Despite Mayor Tim Kant’s plea to give municipal employees a pay raise during the new fiscal year that starts tomorrow, the City Council adopted a budget Monday that did not include a 3 percent cost-of-living salary increase or one for merit raises.

“I would like for the council to consider the COLA increase for city employees,” Kant read from a prepared statement at the meeting. “I have a few facts that the council should consider, not a committee.”

After the mayor’s comments and a presentation by Chuck Zunk, who chaired the council-appointed Financial Advisory Committee that recommended the proposed budget, the council voted unanimously to adopt a budget with approximately $61 million in revenue from the general fund and the city’s four public utilities funds (electric, gas, water and waste water).

It was the Financial Advisory Committee that recommended the proposed budget after four meetings in August and September with department heads and other staff.

“(The) FAC made its own determinations regarding each item in the budget, sometimes accepting the department heads’ recommendation, sometimes accepting the mayor’s recommendation, and sometimes accepting a recommendation different from both the department heads and the mayor,” Zunk stated Monday.

The approved budget summary documents show revenue amounts from the general fund of $24,829,640 and expenditures of $24,774,782, and also included detailed figures for the public utilities funds, which for the first time split the water and waste water fund into two separate funds, which projected a net loss in the sewer system operations of $176,446.

During his remarks, Kant said the city’s finances are in “great shape” with city public utilities “set to make over $7 million for the year, (with) the general fund … in the black over $200,000.”

A COLA increase of 3 percent for the city’s 246 hourly employees would cost $311,542, Kant said.

“Surely with all the debate on finances, we could find an extra $300,000 for the employees,” Kant said. “Just off the top of my head, we could cover that cost by not allowing (city) cars to leave the police jurisdiction or increase rounds of golf by (one dollar).”

After the council adopted the budget, Councilman Mike Ford made a motion to add pay raises for city employees to the budget, but the motion died for lack of a second.

The city’s financial audit for the fiscal year that ended Sept. 30, 2008, offered an assessment of the city finances when it was presented to the council in March this year.

“When reviewing the city’s finances, it is important to ask if the city as a whole is in better financial condition when compared with the prior year,” the Comprehensive Annual Financial Report stated. “An indicator of the city’s financial health is whether the fund balances of the governmental and net assets of the (utilities) funds increased or decreased as a result of operating activities. Fund balances for all governmental funds, including general fund, capital projects fund, gas tax revenue fund and debt service fund, decreased by $2,673,352. (Utilities) funds net assets increased by $798,933.”

The audit noted that the city did not increase utility rates that fiscal year to offset the increased costs of utilities, and that one of the main reasons for the downward trend in revenue was the state of the economy and reduced construction projects.

During the past fiscal year, the city has increased some utilities rates and passed a local municipal sales tax, and may increase other utility rates, based on a pending electric rate study that might be conducted for the area.

In other business, the council:

• Passed a resolution that requires certain non-budgeted expenditures be reviewed first by the Financial Advisory Committee before being submitted to the council. The FAC will analyze and make a recommendation to the council regarding the proposed expenditure, according to the resolution, which provides that such requests can be considered immediately by the council without the committee’s prior review under emergency conditions.

• Adopted an ordinance that eliminated a health insurance benefit for city employees hired after Jan. 1, 2010, regarding insurance benefits for certain employees between the time they have have retired and before they become eligible for Medicare. For current employees, the city pays all but 10 percent of the premiums to maintain the insurance on those former city employees.

• Approved payment of appropriations for the Eastern Shore Chamber of Commerce’s Blueprint for Tomorrow project in the amount of $35,000, and to Ecumenical MInistries Inc. and Baldwin County Economic Development Alliance, each for $10,000. Those amounts had been approved by the council during the past fiscal year, Councilwoman Debbie Quinn said, and the amounts paid would be included in the past year’s budget.

• Approved the mayor’s hiring of an executive secretary at the initial salary of $35,000.

• Delayed consideration until the next council meeting on two ordinances concerning noise and sale of alcohol in the city’s police jurisdiction.

• Heard from Kristie Street who objected to the council’s proposed use of $25,000, which was included in the FY 2009-2010 for a feasibility study to consider splitting the city’s schools away from the county’s public system in order to form an independent private system.