If Lewisburg councilmen adopt a proposed $9.6 million budget as planned Wednesday, then about 105 city employees will receive a $600 bonus to be paid during the fiscal year starting July 1.
That proposed spending plan is down from about $10 million as adopted last summer for the fiscal year ending June 30. Subsequently, there will be budget amendments to deal with costs this year that exceed the current budget.
The figures were presented by City Treasurer Connie Edde. On a request from newly sworn-in Councilman Steve Thomas, the treasurer presented three ways to deal with a shortfall of nearly $459,000 in revenue compared to proposed spending.
All three were rejected in favor of dipping into reserves. The city's fund balance totals more than $4 million. However, the amount that could be withdrawn from that "rainy day fund" might exceed $750,000. That's about a fifth of the reserves. It's reaching three quarters of a million dollars because nearly $300,000 could be needed to close out this year's budget.
The alternatives that were rejected would have increased the:
* Property tax rate by 19-cents which would charge $48 more annually on a house valued at $100,000. The city property tax bill would go up from $340 to $388.
* Sanitation fee. It could have gone up by about two fifths of what's paid now. The monthly increase would be from $12.50 to $20.50, or $96 more annually. That would raise about $419,500.
* Sales tax rate. Currently, consumers pay 9.25-cents more for every dollar spent on retail purchases. The state permits municipalities and counties to increase the local option sales tax rate. That would generate $458,300 more for Lewisburg. The sales tax rate in the city might then be 9.74 cents on every dollar spent.
Increasing the sales tax requires a referendum. Councilmen appeared to agree: voters would defeat it like they voted against a county referendum on the same thing in August.
Last week, councilmen considered a three percent increase in employees' pay rates, a subject broached by Councilman Ronald McRady, according to Councilman Hershel Davis' report on the May 25 meeting. Councilman Robin Minor advocated a one-time bonus of $500. Edde sought the $600 bonus because it would mean an even $50 more per month starting in July.
The bonuses cost less and were seen as equal, or "across the board" so the percent increase for lower-paid workers would be greater than what a top salaried employee would get.
Lewisburg hasn't had a true property tax rate increase for 22 years -- since 1989. The rate is now $1.36 per $100 on the assessed value of a property. In 1989, the rate was $2.85, but it's gone down because of reappraisal. The city has adopted the state's certified rate for its property tax rate after reappraisal. The certified rate is lower so there's no windfall of revenue because property values increased over time.
The five councilmen unanimously voted for the budget as discussed Wednesday and they planned to meet again this afternoon for the second of three required votes to adopt a revenue and spending plan for the next fiscal year. The next regularly scheduled meeting of the council starts at 6 p.m. June 14.