ESCANABA - Escanaba administrators have their work cut out for them as they figure out how to create a balanced budget for 2012-13. Administrators meet with department heads today.
City council members met with administrators and department heads Wednesday, when City Manager Jim O'Toole sought input on the upcoming finances and ways to eliminate or reduce the deficit.
Escanaba is looking at an $800,000 deficit going into the new fiscal year, he said. The city balanced an $888,000 deficit in this year's budget by using funds from savings. The current deficit is at $490,000.
"I'm going to give you a balanced budget," O'Toole told council. "We do have a rainy day fund but we do have a duty to address the deficit."
O'Toole anticipates several factors will aid in reducing the deficit, including cost-saving measures already underway.
The city is saving money with a different insurance carrier, an increased co-pay for insurance, and one union switching to another union with a different medical policy. Overtime has been reduced at the police department, he said. More sharing of employees among departments will be considered, he said.
Expiring tax credits could result in an additional $280,000 for the city and $85,000 could be realized from increased property tax values this year, he added.
O'Toole said the city is expected to receive $300,000 in state revenues for meeting 2011-12 requirements to create a citizen's guide on the city's financial spending, to create a plan of shared and consolidated services, and develop an employee concession plan.
During the budget process, administration may consider increasing fees for zoning, code enforcement, public safety, recreation programs, engineering services, and library services. A 1 percent administration fee on summer taxes could generate about $86,000 for the city, if initiated.
The upcoming general fund budget - which funds the day-to-day operations of the city - will be similar to the current year's $7.6 million allotment, O'Toole said. The city's overall budget is $37 million.
"We plan for the worst case scenario and hope for the best case scenario," he said about the budget process.
Administrators have been working on the 2012-13 finances since January. Council will meet for budget work sessions in April. Public hearings will be held on the budget which is approved in May.
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Jenny Lancour, (906) 786-2021, ext. 143, firstname.lastname@example.org