Murfreesboro city workers could face paying up to nearly $39 per month more for family insurance without getting a raise to cover the hike next fiscal year.

 

The proposal also includes laying off 14 workers and eliminating one part-time worker while adding three police officers.

 

The administration recommends the City Council approve the plans as part of a $98.5 million budget, which would be funded without a property tax increase.

Paying for the insurance hikes concerns Murfreesboro Fire Fighters Association President Bill Durkin.

 

"The city has yet to follow through on its past commitments to provide our members with step raises promised when times were better," said Durkin, who's been a Murfreesboro firefighter for two of his six years in the profession. "But we are aware of the current economic downturn. Any increase in tax revenue should be reflected in the promised step raises.

"We are also very concerned and will vigorously oppose any potential attempts to alter our current insurance compensation package. We look forward to working with the city on these issues."

The city will also have to pay about $730,000 more for its self-funded insurance plan, while employees' total cost comes to $150,000, Assistant City Manager Jim Crumley said.

"Nothing has changed in the long-term relationship with the city paying 80 percent of the insurance costs and the employee paying 20 percent," Crumley said.

The insurance hikes combined with no raises means the employees have less income left.

City Manager Rob Lyons recommends that the council hold off on raises until February to see if collection of Christmas sales taxes are strong enough to increase pay.

"It would be my hope that the economy would pick up steam, sales tax collections would be ahead of budget estimates and that we would be able to fund a pay increase," Lyons said.

Assistant Finance Director Erin Tucker said a 1 percent pay increase would equal $378,863; 2 percent would be $757,727; and a full step increase of 3.5 percent would exceed $1.3 million. The costs are inclusive of the raise and increased FICA and retirement costs.

The current budget year, which ends June 30, was the first year since fiscal year 1992 that raises were not provided" Lyons said. That year, the city approved an effective increase of 4.53 percent.

 

If the council wants to cover raises through a property tax increase, it would take about 1.5 cents added to the new state certified rate of $1.2703 per $100 of assessed value.

An average city homeowner with a $158,000 house pays about $502 per year with the certified rate. The bill would increase about $6 to cover a 1 percent pay increase for city workers.

It would take close to the same amount of tax increase to avoid laying off 10 full-time employees and four part-time workers, as well as cutting a vacant job in the judicial office. The job cuts will save the city about $414,174.

The city administration also proposes saving $70,000 in fuel costs by cutting back on yard waste collection from weekly to every other week. The biggest cuts involve seven full-time and three part-time workers in the Solid Waste Department.

In the early part of the budget process, the administration met one-on-one one with each of the seven council members, and they weren't interested in a property tax increase, said Crumley, the assistant city manager.

"It's the wrong time in this economy to raise taxes and raise fees to balance the budget," Crumley added. "We communicated that to council."

It's easier to attract businesses and jobs when the city can boast 12 consecutive years without a property tax increase in the coming fiscal year, he added.

"Businesses like stability," Crumley said. "It enables them to predict what their tax burden is going to be. The city has a good track record of good financial management. We have a good track record to show."

Given that revenues are sagging, city officials also talked about giving employees unpaid furloughs or offering retirement incentives, Crumley said.

 

"We recognize the value of our employees," Crumley said. "The city work is done by our employees. But in a year in which we are laying off employees, it didn't feel right to offer who was left raises."

 

The county is planning a 1 percent increase this year after two previous years of raising property taxes.

On average, the governments gave out a 1.2 percent pay increase this current fiscal year and project giving out a 1.7 percent increase next year, with only three giving more than 3 percent.

 

"Our finances just don't allow us to do that," Crumley said.

Four of the governments project to give no raises, and two of them like Murfreesboro plan to wait until later in the year to see if revenues increase, Crumley said.

One other government is anticipating layoffs, he added.

"The compensation plan doesn't promise anyone a raise any year," Crumley said. "It's budget driven."