By Charles Sercombe
Hamtramck’s financial survival may depend on two key things: Providing police and fire services to Highland Park, and getting retired public employees to agree to a less expensive health insurance and/or kick in co-pays.
Those topics were among several options and issues raised in a budget work session for city council on Tuesday evening.
The meeting was also the first budget session held in several months, and it also served to bring two new councilmembers, Abdul Algazali and Robert Zwolak, up to date on finances.
What’s clear from Tuesday’s meeting is that city officials have their work cut out for them.
This could be Hamtramck’s most challenging time since the closing of the Dodge Main plant in 1980, which at that time was the city’s largest employer and taxpayer, and — to stretch back further — the Great Depression of the 1930s.
To put it simply: The city is spending much more than it is taking in from tax collections.
Consider the following statistics:
With the collapse of the housing market, the city has experienced a decrease in property tax collection amounting to $500,000.
The drop in property values has also resulted in collecting only $900,000 from the GM Poletown plant instead of an expected $1.7 million.
The cost of public safety, and that includes retirees, has gone from $7.2 million in 2002 to $11.8 million in 2011.
The state cut $500,000 from the city’s state revenue sharing last year.
The closing of American Axle & Manufacturing a few years ago lead to the loss of $1.7 million a year in tax collection.
By the end of next June, the city will likely be staring at a $3.4 million budget deficit with little to no room to find new revenue streams or places to make cuts in the budget.
But before that date arrives, the city is also looking at a cash-flow problem that could hit in March.
In the not too distant future, the city may find there is not enough money to make employee payroll, or cover any number of other expenses.
But there are glimmers of hope. It’s just going to take time, however, time is not on the city’s side.
On top of the list of things to do immediately is: Talk with Hamtramck’s police and firefighter unions about expanding services into Highland Park. At the same time, the city has to start negotiations with Highland Park officials.
City officials also must sit down with retirees and explain that if health cuts aren’t agreed to, the city could very well enter bankruptcy and those pensioners could find themselves without health insurance as well as even a pension.
(Pensioners will no doubt say their pensions are protected by law.)
As for Hamtramck stepping in to take over police and fire services in Highland Park, the mayor of Highland Park, DeAndre Windom, said in a telephone interview with The Review that he’s open to discuss fire services but not so much about taking over police services.
“We might be able to talk about shared fire services,” Windom said.
He said he has reservations about Hamtramck taking over police patrols because it is largely an all-white force that would be patrolling a majority African-American community.
Hamtramck City Attorney Jim Allen seemed optimistic in getting talks going.
He said that if a plan can be worked out, it could be a model for other communities in the state.
“If it works for us, it’ll work for others,” he said.
Mayor Karen Majewski said that the Michigan Municipal League, of which she is president, is also willing to help, free of charge, to come up with a plan to provide services to both communities.