Source: Sherman Publications

Proposed village budget contains no tax increase, 1 percent pay raises
Council must find way to pay for two major road projects totalling $820K

by CJ Carnacchio

April 16, 2014

Oxford Village residents should be pleased to learn the municipality’s proposed 2014-15 budget contains no property tax increase.

In the budget he submitted to council last week, village Manager Joe Young proposed keeping the tax rate at 10.62 mills.

One mill is equal to $1 for every $1,000 of taxable value.

Under the proposed rate, a home with a taxable value of $50,000 would pay $531 for the July 1 village tax bill, while a home with a $100,000 taxable value would pay $1,062.

The village’s three general funds are proposed as follows – $1.936 million general fund budget, $844,457 police budget and $304,653 dispatch budget.

The $1.936 million general fund includes a $700,000 transfer to the police budget. The police budget, in turn, includes a $270,000 transfer to the dispatch budget, which means the actual proposed cost to run the police department is $574,457.

Young projected the reserves for the three general funds should amount to $365,000 by June 30, the end of the current fiscal year.

However, the proposed budget calls for using $30,000 (or 8.2 percent) of the reserve to balance it, reducing the fund balance to $335,000.

Included in the proposed budget is a 1 percent pay raise for all village employees, both union and non-union. The total cost to the village would be just under $10,000.

“The employees have not had a raise since July 1, 2009,” Young said.

Two significant revenue losses are reflected in the proposed budget.

One is a proposed $31,750 reduction in the fees that the Downtown Development Authority (DDA) pays the village for services provided by the police and Department of Public Works (DPW).

Last year, council decided to reduce these fees on an annual basis. This year, the DDA was scheduled to pay $21,750 less for police and DPW services, but the DDA board requested an additional $10,000 reduction in order to help pay for the hiring of a part-time director, who would work 25 hours per week for an annual salary of $25,000.

The other revenue reduction stems from the loss of the $38,000 fire dispatch services contract with Oxford Township. However, $20,000 is being made up by the new police dispatch services contract with Lake Orion, so the net loss to the village is actually $18,000.

How to fund two major road projects is a big issue that council must tackle as it prepares to approve a new budget.

One is the reconstruction of badly-deteriorated, pot hole-ridden stretch of W. Burdick St. between Ashley Way and S. Waterstone Dr. The 1,650-foot project’s estimated cost is approximately $550,000.

“The (village’s) major street fund does have over $150,000 available for this project,” Young said.

Because 500 feet of the project is located within the township, the village wants the township to share in the cost, however, there’s no agreed-upon amount.

Oxford has applied for $378,000 in state funding to help pay for it and is waiting to hear from Lansing.

“Unfortunately, at this point in time, the (state) Legislature has not taken action on that funding,” Young said. “It’s hard to say if and when that might happen.”

“We need to have a Plan B,” said Councilman Bryan Cloutier. “I feel strongly that we need to repair that road this year. It has to be done.”

The manager told council the village has two funding options if the state grant doesn’t come through.

One is to borrow money from the township. The other is to use part of the $1.2 million the village has in an investment pool run through Oakland County. Young noted the village is earning “less than 1 percent” in interest in this pool.

“If there is an alternate (funding plan) out there and that is the route that we have to take, we need to know so that we can act on that, so that (Young) can get the ball rolling,” Cloutier said. “Because it is spring time and we still don’t really know how we’re going to pay for this.”

The other major road project that the village must find a way to finance is construction of the East/Edison Alley.

The project calls for constructing a two-lane, 28-foot-wide road, just east of M-24, from Ensley St. to the Holy Cross Lutheran Church’s parking lot. Another 16-foot-wide, one-lane road would then be constructed from the alley's southern end to M-24. Both roads would contain bicycle lanes.

According to Young, the estimated project cost is $270,000, of which $50,000 is already included in the DDA budget. The remaining $220,000 would have to come from other funds and potentially a special assessment district.

Originally, the plan was to construct the alley over a three-year period, but Young said the alley needs to be built this year because Genisys Credit Union plans to break ground on a new 3,300-square-foot facility on the lots located at 114, 118 and 120 S. Washington St. The site plan was approved last month.

Part of that plan includes traffic being able to access and exit the site via Edison/East Alley. “The construction of that alleyway is a key component to this new development and future development,” Young said.

Young noted the Michigan Department of Transportation (MDOT) has verbally told the village that left-turns from M-24 onto the Genisys site and left-turns onto M-24 from the credit union will both be prohibited.

“We’re pursuing getting relief from that,” Young told this reporter.

He explained the village will be asking MDOT to temporarily allow left-turns between the Genisys site and M-24 until the alley is constructed.