A preliminary 2019-2020 recommended budget was presented by department heads to the Birmingham City Commission at an all-day workshop on Saturday, May 11, in order to address current and future community needs while balancing service demands and long-term capital requirements.
The total recommended budget for fiscal year 2019-2020 for all funds is $86.2 million, representing a decrease of $2 million, or two percent, from fiscal year 2018-2019, which was $88.2 million.
Fiscally, commissioners were informed by city manager Joe Valentine that the city is in strong economic condition and it continues to experience strong reinvestment in its commercial and residential properties. Fiscal year 2019-2020 will mark the eighth straight year of taxable value growth in the city, largely due to increases in the housing market. Property tax revenue is the single largest revenue source, accounting for 69 percent of Birmingham's general fund revenues, and 47 percent of all city revenues.
Over the past three fiscal years, the city's taxable value has grown by 5.5 percent in 2016-2017; 5.2 percent in 2017-2018; and 6.3 percent in 2018-2019. The recommended budget for 2019-2020 includes a 5.8 percent increase in taxable value with a projected 3.9 increase in 2020-2021, as “the future of the state and southeast Michigan economy looks uncertain as the U.S. auto makers announced plans earlier this year to limit or cease production of internal combustion cars and concentrate on electric vehicles, SUV’s and trucks,” the budget document stated.
Key anticipated expenditures are $14.4 million for public safety; $8.3 million for engineering and public services; $8.3 million for highways and streets; and $6 million for general government costs. The city is looking at street reconstruction projects, including the Maple Road reconstruction project beginning spring 2020.
Key anticipated revenues are $36 million in taxes; $26.5 million for charges for services; $6.7 million for contributions and transfers in; and $5.2 million for intergovernmental revenue.
The millage is projected at 14.3584 mills, inclusive of city of Birmingham property taxes, Birmingham Public School taxes, state education taxes and Oakland County program taxes.
Pension legacy contributions are projected to increase by $332,030, or 17 percent, for fiscal year 2019-2020 and $238,530 or 10 percent, for fiscal year 2020-2021. Retiree health care contributions are projected to remain approximately the same for 2019-2020 and 2020-2021 at $2.9 million, and the city is contributing approximately $1 million more per year than the actuarially calculated contribution based on the valuation that was performed at June 30, 2018.
Water rates are anticipated to remain the same this fiscal year, while sewer rates are anticipated to increase 3.4 percent due to sanitary costs from the Great Lakes Water Authority (GLWA) and the Oakland County Water Resources increasing costs by four percent.
The city's fiscal year begins July 1 and runs through June 30 each year. The budget will come back before the city commission for final approval at a future meeting.