After four years of cutbacks and concessions, the faces its toughest budget yet.
“This is definitely the worst it’s looked. But the good news is that the economy is stabilizing. We’re looking at a one percent decrease in property values,” said Mayor Gretchen Driskell. The city is banking on collecting $5,182,696 in real property taxes in 2013, down from $5,468,271.
At the same time, the city is staring at a $550,000 fix to the roof of the building and $150,000 to fix the storm drain in the Wildwood subdivision. Total general fund expenses are expected to rise nearly $700,000 in 2013.
The end result is that more tough choices will need to be made in the coming weeks.
“We’re going to have to talk about ways to generate revenues and to cut expenses,” said City Manager Todd Campbell. “80 percent of our budget is people so as we continue to cut costs that’s more burden on the employees, and that’s something we’re going to propose to continue to do. But at some point, we need to consider a balanced approach and talk about revenue generation as well.”
For now, council is working under the assumption that the police department will continue to work without a Deputy Chief. The city is also planning not to hire anyone to replace any of the four DPW workers who are retiring, which will mean the department will have just 10 employees. As well, the city office staff has been thinned by attrition as well.
Campbell said the city would approach non-union staff about continuing the wage freeze. The city is sitting down to negotiate a new contract with the Teamsters union representing DPW and other city employees. Campbell said the city might ask employees to forgo cost of living increases and longevity and merit pay increases, along with continuing the wage freeze. He said once a deal is reached with the Teamsters and non-union staff, the city would go to the police unions, who have contracts until 2013, and ask for concessions.
At Monday night’s city council budget meeting, Finance Director Lee Bourgoin suggested one option was to assess the fire millage that remains unused in the city. The idea was not well received, as council recently passed a motion to continue to pay for its share of the fire department out of the general fund.
Another option for revenue generation might be a parks tax. The general fund partially subsidizes the Rec Center, for example. Council member Dean Girbach suggested that continued financing of the program might require citizens to vote on a special recreation millage.
The city levies 13.4410 mills for operating. The maximum millage available to the city is 14.6281 mills. Over the years, the city’s millage has ranged from 11 to 17.3 mills. Because of lower property values, city residents are paying lower taxes than in the past. Bourgoin said that in 2007, the typical Saline household paid more than $1,500 in taxes for city operations. Today, that number is at $1,283. Bourgoin noted that it would take a millage increase of about 3 mills to make up the difference.
Driskell didn’t appear keen on tax hikes on residents.
“Residents are paying less in taxes. But they have less income, too. There has been a big shift in the state and we’re still absorbing it. It’s going to take more time,” Driskell said.
Instead, she suggested aggressively marketing vacant city-owned land, like the old DPW site on Maple Road. She said that the city would have to take a close look at every capital project. She also said workers would have to bear the brunt of the financial strain.
“We’re going to have to ask our employees to sacrifice more. But we need to be cognizant that there’s a breaking point,” said Driskell.
City administration and department heads have already taken one crack at the budget. The first look at the budget on March 26 showed the city’s fund balance falling from $709,391 into a deficit of 1,392,715, a drop of more than $2 million. After going over the budget with department heads, Bourgoin and Campbell have reduced the $2 million shortfall to about $600,000, with the latest budget projections showing a fund balance of $138,937.
City council will continue budget discussions at 6 p.m. Monday, prior to the regular meeting.