Kilmarnock Town Council approved the fiscal year (FY) 2014 budget on Monday in spite of opposition from two councilmembers and the mayor.
On May 20, Town Manager Tom Saunders proposed $2.9 million in income from the town’s water, sewer and general funds, and $2.6 million in spending.
Saunders noted that significant changes in the budget proposal for fiscal year 2014 included an appropriation of a 3 percent pay raise for all town employees, a $40,000 falloff in tax real estate revenue and a loss of $60,000 in sales tax repayments to LancasterCounty and a $200,000 savings in interest expense.
“We’re saving enough money, we think, to cover the decreases in revenue,” Saunders told council, while adding that he projected an operating surplus of $302,000 that would be used towards capital improvement projects (CIP).
“In that category, we have proposed spending of $920,000 in FY 2014,” Saunders said, noting that $800,000 of the money in the capital projects line item was budgeted for the acquisition of the Bay Trust Property on 1 North Main St.
The budgeted amount for the building, which is slated to become Kilmarnock’s new town hall, includes the purchase price of $729,500 as well as money for furnishings, fixtures and renovations.
“The town has reserves set aside to cover this cost,” said Saunders. “It doesn’t seem to make any sense to borrow money at 2 or 3 percent when we have it.”
He projected a general, water and sewer capital budget of $1,095,000, but pointed out that while the town anticipated spending $1,010,000 in capital projects for FY 2013, they only spent $337,000.
“Town attorney [Chris Stamm] often calls the capital improvement budget a wish list,” said Saunders. “That is what it is in many ways: it’s things we’d like to get done, and eventually we need to get done.”
Councilmembers voted 4-2 in favor of the FY 2014 budget with William Smith and Shawn Donahue dissenting.
Mayor Raymond Booth also voiced his opposition, claiming there was not a surplus in the budget as was presented by Saunders.
“I recognize that we have a $700,000 surplus in the general fund,” said Booth. “I also recognize that proposed capital improvement spending for 2014 is almost $1.1 million, and that creates a basis for a sizeable deficit if all CIP spending is executed.
“But we do realize, and I agree, that [the CIP budget] is somewhat of a wish list, and it doesn’t all get routinely spent each year,” Booth added before emphasizing that council spend the appropriate amounts for all areas of the budget in FY 2014.
Booth also agreed with Councilmember Shawn Donahue’s recommendation to not give a 3 percent salary increase to town employees.
Donahue said it was inappropriate for Kilmarnock staff to take a pay raise when he felt the money would be more beneficial in aiding the Kilmarnock Volunteer Fire Department.
“Two years ago, we did 3 percent to Kilmarnock employees,” said Donahue. “Now we’re going to go back one more time, give them a 3 percent increase again? I think we should take that money and give it to the fire department rather than to [town staff].”
Vice Mayor Emerson Gravatt disagreed.
“If the town employees were overpaid, I would agree with you,” said Gravatt. “But I can’t believe you would want to take a 3 percent increase away from [them].
“Let’s just go ahead and give the fire department additional funding,” Gravatt added. “But don’t take it away from the employees of the town.”
Councilmember Rebecca Nunn said that Kilmarnock’s staff was a principal reason for the town being in “very good fiscal shape” and stressed that they needed to be rewarded.
Councilmember Howard Straughan said the salary increases were “minimal.”
“I don’t think that employees of this town should be asked to bear the cost of everything else we’re going to do,” he said, while Donahue agreed with Straughan’s belief that Kilmarnock’s staff was not overcompensated.
Smith re-emphasized his position from the budget work session on April 22 that the town should not be making “charitable contributions” to local organizations.
“If an individual wants to make a donation, then [he or she] would do that on [his or her] own,” said Smith. “I don’t think we have a right to tell our town residents who they’re donating to and who they’re not.”
Smith added that the volunteer fire department and rescue squad in Kilmarnock were “completely different” because they were service-oriented.
He did, however, stress that the money allocated to the two organizations should not be listed as charitable contributions.
“If we sit up here as a committee and…say the library is important, but we’re not going to give money to the Boys and Girls Club, the Free Health Clinic or the YMCA, I think we’re creating major headaches,” said Smith.
Following Smith’s comments, Nunn said council would call the line item “essential services” as opposed to “contributions.”
A second reading and adoption of the FY 2014 budget will be held June 17 at 7 p.m. in town hall.