By LINDA LOBECK
IRON MOUNTAIN - Iron Mountain City Council, at a special meeting Tuesday, unanimously approved the fiscal year 2014-15 budget and general appropriations act including total expenditures in the general fund of $6,444,602.
With revenues in the general fund totaling $6,403,164, the unreserved fund will be used to cover the deficit of $41,432.
As a result, city taxes will be increasing. Water rates are also increasing.
Council members Bob Moraska, Rick Zolner and Brad Coe were absent from the meeting.
The council levied a millage total of 21.0629. In the general appropriations act adopted by the council, this includes 17.5808 mills from July 1 through June 30, 2015, for the purposes of defraying the cost of the general expense and liability of the city of Iron Mountain. This is an increase of .165 from last year's levy for the general fund of 17.4158.
An increase to the general fund millage comes from what was needed for the garbage refuse tonnage fee increase as well as capital projects including fixing the compost area.
The tax levy of 3.2321 mills was also levied to pay the city's contribution to the Police and Fire Pension Fund and Health Insurance Fund for the police and fire retirement benefits. That levy was 3.1534 last year.
The general appropriations act also included the levy .25 - the most the city can levy for the cost for the police liaison officer expenditures in the Iron Mountain Public Schools. City Manager Jordan Stanchina noted that the remainder of the cost will come from the school district and this is the final year of previously voted on five -year levy.
Last year, the council levied .1630 for the liaison officer.
Council had agreed to place the position before voters in the November election to decide if they wanted the liaison officer to continue in the schools.
Stanchina noted that the budget adoption at Tuesday's meeting was a culmination of many budget workshops held with the council. He added that the council still has millage available to levy - .7880 -- which would generate approximately $177,500. This can be levied by the council without having to go to the voters. The millage remains from what is still available under the Headlee Rollback Amendment of 1994.
Some of items affecting this year's budget, Stanchina noted, included the loss of $60,000 due to the personal property taxes no longer being collected.
"If we would have still been able to collect those taxes, our budget would have been in the black this year," he said.
City staffing levels are at 44 full-time and 15 part-time employees. This is compared to 55 full-time and two part-time city employees in 2006-07.
Stanchina said that there will be two police retirements this year and they are planning on not replacing one of the lieutenants for a savings of $75,000.
Chief Financial Officer Carol Bartolameoli will also be retiring during the fiscal year and there will be the expense of hiring someone to train that will eventually replace her. He added that is a one-time cost that is needed so that the replacement is familiar with the budgeting and state reporting that is required by the city.
Along with the budget process, the city also works on a five-year plan. Stanchina said that by hiring a police and fire services director and not replacing the police and fire chiefs, there will be a savings of $90,000 a year for a total of $450,000 during the next five years.
The projection shows a fund balance of $977,000 in five years and that savings plays into half of the balance. This plan also calls for revenues increasing by two percent and expenses also going up by two percent.
In the 2016-17 year, Stanchina said the five-year plan also calls for not replacing a retiring police officer. But they will evaluate that when the time gets closer to see if that will work. An eight percent increase in health insurance costs is also figured into the forecast.
Bartolameoli noted that this year wasn't a good one and the city experienced a 5 1/2 percent overall increase in insurance costs.
Another area highlighted by Stanchina was the city water funds noting that there was only one rate increase in 10 years - .42 cents per cubic feet in 2012. There are a number of capital improvement projects that are lined up along with the city needing to maintain its water fund. A total of $595,000 is set aside for projects this year.
To help the fund, the fixed water charge will go up $4.50 a month along with the residential charge of $4.28 per thousand cubic feet. This is equal to an increase of $11.89 per bill or just under $6 a month.
Due to necessary improvements at the Iron Mountain-Kingsford Wastewater Treatment Plant, the sewer rates have also increased.
Stanchina suggested that the council in two to three years do more to look at what is needed in these funds and review them annually. "We need to start looking at that going forward."
Stanchina said that work remains to be done in the water system, especially with the information received from the recent study. He said that 48 percent of the city's water mains were installed in the 1920s and 33 percent were in 1920.
"What the water study stresses is that we have to keep replacing mains or it will catch us down the road," he said.
Some discussion during the meeting also concerned the local and major street projects for the upcoming fiscal year. Local street funds totaling $252,248 have been budgeted and the council will have to look over the road ratings and decide which ones can be done this year.
Major street projects include Hydraulic Falls Road, which will be improved from the Breitung Cutoff Road to the railroad crossing. In addition, the city will have work done on Park Avenue from D to A streets and Margaret Street from the city limit to Grant Street. Both projects are funded by the Small Urban Program with the 20 percent match from the city totaling $99,969.
Linda Lobeck's e-mail address is email@example.com.