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By Rob Alway, Editor-in-Chief
SCOTTVILLE — The City of Scottville is facing some serious financial issues that will require major changes in how the it conducts business which may include eliminating or contracting out police services, re-assigning ordinance and code enforcement, reducing the city manager’s salary and hours, or raising taxes.
In a memorandum to the city commission written on Oct. 15, 2024, Interim City Manager Clarence E. Goodlein reported that city auditors have recently completed their audit and it doesn’t look good. Since fiscal year 2021/2022, the city’s general fund has shown a deficit of $473,379. The city’s fiscal year is July 1 to June 30. In 2021/2022 it outspent revenue by $16,728. That deficit increased to $227,739 and $228,912 in 2022/2023 and $228,912 in 2023/2024.
The city’s annual general fund budget is $1.41 million, generated through 16 tax mills.
Goodlein has been interim city manager since June following the resignation of city manager Jimmy Newkirk. Goodlein has worked in public service for over 45 years, his resume including service as the city manager of Flushing and public safety director and police chief of Wixom.
Goodlein said the deficit has occurred through several actions including an un-budgeted $368,005 repair of a water main along with un-budgeted repaving of a portion of a city parking lot for $43,000 and the mis-management of a state grant to a local business of $50,000.
“In addition, there was just several incidences of over-spending that have occurred over the past few years,” Goodlein said.
Goodlein said citizens should be reserved when placing blame on elected officials.
“People need to understand something. Our municipal governments are overseen by ordinary citizens who are elected by their peers to represent them. By charter, those ordinary citizens hire a professional administrator to carry out policy, which includes setting a budget. When you hire someone, you trust that person will do his/her job and carry out the duties set forth by the elected citizens.”
At this stage, Goodlein said, the memorandum has been distributed to commissioners and has been discussed at a recent finance committee meeting. He said the commission is not at a point to make any decisions and the topic is not planned for any upcoming regular meetings of the commission until the various committees have opportunities to discuss it.
“Not unlike one’s personal finances and the finances of corporations, debt and spending are always threats to the financial vitality of municipalities while thrift and economy encourage success,” Goodlein wrote.
“The importance of adequate unappropriated fund balances/unrestricted cash reserves for operational funds cannot be overstated,” Goodlein said. “Adequate unappropriated fund balances/unrestricted reserves are a barometer of a municipality’s financial health and a measure of its capacity to weather unexpected occurrences that demand other than budgeted financial resources or that overwhelm the ability of operational funding to provide for that expense without grave difficulty.”
Besides a deficit in the city’s general fund, its water fund’s reserves are also low. The unappropriated fund balance/cash reserve is $87,688. The only reason that it is at that level, however, is because the city loaned itself $200,000 from an account meant to fund the city’s motor pool. The city’s water fund was $112,312 in deficit prior to the loan.
That deficit was caused due to an expense of $368,005.17 for the replacement of a water main in the alley in the south 100 block between Main and Blaine streets. The main services only a few businesses in that alley and leads to a planned restaurant located in the old feed mill building.
“It is important to note that, despite some commissioners’ reports that city administration made verbal statements that part or all of the cost of this alley water main replacement was funded by a ‘grant,’ none of the expense for this work was paid by any entity except the City of Scottville and its water fund,” Goodlein wrote, referencing former city manager Newkirk.
Goodlein said the health of the city’s streets also add to the negative financial health of the town.
“Currently, the city has no street revitalization plan and current employees report that, in their opinion, the city has had no written plan during any of their tenures. While a discussion of the importance, value, and mechanics of a street revitalization plan is not a discussion for this report to the city commission, its absence explains why many of the city’s streets have fallen into extreme disrepair since these plans provide a street repair schedule that coincides with annual funding appropriations that are set aside and earmarked for only street repair and reconstruction.”
In the memo, Goodlein offers solutions to Scottville’s deficit.
“The City of Scottville’s pathway to future financial vitality and success is dependent upon significantly reducing expenses and developing operational and strategic plans for the maintenance, repair, and improvement/replacement of critical infrastructure,” he stated. “Given the city’s difficulties with its general fund’s unappropriated fund balance/cash reserves and its inter-fund loan to its water fund, the required repayment inter-fund loan and debt elimination plan schedules that will be required and city streets and water and sewer infrastructure in need of repair and improvement/replacement, future appropriations to general fund expenses should decrease by no less than 15 percent ($156,000) and preferably 20 percent ($208,000) in the next fiscal year and should not increase for the foreseeable future. Decreasing expenses by 5 percent ($52,000) or 10% ($104,000) will not provide for a reduction of expenses that can adequately address the debt and unappropriated fund balance/cash reserves inadequacies of the general fund and that would enable the city to adequately address its deteriorating infrastructure.”
