Fiscal Court splits vote over sustainability of pay increases for county employees

By Eugenia Jones
eugenia@highland.net

There were significant differences in opinions over the sustainability of a $1.00 per hour pay increase budgeted for all county employees in McCreary County’s proposed 2021/2022 budget. As a result, members of the McCreary County Fiscal Court split their vote, 3-2, in favor of approving the first reading of the upcoming fiscal year’s budget. The pay increase applies to approximately 110 full and part-time county employees. All elected officials are exempt from receiving the raise. Sheriff Waters’ deputies are covered by the pay increase; however, the Sheriff’s office staff is not included as they are paid through the sheriff’s office budget. Courthouse security officers are also excluded since they are paid by the Administrative Office of the Courts (AOC.) According to McCreary County Finance Officer Randy Jones, the total cost incurred by the pay raise is $248,000.
During Fiscal Court’s regular meeting on May 13, Magistrates Roger Phillips and Bill Hale voted against the proposed budget including the $1.00 per hour pay raise while Magistrates Bobby Strunk and Randy Maxwell voted in favor of the budget. McCreary County Judge Executive Jimmie “Bevo” Greene cast his tie-breaking vote in favor of approving the budget.
Magistrate Roger Phillips, who supported what he felt was a more sustainable twenty-five cents per hour pay increase, was the first to question the inclusion of a $1.00 per hour pay raise in the budget. Although the proposed budget reflects significantly more revenue than in the past, Magistrate Phillips questioned the wisdom of budgeting the extra funds for salary increases.
“We are ahead in this year’s budget because jail bills went down due to COVID-19, and we received $500,000 from the government to help pay salaries,” Phillips noted. “What are we going to do in a few years when this money from the government isn’t available? It’s not that I don’t want county employees to have raises, but I’d rather say “no” to pay increases for employees now instead of watching some of them lose their jobs in a few years because we can’t pay them.”
Phillips stated his opinion that a pay increase of $1.00 per hour increases the likelihood of another increase in the county’s occupation tax at some point if jail costs increase and there is a decrease in occupation tax collection and/or the number of EMS non-emergency runs.
“Why not shift the money into more law enforcement, more ambulances, or other things?” Phillips questioned. “There are so many ways we can spend this money to help the county and the different departments at the same time. If we can stand taking $250,000 out of the budget every year, why not give everybody in the county who works a raise by lowering the occupation tax?”
Countering Phillips, Greene noted the need for employees to receive a raise.
“I understand your point of view,” Greene said. “However, we are taking in more occupation tax, and the EMS (ambulance) is taking in more revenue. I feel this budget can be sustained over the long term.” This year’s budget stands at $11.9 million-a significant increase over last year’s budget of $9.2 million. Additionally, for three consecutive years, McCreary County’s General Fund budgets have reflected more than a million dollars in carry over (surplus) money from previous years. This year’s General Fund budget allocates $1,500,000 (26.91% of general fund total) as surplus money from last year plus an additional $1,670,923.00 as prior year surplus from the federal American Rescue Plan Act. The American Rescue Plan Act money is expected to arrive later this month and is budgeted as carry over (surplus) money in the budget for the 2021/2022 fiscal year beginning July 1. Another $1.6 million of American Rescue Plan Act funding is anticipated next year. All of the American Rescue Plan Act funding must be spent by 2024. Funding guidelines are still vague; however it appears the federal funds can be used for several COVID-19 related items including employee bonuses and infrastructure. Recent budgets, including the 2021/2022 budget, reflect a vastly improved financial situation for county government. In contrast, just a few years ago in 2017/2018, county government faced a shut down and state take-over for lacking sufficient revenue to develop a yearly budget covering basic expenditures. As a result, Fiscal Court voted to increase McCreary County’s occupation tax from 1% to 1.5%.
“Increasing the occupation tax from 1% to 1.5% a few years ago definitely helped us have surplus money for three years in a row,” Jones stated. “Also, this year, we received more than $500,000 CARES (COVID-19 related funding) from the government which helped pay the salaries of EMS, 911, etc.”
Magistrate Phillips voiced concern when three different budgets were presented to the magistrates with the first reflecting the $1.00 pay increase, the second reflecting a 50 cents pay increase, and the third reflecting no pay increase. A comparison of the three budgets shows road funding for highway resurfacing/blacktop dropped from $1,200,000 million dollars in the budget with the $1.00 per hour pay increase per employee to $1,000,000 in the budget with the 50 cents pay increase to $700,000 in the budget with no pay increase. Road funding is typically a high priority to magistrates as they seek funding for road improvements within their individual districts. Outside of the meeting, Phillips questioned if road funds were possibly adjusted in the different budgets to sway the outcome of the Fiscal Court’s vote.
Despite Phillip’s concern, Finance Officer Jones said preparing more than one budget is a relatively common practice. In this case, Jones stated three budgets were prepared-one being an optimistic budget (with $1.00 pay increase), one being a middle ground budget (50 cents pay increase), and one being a pessimistic, worse-case scenario budget (no raise.) According to Jones, road funding was reduced by varying amounts in the different budgets in order to increase jail funding. Jones said this was an attempt to address Phillips’ concern that jail costs will increase in the coming year. In the 2020/2021 fiscal year, the total cost for housing county inmates dropped to under $500,000 with a budgeted amount of $925,000. The decrease in jailing/housing of county inmates resulted in more than $400,000 in savings due, in large part, to the COVID-19 pandemic.
Magistrate Bobby Strunk said the amount of road funding did not influence his vote.
“Road department funding did not have anything to do with the way Randy Maxwell (4th district magistrate) and I voted,” Strunk noted. “We strictly voted for the employees because we feel this budget can be sustained. We do not feel the pay increase will lead to an increase in taxes.”
Finance Officer Jones feels confident the pay increase is sustainable long term.
“I would never try to fund a pay increase through a non-sustainable source,” Jones stated. “I don’t anticipate a tax increase, and I don’t think there is anything in this budget that will lead to an increase in taxes. We have a new factory (Fibrotex) with employees paying occupation tax, we have increased occupation tax collection efforts, and we also have some revenue coming in through alcohol sales.” Jones noted the pay increase is not funded totally by the occupation tax.
“At least half of the money for the pay increase is being generated from non-emergency transports through EMS (ambulance),” Jones stated. “EMS brought in an additional $125,000 for the general fund this year. If we can get them a couple of new trucks and a couple of more people, they should soon be able to fully fund the pay increase.”
The last time all county employees received a pay increase was in 2019. The increase at that time was for 25 cents per hour. Road department employees received a pay increase of $1.11 in December 2020 when they did not hire an extra person to fill a vacant secretarial position-choosing instead to assume the secretarial duties themselves and diverting the budgeted secretarial salary funds into their pay increases. EMS employees received a one-time $1,000 bonus for their work during the COVID-19 pandemic.
The budget will now be sent for approval by the Department of Local Governments. It can take up to one month to receive their approval. At that point, the magistrates are required to act on a second reading of the budget. However since the budget must legally be in place on July 1st, there is little opportunity for changes in the budget or vote during a second reading.

