Douglas Officials Clarify Increase In 2016/2017 Police Department Budget
A Douglas city councilman said he was upset that a Clare County-based newspaper that occasionally prints local stories got it wrong in a recent story and did not provide clarification relative to the recently proposed Saugatuck-Douglas Police Department budget.
Douglas City Councilman Greg Harvath repeated himself on three different occasions at Monday’s meeting - sometimes in a jocular way, other times more sternly - that “the police budget did not simply increase 24 percent” from previous year, as it was reported in the Clare County-based publication.
“I want the newspaper to understand,” noted Harvath, “that the (2016-2017) police budget increase is under three percent— (however) due to the payment of the MERS (Municipal Employee’s Retirement System of Michigan) account, the budget was different.”
While the overall police budget does indeed increase 24 percent (the 2016-2017 total police budget is $1.29 million), what Harvath took great umbrage at is that it was not reported that the increase was mostly due to additional payments to the MERS pension plan for police officers that the City of Douglas - along with the City of Saugatuck - plan on making for the upcoming year.
That payment to MERS, the statewide public employee retirement system, totals $263,000 to cover the remaining portion of the unfunded liability outstanding with MERS, according to Douglas City Treasurer Bob Drexler.
This will result in future savings for the city, Drexler and Harvath emphasized.
“As for the future cost savings, with the police payment alone, that will save about $16,000 annually in the budget and generate about $18,000 additional interest earned in the fund each year,” Drexler told The Local Observer.
“With the savings of $16,000 annually and additional $18,000 in interest, the cities will get their monies back in about seven years on the investment and everything after that will be the benefit of paying off this debt.”
He continued, “So you are correct in saying that budget is increasing 24 percent from last year because in governmental accounting we have to ‘budget’ for every expenditure as an operating expense where in the private sector accounting it would be considered a one-time payment and not part of an ‘operating budget.’”
The Saugatuck-Douglas Joint Police Commission recently approved the 2016-2017 police budget.
Saugatuck approved it May 9 while it is expected to go before Douglas officials for approval at its May 16 meeting.
The proposed budget cuts administration fees for Saugatuck by $15,000.