GLADSTONE - While Gladstone's city budget will not be finalized until it is approved at the next regular commission meeting, residents can expect cuts to services and fee increases in the near future.
"When you look at a budget that's roughly $12 million when you add them all together and we're only able to spend $689,000 in capital outlay, it's a little low, but when you don't have the money you don't have the money," city manager Darla Falcon told the Daily Press.
The revenue for the General Fund from the 2012-13 year to the projected revenue for 2013-14 year changed very little - decreasing by only $6,691. According to Falcon this is because the three major sources of revenue - taxes, constitutional revenue, and parks and recreation user fees - have remained stable.
Despite inflation suggesting property taxes should increase by 2.4 percent, the majority of properties in the city are already being taxed at their assessed value. Because taxable value cannot exceed assessed value, tax rates cannot increase unless the housing market changes and property values rise.
Constitutional revenue was previously distributed through statuary revenue sharing, but has been awarded through the Economic Vitality Incentive Program since 2011. Since the change, constitutional revenue has remained consistent.
"We are planning to comply with the three EVIPs like we've done in the past. That is $100,000 to the city," said Falcon. "What I keep pointing out to the commission and our legislators is that when it was statutory revenue sharing we received almost $300,000, and now we have to prove we've earned it."
Revenue from parks has also remained stable because the city has opted not to increase fees.
"People can't afford increased fees to come and enjoy our parks," said Falcon.
While revenue has remained relatively stable, the expenses in the general fund have increased by $98,775, which will reduce the unreserved portion of the general fund to $18,281 by the end of the 2013-2014 fiscal year.
The increase in expenditures is largely due to a 15.66 percent increase in the Municipal Employees' Retirement System Defined Benefits pensions.
"The majority of that increase is general fund because any previous employees that retired out of a general fund department - public safety, parks and recreations, clerk, treasurer - their benefits come out of the general fund," said Falcon, adding the 15.66 percent represented an increase of nearly $85,000.
MERS DB pensions were not the only benefit increase on the budget. Health insurance for retired city employees through the Michigan Conference of Teamsters Welfare Fund increased by 9 percent, and Teamster union wages increased by 3 percent per contract.
Despite discussing the general fund during both days of workshop time, Falcon is preparing to re-examine the fund again.
"Staff and I need to get together again, and we need to look at every single department and where can there be cuts made ... it's going to be cuts in services because staff is cut to bare minimum. There's nowhere else to cut," she said.
Residents can expect to see a 25 cent per thousand gallon increase in their water bills - an increase of roughly $1.25 per month for the average Gladstone resident.
"When the increased expenses are beyond our control, we can't really not have an increase unfortunately," said Falcon, who noted the cost of treatment chemicals goes up annually partly due to the increase in fuel prices and shipping costs.
Wastewater bills will also increase by 25 cent per thousand gallon. The increase will be applied to system improvements including a new grinder and pump.
"Our new ... challenge is people are flushing baby wipes and those thicker hand-washing towels. They're flushing them and when it gets to our wastewater plant those are not biodegradable like other solids," explained Falcon, adding that the grinder was necessary to process the material.
There will be no increase in electric rates for residents.
The city commission will vote on the budget at its next meeting on Monday at 5:30 p.m. The meeting will be held earlier than normal to allow for special election preparations later that evening.