(C. Proxmire, May 1, 2013)
The FYE 2014 budget has been passed by City Council, with an increased millage rate and a dip into the general fund to compensate for decreased revenue. The plan was approved on April 29 after several weeks of budget meetings where each department’s needs were taken into consideration.
Struggling to keep pace with increased costs and decreased property tax values, city leaders agreed that dipping into the City’s general fund made sense after other cuts were made. For the 2013-2014 budget, Ferndale will use $178,732 of general fund balance to make up the difference between $17,896,395 in revenue and $18,075,127 in expenses.
Residents will pay a higher tax rate. When voters approved a Headlee Override for 2012, an additional 3 mils were collected above their regular property tax rate. In 2013 this increased to 3.5 mils. The approved increase for 2014 is 4.6 mils. For 2015 it is expected to be 5.4552 mils. The override sunsets in 2016. According to the report, “The City projects a total loss of revenues in 2014 to be $1,200,934. To this point, the passing of the Headlee Override vote has replaced lost revenues and has allowed the City to avoid drastic reductions in staff and services.”
The Headlee Override combines with property taxes, library taxes, a pr tax and general obligation bonds for a total tax rate of 31.0883 mils for 2014 and 32.1915 mils projected for 2015. In 2013 the rate was 29.5714 mils.
The most notable budget overage is the cost of maintaining four firefighters on staff who had been working under a Federal SAFER grant. At a recent budget meeting, Council agreed to give the department another six months while Fire Chief Kevin Sullivan tries to work out shared services agreements with other nearby departments. (For details see http://oaklandcounty115.com/2013/04/17/four-firefighters-get-six-more-months-of-work/).
According to the budget presentation, Taxable values have declined by 17.8% over the past three years. Revenue sharing from the state, which is the second highest source of income for cities, has been declining since 2009. And the City faces another hit in 2015 if voters uphold a plan to cut personal property taxes. In 2014 Ferndale expects to collect $730,000 in personal property taxes, 35% of which could be eliminated if the bills are not voted down in the Aug. 2014 election.
Costs have also been doing up, particularly in water and sanitation. The City has been looking at water rates in depth, comparing Ferndale to other communities and taking part in regional discussions on how to best manage this natural resource. Council voted to keep water rates the same until a more detailed analysis could be made. (For details on water bill costs and considerations see http://oaklandcounty115.com/2013/04/29/water-bill-worries-explained/). Sanitation fees will increase approximately $10 per household. The bulk of the budget is made up of police and fire services.
The General Fund currently has a $5,429,402 balance, which is 32% of expenses. Industry standards recommend keeping a general fund balance, or “rainy day fund” of at least 15%. Dipping into the fund still keeps it at above the 15% mark.
For complete budget details, including an easy-to-follow guide, download the City’s Budget Report here – http://oaklandcounty115.com/wp-content/uploads/2013/05/Final-2014_2015-Budget-Book.pdf. Information can also be found on the City of Ferndale website at http://www.ferndale-mi.com/.