City slashes spending by $2,000,000

Students may find a lack of new apartments to live in next year as the Rental Rehab program has been cut from Hillsdale's services. The cuts come as the city of Hillsdale submitted its budget for the fiscal year 2011-2012.
"Apparently there was a lack of interest in using those funds," Interim City Manager Linda Brown said. "There was only one project and submission."
Economic Developer Christine Bowman said the rental rehab program, a grant allowing downtown businesses to renovate apartments above their stores, has stopped, though the program doesn't affect budget.
The City of Hillsdale has cut spending by $2,000,000, from the previous fiscal year. The halt on spending comes as Michigan Governor Rick Snyder slashed Michigan's State Revenue Sharing.
Bonnie Tew, fiscal director for the City of Hillsdale, said the cuts aren't surprising. State revenue sharing, where communities share the revenue generated across the state, decreased by 30 percent. Tew said that's roughly 16 percent of Hillsdale's total revenue.
"The problem is we cut everything we can cut," Tew said.
Snyder's money-cutting measures will cause Hillsdale to cut back on sidewalk replacement and to cut down on capital expenditures within the city. All while health care costs are rising. The city is left with the daunting task of doing more with less.
Bowman said despite the budget cuts, Hillsdale's economy is showing signs of recovering — four to five new businesses have opened within the past four months and several local factories are looking at expansion projects.
"The silver lining in all of this is what's happening in the downtown district isn't changing," Bowman said.
Tew said Hillsdale has three major sources of income: property taxes, contributions in lieu of taxes, and state revenue sharing. State revenue sharing decreased by 30 percent due to Snyder's state-wide budget proposals.
The city does have a chance to earn back some of the money lost in state revenue sharing through Snyder's Economic Vitality Incentive Program. For every criteria met, Snyder's program would return a third of the monies lost in state revenue sharing. The three criteria demand the city create a guide to the city's finances and performance for its citizens, list plans to consolidate services, and to address employee compensation for any union contract.
She said the city is also facing a 25 percent increase in health care costs, as the Affordable Health Care Act begins to take effect. Tew said the healthcare providers are slogged down by additional costs from the new law, and in turn pass the costs onto consumers through increased premiums.
In a letter to the city council, Brown wrote that "money is extremely tight again this year," saying the council needs to look at ways of generating additional revenue. One suggestion was to set aside $20,000 to research a city income tax increase.
Brown said the study would help forecast the city's funds in future years.
Capital improvements such as road repair will continue to be made. Repairs to State Street alone are estimated to cost $660,000. But Tew said grants such as the Small Urban Program awarded to the city, will help make up the costs. The Small Urban Program will contribute $375,000 to State Street's reconstruction.
Some improvements weren't so lucky.Tew said the sidewalk repair program was cut entirely.
But, for the first time in three years, city staff isn't being cut. Instead, Tew said it's maintaining its current employment levels. Tew said the city is also looking at union contracts in an effort to save money.
Councilwoman Mary Wolfram, who sits on the finance committee said most of the budget cuts were made quietly. City Clerk Parke Hayes agrees.
"Obviously, people around town won't notice much," Hayes said. "Except for maybe the sidewalks."