Shores Makes State Fiscal Watch List- Again!
April/22/2010 09:01
While Mayor Cooper and the incumbents proclaim to voters that city finances are not that bad, the State of Michigan has kept the Shores under fiscal watch for the second year in a row. Once again, the Shores is the only one of the Grosse Pointe Communities so named, refuting the repetitive assertion of the incumbents that all cities are in the same boat.
Look at the Shores fiscal report card from the State of Michigan Treasury Department and the basis of why the Shores remains under fiscal watch is clear. The prime factor keeping the Shores under fiscal watch, and a factor clearly under the control of the incumbents is two consecutive years of deficit spending. Note that their habit of spending more than the city took in started back in 2006. This is well before the precipitous decline in housing values that the incumbents would like you to believe is the current root cause of the Shores fiscal crisis.
Keep in mind that the state’s grading system severely underestimates the grim actuality of the Shores fiscal future, since the methodology employed does not even look at the Shores $17 million dollars of unfunded liability for retiree pension and health care costs.
More bad news will come when the state gives their grades for our 2009 fiscal performance. Expect the Shores to get dinged by the state with even more points for yet another year of deficit spending, an insufficient general fund balance, and a general fund deficit. The overdrawn general fund deficit of $215,000 is something that the city auditors were required to report to the state, as reported by the Grosse Pointe News in the article entitled “Seeing Red.”
Check out the facts on the Michigan Department of Treasury website by going to the Local Unit Audit Section. The audit reports from recent years for all cities in the states are there for citizens to peruse. Take a look at the last 5 years of reports documenting the deficit spending in the Shores, and you will understand why the healthy total balance in 2005 of 2.5 million dollars in major city funds have been frittered away under the Cooper regime. If you don’t have time to go to the web yourself, here are the figures, taken right from the Shores own annual audit reports as posted on the state web site.
The sad reality of the situation that the incumbents have placed our city in is that Michigan law mandates that municipalities run a balanced budget! The Uniform Budgeting and Accounting Act 2 of 1968 states that cities “shall not adopt a general appropriations act or an amendment to that act which causes estimated total expenditures, including an accrued deficit, to exceed total estimated revenues...” Yet in four of the last five years, the Mayor Cooper and his slate of incumbents failed to control expenses and let city expenditures exceeded revenues.
Mayor Cooper and Council members Boyce and Graziani tell Shores voters in their justification of conduct statements on the May 4th ballot that their actions were “in the best interests of the community”, and “did not violate any laws or policy.”
Anyone who spends a little time on the Michigan Department of Treasury web site to research both the basics of state municipal finance law, and the specific details of Shores finances is smart enough to know otherwise. The actions of the incumbents in handling the city budgets and creating the years of deficit spending that depleted our once adequate city coffers do not appear to be in compliance with what Michigan State law requires. Shores voters should remember this as they head to the polls on May 4th.