By Jim Bloch
The city of Port Huron has adopted an overall budget of $98,421,850 for fiscal year 2020-2021, which features a balanced general fund of $27,601,888. Expenses from the general fund, which include non-revenue based operations of the city, such as public safety, is up $1,582,511 from last year. The new fiscal year starts July 1.
Council member Scott Worden accused Mayor Pauline Repp of reaching a “private agreement” to increase City Manager James Freed by about $25,000, which Repp vehemently denied.
The city council voted 4-2 to approve the budget at its regular meeting on May 26.
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Worden and council member Ken Harris voted against the budget.
Both men cited increases in the ready-to-serve charge for water and sewer service and concerns over the city manager’s salary as underlying their no votes.
Harris also mentioned his concern about a 7.1 hike in employee wages. Worden wanted to see higher contributions to the city’s pension funds.
Worden made his allegation about Repp and Freed via email after the council meeting.
Some budget highlights
Property taxes will be the primary source of revenue for the city, based on an overall millage rate of 19.9931.
The budget includes $13,604,564 for special revenue funds, such as the combined street funds at nearly $7.2 million, garbage and rubbish collection at just over $2.1 million, and $1.895 million for the city’s community development block grant fund, among others. The special revenue funds will spend nearly $3.5 million less than last year.
The budget also includes $36,303,384 for the city’s revenue generating enterprise funds, such as water, wastewater, parking, marina and McMorran, an increase of about $1.6 million from last year.
Internal service fund, which include as items as the motor vehicle fund and the insurance and tax fund, is budgeted at $18,431,964. The tax increment funds, which includes such items as four brownfield redevelopment funds and industrial park expansion fund, are budgeted at $2,480,050.
“I appreciate the productive budget work sessions,” said Freed. “I thought it was great that we were able to speak about the unknowns like the COVID activity. We don’t know what the implications are for this year let alone the next fiscal year. Having that on our radar, understanding that this is going to be a living document for the next 12 months, I think that was a great conversation to have.”
The employee wage hike
“As to the seven percent wage increase, that decision is not being made tonight,” Freed said. “Council has already voted 7-0 on our collective bargaining agreement. Labor contracts you voted for last July dictated the five percent increase plus the step. So tonight, you’re not voting on the seven percent wage increase. You already authorized that. The budget is just funding the labor contracts that we already voted for. We’re legally obligated to fund that. So unless we want to breach our labor agreements, which I don’t think we want to do, we have to pass a budget that supports our labor agreements.”
Mayor Pro Tem Sherry Archibald concurred.
“It would be very premature to breach those contracts and withhold those raises when we don’t know if in fact there will be any long term effect from COVID,” said Archibald. “We’re doing okay right now. For all we know, things will turn around relatively quickly and we won’t suffer the revenue loss that we fear.”
Freed said the union agreement represented $15-$20 million in savings for the city. To get the wage hikes, workers gave up their pensions, capped their overtime and reduced their healthcare coverage. Without those concessions, the city would be facing a dire financial crisis, Freed said.
Repp: No private agreement
In an email after the May 26 council meeting, Worden argued that the city manager’s salary had jumped from $126,525 in 2018 to $152,250 in the new budget. He claimed that there had been “no mention or action by mayor or council members as a collective body to initiate any potential increase” in the manager’s salary. He said that the city manager cannot determine his own raises.
“This type of private agreement between the mayor and the city manager completely undermines the city council,” Worden said. “It undermines the true process and equal involvement by each city council member to represent the electorate and taxpayers.”
Asked about the accusation, Repp said via email: “Scott is wrong and, as I emailed to him, I am highly offended that he would accuse me of such a thing. No private agreement exists nor would I do such an illegal thing.”
Repp addressed the city manager’s salary.
“James’ current salary is $132,900 which reflects his contract plus a 2.5 percent increase that all city employees (of which he is one) got in 2019,” Repp said. “James will get the same increase this year that all city employees are getting and that is it. He publicly stated that he was not asking for any additional raise plus he explained the reason for the $152,250 in the budget. Perhaps if Scott had showed up on time for the meeting, he would have heard the explanation (he was close to 20 minutes late).”
Worden was late enough to miss four earlier roll call votes and the bulk of the discussion on the budget.
Repp summarized Freed’s discussion of his salary in her email.
“The $152,500 is stated in the city manager portion of the budget under wages and is a ‘place holder’ in case there is a need for additional work hours for that department’s share of an administrative assistant that is shared by several departments not for James personally,” Repp said. “If the need is not there, then the money is not spent. James’ budget has traditionally been under-spent each fiscal year. This accusation that Scott has made has been denied but he doesn’t seem to want to believe it.”