AboutClarkston.com

City Finances Seminar, continued

2005

2005 is the year of reckoning for the City of Clarkston. The city could continue on its current course—but not for long. By year’s end, the city’s cash reserve would be depleted. In 2006, the city would have to tap long-term savings or set a tax rate at four times the current level.

Under the administration of a new City Clerk and Financial Officer, guided by a City Council becoming more cognizant of the gravity of the situation, the city has already implemented steps to improve the budget development process. For the first time in years, city administrators appear to have properly reported non-tax revenue, giving city leaders the reliable information they need to make the tough decisions.

BUDGETED
Expenditures = 2,301,774 (+1.5%)
Non-Tax Revenue = 1,398,210
Tax Dollars Needed = 903,564
Net Tax Digest, proposed = 85,582,920
Net Tax Digest, projected historical = 89,615,850 (+2%)
Millage, proposed = n/a
Millage, if Rollback = 4.521

The City is proposing to spend 2,301,774 which, although 1.5% higher than last year’s budgeted expenditures, is $189,473 less than the City actually spent in 2004. Specifically, the current budget reduces some Council and Admin travel and education expenses and eliminates pay raises for some department heads. In general, however, it appears that there are few actual reductions in services. The improvements in “the numbers” are generally as a result of correcting previous years’ budgeting errors.

There still remains, however, a significant amount that must be funded by cash reserves, borrowing, the sale of bonds or your tax dollars.

The 2005 budget is not without its concerns—and opportunities for improvement. For example, General Administration costs are proposed to increase by $61,551, partly as a result of higher employee costs and also a higher Beverage Tax payment. In fact, employee costs are up across the board, even though some raises are being delayed.

The Public Safety budget is up slightly over 2004 budgeted, but it is lower than the PD actually spent last year. Likewise for Parks (Culture & Recreation); the budgeted amount is slightly higher than 2004 budgeted but $26,000 less than what Parks actually spent last year. The 2005 Highways and Streets budget is also higher than last year, but less than 2004 actual expenditures. All departments will need to stay within budget to avoid a repeat of previous years’ deficits.

The Solid Waste & Recycling budget has been cut substantially ($193,008 in 2004 to $148,100 in 2005), well below even what the department spent last year ($167,241).

You should plan to attend the City Council’s work session on Wednesday, April 27 at 5:30 pm. At that meeting, the Council will discuss the budget and, specifically, the adoption of the millage rate.

Next: "Paying for It" -- Possible Solutions