The Gilbert Town Council decided against the voluntary 3 percent pay cut the town's unions suggested in April to help balance the budget, instead pulling more than $8 million from savings funds.
Council members made the decision last week to decline the pay cut, estimated to save the town $1.8 million. The pay cut was suggested by the town's three union groups: Gilbert Police Leadership Association, Service Employees International Union and United Mesa Firefighters Local 2260, which Gilbert firefighters are a part of. That pay cut was supposed to start July 1.
An e-mail inquiry to a union spokesman was not returned Tuesday.
Councilman John Sentz said town employees have worked "pretty hard" and already have the lowest employee rate per thousand residents compared to surrounding cities.
"We just felt that employees have given and given," Sentz said. "We felt that taking money from savings accounts was a better deal."
Interim town manager Collin DeWitt outlined to the council last week funds that are unrestricted and could be used.
The money includes $2,697,000 from the Local Transportation Assistance Funds, $2,065,000 in unused General Fund Equipment Replacement Fund, $2,316,000 in unused General Fund balance, and $1,106,000 by reducing the Contingency Fund by 50 percent.
That totals $8,184,000 to balance the town's upcoming fiscal year budget.
"I'm satisfied, but not happy" with the way the town handled this year's budget, Sentz said. "I don't think we're doing the right thing by raiding the savings accounts. You can only pay your Visa card with your MasterCard for so long. We need to look for some long-term solutions."
Equipment replacement would be put off until Gilbert is able to come up with the money. The contingency fund is used for unexpected events that happen through the year. The unused General Fund balance is the result of efforts lead by Gilbert staff to reduce costs, DeWitt said at the meeting.
Gilbert had planned to use money raised from a quarter-cent permanent sales tax to help balance the budget. However, in last month's election voters shot down the tax increase that would have raised an estimated $5.1 million in its first year. The taxes were earmarked for public safety services.
Using money from the savings accounts will work for the town this year, but now council members need to figure out what to do for the 2011-12 year.
"We're heading for a cliff and we're not doing anything to put the brakes on for the long term," Sentz said. "We've got to structurally look at the way we finance the town."
Sentz, Mayor John Lewis and new Councilman Ben Cooper have been tasked with finding sustainable ways to fund the town. The three are still meeting and have not yet come up with any recommendations for the council, Sentz said.
The only other decision the council has to make for the upcoming budget is how much the fire department needs to handle overtime for the upcoming year.
At next Tuesday's meeting, the fire chief is expected to give a dollar amount. Last week, Interim Fire Chief Jim Jobusch said the department might need $1 million.
The council could fund the fire department's overtime using the General Fund reserve, DeWitt said.