No pay raise for Logan employees due to Coronavirus

Mayor Holly Daines told members of the Logan City Council that the city's budget for the next fiscal year will be uncertain until September when sales tax revenue data is available from the state of Utah.

LOGAN – Although much of the City of Logan’s financial future remains murky, Mayor Holly Daines said that a planned pay raise for city employees is definitely no longer in the cards.

That announcement came during the mayor’s annual budget message to members of the Logan City Council, which focused primarily on uncertainty about city’s financial status in the next fiscal year due to the negative economic impact of the Coronavirus.

“One of the changes that we have had to make to the next budget since March impacts employee wages,” Daines explained. “We had planned for a three percent wage increase for our employees next year.

“However, since our revenue forecasts are down, we will help our employees by moving deferred income to current income. Instead of contributing 2.5 percent to their 401k’s as we normally do, we can add that amount to their salaries. So, they can choose whether they want extra income now or continue to put that money away for retirement.”

The reason for that and other planned belt-tightening measures, the mayor added, is that Logan’s general fund revenues are expected to be drastically reduced due to the economic shutdown during the ongoing Coronavirus outbreak.

“To give you an insight into our concerns, of our General Fund revenues, $2 million comes from property taxes while $11 million comes from sales taxes,” Daines said. “Grocery stores still seem to be doing okay during this crisis, but I don’t have to tell you that most retail sector businesses have been negatively impacted since mid-March.”

Cache Valley’s restaurant and hospitality industries have been particularly hard-hit by the cancellation of major events (like the Utah State University commencement and the SummerFest Arts Faire) and tourist attractions (like the Utah Festival Opera and Lyric Repertory Company theater seasons). The cancellation of the USU Summer Citizen Program alone is expected to reduce local economic activity by more than $4 million this summer.

“With the way that sales tax revenues are remitted to us by the state,” the mayor said, “we likely won’t have a good idea about those numbers until September.”

While she acknowledged that the city’s current budget for Fiscal Year 2020-21 is based largely on guesswork, the city council is required by law to approve the financial plan by June 22.

After that, city employees will have to hedge their bets by carefully managing their financial accounts until more concrete fiscal projections are available in the fall.

“We will proceed with caution by delaying some capital expenditures – like rolling stock – during the first part of the next fiscal year,” Daines said.

But other expenses — including maintenance expenses, utility costs and a nine percent increase in health care insurance premiums – cannot be deferred.

“In summary, this will be an unusual year and we may be impacted for some time to come,” Daines concluded. “But we are confident that we can continue to provide essential services and operate the city well during these trying times.”

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1 Comment

  • Mr. Jones May 6, 2020 at 9:50 pm Reply

    This is very unfortunate. City Staff are always essential employees who provide exceptional public services during pandemics. These employees interface with Logan’s general public to carry out the Mayors mission, vision, values and goals to resolve complex land use issues, repairing critical infrastructure failures, determining financial relief to those who are impacted by Covid-19, and they continue to do so while providing exceptional public service during unrepresented times. Hang in there Logan City employees! As I was once a resident of Logan, a tax payer… I open heartily appreciate all that you do. Keep in mind, the beautiful image of our US Constitution is that it permits provision for tax payers to shed a new light at election time. God Bless you All for all the hard work you do! One Love. America!

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