Council Votes to Raise Employee Pay

Town leaders are confident the funds will be available to pay for the raises despite the state's recent financial problems.

The town is expecting to receive an estimated $1.6 million in funds from a new half-cent sales tax increase and from state beer, wine and utility taxes, said Chapel Hill Town Manager Cal Horton.

The town expects to spend $478,000 of that money on pay raises Dec. 1 for all of its 500 employees, who haven't had a raise since last fall.

"I think we should avoid a year without a pay raise for our town employees to keep up with the increasing cost of living," said council member Mark Kleinschmidt.

The raise will not only help town employees keep up with the cost of living but it will also help the town recruit new employees, Kleinschmidt said.

"In order for the town of Chapel Hill to have qualified, competent employees, we must offer competitive wages," Kleinschmidt said.

"I think they've earned it," council member Jim Ward said of the raises.

Though town leaders agree the pay raises for town employees are warranted, there was some question at Monday's meeting over the availability of the funds needed to pay for the increases because of the state's financial trouble.

But town leaders are confident the $1.6 million that is expected to come from taxes is a conservative estimate, Ward said.

"I think we have addressed the issue, and the money will be there," Ward said.

"I don't believe that the amount of money jeopardizes the town relative to next year's budget."

Kleinschmidt said it is possible Gov. Mike Easley could try to withhold money from the town.

"I know that much of the money is secure," he said.

"I wouldn't be shocked if the governor tried to withhold money, but I feel that he would find other ways to balance the (state's) budget.

"He would have to face lawsuits if he withheld money."

In addition to employee raises, the council also approved $170,000 to begin the early phases of a stormwater management program.

As for the remainder of the funds, the council has not made a final determination of where the excess will be allocated, Horton said.

The council does have a list of recommended uses for the estimated $1.1 million of projected additional revenue.

Some of these uses include replacing funds drawn from emergency accounts during last year's fiscal crisis and spending $815,000 on capital improvements.

The City Editor can be reached at citydesk@unc.edu.