City’s finances are now at a critical crossroad

City councilmembers received an earful this week about the city’s dire financial picture.
It’s a subject that’s been brought up before, but not quite at length like in Tuesday’s budget work session.
The point is, the city is quickly running out of money. Not only have expenses, such as the city’s pension obligation, continued to rise, there has also been a huge impact from COVID.
Because so many people have lost their jobs, or have had reduced work hours, the city’s income tax collection has been significantly down.
And, in an effort to minimize contact with people, police officers and city code enforcers have also backed off from issuing tickets, which means less revenue collected from that source, as well.
We’re not sold on the idea that issuing tickets is something cities should count on as a revenue source, but it is a major revenue source for Hamtramck.
There is one way out of this: pass the financial obligation of pension costs onto property owners, via a voter-approved millage increase.
Previously, the city tried to get voters to OK increasing the pension millage from a half mill to up to 10.5 mills. Predictably, voters resoundingly rejected this proposal.
But that doesn’t make the financial obligation go away. Instead, it increases the likelihood that the city will miss a pension payment, which will then trigger a lawsuit.
And that will result in a judge ordering a millage increase to pay for the pension.
It’s something that just happened in Melvindale. In that case, a judge ordered 10 mills on that city’s property tax roll.
Think about it, Hamtramck.
Posted March 5, 2021

One Response to City’s finances are now at a critical crossroad

  1. Mark M Koroi

    March 6, 2021 at 5:22 pm

    While ongoing MERS obligations continue to create a burden on city finances, one aspect of the financial onus resulting from lawsuits against the city alleging civil rights violations by members of the police department.

    Former Hamtramck P.D. Officer Ryan McInerney recently pled guilty to civil rights violations in a criminal case file in U.S. District Court and faces possible prison time:

    That July 22, 2014 incident resulted in a federal civil rights action brought by one of the victims via the Fieger Law Firm which was settled on October 4, 2019:,_City_et_al

    In addition other civil rights actions are pending:

    The Breakthrough Towing federal civil rights suit that named the City of Hamtramck as a co-defendant two years ago remains pending despite diligent efforts by City Attorney James Allen’s office to obtain dismissal of claims against the city.

    The plethora of civil rights litigation against the city and its police personnel the last several years have drained municipal financial resources due to settlement payouts, attorney fee obligations to law firms defending the city and its officers, and increased liability insurance premiums.

    Everyone talks about MERS – no one talks about the multiplicity of lawsuits that contributes to city budget woes. This needs to be addressed by City Council.

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