Village explores options to beef up fund balance
May 04, 2011 - The Village of Oxford isn't facing a deficit for the 2011-12 fiscal year beginning July 1, but it is facing the prospect of having a fund balance that's a lot lower than municipalities typically feel comfortable having.
According to village Manager Joe Young, right now, the municipality is faced with a projected fund balance of 3.8 percent next year, which equals $84,323
"The goal, of course, is to have a 12 percent fund balance, which at this time the general fund does not," he told council.
A 12 percent fund balance would equal $266,498.
A fund balance is basically a government's savings account that can be used to pay for things like unforeseen expenses and special projects or to offset revenue losses.
The reason the projected fund balance for next year is so low is because in order to balance the proposed 2011-12 budget, the village is looking at using $308,691 from its current fund balance, which would leave $84,323.
In order to attain the target fund balance of 12 percent, the village has several options including raising property taxes, cutting expenses, pursuing new sources of revenue and collaborating with other municipalities to provide certain services.
Given 1 mill currently generates $95,000 in revenue for the village, if council chose to generate the $182,175 necessary to bring the fund balance up to 12 percent by simply raising taxes, it would require a 1.92-mill hike.
The village's current rate is 10.62 mills.
The village could also choose to lower its target fund balance from 12 percent to 11 or 10 percent. "I would be comfortable if we ended up with the dust settling at 10 percent, which is the lowest, I think, since I've been on this council," said village President Teri Stiles. "If we can keep a 10 percent fund balance and not lose any people, I think that should be our goal."
Young made a list suggestions as to how the village could save or generate money in order to beef up its fund balance. This list was posted at www.villageofoxford.org.
Some of Young's suggestions were:
n Lease for $20,000 per year or sell for $200,000 the 18 W. Burdick St. property (the old township hall);
n Lease for $20,000 per year or sell for $200,000 the Northeast Oakland Historical museum building in downtown Oxford and move its contents into 18 W. Burdick St.
n Reduce or eliminate Scripter Park beach staff – save $7,750
n Reduce or eliminate part-time seasonal DPW staff – save $7,970
n DPW takes over custodial cleaning services – save $10,000
n Reduce or eliminate part-time code enforcement officer – save $14,340
n Increase employees' retirement contribution from 0.5 to 1.5 percent – save $7,500
n Increase employees' cost-sharing for health insurance – save $6,000
n Eliminate one eight-hour part-time police shift per week – save $6,000
n Have village office open four days a week from 7:30 a.m. to 6 p.m. – save $3,400
n Share police/fire dispatch services with Lake Orion two nights a week – save $5,000
n Have the township collect village taxes – save $1,000
n Have the township conduct village elections – save $2,500
n Contract with another municipality for planning services – save $5,000
n Contract with another municipality for engineering services – save $5,000
Councilman Tom Benner didn't like the idea of eliminating the code enforcement officer. "I kind of hate to see that done because I think he's doing a good job," he said. "We've had a lot of progressive improvements in the community because we have a code enforcement officer."
Benner also expressed his concern about any potential reductions to police or 9-1-1 dispatch staffing. "I'm all for saving taxpayer dollars, but I don't want to put the taxpayers at risk," he said.
Councilman Dave Bailey wasn't too keen on the idea of contracting with the township to collect the village's property taxes.
He was concerned about creating a perception of the village "as a community that can't even collect their own taxes."
"I prefer to collect our own taxes," he said.
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.