St. Clair Shores City Council hears 2021-22 budget requests

By: Kristyne E. Demske | St. Clair Shores Sentinel | Published May 5, 2021

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ST. CLAIR SHORES — Not many changes are proposed to the operations of city government in the 2021-22 fiscal year budget, as presented to City Council members in April.

For the 2021-22 fiscal year budget, city finance officials made some changes to how funds are accounted in the city. Instead of one large utility fund, there are now water, sewer and stormwater utility funds. The golf course, Civic Arena, pool and boating budgets have now been moved into a recreation enterprise fund. City Manager Matthew Coppler said the liability insurance company covering St. Clair Shores said the city could lose governmental immunity if the recreation funds continued to be in the general fund.

“These operations tend to be the higher level of risk for the city, as well,” Coppler said during the April 26 budget hearing.

Accounting for those departments in their own fund leads to more transparency, he explained.

“People can understand how we’re spending money a lot better,” he said. “Pools drain revenue, and it’s going to be very obvious that pools are draining revenue. There is a cost to providing these services, and it has to come from somewhere.”

The budget also reallocated costs associated with information technology and phone operations into the IT budget, charging each department depending on the number of computer users in that department.

“It’s not perfect. We’re still trying to come up with some different areas where we think it’s more city-wide versus in one particular department,” he said.

The city has also gone back to having one motor pool fund and charging each department rent annually for vehicles out of that fund instead of individually budgeting for different vehicles each year in each department.

“What’s old is new again,” Coppler said in an interview April 28, explaining that the city had budgeted for vehicles this way in the past.

The cost of vehicle depreciation will be charged to each department for each vehicle in the hopes that, by the time a new vehicle is needed, most of the cost will already be saved to pay for it. That doesn’t take into account price increases for vehicles, he said, but the city is developing a complete replacement schedule for all vehicles in the city to begin to manage that gap either by paying for it in the budget when the vehicle is being purchased, planning ahead and charging more for depreciation or by selling old vehicles and earning interest on that money.

Instead of budgeting every three years for a new fire engine, for example, but having a much smaller budget on the off-years, “it allows us to have a better budgeted number every year (that) takes out those dramatic peaks and spikes in costs,” Coppler explained, adding that it also “makes sure you’re getting rid of vehicles when they should be replaced so you’re” saving on repair costs, as well.

Overall, the proposed budget shows $106,699,269 in revenues and $112,554,966 in expenditures across all funds, which would take the fund balance from $70,302,902 to $64,447,205 if spending and expenditures follow the budget to the letter. But Coppler said there are signs there may be a little more revenue from property taxes and state sales tax revenues, as well as from the federal government, which was not accounted for in the budget. In addition, he said, department heads routinely find ways to cut costs throughout the year.

“We don’t generally spend every dollar,” he said. “Today, (the difference is) being projected at $5-plus million, but I think that’s going to come down by the end of the year.”

He said there are projected COVID-related expenses that may be covered by federal funding and that permit requests seem strong as residents continue to do home improvements. There has also been a small increase in the taxable value of properties in the city, which is subject to a Headlee rollback but, nevertheless, will bring in slightly more tax revenue for St. Clair Shores.

The additional spending is a “good problem to have,” he said, because the city is investing in its infrastructure, including roads, water mains and parks. An approximately 4.4% increase in the rates for water and sewer was also not accounted for, which will offset some of the higher costs this year in the water department, including lead service line and water main replacements. If approved, the increase will cost the average homeowner about $33 more per year.

“The issue is that we’re doing more roads this year and so we wanted to get in and get those water mains replaced,” he said. “We’re paving roads, redoing water lines, rehabbing our sewer lines — we’re spending a lot of money improving parks.”

In the Police Department, the largest potential increase that could hit the department in 2021-22 would result from a new contract for animal control services with Macomb County. Police Chief Todd Woodcox said that he has been working with Macomb County Animal Control Chief Jeff Randazzo on the new contract, which is up for renewal, but he anticipates a cost increase from $88,000 to $120,000.

The department also needs to replace in-car cameras that are more than two decades old and is looking to add police body cameras, as well, for a total cost of about $350,000. The city manager’s office is investigating the potential of a grant that could pay about $300,000 toward the cost of both sets of cameras, Woodcox said. The larger cost for the services, he said, would be video storage, estimated at about $20,000 per year for cloud-based storage.

“I’m happy to see we’re considering body cameras for accountability purposes, but also to protect the public and the officers, themselves,” said Councilwoman Candice Rusie.

The Fire Department reduced its capital requests by 11%, or $68,500, for the 2021-22 fiscal year compared with the prior year, Fire Chief James Piper said. Capital expenditure requests include a new ambulance to maintain the fleet. The department tries to spread the cost of five new ambulances over about eight years, allowing for the vehicles to be used in primary status for about four years and then in reserve status for two years before replacement is necessary. The Fire Department is also asking to replace a 1997 rescue truck with a vehicle more suited to that work.

Piper said they have begun a building study to assess if repairs, renovations or a complete rebuild are needed for the city’s three aging fire stations. Central Fire Station, he explained, may need to be completely rebuilt at some point in the near future, so the department is trying to plan for that eventuality and the retrofitting that may be necessary at the department’s other two stations.

Coppler said the city is looking to fill the rehab coordinator position in the Community Services department in order to facilitate the no-interest loans available to qualifying homeowners to fix their homes. A lien is then placed on the property to be repaid when the house is sold in the future.

“I think it’s a valuable tool for us to have,” he said. “Most of that cost is going to be covered by (Community Development Block Grant funds), so it isn’t really an impact to our operations.”

Councilman John Caron said he thought the rehab coordinator position was important.

“I think that’s helped out a lot of people in the past,” he said.

City Council will approve the budget, millage rates, and water and sewer rates in June.