City begins work on fiscal budget
ALPENA – Although the City of Alpena’s 2014-15 budget doesn’t begin until July 1, staff already are working hard crunching numbers for it. At this point it appears the city will begin the budget year with between $2.5 million and $3 million in its fund balance, after some is taken to bring revenues level with expenses for the remainder of this budget year.
Treasurer Karen Hebert said it still is not known how much money will be needed from the fund balance before July 1, but the fund still will be in good shape and might allow the city to tackle some needed projects in the city.
“I have no final numbers yet, but we are coming in strong and that could allow us to do some more capital this year,” Hebert said. “I’m trying to put a little bit for capital for each department’s budget.”
Hebert said the city also is looking to add to the amount it is going to put into post retirement health care. She said the city is lagging in its obligation to the fund, but the extra money will help lessen the financial burden a little.
“We are not funded anywhere where we should be ,” Hebert said. “We are supposed to put about 10 percent into it, but I’m thinking about putting at least 5 percent. It is figured by 5 percent of payroll, so it will be about $100,000.”
Hebert said she begins work on the new budget, which runs from July 1 through June 30, in January when she begins to meet with the department heads. She said in turn they begin to examine what their projected revenues and expenses will be for the upcoming year and a second year out.
She said the state requires local government to have preliminary budget estimates two years in advance in order to get state revenue sharing funds. She said it is hard to be accurate when doing budgets that far out, because of all of the unknowns.
“It is hard enough to do the current forecast, but in two years we don’t know what our funding from the state will be, what property values will be or what our contracts with the workers will cost. There are just too many unknowns to have a real accurate projected budget that far out,” Hebert said. “By doing it though and looking into it, it could send some flags out if there is something serious and get us prepared now.”
City Manager Greg Sundin said like most other municipalities, the city is still dealing with increased expenses and reduced revenues. He said being frugal with the city’s money will have to continue.
“It is still going to be a struggle. We’re going to have to look at a very tight budget again,” Sundin said. “The loss of personal property tax this year will offset the little gain we had from real property tax, so we are still going to have to get as much bang for our buck when we do have to spend.”
This is Sundin’s second time involved in the budget process as city manager. He said having Hebert and the rest of the staff experience at his disposal really helps. He said it is also good that the council is mindful about what is transpiring when it comes to the city’s finances.
“Karen is the watch dog and really keeps an eye on everything. She does an excellent job or keeping an eye on the budget and reeling in the department’s spending,” Sundin said.
Hebert said sit-down meetings with each department head will begin next week. They will have their budgets and share thoughts and concerns. She said then they are all combined and built into one, which will then move on to the council.
“Once we have a preliminary budget we will take it to council during the first meeting in May so they can look at it and ask questions,” Hebert said. “Then there will be a public hearing the second meeting in May for the public to make comment. Then if it needs tweaking a bit we will do that and then it is finalized.”