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 The Eastpointe City Council is considering a proposed budget for the 2019-2020 fiscal year. It focuses on balancing the budget while allowing for expenditures such as road projects and hiring new police officers.

The Eastpointe City Council is considering a proposed budget for the 2019-2020 fiscal year. It focuses on balancing the budget while allowing for expenditures such as road projects and hiring new police officers.

Photo by Brendan Losinski

Eastpointe considering 2019-2020 budget

By: Brendan Losinski | Roseville - Eastpointe Eastsider | Published April 23, 2019

EASTPOINTE — The Eastpointe City Council is considering a proposed budget for the 2019-2020 fiscal year presented to it at its April 2 meeting by City Manager Joseph Sobota.

Sobota said it is a budget of $50,914,757, and it is balanced so that expenditures do not exceed revenues. Balancing the budget was of particular importance to Sobota, as predictions for the near future indicated a projected deficit.

“One of my first priorities when proposing the budget to the City Council was creating a budget that eliminates as much of the structural imbalance as possible,” he said. “We somewhat achieved that goal. At this time last year, we were predicting a $1.8 million operating deficit (looking five years into the future). Now we only predict a $275,000 operating deficit. We are structurally balanced this fiscal year and next fiscal year. We are trending in the right direction.”

Sobota said the city was able to make improvements to its financial standing by continuing responsible spending practices and instituting more beneficial investment strategies with the city’s idle cash.

“We will now be more active in investing our idle cash, and the City Council recently approved a new type of investment vehicle that allows for a higher return on investments,” Sobota said. “It’s in a pool from communities from across the state of Michigan, which means less expenses on individual communities like ours. There’s a greater rate of return because the pool is able to invest more money at once when it’s all invested together.”

Mayor Suzanne Pixley reviewed the proposed budget and was pleased with what she saw, but she said it requires more review because it is different than previous budgets, given it is Sobota’s first time creating one for the city of Eastpointe.

“I think it’s completely different than anything we’ve seen before. It will take a while to go through it,” said Pixley. “(Sobota) did not list everything by line item, which we usually do. We had to get that information separately. We on the council are meeting with Mr. Sobota over the next week. …  I think it needs to be clear so the average person can read it and understand it clearly. If I’m a little bit confused, and I’ve been a mayor for 12 years, it will be confusing to taxpayers.”

Sobota said the biggest areas of concern when assessing Eastpointe’s finances were two issues that have been significant issues for the city for several years.

“The long-term debt for (other post-employment benefits) and pension costs are still our biggest concerns looking forward to the next few years,” he said. “Finding ways to fund various capital improvement efforts, particularly roads and water and sewer lines, also are going to be one of our most significant priorities.”

He believes the new budget does everything currently possible to address those issues.

“We are looking at spending the most amount of money that will create the biggest benefit in terms of roads covered. We’re trying to spread it out and preserve rather than replace when we can. Water and sewer are funded by user fees, and we are looking at targeting $4.2 million in investment in water and sewer lines,” said Sobota. “As for OPEB and pension concerns, they aren’t addressed in the current budget, but we are looking at different options for the council to consider to help reduce costs or fund liabilities.”

The budget also includes provisions for the hiring of several new police officers to replace officers who will become eligible for retirement in the next two years.

“Realistically, although seven new police hires are included in the budget, we can probably only bring six new officers on at a time. With nine officers eligible or approaching eligibility for retirement by November of 2020, and the city’s ability to only train six officers at a time — which takes between four and six months — trying to process 16 officers can be a practical challenge.”

Pixley said the biggest issues facing Eastpointe in the next two years are combating drugs in the community and ensuring that the city is able to attract new residents.

“Our biggest problem right now is the opioid crisis, and we are attacking that right now,” she said. “Our police have a really great handle on these efforts and reach out to people. The budget includes adding more police officers. I’m not sure if the full number will make it through council discussions, but I think this issue is addressed in the budget.”

She added that both issues are addressed in the budget, but she also thinks more state support is needed to accomplish certain goals.

“Our efforts to attract families and make Eastpointe a pleasant place to live also is a major issue here,” Pixley continued. “The budget does include measures to maintain the parks, but our other issue in this area is maintaining and fixing roads, and while we’ve done a lot of good work, we can’t fully address this program until we work on getting more state funding.”

The budget includes approximately $640,000 in one-time expenditures. These expenditures include computer upgrades for city offices, new vehicle and equipment costs for the Police and Fire departments, costs for maintaining and upgrading the fire station, and funds dedicated to an ongoing lawsuit involving the federal Justice Department regarding the city allegedly having a racial bias in how officials are elected.

Sobota said these expenditures are priorities that need to be addressed in 2019 or 2020 and are still possible while maintaining a balanced budget.

“We are in a position where a lot of our operating software is approaching the end of support and we are experiencing some failures, so new computer upgrades are necessary,” he said. “We need to be in a position to fight the allegations against the city; this is something that cannot be helped at this point, and we have to continue to go through litigation. The Police and Fire department do have equipment that they need to have a safe and effective working environment to keep themselves and the city safe.”

The Eastpointe City Council will vote on whether to approve the budget at its regular meeting at 7 p.m. Tuesday, May 7, at Eastpointe City Hall. Prior to the vote, members of the public will have an opportunity to voice any concerns about the budget.

Call Starr Writer Brendan Losinski at (586) 498-1068.