26BUDGET(FULL-LINKED) - Flipbook - Page 32
City of Plymouth 2025 / 2026 Budget
Long Range Deficit Elimination Planning
In June 2003, in response to declining State Revenue Sharing and stagnant tax revenues
resulting from the Headlee Amendment and Proposal A, the City Administration implemented
revised budgeting practices. These included integrating the current year’s budget with a
four-year projection model aimed at addressing long-term structural deficits and
implementing permanent fiscal reforms.
By Fiscal Year 2006/07, substantial progress had been made, and the City adopted two
consecutive deficit-free budgets. However, the 2008 recession and a sharp decline in
property tax revenues led to projected deficits in the 2009/10 budget cycle. Through focused
financial management, the projected deficit was reduced from $942,640 to $147,934 by
2012/13. While the 2013/14 budget was initially balanced, subsequent amendments caused
projection years to remain in deficit, warranting further review.
Despite continued revenue constraints, the City delivered balanced budgets for both Fiscal
Years 2014/15 and 2015/16, reflecting meaningful progress. However, rising pension
obligations necessitated adjustments, and the adoption of “Option B” provided temporary
relief in managing MERS contributions.
In April 2017, the City Commission reinstated the 1% tax administration fee, generating
additional General Fund revenue. The 2017/18 budget remained balanced, though
projections for 2018/19 once again anticipated deficits due to increasing legacy costs.
Legacy obligations, particularly those affected by revised MERS actuarial assumptions,
continue to present significant fiscal challenges. While the City has taken steps to minimize
budget gaps, long-term projections remain uncertain, especially under the revenue
limitations imposed by Proposal A.
The City continues to navigate the dual challenge of constrained revenue growth and
increasing legacy costs, reinforcing the need for long-term strategic planning. Options under
consideration have included modest millage adjustments and operational efficiencies to
mitigate projected shortfalls.
Despite ongoing efforts to stabilize the budget, uncertainty around future revenues and
pension liabilities remains. Continued fiscal discipline and strategic foresight will be critical
to sustaining core services and ensuring the City’s long-term financial health.
Fund Accounting
The accounts of the City are organized by funds and account groups, each of which are
considered a separate accounting entity. Funds are established to segregate specific
activities or objectives of a government in accordance with special regulations, restrictions
and limitations. The various funds are grouped into generic fund types in four broad fund
categories as follows:
General Fund – The General Fund receives revenues related to the general
operations of the City Government, and provides the general services of the City
Government, which are not required by law or City policy to be accounted for in
separate funds.
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