Budget Talks Continue

by, Crystal A. Proxmire


Ferndale, Michigan - The budget process began in Ferndale on Mon 3/8/2010, a
month ahead of the usual schedule. The City Charter requires the Finance
Director to submit the budget to the Council at the first regular meeting in
April of each year. However, the City began the FYE 2011 Budget process
early in order to deal with the unprecedented financial challenges facing
the City and the region.

In the meantime, the City has put additional budget information online and
made it easier to find. The current and past three budgets have been on the
City's website for some time. The City reorganized the budget webpage and
added the FYE 2011 Budget requests and meeting schedule, as well as the City
Manager's presentation and recommendations.

The City created an easier way to access the budget webpage by redirecting
www.ferndale-mi.com/budget to the budget webpage
(www.ferndale-mi.com/Services/Finance/Budget.htm). The City also added a
link from its homepage (www.ferndale-mi.com) to the budget webpage.
Additional information will be posted on the budget webpage throughout the
budget process. May 7 is the deadline for the City Council to pass the FYE
2011 appropriation resolution pursuant to the City Charter.

City Manager Robert Bruner said, "This financial crisis affects everyone in
our region. No one is immune. The more information the City provides, the
better our community can understand the financial crisis facing us all."


The City of Ferndale is boggled as city leaders, police and fire unions and other department heads try to solve the $3.1 million budget deficit for Fiscal Year Ending (FYE) 2011.  The deficit is primarily caused by sharp drops in property tax revenues and unprecedented declines in state revenue sharing, which are funds that local governments get from the state sales tax. 


At the March 10, 2010 City Council meeting, City Manager Bob Bruner presented his “starting point” budget to the city, which calls for a wave of layoffs in various departments, including Police and Fire, as well stopping services, like animal control, cable and recreation, in order to make up for the losses in revenue. 


“None of us wants to implement that plan and we’re all ready working very hard with the city’s labor unions to avoid implementing that plan,” Bruner said.


City leaders began working on the budget proposals months ahead of schedule so that department heads, members of the public and the labor unions could have ample time to make suggestions.  Over the past two months citizens have come to council meetings to ask council not to cut police and fire personnel, although Bruner says that because police and fire make up 42% of the general fund it would be impossible to cover their current costs, even if they got rid of all other expenses.


“With union cooperation, employees and taxpayers can share and minimize the sacrifices required to balance the 2011 General Fund Budget,” Bruner said.  “Without union cooperation, employees with be laid off and the service eliminations and reductions required to balance the FYE 2011 General Fund Budget will be greater than otherwise necessary.”


The preliminary budget is based on a 2009 Citizen Satisfaction Survey.  Cobalt Community Research (Cobalt), the Michigan nonprofit organization administering the study, sent surveys to a sample of 1,500 registered voters using two mailings in September and October and received 344 valid responses. Cobalt Executive Director William SaintAmour calls the City’s 23% response rate “very solid” compared to other communities.  The study ranked municipal services based on how important they were to overall citizen satisfaction.


Based on the study and the possibility that there will be no compromise with the unions, Bruner recommended the following (which can be viewed in full at http://ferndale-mi.granicus.com/MetaViewer.php?view_id=2&clip_id=53&meta_id=4993):


-Reducing the City Clerk’s office by 17%

-Bringing Community Development from collecting 79% of their expenses back in revenue, to collecting at 100%

-Reducing the Finance department by two people (22%) and having citizens mail payments directly to the bank rather than collecting at City Hall

-Replacing Cable Director with a less expensive contractual position

-No reduction in Dream Cruise expenses

-Reducing public safety expenses by 32%, including police and fire layoffs

-Eliminating animal control

-Eliminating six officer patrol positions and civilian service aid positions from the police Patrol Division

-A 55% reduction in Detective Bureau staff, which would bring Ferndale in line with detective staff from similar sized cities

-A 29% reduction in fire safety

-Eliminating one record bureau position

-Eliminating six seasonal positions and a Park Supervisor position in the Public Works Department, which means the elimination of all athletic field maintenance for Recreation, closure of park restrooms and reduced park building and equipment repairs. 

