Pay raises and new positions drive Myrtle Beach budget increase

The city of Myrtle Beach seeks to create 13 new positions and usher in the highest across-the-board pay increases for city employees in at least seven years.

The plan, presented on Tuesday and up for approval on June 28, raises the budget 4.2 percent from the last year. The plan means an additional $7.7 million in appropriations may be enacted starting July 1.

“Adding those positions, plus primarily the pay raises and new capital projects, are what drives the increase,” City Manager John Pedersen said.

He added that the city has been trying to make employee pay comparable to similar areas. He said compensation was one of the “main drivers” as the city wrote next year’s budget plan.

To determine how much employee pay should rise, Myrtle Beach began a study last year comparing itself to 15 other governments, including Charleston, Horry County, Greenville, Asheville, N.C.; Ocean City, Md. and Fort Lauderdale, Fla.

“No matter who you compare ourselves to, the level of work here is just not kind of a standard thing,” Pedersen said. “If you look at police calls here, we just don’t compare to other cities that have our type of economy. Our first responders answer many more calls.”

Myrtle Beach adjusted compensation so that employees would be paid more than in 75 percent of the cities and counties studied.

Michelle Shumpert, Myrtle Beach’s director of budget and evaluation, said regular city workers would receive an automatic 4.25 percent raise as a “market adjustment,” totaling $1.9 million in the budget. Employees are also eligible for an additional 5 percent increase in merit pay.

But Pedersen said that employees will generally not receive the full 5 percent, and that the $1 million allotted for merit increases does not exceed last year’s amount, when merit raises were capped at 3 percent. He said employees told him that 3 percentage points “was not really enough of a spread to reward people who are superior performers.”

In total, if a city employee who was paid $40,000 this year received a full merit pay increase, they would earn $3,700 more in the 2016-2017 fiscal year.

The city’s larger budget will also be affected by rate hikes from electricity provider Santee Cooper, which has raised rates from 4 percent to 12 percent, depending on the lighting fixture, Shumpert said.

“Basically the rest of the cost increases really deal with maintenance of our facilities and inflation, janitorial costs and supplies, pretty much like anybody has to deal with,” Shumpert said.

She added that regular customers should also expect more expensive service from Santee Cooper. In addition to rising electricity costs, Myrtle Beach utility costs will rise for families by at least $36 in the coming year. The rise, caused by a new solid waste container fee and rising water and sewer charges, could be more for larger households. Pedersen said it is “absolutely dependent on the amount of water that’s actually used.”

The new fees will pay for maintaining infrastructure and utility personnel, he said.

An additional 4 percent increase in property tax will affect second-home owners and rental owners the most, meaning an additional $24 for a house valued at $200,000.

Property taxes for those who own and occupy residences in the area are largely offset by funds from the city’s 1 cent sales tax for tourism. That tax would completely offset any raises in property tax this year for full-time residents, Pedersen said.

This story was originally published June 16, 2016 at 5:20 PM with the headline "Pay raises and new positions drive Myrtle Beach budget increase."