Budget discussions can be tedious and mind-numbing but they are necessary. In three 90-minute work meetings in April, Saline City Council discussed the details of the fiscal year 2017 budgets for operating expenses and capital improvements.
City Treasurer Micki Jo Bennet and Deputy Treasurer Joanne McDonough provided the intricate details, assisted by City Manager Todd Campbell. Representatives of the “big three,” the three city departments that use the most money, were Jeff Fordice of the Department of Public Works (DPW), Carla Scruggs of Parks and Recreation and Sergeant Jay Basso of the Saline Police Department.
Campbell noted that for the first time in a few years, the city’s projected expenditures (for fiscal year 2017) exceed their revenues. The gap is $249,000. Reasons for lower revenue include an increase in state mandated personal property tax exemptions, and reduced state revenue sharing. New expenditures include a one-time cost for the Michigan Avenue Streetscape Project and the increased annual cost of fire protection.
The EMPP, eligible manufacturing personal property, is part of a phased loss of property tax revenue. This reduction was significant. The personal property tax loss for fiscal year 2017 is $264,765 or about nine percent of personal property revenue.
Bennett emphasized that the proposed budget has been pared down as much as possible. For example, they capped cost of living increases for city staff. Members of the big three were urged to defer purchases wherever possible, but there are limits to how long this can go on before problems start piling up.
There is also some positive news.
The state has said that it will compensate the city for lost personal property income, though it will not make up for the total loss. City officials have been setting aside funds from repayment of a loan to the Sauk Trail project to help finance the streetscape. Recent passage of the county E911 millage will save the city about $180,000 in equipment costs for the police dispatch center.
Projected revenue for fiscal year 2017 is $8,856,202, about 66 percent of which comes from property taxes. Expenditures will be $9,105,885.
The cost of fire protection for the city will go up by $68,000 because the department had to hire three more fulltime firefighters. The city could pay for this increase by levying a millage of up to 1 mil, a contingency that was approved by voters many years earlier, but council is leaning towards taking the money from the general fund.
DPW Director Fordice presented a list of items to be purchased by the city. First on his list was a police patrol vehicle. The city policy is to buy one each year to keep the average age of the fleet no more than four years old.
Similarly, the DPW tries to keep the maximum age of its other vehicles to a prescribed minimum, e.g. 12 years for trucks, but some vehicles are older.
DPW needs to replace a 1974 tractor used for maintaining roadside ditches and shoulders and for leaf pickup. They will also purchase a Steiner, a small tractor with various attachments that can be used for plowing snow in smaller areas and for mowing in the cemetery without plastering grave markers with grass.
They will obtain a small bucket truck to use in servicing streetlights and banners downtown without obstructing traffic. They will also buy or renovate various other pieces of equipment.
Other expenses include a new arrow sign to help direct traffic during the Michigan Avenue project and replacing the roof of the salt barn. The total DPW budget is around $170,000, not including the police vehicle.
Besides a new vehicle, the police department will be renovating its dispatch center. Sergeant Basso described the proposed facility which will include state of the art electronics (existing 911 equipment is from 1991) and will also improve ergonomics and give the area a more professional appearance.
The cost of renovating should be under $100,000, after the county contribution.
Parks and Recreation Director Scruggs presented the budget for her department. She started with positive news about several grants they have received recently amounting to about $67,000.
She also gave a positive outlook on future revenue for the department. Memberships are increasing and the number of rentals for parties are also up.
She announced the official anniversary celebration of the Recreation Center which will be on June 12 from 1 to 4 p.m. There will be speeches by dignitaries, hotdogs cooked by the firefighters, art projects by Two Twelve Arts and many free fitness activities both inside and out.
She also listed a number of needs. One is repairing the roof of the Rec Center which seems to have almost blown off on March 17. The temporary fix has been to weight it down with sand bags, but a more permanent solution will be needed soon.
The center will also need to replace a number of items including ADA door openers, the pool entrance doors, the pool deck and variable air valves. They will also initiate phase II of the parking lot repairs.
A new parking area and path in Saline’s newest recreation area, Salt Springs Park, is also on the list for this fiscal year.
The cost of capital improvements was also reviewed by city council. The item of greatest concern is street repair.
Several streets in the city are in need replacement and many more will need work in the near future. State legislators have not been able to provide anything close to adequate funding for roads, so the county passed their own millage request last year which continues into this year.
The county millage will provide about $188,000 to the city of Saline this year and for four more years if the millage is renewed in August. Yet this is still inadequate.
Fordice says that by 2020 the city will still need an additional million dollars to keep the roads in a decent state of repair. Council discussed the possibility of borrowing through a municipal bond or asking tax payers for an additional millage.
Since the city is still paying on loans from previous road repairs, they were reluctant to go that route.
“We should not bond for a longer period of time than the roads are going to hold up for,” said Councilman David Rhoads.
Rhoads also suggested that the city could invoke the millage for the fire department to pay for them, thereby freeing up money for roads. Councilman Dean Girbach disagreed, calling that a “shell game” and arguing that a specific millage for roads is needed.
“My hope is that whatever we do will be put to the voters,” Girbach said.
The consensus of the board finally went with Girbach. However, Councilman Jack Ceo warned that there are rumors of more new millage proposals coming from the county.
The other major capital improvement expense for city is the sewer system. The renovation of the sewage treatment plant is being paid through a loan, but the city will have to pay about $200,000 a year for a long time to pay it off.
Of more immediate concern is the unexpectedly high cost of a new sewer main as part of the Michigan Avenue renovation project. It was estimated that this would cost about $230,000 and it will instead cost in excess of $700,000.
This cost increase can be paid for by a significant jump in what customers pay for sewer. This could be done with a large increase this year or a smaller increase spread over two to three years.
Council members Janet Dillon and Linda TerHaar promoted paying it off now, but Girbach and Rhoads argued for spreading the payment over more years. Council finally agreed to ask the auditors their opinion and abide by that.
Budget questions are complex. Citizens requiring more information should contact the Saline Treasurer’s Office.