Commission okays the concept for a special assessment district
By Barb Pert Templeton
Adopting a balanced city budget is something that is required by law so when Marine City Manager Michael Reaves discovered a $650,000 deficit to the general fund plans to fix that problem began in earnest.
At an April 16 city commission meeting Reaves began by explaining once again that laws do not allow him to borrow money from roads or water funds to cover the general fund deficit.
Reaves said so far, he’s found $450,000 in cuts to the budget and those include personnel cuts including reducing people from full-time to part-time status, a wipeout of any capital improvement items, plus a significant cut in all budgets across the board from training to supplies.
Marine City Attorney Robert Davis explains the process to establish a special assessment district at a recent city commission meeting.
“Literally, I don’t know of too many sections of the city where there were know cuts whatsoever, every department as they say, took a haircut,” Reaves said.
He also noted that he asked all the commissioners to take a pay cut to $1 for the coming fiscal year, down from the $2,000 annual stipend they each normally receive. His own salary was rolled back to his original salary, agreed to when he was hired in 2024.
Despite all those cuts they still have a deficit of over $268,000. He said the problem is you can’t just fill the deficit you have to have room for emergencies. Costs continue to go up for lights, ga and nearly everything else and you need to have that cushion, Reaves said.
“I’ve scoured the opportunity to drive revenues in this city,” Reaves said. “The revenue model for the city is broke.”
He explained that although home assessments go up, they have a stagnant market because not a lot of homes are sold, so the value of those is uncapped. So, you’re not bringing in an excessive amount of new tax money, which means revenues actually go down each year.
In 2015 the city was getting 18 mils in revenue but his year they’ll be getting just 14 mils.
Just like everything else, gas and food prices are soaring, the city costs have gone up and up. The general fund has been used to cover various other accounts over the years and it was propped up the last few years due to AARP Funds but now the options are limited, Reaves said.
By law the city has to adopt a balanced budget, in order to do so that the city manager said he has two options. Based on the deficit he could wipe out certain city services and not all of them touch the general fund but both police and fire touch it.
Eliminating police and fire?
In fact, $1.3 million from the general fund is for public safety, police and fire, coverage.
Marine City Manager Michael Reaves
“I could do away with the police department, you would reduce your police coverage to what would be a general rule coverage, there wouldn’t be a dedicated car for the city and you would await police services to however long it took dispatch to send an officer from Port Huron or Port Huron Township and provide service,” Reaves said. “That’s problematic in an emergency.”
If someone calls for medical assistance EMS would not enter the home until the police arrive and secure the scene and that “could be life altering,” he said.
“I also can’t image a community operating without fire services or reduced fire services, or charging for fire services, so if you have a house fire or motor vehicle accident, we’ll bill you for the cost of that response, so if it’s $40,000 in equipment and neighboring assistance that will be difficult to collect,” Reaves said.
Under those circumstances, of basic services being cut, everything from snow plowing to upkeep of the cemetery, it becomes very difficult to get people to want to move or bring a business to the city, he said.
“Very candidly we are right at that crossroads,” Reaves said. “This is a very difficult process and it has to be achieved through a combination of different things.”
Officials have to decide how much they want to reduce the city’s services or if they want to produce more revenue so they can maintain services then they must look at a special assessment district which will allow them to balance the budget.
“I wish that there was another way, I wish we could write a grant, we could shift money, we could find a donor, if there was another way other than putting it on the backs of our residents. I understand our residents, probably all, will not like this, I understand that, I don’t know though that the alternative is something they would care for either.”
Marine City Manager Michael Reaves
“I wish that there was another way, I wish we could write a grant, we could shift money, we could find a donor, if there was another way other than putting it on the backs of our residents,” Reaves said. “I understand our residents, probably all, will not like this, I understand that, I don’t know though that the alternative is something they would care for either.”
Reaves said his proposal, an estimate, is that the special assessment be for five mils that would raise $740,000, which is 50% of the public safety services costs.
“I’ll admit it, this is shift, let’s be fully transparent with our taxpayers, I’m being honest and open and I’m not calling it anything else, unfortunately it’s the only tool available, ” Reaves said, noting that he’d love to put it to a vote of the people but frankly there’s no time because the state requires a balanced budget by the end of May.
“If you decide not to offer a special assessment district then we are going to significantly cut services across the board,” Reaves said.
City attorney weighs-in
City Attorney Robert Davis then took the floor, stepping to the podium to explain the process of starting a special assessment district.
Davis said there are three steps to the plan. The first is having the city manager introduce the idea of creating the district giving an estimate of the amount of funds needed. The second step is to host a public hearing on the topic and the third, is a second public hearing and the commission approving establishing the special assessment district.
Davis said the commission does have the option to send the idea to the voters or they can just adopt a resolution themselves to establish the special assessment district.
The resolution to introduce the mils that will be sought is expected to be set by the commission at a May 7 meeting. Then the process begins to raise the money to put into the budget and it’s going to be levied and spread across the winter taxation bills to citizens based on the taxable value of their properties. The special assessment district will be across the entire community it will be for all the parcels in the city not just a certain section.
The commission unanimously voted to accept the special assessment district estimate and to accept the concept of the special assessment district while setting a May 7 public hearing date.
