City Council facing financial woes
By Kathy McCarty
Staff Writer
PRESQUE ISLE — Budget concerns continued to be discussed by city officials during Monday night’s special City Council meeting at City Hall.
City Manager Jim Bennett said the municipality will receive $2.3 million less than it’s owed by the state, thanks to cuts to the revenue sharing program.
“About 22 percent of our budget was funds from revenue sharing. For $2 million we could fix a lot in this community. They took from municipalities and used the money for state expenses. They’ve (state officials) raided community budgets,” said Bennett.
Bennett said the state is looking to take even more money that is rightfully Presque Isle’s.
“As the budget sits with the governor, they’re looking to take away another $849,000. That’s close to $3.3 million due back from the state. Instead of it being used here locally, it’s going elsewhere for some other state project,” Bennett told councilors.
Bennett said the budget shortfall created by the state budget for the balance of this year is $290,000. For 2014, the budget shortfall will be an additional $225,000.
“In considering the solution for the 2013 shortfall, please keep in mind that any solution that is a one-time occurrence and cannot be repeated in 2014, will create that budget shortfall again the following year” — again created by the state government, said Bennett.
Bennett said taxpayers are already looking at an increase in taxes, following the approval of the SAD 1 budget, which will result in about a .81 increase to the mil rate; add to that the County tax increase of about another penny, the school and county figure will be .82 per $1,000 in valuation. The city’s current mil rate of 23.5 will go up accordingly but until the city’s budget is finalized, officials aren’t sure by just how much.
Bennett told councilors of the $290,000 needed this year, he and staff have found about $80,000 in savings, including added revenue from building permits, change in personnel and related pay scales for new hires vs. experienced personnel and closure of the outdoor pool.
Councilors discussed possible options to cover the remaining $210,000, including taking as much as $100,000 from the emergency reserve account and possibly postponing purchasing a new fire truck and buying a used one instead.
“Personally, this is extremely frustrating. We’ve worked hard to keep the budget down and no new taxes. I hope the citizens understand this is all being driven by decisions made in Augusta and not by people sitting at this table,” said Bennett.
“I think Jim is right. We’ve reached a point of either raising taxes or decreasing services. When you look at the services we offer, I suppose you could eliminate services to children, cut back on the highway department and have no capital improvements for two years. But you’d pay the piper in two to four years. I just don’t know,” said Councilor Dick Engels.
“The basic services — police and fire — you can’t cut to the point they can’t do their jobs,” continued Engels. “I’m personally at a loss where we can go.”
Councilor Craig Green agreed, noting councilors need public input to help them make an educated decision.
“We need input from the citizens — what makes Presque Isle just that, Presque Isle, be it the pool, rec services or whatever. What’s near and dear to their hearts and what are they willing to pay for them. In order to keep, we may have to pay more,” said Green.
Councilors also discussed the possibility of selling unused city assets. Bennett, however, indicated that wouldn’t raise more than a few thousand and would be a one-time fix, since most of the city’s assets involve property and larger machinery.
Bennett said it all boils down to the state’s raiding of the revenue sharing program.
“We’re talking 22 percent of the gross municipal budget — what we should get in revenue sharing. We got rid of 15 employees to cover $1 million lost in the last few years. We’ve been creative but not without pain,” said Bennett. “It’s going to get tougher.”
City Council will meet again Monday, June 24, at City Hall to continue discussing ways to address the predicted shortfall.
