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No tax hike, $300K reserve in proposed village budget

May 01, 2013 - Things are looking up.

That seemed to be the overall theme of Oxford Village's proposed 2013-14 budget when it was presented to council last week by Manager Joe Young.

"The good news is we're above water here," he said.

The village is projected to maintain a fund balance (or cash reserves) of approximately $300,000 – which equals about 14 percent of the municipality's expenditures – for the remainder of the current fiscal year ending June 30 and for next year's proposed budget.

"We are living within out means," said Young, noting the village is looking at having three consecutive years of maintaining $300,000 in reserves.

The manager explained that maintaining a healthy reserve fund – as opposed to consistently dipping into it to offset revenue shortages or cover unexpected expenses – should help the village improve its rating from Standard and Poor's.

In late March, the financial services company gave the village an 'A' credit rating, but with a "negative outlook," which means a rating may be lowered.

Standard & Poor's indicated it could revise the village's outlook to "stable" – which means that a rating is not likely to change – if the municipality can avoid heavy dips into its fund balance for the remainder of the 2012-13 fiscal year and the upcoming 2013-14 budget.

There was some good news for village taxpayers, too, as the proposed budget includes no property tax increase.

The proposed budget would once again be supported by a 10.62 mill property tax. One mill is worth $1 for every $1,000 of a property's taxable value.

Property tax revenues for the village's new fiscal year, which begins July 1, are estimated to be $986,000, which represents a 0.3 percent increase.

Although it's slight, Young noted that's the first increase in four years.

"At least we're headed in the right direction," he said.

In his memo to council, Young noted how "over the past few years, the total village and DDA (Downtown Development Authority) property tax revenues have decreased from 2007 (when they were)$1,694,000 to $1,155,000, a decrease of $539,000 or 31.8 percent."

The village's three general funds are proposed as follows – $1.89 million general fund budget, $816,499 police budget and $368,300 dispatch budget.

The $1.89 million general fund includes a $700,000 transfer to the police budget. The police budget includes a $245,000 transfer to the dispatch budget, which means the actual cost to run the police department is projected to be $571,499.

According to Young, the proposed general fund budget represents a $44,900 reduction (or 2.32 percent) from the current fiscal year's adopted budget.

"This is the fifth year of reduced budgets from 2007 when the budget was $2,439,000," the manager wrote in a memo to council. "The difference from 2007 to the proposed budget (for 2013-14) is $548,000 or 23.3 percent."

In other budget highlights, Young informed council that the village is anticipating $257,000 in state-revenue sharing funds, which represents a $9,000 (or 3.6 percent) increase over the original estimate for this year.

It was noted that village residents could see an increase in their monthly garbage bill. The fuel surcharge in the village's contract with Rizzo Environmental Services, a Sterling Heights-based waste hauler, increased by $6,000.

Young indicated this "may require a rate increase to residents and businesses to break even."

Increases in water and sewer rates could also be on the horizon.

Young reported the water and sewer funds are being reviewed for possible rate increases because increased system costs are not being offset by a corresponding increase in water sales.

"The economic conditions with vacant houses and reduced commercial and industrial activity has resulted in lower water sales for the past three years," the manager wrote. "Costs for the services, including the sewer treatment charges from Oakland County and the Detroit Water & Sewer Board, have increased during this time."

On top of that, village sewer customers will be responsible for $2.5 million, over the next 25 years, of an estimated $150 million in repairs and improvements to the Clinton-Oakland Sewage Disposal System, which consists of 12 communities in this county.

CJ Carnacchio is editor for The Oxford Leader. He lives in the Village of Oxford with his wife Connie and daughter Larissa. When he's not busy working on the newspaper, he enjoys cigars/pipes, Martinis/Scotch, hunting and fishing.
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