Rough sailing for Flint's first post-oversight budget

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The Flint, Michigan, City Council could not muster the votes Wednesday to override Mayor Karen Weaver’s veto of its amendments to her budget plan.

The city council’s budget included eight amendments to the Mayor’s $56 million proposed budget for 2018-2019. Weaver vetoed the amendments after the city's chief financial officer, Hughey Newsome, said he was concerned about the changes. The budget would be the city’s first since exiting state oversight.

“This is a crucial time for the city of Flint; this is the first budget we are responsible for since regaining control,” Weaver said in a statement. “I am proud of the budget that I submitted and I have full faith in the City’s chief financial officer. Just as I have the right to veto the budget, the City Council has the right to override that veto. It is my hope that they would strongly consider my reasons for vetoing and that the Council and I can work together to create a budget that can sustain the City for years to come.”

Wednesday's failed attempt to override the veto means Weaver’s original budget will now move forward to a final vote in front of the council next week. The new fiscal year begins July 1.

One issue the mayor had with the council's amendments was that it added raises and benefits for some city employees.

Those amendments include a pay increase of $20,000 to the city clerk, a new deputy clerk position, a new parliamentarian position and full health benefits for part-time employees.

“The risk these added costs could pose on the city’s budget is not in the best interest of the city nor the citizens of Flint,” Newsome said.

Newsome expressed disappointment over the time wasted on arguing over what amounted to $55,000 in the mayor’s budget, especially when the city was currently tackling bigger fiscal challenges such as its $271 million unfunded pension liability and keeping the city’s water fund afloat.

“These are things that we are looking at and during all of these [budget] proceedings so little attention was paid to that,” Newsome said.

The city remains in a precarious financial position facing some serious fiscal challenges after its exit from state financial receivership on April 10. Those challenges include employee retirement funding and the aging, corroded pipes that caused its drinking water crisis.

A state law passed at the end of 2017 requires that local communities to report underfunded retirement benefits. Flint reported a pension system funded at only 37% and zero percent funding of other post-employment benefits, which the city doesn't prefund, according to the state treasury report.

The price tag to fix its aging water infrastructure is roughly $600 million.

The city is expected to bring in approximately $55.8 million revenue to the general fund in 2018-2019, of which $4.7 million is expected to come from property taxes. This is an increase of roughly $120,000 from the 2017-2018 amended budget. The city’s water fund will have a $4 million surplus at the end of the 2018 fiscal year, but Newsome said the fund will fall into the red within the next five years if it fails to bring in more money.

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Budgets City of Flint, MI Michigan