By ANDREA POTEET
Sunday Times Newspapers
WYANDOTTE — The city is facing a possible budget deficit of $1.8 million in 2012.
That figure is a “worst-case scenario” presented as part of an audit report by Plante & Moran of the city’s finances ending in September of 2010. City Council members heard the report at their meeting Monday.
Property tax values are expected to decline by as much as $613,433,000 by 2012, the report said. Additionally, Gov. Rick Snyder’s proposed revenue sharing cuts could bleed as much as $1.1 million in expected funds from the city’s budget for that year.
“We did not create this deficit by overspending,” Mayor Joseph Peterson said. “There’s no way anyone on this horseshoe could do anything to stop the train wreck that just hit us.”
The best-case scenario for revenue sharing includes a $504,500 decrease in funds, if Snyder does not eliminate all statutory revenue sharing, the portion of funds from sales tax that cities are not constitutionally required to receive.
The news was not all bad, however. The city added $10,000 to its general fund over the 2010 fiscal year, when other cities in the area were looking at general fund deficits.
“All things considered, the city did about as well as could be expected, given the economy,” Plante & Moran partner Beth Bialy said, adding that the city’s general fund is in the top 25 percent of local cities.
The city added to its general fund by implementing some of Snyder’s budget recommendations a decade before he made them. They consolidated 911 services by becoming part of Downriver Central Dispatch and switched from a defined-benefit pension plan to a defined-contribution pension plan.
The city also froze wages for nonunion employees, cut nearly 40 employees, closed its Memorial Pool, and dropped its fully-funded health insurance plan in favor of a plan where employees pay 20 percent.
Now, city officials are wondering what else can be trimmed to combat the possible deficit.
“We’ve basically already picked the low-hanging fruit from our employees,” Peterson said. “There’s no way we can have the services we had yesterday if we don’t take some drastic steps today.”
Officials proposed assembling a residents advisory committee to help decide what services can be sacrificed. The committee would comprise volunteers representing each of the city’s demographic groups.