Dowagiac City Council received no public input at Monday night’s hearing on the 2011-2012 budget starting Oct. 1.

“This is a work in progress this year,” City Manager Kevin Anderson said, “mainly because we’re just now getting to the point where we’re hearing from the state what revenues will be, so we can continue to make revisions to have our expenditures match our revenues and we can continue to operate in the black.”

Public safety — police and fire protection — represents the largest expenditure, with “a significant portion of the police budget dedicated to CCDET,” the Cass County Drug Enforcement Team (CCDET) partnership with the Cass County Sheriff’s Office, Anderson wrote in a May 20 memo to Mayor Donald Lyons and council members.

General fund revenue has shrunk $1 million over the past four years, from $3,926,722 in 2008-2009 to $2,941,374 for 2011-2012.

About 56 percent of all general fund revenue comes from property taxes.

The 43-page budget summary shows appropriations pegged at $3,006,228, with a $64,854 gap to close and a $917,617 beginning fund balance.

The document allocates $1,122,313 to police, $257,853 to CCDET and $511,996 to fire.

Anderson said city officials face the continuing challenge of assessing how services are delivered to the community while finding new ways to deliver those services at less cost while also identifying “ways to invest in roads and utilities before they deteriorate too far.”

The city contracts with two adjoining townships, LaGrange and Pokagon, for fire protection services.

Costs to operate the wastewater treatment plant are shared with the Village of Cassopolis, Sister Lakes and Indian Lake utilities.

Beginning this year and continuing through the next three fiscal years, the city manager stated, attempts will be made to slowly but steadily improve funding for the capital side of the water and sewer funds.

“The plant and pipes are showing their age,” according to Anderson, “and several improvements will need to be made for efficiency and to make sure that pollution controls and safe drinking water are in place.”

User fees are reviewed annually to assure that revenues are sufficient to support utility expenditures.

The bulk of funding for DART, the Dial-a-Ride Transit system available in and around city limits, comes from state and federal sources, but those levels have seen reductions for several years and that fund operates at a deficit.

Total millage levied will be 16.1021, including 14.1521 mills for general fund operations, .5500 mill for DART and 1.4 mills for solid waste.

Anderson is authorized to transfer up to $15,000 between departments or funds without prior council approval.

City Treasurer Robin Coffey’s office is authorized to assess a 1-percent property tax administration fee to offset costs incurred by the city for assessing property values and for collecting and accounting for property taxes.

A late penalty fee of 4 percent shall be added to delinquent city taxes which remain unpaid as of Sept. 16. All delinquent property taxes collected on or after Sept. 16 shall have an additional 1 percent added per month thereafter to the outstanding balance due.

Mayor Pro Tem Leon Laylin and Second Ward Councilman James Dodd visited Lansing Friday.

“It was reported in regard to revenue sharing that there’s an additional $15 million to be divided up. They promised that by 5 o’clock (tonight) they would have a decision on how, but that still doesn’t give what’s coming to us — but we’re working on it,” Laylin said. “We did have a chance to talk directly with the president of the MML (Michigan Municipal League),” as well as several legislators. “What action they’re going to take on personal property tax is not settled. There’s still discussion in committee work. If they do away with it, for Dowagiac that’s about 14 percent, which would hurt us immensely.”

In other May 23 business, council conducted a public hearing on establishing an industrial development and plant rehabilitation district in the newer section of the industrial park.

“It’s a foundational item that needs to be in place for us to use the full range of economic development tools when trying to lure businesses into the community,” Anderson said. “This needs to be in place for anyone wanting to receive tax abatements. The city clerk discovered a couple of months ago that designation was never put on that section.”

Anderson reported on federal guidelines for poverty exemptions.

“The Michigan General Property Tax Act requires that each community have in place some policies for residents in extreme poverty situations to be able to not pay their taxes this year and basically have the state pay them on their behalf, then allow them to be paid back as either their economic condition changes or the property sells. It’s not used very often throughout the state, but there is that provision that it needs to be in place.

“Each year the State Tax Commission establishes, based on federal law, what poverty income guidelines would be, but it also gives local municipalities discretion to come up with their own guidelines. What this resolution does is it tries to establish this so you don’t have to go through this each and every year. It says the City of Dowagiac would establish whatever standard the State Tax Commission determines to be appropriate.”

According to the Michigan Department of Treasury, income level for a household of four person shall not be set lower than $22,100.

The income level for a family of four persons, however, may be set higher than $22,100 by the local assessing unit.

Anderson said there are also conditions a person must meet: own and occupy the principal residence for which the exemption is requested; file a claim with the Board of Review, which examines their tax returns; show proof of ownership; and meet an asset level test. “It’s a fairly rigid test,” he said, “but it does give a relief valve. It’s not very commonly used, but it is available.”

Council amended its agreement with the Cass County Board of Public Works water operation management agreement.

“It doesn’t have any impact at all on the City of Dowagiac side of the agreement,” the city manager said. “This simply attempts to clarify for the CAUA (Cassopolis Area Utilities Authority) what it means when it says the share of money that goes to them is being used for capital projects and hydrant flushing. This goes further to say auditing costs and administrative expenses in association with flushing and capital projects are appropriate uses of funds … The change simply clarifies allowable CAUA expenditures for funds that are remitted to them.”

Beginning June 16, Dowagiac will maintain the Penn Township, Donnell Lake and Diamond Lake water system, with CAUA serving as oversight agency on behalf of the townships.

Council members expressed their condolences to Mayor Lyons on the loss of his brother, Larry, the Daily News outdoors writer.