Cape City Council leaves employee raises in budget

Tuesday, June 4, 2002

The Cape Girardeau City Council gave the proposed $41 million budget first-round approval Monday night, rejecting one councilman's proposal to withhold city employee cost-of-living raises.

But the council didn't ignore a $250,000 budget shortfall and three years of flat sales tax revenue, asking city staff members to give the council quarterly revenue updates that would allow it to make cuts later if necessary.

Councilman Jay Purcell suggested holding off on giving the city employees their 1 percent cost-of-living raises, arguing that it would save $111,246.

But the council voted 6 to 1 to approve the budget for fiscal 2002-03, which begins July 1, with Purcell voting against the measure.

During the roughly one-hour discussion, Purcell said the employees deserved the raise, but he was not comfortable spending money that the city doesn't have. He said he was especially troubled considering that it was based on forecasts that the economy will have a turnaround, something he's been told for the past three years.

"You can't work on assumptions," Purcell said. "We have to make decisions on what we have at hand. ... They deserve the money, but can we afford it as a city?"

Purcell said holding off on the raise until more money became available was financially sound and would bring the deficit to a more manageable $130,000.

Purcell also pointed out that two-thirds of employees would get merit raises. The other third is already at the top of the pay scale.

Forecasts are good

But Councilman Hugh White said the council should wait to see what happens with the economy and should approve the budget without drastic cuts, especially cuts for city workers who already are paid less than those in comparably sized cities.

"Usually in a budget crisis, employees always seem to pay the price," White said.

Mayor Jay Knudtson agreed, saying that economic forecasts are good and pointing to the $425,000 safety net the council has in emergency reserve accounts.

"I don't think we're at the point where we have to make drastic cuts yet," Knudtson said after the meeting. "We're all very much aware of what's at stake. That's why we've set it up where we can come back later and see how it's going. If things aren't what we hoped, we can make adjustments."

Knudtson said at some point, it has to come down to trust -- in this case, trusting the city's budget team and its recommendations. He pointed out that there are four new members on the council -- himself, Evelyn Boardman, Marcia Ritter and Charlie Herbst -- and it would be unfair to expect them to fix the shortfall immediately.

"The budget shortfall is so close, and we have enough in reserves to cover it," Knudtson said. "And as far as employee raises, I'm struggling in my own mind on the message that sends."

Councilman Matt Hopkins said it was important to him to keep the city employee salaries competitive. He said that the council can look at cuts later if things don't start getting better.

"But I'm optimistic," he said. "If the economy goes OK, it won't have to come to that."

The first-round approval came after a public hearing on the budget. No one spoke at that hearing.

335-6611, extension 147

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