City staff told the Mount Pleasant City Council during a goal‑setting workshop that the city faces continuing budget pressures driven in part by lower sales‑tax receipts and a draft fiscal audit that shows past revenue expectations were overly optimistic.

City staff said the prior fiscal year audit (year ended September 2024) showed weaker results than expected and that sales tax this fiscal year declined below budgeted estimates. Greg, a staff facilitator, said the city “overestimated revenue” and that staff are working to close a current shortfall: “At the first round, we’re still half a million dollars that were missing the mark,” he said.

Staff noted reserves were higher than usual because of earlier federal CARES funding; the facilitator said the CARES allocation of about $3,000,000 had temporarily increased the city’s reserve percentage. That one‑time cushion, staff said, improves short‑term flexibility but does not eliminate the structural need to align recurring spending with recurring revenue.

Council discussion and staff priorities: Council members and department heads emphasized employee retention and public safety while asking staff to seek budget solutions that minimize service cuts. A council member urged rethinking the proposed uniform 3% across‑the‑board raises to give proportionally larger increases to lower‑paid employees: “If you’re making $45,000 and you get 3%, it’s not the same [impact] as someone at $100,000,” the council member said. Police and fire leaders reiterated that retaining experienced personnel is their top priority.

Operational steps: Finance staff said departments were asked to identify line‑by‑line reductions and that a second round of cuts will be developed in the next 10 days to close the remaining gap. Staff described a three‑tier approach to prioritizing budget items. The city manager told council that the budget process is ongoing and that staff will present a revised plan as the audit and revenue picture firm up.

Why it matters: The outcome of the budget exercise will determine staffing, capital projects and services across the city. Staff repeatedly asked for council guidance on which goals to protect in the event of deeper cuts, naming public safety, infrastructure projects and core services as likely high priorities.