Slidell officials continued to move cautiously with city finances Tuesday night, adopting a $41.1 million budget for the next fiscal year that anticipates no growth in sales tax revenue, despite the recent opening of a large new shopping center and a slight increase in collections for the first seven months of fiscal year 2014 compared with 2013.
The budget presented by Mayor Freddy Drennan and approved by the City Council does include a small raise for employees, 1.5 percent, following changes that have resulted in less take-home pay for workers because they have to pick up more of their retirement costs — 5 percent more in 2014 and an additional 5 percent in 2015.
The raise proved controversial at Tuesday’s council meeting, however, especially when it came to the pay of elected officials.
The administration sought to soften the blow of increased retirement contributions for employees hired before April 26, 2011, by giving them an additional 5 percent raise this year.
Councilman Joe Fraught said the city’s financial picture isn’t secure enough to move so quickly. He offered a motion to reduce the 5 percent raise to 4 percent, but it died for lack of a second.
Councilman Buddy Lloyd also sounded a note of caution, saying he doesn’t think the city does enough for the workers on the lower end of the pay scale.
Councilman Sam Caruso said the city will have to monitor its finances carefully and perhaps make some changes later in the year.
“I think all of you know how conservative Sharon (Howes) is,’’ Drennan said, referring to the city’s finance director. “She’s assured me that the budget submitted to you is a flat budget ... and we can sustain it.’’
Drennan said he and the council have had to make difficult decisions, “but now we can stand here with confidence and ask you to now give some back to the employees so we stop losing them,’’ he said.
The budget passed unanimously.
Drennan said before the meeting that the city took on the retirement costs in the mid-1980s in lieu of providing a raise for employees, but the increasing costs were not sustainable, prompting the decision to pass on more of the cost to employees.
The city’s elected officials will also see an increase in their pay, but when the council took up a proposed 5.25 percent raise for all elected officials, Fraught and Lloyd balked, with Fraught saying that Slidell officials’ pay is high compared with other cities. Lloyd offered a substitute motion to set the raise at 1.5 percent — in line with what other employees are getting.
Council members are paid $18,750 for their part-time position and would have seen their pay increase to $19,734 with the 5.25 percent raise, but under Lloyd’s amendment, their pay would be $19,031.
Police Chief Randy Smith said he didn’t complain when the city cut his retirement benefit but pointed out that he won’t derive the same benefit from that because he is term-limited. “I don’t need a raise, but I also don’t need a cut in take-home pay. It’s not a part-time job that I have,’’ he said.
Councilman Bill Borchert offered a substitute motion to give the mayor and chief a 5.25 percent raise and the council a 1.5 percent raise.
That motion passed by a 6-3 vote, with Fraught, Lloyd and Lionel Hicks voting no.
Drennan will be paid $109,683 and Smith $98,715.
Sales tax proceeds are by far the largest source of revenue for Slidell, making up 44 percent of the budget. The city estimates the amount will increase by nearly $600,000 next year because of a stronger economy, and Drennan pointed to the long-delayed opening of the Fremaux Town Center in March as a positive growth trend.
Even so, the adopted budget projects sales tax revenue for the upcoming fiscal year — July 1, 2014, through June 30, 2015 — at $18.1 million, essentially the same as in 2013.
The city has rolled back its millage rates three times in the past nine years as assessed values have risen, the budget message notes, and the rate in 2013 of 26.56 mills is the lowest since 1981. The proposed millage rate for 2015 is even lower: 25.85 mills.
Fred McDonald urged the City Council to consider increasing the millage for sewerage and public works in order to address the city’s deteriorating terra cotta pipes, which he said could cost as much as $60 million to fix. Failing to do so is a lack of leadership, he said.
But council members and Drennan defended the city’s stance. Drennan said an engineering firm is helping the city recover some money from FEMA because of the damage that Hurricane Katrina did to the city’s drainage and sewerage systems. Lloyd said that until the scope of the needed work is determined, the city can’t go to the public to seek funding.
Follow Sara Pagones on Twitter, @spagonesadvocat.