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City of Corinth in better position for economic future

Profile image for By John D. Harden / Staff Writer
By John D. Harden / Staff Writer

CORINTH — The proposed 2013-14 budget for the city of Corinth shows an increase in revenue, which officials say places the city in better position to either maintain or improve service levels and to invest more into employees. 

City staff and council members said the city was forced in recent years to make tough decisions that included departmental reductions and postponing pursuing goals.

The budget is still tight, officials point out, but now they say they have a little breathing room. 

Officials said that the decline in the economy affected the way the city took care of its employees for years. 

“We really didn’t have the means to give raises or increase the compensation for our employees,” said Mayor Paul Ruggiere.

However, after seeing slight increases to property tax revenue and other sources of income, city officials decided it was time to give back.

In 2013, the city hired Ray Associates Inc. to conduct a compensation study to compare the city’s compensation and benefits to 12 other cities. 

The study showed that adjustments to the general employee, police and fire pay rates were needed to make the city more competitive with other cities. The city also seeks to add merit-based raises to employees who deserve them. 

Ruggiere said city employees have gone without significant raises in recent years to save money. There was a lot of cutting and attrition related to employee costs — the city’s biggest expenditure. 

“And that coincided with what happened with the economy,” Ruggiere said. “Now we can compensate our employees the way they should be compensated.” 

The city also made improvements to its employees’ health insurance coverage. A renewal proposal from the city’s current health provider would have resulted in a 14.2 percent increase in health costs, according to officials. 

To manage the insurance premium increases, the city decided to offer employees a high-deductible plan with a health saving account. On a high-deductible plan, the employee pays 100 percent of their medical and prescription costs until the deductible is met. 

The revised insurance structure includes a city contribution of $1,000 per employee into the individual savings account to assist employees in the transition from the low-deductible plan to the high-deductible plan. 

Lee Ann Bunselmeyer, finance director, said with the changes, city staff was able to get health care costs lower than what was budgeted.

Final negotiations and the elimination of the two insurance plans and the addition of the professional health service subscription netted a 3.4 percent decrease in health costs, according to the proposed budget.

Despite the positive changes, the city still has a few challenges to resolve before the budget can be approved. 

One challenge the city is tackling is coming up with the means to fund two police officer positions that were added last year. 

In September 2012, council members voted 3-2 to approve the addition of two police officers, adding an additional $145,000 to the budget. 

Adding the new positions forced council members to raise the property tax rate to pay for the positions.

However, the officers began in the middle of 2013, resulting in the city spending only about $70,000 on the position.

At the time, Ruggiere said the city wasn’t in a financial position to add two positions without assurance they could be funded, but council members argued that they saw a need based on data presented by the police department. 

“This year, we’re going to feel the full effect of those two positions,” Ruggiere said. 

The council has the option to approve a tax increase again this year, but officials believe they can avoid it by making cuts elsewhere in the budget, Ruggiere said. 

The proposed budget includes a property tax increase from $0.60489 to $0.60989 per $100 of assessed valuation. 

Council member Mike Amason said the argument has been made that the tax increase will address the two police officer positions. 

“We’re not talking about a big increase. Raising the tax rate would result in about a $15 increase per property. But raising taxes is raising taxes, and that’s not something we want to do,” Amason said. “I’m opposed to the increase and I don’t think it’s a good option.” 

During a recent council meeting, Bunselmeyer said there are other ways the city can cut costs, such as altering overtime calculations and fire department schedules.

Other highlights in the proposed budget include a 2.53 percent increase in property tax revenue, which will generate an additional $71,448. 

It also includes a $32,725 contract increase for fire vehicle replacement. 

Other expenditures include a one-time use of $945,000 from the fund balance for City Hall carpeting, a public safety communication system update, fire department stretchers and future capital improvement projects. Also, the budget includes total resources of $32.1 million and expenditures of $31.4 million. 

The budget is still being shaped and has yet to be approved by the council. The budget must be approved by Sept. 30 — the end of the current fiscal year.

JOHN D. HARDEN can be reached at 940-566-6882 and via Twitter at @JDHarden.