A $49.6 million budget for fiscal year 2019-2020 was approved on Monday, March 11, by the Bloomfield Township Board of Trustees sidesteps potential cuts to services for the next year, as the township works on a plan to close a structural deficit projected to total $5 million to $7 million each year.
The board voted 4-2 to approve the budget, with trustees Dani Walsh and David Buckley opposing, and Bloomfield Township Clerk Jan Roncelli absent.
The township's fiscal year runs from April 1 through March 31 each year.
Bloomfield Township Finance Director Jason Theis said the budget estimates an overall increase of about 4.5 percent due to increases in the overall taxable value of property in the township, which will equate to about a 3.5 percent increase after tax rollbacks due to Headlee. He said the township estimates a slight increase in state shared revenues, while other revenues remain generally neutral.
Of the $47.4 million in revenues, about $34.5 million will come from property taxes, up from $33.3 in 2018-2019; $3.6 million from state shared revenue, up by about $40,000 from the previous budget; $600,000 from investment income, with no change from the previous year; and $8.5 million from other sources, up from $7.6 million.
Property taxes to the township's general fund are expected to be about $8.5 million in the 2019-20 budget, up from about $8.2 million in the current budget. About $2.6 million in property taxes will go to the township's road fund, up from about $2.5 million. The largest portion of property taxes will go to the township's public safety fund, at about $23.3 million, up from $22.5 million in the current budget.
Under the approved budget, general fund, road fund and public safety fund expenditures will outpace revenues by nearly $2.2 million, with the difference being made up from an estimated fund balance of about $27.2 million.
Proposed expenditures were $49.6 million, up from $46.3 million the previous year. Major expenditures include about $11.3 million for the township's general fund, up from $10.6 million; $4.9 million in the township's road fund, up from $4.7 million; $31.8 million by the public safety fund, up from about $29.4 million; and $1.4 million in capital expenditures, down from about $1.5 million.
In terms of expenses, the budget includes a 2-percent increase in all full-time wages, equal to about $430,000; a 2.5-percent increase in healthcare plan premiums, equal to about $200,000; and some one-time capital items, including replacement of underground fuel tanks ($525,000); replacement of a fire rescue truck ($250,000); and the replacement of a motor pool service truck ($90,000).
“If you listened to the study session, you know I was dismayed by this budget. We were going to be different. We were going to be the first board not to kick the can down the road,” Walsh said. “We worked with trustees and department heads and paid a consultant on how to reduce expenditures on the budget, yet after all that time we were presented with a budget with no changes. All the departments were presented with suggestions. None of them were included.”
Walsh and Buckley said on March 11, as well as at a Tuesday, February 26 budget study session, that they had hoped to see cuts in the budget that would help close a structural budget deficit related to roughly $164 million in unfunded other post-employment benefits (OPEB) liabilities. OPEB includes benefits such as medical, dental, vision and life insurance for retirees and their spouses.
“I'm unable to support this budget,” Buckley said. “I have always supported it in the past – 16 times previously, but not when facing a budget issue that wasn't created by the current board.”
The township in December 2018, announced that changes to to the state's accounting laws require municipalities to fund at least 40 percent of their unfunded retiree health care liabilities. Prior to the changes, municipalities were permitted to pay for those expenses as they came due each year, known as “pay-as-you-go.” The change means the township will need to increase OPEB funding by about $65 million over the next 30 years.
Looking for ways to increase OPEB funding, the township hired financial consultants Plante Moran to help assist in pinpointing potential cuts in services and/or revenue increases. Those measures could include eliminating the township's animal welfare division; outsourcing police and fire dispatching services; cuts to public safety staff and operations; eliminating hazardous waste disposal, gypsy moth control; contracting assessing services; and other cuts. Additional revenue could also be raised through additional fees for services, as well as a bond issue to address OPEB liabilities and/or a special assessment district (SAD) related to public safety.
Trustee Neal Barnett, referring to the February study session, said the measures that will go into the strategic plan will likely be a mixture of cuts and revenue increases. However, he said those measures weren't proposed in relation to the budget, which must be approved before the start of the next fiscal year that starts April 1.
“The responsible thing to do is to move forward,” he said about the budget. “We should pass the budget then move forward with the strategic plan, look at expenses we need to save, then go to the voters and move forward. Looking tonight to pick and choose as where to cut expenses is irresponsible without having a full plan.”
Bloomfield Township Treasurer Brian Kepes echoed Barnett's remarks.
“Plante Moran was hired for the strategic plan – they weren't hired for a budget,” Kepes said.
Trustees opposing the proposed budget said that it should have included cuts on behalf of the township to show it has already made cuts before asking taxpayers for additional money.
“We know as a board we need to tighten our bootstraps, and status quo is what we were given,” Walsh said. “Then we'll put something out to the taxpayers and have them pay for it all – none of that is fiscally responsible to a group of Republicans.”
Walsh said she didn't believe that the township would have trouble attracting and retaining employees if wages were frozen, referencing freezes made during the Great Recession. She also noted that the previous board of trustees had suggested the treasurer position be reduced to a part-time position, but the idea was never implemented. She also took aim at vehicles provided to 9 township department heads.
“Instead, I saw raises,” she said. “How can you give raises when we can't pay the bill that is in front of us right now?”
Kepes, who served as a trustee prior to being elected treasurer, said the part-time position was discussed in relation to the previous treasurer's performance.
“We did think about a part-time treasurer because we had a treasurer who was showing up part-time and was being paid full-time,” he said. “I hate to bring it up, but it was brought up. We can bring that (proposal) up again.”
Kepes said such cuts would fail to come close to filling the budget gap in the future. He also noted that the township has retained a AAA bond rating due to its fiscal responsibility.
“It's $4 million. It's not a car here or pens and erasers – it's not marginal items. It's significant dollars that's going to require a significant fix,” he said. “It's important to understand that we have a challenge, and it's a significant one, and it's in our means, whether we do it in cuts, increases or both.”
Bloomfield Township Supervisor Leo Savoie took issue some of the comments.
“We aren't kicking the can down the road. The budget and the strategic plan are separate from each other. When we discuss the strategic plan, there is more than one option for this board to come up with,” he said.
In terms of township vehicles, he said 3 of the 9 department heads who receive them are required to have an emergency vehicle 24 hours a day. He said maintaining a motor pool for those that would be used for township business only would still require at least 4 additional vehicles. Further, he said, the vehicles are kept on an average of 10 years, with a high trade-in value.
Savoie also noted that salary cuts and freezes made during the recession were accepted because all communities were making cuts during record-high unemployment and dwindling property values.
“It's a completely different economy than 2008. The economy was in turmoil and unemployment was the highest it had been since the 1980s. Values of real estate were crumbling,” he said. “2019 is completely different. I've had 2 department heads offered jobs at different municipalities in the past 90 days. You're going to take a quality workforce and decimate it. Utterly decimate it. For 5 years they took a pay freeze, and now they have other options out there. If you want to decimate the workforce, then do it, but I won't allow it.”