Published: June 17, 2009 01:41 pm      

McLendon-Chisholm’s budget talks continue

Council, new and old, agreeing to need for property tax, city staff, communication

MCLENDON-CHISHOLM — All members of the McLendon-Chisholm city council, both the three new and the three veterans, are agreeing on key decisions — the apparent need for a property tax to sustain the 2009-10 draft budget, the need to keep the city staff salaries in it, and the need to communicate with the public on fiscal matters, as well as in general.

To this end, they will present the rationale for the draft 2009-10 budget, and at least verbally present it, to the public in a June 23 regular council meeting. The draft budget as of Tuesday contains a $107,000 shortfall between expenses and revenue, leaving the council in the position of probably establishing a property tax.

Steve Hatfield, veteran member, said, “They (the public) need to know what’s going to happen,” said Hatfield. “It’s (tax) going to have to happen; we’re in the hole.”

The city is sending postcards to alert the residents of the opportunity to speak up in “Citizens Comments” (always a part of the meetings anyway) on June 23, and to listen to the council review the draft budget, take input, and ask staff to return with a finalized budget to adopt after July 27. That is the only agenda item scheduled at this time.

In August, the city will hold the legally required public hearing on what by then will be the proposed budget and proposed tax rate, both of which must be adopted by Sept. 30, based on the certified tax roll to be released in July.

One outcome of a McLendon Chisholm citizens committee which met throughout November, December and January on the fiscal issues of the city, was a 7-5 committee vote to recommend instituting a property tax, and to not dissolve the city. It also was “unable to conclude that sufficient cuts could be made to balance the budget.”

One cut brought up by a few of the 20 speakers at a January town hall meeting on the citizens committee report, was that of staff and salaries.

In a recent workshop, the council agreed to keep this year’s amount for city staff salaries, $95,790, in place for 2009-10 budget.

That is a good deal, noted newly elected Gary Moody, in the Tuesday June 9 meeting. “We’re getting a deal,” he said, and wants the public to see the document showing salaries of like positions in area towns of similar populations.

McLendon Chisholm’s city manager is paid $58,000 and its secretary, $37,900. McLendon Chisholm’s population is 1,750.

According to information gathered by Hatfield, the City of Lavon, with a population of 2,014, pays its city secretary $40,352, and its manager $77,000, plus benefits, which McLendon Chisholm does not provide: medical, dental and life insurance and a retirement match. Fate, having recently become home rule, through reaching population 5,189 in 2008, pays its city secretary $50,000 and city manager $100,000, and benefits.

Salaries was a major topic in the first budget workshop, as was capital projects.

It was determined then that $6,000 would be budgeted as a “band-aid” for road repair.

However, Tuesday, city manager Dave Butler noted that to repair Pullen Road alone will cost $50,000.

Such capital issues, as well as maintaining a reserve fund, were both mentioned as important to thinking about establishing a tax rate.

“As you go forward,” Butler said as the meeting wound down, “it is clear to anybody that an ad valorem tax needs instituting.” Legally, a property tax can be raised up to 8 percent a year, no more. He suggested the council consider “ramifications of raising taxes next year and to consider capital improvement projects.”

“If you don’t set the course now, it will be very difficult to do so next year.”

As far as the reserves, the citizens committee recommended a reserve which is 30 percent of revenue.

“We request that the Council preserve and protect the fund for emergencies,” stated the committee’s final report. “In the last few years, the fund has been tapped to cover budget deficits,” the report noted, saying this is not a good practice.

Jess Lovell, recently elected, suggested that 30 percent be a goal reached over time.

“I don’t know that we need to be at 30 percent at the end of 2010. It may take three or four years to get there,” he said.

Hatfield suggested 10 percent, and Jackie Pullen, with more than 20 years on the council, said, “I’ll follow you.”

Revenue in the draft budget as of Tuesday is $138,400, and a reserve of 10 percent would be $13,800.

Expenses in the draft budget are projected to be $245,518.

Keeping citizens informed about revenue and expenses is another recommendation of the citizens committee, and this was reiterated at council Tuesday.

“The citizens want to know the direction of the council,” said Mayor Michael Donegan, as he opened discussion about holding the June 23 meeting at Chisholm Baptist Church hall for the public’s benefit.

“The purpose of the June 23 meeting is to inform them and show them the budget deficit and then lead to how to fill in the deficit.”

Council discussed whether or not they are premature in bringing the budget public, since it won’t know a tax rate on June 23, but the upshot was to agree to invite the public to learn of council’s decisions to date.

“The reality is we need to own the fact that we can’t tell you exactly,” said Patrick Short, newly elected. An attorney, he likened the information to the opening argument of a case.

“Here’s the budget, ask the questions you want,” he said.

“We have a great deal of information,” Moody said. “We’re trying to get this done for the citizens. We have some challenges with not having a number.”

He wants to present to the citizens, “Why we made the decisions we did, here’s where we’re at, and here’s where we’re headed.”

Short gave a comment which was met with agreement around the table.

“These people are good people here. The big problem is they felt they haven’t been communicated accurately with.”