For the first time in about five years, Farmington Hills officials have approved a budget without dipping into financial reserves.
Officials expressed appreciation to voters for a 2011 public safety millage, which shores up police and fire budgets, while taking some pressure off the city's general fund.
The resolution city council members approved Monday includes just $28,000 in reductions. City manager Steve Brock pointed out that significant budget cuts were made in previous years, including a round of voluntary separations that cut the city's workforce by 39 employees.
The total general fund budget, which covers operating expenses, is $51.4 million, more than 60 percent of which goes toward personnel costs.
Brock said department heads "do a fantastic job every year" of meeting budget goals. "I asked them to cut 3 percent," he said. "I went in and added a little back, because it was starting to affect service delivery."
He said this year's budget achieves the goal of trying "stabilize things" after years of struggling with reductions caused by declining property values and losses in state shared revenues, along with rising health care and retirement costs.
Brock said he expects the city of continue meeting requirements of, and receiving funds from, the state's new Economic Vitality Incentive Program (EVIP). Officials met standards this year by enacting a "hard cap" on benefits, requiring employees to pay more for their health insurance, establishing a transparency dashboard and sharing services with other communities.
Two police officers funded, not hired
A public safety millage passed by voters last fall has given the city some breathing room. However, Brock said a possible repeal the state's personal property tax, which generates about $2.6 million in revenues for the city, will delay the hiring of two police officers propsed in the budget.
"We're going to fund two positions, but not fill those positions, until we get a better handle on what's going on," he said.
The city has purchased 10 new police vehicles to replace aging stock and will bring back some programs, like Neighborhood Watch.
Also coming back will be the city's budget for capital improvements, like fulfilling requests for sidewalks to make the city safer for pedestrians. "The last few years, we haven't made much of an investment," Brock said. "We need to get back to that, and this year, we will."
The proposed millage rate increases this year to 12.3506, because of the voter-approved 1.7 mills for public safety and .0326 mills for refuse removal. Brock said there will be a small reduction in the recycling fee to off-set that increase. There's also a .0010-mill increase in the economic development millage, Brock said. Operating and parks and recreation millages remain the same.
The city has the eighth lowest millage in Oakland County, Brock said, but that may change as other communities look at increasing their millages.
"We were just successful in keeping our AA-plus bond rating," Brock said. "Relative to other cities in this area, we're in pretty good shape, and we appreciate voters making that possible."
While property values may begin making a "slow, steady crawl" forward, Brock said the city is limited by Proposal A to increasing property tax revenues by 5 percent or the rate of inflation.
City council member Michael Bridges asked Brock what concerned him as he looks into the future.
"Hiring good people, finding good people," Brock said. "A lot of good pepole have left the state, particularly in fire (service)."
The city still has some work to do in closing general fund budgetary gaps. Brock said expenditures are expected to rise three percent, while revenue increases are expected to fall between one and three percent.
A copy of the 2012-2013 budget presentation can be found on the city's website.