City may borrow from future tax funds

Sunday Times Newspapers

ALLEN PARK — Officials here are continuing to seek ways to handle looming budget deficits.

The City Council voted Tuesday to explore the possibility of borrowing against future tax income and announced some other cost-saving measures.

Members approved a request by City Administrator David Tamsen to investigate a tax anticipation loan that would provide a “cushion,” for the city at the beginning of the fiscal year, which begins July 1. Before his resignation in April, former Financial Director Timothy McCurley predicted the city would begin that year with a budget balanced, but with no money in the bank.

City officials announced a projected budget deficit of $7 million for the next four years earlier this year.

“It will take us about a month and a half to receive our full bank account,” Tamsen said. “This will give us a little cushion if we need it.”

He reiterated that the measure did not approve borrowing the money, but was needed for him to begin investigating the process and finding out details like interest rates and the amount to be borrowed. He expects to present his findings at a special meeting scheduled for 7 p.m. Tuesday.

The city also approved hiring former Financial Director Kim Kleinow on a part-time basis to assist with financial director duties until the budget for fiscal 2011 is completed. Kleinow, who left the position in July 2010, will work evenings and weekends as an independent contractor for $40 an hour with no benefits.

A budget hearing was set for 7 p.m. May 27.

In other cost-saving measures, the council also voted to cancel the city’s hazardous waste collection day. The event, originally scheduled for June 11, would have cost t$1,000 in labor and $12,000 to $25,000 in disposal fees.

“The city simply does not have the funds available to run it for this year,” Tamsen said.

A county collection day will be held from 8 a.m. to 2 p.m. June 18 at Henry Ford Community College in Dearborn.

“Citizens can save the city money and let the county pick up the cost,” Mayor Gary Burtka said.

Council members also voted to lay off the Parks and Recreation Department’s facilities manager, effective Wednesday. The position was one of the last that officials had hoped to keep after a review in February, Tamsen said.