Teamwork key to solid financial footing in tough times, mayor says

Photo by Tom Tigani

Mayor Joseph Kuspa tells residents Wednesday that cooperation has helped deal with financial challenges and that city officials must continue to make adjustments.

‘It will be 12 to 15 years before Southgate returns to 2008 revenue levels.’
— Southgate Mayor
Joseph Kuspa

Sunday Times Newspapers
SOUTHGATE — The city was able to hold the line financially in 2010 despite a “tsunami of circumstance,” and officials have been able to lay the foundation for a brighter future.

Mayor Joseph Kuspa relayed that message to residents Wednesday during his State of the City address, which looked back on the events of his first year in office. Much of it dealt with economic issues, as it was a year in which revenue was reduced 10 percent.

That situation could have devastated services and community programs were it not for a team effort from city employees, Kuspa said. The team effort involved salary concessions from administrators as well as front-liners, personnel realignments and rearranging of workers in various city departments. Of the latter, the most notable was the creation of the Downriver Central Dispatch for police and firefighters with the cities of Lincoln Park and Wyandotte. The city also stepped up its energy-efficiency measures and was more aggressive in pursuit of federal and state grant funding.

“We did not look to Lansing or Washington for a simple solution,” Kuspa told a crowd of some 50 people inside the City Council chambers at City Hall. “Rather, we banded together and produced results in a time when we needed it the most.”

Those results were “non-negotiable,” he said, because the city’s taxable property value “plummeted” by over $100 million, and because of “staggering” state revenue sharing cuts of $1 million.

“Virtually overnight these factors combined had left our city with a $1.6 million budgetary shortfall,” Kuspa said. “According to the estimates of our independent auditing firm, Plante & Moran, it will be 12 to 15 years before Southgate returns to 2008 revenue levels.”

Because of the stagnant economy and rising health care costs, Kuspa said, and because 71 percent of the city budget goes toward wages, benefits, pensions and retirement contributions, the past year’s steps were the beginning of “what seems today like a pilgrimage.”

That journey started with a “holistic approach” to budget and services in which all departments and services were evaluated, cuts were made and eliminations took place when necessary.

“I am proud of what we have accomplished,” Kuspa said. “The sacrifices … have affected us all, but it has given us the opportunity to take part in a sustainable future, and it would not have been possible without the selfless acts of our employees and elected officials.”

The Finance Department is preparing for an anticipated $1.2 million budget gap over the next two years, Kuspa said, adding, “With continued commitment and cooperation, I remain confident that we will manage and guide our city’s future on a positive path.”

Other cost-saving efforts have included moves by the Department of Public Services to aggressively reduce carbon emissions and increase efficient alternative energy use. Toward that end, an electric vehicle was purchased with proceeds from scrap metal sales.

Grant funding also played a role in energy cost reduction, he said, citing lighting fixtures on the municipal campus that were replaced with light-emitting diode units through a $100,000 grant from the Michigan Department of Energy, Labor and Economic Growth. The city is expected to save $30,000 annually as a result.

Southgate also was one of only five Downriver cities to receive a $150,000 federal Assistance to Firefighthers Grant, part of a total of over $1.4 million in federal, state and county grants.

Kuspa said further savings are anticipated through technology use, such as the installation of new water-meter reading equipment at residences that will reduce labor costs and increase efficiency. The council itself is reducing costs by using paperless agendas for its meetings.

Southgate’s future also depends a great deal on its businesses, Kuspa said, noting the city’s recent efforts to keep the AJM Packaging Corp. facility in place and expanding, as well as the new Walmart set to open this summer at the corner of Dix and Eureka roads. Those two businesses are expected to bring another 600 jobs to the city, Kuspa said.

The city’s Downtown Development Authority also got into the grant game, giving more than $50,000 to spur $110,000 worth of local business improvements.

All of the aforementioned points were among things Kuspa said would help keep the city “sound and on the right path.”

“These efforts reinforce my commitment to keep Southgate a great place to live, work and raise a family,” Kuspa said.