Fort Mill Times

Tega Cay crunching budget numbers

A newly amended budget for Tega Cay comes at a cost.

Salary cuts. Pay freezes. Furloughs.

And a nearly depleted fund earmarked to finance city emergencies.

That's what it took to balance Tega Cay's ailing budget. But the panacea that reduced the city's contingency fund from more than $100,000 to less than $7,000 has some residents raging.

"We shouldn't have [only] a $6,000 contingency [fund]," resident Deborah Collins said. "We should have cash in hand. An emergency would wipe us out. We're better than that."

Yet, city leaders contend that the amended budget with its depleted contingency fund is the city's best move.

"It's a very realistic plan to meet some very challenging fiscal conditions," City Manager Grant Duffield said. "We as a staff have developed what we think is the very best plan to move forward."

The city's budget period runs from Oct. 1 to Sept. 30, he said.

The budget includes a mandated two-day furlough for all but four full time police dispatch employees, Duffield said. The plan also freezes salaries and removes a 4 percent cost of living raise from employees who have already received a raise this year.

The amended budget is a necessary move to keep Tega Cay from operating in the red. To stop a projected shortfall, the Tega Cay City Council gave its initial approval to the amended budget at a nearly three-hour, special called April 27 meeting. Duffield initially presented the council with a budget that included laying off four administrative employees from the city's pool of 46 full time employees, but the measure wasn't popular with the council, so Duffield tweaked other components, including the contingency fund.

"They shifted some money from the contingency rather than letting people go and short staffing us," Councilman Larry Harper said. "Everybody wanted to keep the contingency. It's just unfortunate that we had to make this decision to use this money to get us through our shortfall."

Until April 27, the contingency fund had $130,933 for city emergencies. Under the newly proposed $5 million budget, the city's emergency cash reserve goes down to $6,318, the proposed draft shows.

"We're going to have to live with it," Harper said. "We will have to look at other means."

If Tega Cay does end up facing an emergency this year, Duffield said, the city won't be caught off guard.

"We've got other options if needed," Duffield said. "We have the ability to draw from other enterprise funds in the city."

City leaders can take out a loan not to exceed $400,000, Duffield said. Officials also could tap into a reserve account that holds $215,000 earmarked for the Stonecrest development, he said.

Stonecrest, a mixed community and commercial area, was constructed as part of a developer agreement in which the developer was required to contribute land or a cash donation. The developer elected to give a monetary donation, hence the $215,000, Duffield said. The project is still under construction in some areas.

City leaders also could draw funds from the city's beach and swim center, he said.

Another option includes pulling funds from the Tega Cay Utility Department, Duffield said. But there's a problem with that game plan: TCUD owes the city's general fund $338,474 and is expected to make a $90,000 payment late this summer, Duffield said.

Another safety net is revenue generated from the city's business license fees.

"We still have one big unknown. That's our business license fees." Councilman Les Conner said of a projected revenues stream of more than $600,000, according to estimates.

"We don't know what that number's going to be."

And that's the problem.

"Our budget amendment is based on us getting that revenue," he said.

Still, Conner didn't find fault with the proposed budget.

"I'm satisfied with where we are today," he said. "I'm satisfied with waiting on the business revenue to come in."

While leaders contend that they may have to amend the budget this summer, Conner expressed concerned about the depleted contingency fund.

"I'm willing to take that chance right now," he said. "A contingency is in the fund for unexpected expenses. That's what we done. We've taken the contingency and used it for the shortfalls in the budget. I'm not sure that a contingency fund of $6,000 or $20,000 at this point and time makes a difference because anything that might occur will be more than $20,000."

That's why residents such as Stephen Perkins say the city should maintain a contingency fund.

"I'm not in favor of the city getting to a point that they have no money," said Perkins, a former Tega Cay council member. "It's a shame. Over the last few years, we've spent a lot of money. As a result, we're in the position we're in. I don't think the council has addressed putting away for a rainy day. At this point, they can't afford to."

Perkins said the council should have left the contingency fund untouched and taken other measures to bring the ailing budget in line.

"They needed to make more drastic cuts," Perkins said of reducing the city's workforce.

City leaders also could redline previously approved purchases, he suggested.

"I would cut anything that they have outstanding to purchasing orders to any work that they can get away with not doing," he said.

A tax increase -- a form of revenue the city hasn't seen in years -- also is an option, he said.

Collins disagreed.

"I don't think the city needs a tax increase when we haven't cut personnel," she said.

Cutting an undersized staff isn't an option, Duffield said.

The "council realized that the city operates with a very limited staff," Duffield said. "To reduce staff further could possibly impede our ability to provide quality services."

Yet, Perkins said, trimming the staff and implementing a tax hike will help get Tega Cay's budget back on the right path.

"They needed to find deeper cuts while they had a contingency buffer," Perkins said of city leaders. "By the time they know where they are with the business revenue license fees, they will have to take even more radical cuts."

Collins, a local realtor and broker, suggested one quick fix for what ails Tega Cay.

"It's time to clean house and start over," she said.

But for now, revenue uncertainly coupled with the potential need for a third budget amendment has left Collins feeling as though budget woes are the beginning of Tega Cay's demise.

A second approval on the budget could come in a special called council meeting or at the council's next regularly called meeting on May 18.