-Two options for Recreation.  One would be to eliminate the Recreation Department completely.  The other is to close the Community Center and relocate staff to City Hall and offering self-funded programs


“Balancing the FYE 2011 Budget without eliminating a single position would require every General Fund employee to accept a 20% decrease in total compensation.  That is more that I am able or willing to personally sacrifice so I cannot ask my fellow City employees to give up so much.  Therefore balancing the FYE 2011 will require some combination of voluntary separations, negotiated personnel cost reductions and layoffs as a last resort,” Bruner said.


Debate has begun on how best to change these recommendations.  Some have suggested a public safety millage, however there is not time for one to pass for the current budget year.  Additionally Bruner has said that with the current economic situation a millage is unlikely to pass.  Police Lt. William Wilson disagrees with comparisons of Ferndale to other cities of similar size and population.  “Ferndale is different because we are a small city that is on the border of Detroit, that has a major highway going through it,” Wilson said.  “We need more officers because safety is an issue.  Crime is controlled because our police have a visible presence in the community.  Once that starts to fall apart it is a hard reputation to get back.  We don’t want to become Highland Park.”


The biggest factor in the budget process at this point is the negotiations with the unions, which are done in private.  “The whole situation is bleak,” said Police Chief Michael Kitchen.  “We are working as best as we can and we’re hopeful we can work something out.  There’s a lot of strategic posturing, it’s just the nature of the beast.  It’s still sort of the feeling out step of the process.”


City leaders are eager to hear suggestions for how to balance the budget.  One suggestion brought up at council was for people to donate the difference in their property taxes back to the city for the General Fund.  Bruner and the City Clerk will be looking more into this possibility.


Mayor Pro Tem Kate Baker suggested that a continued focus on long-term planning might help Ferndale to better improve our economy.  “To add to our taxable value seems to me to be a way to jumpstart our recovery.  New development adding and new property tax to our tax base are ways we can help.”  Bruner added that only properties outside of the Central Business District (Downtown) add to the general fund.


“DDA [Downtown Development Authority] property tax revenue is going to go up next year because of new development like Rosie O’Gradys.  I think it’s important for folks to understand that none of the money is going to the City’s General Fund,” Bruner said.


Mayor Craig Covey suggested asking the DDA to pitch in.  “Of course if we wanted to we could talk to the DDA about contributing towards some of the costs we pay for like police, like lighting,” Covey said.


He also said that although there is no time to approve a millage to fix any areas of the FYE 2011 budget, voters could begin working on one for future years.  A millage would have to be put on the November ballot by a petition, and if the public approves it, it could go into effect the following June.  Millages are property taxes collected for a specific purpose.  For example, voters agreed to a special tax to fund the new Public Library which is scheduled to open June 10, 2010.


The Fire Department is also looking at a long-term goal of consolidating services with Hazel Park and other departments, to save money on a regional level.  However without a separate Fire Authority, which costs more money to initially fund, complete consolidation is not possible, said Fire Chief Roger Schmidt.  He is currently in negotiations with the Hazel Park Fire Department to see what cost-saving measures could be implemented in the short-term.  The Fire Department already works with Royal Oak Township and Pleasant Ridge to provide services, which also provides the City of Ferndale with revenue.


Councilperson Scott Galloway said we are facing at least 30 years of reduced budgets, and that “this is the reality we face” as governments in all Michigan cities figure out how to do more with less.


At the March 8, 2010 meeting Council approved a schedule for budget discussions, which can be found at the City of Ferndale website at http://www.ferndale-mi.com.  There are also more detailed budget-related documents, including the city’s current budget which can help citizens better understand where their tax money goes.

Send us your opinion or question! Your response could be in our FERNDALE VIEWS section next issue!