Bedford aiming for 5% cut in spending

6/18/2008

TEMPERANCE - Bedford Township department heads are being asked to scale back budgets amid flattening revenues and a dismal economic climate.

With development stagnating, interest rates down, and state support dwindling, township Supervisor Walt Wilburn has requested that every department present a plan to trim its spending by 5 percent.

Although the township expects to maintain a more than $1 million balance in 2009, general fund spending is predicted to outstrip revenues by $427,760 next year, Finance Director David Manning said.

Total general fund revenues are expected to increase only about $125,450 over 2008 and that total that is expected to be consumed by the cost of inflation, Mr. Manning said.

A decline in new home development is partly to blame for the municipal belt-tightening, officials say.

Construction of single family homes in Bedford Township has decreased from an annual height of 247 in 1998 to only 20 so far this year, officials report.

Slowed development is affecting revenues in the building department and threatens to reduce the township's overall tax base, Mr. Wilburn said.

Overall building inspections have decreased about 50 percent since 2006, dragging department revenues down, as well, Building Inspector Dennis Kolar said.

The decline has forced township officials to consider reducing the employee hours in its building department, officials say.

Meanwhile, property taxes are expected to increase just $35,000 in fiscal year 2009, compared to a $143,997 increase from 2007 to 2008.

About 25 percent of the township's general fund revenues comes from taxes based on property values.

"Until things start looking up, I've got to look at decreasing spending," Mr. Wilburn said.

Township Trustee Dennis Steinman worries Bedford's budget could suffer further reductions as more Bedford residents sell their homes at decreased values.

"It would reduce the effectiveness of that millage and would reduce revenues," Mr. Steinman said.

"The more valuation we have in the township - the more houses - basically the more millage we have."

Other revenue streams are suffering under the slumping economy.

The township expects to collect $15,000 less through its savings accounts in 2009 than it did in 2008 due to lowered interest rates, Mr. Manning said.

The state of Michigan is offering the township only $33,000 more assistance than last year, Mr. Manning said.

Furthermore, the township just received notice that the increase might be rescinded, he said.

With consumer confidence lagging, Mr. Steinman said state support, which is generated largely through sales tax, doesn't seem likely to rebound. If gas prices continue to climb, and motorists reduce their fuel consumption, the township's road funding could suffer as well, he said.

In many ways, Bedford Township has been more fortunate than other Michigan communities, Mr. Wilburn said.

"We've managed to stay about the same" in revenues, he said. "But the problem with that is that the costs are going up."

Some township expenses, such as fuel costs, have risen as much as 30 and 40 percent, he said.

The effort to reduce spending is intended to be a proactive response to external economic stressors, he said.

"We're in good shape" currently, Mr. Wilburn said. "We need to be looking at what we can do to save money right now, not at the 11th hour."

Contact Angie Schmitt at:

aschmitt@theblade.com

or 419-724-6104.