BERLIN – Employee raises, the cost of special events and a potential tax increase dominated a budget discussion in Berlin this week.
Mayor Zack Tyndall and the town’s council members met Monday to review the proposed general fund budget for fiscal year 2023. A common refrain among department heads was the need for pay increases for municipal workers.
“I know everybody agrees with me and I’m probably putting my head on the chopping block but we’re never included in that process until this year,” Planning Director Dave Engelhart said. “We have to wait until the end and wonder if we’ll get antyhing. We get to the end and the cookie jar is empty and all we got to do was stand around and hope.”
Though the town’s proposed budget initially included a $462,000 shortfall, modifications in recent weeks dropped the deficit to roughly $280,000. Town Administrator Jeff Fleetwood said that despite the figure the town was in good financial position. In 2019, Fleetwood said the town had $16,000 in unrestricted funds. In 2020 that grew to $1 million and in 2021 increased to $2.9 million. At that point the town was able to move $1.9 million to reserves.
“I think we’re doing good,” he said.
He said he supported the budget requests presented by department heads.
“Employees are the number one resource of this town,” he said. “But this number one resource also needs the things to do their jobs. We also want be competitive with our surrounding employers.”
Police Chief Arnold Downing said he was struggling to find officers and as a result had increased the department’s proposed overtime budget. Despite a 9% police pay increase three years ago, salaries at the department remain low compared to those of other area agencies.
Mayor Zack Tyndall suggested hiring public safety aides or retired officers. Downing said that while that worked in Ocean City during the summer, when aides supported the array of resort officers, it would not work in Berlin. Often, only one officer is on duty.
“It’s not something we would even think about doing,” he said.
As far as retired officers, Downing said he’d love to hire some but that they were in high demand. As a result, Downing is trying to attract officers who might have retired from law enforcement jobs on the other side of the bridge.
“Some of those places work 12-hour shifts and they just go and go and go,” he said. “When they come here it’s called the beach. We can go ahead and sell something in a different way than they do when we’re talking about second life or second career.”
Tyndall acknowledged that Berlin would likely still have difficulty hiring.
“I think it’s going to be very difficult for us to compete with some of the numbers people are able to associate salary wise when we look at size and available funds that we have here in the Town of Berlin,” he said. “I empathize with the fact that we are short staffed.”
Ivy Wells, the town’s economic and community development director, highlighted the cost of special events in her department’s budget and said she was considering some sponsorships. The potential downside to that is working with a sponsor will increase some costs for her department, such as marketing and advertising.
She said the town could see substantial savings with changes to New Year’s Eve festivities. When the town hosts a 6 p.m. ball drop and a midnight ball drop, staff costs are high because they’re essentially on duty for eight hours during the special event. Wells said the town could host a 6 p.m. ball drop for families and then let businesses take over late night festivities.
“We could close the road,” she said. “We’ve got a lot of restaurants and bars downtown. I don’t know that we necessarily need to do a town sponsored event.”
Following a review of the town’s projected revenues and each department’s expected expenditures, Councilman Jack Orris and Councilman Jay Knerr each presented ideas on ways to eliminate the deficit as shown. The proposal by Orris delayed a substantial amount of street paving and made use of American Rescue Plan Act (ARPA) funding. Knerr’s proposal used ARPA funding for various large capital vehicle purchases and used $109,000 of the town’s unrestricted funds.
“We have in excess of $1 million in unrestricted reserves so we can definitely afford to do that,” he said.
Both proposals included raises for staff—3% in the Orris proposal and 5% in the Knerr proposal—which are not currently shown in the town’s projected expenditures.
“There’s a common theme,” Tyndall said. “We all want to see something for our employee group. We do recognize that work, what that value is we don’t exactly know.”
He said he thought the town needed to start looking at things differently in an effort to save money. He asked officials to consider ways to accomplish what needed to be done but without passing on additional costs to taxpayers.
Councilman Dean Burrell praised department heads for their presentations.
“Someone said something about this budget that has been presented, that it’s not a budget of wants it is a budget of needs,” he said. “What you need to do your job and what you need to do your job safely with a competent staff is what I think is important.”
He also addressed the mayor’s suggestion to improve operations.
“I think there’s room for greater efficiency and effectiveness but the time is out of joint,” he said. “This is not the time I feel to have those discussions. We’re going to be striking a budget at the end of this fiscal year. I think those type discussions the mayor is talking about need to be an ongoing thing for the upcoming year. We can sit here and talk about events and sponsorships and all that kind of stuff but that time is not now.”
He acknowledged the concerns about staff salaries and said human resources were the town’s greatest resource. Councilwoman Shaneka Nichols agreed and said she was pleased that Knerr and Orris both proposed pay increases.
Councilman Troy Purnell said he liked Knerr’s proposal but would give the employees a 10% increase. He said it was great that the town had ARPA funding to supplement its budget but that those funds wouldn’t last forever.
“I’m sorry to say it but it means a tax increase or you’re going to run into it worse a few years down the road,” he said.
Burrell said the salary increase should be a policy issue. He said the creation of a step and grade system would help with hiring.
Engelhart said the town should set aside funding for employee raises, similar to the reserve funds. He also objected to the practice of equating pay increases to cents on the tax rate, as that created a negative perception among citizens. Finance Director Natalie Saleh agreed that tax increases related to a combination of factors. Like Purnell, she encouraged officials to think about the future, when there was no ARPA money. She said the expenditures presented featured a deficit even without pay increases. She said the town had to plan for the future and begin setting aside funds.
Tyndall said he would meet with Knerr and Orris to go over their budget proposals. The council’s next budget work session, which will focus on the utility funds, is set for April 11.