MEMBERS OF OWOSSO CITY COUNCIL gathered for an informal, educational meeting on the 2019-2020 Recommended Budget on Tuesday, June 4.
(Independent Photo/Karen Mead-Elford)
by Karen Mead-Elford, co-editor
Nathan Henne, city manager of Owosso, submitted an initial draft of the 2019-2020 budget proposal to council members in the Monday, May 20 meeting. Council members have since dutifully educated themselves on the material after planning to meet in an informal meeting at city hall on Tuesday, June 4.
In the executive summary provided by Henne, he shared that, “Local economies around the state are slowly recovering from the Great Recession; some more than others. It will be important for the city of Owosso to identify those factors and encourage better than average improvement in the coming years.” Henne continued by stating that the budget document is “designed to provide a transparent view of the city’s current funding practices, historical financial health and our projections for future revenues and expenditures.”
Council members and staff attended the Tuesday meeting, while Henne offered a thorough presentation on budget details and answered numerous questions. A large portion of the meeting was focused on the general budget.
The presentation demonstrated that the city arrives at budget numbers through wages/benefits and revenues/expenditures, obvious exceptions being capital improvement/road improvement funds and debt obligations, which are based on schedules and fees. The city currently has 90 full-time employees, with the largest number of those in police, fire and DPW. There are 30 part-time employees and seven that are contractually based.
Considering general fund revenues, 45.9 percent of revenues come through property taxes, with 23.8 percent contributed through the state. The rest come from licenses and permits, fines and forfeits and other areas.
The general fund budgeted in this plan calls for an operating budget of $7,747,159, compared with the previous budget of $7,755,766. Likewise, general fund expenditures balance out at $7,747,159. Suggested increases may be found in the recovery of the tax base as the economy hopefully improves.
Henne made certain that council was aware that a good budget proposal always involves conservative budget making strategies, underestimating and overestimating in certain areas, knowing that adjustments will need to be made going forward.
As the city continues to see increases in pension and benefit costs, property tax increases are not meeting those expenditures. Some of this should be countered, as new employees will now be covered under the new MERS Hybrid Plan – requiring city employees to contribute 4 percent of wages and concluding when the employee retires or leaves employment.
So, where does the money go? General fund expenditures break down into 26 percent for the police department, 25.2 percent for the fire department and 24.6 percent for general government. The rest falls into the public works department, transfers-out, community/economic development and recreation/culture.