If the city continues existing operations through the 2017 fiscal year, Ann Arbor will experience a $72,262 budget deficit, according to a budget work session Monday night.
Craig Hupy, the Ann Arbor public services administrator, presented a review of the city’s water, sewer, solid waste and storm water funds.
Hupy also reviewed the progress of the Residuals Handling Improvements Project, Facilities Renovations Project, the tree removal and pruning project and fleet services.
Tom Crawford, the city’s chief financial officer, presented a plan for fiscal years 2016 and 2017, providing an overview of the city’s General Fund and Street Millage Fund, among others.
Crawford’s presentation showed fiscal year 2017 revenues of the city anticipated to total $98,887,473, while the city’s expenditures are projected to reach $98,959,735, leaving $72,262 in deficit.
Other topics of concern involved the review and projections of the city’s Water Fund.
Hupy said cities are using less water nationally, and noted Ann Arbor is no exception.
“That is a national trend,” Hupy said. “… As the message about water conservation is sent out across the whole nation it’s having an impact not only in the west … it’s also affecting those of us east of the Mississippi.”
As a result, water bills in Ann Arbor are increasing to make up for the loss in sales.
Councilmember Sabra Briere (D–Ward 1) expressed concern over this issue.
“Everything that I get from the city encourages me to conserve and use less and I’m ready for that, but the incentive is being taken away when you raise my prices,” Briere said.
Hupy said the issue is not just a local one but a concern for the national water and sewer industry.
“I don’t have the answer tonight,” Hupy said.
Another issue discussed by council members was the widening gap between cost and revenue numbers concerning the city’s solid waste management, specifically recycling.
The city currently levies a tax to provide funds for solid waste management. After recyclable goods are collected, certain items can be sold for revenue. Hupy’s presentation examined how the cost of the recycling service is increasing and exceeding revenue generated by the process as taxes and revenue remain stable in the city.
Councilmember Sumi Kailasapathy (D–Ward 1) asked Hupy why the cost of recycling services is increasing.
“Why is the cost increasing dramatically whereas the revenue is staying put? … What’s happening is the gap is getting bigger and bigger so we need to get a handle on that,” Kailasapathy said.
Hupy said he could provide further analysis and a written formal response along with other formal answers to questions raised by councilmembers during the budget review.
The Ann Arbor City Council will vote on the final version of the budget May 18, following two more meetings, including a public hearing May 4.