Traverse City Record-Eagle

October 16, 2013

Tiny Benzie County village of Elberta facing big deficit

Traverse City Record-Eagle

---- — ELBERTA — Two years of losses and a $560,000 deficit in Elberta’s general fund prompted village officials to consider slashing expenses before the state Treasurer installs an emergency manager.

“These are drastic cuts — cuts in services, wages, the whole ball of wax,” said Reggie Manville, Elberta village president. “We’ve had this deficit for a while. We’ve whacked away at it. We’ve been hovering at same level for a while. You’ve heard of ‘too big to fail’; I think some of the council thought we were too little to fail.”

The tiny Benzie County village of 372 residents on the Lake Michigan shoreline has run a general fund deficit for close to a decade after a proposed brownfield redevelopment never materialized. The deficit reached $800,000 at one time but village officials were able to knock it down. Audits, though, show the village fell deeper into the red the last two years and officials drew on the village’s sewer fund in an effort to offset the cost of running village operations.

Manville said the state Treasurer set a Thursday deadline for the village to come up with a five-year deficit reduction plan. He said cost-cutting and revenue-generating measures discussed during a council meeting last week included reducing or eliminating village employees’ benefits, starting a three- or four-day work week, raising fees for garbage and water and selling assets like community buildings and parks.

“The next proposal was the council would come together to make a millage proposal to raise operating funds for the village,” Manville said.

Other village officials weren’t so forthcoming with comments on the financial situation and potential solutions.

“Nope, I’m not going to say anything at this time,” Treasurer Laura Manville said before she disconnected a call from a Record-Eagle reporter last week.

The state has not started a formal review process that could lead to the appointment of an emergency manager, but some fear that’s the next step. Emily Votruba, a member of the village’s parks and recreation commission, said members are concerned the village may have to sell parkland, including Lake Michigan beachfront, to help satisfy debt.

“We have a beautiful stretch of beach and it’s all undeveloped,” Votruba said. “This is a situation that’s ripe for someone to come in and sell off some land … and in an emergency manager situation we won’t have any control.”

Manville said three parks -- the marina, community building and Anderson Park -- would be the only ones “feasible to sell.” He said the council will vote Thursday on a plan, but its up to the state to determine whether it passes muster and the village can avoid an emergency manager.

“Their philosophy on this is have the village have the first chance to solve its financial problems,” Manville said.