Fiscal Year 2012-2013 Budget Approved by Council
The fiscal year 2012-2013 budget was approved by the Portage City Council on May 22, 2012. The Council and City Administration are pleased to have prepared a balanced budget, totaling $61.4 million. Importantly, during this period of economic difficulties, the city has practiced an approach to the provision of public services that promotes lower-cost service delivery, including partial or complete privatization of services; the use of part-time, on-call and contracted personnel to supplement full time staff; funding of post employment benefit obligations to lessen or eliminate long-term unfunded liability and, most recently, altering benefit programs for new hires to limit added liability in the future. Highlights of the fiscal year 2012-2013 budget include:
- A decrease in the overall city tax rate from 10.8916 mills to 10.7778 mills.
- A decrease in budgeted General Fund expenditures of approximately 2.4 percent from fiscal year 2011-2012 budgeted General Fund expenditures.
- Incorporation of a 1.5 percent increase in property tax revenue, resulting from an increase in personal property tax revenue.
- An increase in the fund balance of the General Fund from 13 percent to 25 percent of total General Fund expenditures.
- Continuation of General Fund support for the Capital Improvement Program, the Major Street Fund and the Local Street Fund.
- Allocation of an Intergovernmental Collaboration Studies Fund in the amount of $100,000 to address funding needs associated with planned collaborative service studies.
- Maintenance of the City of Portage position in the lower 25 percent of all Michigan cities of greater than 25,000 population in terms of millage level.
General Fund Balance
A significant element of the fiscal year 2012-2013 budget involves the increase of the Council-prescribed fund balance for the General Fund from 13 percent to 25 percent of total General Fund expenditures. The City of Portage budget continues to support a broad service delivery program as well as significant capital investment in infrastructure. However, it is anticipated that fiscal year 2012-2013 through fiscal year 2015-2016 will continue to be very challenging. As such, it is increasingly important that a conservative financial posture be maintained, with an emphasis on preserving fund balance. Until a clear picture of a stabilizing revenue base exists, reserves above 13 percent of General Fund expenditures will be planned.
The major categories of the city budget include the General Fund, the Capital Improvement Program Fund, Curbside Recycling Fund, Leaf Pickup / Spring Cleanup Fund and the Municipal Street Fund. The total millage levy in the fiscal year 2012-2013 budget is 10.7778 mills, slightly less than the fiscal year 2011-2012 millage level of 10.8916 mills. The millage includes a General Fund levy of 7.5000 mills, a Capital Improvement Fund levy of 2.0000 mills, 0.4000 mills for the Brush and Leaf Pickup / Spring Cleanup programs, 0.3349 mills for operation of the curbside recycling program and 0.5429 mills of the Municipal Street Fund millage.
Significant aspects of the major budget categories are outlined below.
The General Fund supports the majority of service operations of the city, with the largest percentage of the budget devoted to Public Safety services. Among other notable elements of the General Fund, total full-time staffing has been reduced to 179 full-time positions from 184 full-time positions in fiscal year 2011-2012 (and from 215 full-time positions in fiscal year 2005-2006). After two years of declining property tax revenue, a 1.5 percent increase in General Fund property tax revenue infiscal year 2012-2013 (attributable to an increase in personal property tax receipts) is in contrast to the 4.4 percent and the 2.6 percent decrease over the previous two years. And while shared revenue from the State of Michigan for the City of Portage was impacted by the loss of statutory revenue sharing in 2011, the magnitude of this loss was reduced by revenue from the state’s new Economic Vitality Incentive Program (EVIP) for which the city qualified. Receipt of EVIP revenue is planned for in the fiscal year 2012-2013 budget as well. Finally, as noted above, a projected fiscal year 2012-2013 ending fund balance of 25 percent of General Fund expenditures has been planned.
Capital Improvement Fund
The Capital Improvement Program contains capital projects that promote the public health, safety and welfare; facilitate growth and development; protect community resources and enhance the quality of life within the city. Revenue is provided to the Capital Improvement Program through the property tax millage, Municipal Street Fund millage, utility funds, Federal and state funds, special assessments and through a fund transfer from the General Fund.
With continuing and projected financial constraints, capital projects are focused on essential government functions, with careful management of the level of additional debt resulting from the Capital Improvement Program. The fiscal year 2012-2013 Capital Improvement budget supports $10.968 million directed toward infrastructure improvements, with $3.995 million directed to street related improvements, $1.005 million directed to utility infrastructure improvements and $900,000 in public facility, police, fire and park and recreation improvements.
Curbside Recycling Fund
The fiscal year 2012-2013 budget provides for continuation of the weekly curbside recycling program and the Portage-only Saturday household hazardous waste drop-off program initiated in 1999. A slight millage decrease of 0.0254 to the Curbside Recycling millage levy resulted in a levy of 0.3349 mills, which is sufficient to maintain the current level of service.
Leaf Pickup/Spring Cleanup Fund
The fiscal year 2012-2013 budget also continues the pro-vision of the Leaf Pickup Program, with three autumn leaf collection periods. The separate Spring Cleanup Program and the Quarterly Curbside Brush Collection Program are maintained as well. In order to provide sufficient revenue to continue planned programs and provide adequate fund reserves, the Leaf Pickup / Spring Cleanup millage has been maintained at the maximum 0.4000 mill levy.
Municipal Streets Fund
In addition to the specific roadway reconstruction projects that are outlined in the 2012-2022 ten-year Capital Improvement Program, street pavement maintenance receives support in the fiscal year 2012-2013 budget, totaling $560,000.
In summary, the fiscal year 2012-2013 budget maintains the favorable standing of the City of Portage in the lower 25 percent of all Michigan cities of greater than 25,000 population in terms of millage level, while placing the city in the best position to address the anticipated financial challenges that lie ahead. The City Council and City Administration believe that this conservative financial plan is a responsible and sound program for addressing community needs.
Questions concerning the City of Portage fiscal year 2012-2013 budget can be directed to the Finance Department at 329-4451. View the complete budget online. The document is also available for public viewing at Portage City Hall (7900 South Westnedge Avenue) and the Portage District Library (300 Library Lane).