Review of 2021-22 Biennial Budget

I’d like to close out the year with a report on the Council’s Final 2021-22 Biennial Budget.  The challenge was spending $9.7M in an ‘unassigned fund balance’ ($4.4M in 2021 & $5.3M in 2022).  You can review the expenditures below (Table X) and make your determination as to the importance and priority of those expenditures.

The Community of course appreciates the time and energy Councilmembers’ spend on the Biennial Budget process.  There are probably over five meetings lasting 3+ hours well into the night.  A heartfelt THANK YOU.  In general the Council stayed on track, transparent, and according to plan with no surprises until the last hour of the last meeting of the year.  It’s then that Councilmember Reynolds made a surprise amendment to the Final Budget to subsidize the Chamber of Commerce $14,000. 

As an organization that monitors City Finances, MISS feel this amendment was an affront to citizens and good governance.  When asked what the City received for the $14,000, Councilmember Reynolds stated, “I have no specific deliverables in mind…”

In a Biennial Budget of $XXXM with $9.7M in ‘unassigned balances,’ one might suggest MISS not sweat the little things.  But giving money away without deliverables is basically a gift.  And gifting is illegal.  Introducing the amendment at the last hour of the last meeting of the year was not professional to fellow Councilmembers and not transparent to the Community.  If the subsidy was introduced in time for public scrutiny, the Council would have received a lot of public push back.  Instead public scrutiny is after the fact.

The back story is the Council wisely weaned the Chamber from its subsidy a couple years ago.  The Chamber is a private entity that should sustain itself by performing a necessary service to its customers.  The Chamber’s need for a City subsidy is indication of the Chamber’s failure to provide the services Island retail requires.

Because of its dependency, the Chamber finds itself beholden to the City. The Chamber fails to represent and vigorously challenge City policies that might not benefit our ‘brick n mortar’ retail.  For more detail on the Chamber’s focus and why the Council should not have approved this subsidy, read the attached email to the Chamber from one of our most treasured retailers.

A challenge:  Get to know your Councilmembers:  Good, bad, or indifferent, please spend 15 minutes listening to the Council’s discussion on the Chamber Subsidy (https://youtu.be/3qj1H7Hi-mY?t=15924).  As one who knows the Councilmembers, I would characterize these 15 minutes as representative of how each Councilmember legislates. 

Finally, with the $9.7MM in ‘unassigned balances’ and the Chamber’s $14k last minute subsidy, we can only suggest the time and energy spinning the public up for donations to light the Christmas Tree and Menorah  https://letstalk.mercergov.org/illuminate-mi was more hype and less financial necessity. 

With the $55k allocation for a Special Election, the Council is signaling that it is planning a 2021 Special Election.  We know the City plans to float another levy in 2021.  We believe Councilmembers have a Biennial Budget that in general can withstand a 2021-2022 levy.

Each of you may have your own take on the value of these expenditures but a few things jump out - studies and assessments!  Now we all want MI staff and City Council members to have the right information with which to plan but is it really necessary to spend $635,000 in the next two years on this kind of thing? Shouldn’t our city staff and directors be able to do this kind of work?  After all who knows the city better than they do.

Of course, the real costs are associated with people, or as the City refers to them as Full Time Equivalents (FTE’s).  These are on-going expenses that are increased every year.  A few of these appear to be bureaucratic appointments that add little value to our city.

How essential are some of these expenditures?  Remember after this money is spent it’s not coming back.  It will be interesting to see if after spending down the balances the City asks for a tax increase.  We might anticipate this given they have budgeted $55,000 for a special election in 2021.  We hope this analysis is useful in putting the city’s finances in perspective and keeping you informed with respect to how your tax dollars are being spent.