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What happened? That was the question some Farmville town council members asked Friday morning. How did the town go from a positive financial report in 2024 to a $1.3 million budget deficit in 2025? The answer was the same one as it’s been throughout this budget season. It’s a combination of higher costs and broken equipment needing repairs.  

The council had agreed to hold Friday’s special meeting in order to decide if they should eliminate a benefit offered to Farmville employees that don’t take the town insurance. But some council members argued that before cutting anything, they need to look at the budget numbers and understand how the deficit came about. 

Council member Sallie Amos pointed out that in the Feb. 7, 2024 work session, the council had been told revenue was up compared to prior years, the unassigned fund balance had grown to $3.9 million and the majority of the town’s debt would be paid off over a three year period. 

Flash forward a year to March 2025 and everything has changed. 

“So all of this good stuff is coming to us from a year ago and then all of a sudden in March, we’re in this budget deficit? Am I the only one who’s not seeing what’s going on?” Amos asked.

Council member John Hardy agreed that he wanted to go over the numbers before agreeing to any cuts. He had asked for a copy of the proposed budget, but it’s not ready yet. 

“For me, this $1.3 million deficit is rough,” Hardy said. “I’d still like to see where we went from sunshine and roses to a $1.3 million deficit.” 

Both members suggested that any cuts be put on hold until after they can go over the proposed budget and see what all of the town’s options are. 

“Get it out to us where we can take a day or two, compare it to last year and the year before and see where our big, big changes are,” Hardy said. 

Going over the challenges

Farmville Town Manager Dr. Scott Davis said what changed between last year and this one were rising prices for some items and the need to replace equipment, replacements, he pointed out, that town council members had agreed to. 

“There is expense so we can continue services like we have in the town of Farmville,” Davis told the council. “That’s by replacing (a) 20-30 year old dump truck, (replacing) police cars (and) a whole slew of things that you’ll see in that budget. That is something this council has committed to in the past, for us to maintain services.” 

If the council doesn’t want to make those replacements, then some of that deficit goes away, Davis said. But the problems won’t be eliminated. The dump truck will still need to be replaced, as will some police cars. And prices for those items aren’t going down. There’s also $16 million in general obligation bonds as part of the budget, Davis said. That’s to replace a ladder truck and the renovation of the firehouse, which is another item that council members had agreed to move forward with. It’s not that money has disappeared or something has changed. It’s that council members previously said they wanted to move forward with projects and the cost of those projects keeps climbing. 

Farmville council focuses on health benefit 

And that brings us back to the reason Friday’s meeting was called, taking a vote about keeping or eliminating an employee benefit. In Farmville, in the last 21 years if a town employee declined to take Farmville’s health insurance, they would be given a stipend instead. That stipend started out at $3,660 and now stands at $8,500 annually. The problem is the cost. Through the years, previous councils have continued to increase the amount of the stipend, to where it’s eating into the town’s budget. On the other hand, some council members don’t want to reach out and snatch $8,500 out of an employee’s pocket, especially if they had already planned and budgeted with it in mind.

That’s where the challenge comes in. Currently 32 employees and seven council members get the benefit, instead of taking the town’s insurance. That’s 39 total, with each receiving $8,500, adding up to $331,500. If completely eliminated, that wipes away more than one-fourth of the budget deficit. 

Amos was against eliminating the benefit. 

“As leaders of an organization, we need to ensure that our employees feel valued, supported and have their needs met,” Amos said. “This can lead to increased productivity, loyalty, job satisfaction and (we) would be foolish to think this decision today will not lose one or two or more employees.” 

It doesn’t matter that this is not listed as part of their salary, Hardy added. It’s a benefit, additional funds that might be an incentive for potential employees to choose Farmville. By taking that away, would that keep potential employees away? 

Why was this a surprise? 

Amos also pointed out that some changes in health insurance costs should have been expected. Earlier this month, the council was told they had dipped below 100 Farmville employees accepting the town’s health insurance. As a result, they fall into a different tier, one that will mean a 12% increase in health insurance costs. But that shouldn’t have been a surprise, Amos argued, since Farmville didn’t fill three positions that became vacant due to retirements and people leaving over the last year. 

“This is on us, we need to be held accountable for this,” Amos said. “We don’t need to be throwing our employees under the bus. We are accountable for this. We as a council body should have been on top of this.”  

Council member Donald Hunter said their insurance representatives should have notified the council before the 11th hour that this was coming. Each month, council members don’t ask how many employees the town has, Hunter said. The insurance agency “should have let the town know we were on the fence of not having enough employees.” 

But regardless of how it happened, the reality, council members said, is that they have to decide if it’s time to phase this benefit out or keep it in some capacity? Farmville Mayor Brian Vincent also pointed out the town has taken care of employees over the last few years, with $10,000 in raises. Also, that 12% increase in health insurance costs will be absorbed by the town, rather than passing it on to employees. 

A majority of council members decided to phase down the benefit, with Amos and Hardy in opposition. That trims down $2,500 from the benefit this year, then $2,500 next year and then a final $2,500. That would leave the stipend at $1,000 after that three year period, with eligibility to sign up for the benefit being cut off as of March 21, 2025.  

When will Farmville council see the budget?

Davis said he would present the full proposed budget in the next work session, scheduled for Wednesday, April 2. Then the council would have to take a vote on the proposed tax rate, with a public hearing scheduled for April 9.