26BUDGET(FULL-LINKED) - Flipbook - Page 16
City of Plymouth 2025 / 2026 Budget
expenses. Our concern is related to if these “grants” will continue into the future or if the state
will attempt to avoid their Headlee obligation.
We are also genuinely concerned about the 35th District Court as they will soon be a significant
expense for the city, as they are continuing to operate at a deficit. The Court is independent of
the city, and we do not control their operations. They are also anticipating a major capital
expenditure program, which expenses will be passed along to the five communities. It should be
noted that we predicted that there would be no need for a third judge and related staff in 2001
and 2002 and that the cost of adding a judge (in 2003) would lead to a situation where the court
would become a cost center for the city. In this budget and beyond, the cost of the court may have
significant impact on local budgets as the court will merely present their budget deficit and put
it on the shoulders of the five local units to fund. Further, there is legislation to have the state take
over the court system statewide and the concern is that this will be another state program that is
not fully funded to meet expenses, leaving the local units to meet the funding obligations on
behalf of the state.
We also must be aware that significant changes in the stock market will impact our legacy costs.
When I wrote this message in April 2020, the Dow Jones Industrial Average was at 24,345. In
March of 2022 the market closed at 35,228. Today, (04-04-25) the market is at 39,186, which is
nearly the same place it was one year ago. A falling stock market will negatively impact our MERS
actuarial accounts and for those former employees who are on the old defined benefit program.
A long-term downward trend or recession will decrease stock market values and increase our
costs to fund the old Defined Benefit Programs. You will recall that the Defined Benefit program
was eliminated 25+ years ago as the city broke away from the old governmental model of doing
business. A falling market will also negatively affect all current employees who have the 401K
style retirement program.
We have been frugal with expenses over time, and we have lived within our means despite
challenges and additional regulations from the state and federal governments, and high inflation
in two of the last three years. One area that the City Commission has given priority to is upgrading
our vehicle fleet, and we made several purchases. However, we still have significant needs for
vehicle and equipment replacement. We must also be aware of rapidly increasing vehicle costs.
In 2008, we purchased police vehicles for $33,000, in 2022 the price had jumped to $38,700 and
now when we ordered a police car 2024, we paid $52,200 for the same type of vehicle we
purchased in 2008. In addition, the emergency equipment that is installed on our police and
municipal services vehicles is also escalating at an extreme rate, and much of the electronics is
made overseas. We will need to continue to closely monitor the Equipment Fund to ensure that
we are rebuilding the Fund for the future, as well as meeting current expenses.
We have limited capital purchases for a number of years, and we attempt to put as much as we
can into selected projects. We have many more projects than we can fund. We are placing a
priority on projects where we can obtain grant funding to match our funds. We anticipate
beginning work on meeting with the neighborhoods around Lions and Rotary Parks, as those two
organizations have committed substantial funds to upgrade their parks. We plan on matching
those donations to make the most impact. However, the first step is meeting with the
neighborhood this spring. This would be similar to what we do with our street paving program.
The Cemetery Mausoleum upgrade is in the current year budget but has not started construction.
We anticipate that this will be a fall project in the new Fiscal Year. Those funds from the current
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