Goodlein said doing nothing is not an option. Dealing with the deficit will also require the city to file a deficit elimination plan with the Michigan Department of Treasury and to enter into a monitoring agreement with the state that includes an annual payment plan to remove the deficit within five years.
Goodlein said a prorated decrease of current expenses should occur in the present fiscal year similar to what he is recommending for the 2025/2026 fiscal year. At the latest, the commission has to deal with the issue prior to the adoption of the next fiscal year’s budget, a process that is finalized, by charter, in May.
“Reduction in the allocations to the general fund expenses of 15 to 20 percent cannot be accomplished without a reduction and change in the way city service is provided. Given the small size of the city’s workforce and the city’s need for the maintenance, repair, and improvement of the city’s infrastructure as well as the continuing need to provide the services rendered by the city clerk and city treasurer, you will notice that no reductions have been proposed for the Department of Public Works or city administration staff. These are core city services that cannot be obtained elsewhere easily or reliably and are services that should not be outsourced.”
Goodlein’s recommendations include reducing the city manager’s compensation, re-assigning law enforcement duties to the Mason County Sheriff’s Office, re-assigning zoning administration, building code enforcement, and rental enforcement to a city employee and leasing the city’s boat launch and fish cleaning station to a third party. He is not recommending raising property taxes, however, that is an option the city commission could consider.
City manager compensation
Goodlein said a reduction in city manager compensation could happen in the reduction in salary and/or benefits or a reduction in the number of hours worked. Goodlein is recommending the city reduce the city manager’s salary by 15.78 percent or $18,000; reduce hours to 32 hours per week, saving $22,800; reduce hours to 24 hours per week, saving $45,600; or creating a mix of a three-day, four-day or five-day weekly schedule resulting in a reduction of $20,000 to $30,000, or 18 to 26 percent of salary.
“As the city administrator I believe that I should feel some of the pain of these reductions,” Goodlein said. “We simply cannot reduce the salaries or duties of the clerk, treasurer or the three DPW employees. They each provide essential services that are required for the city to function.”
Goodlein said there are scenarios that could be discussed that include re-directing some of the city manager’s duties, especially with the duties of code and ordinance enforcement, discussed further in this article.
“Those are options that the commission could certainly look at,” he said.
Law enforcement
The city’s two-person police department provides 3,920 hours a year, or 44 percent, of the city’s law enforcement services with the remainder, 5,840 hours, 56 percent, covered by the Mason County Sheriff’s Office, along with coverage by Michigan State Police as well.
In the current fiscal year, the city’s appropriation for its police department is $230,750 while its expense to Mason County Sheriff’s Office is zero.
“One difference between the extent of police service that is provided by each police agency is that the Scottville police officers provide directed police patrol and traffic and ordinance enforcement while the MCSO only responds to calls for police service typically,” Goodlein said. In other words, the sheriff’s office only responds when someone calls 911 while Scottville police officers patrol the city. “Another difference is that the Scottville police officers, by virtue of their presence and availability, provide city residents with easy access to police related information and familiarity.” Sheriff’s deputies and state police troopers can only enforce state laws while city police officers can also enforce city ordinances.
Goodlein said there are two options the city commission should consider: “Should the city commission decide to do so, law enforcement could be obtained from the MCSO and could be acquired by appropriating funds for the assignment of a deputy sheriff to the city for 1,960 hours annually, or could be procured by accepting circumstances whereby any available MCSO deputy sheriff would respond to any request for police service in the city (through 911), would provide only incidental/non-directed patrol, and no regularly assigned deputy sheriff.
“A decision to proceed with the latter of these two policing formats would require the city to create a new position of part-time ordinance officer who would engage in self-directed and complaint-directed enforcement activities. Should the city commission decide to obtain future law enforcement services by either of these two methods, then city administration would work with the MCSO and other law enforcement agencies to dispose of the police department’s tools and equipment that have exclusive law enforcement purposes or that would be inappropriate for release to other than a law enforcement agency.”
Goodlein said evidence and other found property held by SPD would be turned over to the sheriff’s office or MSP.
