2018-01-11 / Business

Councilman says city could exhaust its general fund

BY TANYA TERRY
810-452-2645 • tterry@mihomepaper.com

BURTON — At the Jan. 4 city council meeting, Councilman Vaughn Smith presented information some people could find shocking and challenged the city council to come up with ways to prevent the city from eventually exhausting its general fund.

“What is clear is city expenses continue to increase while Burton residents’ incomes continue to decrease,” Smith said.

He said on Nov. 5, 2013 Burton residents dug deep into their wallets and approved a 20-year 6.5 mill police millage which would raise police revenues $3.4 million per year. One goal of the millage was raise the Burton police officer staffing from 29 to 36 officers.

“The city has achieved that goal,” Smith said.

Smith said an additional goal of the 6.5 mill police millage was to attain police department financial independence from the general fund.

“The city did not achieve that goal,” Smith said. “Unfortunately, the 6.5 mill police millage has not allowed the city’s police department to achieve the sought financial independence from the city’s general fund. Our most recent city budget still required our general fund to fund the police department by $500,000.”

The third goal of the police millage was to reduce the city’s pension liability. Smith said the city is achieving that goal as the city’s pension funded percentages increased to from 37 to 41 percent. Since the police millage passage, Smith said the city had with the most recent payment paid an additional $4.7 million dollars into the city’s pension fund.

Two years ago, the Burton City Council voted to reduce the general operating millage by .707 mills, resulting in a reduction of $365,000 in general operating revenues in 2016 and approximately $380,000 in 2017. Unfortunately, city expenses increased in each of these years beyond the $365,000 in 2016 and the approximately $380,000 in 2017, despite additional cuts in the city budget. The city’s general fund balance was reduced from $1.7 million to a little over $1 million.

Smith asked the council if they should continue to pay the pension plan an additional million dollars per year, bring back the .707 mills and reduce spending or continue the current course and slowly exhaust Burton’s general fund hoping increased business investment and property taxes will solve the city’s revenue shortfall.

“Our residents are paying a senior millage, their paying a 911, animal control, veterans, EMS, paramedic, school millages, police millage, fire millage, garbage assessments, county, library and summer-winter taxes and I believe they cannot be hit anymore,” said Councilwoman Tina Conley. “I’m not looking to raise anything.”

Conley, along with other council members, said a workshop to discuss this matter would be helpful.

Although Smith said since money circulates 11 times before it leaves the community, the $365,000 the residents received back due to the .707 mill reduction benefitted the community by more than $365,000, Wells said a city can’t continue to lose money and then give back money to people that don’t even realize they’re getting it back.

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