On a 3-2 vote, the Haywood County Board of Commissioners passed an $90.3 million budget that will make county salaries more competitive, add personnel to ensure emergency calls are handled in a more timely manner, care for county buildings and upgrade police/EMS vehicles.
The budget is based on a tax rate of 53.5 cents per $100 of property value, a nickel lower than last year, but one that would still bring in more revenue because of the recent property revaluation. The revenue-neutral tax rate — one that would bring in the amount of funds about equal to last year — is 50.78 cents per $100 of value.
During one of three budget discussions earlier in the year, County Manager Bryant Morehead explained the difference between the revenue-neutral rate and his proposed tax rate is $2.4 million, an estimated amount needed to implement the county’s employee compensation study.
Commission Chairman Kevin Ensley, Commissioner Tommy Long and Commissioner Kirk Kirkpatrick, who was out of town but joined the meeting by phone, all voted for the budget.
Commission Vice-Chairman Brandon Rogers and Commissioner Jennifer Best voted against the budget, though both expressed strong support for county employees and seeing them adequately compensated.
Ensley said Haywood’s tax rate is 15th lowest in North Carolina and spoke of daily complaints about the time lag at the development services department, something he directly attributed to the below-average county salary levels.
“They are down to two to three staff members and should have six,” Ensley said when explaining his budget vote. “I can think of three losses in the last several years due to salary. I feel like I need to do something.“
When all the building tradesmen, landscapers, attorneys, real estate agents and other housing-related professions are considered, it is a major industry in the county, Ensley said after the meeting, adding, “we can’t afford to hinder it.”
Rogers said he supports “whatever the pay study tells us,” and favors bringing wages where they need to be to take care of employees.
“I did that in my own business, and we need to do it here in the county,” he said.
Rogers said retaining employees will save money in the long run. Still, he said he would like to take more time to make the budget revenue-neutral, but added it “looks like it will be tough to do.”
During previous budget meetings, Rogers cited strong economic indicators in the county, spoke of debt that is rolling off and asked about using more money from the fund balance to lower the tax rate.
In response, Morehead said using reserves to support ongoing costs was not a financially responsible course and wasn’t something he could recommend.
Long, who made the motion to approve the budget, said the $2.4 million gained by setting the tax rate above revenue-neutral rate is “basically a wash” because it all will be used to implement the salary study.
“You also have to remember we’re funding 13 patrol cars, EMS and two new ambulances,” he said, noting there will be six positions in the 911 call center under this budget, which will help bring response times down.
Long reminded his colleagues that $5.9 million is already being pulled from the fund balance to fund employee compensation and keep the tax rate low.
The early results of the study show county salaries are about 12.5% behind the middle range of regional market rates.
In his proposed budget, Morehead wrote that salaries and benefits for the coming year are proposed to increase by $6 million, which included a 2% merit and a 2% cost-of-living increase, as well as an estimated amount to implement the county pay study.
“I’ve always been a needs-based person,” Long said. “I think you’ll see this board is always strong on public safety.”
During the budget hearing, Kirkpatrick said the reason he hadn’t argued against the proposed tax rate was because the items in the budget were recurring expenses.
He said he doesn’t want to see a fund balance that is too healthy as it means the county is holding taxpayer funds, but indicated he’d be willing to dip into the fund balance for an upcoming capital project.
Best said the salary study wasn’t complete and she didn’t want to vote on funding a study sight unseen.
She called the budget vote the most difficult decision she’s had to make since being seated.
“I see pros and cons,” she said. “I stated I was committed to a revenue-neutral rate, so I couldn’t vote for the proposed budget today.”
Following the meeting, Best said she thinks the county’s estimate to implement the salary study could be short. She said in her line item by line item budget review, she found some fat that could be trimmed, though it wasn’t enough to cover the shortfall for the employee compensation package.
“I tried to be so very clear, as Brandon did, this is not a vote against our employees. ... Based on where we were and the information we were given, I felt like that was the correct vote,” she said, adding the county may have to do something more next year. “They passed the budget without me, so it doesn’t really matter.”
Not a first
Ensley recalled several previous budget votes where the board was split, including one in 2009 when he and Skeeter Curtis voted against the budget.
This year, though, Ensley said it was impossible to support employees and help the county’s workforce woes without voting in favor of the budget.
“You can’t have it both ways,” he said. “That is just giving lip service.”
He said he was disappointed that those opposing the budget didn’t propose an alternative.
In an interview following the meeting, Rogers said he suggested on several occasions that competitive salaries could be offered by maintaining the revenue-neutral tax rate and drawing an additional $2 million from the fund balance, which was about 39% of the total budget prior to the $5.9 million budgeted transfer.
“The only difference is how we get there,” Rogers said of funding the salary increases. “If we pull $2 million to cover capital and vehicles from fund balance, I would be fine with that.”
Kirkpatrick later noted that the $2.4 million that the tax rate will bring in over last year’s revenue will be used to fund the ongoing expense of the salary plan.
“We’ve been using fund balance every year to balance the budget,” Kirkpatrick said. “I’m not opposed to doing that for one-time expenses but it’s like paying your mortgage out of your savings account. We’re never going to reduce the rate of pay, so you can’t keep doing that.”
Kirkpatrick said he wished those who opposed the budget would have provided an alternative, but said if that option was taking it out of fund balance, it wouldn’t have been good enough for him.
“Otherwise, I would have considered it,” he said.
The budget as adopted would raise county taxes on a $500,000 home by $130 annually and $65 annually on a $250,000 home, Ensley said.
It’s a price he said should be worth it to get employees where they need to be and to “stop the bleeding” when it comes to losing trained personnel to other employers.