Orion Township may still have six million bucks in the bank, but if the dire predictions of their accountants come true, a fund balance deficit nearly twice that may be the reality.
The township board of trustees got the bleak forecast from the Plante Moran accounting firm at their regular meeting June 4, the same day GM’s bankruptcy and the idling of Orion’s assembly plant were announced.
‘There are a lot of challenges ahead,? said Beth Bialy of Plante Moran. ‘The township has done some things right in the past, and you’re sitting in a good position to try and weather the storm.?
Bialy is referring to the township’s fund balance, or ‘rainy day? funds, which is at $6,073,784.
The combined fund balance, which includes police and fire in addition to the general fund, is around $7,847,000.
If the property values continue to fall and spending stays the same, the township’s fund balance could carry a deficit more than that–around ten million dollars–in five years.
‘I think that’s the most eye-opening [aspect],? said Supervisor Matt Gibb. ‘To see how quickly we could spend everything we have saved and be that far in the hole if we don’t change our patterns a little bit.?
According to Plante Moran, township funds have seen decreases in many areas. The fund balance is down $110,009 from 2007; general fund revenue in 2008 was $5,122,000, down $1,304,000.
General fund expenditures were also down $985,000.
The five-year forecast isn’t encouraging. While money coming in from property taxes goes down, expenses will continue to go up.
There is a 7.6 percent predicted decline for 2010 based on actual tax roll, according to Bialy.
Meanwhile, the Oakland County police contract, health premiums and utilities expenses are just some of the items that increase annually.
What will that mean in five years?
According to Plante Moran, the township’s revenues would be $2,486,000 less in 2014 than what it is in 2009, while there would be an increase in expenditures by $2,097,000.
‘The drop off is very dramatic,? Bialy said.
Decreased property taxes would be the main culprit, though a drop in state revenue sharing would also hurt the township’s budget.
‘It’s a guess as to where property taxes might head,? Bialy said.