, where he said the city pays linemen far less per hour than they can make at other utilities.
However, during that meeting, he estimated the preliminary number for the raises at $500,000. It wasn’t clear then if it included across-the-board raises for all employees.
The Daily Advance on Tuesday requested the staffing analysis supporting the proposed raises; city staff said it wasn’t complete yet.
In other personnel expenses, Olson reported the city is facing a 5-percent increase — about $167,000 — to its health insurance costs. However, the city is also getting a reduction on its worker’s compensation costs of $50,000, he said.
Olson also reported he’s still researching the merits of opening a health clinic specifically for employees and their dependents, which he said could reduce or eliminate the 5-percent increase. However, that clinic could cost $200,000, he said.
During Monday’s meeting, Councilor Johnnie Walton expressed concerns about the city’s costs for family health plans.
Olson acknowledged the city’s family plans are unaffordable for many employees. That’s where a clinic could help, he said, because a worker’s spouse and children could receive care at one for free.
Other key parts of next year’s budget, based on Monday’s presentation, include:
* The city is facing a 3-percent electrical rate increase in April 2020, which would follow an expected 1.2-percent increase this April. Those increases are to the city’s wholesale rates, and council has the discretion to have the city absorb them or pass them along to customers. Doing the former, Olson warned, could starve the electrical department of revenue needed for important investments, such as $2.5 million in electrical upgrades on Halstead Boulevard, including installing streetlights on Halstead Boulevard Extended.
* Funding for a new senior center. Olson said the city would split the estimated $1.5 million cost of the facility with Pasquotank County. City councilors have called a new senior center a major priority, and several seniors spoke during Monday’s public comment period about the need for the facility. The current center at Knobbs Creek Recreation Center is far too crowded, they said.
* $1 million for a citywide road resurfacing project. Which roads would be fixed is to be determined.
* Three major water system projects: a new section of the city’s raw water transmission line, which Olson said could cost more than the roughly $900,000 state grant the city’s won; a new cover for a raw water reservoir, which could cost $1.6 million without a grant; and $1.5 million for a “smart grid” system separate from the Nexgrid system planned for electrical meters.