With deficit problems in the 2007 budget, trustees are considering a dip into Independence Township’s savings.
Among items discussed at the Jan. 9 budget workshop at fire station one was the idea of using excess fund balance to save some programs lost to budget cuts.
General-fund revenue is set at $6,047,830. This is $27,355 short of expected general-fund expenditures of $6,075,185. However, the Township has about $2.5 million in its fund balance, its ‘savings account,? said Joe Heffernan, CPA with Plante and Moran, the township’s accounting firm.
The fund balance is about 40 percent of the general fund budget. This is on the high end for a township like Independence, Heffernan said.
‘Independence Township is not built out,? he said. ‘It’s plateaued a little bit, it feels like it’s built out.?
The economy for the township and the state should start improving in a few years. By that time, the township’s budget should be in better shape, he said.
Township governments should set a desired range for their fund balances, based on projected development and other revenue streams versus projected costs, he said.
Residential development in Independence Township is leveling off, but several commercial developments are in the works, especially along the Sashabaw Road corridor. With an increase in tax revenues expected in the near future, a fund balance of about half as much would still be sensible, he said.
‘I think the fund balance is too high,? said Trustee Daniel Kelly. ‘I think we should have 18 percent ? we’re a growing community.?
The township Parks and Recreation Department should not have been made to bear the budget-cut burden, Kelly said.
‘I don’t like how the budget was cut ? this was made into a Parks and Recreation issue,? he said. ‘It’s not a Parks and recreation issue.?
Deer Lake Beach, sports programs, and most special events have been cancelled, equalling more than $165,000 in cuts for Parks and Rec.
‘As a trustee, I don’t want to just hold onto our bank account and then tell the community that we’re closing Deer Lake Beach ? I want to take action,? said Trustee Charles Dunn. ‘Forty percent is way too much.?
Funds transferred out of the fund balance should be used to restore some of the programs cut from the Parks and Recreation Department, including Deer Lake, Dunn said.
‘We have some wiggle room (with the fund balance) ? but not for drastic changes,? said Treasurer James Wenger. ‘I don’t want to saddle a future board with problems by us being irresponsible.?
The $2.5 million fund balance includes money designated for certain projects, such as retiree health care and a new township hall. The administration will prepare a list of fund-balance designations for the trustees at its next budget meeting.
The administration will also take the Township Board’s input and assemble a budget-amendment proposal for their consideration, said Supervisor David Wagner.
‘I wanted to hear what the board had to say about this,? Wagner said. ‘Every year, we’ve done the same thing ? what I’m hearing now is that you want to do something.?
Wagner and Finance Director Sue Hendricks will provide options for the board, he said.
The next budget hearing was rescheduled for Tuesday, Jan. 30, in an effort to expedite the process. It was initially scheduled for Feb. 9. The workshop will be held at 6 p.m. at the fire station, 6500 Citation Drive. For more information, call the Township at 248-625-5111.