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Hazel Park budgets cautiously amid pandemic

By: Andy Kozlowski | Madison - Park News | Published June 19, 2020

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HAZEL PARK — While the budget unanimously adopted by the Hazel Park City Council late last month is essentially a mirror image of the previous year’s budget, it was approved with the caveat that aspects of it may need to be revisited in the future, as the full impact of the pandemic on the city’s finances becomes clear.

“Because of the uncertainty of the state revenue sharing and the lack of revenue from city entities like the Recreation Department and Ice Arena, there will be some flexibility and probably some amendments to the budget, later in the year,” said Hazel Park Mayor Pro Tem Alissa Sullivan. “We do currently have a balanced budget, and I do expect it to stay that way.

“New programs and some extracurricular projects we had hoped to do may have to wait a bit because of the uncertainty of where we will stand with some of our previously expected funding sources being restricted due to the statewide shutdown for safety during COVID-19,” she continued. “I don’t foresee any major changes to current provided services or programs for residents.”

Generally speaking, residents of Hazel Park will see only a slight tax increase in the new fiscal year that begins July 1, since assessed values remain higher than taxable values. Most residents will see a small increase correlating with the increase in the rate of inflation. The water and sewer rates are expected to go up $0.49 per unit.

The overall budget weighs in at roughly $37.7 million, which doesn’t include the library funding, and of this amount, the general fund accounts for about $16.7 million, covering such core services as police, fire, City Hall, the Department of Public Works and retiree healthcare.

There is currently no use of fund balance for the new fiscal year. The city had a fund balance of nearly $1.9 million as of this time last year. It is anticipated that about $500,000 will be used for the current fiscal year due to revenue cuts and closures caused by the pandemic.

No positions are being added in the budget. Administration is also trying not to eliminate any existing positions since the city is already run on minimal staffing. However, there remains the possibility of eliminations, depending on how much the state withholds from revenue sharing, as well as if the governor decides to alter the property tax collection deadlines and rules, officials say.

Most of the employees at Hazel Park City Hall, the Recreation Department and the court are furloughed until the end of July. The city has reduced hours of staff for the time being in order to reduce costs.

In terms of new road projects, it remains to be seen what the city will attempt, pending the availability of matching funds from the county for road work in areas such as Woodward Heights Boulevard. There will be water main and sewer relining projects completed based on lead line replacement requirements and general infrastructure improvements. The infrastructure budget has been set at $700,000 for the new year.

General fund revenues are projected to be around $16.7 million in the new fiscal year, with a small increase in property tax revenue anticipated from the ongoing development by Ashley Capital at the Tri-County Commerce Center — located at the site of the former Hazel Park Raceway — and related to new marijuana facilities.

City employees are furloughed for the first month of the new fiscal year, which will save money, and healthcare and prescription costs continue to be reviewed on a regular basis. The city also hopes to receive pandemic-related reimbursements from the Federal Emergency Management Agency, and the city continues to search for grant opportunities, particularly with regards to recreation.

It’s a fairly status quo budget, all things considered, but city officials say that COVID-19 has made it difficult to predict how the current fiscal year will end and how the new fiscal year will play out. There will be revenue losses due to the cancellation of events that typically raise money for the city.

“This may be the most unusual year for budgeting because of the enormous uncertainty caused by COVID-19,” said Jeff Campbell, Hazel Park’s community development director and deputy city attorney. “The economic hardships faced by so many Hazel Park residents and Americans will detrimentally affect revenue sharing provided to municipalities by the state of Michigan, potentially resulting in budget cuts.”

Hazel Park City Manager Ed Klobucher described the process of preparing the new budget as unlike any previous budget in the city’s history.

“We presented the City Council with the best possible information about revenue projections, but we simply cannot have an accurate projection due to the pandemic,” Klobucher said. “This budget will need to be reviewed throughout the year to keep with changing information about revenues, especially (state) revenue sharing dollars.”

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