Council passes budget with $6.9 million deficit

By: Kristyne E. Demske | St. Clair Shores Sentinel | Published June 15, 2016


ST. CLAIR SHORES — With a proposed rate actually less than the mills levied on St. Clair Shores homeowners in 2015, City Council adopted the 2016-17 millage rates, water and sewer rates, and budget at its June 6 meeting.

Because of the Headlee rollback factor, the city will only be able to levy a total of 21.23 mills on homeowners in the city this year, a drop from the 21.26 mills levied in 2015. That, Finance Director Doug Haag said, will result in a slight increase in property tax revenue coming into the general fund of $73,305. The average homeowner with a valuation of $44,412 will pay $18.34 more in taxes this year than they did in 2015, or a total of $942.91, a 2 percent increase.

A slightly higher increase was predicted for water and sewer rates, with a blended increase of 7.2 percent to water and sewer rates passed along from the Great Lakes Water Authority.

Haag said the average customer, using about 25 units and currently paying $269.69, will pay about $288.44 under the new rates.

City Councilman John Caron pointed out that the new rates will help pay for $3.6 million in water main replacements and $1.4 million of a sanitary sewer project on 10 Mile Road in 2016-17.

“There is significant capital work that’s going to be going along with these rates that we have to set,” he said.

The total 2016-17 fiscal year budget has a deficit of about $6.9 million, Haag said, including $1.7 million being absorbed by the utility fund and about $4.3 million being absorbed by the rainy day fund. Revenues for the year are predicted to be about $95 million and expenditures are budgeted around $102 million, he told City Council.

“Overall, this is still just a status quo budget,” he said. “Property tax revenues are flat, but there’s still no reduction in services or programs.”

Suggestions from City Council members amounted to savings of about $1.5 million after the April 25-26 budget hearings, he said.

But Mayor Kip Walby said he thought more cuts could still be made.

“I don’t concur with all of the capital (expenditures) that’s sitting in here but, A, we need a budget and, secondly, the budget is everything that comes back in front of us,” he said. “It comes back to us, and at that point we vote yes or no.”

Councilwoman Candice Rusie, however, said she was uncomfortable passing a budget with a rate increase for City Attorney Robert Ihrie before City Council had made a decision as to that increase.

City Manager Mike Smith, however, said that such a contract will still come back before City Council for approval; just because an increase is in the budget does not mean that it will be approved, he added.

Walby said the new contract should be up for discussion before City Council at the June 20 meeting, before the new budget year begins July 1.

The budget was approved 6-1, with Rusie opposed.

“In terms of this budget, there is a significant deficit going in,” Caron said. “As we’ve cut a million out of the budget through the hearings, there’s still a deficit left here that, next year, through the budget, we’re going to need to fill.

“This is not something we can do two, three years in a row.”