2012-2013 Budget - City of Saginaw MI

Tax ShiftThe taxable value of residential properties decreased from $350,887,163 to $334,056,853, a decrease of4.80%. The total taxable value projected for FY 2013 is $542,029,556 of which real property will be$448,118,356, and personal property will be $93,911,200.Income TaxThe Uniform City Income Tax Ordinance empowers the city to collect an income tax of one and one-halfpercent or three-quarters percent, depending on the individual’s residency status and/or place ofemployment. Income Tax revenue for FY 2013 is projected to be $12,022,879 (a 1.89% increase fromthe FY 2012 projection of $11,800,000). Income tax revenue relies heavily upon the financial health ofbusinesses operating in the Saginaw area.It should be noted that $971,879 of the projected income tax revenue for 2013 is related to delinquenttaxes. As the city has been experiencing a decline in the Income Tax base and other revenue sources inprevious years, an aggressive approach towards delinquent revenue collections has been undertaken. Aspart of the process of collecting revenue owed to the city, departments throughout the city have beenworking with Plante & Moran, Inc. in the Department of Fiscal Services and other key personnel todevelop, implement, and structure the revenue collections effort. Going forward, it will be imperativethat monies owed to the city are collected.Cost Allocation PlanIn an effort to accurately reflect the cost of providing and administering services in all departments, thecity began completing an annual cost allocation plan in 2008. This was instituted because the city strivesto continuously improve the budget process. The implementation of this plan has ensured that costs arespread equitably among city departments and administered accurately. The 2013 Budget reflects thecontinued use and updating of the cost allocation plan.Unfunded Liabilities/Retiree Health CareThe City of Saginaw provides post-employment health care coverage under a traditional insured plan toretired employees, their qualified spouses, and other dependents as mandated by collective bargainingagreements. Historically, the city has recognized the cost of this benefit on a “pay-as-you-go” basis forthose current recipients of the benefit, as well as pre-funding a portion of these future benefits.The Governmental Accounting Standards Board, which is the regulatory body responsible for establishingthe financial reporting requirement with which municipalities must comply, has changed the reportingstandards for post-employment health benefits through GASB Statement Number 45, Accounting andFinancial Reporting by Employers for Post Employment Benefits Other Than Pensions. This statementrequires governmental entities to begin reporting the Accrued Liability for retiree health care and otherpost employment benefits over a phase in period. The FY 2009 audit was the first audit affected byGASB 45. In addition, there are a variety of unfunded liabilities that are addressed and explained as partof the city’s fiscal year end audit.Reorganization EffortsThe 2013 Budget will create the foundation for reforming the city’s public safety delivery system; thisbudget contains bold and innovative steps to reorganize public safety. The first step in this process waspreviously pointed out in the Staffing Complement section. An effort of this magnitude is required forlong term reform and sustainability of all city services. The City must find a way to balance the need forpublic safety services without decimating our ability to be a full service city. A Committee on Public4