May 29, 2014GROSSE POINTE SHORES — An anticipated $60,000 year-end municipal surplus is a leg-up on the next budget cycle.
"Our revenue forecast is strong," said Councilman Bruce Bisballe, chairman of the Grosse Pointe Shores finance committee. "We're probably going to have 20 percent balance in our rainy day fund."
On Tuesday, May 20, the city council approved the budget for fiscal year 2014-15, starting July 1.
Although the tax rate remains 17.8794 mills, revenues jump $185,000 due to higher home values.
Property tax receipts are expected to keep rising in coming years as the housing market strengthens.
Property tax income gets a boost from the sudden increase in taxable values when houses change ownership. Increases are otherwise restricted by the Headlee Amendment.
The budget contains cost and revenue projections through fiscal year 2018-19.
"Our revenues are still not back to where they were in 2009-10, but we hope that we're going to continue to move forward, not with tax increases, but with a change in assessments in the community," Bisballe said.
Of eight houses in the Shores on the market for more than $1 million, four sales are pending, Councilwoman Kay Felt said last week.
"Things are clearly looking up in terms of real property sales," she said.
A house on Lakeshore is listed for $15 million.
If it sells for that amount, its uncapped value will generate $250,000 additional municipal property tax receipts per year, according to Bisballe.
The figure is $7,000 shy of representing 1 mil, which in the Shores currently equals $257,000, according to Mayor Ted Kedzierski.
"Anybody can balance a budget by cutting services, but we said we were going to maintain or increase our service level," Kedzierski said. "It's a challenge, believe me."
Among expenditures in the budget are:
hiring a public safety officer, buying two patrol cars and retaining front-desk clerks,
repaving Willow Tree Place,
city-wide road joint sealing,
replacing a public works snow tractor,
across-the-board, three-year employee labor contracts with 2 percent raises — the first since 2009 — in the first two years, costing a combined $34,000, and a wage reopener in the third year,
continued resumption of tree trimming and
continued installation of remote-read water meters.
"We're instituting a capital equipment fund," Bisballe said. "It was a recommendation of the Blue Ribbon (Operations) Committee to ensure future capital equipment needs, principally in public works for a dump truck and other heavy equipment that we need to save for."
A Blue Ribbon recommendation to eliminate in-house EMS services was rejected.
"No changes in public safety or the ambulance service are even being considered at this point," Bisballe said.
Members of the finance committee may recommend shifting the employee pension system to the Michigan Employment Retirement System to save costs and improve investment returns, Bisballe said.
"The only concern we face is the marina," Bisballe said. "The marina cannot make enough revenue by (renting) boat wells to cover the cost of the bonds (to fund reconstruction nearly 10 years ago)."
The marina at Osius Park has 11 vacant slips, according to Councilman Robert Barrette, chairman of the parks and harbor committee.
He said harbor occupancy "is pretty close to where it was last year."
"It's important that we get 100 percent occupancy," Kedzierski said. "We see a little stress on the finances, not this year, but in the next three or four years."
Budget projections show the marina beginning a $6,033 deficit in fiscal year 2015-16.
Deficits grow yearly to $145,388 in fiscal year 2018-19.
"We're looking for a solution, to maybe refinance those bonds, but we are still working on that," Bisballe said.
Where it goes
Based on 2013 tax rates, Shores officials said every $1 collected in taxes is distributed accordingly:
34.6 cents to the Shores,
19.5 cents to Grosse Pointe public schools,
17.3 cents to Wayne County, including the Detroit Institute of Arts and Detroit Zoo,
11.6 cents for the state education fund,
6.7 cents to the Wayne Intermediate School district,
6.3 cents to Wayne County Community College District and
4 cents to the Grosse Pointe Public Library.