Photo: Mayor Sheldon Neeley recently presented city council with an overview of the city’s proposed fiscal year 2021 budget
By Tanya Terry, with information taken from city of Flint website
Mayor Sheldon Neeley recently presented city council with an overview of the city’s proposed fiscal year 2021 budget. While Flint faces structural funding shortfalls, the budget projects continued revenue growth of 3% per year, driven in large part by increased property values (which are up approximately 12% this year). The balanced budget shows total revenues of $56.9 million and total expenditures of $71.3 million, using city savings from its previous general fund balance to make up the difference.
“This is a clean budget that accurately reports our revenues and expenditures while also fulfilling the requirements of the new city charter better than ever before. While we face funding challenges, we are responding with a calm and calculated approach. We cannot afford to slash our budgets. We must continue to maintain city services while continuing strict spending controls in all our departments,” Ne eley said.
The budget priorities, according to Neeley, were to maintain city services and balance the budget, fulfill charter responsibilities, accurately represent the city’s revenues and expenses, end longstanding budget practices that do not conform with the city charter or the state requirements and to increase community education and outreach.
The budget calls for zero layoffs inside the city of Flint.
“We must maintain our level of service inside the city of Flint,” Neeley said.
In fulfilling charter responsibilities, the proposed budget establishes the city of Flint Civil Service Commission, a previously unfulfilled mandate of the Flint Charter, Sec. 5-101. The commission was established to investigate and rule on disputes between employees and both Hurley Medical Center and the city. It was added to the city charter by a voter referendum in 1935. Neeley served on the commission for five years, and the city administrator served on it for approximately six years.
Neeley said, in reality, the city was only able to build up a “general fund balance” in prior years because it had not fulfilled its financial obligations. After paying $10 million into the retiree pension system as required by law, stopping the transfer of funds from the water fund, meeting charter obligations, and making basic capital repairs, $7.8 million is expected to remain in the general fund balance.
According to the 2019 audit, the city claimed a general fund balance of $24 million. However, approximately $2 million of that is being spent in the current 2020 fiscal year budget, which was set by the previous administration.
The proposed budged stops past practice of transferring millions of dollars from the Flint Water and Sewer Fund to boost general fund dollars. Neeley said is in violation of the charter (Sec. 7-106(B)), and he said monies would no longer be taken out of the water and sewer fund in order to increase monies in the general fund.
“That’s pursuant to law. It’s pursuant to good practices, and it’s pursuant to what the people really want.”
After years of declining rate of investment into the retiree pension system, the city of Flint will increase its annual contribution if the proposed budget is accepted. The city is currently paying $24 million of a $39 million annual obligation. The proposed 2021 budget increases the city’s annual investment by $10 million, and in the following year it increases the investment again to fully meet the $39 million obligation.
“We have about 1,800 retired employees and future employees that will be in that system, and we have about 400 individuals pulling into the system. Our deficit really leaks in this direction. We have to make sure that these working men and women that are retired receive these payments.”
One core issue in Flint, like all Michigan cities, remains a lack of adequate state funding. In just five years, the state has underfunded Flint by more than $44 million dollars (2013-2017, the most recent year available. Source: Michigan Municipal League at savemicity.org). Since 2003, Flint alone has been shortchanged by more than $101 million in state revenue-sharing.
“I’ve never seen a budget presentation like that in all my days. Normally, a mayor comes up. He tells how much his budget is specifically. We get a chance to look at the figures. We then vote to receive it,” said Councilman Eric Mays.
He said normally the mayor goes over figures and departments.
Mays voted not to receive the budget for further review. However, six council members; a majority, voted to accept it
“This presentation in presenting a budget is no different from any other presentation I’ve seen,” said Councilwoman Kate Fields.
She said when the council goes into details of each department and what’s in them was done not when the budget was received but later when departmental hearings were set up and at meetings in which council could discuss changes they would like to make.
“What we got was an overview of the major changes in the budget,” she said.
The council is expected to review the proposed budget, and a budget hearing will be scheduled and posted on the city’s website. Additional adjustments are likely in the coming weeks and months as the city continues to cleanup financial records at city hall. The 2021 budget is to be adopted by June 1.
“While we know there will need to be additional adjustments throughout the budget process, I am proud of this budget created by the team at city hall. We are tackling our problems and working to move our community forward now and for the long term,” Neeley said.