By Charles Sercombe
The City of Hamtramck is once again facing a financial challenge.
Scratch that. It’s a crisis.
At last week’s city council meeting, City Manager Kathy Angerer didn’t mince her words on how bad it is.
Here’s the short list of what’s looming ahead:
o Next year’s budget will not include a federal grant that currently covers the salaries of firefighters. The city had received this grant for the last several years. Angerer said the city received $575,000 for the 2018-19 budget year from this grant, but she noted the amount changed from year to year.
Angerer said the city no longer qualifies for the grant because the qualifications to receive it have changed. The grant, she said, is now only going to cities with volunteer departments or those that are adding additional employees.
o GM is expected to close its Poletown Plant, which will mean a $760,000 a year hit to the budget.
o A long-standing Community Development Block Grant has been reformatted, which will result in a loss of $100,000 per year that went to pay for code enforcement.
o In three years, Wayne County is expected to transfer prisoners from its Hamtramck jail to the new one being built in Detroit. The upshot: A loss of $1.1 million a year.
o Over the next seven years, city employee payroll will increase by 7 percent, and the total cost of their health insurance will go up by 30 percent.
o According to Angerer, if the city does not make adjustments to its budget, there will be an $11 million deficit by 2023. The city’s annual budget is about $16 million.
o On top of that, the city is always vulnerable to lawsuits and “other hidden costs,” Angerer said.
A year ago, the city boasted of having a $5 million budget surplus. This past year, Angerer said, she has already had to dip into that cushion to cover costs.
In the meantime, she is teaming up with the public school district, to see if the city and district can pool services to save on costs.
Angerer challenged the city council and the mayor to “put on your thinking caps” to come up with solutions.
“We have to address this together,” she added.
Hamtramck has a history of falling into financial trouble. The state has twice stepped in and appointed an emergency manager to take control of the city’s finances.
Local control was returned four years ago.
Feb. 22, 2019
Edited for clarity on Feb. 22, 2019