City mulls budget options

By Charles Sercombe
Hamtramck City Hall could look very different in the coming weeks and months.
No, we’re not talking about a physical change to the building.
Instead, it’s what you’ll see – or not see – by the time the coronavirus pandemic fades away.
There could likely be fewer employees working inside city hall.
Recently, 27 city employees were temporarily laid off – or furloughed, as it is being called — because of the city’s shrinking revenues.
Hamtramck is among many municipalities, county governments and state offices that have reduced its work forces.
For some, the furloughs will be temporary – as Hamtramck had originally planned.
But City Manager Kathy Angerer told the city council that there might now be a need to restructure city offices, and to merge work.
The city was already in deficit spending for the current budget year to the tune of $1.8 million.
Fortunately, the city had a $5 million budget surplus. Budgeting for the new fiscal year, which starts July 1, was already going to be a challenge.
“But this COVID emergency changed everything,” Angerer told the council.
It now looks like the city will have to dig deeper, possibly over $1 million, into its surplus.
“We have a revenue problem,” Angerer said.
And that includes, because of the statewide work shutdown, a loss in income tax collection (for which the deadline to pay has been pushed to July), a loss of property tax payments, and likely a huge decrease in state revenue sharing.
Even the Hamtramck 31st District Court has seen a dramatic loss in revenue. There have been few traffic fines paid lately because police officers are not issuing tickets in order to limit their contact with the public and possibly become infected with COVID-19, Angerer said.
Angerer said that in times of financial crisis where other cities come down with metaphorical “colds,” Hamtramck catches “pneumonia.”
Because of the financial crunch, the city will likely cancel this year’s ongoing alley repair program, which will save $285,000.
Angerer came up with several other cuts, but they totaled a paltry $460,000.
None of the proposed cuts touched the police or fire departments, although the fire chief’s position has been reduced to part-time with also a 50-percent pay cut.
One way to help ease the city’s financial obligation, Angerer said, is to ask voters to pay an increased millage that will help pay for the cost of police and fire retirees.
The city now levies a half mill for the cost, but that covers only a fraction of that expense.
At Tuesday’s council meeting, the council agreed to ask voters to increase that millage to 10.5 mills in the August Primary vote on Aug. 4. The council agreed.
The half mill raised $103,359 for 2019. If the extra millage is passed, it would raise almost $2.6 million a year, which would cover the cost of the police and fire retirees’ pension.
Angerer is also considering to end funding health costs for retirees who are under the age of 65. The city currently pays those employees $134 a month.
That move will certainly spur a howl of protest from those retirees, but a court recently ruled that cities are not obligated to pay the health costs for retirees.
Angerer stressed that, no matter how unpopular the budget decisions will be, “we need a clear path to our survival.”
Posted May 15, 2020

5 Responses to City mulls budget options

  1. Resident

    May 17, 2020 at 4:43 pm

    New taxes: 10.5 mills for City Council. 7 mills for School Board… Why stop there? Why not go for more?

    With all the unemployment benefits and/or free foods that some or many of the residents are receiving, some could argue that residents ought to be able to afford more.


  2. Nasr Hussain

    May 18, 2020 at 4:09 pm

    What happened, were we intentionally misinformed when we were told that Hamtramck was at max mills and that the residents couldn’t have the option of replacing the income tax with a millage 🙂

  3. csercombe

    May 18, 2020 at 5:49 pm

    It’s an exception and based on this:
    Act 345 of 1937, the Fire Fighters and Police Officers Retirement Act, allows for a retirement plan for police officers and firefighters and also authorizes a funding source. Act 345 is a tool local governments can use to fund retirement costs

  4. Nasr Hussain

    May 18, 2020 at 10:58 pm

    The argument was that the city can not place “any millage” on the ballot to offset any loss from income tax elimination.

    If this millage is passed, the money saved from the general fund used for pension obligations will easily cover, if not exceed, any loss from the elimination of the income tax.

    And hopefully the Federal government bail out of city governments, in the works, will cover any shortcomings causing this proposal to be placed on the ballot.

  5. J Otway

    May 22, 2020 at 6:04 pm

    Should of opened a marijuana facility. Chalk it up to Hamtramck cutting off their nose just to spite their face. Revenue lost again. Just sayin.

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