Plante & Moran: City to run out of money by March

Sunday Times Newspapers

ALLEN PARK – The city will run out of money by March unless it borrows $2.1 million from the state, officials said Tuesday.

Financial Director firm Plante & Moran’s Carl Johnson relayed the news as part of a three-part budget amendment put before the City Council at its regular meeting. The amendment also included reflecting in the budget a public safety millage that passed in November set to bring in about $2.5 million per year and a $334,000 contribution to the general fund by the Downtown Development Authority.

The city’s former movie studio property, which is now at a $10 million fund deficit, is one major cause of the shortfall – pulling a $2 million subsidy from the city’s already-struggling general fund.

The decision now before the council is whether to issue the debt, a “one time Band-Aid” allowed by the state treasury, or allow the city to run out of money, which would immediately trigger an emergency financial manager, whose first step would be issuing the debt, Johnson said.

The first two amendments were passed while the one pertaining to the debt was tabled to allow for further research and discussion.

Councilman Dennis Hayes said an EFM might be preferable to continuing to “throw money at a rotten mess.”

“I don’t know how anyone here can imagine how our public could even countenance the idea of having debt,” Hayes said. “They voted down millages twice … I don’t see there’s any appetite for it. We have to have some structural change in our operations here and it’s not forthcoming.”

Mayor William Matakas disagreed.

“I didn’t run for office or get elected to have someone else decide the fate of the city,” he said. “I think we all ran to govern our city and I think we ought to do what we can.”