Plante Moran hired for financial triage

The City of Wayne has hired Plante Moran to help run the city’s finance department and help reconcile the 2014-15 budget and prepare the 2015-16 budget.
Plante Moran is an auditing firm that will spend the next six months working with the city. Former Wayne Finance Director Tim McCurley has been assigned to Wayne. The city will pay $73,350 to have Plante Moran function as the finance director.
Brian Camiller, senior manager of Plante Moran, made a presentation to city council at their January meeting and said his firm will work with the city through three phases- triage, transition and maintenance.
He told council the structural deficit for the year is $2 million.
“You should keep that in your heads,” he said. Because the city transferred money from other funds to help balance this year’s budget the current deficit is about $500,000 but the estimated deficit for 2015 is about $2 million.
“We’ve been spending more money than we have been taking it. We need to fix this issue. We have been living on our savings,” said Councilman Albert Damitio.
This year the retirees’ healthcare fund paid out more than it brought in. The city has about $1.4 million of available fund balance because they are not paying all of the sick pay and other employees now. The minimum recommendation is two month of operation. Currently the city has about 9 percent of their budget and they should have 16 percent of their budget in that fund.
Some of the solutions Camiller suggested include having the city become self-insured for health benefits and installing lock boxes and outsourcing for water and tax bill payments. “Instead of mail coming here and someone opening and scanning and making the deposit it goes right to the bank and the bank scans and deposits and emails you a file to upload. It eliminates time for city employees that can go to other things,” he said.
He also said council should study all of the city’s buildings and decide whether or not they need them all or if some can be sold off.

Council supports 3-mill proposal for May|

Damitio said there are two areas the city has financial problems in- retiree health care costs and pensions.
Health care costs have increased 20% per year since 2010 and pensions have gone up 10% per year since 2010, Damitio said.
“At this point we need to have a millage for 345 and my recommendation is three mills for five years so we can fund the pensions for the city and we need to support our city employees. They don’t get social security. This is their retirement and we need to protect it,” he said.
Wayne resident Nancy Pride said, “I would hate for someone who worked most of their life for the city to lose their health benefits.”
“I am not talking about cutting pensions. It is mainly the healthcare benefits and we have to look at reductions in those benefits,” Damitio said. “I am bringing up these proposals to protect that. We need a structurally balanced budget for 15-16 and to do that we need these two measures.”
Damitio said there would come a time when the number of retirees is not as high as it is now. There will be relief as far as pensions increasing.
City Manager David Murphy said the city has 150 retirees and 75 full time employees supporting them.
If the three mill Act 345 passes, it will bring in just over $1 million a year, Damito said and would strictly be used for pensions of police and fire personnel.
There are about 95 retired police officers. This is the largest amount of city retirees.
The cost of this to a homeowner of a $50,000 home would be about $50 per year for five years.
If the language is approved by the Attorney General the proposal will be on the May ballot.
A resident asked if there is a Plan B if the voters do not pass this proposal.
“Plan A is the 345. Do you have a plan if the voters don’t pass it,” he asked. Mayor James Hawley said,  “We will have a plan B when we start the budget process.”