Community Corner

Dearborn Tightens Budget for 2013-2014 Fiscal Year

City officials are expected to decrease the general fund budget by $4.9 million for the upcoming year.

Dearborn officials are hoping to run the city's departments with a leaner budget for the upcoming fiscal year.

James O'Connor, director of finance, and Mayor John B. O'Reilly, Jr. presented the fiscal year 2014 proposed budget to the city council at a planning meeting on April 24.

The meeting was the first of several council meetings and workshops scheduled to deliberate the proposed budget. The city council will adopt a final budget on May 28.

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The proposed general fund budget calls for roughly $98.2 million in revenue and $99.7 million in expenditures. O'Connor said Dearborn is expected to spend $4.9 million less than its current budget.

"We're not cutting funding from any particular department," O'Connor said. "The general fund budget proposal is a reduction in spending driven by cost savings associated with decreased staffing, increased employee cost sharing in health care and retirement programs, and other adjustments."

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To make up the revenue difference, the city will draw from its fund balance, O'Connor said.

The city has $19.8 million in reserve, with the option to use up to $6.2 million during the current fiscal year, and another proposed $1.4 million for the 2013-2014 fiscal year.

Dearborn City Council President Tom Tafelski said he would like to see the city produce a budget that does not take money from the fund balance.

"We are still going to have to make a general fund contribution from the fund balance. I'm hoping that we can get to a point in the near future where we won't have to make a general fund contribution and instead use that money for a rainy day fund," he said. "I'm not, however, opposed to using money out of the fund balance to continue to make our community a great place to live, work, and, most importantly, raise a family."

According to The Civic Federation, as a general guideline, municipalities should keep between 10 and 15 percent of their general operating budget in the fund balance for fiscal emergencies.

Other notable aspects of the budget include:

  • Taxable values are estimated to decrease from $3.4 to $3.2 billion, representing a $30 million decrease. One mill is expected to generate approximately $3.4 million, or $30,000 less per mill less than previous years.
  • Taxable values will continue to decline, due in part to changes in Michigan's Personal Property Tax law.
  • The proposed city tax rate is 25.9 mills, representing almost a 1 mill reduction from the current fiscal year. For a home with a taxable value of $100,000, the homeowner will pay $2,590. O'Connor said the reason for the reduction can be attributed to paying off the debt for the Ford Community & Performing Arts Center, as well as other debt retirement.
  • Water and sewer rates will increase 5.8 percent.
  • A decrease of 21.5 full-time positions (18 from police and three from the Assessor's Office).
  • No pools wll close for the 2013-2014 fiscal year.

"The city has continued to make strides to hedge against budgetary challenges. The problem is ongoing declines in property values and significant inflationary trends continue to erode the successes that are accomplished," O'Connor said. "We work to reduce costs, and at the same time costs go up as property values — our main revenue source — remain relatively flat.

"It's a tough situation. We have to live within our means and do the best we can with the resources we have to keep people safe while providing good quality of life amenities our residents have come to expect."

The council will hold its next budget meeting at 5:30 p.m. on Wednesday, May 1 in the council conference room at city hall. The purpose of the meeting is to discuss the budget for the Dearborn Fire Department and the Dearborn Administrative Center. The meeting is open to the public.

The entire proposed budget and related documents is available on the city's website under the "transparency" section.

A schedule of upcoming budget meetings is available here.


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