Dowagiac City Council Monday night addressed for the state how it would deal with budget deficits totaling more than $100,000 in the solid waste fund and municipal facilities improvement fund.

“Each year our audit is filed with the state Department of Treasury for review,” City Manager Kevin Anderson explained. “This year they need to see a more detailed report of how budget deficits” in the two funds will be addressed.

Anderson attributed the $17,700 shortfall in the solid waste fund to the Michigan Department of Environmental Quality (DEQ) for compliance costs.

That deficit is addressed by a transfer from the general fund balance.

The municipal facilities/improvement fund shows a deficit balance of $84,300, “which is primarily due to two items,” according to the city manager.

One, the final portion of capital improvements to the fire station. Two, land purchase to gain additional access to Witko Pond.

The general fund balance will again be used to offset the amount.

“However,” Anderson added, “it is anticipated that the general fund will be fully reimbursed via the sale of city property and the annual savings from reduced building and equipment costs due to construction of the fire station” on Wolf Street.

The city’s audited financial statements for the period ending Sept. 30, 2010, were prepared by auditor Berthiaume and Co.