Flint, MI– During a public hearing regarding the city’s preliminary budget, one councilman referred to it as a “somber and disappointing reality.”
“One day we’re going to have to have a come-to-Jesus on these numbers and that’s going to be a scary day,” said Councilman Dennis Pfeiffer during the hearing on Jan. 20.
The mayor initially presented the preliminary budget for FY 22/23 during a special city council meeting on Dec. 21. As Pfeiffer and many council members pointed out during the public hearing, there is “a lot of red,” in this budget.
The preliminary budget shows a general fund expenditure for this fiscal year of nearly $72 million. The revenue in the same fund came to around $56 million, meaning the city is spending nearly $16 million more than it’s making.
In the upcoming fiscal year, the projected fund balance is around $2 million, but by fiscal year 2023-2024, the balance is forecasted to have a $17 million deficit.
That deficit was originally supposed to be the case for next year, but the administration has proposed an $8 million transfer from the balance remaining in “Internal Service funds,” into the General Fund, staving off the deficit for another year.
“I’m afraid that with the $8 million transfer that we’re proposing, it’s almost like it’s financial trickery to kick the can down the road. … So as long as we can, you know, push that day off, I’m all for it,” Pfeiffer said. “But we need to start putting processes, we need to start putting savings into place.”
During the initial budget presentation, Mayor Sheldon Neeley said that the deficit is largely due to rising pension costs, which was a concern for last year’s budget too.
Flint’s pension fund obligations, which were $21 million in 2018, are projected to be $32 million in 2023, and $40 million by 2024.
“Are we in threat of having the federal government take over that? Because there are retirees who are worried and concerned about that,” said Councilwoman Tonya Burns. “They’ve done their jobs, they’ve worked for our local government municipality, and that means they may lose half their pension. They shouldn’t have to worry about that because we are not being transparent.”
Burns also said it seemed like the city was “kicking the can down the road,” in regards to the pension costs.
“That’s huge for the city of Flint. How are we going to make those payments? That is a serious concern and conversations that we need to have,” she said.
There are several other areas where the budget shows higher projected expenditures than revenues including the funds for neighborhood policing, parks and recreation, street lights, trash collection, public improvement, governmental, building inspection, sewer, water, and enterprise.
At the public hearing on Jan. 20, Chief Financial Officer Robert Widigan reiterated that the budget document was “preliminary in nature,” with several factors that are “highly uncertain,” such as revenue sharing estimates, property tax values, results of the financial audit, new pension data, and the allocation of the American Rescue Plan Act funds.
“City council and residents of Flint should expect changes in both revenues and expenditures across several funds for the budget presented in March coming up here, in the proposed budget for Fiscal Year 2023 and the forecasted budget,” Widigan said.
Widigan said he and Neeley would be listening and taking into account public input on the preliminary budget, but only one person spoke at the hearing.
Flint resident Arthur Woodson said he was concerned about how the ARPA funds would be used, and urged the city not to give funding to the Genesee County Land Bank.
“The land bank just got 600 homes, houses, from the city. And the ARPA funds, the city is getting ready to give the land bank, the county, money for houses they own,” Woodson said. “How do we look giving money to a county that received $79 million also? Why do we want to give them money for something that they own?”
Woodson also asked if the ARPA funds could be used to reimburse the city for what was spent on COVID-related expenses.
“Couldn’t we use some of that ARPA fund to put back into our general fund, for what we spent on COVID? I don’t know, I’m just asking, it’s just a question. It’s just a question,” Woodson said. “So would that change what we’re looking at right now as far as everything in red?”
Nobody answered that question, but Burns said she felt the ARPA funds should be for the residents.
“The residents of the city of Flint should be able to use that money for them. It’s for relief for them,” she said. “It’s really for the people and for employees who work and live in the city of Flint, not because we mismanaged money.”
Widigan said the city will present a proposed budget in March, and there will be more public hearings at that time.