Could Benton Charter Township’s financial situation reach the level of nearby Benton Harbor’s? Township superintendent, Elden Piontek says “no.”
At a meeting Tuesday night, representatives from the firm Plante Moran presented the results of their 2012 audit. Piontek said the major takeaway is that the township’s police fund had about a $277,000 operating loss last year, in addition to a predicted operating loss of $330,000 for 2013.
Piontek was brought back from retirement in December to resolve the financial issues the township has encountered. Based on what he’s reviewed, the tax revenue losses could reach $1.3 million in the near future.
The public safety departments could continue overrun spending unless major changes are made. Last year the township had to transfer money from the general fund to the police fund to avoid running a deficit.
“As it continues to grow, just like a savings account, it starts to go down to zero,” Piontek explained.
Making matters worse, revenue is down overall thanks to decreased property taxes on major “big box” stores like Target and Home Depot.
The Michigan Tax Tribunal awarded several large businesses tax reductions up to 50 percent in property taxes, leading to a $300,000 drop in revenue.
“While their property taxes are going down, our residential taxes are going up,” said Piontek, “which makes it difficult to ask residents to pay more taxes to offset the reductions.” With personal property taxes increasing about 6.6 percent, Piontek says he is hesitant to ask people to vote for more with a millage proposal.
Since taking over as superintendent, Piontek says the township has undertaken some efforts to reduce spending. The assessing and billing departments were combined into one which eliminated an administrative assistant post. Beyond that the police and fire chiefs were re-hired without fringe benefits, another cost-saving measure.
The most recent audit may make it seem as if Benton Township’s financial future is bleak, but Piontek says there were a handful of positive economic steps taken in 2012. The sewer bonds were refinanced in such a way that tax payers will be saved $650,000 over the course of the bonds’ lives. Additionally, the township insurance plan was changed for municipal employees with higher deductibles and increased contribution rates, yet another way to save money.
One of Piontek’s hopes is to equalize insurance plans for all employees in the township. To handle the costs of the unions, Piontek says the township can no longer afford to pay as much for insurance and pension plans.
“Those benefits just aren’t out there anymore,” said Piontek.
The next step is to gather information and look at the different options for providing services. Piontek said some of those options include hiring more part time employees without fringe benefits, contracting out services and standardizing insurance plans.
“I don’t sugarcoat things” Piontek added. Numbers and figures don’t lie, but the township is taking the steps to avoid economic downturn and hopefully maintain a balanced budget for the long term.