Ishpeming Mayor Joe Juidici, center, talks about budget issues during a special city council meeting on Wednesday as Councilman Justin Koski, left, City Attorney Bonnie Hoff, second from left, and City Manager Mark Slown, right, look on. (Journal photo by Lisa Bowers)

ISHPEMING–Ishpeming officials continue to wrestle with a projected shortage in the city’s general fund in 2019.

During a special Ishpeming City Council meeting on Wednesday, councilors expressed concerns about a projected shortfall of $171,800 even after significant cuts.

City Manager Mark Slown said the funds to balance the 2019 budget will come out of the fund balance, leaving about $528,950 in the fund at the end of the year, adding that dipping into the reserves could not be continued indefinitely.

“If you approve the balance — with it coming out of the fund balance — it’s a balanced budget because you have the money and it’s a balanced budget,” Slown said. “The problem, in a nutshell, is you can’t keep doing that year after year after year. That’s the message.”

A significant portion of the budget shortfall comes from a projected increase in the city’s 2019 contribution to the Municipal Employees Retirement System, or MERS, with an expected rise from about $631,000 in 2018 to $686,000 in 2019, according to budget documents. The general fund allocation for MERS is expected to rise by more than $120,000 from roughly $566,000 in 2017.

Councilman Mike Tonkin said critical decisions need to be made in order to increase efficiency.

“It’s the elephant in the room. I know it sounds like we’ve cut to the bone, but people we have not cut to the bone,” Tonkin said. “I was in business for over 40 years and went through a lot of this same type of thing, and we’ve got to be careful about putting money from one pocket into another and calling it a savings because it is not a savings. It makes another department look better, but we need to be cautious about doing things like that, and that is why the state requires that we separate our money. I don’t believe it’s acceptable. In other words, it’s — you’ve got to find some way to come up with $170,000, and what are the options?”

Slown said the cuts might come down to staff cuts in either city hall, parks or cemetery.

“You can start cutting part-time people, but you are only nickel-and-diming it,” Slown said. “If we cut the deputy treasurer we are looking at maybe $20,000 in savings. If you cut the clerk, you are looking at maybe $20,000 in savings. So, you know, with all due respect, sir, I believe we have cut to the bone.”

Several councilors concurred that an annual budget, once it’s approved should be seen as a guideline.

“We can talk about a balanced budget until the cows come home, but what we are really talking about here is, and I hate this overused word, sustainability,” Councilor Karl Lehman said. “We don’t want to put it to bed forever and forget about it. We need to stay after this. We don’t know what is going to happen next year and the year after with MERS and other expenses.”

Slown suggested the council consider forming a subcommittee or a committee of the whole council to form a plan going forward.

“Schedule working group meetings to discuss sustainability, and how we are going to get there, what are our options, and start making some of the tough choices,” Slown said. “If you want my personal opinion, we have to address the MERS problem, and we have already done that in a meeting that we had and we have letters going out. MERS is a big part of it and it’s going to be making it worse.”

Councilman Justin Koski said he sees budget planning as a long-term effort and gave credit to city staff for the work they had put into the budget.

“I also look at the budget as one, five and 50 years,” Koski said. “Just because we are talking about 2019 budget right now and approving that … I mean, that’s not what this is about. It’s about 2020, 2021, 2022, the sustainability piece. Looking at those things all in one lump … for the next five years is more of this board’s obligation.”

The budget will likely be considered at the council’s next regular meeting on Wednesday, and needs to be approved by Nov. 15.