The long-awaited step pay plan for Covington police and firefighters that was put on hold after voters rejected a 1/4-cent sales tax hike last fall has found new life. Covington City Council President Matt Faust said the money has been found in the budget to fund the pay plan for police and fire employees in the city.

The City Council will vote on a resolution to adopt the plan Tuesday.

Faust explained that $200,000 was spread around in the budget to repay St. Tammany Parish for over collection of sales taxes associated with the revenue sharing agreement. Faust said initially the repayment was to come from the general fund, or city taxes. Instead, the repayment will be made from those monies collected from the revenue sharing agreement, since this is where the money originally came from. This will be a payment of $200,000 a year for the next three years, then will not recur.

Both are recurring sources of revenue and will still leave Covington with $1 million for roads, bridges and drainage projects.

Another $72,000 for the step-pay plan will come from the increase fire department millage renewal, also a recurring source of income that generally increases each year.

The police department is trimming its budget by about 1.2 percent, which will save about $50,000. Gasoline costs are down by half of the estimated $4 per gallon inserted in the budget for 2009. By reducing that cost by 10 percent, $110,000 was saved.

Faust said that $100,000 was budgeted for 2009 to cover some one-time early retirement expenses. This cost is in reserve from the 2008 budget that was not spent.

Faust said the total money available for the step-pay plan is around $534,000 to fill a $480,000 annual need.

Faust said that in addition to this, the City Council was able to increase the city’s reserves by about $1.2 million from the original budget submitted by the administration.

All monies included in this budget is recurring income. Faust said even if revenue remains flat, the city would be able to fund the current increases in the year 2010.

Of course, as in any economic endeavor, additional increases will depend upon increased revenues, just like any other business.

“Should revenues not increase as they have every year for the past 17 years, we will have to make the appropriate business decision at that time that is best for Covington,” said Faust.

Mayor Candace Watkins is not as optimistic.

“I am very happy that we are giving them the increases, but this does not constitute implementing the pay plan because this money may not come back next year,” she said.

The sales tax was defeated by a vote of 2,915 to 1,297, or about 69 percent of voters, with almost two-thirds of the city’s voters casting their ballot last November. Faust opposed the sales tax, stating the money for the plan was available in the budget.

The step-pay plan will enable the Covington Police Department to hire seasoned, veteran officers at a rate comparable with their experience.

Presently, anyone hired must start as a new hire, regardless of experience. Police Chief Richard Palmisano had previously said the present pay scale made it difficult to hire and keep officers. He and Watkins had also said a change was needed to keep officers from leaving for other higher-paying departments in the area.

The City Council will meet at 6 p.m. in Council Chambers. A public hearing will be held before the vote.