BATTLE CREEK, Mich. — City manager Rebecca Fleury said she’s had many sleepless nights since November. It’s when the State of Michigan's treasury office gave the city $858,000 for their general funds budget after they budgeted for three times that amount. The city is now left with a $2,400,000 revenue shortfall.
“Cities and villages and townships and counties we rely on that revenue to meet the service needs of our communities,” Fleury said in an interview at City Hall Tuesday morning. “So when we watch a number go from $3,900,00 to 1,550,000 we’re a little bit concerned.”
Fleury said the state began giving away reimbursements to cities and municipalities when the Local Community Stabilization Authority was implemented in 2016. It replaced the personal property tax and its goal was to make communities financially “whole” by giving them money for its budget. In November 2016, Battle Creek received $3,900,000 for its first reimbursement. The following year it dropped to $1,550,000.
“As we’ve watched those revenues go down, we’ve realized that we have a new normal as far as our revenue for our general fund, which is really the fund that provides funds for our operations as a city,” Fleury said. “And so six months [into this year] we are realizing that we have a $2,400,00 dollar deficit.”
Fleury said City Hall has been in contact with the treasury office for over a year. After the first decline, they had a $2,000,000 shortfall. However when Senator Mike Nofs (R-Battle Creek) stepped in and requested help to cover it, they gave the city the same amount of money to fix it. City officials also asked the treasury why the funding dropped and they said it had to do with reimbursements the city received in other areas. The state said they accounted for them in their calculations when giving out the checks.
“We are mandated by law to have a balanced budget,” Fleury said. “So now we have to match our expenditures to the revenue that we expect to receive.”
Now all the department heads at City Hall are coming up with proposals to see where they can make some amendments to their budget, she said. They have until June 30, 2019, the end of the fiscal year, to get out of debt. Their hope is to make the best decisions without affecting people's jobs especially those with emergency services like public safety and the fire department.
“We would like that not to happen but we also now $2.4 [million] is a pretty big number,” Fleury said. “A lot of our resources are spent on our people and their benefits and we want that to continue. We want to be competitive in that competition for talent but we also have to do it within our means.”
