LEGISLATIVE UPDATE

At Tuesday's City Council meeting, Interim City Manager Warren Renando presented the City's five-year financial model, which clearly shows that by fiscal year 2012-2013, all reserve monies will be spent and the City will end the year with a $2,154,248 shortfall. Renando admitted that he made some assumptions about income and expenses, as everyone must when creating a budget. The assumptions are outlined in the report.

Unless something drastic happens within the next two years, the City will go into receivership, meaning the State will appoint an emergency manager to handle day-to-day operations, working to bring the city out of bankruptcy.

Council members discussed how the City has the lowest median household income and the lowest home sales price and yet it also has the highest mileage of any neighboring community and an income tax (one of the few municipalities in the state to do so). The City struggles with bringing in new residents because those fees and taxes are higher than nearby communities and the current residents can barely afford them.

The Council then voted to hire Tetra Tech for $12,400 to create a feasibility study on storm water utility fees. If the Council decides to move forward with the plan, it would be one of a few Michigan municipalities to charge this fee; however, because the City separated its storm water pipes years ago, residents have been paying a significantly reduced rate for years.

Mayor Dunigan's recommendation to have the Rules and Personnel Committee negotiate a one-year contract with Renando and restart the City Manager search process in May did not move forward. Instead, Council voted to have the Committee discuss the City Manager issue and report back to the Council.