 

 

Fiscal Court Approves First Reading of Budget

Property owners with delinquent taxes need to set up payment plans with County Attorney

By Eugenia Jones
eugenia@highland.net

In their May 13th meeting, McCreary County Fiscal Court narrowly approved the first reading of a controversial 2021-2022 fiscal year budget by a 3/2 vote. McCreary County Judge Executive Jimmie “Bevo” Greene cast a tie-breaking vote approving the budget along with Magistrates Bobby Strunk and Randy Maxwell. Magistrates Roger Phillips and Bill Hale voted against the budget. The split vote resulted from Phillips’ and Hale’s concerns over the sustainability of the $1.00 per hour pay increase for county employees included in the 2021/2022 budget. (For more details regarding the budget and pay increase, see the accompanying article “Split Decision” on page 1 of this week’s “Voice.”)
Total budgeted appropriations for the 2021/2022 fiscal year budget include the following: general fund-$5,573,954.00 (46.73%), total road fund-$2,947,524.00 (24.71%), total jail fund-$1,079,474.00 (9.05%), total L.G.E.A. fund $32,034.00 (0.27%), total federal grants fund-$1,670,923,99 (14,01%), total ambulance eq. fund-84,010.00 (0.70%), total grant fund-$397,139.00 (3.33%) and total revolving fund-142,100.00 (1.19%) for a grand budget total of $11,927,158.00. This year’s budget reflects an increase over last year’s budget of approximately $9.2 million.

Other business during the meeting included the following:
• Approved several hires and transfers for 911, EMS, etc.
• Approved the start of bid process on new roof for courthouse.
• Approved payment from incoming CDBG grant funds to Rose’s Excavating, Inc. for work on Marsh Creek Road Waterline Replacement Project.
• Approved a resolution for a grant for a handicapped accessible playground at the McCreary County Park.
• Approved appointment of Suzie Thompson and re-appointment of Ruby Keith Taylor to the McCreary County Public Library District Board of Directors.
• Approved reappointment of Teddy Coffey to the McCreary County Ethics Commission.
• Approved the following appointments to McCreary County Safety Advisory Board: Randy Maxwell, Randy Waters, Jessie Hatfield, Milford Creekmore, Jimmy Barnett, Stephen McKinney, and Nathan Nevels.
• Approved appointment of Edward Allen Campbell to the McCreary County Board of Assessment Appeals. Campbell replaces Jill Dolen whose term expired.
Additionally, County Attorney Austin Price urged anyone who needs help establishing a payment plan for delinquent property taxes to contact his office immediately. Setting up a payment plan will prevent property with a delinquent tax bill from going to auction.

The McCreary County Fiscal Court meets in regular session on the second Thursday of each month at 6:00 at the McCreary County Courthouse.