City of Bay City Making Plans to Lose State Revenue Sharing, GM Plant
Five Year Financial Forecast Includes Doomsday Cash Flow Scenarios
December 11, 2005
By: Dave Rogers
GM Leaving? Tax Base Would Take Big Hit
While the Bay Area Chamber of Commerce and local officials have opened a dialogue with General Motors in an attempt to preserve industrial operations and tax base here, the city is preparing for the worst.
"We need to examine the daily services the City provides and identify either other funding sources or elimination of the services and reallocation of employees through attrition."
The above statement by City Manager Robert V. Belleman is a red alert to the City Commission issued Dec. 9.
"I am in the process of compiling data and financial information from each of the General Fund departments relative to four scenarios," Belleman wrote to Mayor Robert J. Katt and commissioners.
Three scenarios involvereduction in state revenue sharing by 25, 50 and 100 percent. "The fourth scenario includes the loss of a large taxpayer (i.e. General Motors Powertrain Facility) and its implications on the City's operations," Belleman wrote. Water and sewer departmentswould also be severely hit by loss of the GM plant, he added.
Belleman suggests as special meeting in January to discuss the potential fund losses "and the overall level of service the City of Bay City is looking to provide its residents and businesses."
The manager and assistant manager Steve Black attended a Delphi Strategy Meeting in Lansing Dec. 2 hosted by the Michigan Economic Development Corporation (MEDC). The state and many municipalities are evaluating the financial impacta Delphi bankruptcy would have. The city is making retention calls to area businesses that are currently supplying products to Delphi.
GM announced Nov. 21 that it is restructuring manufacturing operations to return the company to profitability and long-term growth. A total of 30,000 manufacturing positions will be eliminated through 2008.
While the fate of the local plant that has been a GM facility for nearly 95 years has not been announced, local sources fear that the cut of 30,000 jobs inevitably will affect Bay City over the next three years.
The company plans to achieve most job reductions through attrition and early retirements. GM is negotiating these issues with unions.###