UPDATE: City Approves Budget Amendment to Retain Staff Positions

Troy's governing body approved altering the city's current three-year budget to retain four positions within the city's police department that had been scheduled for elimination.

The positions, which include two sergeants and two officers at the , were among 38 positions slated for elimination by the end of the 2014 Fiscal Year. City Council approved Monday night a measure to increase expenditures to the police department over what had originally been budgeted in order to retain the positions.

The decision came with news that an expected $2.6 million budget shortfall in 2012 will instead be a surplus.

The city's have resulted in revenues exceeding expenditures in the first two years of a three-year budget that was originally passed by the City Council at the end of June, Troy City Manager John Szerlag said.

Szerlag recommended using some of the revenues to retain the police positions or risk running the department at an unsustainable level.

"The streets, drains and parks division of public works would not be sustainable unless we reinstated eight positions slated for elimination," Szerlag wrote in a resolution to City Council members for Monday night's meeting. "The police department would not be sustainable unless four of the thirty-eight sworn positions slated fro elimination were retained."

The statements, he wrote, are taken from a study performed by the International City/Council Management Association.

"In other words, proposed cuts made by staff and approved by Council were essentially too deep to be sustainable in these areas," Szerlag continued. "Our three year budget retains the eight positions in public works, but does not address the four sworn positions in the police department."

Cost savings revelation

In June, the mayor and City Council members approved a budget that had predicted a shortfall in revenues and called for using $2,610,131 of the city's general fund balance to balance the budget in 2012; $78,660 of the fund balance in 2013; and $2,653,160 at the end of the 2014 fiscal year.

Council and city administration had been pressed by some members of the public to update the budget's figures to include projected cost saving measures. However, it wasn't until an that City Council directed city administration for an update on the budget projections.

The mayor and City Council were presented with projections during an The latest projections indicate that while expenditures will still exceed revenues in 2014, budget surpluses in 2012 and 2013 will result in an average surplus of $600,000 per year over the next three years.

City Council had anticipated the savings prior to the special election Aug. 2, Councilman Dane Slater said.

"This is really good news that we were all hoping we were going to get," Slater said during the study session. "When we were debating the ERIP (Early Retirement Incentive Program) and concessions... that's why we asked for .7 (mills) instead of one, because we were hoping to see some savings."

Szerlag said on Sept. 5 that the library millage is separate from other funds and doesn't effect spending in other departments.

"It only affects our overall budget," Szerlag said. "In terms of general fund balance, there is really no effect."

Increased money no surprise

Troy resident , was a leading voice in the opposition of a .7-mill tax levy to create a dedicated library millage. She had asked for council to update the budget with "more favorable numbers" several times before the election.

Daniels said she wasn't surprised that new projections show more positive figures than presented prior to the special election. Daniels also represented Troy Citizens United, an anti-tax group opposed to the library millage, during a .

"I'm surprised that it took 13 days after the election to make the public aware of the money that was available," Daniels said last week. "We believe there is more money than just that. We knew it all along. It verifies that TCU was telling the truth."

Szerlag said prior to Labor Day that final numbers on the effectiveness of the early retirement program and total cost savings won't be available until the program is closed to employees that want to enroll, which is in November.

He said current figures are only estimates, and final figures "may go up slightly."

Szerlag said he anticipated changes to the figures included in the budget passed by City Council, not all employee groups had accepted concessions or taken the retirement package far enough in advance to include any real estimates in the budget.

And while he said he now estimates revenues will exceed expenditures in the first two years of the three-year budget, he said a long-term solution to solve falling revenues is still needed.

"It will be an average of $450,000 a year as recovery costs to bring back the positions," he said. "It's not as if we are out of the woods."

In addition to the cost to retain the positions, Szerlag said he hopes City Council will retain the 40-hour work week used by city employees, which is scheduled to fall to 32 hours per week in the 2014 fiscal year.

Budget projections released during the Aug. 29 study session are good news, said Edna Abrahim, spokeswoman for Troy Residents Unified for a Strong Troy. 

"This is exactly what we were counting on since the budget discussions back in May when City Council acknowledge the potential positive impact of the union negotiations and early retirement incentive program," Abrahim said in a news release. "While no huge windfall, these savings could really help offset some of the deep cuts to public safety and roads while still allowing us to retain our Fund Balance and AAA bond rating."

Heading in the right direction

While Daniels said she doesn't believe a millage was necessary to retain library services, she doesn't know yet if plans to increase funding is appropriate or not.

"We never believed it was necessary to have a millage," Daniels said, "not at a time of economic distress, which is what we are going through in this country.

"I can't second guess what people are saying now because I don't have a seat at the table."

Still, she said not presenting a more accurate depiction of the city's overall expenditures prior to the Aug. 2 election could damage the reputation of a city where 68 percent of residents polled last year indicated the city was "headed on the wrong track."

"I don't think that this new revelation is gong to help," Daniels said.

Meanwhile, TRUST said it is pleased with the direction the city is headed and believes City Council and administration has been open and honest about its fiscal condition.

Abrahim noted that City Council had considered adding a roads and snow plowing millage proposal to the Aug. 2 ballot, but believes it decided against it because of the possibility of savings from concessions, early retirement and other measures.

"TRUST has always maintained that the library was just one piece of the problem," she said. "A library in the midst of a wasteland makes no sense, and we were counting on this good news to help take us one more step toward our vision of restoring our world-class services at a tremendous value to Troy residents."