Progress is being made in the state-mandated five-year deficit elimination plan imposed on the City of St. Ignace last August, following the 2007 audit that revealed a deficit in several city funds. Some deficits already have been eliminated or reduced, although the city continues to struggle to erase the $56,000 deficiency in marina operations, and finding the money to pay for snowplowing remains a concern.

The city is required to show that progress is being made to clear up the shortages.

"The goal here is to have everything to zero or better in four years," said City Manager Eric Dodson.

One dock attendant position at the marina has been eliminated and more cuts are expected to get the account out of the red. Expenses at the marina are higher than anticipated and a purchasing requisition approval process is helping the city keep a closer watch on how funds are spent.

The city-wide purchasing requisition program put in place two years ago was enhanced in February with a computer program that now records purchases, tracks inventory, and follows department spending.

The city may seek advice from its accountants on a possible transfer of funds from other accounts to boost the marina's numbers, said Mr. Dodson. Last October, the Downtown Development Authority agreed to support marina operations with $30,000 in funding spread over three years.

The local and major street funds are at the "mercy of the state contract and snow," said Mr. Dodson, and still remain in deficit.

The 2007 audit showed a deficit of $10,027 in the local streets fund and a loss of $17,089 in the major streets fund.

"We're constantly monitoring this and watching them very closely," he said.

Overtime has been cut for snowplowing and sidewalk clearing, he said. The city is plowing only in what Mr. Dodson calls "an emergency mode," which is when there is more than four inches of snow on the road.

"Really," he said, "our roads are kept to a different standard than they were previously."

The downtown, hills, and curves continue to be plowed on a timely basis, including and roads near the fire department, schools, and hospital, which are priorities, while side streets are not cleared as quickly as before.

The city is picking up the slack in state funding, he said, which is not fair to residents who have paid taxes to the state and are not getting as much service as in the past.

"Things are going to have to happen on the state level, too," he said. "They are underfunding us for our trunkline maintenance."

City taxes of 15.25 mills have not been raised for 24 years, said Mr. Dodson. City tax revenue has increased, however, as assessments have risen.

"There are areas we have to look at in years to come," said Mr. Dodson; "most importantly, streets. We have to find solutions. I don't know if that includes a millage increase or not, or a voted millage, but we have to find a solution. Hopefully, the solution comes from the state, but I'm not going to count on that."

Many communities in the county have road millages, he said, although the city does not. Some council members oppose a tax increase, he said.

The cemetery fund was in the red by $4,500. The city raised fees and transferred $1,700 from the general fund to eliminate the shortfall.

A $27,050 deficit in the wastewater treatment fund was a holdback on grant funds. A portion of grant funds the city will receive from the state for the wastewater treatment refurbishing project are held until the project is complete. The city reminded the Department of Treasury that it is holding the funds. The city did transfer the money from the general fund to offset the deficit until the grant money is released, said Mr. Dodson.

The fitness room addition to Little Bear East Arena put the Recreation Department in the red by $9,863. The Sault Ste. Marie Tribe of Chippewa Indians contribution of $6,800 fell short of the nearly $16,000 cost of the room. To cover the deficit, $5,000 was transferred from the Little Bear East Arena construction fund and $5,000 was transferred from the recreation fund.

The equipment, office equipment, and data processing funds also have shown a deficit. All city departments now are paying into the equipment fund, which has a negative $27,900 balance.

All departments using city equipment now pay into the account. In the past, that was considered part of the city's general overhead.

Building and zoning permit fees for home and commercial structures, signs, and other construction were increased in September as part of the deficit elimination plan for the building inspector's fund. It was in the red by $2,077.

Shortfalls in the water and sewer accounts are not considered end-ofthe year deficits, as they are cash accounts, said Mr. Dodson, and are not under a five-year deficit elimination plan.

The city, however, has a separate plan to reduce the shortages in funding, which included a rate increase about four years ago, and a final bond payment made last year has reduced expenses.

When the city began working on reducing the deficit, the water and sewer account was at a negative $785,000. Now, they are in the black and fluctuate monthly based on payments received by users. Currently, the water fund is at $28,000 and the sewer fund is $124,000.

The reserve account, however, remains underfunded. The city's bond sale requires it to keep one year of payments ($280,000) in reserve.

The city expects to get its 2008 audit report in May.