The Ypsilanti City Council will hold its first budget session Tuesday for the 2013-2014 fiscal year and while officials have said the budget is balanced, pensions and health care costs for police and fire retirees continue to rise.

Officials also are saying personnel costs continue to exceed 80 percent of the city's total costs.

The city is scheduled to have three budget sessions during May and several key city officials will present information about their respective departments.

In a letter to Mayor Paul Schreiber, council members and Ypsilanti residents, City Manager Ralph Lange said the proposed 2013-14 budget is balanced.

However, Lange noted that pensions and health care costs for police and fire retirees are expected to increase in the new fiscal year because of an unusually large number of new retirees within the last year. Six individuals retired from the police department and four from the fire department.

The proposed budget is consistent with the council’s budget priorities, which were intended to eliminate a projected deficit for FY2012-2013, according to Lange.

"City council determined that a financial strategy, which makes the necessary reductions in the proposed budget, was more prudent than waiting another year to address them," Lange wrote. "While the reductions in personnel primarily impact the fire department, the city has very few options."

According to Lange, personnel costs continue to be the city's largest expense, exceeding 80 percent of its total costs.

"The centerpiece of my recovery plan has been my proposed consolidation of the police and fire functions into a hybrid police and fire department," Lange wrote. "...I understand this is not the preferred option for delivering police and fire services for some individuals who work for and live in the city.

"This being said, in my professional view, and that of the police department, it is the best model for delivering police and fire services the city can afford at this time."

A few highlights from the budget:

• No Water Street debt appropriation is budgeted. Instead a combined fund balance appropriation of $549,345 was budgeted.
• The police services budget includes the hiring of three additional officers at Tier 2 wages and benefits and two part-time officers with no benefits.
• The fire services budget includes hiring two firefighters at Tier 2 wages and benefits, replacing the retirement of four firefighters.
• Vacation and sick time cashout is expected to decrease.

The city will also realize a small decline in the city's taxable value and reductions in general fund expenses.

"The proposed fiscal year 2013-2014 budget is based upon the 2013 taxable value of $289,614,595, which is .38 percent lower than the fiscal year 2012-2013 taxable value," Lange wrote. "This decline is much less than that experienced each of the last five years and reflects the reported stabilization of the real estate market locally."

According to Lange, property tax revenues for FY 2013-2014 are projected to be about $308,046 higher than originally projected due to an increase in the fire and police retirement millage from 7.403 mills in 2012-2013 to 8.9229 mills in 2013-2014.

The schedule for the budget presentations are as follows:

Thursday, May 7

City Manager Ralph Lange will give an update regarding the general fund revenues for fiscal year 2012-13 and fiscal year 2013-14. Lange will also discuss the street lighting fund and the city manager administration.

City Clerk Frances McMullan will review the city council budget, as well as the clerk’s office and treasurer budget.

Human Resources Manager Judi Smith will discuss the workers compensation fund.

City Planner Teresa Gillotti will provide information regarding the building department and ordinance enforcement, as well as the planning and development offices.

Director of Public Services Stan Kirton is expected to present about energy efficiency, DPS parks, parking lots and the Rutherford Pool renovation grant.

Finance DirectorMarilou Uy will share information about the city's finance and general accounting department, as well as vacation and sick time

Tuesday, May 14

Police Chief Amy Walker will present the department's budget and discuss a series of grants officials have applied for to go toward police services.

Fire Chief Max Anthouard will discuss the fire department's budget.

Ypsilanti Downtown Development Authority Tim Colbeck is slated to present the DDA Depot Town Fund and the DDA Downtown Fund

Marilou Uy will again present with information regarding the city's bonds, capital improvement fund and the retirees' benefits fund.

Tuesday, May 21

A continuation presentation of general fund expenditures and budget review, if necessary.

The city council meeting will begin at 6 p.m. Tuesday at the Ypsilanti City Hall.

Katrease Stafford covers Ypsilanti for AnnArbor.com.Reach her at katreasestafford@annarbor.com or 734-623-2548 and follow her on twitter.