October 31, 2012 - Crestwood employees could receive a 1-percent merit-based raise if the Board of Aldermen approves the Ways and Means Committee's recommendation for the 2013 budget.
Ward 3 Alderman Paul Duchild, a member of the committee, made the recommendation, which was unanimously approved, during a series of Ways and Means Committee meetings last month.
A 1-percent merit-based pay raise would cost roughly $54,000, according to Finance Officer Greg Kremer, with $50,000 from the general fund and $4,000 from the park and stormwater fund.
Ward 1 Alderman Darryl Wallach, a Ways and Means committee member, suggested reducing expenditures in the capital improvement budget to balance the overall budget, if necessary, while allowing a 1-percent raise.
If there is a negative balance after calculating the expense of raises, funds could be pulled out of the mill-and-overlay line item to balance the budget.
Duchild told the Call the mill and overlay line item is "computed with a large buffer ... which is rarely, if ever, exceeded."
The Ward 3 alderman told the Call Monday that transferring funds from the mill-and-overlay line item will not be necessary. The Ways and Means Committee's 2013 draft budget, including a 1-percent merit-based pay increase, shows a citywide surplus of $3,676, according to Duchild.
Duchild originally proposed a 2-percent merit-based raise, but told the committee because of how the budget appears, it gives the impression the city will not have a balanced budget.
A summary of all city funds, including the effect of a 2-percent raise, shows the city would have a $60,702 deficit.
"It includes the 2-percent raise like we discussed last time, which puts us technically at the $60,700 (over) budget," Duchild told the committee Oct. 25. "... Expenditures exceed our revenues under the plan with the 2-percent raise. Without the 2-percent raise, we're at about $47,000 on the good side."
Duchild's original 2-percent merit-based proposal would have been achieved using excess reserve funds that were set aside to purchase a fire truck.
The 2013 budget allocates $500,000 toward the fire truck purchase. The city received $342,000 in federal grant money and also has $210,000 in reserve, according to Fire Chief and acting City Administrator Karl Kestler.
Duchild suggested using the difference between the allocated amount and the grant, $158,000, and whatever funds would be left over from the $210,000 in reserves as a transfer from the cash reserves to supply the funds for an average 2-percent raise and to re-start a resident-based program, such as the street lighting program.
The way the budget reads caused concern for the Ward 3 alderman because the way funds are reserved for future purchase of a fire truck and police car, the city does not "take it off the bottom line of the budget," but indicates those funds with a footnote. Duchild suggested the city "come up with a better way of actually reserving funds," possibly by creating a separate account.
"I don't think it's a true and accurate picture all the time" Duchild said.
If the funds reserved in the capital improvement fund, for example, could be placed in a separate account, the city "could apply those funds and pseudo revenue to the 2013 budget," which Duchild believes would cause a positive balance and allow the city to move forward with a 2-percent merit-based raise.
Kremer said if those funds are set aside in a different account, it will not change the final budget numbers.
"At the end of the day, when you roll it all the way across to the total column, you're still going to be at the same point you were where you're currently at, you'll just have a transfer out and a transfer in," Kremer said. "There is no way to create that expenditure unless the city has actually expend(ed) those funds."
Kremer said creating an additional account would not create "an actual expenditure," rather just move funds from one account to another.
No action was taken regarding creating a separate account.
Wallach said Oct. 18 he agrees employees need raises, but noted the funds that would be allocated for raises are specified for capital improvement.
"I think that's going down a wrong road. That $158,000 is really capital improvement, not for the general fund for the employees," Wallach said.
Mayor Jeff Schlink, also a member of the Ways and Means Committee, said he believes the proposal is a "great idea." Schlink also told the committee he understands where Wallach is coming from and that residents have made similar points regarding different funds.
"In a perfect world, I think it would work that way, but unfortunately we don't live in a perfect world," Schlink said, "and I think that when money is shifted from one fund to another, I think that sometimes it's gamey and sometimes it's for the wrong reasons, but for the reasons that we're talking about here, I would be in support of a plan like that."
Duchild said he understands the issue about moving money around, but believes the revenue is available for the pay raises.
Wallach also voiced concern about how the 2014 budget and future budgets would be affected by the raises.
The committee also discussed overtime pay, employee cell phone reimbursement, setting aside funds for the future purchase of a police car and health and wellness in relation to gym memberships for city employees, among other items.
EDITOR'S NOTE: This story was updated from the version in the Call's print edition to reflect additional information from Ward 3 Alderman Paul Duchild that transferring funds from the mill-and-overly budget is not necessary to balance the 2013 draft budget.