www.mybaycity.com January 11, 2009
Government Article 3418

New multiple application salt spreader received Jan. 8 by the city is ready to go into action to meet heavy winter snow and ice.

Budget Squeeze, Winter Woes to Confront City Commission Monday Night

Assessor to Cite Impact of 1265 Foreclosures Since 2000 on Tax Revenues

January 11, 2009
By: Dave Rogers

Old Man Winter is hitting City Hall where it hurts.

Not only is the City of Bay City facing hard times financially, a severe winter already has used up 2000 tons of salt, or 67 percent of the salt inventory for ice melting on roads.

All the howling won't be just from freezing winds, some may be coming from the commission chambers.

City Assessor Amy DeHan-Legge is expected to tell city commissioners Monday night that annual city tax revenues are down substantially because of 1265 home foreclosures since 2008.

How much foreclosures have bit into tax funds, we can only guess. Let's just say, probably into seven figures (a million dollars or more).

The finance/policy committee will grapple with budgetary constraints and will be advised by City Manager Robert V. Belleman that capital improvements may have to be postponed.

Brrrrr.....It's really chilly!!!!

Wrote Mr. Belleman in his bi-weekly general information memo that took a decidedly cautionary tone:

"Since property tax revenues are the major revenue source for the General Fund and the second major revenue source for major and local streets, I believe it is imperative that we understand the implications the increased foreclosure activities are having on our ability to balance our budget and provide the same level of services."

Commissioners will review and discuss the proposed capital improvement program for fiscal years 2009 through 2015. The city is required by state law to have a capital improvement program, the manager pointed out.

Department directors and managers have been asked to tell the commission which projects can be postponed "if revenues fall short and deficits are inevitable."

The Electric Department's capital improvement needs will be the subject of a later meeting, he said.

The three major agenda items for Monday night's meeting will be:
  • the health care program,

  • the capital improvement program, and

  • property tax revenue projections.

    Only after those items have been reviewed and discussed can the commission attempt to revise the 5-Year Financial Forecast, wrote Mr. Belleman.

    Word has come from Lansing that little financial help will be available, Mr. Belleman said. Michigan's general fund and school aid fund revenues may fall more than $1.5 billion from the 2007-8 to the 2009-10 fiscal years. News reports are that the Michigan House Fiscal Agency has said the state's already weak economy will be "significantly affected by the national recession, the weakened level of motor vehicle sales, tight credit conditions and the financial condition of General Motors, Chrysler and their suppliers."

    Reflecting energy concerns and changing patterns of home heating, the manager also will bring up the question of outdoor wood boilers.

    And, the dilemma arising regarding phosphorus in the water system may add another perplexing note to the meeting. While legislation is pending to ban phosphorus in lawn fertilizers, the city has received a recommendation to add phosphorus to the water treatment process to line the water mains and help to control the amount of lead and copper in the water.

    Meanwhile, word has come from the city barn that most of the salt on hand for winter road use has already been used up in December, the city manager wrote. A shipment of 550 tons more salt is awaited.

    The second highest recorded snowfall in December for this region was reported, amounting to about 40 inches. Typically, this area receives 48 inches of snowfall for the entire winter season.###

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