EM forecasts debt elimination before June

Sunday Times Newspapers

ALLEN PARK — Its been about 15 months since Emergency Manager Joyce Parker took control of the city’s finances and she said the city’s debt could be eliminated by the end of the 2014 fiscal year.

When she arrived in October 2012, the city had a cumulative deficit close to $1 million and about a $4 million structural deficit, Parker said, and her first steps were to create and implement a financial plan that would close the gap between the revenues and expenses.

Parker said that plan included the “revenue enhancements” that included increasing the police and fire millage, obtaining grants for city including the Staffing for Adequate Fire and Emergency Response grant for the fire services, increasing licensing fees, reviewing administrative fees associated with city services, and implementing a plan for a Point of Sale program for properties being sold in the city.

Those goals were accomplished, she said, with the exception of the P.O.S. program, which should be completed before she leaves. Parker said the city received the $1.2 million SAFER grant for the Fire Department and residents voted for a police and fire millage increase that will bring in an additional $2 million annually.

Parker also focused on reducing the city’s expenses through eliminating vacant positions within the city’s departments, restructuring the health insurance payments, restructuring the pension programs, decreasing the salaries of the Police and Fire departments.

She said nine positions were filled around the city; the health insurance plans were adjusted to allow an 80/20 split by the city and employees, respectively; the Police and Fire department pension plans were restructured for higher contributions by employees; and the retirement multiplier was reduced.

She said most of the reductions were achieved through the negotiations with the different unions, or through implementing an executive order. The contract negotiations for the Police and Fire departments also reduced salaries by 10 percent and allowed the city to hire part-time employees. Changes also were made to the retiree health care that reduced the city’s costs, she said, which still provided them with comparable benefits.

Part of her original plan was to reduce the city’s expenses by refinancing the bonds used to purchase the Southfield Lease Properties and to sell the property. Parker admits those goals have not been accomplished yet, but she said her focus remains on selling the 104-acre Southfield Lease Properties, refinancing the $25 million bonds, and restructuring city departments to get adequate staffing.

“Right now, we are still in the process of getting things structured to refinance the bonds,” she said. “The goal to market the property and sell it is still underway. Potentially we have two or three good prospects that are out there now. I am hopeful we can get the property sold by end of this fiscal year, as long as everything goes according to plan.”

Parker expects the financial plan she created and implemented to have the city operating in a balanced budget by June 30. She said the structural deficit, through the changes she made, was eliminated at the end of the 2013 fiscal year and a December 2013 audit report showed the cumulative deficit has decreased to about $600,000.

“My 18 months will be up around October, so the plan is for me to transition out this year,” she said. “In order for me to do that the deficit has to be eliminated, a two-year balanced budget has to be created, and a strategic plan should be made for the future.”

Once those steps are completed, Parker said the transition process can begin to transition the financial responsibilities back to the mayor and city council. She plans to host a vision and strategic planning session with the Allen Park Advisory Committee March 1 to develop the strategic plan for the city.

She does not have a set timeframe she will transition away from the city, but has started planning a retreat with the city council and mayor to help them with the transition and resume leadership of the community. Parker said the city will receive an audit report June 30 and believes the city is on track to end the fiscal year with a balanced budget.

“The audit should confirm whether the city’s finances are back on track and will be a positive report card for the city,” she said. “In any event, I want to establish a policy on operating a reserve and developing the plan to relocate city hall.”

(Gabriel Goodwin can be reached at ggoodwin@bewickpublications.com.)