Budget approved, township to 'spend down' huge fund balance
December 29, 2010 - Officials in Orion Township have calculated, ironed out, and approved their 2011 budget.
At the Orion Township Board of Trustees meeting on Monday, Dec. 20, the proposed budget passed with a vote of 6-0, with John Steimel absent from the vote.
The projected 2011 year-end general fund for expenditures total $4,632,952, down from 2010's projected year-end $4,978,014. The general fund covers "general" township spending, such as boardmember salaries, road maintenance, maintenance of government grounds and parks, and elections.
The general fund also covers expenditures related to senior activities, which are predicted to increase from $272,507 in 2010 to $317,420 in 2011. The increase is in part because of costs related to the new senior center being erected on Joslyn Road south of Clarkston.
Similar to last year, the township will be operating with a general fund balance of 106 percent, but Township Supervisor Matthew Gibb said the township is trying to whittle that number down.
"It's anticipated that there will be 46 bankruptcy filings by Michigan municipalities, whereas before there has only been four in the history of the state," said Gibb. "What I'm fearful of is that [Lansing] is going to look at a community like ours, and our fund balance, and say 'hey I know how to solve the budget, you have to rely on [your fund balance] first.
"So right now it's better for us to budget [the fund balance] and spend it down, and that's what you're going to see over the next few years."
Trustee Neil Porter noted that despite an overall increase in cost for services and other items, the township has managed to make sure expenditures are consistently going down.
"We're doing everything we can to cut cost and keep out expenditures in line with the reduced tax revenue," said Porter. "Every time you do that it hurts someone, but those are the decisions that have to be made."
Gibb added that Orion Township is a very stable community, financially, and that many crises that can catch municipalities off-guard are compensated for and anticipated by the township.
The police fund expenditures are expected to go down, from $4,151,327 in 2010 to $3,963,077 in 2011, but the fund balance will also decrease, dropping from $1,495,394.66 in 2010 to $605,165.16 in 2011.
Police revenue is also expected to drop from just over $4 million to a little over $3 million due to a drop in property values and the taxes associated with them.
Orion Township Substation Commander Lt. Bruce Naile said that because of the sharply falling revenues, the shared command and overtime hours between Oxford and Orion Township's police services have become a necessity.
"We cut three positions and I know Oxford cut one, and the problem is that property values are falling so rapidly that these kind of cuts need to be made," said Naile. "We already got the go-ahead to continue talks with Oxford, and I think you'll see us move forward with the plan in the next 30 to 60 days."
"An additional fund for police expenditures exists, but is restricted for liquor law enforcement only, and this number rose from $61,405.82 to $75,405.82 in 2011.
Major cutbacks that allow the police to operate on a lower budget include overtime hours which will save about $27,000 and marine patrol which will save around $10,000. The overtime hours were reduced as a result of the shared overtime between the Oxford and Orion Township police services.
The Orion Township Fire Department is also lowering its expenditures from $1,720,805 to $1,517,790 in 2011. Revenues went down as well, requiring a withdrawal from the fire department's fund balance to cover the deficit.
Because of the withdrawal, the Fire Department's fund balance is expected to decrease from $1,159,997 in 2010 to $1,111,347 in 2011.
The fire department's fire capital improvement fund, a kind of saving account for bigger items like fire trucks and stations, comes in with end-of-the-year expenditures of $1,815,000 and a fund balance of $660,634.
Orion Township Fire Chief Jeff Keys said that the fire department was trying to be as frugal as they can.
"We're cutting back in a lot of areas, and we're staying out of debt," said Keys. "The fire capital improvement fund helps us not have to take out a loan for every big purchase, unlike a lot of other communities."
The safety path fund is becoming more expensive, with a 2011 year-end estimate putting its expenditures at $1,463,175 compared to 2010's $787,000. Its fund balance and repair fund balance have both dipped significantly from 2010, from $1,647,312 and $609,916 respectively to $956,047 and $259,916 respectively.