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City has lots of cash

June 18, 2014 - City of Village of Clarkston has lots of cash in its savings account almost $300,000.

One resident said money should be given back to taxpayers, but officials said the money needs to be spent on projects the city postponed for years during economic decline.

City Attorney Tom Ryan said most auditors would say a healthy fund balance for a municipality is around 20 to 25 percent.

"We are three times that high," remarked Councilman Eric Haven in regards to the city's 43 percent fund balance.

During a budget presentation City Treasurer Sandra Barlass said there has been no dramatic spending by the city, so the fund balance has been on the rise.

Barlass also said Standard and Poor's, a financial company that rates the financial soundness of municipalities, recommends a fund balance between 5 to 15 percent.

"I am not sure any other municipalities are at a 40 percent fund balance," said councilman Mike Sabol. "I have always said we should have as high of fund balance as possible. Higher than normal."

Clarkston resident and former city council member Richard Bisio said the fund balance is too high, and taxpayers should get some money back.

Bisio suggested city officials cut the millage rate, which is now at 12.81 down by 1 mill.

"I suggest the council reduce the general operating millage for 2014-15 so the projected fund balance after five years is 15 percent. This would allow a millage reduction in 2014-15 of 1.8947, resulting in a total operating millage of 10.9577.1," Bisio explained.

"This would still allow funding of all the projected one-time expenses for the next five fiscal years and leave a fund balance at the end of those five years of 15 percent, which the budget presentation characterizes as strong."

City resident Don Frayer said if the city does not cut the rate this year, then perhaps they should could consider doing so next year.

Officials have said the city needs to spend some of the money by doing projects, and buying equipment.

A tractor purchase for $21,800 approved at the June 9 meeting was an expense DPW Foreman Jason Miller said was necessary.

Miller said the tractor always used is 17-years old and had over 3,000 hours of use time on it.

"We use the tractor daily and it really goes through a workout," said Miller.

Several officials said other important projects were also put off when the economy was in decline.

"The storm drains, where all the rainwater goes, need to be cleaned," said Miller. "They have not been cleaned in 10 years, and they should be cleaned every three years."

He estimates the cost to clean the drains would be about $58,752 with an additional $6,800 to replace storm covers throughout the city.

Miller said money could be saved for the storm project if Independence Township DPW loaned the city a truck to do some of the work.

The city can also spend money investing in special lighting to save money in the future.

Councilman David Marsh said he has been involved getting quotes for changing the lighting and estimated cost to change the lights would be $10,000 to $13,000.

Street lighting is also another project that needs to be done in the city by replacing the present lights with LED lighting, the city would save money over time.

"We could cut the light bill in half by changing to LED light bulbs," Carol Eberhardt, city manager, pointed out.

"LED lights have 100,000 life hours," agreed Miller.

Projects to beautify the city also need to be completed.

Eberhardt said many trees have been cut down over the years because of a large insect problem. Although many trees were cut down, the trees were never replaced.

"The city has not planted a tree in a long time, but we have cut them down.Trees provide a lot from an economic standpoint, and they also help with noise control,"said Eberhardt. "We need to plat trees and do sidewalk repairs."

These are the types of projects the city needs to start considering for spending out of the fund balance," she added.

Sabol added it is the right time to also install cameras in Depot Park stop vandalism occurring.

The fund balance is on track to keep rising, Barlass told officials.

"If expenses and revenues stay the same, the fund balance will continue to climb," she said.

Barlass also explained most of the expenses paid by the city go to police, fire and building services.

"Most of the city's revenue, 72 percent, comes from local taxes with the rest coming from federal sources and building and grounds permits," Barlass continued.

City council will approve a final budget later this year.

Staff writer covering Independence Township and Clarkston area.
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