By JAMES MITCHELL
Sunday Times Newspapers
TAYLOR — Whether the city’s budget deficit and debt elimination plan will satisfy state officials — and avoid emergency financial management — will likely take months to confirm.
After submitting a plan last month to Michigan Treasury officials for eliminating a projected $5 million deficit over five years, state auditors responded with an April 23 letter requesting further details on proposed revenues. City administration has until May 23 to answer state questions.
Mayor Jeffrey Lamarand said that variances of more than 20 percent between one year’s revenue and projections for the next raised questions in Lansing. Taylor’s submitted plan predicts a spending decline of nearly $20 million and revenue projections falling by about $12 million. In spite of a deficit for the current fiscal year, based on the submitted numbers the city’s debt will be eliminated within five years.
“They’re looking to see if there are any inflated revenues,” Lamarand said. “My concern is that they’re not addressing our full problem. This may only be the first phase of their evaluation.”
Lamarand said last week the city’s budget and finance department will prepare supportive documents for state review, and that the city’s financial struggles are far from over. Next week’s city council meeting will likely include a proposal to borrow funds from internal sources — temporarily shifting funds within departments in order to meet payroll — but that the search for long-term solutions continues.
“We’re trying to attract cash flow,” Lamarand said. “If (the state) is just looking to see if we inflated revenues in order to show a balanced budget, it may just lead to further problems. I’m sure that’s what they’re trying to account for and prevent.”
For more than a year the city struggled with a shrinking budget, loss of jobs and reductions in service, with countless debates held between elected officials and administrators. City Council Chair Cheryl Burke said the state review of budget projections may be a long-needed wake-up call for an objective look at hard numbers free of personal bias.
“It’s sad that friends might get laid off,” Burke said. “But the community’s been laid off for three years. We can’t look at faces and names, we have to look at the math.”
Burke said that state officials will review a multi-year backlog of city finances, which may tell a story that some don’t want told.
“They asked for the history. I love that they’re doing that,” Burke said. “They will see the pattern that’s been in place for 10 years. The reality is that when we run out of money it will be an obvious kick in the pants.”
(James Mitchell can be reached at [email protected])