Proposed 2017 City Budget Includes Cuts and Fee Hikes
On Tuesday evening, at the East Lansing City Council’s first special meeting to consider the Fiscal Year 2017 budget, City Manager George Lahanas told the Council that the City staff spent the last four weeks developing the proposed budget for the year running from July 1, 2016 through June 30, 2017. It is now up to the Council to spend the next four to five weeks in deliberations on the matter. The Council currently plans to adopt the Fiscal Year (FY) 2017 budget on May 24, 2016.
In his opening remarks, Lahanas said that, four weeks ago, there was a gap of $1.6 million between anticipated expenses and revenues in the proposed budget, so department directors were charged with finding ways to reduce their budgets. They came back with $1 million in cuts.
These came from eliminating some positions and freezing others, deferring replacement of some vehicles and computers, and reducing the pay increase from 1.5% to 1% (while leaving “step” increases intact), among other changes.
Also, the new security system for City Hall will not be implementing during the next budget year. (Read ELi’s Michael Teager’s report on the planned new security system and associated costs.)
The General Fund proposed appropriation for FY 2017 totals $33.14 million, a $2.9 million decrease from the amended budget for FY 2016. Two million dollars of this difference is the result of an amendment to the FY 2016 budget made at the end of 2015, after the Council elections, that increased the budget in order to allocate $2 million to reduce the unfunded liability in the City employees’ pension fund.
Another proposed approach to reducing the initial budget gap involves increases in several fees and rates, including: fees for solid waste and yard waste removal; water and sewer billing rates (up 10% and 9.9%, respectively); fees for parking for special events and for monthly parking permits ($5 monthly increase in all permit rates); and fees for school-age child care and the Aquatic Center.
Lahanas pointed out that the financial challenges evident in this budget validated the need for the Council to create the Financial Health Team, which began its deliberations at the end of February. However, the Council will have to approve the FY 2017 budget well before the Financial Health Team makes its recommendations.
At this week’s special meeting, Council members began posing questions and asking for additional information about the proposed budget. Finance Director Mary Haskell said all questions will be recorded and a single document will be provided that includes answers to all the questions.
For example, in response to a request from Councilmember Shanna Draheim, a pie chart will be prepared showing expenditure categories in the consolidated budget (the General Fund plus other funds such as Major Streets, Local Streets, Solid Waste, Parks and Recreation, Sewage Disposal, and Parking System). Also, in response to a request from Mayor Mark Meadows, a single list of all fees will be prepared, showing whether or not they have been increased in the proposed FY 2017 budget. Councilmember Erik Altmann sought more information about cost recovery.
The next special budget work session for City Council is scheduled for Tuesday, April 26, at 5:30 p.m. Each meeting includes a period for public comment. Citizens can also write to Council to express opinions and convey information.
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