Shelby Township 2012 general-fund budget faces $400,000 deficit

By: Brad D. Bates | Shelby - Utica News | Published December 10, 2012

SHELBY TOWNSHIP — Township Supervisor Richard Stathakis cited continued losses from the township’s primary revenue streams as one of several reasons that the community’s budget ran a general-fund deficit for the first time in his tenure.

Stathakis reported that the final 2012 budget, which was adopted at the Dec. 6 Board of Trustees meeting, would leave the general fund minus $408,078 from where it was at the end of 2011.

The general fund, which does not include budgets for the township’s Police Department, Fire Department or Department of Public Works, was $10,125,819 at the end of 2011, and it heads into 2013 with a balance of $9,717,741.

“The important thing to see here is we are on a downward slide, as far as revenue is concerned,” Stathakis said, highlighting a chart that showed a drop in revenue from its mark of $15.8 million in 2011 to $14.7 million in 2012.

Stathakis explained that, even though the township saw a boost in shared revenue from the state and federal governments following the 2010 census, the shared revenue was dipping from a high of roughly $6 million in 2011 to $5.5 million in 2012.

He also showed that local tax revenue had similarly declined from more than $4 million in 2009 to less than $3.5 million in 2012.

“We are hoping that in 2015 and 2016 that it remains flat, and we are hoping that in 2017 we might see a half percent or 1 percent increase,” Stathakis said of the forecasted dips in shared and tax revenue that account for roughly 60 percent of the township’s overall revenue stream.

“So if you’re getting the idea that it’s not looking good ... as far as revenue is concerned, you’re right,” Stathakis added. “But the good thing about that is the (Board of Trustees) knew something like this was coming down. We’re well-prepared for this.”

Along with a loss of $1,021,221 in revenue, the township’s 2012 expenditures went up by $456,866 between 2011 and 2012.

“Right now, we’re showing about a $400,000 deficit, but some of that is prepayment we had to make for Van Dyke,” Stathakis said of the effect early payments for future road projects had on the 2012 budget.

Along with the road projects, Stathakis said the general fund took a one-time hit in 2012, as roughly $2 million was transferred to a capital improvement plan, which will be used to address township infrastructure needs.

“We will work with our department heads to define their needs,” Financial Management Director Kathleen Moore said of the plan. “And then, with the help of the township engineer, we’ll evaluate township facilities, like parking lots and buildings, and see what are the most pressing needs.

“What we need to have on our radar is, if a roof is 30 years old, we’ll need to buy a new roof in five years,” Moore added. “So, in five years, we need to have that money available.”

Stathakis said that while 2012 was the high-water mark for expenditures during his tenure as supervisor, it was still below the budget he inherited after winning election in 2008.

And he said that the continued cuts in expenditures from then until 2012 created a surplus so the township can weather its current deficit.

“I want you to keep in mind that in 2008 … the expenditures were actually $16 million,” Stathakis said  “In 2009, the first year this board took their seats, we actually had a budget surplus.

“We started with a fund balance in 2008 of about $7 million, and we have brought that up by about a million dollars a year,” Stathakis added.

That is one reason Stathakis said he believes the township can remain true to its commitment to not raise local taxes.

“The pressures to cut spending and balance the budget have been and will continue to be intense,” Stathakis said. “Even with the declining revenue in the general fund going through 2016, though, we are committed to no increases in taxes.”