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Tuesday, March 29, 2011

How does the City of Rogers City Use Your Tax Dollars?

How does the City of Rogers City Use Your Tax Dollars?

All real and personal property tax dollars paid by residents of the city are placed into the General Fund. The city maintains several funds which record the revenues and expenses of the various activities and services provided to its citizens such as Water Service, Sewer Service, the City Marina, Street Funds and smaller funds. This report highlights only the General Fund; the other funds will be the subject of future reports. Michigan Law requires all other funds be reported separately from the General Fund. The General Fund does contribute to some of these other funds when directed by City Council. The information shown is actual dollars, not budgeted or estimated amounts. The City’s fiscal year runs from July 1st through June 30th. One mill of taxes currently raises $75,925. As of February 28, 2011 the General Fund revenue was $1,557,256 as shown below.

General Fund Revenue

Real Property Tax = $1,060,546

State Revenue Sharing = $228,774

Personal Property Tax = $125,657

Miscellaneous Revenue = $112,501

School Resource Officer = $29,778

As of February 28, 2011, the General Fund spent $1,175,132 (see chart on the other side) with the following general description of how the dollars were used:

• The City Council spent $13,810 on Council salaries, travel expenses for City business, education and training, Council directed publications, and Board of Review.

• Administration spent $247,101 on salaries, benefits, and other expenses for the attorney, the manager, the clerk/treasurer, the bookkeeper, the assessor, and elections.

• The Police Department spent $373,366 for equipment, supplies and training, plus wages and benefits for the Chief and six officers (including the School resource Officer).

• The Department of Public Works (DPW) spent $306,609 on equipment, supplies, training, wages, and benefits as partial payment for the Director, six full-time, and two seasonal workers. DPW provides services to other activities like water and sewer which pay for services from their own funds. The General Fund does not pay for these services.

• “Other” spending of $234,247 went for engineering, planning and zoning, street light electricity, insurance, retiree healthcare, promotional expenses, and miscellaneous items. City Hall maintains records showing spending in each area.

General Fund Expenses

City Council = $13,810 

Administrative = $247,101 

Police Department = $373,366 

Public Works = $306,609 

Other = $234,247 

As a snap shot, these figures only tell part of the story. The fiscal year began July 1, 2010 and will end June 30, 2011. In the original budget, the city expected General Fund revenues and expenses to balance at the end of the fiscal year at $1,910,943. The City Council adjusts the budgets as revenues and costs change, needed items break, and staff members save money.

The current amended budget is $1,865,868 in revenues and expenses. Unfortunately, revenues may be even lower due to a decline in State Revenue Sharing. Also expenses continue to rise. For example, on April 1, 2011, health care costs to the City will increases 35%, costing the City an unexpected $7,000 per month. This may force the City to cut back further on spending and/or use some of the “Fund Balance,” sometimes called a “rainy day” fund. This fund currently has a balance of $234,294 or 12.5 percent of annual expenses -- within State guidelines of 10-15%.

Discussions at the state level concerning revenue sharing and other funding for communities along with the outcome of current labor negotiations will impact future budget decisions. Loss of tax revenue from decreased real property value will also impact the budget.

One question that is being asked can be summarized as “If the City is struggling with finances, why does it continue to spend money on projects such as a new water tower, improvements to the water and sewer infrastructure, and new street lights, and purchase new equipment?” Most of the funds for these capital projects come from federal and state grants and/or very low interest loans. These are not part of the General Fund, which is where the financial problems are being experienced. These projects are designed to save the City money long term by reducing costs such as repairs and electric consumption, by keeping employees safe, and by improving services to every citizen.

You can access the City’s financial reports and audit at www.rogerscity.com. City Council and Staff will be working on next year’s budget during the next several weeks, first at public workshops and then at Council meetings. Your comments and suggestions are welcome.

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