Roseville, Eastpointe proposed budgets see stronger incomes despite state cuts

By: Kevin Bunch | Roseville - Eastpointe Eastsider | Published April 25, 2016

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ROSEVILLE/EASTPOINTE — In budgets unveiled at council meetings April 12 and 19, the cities of Roseville and Eastpointe laid out stable 2016-17 budget proposals that should not require delving into the cities’ savings accounts.

In Eastpointe, City Manager Steve Duchane said at the April 19 City Council meeting that this is the first year in some time that the city will not need to dig into its rainy-day general fund balance to maintain city services. Last year, it pulled $1.5 million prior to the passage of a public safety millage through the South Macomb Oakland Regional Services Authority, or SMORSA, which helped stabilize city finances without drastically cutting public safety.

This year the city is looking at a $21.3 million general fund budget, of which $15.3 million will go toward police, fire and the courts, Duchane said. The city will be able to add $1.08 million back into its general fund balance.

“We are projecting an increase in reserves,” Duchane said. “For the first time (in years), the general fund spending will allow us to make a contribution to our fund balance and fully meet our fiscal policies. It’s a very positive step in the right direction.”

Adjustments to the retiree funding system means the city is now able to fully meet its obligations, Duchane added, though retiree health care will still account for $2.6 million of the budget.

The city is expecting to purchase a new light pumper for the Fire Department and new patrol and investigative vehicles for the police.

Duchane said they are also going to finish transitioning the city’s street lighting to LED bulbs this year, and the city will be using $6.6 million from the water and sewer fund for capital improvements.

Another $1.9 million is going toward street repairs, notably on Kelly Road northbound between Nine Mile Road and Toepfer Drive, Duchane said.

Roseville is expecting increases in the general operating budget of its proposed 2016-17 fiscal year budget, without having to dip into its general fund balance, which would be maintained at $4.4 million. On the whole, the city is looking at $36 million for its general fund budget in 2016-17.

On the flip side, the city is expecting $100,000 in cuts to state-shared revenue, and City Manager Scott Adkins wrote in his budget remarks that the state’s phasing out of personal property taxes is set to begin in the coming fiscal year as well, and to run through 2023.

“Further compounding the situation, any increases in property taxes are limited to the inflation rate as a result of Proposal A,” Adkins wrote. “The personal property tax phase out, as well as the provisions of Proposal A, continue to compromise the city’s revenue stream.”

He wrote that while the city is expecting an increase in its taxable value for real property — from $759 million to $767 million — that personal property tax assessment is going to drop from $115 million to $94 million. Even with a reimbursement from the state for the personal property tax loss — an estimated $375,000 — Adkins expects that the city will see overall a loss of $42,000 in tax revenues over the current fiscal year.

Both cities are anticipating a drop in state-shared revenue. In the budget notes, Adkins wrote that they are estimating only $4.6 million coming in from the state, a significant drop from the $6.3 million it received in 2000. Adkins added that he is concerned that the city may need to begin delving into its general fund in coming years just to balance the budget without more cuts.

Roseville is estimating a $10.4 million budget for police and another $5.8 million for fire. In the separate major and minor street funds, the city has budgeted $2.7 million and $3.4 million, respectively, though the budget does not specify any projects. The water and sewer fund has $16 million budgeted as well.

Adkins could not be reached for additional comment by press time.