Help could be on the way. City Council voted 5-2 to have the administration contact the Office of Fiscal Responsibility with the State of Michigan. This is an interim step before bringing in an emergency financial manager.
This does not mean Wayne is hiring an emergency financial manager said Interim City Manager Ramzi El-Gharib.
“This is for us to work with (them) and the city will do all of the decisions. We want to do this internally and not have an emergency financial manager come in from the state as an accountant to balance the books. We have to work to preserve city services.”
The Office of Fiscal Responsibility will help the city come up with long-term solutions for their budget problems. City council will still make all decisions on any amendments to the budget.
The city has $1 million to cut from their current budget and in excess of $3 million to cut from the 2014-15 fiscal year budget.
“The forecast provided is showing a very dismal picture. It is my assessment that what you have is the standing for a financial emergency,” said budget consultant Vince Pastue. “You are looking well in excess of $3 million on a $14 million budget.”
Contacting the office of fiscal responsibility is a good first step before requesting the state come in and do an evaluation, he said.
The city is looking at a negative fund balance at the end of the fiscal year.
“You are going to need to take dramatic action over the next four months to the budget,” he said.
It will take efforts like layoffs and wage and salary reductions to balance the budget.
“The City of Wayne must cut 1.3 million dollars from this year’s budget. That is over $10,000 per day and getting larger every day that passes. It is now about making choices to reorganize our community before someone else does it for us. Our future depends on it,” said Councilman John Rhaesa.
Mayor Al Haidous and Mayor Pro Tem Jim Hawley voted no.
Hawley said, “I don’t agree with this process. I think we are going to have to come up with the solution ourselves. I am ready to sit down and start working on a resolution and the cost difference. I think we are wasting our time going to the state. We are in trouble and we know we are in trouble we need to start solving some problems here and now.”
Councilman Skip Monit said, “ I couldn’t disagree with you more Mr. Hawley. We aren’t going to stand pat. We have to get our feet dirty and make it happen. The Office of Fiscal Responsibility is going to validate our scenario. We are not going to wait for anyone to tell us we are in a financial emergency. We are going to make cuts and get the ball rolling on this.” Pastue said, “I’m not sure you can cut fast enough to continue to provide the essential operation and you have to find additional revenue. If you don’t find additional revenue it is hopeless. It is that bad.”
Part of the budget problems are that for the past seven years Wayne has had declining property values and tax revenues while retiree pension and healthcare costs continue to rise.
Mayor Haidous said before the city brings in the state he would like to go back to every contract holder and union and see what they can contribute to find a solution to this financial problem. He also wants to pursue going back to the community and having them pass a millage to increase revenue.
Councilman Jim Henley said, “We don’t take these decisions lightly. We can’t look at where we’ve been. We are to a point where we are out of options. I don’t know how much worse it can get. This is about changing the way we do business. We would close if we were a business. We need to restructure our city.”