Pay increases for employees and property tax cuts for residents are on the table as the extra money continues to flow into the city of Vienna.
In addition to receiving $ 8.5 million in federal COVID-19 relief funds this summer, the city closed the last fiscal year (July 1, 2020 to June 30, 2021) with $ 900,000 in excess revenue, the city said. staff at Vienna City Council at a conference. Monday (October 18).
“We are in this position because we have reduced our budget. We have reduced our income to deal with the pandemic. We had to reduce our expenses, ”said Chief Financial Officer Marion Serfass. “But then our revenue went into some key areas pretty close to what we budgeted for, which gave us a nice surplus.”
According to city staff, Vienna achieved higher than expected revenues from sales taxes, business licenses, zoning permit fees, and state and federal revenues in fiscal year 2020 -2021. In addition, the vacancies have helped to reduce costs.
The Vienna Budget Committee presented three options for the allocation of surplus funds.
The city could follow its traditional practice of putting half of any surplus into a rainy day fund and using the other half to cover currently unfunded priorities:
- $ 125,000 to correct the wage cut for 41 employees
- $ 175,000 for paving work
- $ 50,000 for the maintenance and beautification of trees
- $ 100,000 to deal with 2022 budget corrections
Because the rainy day reserve is already above what it should be, city staff have offered to “give” money back to employees and taxpayers instead. If the city allocates all of the $ 900,000 in the current fiscal year, it could:
- Cover the above unfunded priorities except paving would only receive $ 75,000
- $ 280,000 to provide residents with a half-cent tax refund
- $ 270,000 to give employees a 3% salary increase effective January 1, 2022
The city could also have $ 550,000 to spend for the next fiscal year, while also covering the currently unfunded priorities:
- $ 280,000 to reduce the property tax rate by half a cent
- $ 270,000 to increase employee salaries by 3% effective July 1, 2022
Serfass noted that the excess could be spent on any priority, but suggested paving and tree maintenance because city council had previously proposed these areas as areas that could use more money.
“Here are a few things that fall under the category of things we wanted to do but didn’t have enough money to do them,” she said. “We could always invest more money in paving. We only get the “fair” rating… We know we have problems with the trees. “
The council has supported funding these needs and saving the money for a tax rate cut in July instead of an immediate refund.
“I know it’s not much anyway, but I think [a rate reduction] is more valuable than mailing someone a fairly small check, ”said board member Ed Somers.
However, the board was skeptical about the proposed 3% salary increase, since it would be a recurring expense paid with a one-time surplus.
“If you’re using long-term money for short-term gain, I’ve never seen it work,” said board member Steve Potter, adding that he would be more comfortable offering. bonuses or other incentive to help recruit and retain workers.
According to Michelle Crabtree, director of human resources in Vienna, other jurisdictions have had some success using bonuses to recruit employees, especially police officers and drivers with business licenses.
“We have had high turnover in public works,” she said. “We have lost eight people this year, and seven of them said it was 100 percent because they could find more money elsewhere.”
Noting that Vienna is not alone with workforce issues, Board Member Nisha Patel said she would support bonuses targeted at positions facing the biggest hiring and retention challenges.
“If we have extra funds that can go to staff, maybe we should use it more wisely to attract and retain, rather than just spread it out,” Patel said.
Vienna City Council will hold a public hearing on the surplus funds on November 15.