"Prosperity Agenda" Outlined for Bay City by Michigan Municipal League
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According to City Manager Robert V. Belleman, the electric and water departments combined lost about $1.2 million last year.
Even as the City of Bay City was revealing it is about $150 million in the red in retiree health care, the Michigan Municipal League (MML) was unveiling an ambitious "Prosperity Agenda" for cities.
MML on Tuesday called for a return of revenue sharing from the state, a move that could pump much needed funds into Bay City and other municipalities in the tri-county area and across the state.
"In the past seven years the Legislature has slashed statutory revenue sharing by more than $3 billion without lifting the service requirements local governments are expected to meet," the league said in its agenda.
Federal stimulus funds should be used to restore local infrastructures first, the league advised. An estimated $5.6 billion is slated to come to Michigan and mid-state communities are already lining up for their shares, according to reports from Lansing.
Pointing to deteriorating roads and bridges and water and sewer systems in communities across the state, MML called for the state to send federal stimulus dollars to local communities.
"Addressing those projects first will create thousands of jobs, encourage business investments, reduce pollution and improve energy efficiency in communities with aging infrastructure," the league states.
The $150 million is the amount of unfunded liabilities in the Bay City retiree health care department.
Meanwhile, although the $133 million city budget is balanced, services are stable and taxes at 19.5503 mills remain the same, finances are not what they should be.
The city levies 15.4615 mills for general operations, 1.5 mills for street assessment, and 2.5888 for debt service.
For instance, according to City Manager Robert V. Belleman, the electric and water departments combined lost about $1.2 million last year.
The light department, that should be a "cash cow" for the city, lost more than $900,000 despite revenues of about $30 million, the city's auditors reported Monday night.
Nearly all the city hall offices were over budget, including the city manager, assessor, clerk, payroll, accounting and accounts receivable, according to the audit.
Meanwhile, the city is having to subsidize the following budgets in the following amounts: fire awareness fund, $101,049; community policing, $36,831; Oak Ridge Cemetery, $58,305; and James Clements Airport, $34,641.
The sewer department was the only area in which a surplus was recorded -- amounting to about $1.5 million on revenues of $12.4 million.
By billing property owners' insurance companies $500 for each fire, previously unrealized revenue of $28,925 is estimated, according to the city manager.
Public safety remains a significant cost in the budget at about $12 million a year, the city manager said.
"No community can prosper without adequate police and fire protection, without clean drinking water, without sound infrastructure like roads and bridges, without recreational opportunities and culture," MML stated.
The biggest costs for local governments are police and firefighter wages, MML said. State law currently does not foster local government efficiency, the agency said. In a typical collective bargaining impasse, a state-appointed arbitrator has final say on wages of police and firefighters.
"The arbitrator does not have to base the decision on whether a local community can afford to pay the settlement, local community finances, staffing or other priorities a community may have," the agenda states.
"The result is often fewer dollars for new police officers and firefighters or other key community services, and can even result in layoffs." MML called for guidelines to enable local governments to effectively distribute limited funds available.
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