Quick Hits: Cutting 15 Percent to 20 Percent from the Budget

On Wednesday, the heard presentations from various components that affect the general fund. The council had asked each to illustrate how it could cut 15 percent to 20 percent from its budget. Here are a few blurbs from each presentation.

Legal Services: Cutting City Attorney Daniel Christ's services was the only place council saw a savings. "We'd have to cut $53,000 to get to 15 percent in this department," Mayor Dave Coulter said. "How? We could attempt to take that out of Dan, renegotiate with Dan, maybe he doesn't come to council meetings?"

Legal services include municipal and labor attorney services. Christ is on retainer for $2,000 a month to attend City Council meetings, which covers preparation and research. Additionally, Christ's firm – Hafeli, Straan, Hallahan, Christ & Dudek – is compensated $100 per hour for other legal services. The labor attorney, Howard L. Shifman, is compensated at $105 an hour.

"Of course, it's better practice to have him here, but it's the only place I see savings," Councilman Scott Galloway said.

"We have to get an estimate," Coulter said. "Tell me how to get to 15 percent otherwise?"

Cable Services: Cables services are run by Del Schmidt, cable director, who makes $27,000 as a contract employee with no benefits. Cable services include televising and streaming City Council meetings. It costs about $110,000 to run the cable services for the city, while the revenue it brings in is only about half that. However, the expenditure related to cable services has been shifted to the public relations and advertising tax and the 1 percent cable franchise fees dedicated to Public Education and Government (PEG) programming.

"This does not affect the general fund," Coulter said. "It's special revenue in and special revenue out."

Financial Administration: This department has already reduced its staff from nine to six during last summer's cuts. It deals with payroll, taxation of real and personal property, investing, invoicing and labor negotiations, among other things.

The six people who currently work in this department are being cross-trained to do each other's jobs. This was part of the reorganization plan implemented in the fall.

According to Finance Director Jaynmarie Hubanks, a budget reduction here would equate to shutting down City Hall an additional two days (it's currently open only four days); requiring all water and tax payments to be sent to the lock box, eliminating all over-the-counter processing; and charging administration fees to all non-general fund functions (an estimated $32,000). Hubanks also said the department would charge a 1 percent service fee to the employee retirement system, which would generate about $22,000-$33,000.

"By doing that, that's about $72,000. That takes care of a good chunk of (cutting 15 percent)," Coulter said.

Resident Katie Hershberger objected to taking away the over-the-counter transactions for tax and water bills.

"How do I get a receipt?" she asked Hubanks. "Some of us don't accept the age of technology. I don't pay anything online. I want a receipt when I pay my taxes and my water bill. I want something that tells me I (made) full payment."

City Council: City Council's expenditures are about $35,000. A little more than $29,000 is a council stipend. The stipend is mandated in the City Charter, and to repeal that would require a vote. The other expenditures are $5,000 for training and travel and $500 for miscellaneous.

"Could we volunteer to cut (the stipend) without going to the voters?" Councilwoman Melanie Piana asked.

"It would have to be voluntary, and it would have to be a donation to the general fund," Coulter said.

Ferndale Interim City Manager Mark Wollenweber suggested not cutting training and travel because of the return the city gets at some of those functions.

"I went to the SEMCOG (Southeast Michigan Council of Governments) meeting, which was city-paid, and brought back the shared services initiate," Piana said. .

"City Council will take its 15 percent cut," Coulter said. "And it will come from one of those two (items)."

City Manager: The city manager makes sure all programs that are adopted by the City Council are implemented, as well as coordinating and managing operational and financial activities for Ferndale. The manager maintains city membership with  various organizations, such as the Michigan Municipal League, the National League of Cities and the Ferndale Area Chamber of Commerce.

Wollenweber said the city could save by eliminating the city manager's part-time administrative person, hire a permanent city manager at a lower salary and reduce the training budget.

"I do not recommend cutting membership," Wollenweber said.

"Cutting $5,800 (for training) really is a net loss to the city," Councilman Scott Galloway said. "It doesn't go toward balancing $2 million (shortfall) in any significant way. We need to identify 15 to 20 percent in all departments; some might get more, but just to cut something is not smart budgeting."

Coulter added that he doesn't see a way to get to $60,000 in cuts – 15 percent to 20 percent of the city manager budget – without eliminating that part-time contract administrative person.

City Clerk: In 2008, the City Clerk Department included the city clerk, a deputy clerk and a full-time and two part-time clerical positions. Today, the department employs the clerk, the deputy clerk and a half-time clerical worker pulled from the six workers in the financial services pool.

City Clerk Cherilynn Tallman presented how the department might make 15 percent and 20 percent cuts:

Have only an administrative assistant working six hours a week; eliminate various boards; increase Freedom of Information Act extensions from 10 to 15 days; transfer various registration and permit requests to the Woodward Dream Cruise director or the Downtown Development Authority; and stop doing everything except dog tags.

"This department has already been cut so deep that I don't think it could perform its constitutional requirements in any way with further cuts," Wollenweber said.

Woodward Avenue Dream Cruise: There's not much to cut from the Woodward Avenue Dream Cruise, since it's mostly funded by sponsorships, Coulter said.

Festival director Michael Lary has taken measures to cut down on expenditures by limiting the focus of the event to East Nine Mile. As Mayor Pro Tem Kate Baker said, people are going to come to the event, regardless of whether Ferndale is involved.

"You're getting grant and revenue to cover costs, and it isn't affecting the general fund," Coulter said.

The next budget review meeting is at 6 p.m. Wednesday at City Hall.

Find Ferndale city budget documents here.