Politics & Government

City Begins Budgeting Process with Four Budgets, $2.3 Million Shortfall

Members of the Ferndale City Council met last week to began the budgeting process.

Balancing the budget for a city is already a complex task, so imagine having to do four budgets. That's exactly what the Ferndale City Council is looking at right now.

"(Council is) basically running four budgets," Ferndale said. "Two years out, one with and one without the Headlee Override."

The council recently adopted a two-year budget planning model, working out not only the coming budget but also the subsequent budget.

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"The nut to crack is a $2.3 million shortfall," Wollenweber said.

To try to fill the city's projected shortfall, the City Council approved putting a Headlee Override measure before the voters on the May 3 ballot. The tax-increasing measure would allow the council to raise the general operating millage 3 mills, effective July 1, and cap it at an additional 2.4552 mills for the next four years.

Find out what's happening in Ferndalewith free, real-time updates from Patch.

This would increase the city's general operating millage to 20 mills. The Headlee Override, if passed, would sunset after five years, thus coming off the tax roll.

A 3-mill increase would equate to about a 6 percent increase on your property taxes (or about $120 on a home whose taxable value is $40,000). Adding an additional 2.4552 the next year would increase your property taxes by an additional 5 percent (or about $100 more). (To calculate property taxes: Taxable value divided by 1,000 times the tax rate [mills] = property taxes)

"Ferndale will be clearly manageable, should the Headlee Override pass," Wollenweber said. "Pretty much business as now if it passes."

He added that if the Headlee Override passes, there would still be a budget shortfall, but it would be filled with a combination of using the emergency fund and cuts.

"The shortfall (would be) fairly small, a more manageable number," Wollenweber said.

Without the revenue that the Headlee Override would generate, Wollenweber said, the city will have to cut an additional 20 to 24 workers, "on top of the 40 that were already cut previously," he said.

Wollenweber said the council has asked department heads to put together a budget that shows 15 percent and 20 percent in cuts to their existing operations. "We want to get an idea of what we can work with," he said.

Wollenweber said the council will have to adopt a budget before the millage vote May 3. "We'll have to adopt the 'no Headlee' budget, and if the Headlee passes, go back and make the adjustments," he said.

But the meeting wasn't just about cuts; Councilwoman Melanie Piana wanted to make sure the city was looking at ways to enhance itself despite the shortfall. "We should be pushing for strategic enhancement," she said. "Enhancements with a return on revenue." 


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