Farmington city officials on Monday unanimously approved a 2018-2019 budget that puts expenditures about $215,000 over revenues.
The city’s millage rate will remain at 14 mills, requiring a dip into reserves that may continue through the next several budget years, unless voters approve a millage increase. City manager David Murphy said that while property tax revenues have increased 4.83 percent, one mill today generates less than it did 16 years ago.
“I think that tells a story in itself,” he said.
The 2018-2019 budget includes a .89 percent wage increase and 5 percent benefits increase for employees, and a 15 percent increase in utilities as the city switches to energy efficient LED streetlights. The biggest hit comes in pension costs, which are expected to rise $425,000 over the next five years.
In the end, the city’s fund balance will drop to 14.59 percent of expenditures, well below the annual budget target of 25 percent.
Residents will pay 3 percent more for water and 1 percent more in sewer costs, which are both below the Great Lakes Water Authority’s 3.75 percent and 1.73 percent hikes, respectively.
Only a few people spoke during a public hearing before the council took action. Resident Greg Collins, who attend one of two civic engagement meetings held this spring, said attendees were “under the impression that the only way to solve the problem was to raise the millage rate.”
“We assumed that there would be a shared responsibility between council and taxpayers, council would raise 1.5 mills and taxpayers would raise 1.5 mills,” he said.
During a previous meeting, council members voted to hold the millage steady and will likely ask voters to approve a 3-mill request in November, evenly split between operating and capital funds.
Collins asked officials to reconsider raising the millage and selling two city-owned houses on Grand River. He also suggested adjusting the Downtown Development Authority (DDA) boundaries so the city would receive proceeds from redevelopment of the Maxfield Training Center.
DDA Director Kate Knight said that redrawing the boundary isn’t an option. It would allow any business to opt out and essentially eliminate the authority, she explained.
After the public hearing, council member Bill Galvin chided Murphy for bringing forward a proposal for a community-driven playground project in Flanders Park, which officials discussed later the same evening.
“My biggest quandary is you’re bringing us a budget…but later on in the agenda, you’re bringing us an unbudgeted and unfunded item,” he said. “Even if we had the one mill, there’s projects we need to fix around the city.”
Murphy noted that council member Joe LaRussa “did the heavy lifting” to get the information for the opportunity to get a 90-97 percent grant to fund the playground.
“That doesn’t happen every day,” he said. “I would have done that for any council person.”
Council member Maria Taylor asked Murphy to explain why officials could not increase the millage rate. He explained that, under the city’s charter, once a public hearing on the millage rate is noticed, officials can only decrease the millage rate.
“Those of us in leadership positions need to do our duty to see that the city stays above water,” said Taylor, who opposed the decision to maintain the 14 mills. She said that her colleagues’ decision was the reason for the budget deficit.
LaRussa encouraged everyone to “stay focused on the deliberation of what we have in front of us” instead of “woulda-coulda-shoulding” previous actions.
“I wouldn’t want to presume how the public will view this sequence of events,” he said. “I just want to stick to this decision we have to make.”
Officials also approved the DDA’s budget and Principals Shopping District Special Assessment, and 47th District Court, Brownfield Redevelopment Authority, Corridor Improvement Authority and Joint Agency budgets.