Budget review to clarify city finances

Sunday Times Newspapers

LINCOLN PARK — City Manager Greg Capote has something of a pre-emptive New Year’s resolution for Lincoln Park.

“We don’t want to go bankrupt,” Capote said.

The financial outlook for the city may not be that severe, but Capote and Mayor Patricia Diaz Krause said projections for 2013 include another budget session filled with deficits, potential layoffs and questions as to city services.

Capote said that auditing firm Plante Moran was contracted to provide a clear understanding of the city’s financial picture. That report is expected for review at the first December meeting of the city council.

“I have a general sense of where things are at,” Capote said. “I’m waiting for empirical data to forecast the next six months.”

Indicators of economic issues in recent months include voter rejection of a bond proposal and Headlee Amendment override that would have generated additional revenue for the general fund. As it stands, the city anticipates a $3 million deficit to address for the 2013-14 municipal budget.

The Plante & Moran review will, Capote said, provide an updated look at revenue sources and expenses, and the answer to a blunt question:

“How much longer can we continue based on the dwindling revenue streams?” Capote said.

Krause said that the auditors’ initial review last month of city finances indicated that corrective actions need to begin sooner rather than later.

“They determined that we have less money than originally thought,” Krause said. “We’ve explored a lot of potential cost-saving ideas, but nothing’s been implemented. That might change.”

Financial problems in the city were evident when a potential fire staffing grant was regrettably declined: The prospect of adding to the department’s roster was welcome, but the added costs not covered by the grant were prohibitive.

Rather than being able to add positions, the fire department and all city offices again face the prospect of potential layoffs. Capote said the results of the Plante Moran review will answer some of those questions.

“From there we can make some judgment calls in terms of layoffs, at City Hall or elsewhere,” Capote said. “This will let everyone know where we’re at, and from there make decisions that ensure our solvency.”

(James Mitchell can be reached at jmitchell@bewickpublications.com.)