City finances are looking better

Hamtramck’s financial situation is now looking stable.

By Charles Sercombe
Several weeks ago, city officials received some sobering financial news.
At that time, the financial projections for the city were that there will be less money coming into the city, and more money going out.
But last week, a financial audit for 2022 painted a much brighter picture.
The city received millions more in revenue than projected earlier, and the city now should be able to break even on the budget.
“It’s not a surplus or a windfall,” cautioned City Manager Max Garbarino. “We’re in a solid place right now.”
The additional revenue came from several sources: state revenue sharing increased, thanks to an uptick in the city’s population, an increase in income tax collection (thanks to an increase in population), marijuana revenue, parking meter revenue, and more property taxes being collected.
The city’s annual budget is about $21 million.
At this point, it appears the city will be on good financial footing for the next budget year.
For the past few years, the city had been delving into its budget surplus to make ends meet.
There will be more financial help ahead. This year, the promised $17.6 million from the state to shore up the city’s pension fund is expected to come in. However, the city is still obligated to keep paying into the pension fund, so there is little relief from that yearly expense.
City salaries and pension obligations make up the majority of the city’s annual budget expense. Property and income taxes make up the majority of revenue coming into the city.
On the downside, the Wayne County Jail on Conant is scheduled to close down once the county’s new jail is ready to operate. That will be a loss of about $1 million a year in revenue from the county.
There are no current repurposing plans for the jail site.
So, are there plans to somehow raise more revenue?
According to a previous budget presentation, it comes down to seeking more grants, and raising taxes and fees.
Chief Financial Officer Aamir Ahsan also said that the city’s various fees are set comparatively low, and need to be increased.
Raising taxes and fees will likely be met with resistance from the public, including some city council members.
Ahsan stressed that, no matter what, revenues must increase.
“We’ll have to do some thinking on how to generate revenue for the city,” Ahsan said.
The city did report some more good news on the budget front: a decades-long housing lawsuit, which has continued to cost the city hundreds of thousands of dollars in ongoing attorney fees, will finally come to an end this year with the construction of three housing units.
Over the last several years, the city has constructed almost 200 housing units in order to settle a housing discrimination lawsuit filed in the early 1970s. The three houses to be built this year will bring the final count of housing units up to 200 even — which is what the city agreed to build in its lawsuit settlement with the housing plaintiffs.
Much of that construction funding came piecemeal from various federal and county grants.
Also, through grants, the city has an ongoing plan to complete swapping out lead water lines with new, non-toxic lines.
There is also a good chance the city could receive millions of dollars from a grant to satisfy a lawsuit requiring the rebuilding of the city’s sewer system.
The estimated cost for this project is about $50 million.
If that comes to fruition, it would mean the end of basement flooding whenever there is a heavy rainfall.
News of this grant coming through could come within this year.
Posted March 24, 2023