ALPENA - City staff presented the preliminary 2014-15 budget to Alpena Municipal Council during Monday's meeting, and as in years past it is looking at a significant deficit that will have to be made up via fund balance funds.
In order to balance the budget council will have to approve using approximately $655,000 from the fund balance, which currently has about $2.5 million in it, or 27.34 percent of the general fund. If all $655,000 is needed to balance the budget, the percentage could drop as low as 18 percent.
Some of the proposed expenditures in the budget include 1.5 percent wage increases for department heads, $40,000 to Target Alpena, $14,500 for the Huron Humane Society and $7,500 for the Huron Undercover Narcotics Team.
Mayor Pro tem Shawn Sexton said a declining tax base due to a drop in property value and a loss in personal property tax are the culprits behind a decrease in revenue that led to the deficit. He said even at 18 percent the city's finances would be healthy, but things would have to be watched even closer. He said the union employee have received an increase in pay and as a way to make things fair, a raise for administrative staff is justified.
"The department heads don't have the quite the same negotiating power as the unions do, so this is a way to kind of make up for concessions they have already made to balance things out a bit," Sexton said. "I feel it is fair, but it is something we will continue to look at during the budget process."
City Manager Greg Sundin said as the fund balance shrinks, the city will need to tighten its belt, particularly is 2015-16. He said the city will have to continue to find ways to increase revenue, or tougher decisions will need to be made in years to come.
"We cut the fat years ago and are now cutting the meat. Soon we will be cutting into bone," Sundin said. "For the city, bone is people. We're OK for this fiscal year, but next year could be very challenging, in terms of wages and people."
Councilwomen Susan Nielsen said investing in the workers is key to the city moving forward. She said she is for the raises and people need to realize decisions made by council, such as the increased water rates, aren't being used for wage increases.
"It is a given that they work hard, they have tough decisions and it is a job that takes a certain education and takes a certain kind of person who is willing to give extra hours and put up with the stress," Nielsen said. "We can't co-mingle funds. Just because water rates go up doesn't mean we can use that money to pay our workers. It is also not efficient to continue to have to have our workers work and for us to pay more and more overtime as well. We have a great staff and we are fortunate to have them."
The city will host a public hearing on the proposed budget before the next council meeting on May 19.
In other business:
* United Water Operations Manager Mike Glowinski updated the board on the toll the harsh winter has had on its finances. He said frozen pipes and water main breaks are expected to cause an overrun in its maintenance budget.
* the council voted to accept a Michigan Natural Resource grant that will be combined with local donations to build a trail-head on Woodward Avenue.
* Assistant CIty Engineer Steve Shultz updated council on viewership of the city meetings on YouTube. He said on average 15 views of the meetings take place. He recommended to council the city continue to post the meetings and advertise their availability for another year in an effort to boost views and subscribers. Shultz said currently the city's channel has only three subscribers.
Steve Schulwitz can be reached via email at email@example.com or by phone at 358-5689. Follow Steve on Twitter ss_alpenanews. Read his blog, Upon Further Review ... at www.thealpenanews.com