Woods Council Discusses Budget, Millage Increase

Grosse Pointe Woods council began 2011-12 fiscal year budget discussions preliminarily Monday, including a vote to include a millage increase to help balance the budget. 

The millage increase, projected to be about 0.5 mills, will be built into the proposed budget that will be presented to council April 4. The decision was debated among council. 

Councilwoman Lisa Pinkos Howle voted against informally supporting a millage increase because she believes making such a decision is more appropriate after getting a look at the actual proposed budget. 

Woods treasurer Dee Ann Irby said she is working with an $11.8 million budget and introduced basic figures for council. The overall shortfall the Woods council will have to balance is $840,000. 

The council recommended Irby add some figures back in to reduce the shortfall to $458,000. The first being $125,000, which is half of the statutorily mandated state revenue sharing amount the Woods receives, and the other amount is $257,000 for personal property taxes. 

They chose to only add half of the state revenue sharing monies because Irby recommended it after a visit to Lansing last week. Gov. Rick Snyder has said monies will be distributed based on consolidation efforts, among other things, and Irby said there is no clear formula for how the state will determine who is meeting the criteria and how the money will be distributed.

Councilwoman Vicki Granger, via telephone, said she was not comfortable with adding the full personal property tax amount into the budget because the values are likely to continue falling.

Once the millage increase is added into the budget, it reduces the shortfall by another $300,000 to about $180,000—an amount the council would likely take out of its fund balance.

Many of the council members voted to include it in the proposed budget at 0.5 mills up to the maximum necessary to balance the budget. But Pinkos Howle said the decision to do so now is premature. 

She believes after the council reviews the proposed budget line by line, there will be other ways to trim and further reduce the deficit.

Mayor Robert Novitke repeatedly disagreed, saying that while changes could be made there would be no significant impact by taking some from here and some from there. 

According to Irby, the 0.5 millage increase would still not increase taxes for most because of the continual drop in property values. She did provide council members with a map showing that a few homeowners would see an increase of $7.06 to $25.79.  

Irby also informed council that part of what she built into the proposed budget was the layoff or retirement of four employees, which she estimated would save about $300,000. City Administrator Al Fincham said the reduction in staff is likely to happen within the next two weeks.

The Woods has already trimmed its staff from 103 full-time employees to 91 through attrition since 2009 without reducing the level of services offered to residents, Fincham said.

Councilman Kevin Ketels, who recently took the position following the resignation of another member, requested a bullet-point list of reductions made by the city, whether through city administration or council action, in the last five or so years.

He wants the list as a reference in preparation for the upcoming budget discussions.

His request prompted Novitke to talk about how well the city and council have managed the finances in the years of declining revenue, even jokingly suggesting that the governor is getting his ideas from the Woods.

Many of the governor's requests related to revenue sharing are ideas the Woods implemented long before Snyder took office, according to Novitke and Fincham. 

Council will next meet April 4, during which the budget for the next fiscal year will be presented and then referred to the committee of the whole for a line-by-line review.