By GABRIEL GOODWIN
Sunday Times Newspapers
MELVINDALE — With an expected $1.2 million from the state of Michigan’s revenue sharing program, Melvindale councilors agreed to ask for roughly 42 percent of the money in advance to continue paying for the fire department consolidation with Dearborn.
The council accepted the resolution to move forward with the application to receive a $500,000 advance from the state. The money would be set aside for the agreement with the firefighters’ union for funding their retirement and continue paying the city’s monthly obligations to Dearborn. Essentially, this advance is similar to a Tax Anticipation Note, Finance Manager Robert Ortiz said, a low-interest loan that is requires repayment within a year.
The revenue sharing program involves the state giving back a certain percentage of revenue generated from sales taxes based on whether local governments meet specific conditions. Ortiz estimated Melvindale would receive $1.2 million, but he said that number could fluctuate slightly.
Ortiz would like to capture the funds solely for paying for the consolidation. He said the money would be used to make the $400,000 owed to firefighters for retirement and make the next $104,000 payment to Dearborn.
In time the monthly savings would satisfy the repayment of the loan, he said, so any other money the city gets would be used for its operation.
“Our cash flow over the next few months is tight,” Ortiz said. “I would like to use this money to meet our obligations with the Fire Department, union and Dearborn. This money is going to make the consolidation run smoothly and not allow it to affect the city’s operations.”
Mayor Stacy Striz said this loan would allow the city to avoid using money unnecessarily from the general fund and free up $100,000 of working capital to make payments toward the consolidation.
(Gabriel Goodwin can be reached at [email protected])