Saline City Council leans toward unchanged tax rate for next fiscal year

The budget is expected to be approved June 4. The city’s 2013 budget runs from July 1, 2012 through June 30, 2013.

City staff members provided a number of different scenarios that included levying an additional 1.8 mills, which when added to the current 15.53 mills is the maximum allowed.

Since 2006, the city’s millage rate has remained steady, while tax revenues have continued to drop. In fiscal year 2009, there was a 2.8 percent decrease. The next year, there was a 4.85 percent decrease. In fiscal year 2011, there was a 9.11 percent decrease and another 5.79 decrease this year. During the last two years, those decreases have mostly been due to the devaluation of both residential and commercial properties.

Monday night’s work session provided the City Council with eight possible hypothetical budget projections, all of which include 3-percent employee contributions to their retirement costs. Several used a maximum tax increase allowed in the city, and several added a special assessment to pay for the city’s $322,000 share of the Saline Area Fire Department costs for fire services in fiscal years 2014 and 2015.

Although no formal vote was taken, a majority of the City Council seemed to lean toward a projected draft budget that showed about $7.894 million in revenues and $9.474 million in expenses. This draft removed a possible $950,000 bond for capital improvement projects, costs associated with a new roof for the Department of Public Works building with an estimated price tag of $650,000, and storm sewer work of about $300,000. To close the gap, the city would use fund balance, and looks to save about $389,500 by not filling four vacant DPW positions and eliminating the vacant deputy police chief’s position.

Catherine Schull, the city’s assessor, is estimating that residential properties will increase in taxable value by approximately 2 percent in fiscal year 2013. Plus, the city is anticipating new construction that will add about $100,000 to $125,000 in new city tax revenue.

In addition, several tax abatements totaling about 27.5 million in taxable value are due to expire this year, which will result in an increase of about $107,000 to the city in tax revenues.

“The thing about raising the millage right now,” said Mayor Gretchen Driskell, “It’s a once-a-year option, and I don’t want to max out on millage … with so much still undetermined.”

Hopefully, she said, the city can add more taxable value and look for opportunities for future revenue.

She said the City Council is trying to be very conservative in its approach to the budget and is using “the worst-case scenario.”

“We’re setting a millage rate, a framework,” she said.

Lisa Allmendinger is a regional reporter for AnnArbor.com. She can be reached at lisaallmendinger@annarbor.com. For more Saline stories, visit our Saline page.