City of Muskegon Budget Reforecast Shows Better Than Expected Costs, Stable Fund Balance

Andrew Trzaska | October 24, 2012

A budget reforecast for the City of Muskegon shows a lower overall operating deficit for the city over the rest of the fiscal year, and general fund cash reserves on par with the last few years but higher than a decade ago.

According to documents obtained from the city, the city’s fund balance at the start of this fiscal year was $5,020,045, revised upward about $500,000 from an estimate made when the budget was created.  At year’s end, the city will have an operating fund balance of approximately $4,805,919, meaning the city will tap into the general fund for about $217,000 to cover its operating costs for the year.  This is better than the $575,000 operating deficit the city was expecting when the budget was first passed.

The documents attribute the smaller deficit to better-than-expected retiree healthcare and pension costs, as well as a new streetlight contract with Consumers Energy.

The city commission formally amended its budget with a vote at Tuesday’s full commission meeting to reflect the numbers from the reforecast.

If this mid-year prediction holds true, the end-of year general fund balance for 2012-2013 o $4.8 million will be the third highest for the city since the year 2000. Balances consistently ran in the $2.5-3 million range from 2000 through 2008, but hit a low of $1.6 million in the economic downturn of 2009.  Balances rose into the $4.5-5 million range starting with the 2010-2011 fiscal year.