Goodlein’s conversations with Mason County Administrator Fabian Knizacky and Sheriff Kim Cole have focused on contracting with the county for 40 hours of dedicated coverage per week at a cost of $230,602 in 2025, $138,570 in 2026, and $143,288 in 2027. The amount would be reduced by $64,290 in 2025 for Scottville Police Department vehicles and equipment that would be repurposed into the sheriff’s office’s inventory resulting in a cost of $166,312 for 2025.
“These 2025 MCSO deputy sheriff costs, as well as the 2026 and 2027 costs, do not reflect the total cost of receiving these services or allow for the determination of what savings the City of Scottville could realize from a deputy sheriff’s assignment to Scottville,” Goodlein wrote.
The City of Scottville currently has policing contracts with West Shore Community College and Gateway to Success Academy. Dedicated policing at Mason County Central Schools is handled by the sheriff’s office. The loss of the contracts with WSCC and G2S would impact the bottom line, but so would the reduction in the expenses having maintaining a police department, such as insurance, utility and fuel expenses, Goodlein said. Goodlein is also recommending the hiring of a part-time ordinance enforcement official. With those factors in mind, he is estimating that the cost of law enforcement services in 2025 would be $200,340—-, in 2026 would be $172,924, and in 2027 would be $177,890.
“Consequently, the savings that would be realized from this occurrence would be $30,320 in 2025, $69,363 in 2026, and $75,511 in 2027,” Goodlein said.
If the city were to eliminate its police department but not contract for dedicated coverage by the sheriff’s office, taxpayers would save $192,632 in 2025, $205,834 in 2026 and $217,596 in 2027.
“Should a transition of law enforcement duties and responsibilities to MCSO occur, the community could expect the same professionalism and excellence that they have experienced from the police personnel of the Scottville Police Department,” Goodlein said. “The professionalism and excellence of the MCSO emanate from the strong and effective leadership of the sheriff and his commitment to public safety and the people who he serves.”
Sheriff Kim Cole told MCP that he is dedicated to providing law enforcement services to all citizens in Mason County.
“I am never an advocate of reducing police services, no matter what color uniform they are wearing,” Cole said. “However, municipalities have to be fiscally responsible and we will provide services to the City of Scottville whether it chooses to maintain its police department, it contracts with my department or it doesn’t contract with my department. Our vehicles are in the city of Scottville constantly throughout the day. Further, there is a sheriff deputy in the city everyday at MCC, who will respond to emergencies as needed.”
Cole confirmed that he has been in conversations with Amber Township to assign the school resource deputy to Amber Township in the summer, which would be a contracted, paid service.
Zoning, building code enforcement, rental regulation
In 2023, the City of Scottville contracted its zoning administration, building code enforcement, and residential rental regulation to SAFEbuilt. In fiscal year 2023/2024 the city paid SAFEbuilt $64,849 for code enforcement, permit technician services, and zoning administration.
“The city should investigate the reassignment of zoning administration, building code enforcement, and enforcement of short-term and long-term rental regulations to its own employee and determine whether those duties and responsibilities could be assigned to an individual who was also qualified to act as the city’s building official,” Goodlein said. “If these duties were combined with other city code enforcement duties that include enforcement of violations that include blight, grass height, and inoperable vehicles
Boat launch
While a smaller expense, maintenance of the Riverside Park boat launch and fish cleaning area costs the city taxpayers about $4,500 annually, even with some revenue generated by parking fees. Goodlein said the facility’s pump and grinder are plagued with repair issues that are estimated to cost about $20,000.
“While it is undeniable that this park area and its boat launch and fish cleaning station indirectly benefit Riverside Park reservations and local and area businesses, the amount is unquantifiable and would be difficult to accurately measure,” Goodlein stated. “In this regard, the benefit to the Scottville community is questionable particularly when a cost/benefit analysis considers the location’s utilization by Scottville residents whose tax dollars fund these expenses.”
Raising property taxes
Not included in the memo, because Goodlein is not recommending it, is the option of raising the millage rate.
City property owners currently pay 16 mills that generate $1.4 million annually for the general fund. By statute, city commission can raise that up to 20 mills. An additional 4 mills would generate $260,250 a year.
“When you look at the median income of a resident in Scottville, I really don’t think that we want to put that burden on them,” Goodlein said. “We have to consider other options, and that’s cutting expenses.”
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