The Orchard Lake City Council has approved a Fiscal Year (FY) 2011-12 budget that calls for maintaining the status quo on suspended programs and refrains from dipping into the city’s fund balance.
The council’s approval came following a public hearing on Monday, May 16.
“City Council does not want to take from the fund balance since at one time it was as much as 40 percent,” said City Clerk Janet Green. “We’ve been spending that down, but during financial difficulties that’s what it’s here for — to have that resource. But 20 percent is as low as council wants to go.
Currently the city’s fund balance is at 17 percent of the current budget’s total.
“The current year anticipated balance is 16.8 percent and the proposed budget would improve that to 17.43 percent,” Green said.
The beginning fund balance for the 2011-12 budget, as of June 30, 2011 — the end of the current fiscal year — is projected to be $391,688, and by the upcoming fiscal year ending June 30, 2012, it’s expected to remain nearly the same.
This will be the fourth year the city has suspended street improvements and the Green Vision program. About $218,000 will be spent on roads during the new fiscal year, which includes plowing and routine maintenance, but there will be no new resurfacing projects.
“Program cuts from prior years will not be restored but, at the same time, we will not be making deeper cuts,” Green said.
Adjustments were made to salaries in all departments reflecting retirement, staff reductions, pay cuts and new responsibilities.
“All employees except the police department have agreed to a 2.5 percent pay cut,” Green said.
While there were no pay reductions or increases for police personnel, there were modifications to staffing and seniority adjustments, including compensation for one sergeant position.
Total operating revenues for the city are expected to exceed $2.35 million. Most of the city’s revenue comes from property taxes, which is pegged at $2 million for the new fiscal year. Other revenue sources for the General Fund include $146,800 in state shared revenue and $122,500 from miscellaneous sources.
Estimated expenditures, also pegged at $2.35 million, reflect a balanced budget. The bulk of the expenditures are for police services ($718,670), Department of Public Works services ($145,405), and general operations ($671,215).
The general fund budget includes a $50,000 transfer to the Retiree Health Care Fund, which is almost half of the cost of providing this benefit for the fiscal year.
“This will force spending 50 percent of the Retiree Health Care Fund balance in the 2011-12 fiscal year and an increase in funding will be necessary in the 2012-13 year,” Green said.
The new budget also accounts for an increase in tax tribunal expenditure refunds as recommended by the city assessor and an increase in City Hall maintenance since new Police Chief Joe George requested security enhancements.
The debt service fund continues to decrease each year. Debt service for sewer and water projects and the Nature Sanctuary is projected at $1.98 million compared to $2.21 million last year.
The budget also includes raising the city’s overall millage by 0.7470 mills from the current fiscal year rate. Currently, the city levies 9.4830 mills, and the amount set for the 2011-12 budget year is 10.23 mills. The sewer debt millage will decrease from 2.756 to 2.06 mills, while the water debt millage will increase from 0.625 to 1.0 mills. The sanctuary debt millage will increase from 1.342 to 1.41 mills. The library millage has remained steady at 0.30 mills, and has so for the past nine years.
A mill is equal to $1 for every $1,000 of a property’s taxable value, which is generally equal to half the property’s market value. The owner of a city property with taxable value of $100,000 is expected to pay $1,023 in city taxes during the new budget cycle. The owner of the same property paid $948 in property taxes under the current millage rate.