News Talk 94.1/AM 1600 Where The Upper Cumberland Talks
Cookeville’s proposed city budget will include no property tax increase while pursuing what City Manager James Mills calls “a very conservative approach.”
Mills outlined the $29 million budget in Monday’s first council work session. Finance Director Brenda Imel said the budget represents a 5.5 percent reduction in income from the current fiscal year’s plan.
“We’re in good financial shape,” Mills said. “But the past few months and the next few months, there are a lot of unknowns and we don’t know what the impact will be.”
The $29 million budget projects a $539,000 loss that will be accounted for by the city’s fund balance. The property tax will remain at .99 per $100, in the bottom third among cities statewide.
The current budget plan does not include any raises for city employees. Only one new employee will be added to the city staff, a communications position in the police department. Mils said he had hoped to restructure the city’s pay system this year in hopes of improving the compensation for all city employees, especially those at the lowest pay rates. In that way, Mills said, this budget is not what he hoped for.
However, Mills said he hopes he can come back to the council later in the year and add these raises.
“The most important thing we’re trying to do is make sure that we keep everybody working and we don’t have to do any pay cuts,” Mills said. “I would rather not project all these additional pay increases and then find out we have to take them away in two or three months.”
Council Member Eric Walker said he understood but questioned whether many city staffers expected the longevity and merit raises approved by the council annually.
“If we’ve done merit-base and longevity in the past, in a sense, we are taking it away,” Walker said.
Walker suggested the council could consider implementing raises and then potentially raising property taxes to pay for them, if sales tax revenues lag further. Mills said longevity raises would cost the city about $300,000.
Cookeville will move forward with several capital plans including issuing $19 million in bonds for the new police station as well as a new ladder truck. The proposed budget also includes expenditures of hotel/motel tax money on several parks and recreation priorities.
The budget plan also calls for taking one penny from the city’s economic development fund to help reduce the budget deficit. Mills said the fund remains important to help the city recruit new development. He said the city wants to put the penny back next fiscal year.
Mills said there remains little guidance in the impact COVID-19 will have on sales tax revenues. He said the best-case scenario for the city would be delay the budget and see how sales tax revenues for March, April and May come in. Because of the several-month lag time, Mills said that would not be possible.
The budget proposed using COVID-19 funding from Governor Bill Lee on several one-time public safety expenditures including patrol vehicles, defibrillators, a new generator for the fire station, and HVAC repairs at city hall.
Council members will continue the budget work session Tuesday. A new budget must be in place by July 1.
