The East Lansing City Council convened for its first of several budget work sessions for fiscal year 2015 Tuesday,focusing on an overview of the the budget as a whole and ending with general questions from council members.
In his opening remarks, East Lansing City Manager George Lahanas told council members the city was finally in a financial position where reserves collected in times of trouble could be used on city services.
“Our focus over the past 10 years has been to control costs and build funds...now is the time to spend some of those reserves,” Lahanas said.
According to many city officials and council members, the outlook of East Lansing’s next fiscal year is currently optimistic, as several financial concerns that have stressed the city for years have gradually improved.
However, issues such as property taxes, revenue sharing from the state and additional transportation needs after a rough winter continue to cause slight concern.
The city budget proposal is currently slated at $73.6 million, an increase of 2.28 percent from fiscal year 2014.
The council has until May 20 to go over budget details line-by-line in a series of special budget work sessions, held each week prior to regularly scheduled council meetings and work sessions.
Despite the additional spending allocated in the proposed budget, East Lansing residents would see a small drop in millage rates for the fiscal year.
The majority of spending would come in the form of infrastructure reform.
The budget proposal has allocated $1.8 million to the local street fund, which would rebuild and repair East Lansing roads.
The fund specifically plans for reconstruction of the Chesterfield Hill and Walnut Heights neighborhoods.
Another $250,000 has been budgeted to fund a hazardous sidewalk program that aims to repair the sidewalks around the city to increase safety.
Both of these projects come in the wake of a severe winter that caused major road and sidewalk damage.
Lahanas said the projects will help to reinvest the city’s reserves back into the city itself.
Other projects would include new equipment to firefighters and in-car printers for police officers.
With the increase in spending for fiscal year 2015, many council members worried about the economic implications it may cause.
In past years, the city’s strict spending and budgeting has landed them high bond ratings from investors.
These bond ratings are crucial for the city because they affect the price at which the city borrows money. If the rating falls, prices rise.
With the additional spending, council members worry the rating could drop.
According to Lahanas and East Lansing Finance Director Mary Haskell, the standards for bond ratings have changed drastically in recent years.
Originally, investment representatives would travel to the city and rate it on a more holistic benchmark.
With the new changes, investing firms are more focused on raw numerical values to determine these credit scores.
These questions were taken by Haskell and will be answered in the next meeting, scheduled for April 15th.
City council has plans for at least three more work sessions, with the budget planned for adoption on May 20th.