City looks to residents’ expertise
to help survive coming budget crisis
Grosse Pointe City Manager Peter Dame and members of the city council hope they have a lot of smart people living between Fisher and Cadieux Roads. They're asking city residents who have financial expertise to help them deal with an impending budget shortfall.
“We have to take a substantial view of what we are doing and look to our community for guidance,” Dame said at this week’s city council meeting. “We need to put together a citizens committee to make recommendations, maybe four or five people with backgrounds in finance.”
The city did a five-year budget projection and, based on a severely shrinking tax base caused by state equalized values that have dropped at least 30 percent, the city will not be able to balance its budget in the future, city officials said.
Dame said the city is heavily dependent on property taxes to pay for city services, and state-shared revenues are shrinking. “There is not a single silver bullet that will resolve this. We have to leave no stone unturned (in finding a solution).”
No doubt, the situation will result in a reduction in spending in all departments, he added.
“The housing market has not got any better,” Dame said, adding the city had 86 sales in the last year and houses sold, on average, for 26.6 percent less than their assessed value.
“While Grosse Pointe is still in a healthy position, there’s a new reality here. Our tax base has shrunk 50 percent,” Dame said. “If were to do nothing and stick our heads in the sand, our fund balance would be gone. In five years, we’d be in the hole.”
City projections show a healthy 2009-10 $6.6 million budget. Seventy-four percent of city revenue comes from property taxes, 7 percent from state-shared funds, 8.2 percent from charges for services, 2.8 percent from court fines, fees and criminal justices issues, 6.8 percent from other revenue and 1.2 percent from licenses and permits. Public safety accounts for more than 50 percent and public works 19.4 percent of the city’s operating expenses. Remaining expenses include everything from parks and recreation to inspections. Outgoing council member Kris Pfaehler suggested collaborating with other Grosse Pointe municipalities in offering city services as a way to cut costs.
Dame said action needs to be taken quickly. Whoever wants to help would need to commit to weekly meetings, most likely in November and December.
“People should know there’s a fairly large time commitment to this,” said council member Jean Weipert.
Mayor Dale Scrace said budget shortfalls are being dealt with by every community. “Peter and I have talked about a citizens' advisory board to help us,” he said. “We need to put together a list of people to consider. We have a tremendous task ahead of us.”
