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July 4, 2020

City manager: Transit cuts no longer in proposed budget

SALISBURY — Stopping transit service to Spencer and East Spencer will no longer be included in City Manager Lane Bailey’s budget following a Monday budget workshop, but other parts of the budget could be the subject of new cuts after City Council members said the projected property tax collection rate seemed too high.

Bailey said the city can use some funding from the federally-approved CARES Act to ensure the continuation of routes to the towns, but it was not clear Monday exactly how long the funding could guarantee transit service Spencer and East Spencer. Parts of the budget outside of transit, though, could still see cuts because council members noted the budget’s tax collection rate higher than county government and nearby municipalities. Bailey said he would look draft options for both items and present them at today’s Salisbury City Council meeting.

The council is scheduled to have a meeting at 6 p.m. today via teleconference software Zoom — details for which can be found under the public notices section on the front page of the city’s website. The meeting will also be streamed online at salisburync.gov/webcast.

Bailey said he, City Attorney Graham Corriher and other staff members on Friday talked to representatives of the Federal Transit Administration. During that conversation, federal officials talked about how more than $950,000 in federal funding received last month could be used. Bailey was told to spend the money quickly so it was not taken back, but it’s possible to spread grant funding out past the end of this year, he said.

The city’s transit master plan says the bus route through Spencer and East Spencer costs $105,000 per fiscal year.

Bailey had proposed eliminating service to Spencer and East Spencer entirely because, among other things, neither town contributes to the cost of running the it and there are places in the city of Salisbury that do not have access to bus routes. Some council members and municipal leaders of the two towns expressed opposition to that plan.

On Monday, Councilwoman Tamara Sheffield suggested county government contribute funding to bus routes through East Spencer and Spencer.

“At what point does the county help our brothers and sisters down the road,” she asked.

Rodney Harrison, director of Salisbury Transit, said it would be helpful if county government could assist with medical trips. Harrison said a high percentage of riders from East Spencer are medical-related.

Mayor Pro Team Al Heggins asked if Bailey could draft an option that could ensure service through the end of the 2022 fiscal year, which ends June 30, 2022.

While the council did not settle on the particulars of how service would continue, Bailey stressed near the end of the meeting that he was no longer recommending the elimination of transit service.

Another sticking point during budget talks on Monday was a staff projection that the city would collect 98.58% of property taxes —  a number 2.08 percentage points higher than what Rowan County government is projecting and more than a number of nearby municipalities. It was higher, too, than the city’s collection percentage during the leanest years after the 2008-2009 recession.

Councilman David Post said the city “would be lucky” to reach 97% during the recession into which COVID-19 has plunged the country. Heggins said she agreed with Post and preferred that the city budget a more conservative projection.

But with a collection rate of 97%, the city would need to cut an additional $358,389 in expenditures. Alternatively, it could use more money from its fund balance, which is partially a savings account.

The council did not direct Bailey to make any specific cuts. Though, council members discussed options that included: hiring fewer staff members to tend to Bell Tower Green Park when it opens, delaying more projects or facility repairs, temporarily stopping repayment of a loan incurred when the city borrowed money from Salisbury-Rowan Utilities to pay for its fiber-optic network in the 2000s and legal fees for the fiber-optic network. There were other more dire options discussed such as furloughs and reducing or eliminating city payments into some 401(k) plans

Bailey said he would only look to stopping loan repayment as a last option. He said the same about furloughs. Councilman Brian Miller said altering retirement benefits would affect the city’s ability to recruit good employees.

Sales taxes are more unpredictable, and the current budget projects collections will be 3.9% lower than projections for the current budget year, which ends June 30.

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