Bay City Mayor, City Commission to Peer Into Financial Crystal Ball

General Motors Plant Adds $2.4 Million to City, Local Governments, Schools

November 23, 2008
By: Dave Rogers

Bay City Mayor Charles Brunner and the City Commission will look the city's financial future in the face Monday night.

Brunner, who made the front page of the Wall Street Journal on Nov. 10, complete with line drawing of his face, about the city's scrapping of the City of Lights because of financial strictures, will preside at a session that could paint an even darker picture.

"Mayor Brunner Sings the Bay City Blues," croaked the headline in the nation's premier business publication. Brunner was not that happy about that kind of coverage but at least Bay City made front page.

Meanwhile, back at home the city's finance and policy committee Monday night will be spotlighting the five-year financial forecast that appears to have few bright spots.

Mayor Brunner recently returned from a trip to Washington to see the elephant, as the saying goes, and a few donkeys as well.

He was part of a contingent of Michigan mayors descending on Capitol Hill to lobby for a loan package to the auto industry.

Few lawmakers, either Democrats or Republicans, were in their offices and available for arm twisting, he reported to the news media. But the mayor distributed a letter stating the cost of rejection of the auto aid.

Not only the Big 3, General Motors, Chrysler and Ford, but communities and their people will suffer if the automakers go out of business, the letter states. Jobs and tax base will be affected, he stressed, estimating that the loss of GM PowerTrain would cost the community about $2.4 million, including $1.4 million to the city.

Brunner would like to see top auto company management take some pay cuts, noting that GM chief Rick Wagoner received about $15.7 million in total compensation last year.

The outcome of the lobbying trip is still in doubt, Congress having delayed a vote on the auto loan package until early in December.

GM has already responded to Congressional criticism, scrapping two corporate jets and planning other cuts in travel costs. But no announcement about pay curtailment has yet surfaced.

But without a positive outcome in Washington, problems at the city and local government and schools level will be much more serious.

Major agenda item for the Monday, November 24 City Commission Finance/Policy Committee meeting is the 5-Year Financial Forecast.

"This is the document which contains the 5-year forecast for all funds, that we will take the time to review during this segment of Monday's meeting," wrote City Manager Robert V. Belleman to the commission and city officials. "This document forecasts where each of the City funds will be for FY 2009 forward through FY 2013. A future Finance/Policy Committee meeting will be dedicated strictly to examining property tax revenues projected over the next several years as a result of the housing foreclosure crisis as well as the overall housing market in Bay City, said Mr. Belleman.

"This particular issue will have major impact on our ability to maintain the level of services that we currently provide and our ability to undertake capital improvement projects or authorize capital expenditures which rely on property taxes as a primary funding source."