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Michigan City finance committee reviews $750,000 in proposed appropriations amid revenue risks
Summary
At a July 7 meeting the Michigan City Finance Committee reviewed two proposed appropriations totaling $750,000 — $300,000 from the rainy day fund and $450,000 from the general fund — heard warnings about a possible $5 million cut to public-safety LIT revenue and approved a claims docket of $48,687.68.
The Michigan City Common Council Finance Committee on July 7 examined two mayoral appropriation requests totaling $750,000 and approved a claims docket that included six payments totaling $48,687.68.
City Controller Tamiko Smith told the committee the mayor is seeking an additional $300,000 appropriation from the Rainy Day Fund — $200,000 for street repair and maintenance and $100,000 for sidewalk repairs — and a $450,000 appropriation from the general fund. "The fund is sufficient to sustain the appropriation, and, we would recommend that for approval," Smith said.
Smith outlined how the $450,000 general-fund request would be used: to make central maintenance whole after earlier budget moves and previous approvals (including a prior $84,000 resolution), to cover emergency repairs at City Hall (roughly $25,000), and to transfer about $170,000 to the local roads and streets fund to avoid dipping below desired reserves. She said the general fund began the year with about $9.4 million and that the presented low/mid/high estimates show the fund can absorb the appropriation without approaching minimum reserves.
On claims, the committee reviewed a docket showing $0 from the Riverboat Fund, $0 from the Boyd Development Fund and $48,687.68 from the Rainy Day Fund. The payments, Smith said, consisted of six disbursements to Indiana Public Retirement to correct retirement-payment records for city employees who had been misidentified as retired. The committee voted to approve the claims docket by voice.
Committee members pressed Smith on several revenue risks. Smith said the city will begin receiving additional Riverboat funds next month — about $166,000 per month starting in August — to cover previously underpaid distributions. She also reported spring property-tax distributions of $9,369,578 this year compared with $9,088,969 last year and noted that fall distributions are typically smaller.
Members expressed concern about a more consequential change under discussion at the state level: the possible loss of public-safety local income tax (LIT) distributions. "We currently receive $5,000,000," Smith said. "So we would lose $2,500,000 for each budget for police and fire as far as LIT, if that LIT goes away." Committee members asked the controller to verify the timing of any change and suggested engaging legislators if a cut is imminent.
Smith also said the State Board of Accounts has directed that building and permit fees be accounted for in a separate fund (fund 2260), rather than the general fund. She characterized the change as a potential hit to general-fund revenue because permit and planning fees are among the city’s larger local revenue sources. A committee member asked Smith to distribute the directive language and explain permitted uses for the new fund at the next meeting; Smith agreed.
Smith reported wheel-tax receipts of about $272,000 through June 30 and estimated an annual projection of roughly $4,545,000; she also said the city received a lane-mile direct distribution of about $105,000 for road maintenance.
The meeting concluded without a formal vote on the appropriations; the items were presented for committee review and appear on the council agenda for further action. The committee adjourned at 6:21 p.m.
