Carry-over bills, health care costs put Portage in financial bind

PORTAGE | Clerk-Treasurer Chris Stidham told the City Council's Budget Committee this week the city's finances are "a mess that I guess you all are inheriting."

"It's not my office's job to lay blame," Stidham said of the estimated $1.9 million deficit the city faces.

Stidham told council members where and why there are shortages and gave suggestions for cuts.

He said nearly $500,000 of the deficit is carry-over bills from last year.

"We have landfill fees left over from October. We have health claims carried over and attorney fees," Stidham said.

Stidham said once the city depleted funds budgeted for landfill costs in October, no money was moved to cover the additional $146,000 in expenses the city incurred, and the bills went unpaid.

That was a surprise to Budget Committee Chairwoman Liz Modesto, who said the council was aware of some overrun with employee medical benefits but was unaware of the other problem areas.

Stidham said the employee medical benefits fund faces a shortfall of $800,000 to $2.1 million, depending on claims, and the economic development income tax fund faces a $676,000 deficit.

The general fund was advertised at $13.5 million but the state cut $257,000, leaving an approved budget of $13.2 million with an estimated revenue of $12.9 million. Some $342,538 will need to be cut, and there is $122,269 in 2011 carry-over bills to tackle.

Stidham said the motor vehicle highway fund is facing $380,922 in cuts; the employee medical benefits fund, $259,681 in cuts; park fund, $124,462 in cuts; and EDIT fund, $676,475 in cuts.

The city also has become reliant on Redevelopment Commission money to pay bills, Stidham said, using $585,112 to make a bond payment last year.

Stidham said health care costs continue to rise, with the city's premiums jumping about $160,000 this year in addition to premiums for the streets and sanitation departments - which are paid to Operating Engineers Local 150 - increasing by $120,000.

Stidham recommended the city change health care providers for its municipal employees to save about $259,000, increase recycling efforts to save on landfill costs, provide some assistance to the EDIT fund from the Redevelopment Commission and cut spending to balance this year's budget.

"The bottom line is we have got to cut costs or get creative with revenue. But I don't support new taxes or user fees," Modesto said.

Stidham said it is up to the City Council and mayor to work together to deal with the deficit.