With cities and towns across Michigan facing multi-million dollar budget shortfalls, Macomb Township Supervisor Mark Grabow said he is confident the 2011-12 budget approved on June 22 will again allow the township to have "one of the healthiest fund balances throughout the state of Michigan."
The Macomb Township Board of Trustees approved the budget for the 2011-12 fiscal year at its meeting on June 22. Although no community members participated in the public hearing on the budget, Grabow and Clerk Michael Koehs took care to provide additional clarification in regard to the budget's projected $11 million shortfall.
"I think it's imperative that we make a statement so that everyone is clear and understanding concerning the budget," Grabow said. "Although we have an that has been reported through the papers, (it's) critical that people remember accounting practices and requirements of those practices."
Grabow noted the Water & Sewer fund specifically, which has a projected revenue of $19.3 million and projected expenditure of $25.6 million–a $6.3 million shortfall.
"We must remember that in that fund alone there is over a $4 million depreciation that must be accounted for," Grabow said.
In the 2011-12 budget, the total expected revenue for the township is projeted at $39,413,158, with $51,215,616 in expenditures.
For the general fund, which represents $8,726,893 of the township's revenue and $10,257,577 of its expenditures, property taxes and fees will account for $1,811,400 in revenue, while state-shared revenues and grants will draw $3.3 million, and license and permit fees almost $2 million.
However, the general fund will also cover some $5 million in general government costs, almost $2 million in employee benefits and insurance, and more than $2 million in public safety and public works. These expenditures will total more than $10 million.
But Grabow stressed that any shortfall in the budget is "a projection," and there is "nothing saying that we are going to be that far in the red at all."
Both Grabow and Koehs cited Macomb Township's history of projecting high expenditures and low revenues in an effort to allow for balance throughout the year.
"We've studied the budget projections for the last five years, and in every one of those five years the revenue that was estimated to be received compared to the actual received was more, and in the same five budgets ... the amount estimated to be expenditures was less than we estimated," Koehs said. "So our pattern here is that we estimate our revenues low and estimate our expenses high so that we maintain our fiscal responsibility."
Even in a worst-case scenario, Koehs said the township's fund balance will not be depleted.
"By making a budget, we're not committing the money to be spent, we're anticpating that we might have to, and then by the oversight provided by the board, we keep a rein on it," he added.
Millage rates for 2011-12 were approved at the June 8 meeting. Those rates are as follows:
- General Operating Mil 0.6757
- Fire Operating SAD 1.0588
- Fire Pension Mil 0.0747
- Police Mil 1.0601
- Parks/Rec Mil 0.8232
- Total: 3.6925
This should result in more than $10 million in revenue for the township.
Budget BreakdownFund Name Revenues Expenditures Surplus/Shortfall General Fund $8,741,893 $11,149,677 $-2,407,784 Fire Operations Fund $2,742,600 $3,565,559 $-822,959 Parks & Recreation Fund $3,802,000 $4,871,646 $-1,069,646 P&R Revolving Fund $3,100 $0 $3,100 Law Enforcement Fund $3,263,800 $3,163,775 100,025 Fire Improvement Fund $204,000 $1,594,500 $-1,390,500 Municipal Street Fund $26,500 $620,500 $-594,000 Building Authority Construction Fund $400 $381,000 $-380,600 Fire Pension Fund $330,00 $171,200 $158,800 Retiree Health Care Fund $957,390 $5,600 $951,790 Water & Sewer Fund $19,341,475 $25,692,158 $-6,350,683
Compiled from the budget draft updated June 13, 2011.