Fire, pension changes proposed by EM

By JAMES MITCHELL
Sunday Times Newspapers

LINCOLN PARK — Barely a month after stepping into the role of emergency manager, Brad Coulter last week submitted a financial and operating plan for the city designed to eliminate the deficit that resulted in the state’s takeover of city administration.

Chief among the plan’s proposals would be a reorganization of the city’s fire department. Up to $1 million may be saved from the budget, according to the 17-page report submitted last week.

“By either moving to a Fire Authority with neighboring communities or by reducing headcount to a core group of personnel with 100 percent outsourcing of EMS activities,” the plan would result in up to $1 million in annual savings.

Coulter, who’d been appointed by Gov. Rick Snyder to oversee city financial operations, began work last month on identifying savings or increased revenues to eliminate a projected $1 million deficit.

A combination of a decline in property values over the past five years and increased health care and pension costs resulted in the city falling into “financial emergency,” a situation confirmed earlier this year by a state review panel.

According to Coulter’s proposal, “Audit reports for fiscal years 2011 through 2013 noted significant negative variances between budgeted General Fund revenues and expenditures versus actual results. In none of these years did General Fund revenues exceed expenditures.”

In the past five years, Coulter reported, the 30 percent decline in property values resulted in an annual loss of nearly $5 million in property tax revenues.

Those audit reports and assessment of city management by an independent panel also determined dramatic changes were needed along with budget reductions and increased revenue streams.

“The city will require significant restructuring in order to continue to exist,” the report confirmed.

It was expected that public safety departments were among the most vulnerable in the city budget, accounting for a significant portion of expenses and an average loss of $2 million for retirement benefits. Public safety pensions systems were, “in danger of running out of money in an estimated 9-11 years,” according to the report.

Along with an estimated $1 million in annual savings under a restructured fire department, Coulter’s plan would realize a variety of savings in health care coverage, with the goal of having all municipal budgets and pensions 100 percent funded over the next 20 years.

Increased revenues would be realized by a number of strategies, along with an expected rebound of property values. A Headlee Amendment override proposal designed to generate an additional $500,000 in revenue will likely be on the November general election ballot; the proposal was rejected by voters earlier this month during primary election balloting.

Details and confirmation of the plan awaited state approval.

Coulter was not available for comment prior to press time.

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