City employees will get about $3 million more in salaries and benefits under Mayor Ellen O. Moyer's proposed budget, far outweighing any other increases in operating expenses.
"The people in the city deserve to have public servants paid consistently with the private market around them," Ms. Moyer said. "This is a city that expects high standards."
The proposed increase for salaries and benefits would eclipse the overall $2.5 million growth in the budget, which has corresponding decreases in everything from supplies to education and travel.
Ms. Moyer's proposal raises general and special fund spending to $67.8 million in fiscal 2009 from $65.3 million in fiscal 2008. The fiscal year starts July 1. Unlike the capital budget, which is mostly financed from debt, the general and special funds are made up from resident and business money - everything from property and income taxes to permit and parking fees.
Union agreements are largely responsible for the rise in salaries and benefits, said Tim Elliott, the director of the city Finance Department.
"This year the emphasis was salaries and didn't really leave a lot left for (increasing) operations," Mr. Elliott said, adding that personnel expenses make up about 80 percent of the budget.
Changes announced yesterday by the city Finance Committee will increase Ms. Moyer's spending plan by more than $900,000. Some changes are contingent on the Anne Arundel County Council adopting a hotel tax increase from 7 percent to 10 percent, which would increase city coffers by $750,000.
Although the city was scheduled to vote on the Finance Committee's recommendations and the full budget yesterday, a decision was delayed until May 19 to give the aldermen more time to study the spending plan.
The salaries and benefits picture under the committee recommendations essentially remains a wash from Ms. Moyer's plan: Net salaries go down by more than $100,000, mostly through cutting positions, but benefits go up by $150,000, with the total $3 million mark more than upheld.
Civil service employees, even those who are not represented by the American Federation of State, County and Municipal Employees, will get a 3 percent pay hike on July 1 and another 3 percent on Jan. 1. The timing of the increases, based on a four-year contract that runs through 2010, will basically give them a 4.5 percent raise, Mr. Elliott said.
In the police department, the pay scale will be shifted as the base starting salary goes up to about $43,000, he said. Consequently, officers will see a 5.3 percent across-the-board salary raise.
"Just about everything is driven by union contract," Mr. Elliott said.
For years, the city was training police officers who would quickly leave for better-paying departments and "dismally" compensating blue-collar employees, Ms. Moyer said.
"It has been catch-up," she said. "We were way low."
Alderman David Cordle, R-Ward 5, introduced a bill yesterday he said he hopes will help the city get a better handle on how negotiated labor contracts will affect the budget in the future.
The legislation would require unions to begin negotiations in the October before the beginning of a fiscal year and have them conclude by the first Monday in February to avoid retroactive pay raises and adjustments.
"In retrospect, some of the changes and raises and such (in contracts) are a mistake," he said.
Outside of salaries and benefits, the average budget expense decreases by 4 percent in Ms. Moyer's plan, said Alderman Ross Arnett, D-Ward 8.
"It is a very, very austere budget," he said. "The days of milk and honey are drawing to a close."
He said eventually the city will be faced with a problem: To continue with salaries that are difficult to afford, or lower them and risk losing employees who act as Annapolis' service providers.
"The day is now here that we're really going to have to start ratcheting down on the pay for our employees," Mr. Arnett said. "It is a real dilemma."
