Council receives $5 million budget proposal
Tecumseh City Council members took a look at the city’s estimated 2014-15 budget during a study session that preceded the regular meeting on Monday, Feb. 3.
“The purpose of today is to give you a general overview of where I think we are going at this point in time with the budget, and it will give you some time to review these documents,” Tecumseh City Manager Kevin Welch told the council members as he offered them a draft of the budget of approximately $5 million. “This way, you’ll be more prepared for our study session in March.”
An official budget approval for the coming fiscal year is scheduled for May 5.
Welch led a discussion through a series of budget spreadsheets denoting previous, current and projected revenues and expenses. The city is anticipating tax revenues of approximately $3,360,000 for next year, which the city manager called, “relatively flat.”
He recapped factors affecting previous budget years, giving a historical look at the city’s financial condition, remembering a time when the city received more in revenue sharing than it does today.
“That’s been replaced with the Economic Vitality Incentive Program (EVIP),” Welch noted. He added that along with losses in revenue sharing, the city has lost revenues through lower taxable values, among other factors. Like other communities, it’s a wait and see game on what will happen with personal property following an election this fall.
In the year 2000, the city had 60 full time employees, and staffing is now down to 43 individuals.
In recent years, the city has addressed some budgetary issues such as reducing the work force, making different choices on health care, and other decisions.
“The council has made some difficult decisions and I think we have seen the benefit of some of those,” said Welch. “Even though those decisions weren’t easy and in some cases, we had no choice, they have helped.”
When the current year’s budget ends on June 30, the city is anticipating $5.1 million in revenue in the General Fund, approximately $81,000 higher than what it was when originally adopted. Welch said the new recreation center is one of the areas where some new revenues are being generated, with increasing usage of the facility. Also, the EVIP payment will see an increase of approximately $10,000.
The city’s building department is in a better position than in the past with areas such as building permits picking up. The police department constitutes the largest share of the budget from a departmental perspective.
Welch said two areas of concern with the budget are the Major and Local Highway Funds and the Tecumseh Center for the Arts (TCA). The city was able to complete a few road projects in 2013, including S. Occidental, Rogers Hwy., and S. Maumee St.
“If not for the grants we were able to obtain, we would not have been able to afford them,” said Welch, adding that those cost more than a million dollars to complete.
City crews also were able to work on a few streets this summer. But available funds in both will be between $50,000 to $150,000 next year, which won’t go very far, Welch said. One of the concerns is that projects such as Burt Street, which could cost $500,000 if completely rebuilt, aren’t typically eligible for state grants, which designate that the streets be heavily traveled by trucks, but still need to be addressed.
The TCA needs the most management, Welch said, and its 2014 fiscal year operating expenses are currently estimated to be about $50,000 lower than the original budget and revenues are expected to be around $32,000 lower than budgeted. The net operating revenue is expected to be approximately a negative $126,000, which he said is one of the best performances in several years. The loss is covered through a $65,000 contribution from the General Fund, a transfer from the TCA’s capital improvement fund, and $47,000 from the Endowment Fund, with $17,000 of that being principle.
“The staff does a remarkable job — both past and present,” said Welch. “This year, we’ve done a pretty good job of predicting what kind of revenue we were going to have with some strategies we put in place.”
He added that the city’s department heads manage their budgets as if it was their own money.
“Overall, in comparison to other communities, I think we’re doing a pretty good job managing our finances,” said Welch. “With that said, I think we’ll still have our challenges, with the biggest being roads and the TCA. Those are things we still need to work on.”