Huntington Woods' Proposed Budget: Good News, Bad News

The message of Huntington Woods' proposed 2011-12 budget, titled The Rain Continues, is this: It could be worse, but it also could be much better.

City Manager Alex Allie presented the proposed budget Monday night during a City Commission study session at . While general fund revenues are projected to decline from $5,713,434 this fiscal year to $5,581,610 in 2012-2013, the drop is less than expected. In addition, the rainy day fund remains funded above 15 percent, and property values appear to have bottomed out in 2010, Allie said.

"The good news is the budget is balanced," he said. "The bad news is it was with great difficulty and with cuts."

The proposed cuts include:

• The elimination of one full-time and two part-time employees: "We've already, in this crisis, laid off nine full-time employees," out of just more than 50 total employees, Allie said. "All that was left in our long-term strategy is to lay off one full-time employee and two part-time employees. The budget, as presented, does not lay off the last part-timer. But the City Commission may decide differently."
• Less-efficient services: Residents may notice the impact of having fewer custodians and staff to maintain city parks, as well as fewer smiling faces at City Hall. "It's visible, but it's not going to get much worse," Allie said.
• Employee concessions: "It depends on the employee group, but wages will go down 1.5 (percent) to 2 percent this year, as they did last year, as they will next year," Allie said. Employees also will be asked to put another 1 percent toward their pensions and will pay more toward "other post-employment benefit" (OPEB) costs, which primarily comprise health care expenses.
• No more tree replacements: "We usually at least replace every tree we take down that's diseased or hit by lightning," Allie said. Unfortunately, during the next year, the city known for its trees will not be able to do so, he said.

The city also may have to use $62,714 of its fund equity to balance the budget.

However, Huntington Woods is well-positioned to fulfill Gov. Rick Snyder's proposed criteria to collect the $74,000 in statutory revenue sharing for which it is eligible, Allie said, having already taken the following steps:

• Shifted pensions from defined benefits (shared employee-city contributions, with set payments after retirement) to defined contributions (a 401(k) system in which the employee pays a set amount and receives benefits after retirement based on how well the investment performs) for all employees except those in the , which falls under another set of rules.
• Consolidated services. For example, Berkley provides dispatch and jail services to Huntington Woods, and the two cities purchase gas and salt together. Huntington Woods also has a library partnership with Pleasant Ridge and is a member of the Southeastern Oakland County Water Authority and the Southeastern Oakland County Resource Recovery Authority.
• Met standards for transparency in government.

The final requirement remains murky, Allie said. The governor has proposed mandating a 20 percent health care contribution for all new employees and has encouraged municipalities to progress toward that goal for existing employees as well, Allie said. The city has done so, but it is not clear whether it has done enough to meet the governor's expectations, which are not yet clearly defined, he said.

"This is probably good news: Revenue sharing is on a per-capita basis, so it won't go down," Allie said. "Our population went up a hair."

from 6,151 in 2000 to 6,238 in 2010, an increase of 87 people, or approximately 1.4 percent of the city's population, U.S. Census Bureau numbers released in March show.

In other budget notes, the city plans to contribute more to its pension system than actuaries require and will continue making OPEB payments, which are not required under the law. Both steps are aimed at heading off potential problems down the road, Allie said.

The Huntington Woods City Commission plans another study session April 26 and a public hearing May 3.

Correction: The story was corrected to say the budget as presented does not lay off the last part-timer.