Traverse City Record-Eagle

Archive: Wednesday

January 30, 2013

Commission divided over infrastructure, taxes

Traverse City commission looks to new fiscal year

TRAVERSE CITY — City commissioners all support moving more money toward the city infrastructure, but that's where the consensus ends.

Commissioners discussed what they wanted to see in the next fiscal year budget that begins July 1 during a study session this week. City Manager Ben Bifoss said he seeks consensus as he pieces together a budget that should be buoyed by more money, thanks to stabilizing property values.

"We should generate about 2.4 percent more tax revenue, so I'm more optimistic going into this year's budget," Bifoss said.

Increased tax payments of 2.4 percent would generate about $190,000 extra revenue, and commissioners said they're willing to dip into their rainy day account to fund street and sidewalk repairs, as well as other construction projects. Their target is to increase general fund spending in those areas from $1.1 million this year to $1.5 million.

Some items will get a look even without consensus. Bifoss agreed with Commissioner Jim Carruthers' recommendation to add another worker for the department of public works to keep up with the workload.

He also agreed he would speak with Grand Traverse County officials about taking over the city's few recreation programs, an idea promoted by Commissioner Mike Gillman and supported by Commissioner Barbara Budros.

Other suggestions didn't fare as well.

No one backed Carruthers' proposal to raise the city millage rate by 0.7 mills.

"I'm tired of cutting," Carruthers said. "I think a lot of people in this town are willing to pay a little bit more for better service."

An idea to throw a couple hundred thousand dollars at the city's $27 million unfunded pension liability also met opposition.

Commissioner Mary Ann Moore said, "it's such a small drop in the bucket" she rather see the money go towards streets.

Ross Richardson, a city resident and former county commissioner, said the unfunded liability is a huge moving target influenced by the economy, retiree mortality, and other items over which the commission has no control.

"It's not like a mortgage, where by paying a little extra each year you can save a little bit of interest," Richardson told the commission.

There is no interest charged to the city for it's unfunded liability, and the city already makes extra annual payments to erase the debt over the next 27 years.

Bifoss said he will develop a couple of different budget scenarios for the commission to review. He'll present a draft budget in April when he has hard revenue numbers.

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