Two months after Mayor John Hieftje presented his annual “State of the City” address asking for a 4 percent cut in all departments, City Administrator Neil Berlin will present the 2001-2002 budget proposal tonight to the City Council.

The proposed budget recommends a gross of $215.4 million and allocates $90.4 million to the general fund. The general fund up 0.18 percent from the 2000-2001 fiscal year covers relatively all basic services, including the police and fire departments and street maintenance. The remaining funds are distributed into debt service, trust funds and other various service funds.

“The fiscal state is that we are trying to change directions,” Berlin said. “We are trying to place a greater emphasis on capital projects and creating a long-term sustainable level of operating expenses while trying to move into a position where in future years there will not be significant upward movement there will be some downward movement on the property tax.”

City taxes will not be raised, though additional funds are made available from the rise in the average residential value by 5.6 percent. Instead of raising taxes the city was forced to make cuts in virtually every department, with personnel taking the biggest cuts at about 72 percent, Berlin said. The city hopes to reduce its labor force by about 55 people by offering a better retirement plan for city workers to avoid layoffs.

“The hope is that there would be sufficient retirement so there wouldn”t have to be any layoffs,” Berlin said. “It would enable people who were qualified for full retirement or early retirement to retire under a different formula and in some instances benefit people.”

Budget Director Alan Burns said he has already spoken to many of the unions and so far does not foresee big problems with the personnel cuts, though more groups will be spoken to in the upcoming weeks.

The police and fire departments will take the biggest cuts, with more than 30 positions expected to be eliminated.

Hieftje said city services will not go down in quality because the current police and fire departments are significantly larger than they need to be. He attributed much of this to the University”s Department of Public Safety and said DPS takes about 90,000 calls every year that used to go to the Ann Arbor Police Department. “If they”re doing that many calls that we used to have to do I think there is adequate room in the police budget and manpower situation to make some changes,” Hieftje said.

The budget calls for $728,000 to be carried over from the previous year”s general fund, which the council originally expressed concerns against. “The council basically said that they wanted a budget that didn”t increase taxes and they did not want to carry money from the previous years,” Berlin said. “If we stayed without carrying any money over we would have eliminated all capital purchases and all property purchases including police and fire necessities.”

Councilwoman Heidi Herrell (D-Ward III) said the surplus from the previous year”s general fund is simply an estimate. “Every single year I”ve been on council there has been more money than they have expected,” Herrell said. “We want to maintain the proper level of our rainy-day fund.”

Hieftje said the city will be making an effort to ensure the general fund is no longer depleted for future years. “If we”re going to stay as a viable competitive community which is what we need for high tech businesses, quality of life issues all of this requires funding,” he said. “We need to watch out expenses very closely.”

Councilman Stephen Hartwell (D-Ward IV) said the city needs to balance capital projects and departmental necessities by prioritizing what the city wants. “The drive is to become more productive with what we have,” Hartwell said. “We have to push to look inside City Hall and current services and find what is needed and what”s not.”

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