Lynchburg reverses pay cut for city employees

The city has rescinded plans for a staffwide pay cut, reversing one of this year’s more divisive budget decisions just a week before it was to take effect.

The last-minute reprieve was granted by City Council on Tuesday. It affects about 1,200 employees.

Officials said they were able to nix the 3 percent across-the-board cut due in large part to the school system’s recent offer to reduce its own funding by $500,000.

The city needed about $1.6 million to restore full pay.

The remainder of that money is coming from a combination of real estate and personal property taxes, both of which are outperforming expectations.

Until recently, the city was projecting a sharp decline in personal property revenue due to the falling value of SUVs and other gas-guzzling vehicles. That drop has not been as significant as expected.

Real estate values also still appear to be strong as the city winds down the recent round of reassessment appeals. Officials originally estimated that revenue conservatively in anticipation of the appeal adjustments.

Those two changes combined are expected to yield an additional $1.2 million in tax revenue for the city.

As a result, council voted unanimously on Tuesday to repeal the pay cut and offered strong praise for those on both the city and school sides who made it possible.

Vice Mayor Bert Dodson, who had the salary issue put on the agenda for this meeting, noted the city had been going through an “emotional time” in reference to the employee protests that erupted — primarily from the public safety division — during the final days of the budget process.

The vice mayor said he hoped this would be a “healing” moment for the city. “Hopefully, it’s back to happier days,” he said.

Lynchburg Police Officer Doug Childress, president of the local police benevolent association and a leader in the anti-pay cut campaign, said this was “great” news for employees.

“I’m glad to see City Council fulfilled its promise,” he said, referencing an earlier pledge made by council to restore salaries at the earliest opportunity.

Childress said he felt repealing the pay cut would also restore employee morale, which took a hit last month when the reductions were approved. “When this first happened, everyone felt kind of devalued,” he said.

Officials are still taking a cautious approach to the budget, noting the unstable economic climate and the state’s growing budget troubles.

A second round of furloughs, similar to what was seen this year, may be needed in spring 2010 if the city suffers a reversal of fortune, said City Manager Kimball Payne.

The city took a 2½-day unpaid furlough earlier this year. The lost wages represented 1 percent of employees’ annual salaries.

Council challenged city employees to remain vigilant and continue working to cut costs in order to keep the budget balanced.

The pay restoration will be formally written into the budget at a later date, but will take effect immediately. The cuts were scheduled to begin when the new fiscal year starts on July 1.