MICHIGAN CITY - Discussing more than $16 million in requests for Riverboat funds, the finance committee of the Michigan City Common Council met Monday at City Hall, along with the rest of the council, Mayor Ron Meer and other city officials and consultants.
In a meeting that became contentious at times, the finance committee - council members Duane Parry, Don Przybylinski and Tim Bietry - ultimately voted 3-0 to support two resolutions and an ordinance which were tabled at last week's council meeting.
The first, and most throughly discussed, would authorize a temporary transfer of $5.5 million in Riverboat funds to several city funds to offset a shortfall in the city's property tax collection if approved by the full council next month.
This shortfall is the result of property tax refunds and corrections dating back to 2007 as well as less-than-expected tax collection in 2014.
The purpose of Monday's meeting was to discuss potential ways to relieve that shortfall, with recommendations coming from Parry including cutting Riverboat expenditures already approved in the 2015 budget - like the fire department's new $1.4 million truck - or transferring unspent money from other city funds.
City financial advisor Karl Cender said at Monday's meeting that most city funds do not allow for the transfer of money into the general fund, which covers the city's operating expenses. Further, he said, the $5.5 million takes into consideration the city's available unspent money.
In response to Parry's suggestion to cut from this year's budget, the mayor asked council members to submit a list of recommended cuts and he would take them into consideration.
If approved by the council next month, the first resolution would authorize the temporary transfer of these funds to bring the city accounts out of the red. It will likely be turned into a permanent transfer, meaning the city will not repay the $5.5 million back into the Riverboat account.
Although Parry said he would not support it becoming a permanent transfer, Cender discussed the need to make it permanent saying, "The shortfall is a permanent problem. You're not going to make up the taxpayer refunds."
The second resolution, also approved 3-0 by the finance committee, supports the temporary transfer of $8.7 million from Riverboat funds to help cover the city's operating expenses for the first half of 2015 until the first tax draw comes from the county in June.
This amount would be repaid to the Riverboat fund later in the year once the tax funds are received.
Third, an ordinance requesting $3 million in Riverboat funds to kick start the construction of the city's new police station was discussed - with the committee unanimously supporting it.
To ease concerns about using too much of the Riverboat funds in one year Cender presented a projected schedule which estimates the Riverboat fund balance, which began the year with $15.2 million.
According to his estimates, it will stand at $9.9 million at the end of 2015. This projection takes into consideration all three requests discussed on Monday as well as the $6.5 million in capital expenses approved in the 2015 budget.
The meeting wound down with nearly everyone in the room agreeing that more communication must be had between the county auditor's office, the city controller's office and the common council when discussing future city budgets.