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Reader feedback … Tackling the city’s financial crunch

By Charles Sercombe
Readers have once again been busy discussing the issues of the week.
Former Hamtramck School Boardmember Nasr Hussain had the most to say in our comment sections for the stories we posted online at hamtramckreview.com.
This past week, he focused on the city’s financial challenges ahead. For the first time in several years, the city is facing deficit spending this coming fiscal year.
Fortunately, the city has a $6 million financial cushion to absorb the blow of spending $2.3 million in the red.
Hussain thinks city officials are on the wrong track by dipping into the city’s budget surplus:
“Continuing to redo the same actions, hoping to get different results, is a form of insanity. The only hope for this city is the removal of restrictions on business development in its ordinances.
“Abolishing the city’s income tax should be the first step to attract businesses and investment to our city.
Dennis Nowak doesn’t agree with eliminating the income tax:
“Abolishing the city income tax is a recipe for financial
disaster for the City of Hamtramck.
“Ask the City Treasurer, City Manager and Finance Director what implications that action you propose will have on the city’s ability to meet its obligations.
Hussain replied:
“I don’t need to ask. The city has been through bankruptcy twice with this tax revenue stream. And projected to go into it again by the persons you are referring me to ask, with income tax still here.
“This is the best time to try something different. The budget surplus will allow us to go for a year or two without income tax and see the difference. If nothing changes, then it can be easily re-instituted.
“We pay the highest insurance rates and water rates. Income tax is something that is under our control to get rid of. Only failing cities like Detroit, Pontiac, Flint and Highland Park have income tax. Successful cities don’t.
“It made sense when the city was full of factories but now the burden mostly falls on struggling city residents.
“Besides, it discourages wealthy people and businesses from staying in the city, and causes continuous flight or the residents to the suburbs where there is no such tax.
Hussain also claims some city leaders don’t live here:
“Even our city leaders, who have a choice, do not live in Hamtramck with income tax being one of the reasons they don’t.
“Not to mention other ‘leaders’ who fake residency in Hamtramck.
“What Hamtramck needs is people with more ‘brain-power’ not ‘money.’ Hamtramck can be one of the richest cities in Michigan if managed correctly.”
June 7, 2019

4 Responses to Reader feedback … Tackling the city’s financial crunch

  1. Tea Party Patriot

    June 15, 2019 at 8:31 pm

    Quick questions for the City of Hamtown:

    Who are city leaders who “fake residency” in Hamtramck?

    Why is the City of Pontiac “not successful” when Oakland County government offices are headquartered there and it has a bustling downtown area and many longtime businesses operating there?

    Who in fact has declared that they do not live in the City of Hamtramck due to the Income Tax Ordinance?

    When did the City of Hamtramck declare a “bankruptcy”? My recollection is that it went twice into state receivership – which is a different process.

    Are increased revenues on the horizon due to a projected increase in property tax revenues in the City of Hamtramck?

    Has anyone factored into the equation projected losses due to anticipated city settlement payouts and attorney fee obligations due to pending lawsuits against the City of Hamtramck?

    Has anyone considered an amendment decreasing the current City Income Tax Ordinance rate instead of abolishing the ordinance entirely?

    Are there any serious discussions on abolishing the police department entirely as a means of reducing city expenses and instead relying upon the Wayne County Sheriff to provide protection?

    Answer these questions, City of Hamtown!

  2. Dennis Nowak

    June 16, 2019 at 7:05 pm

    There are other areas of enhancing revenues that have been given short shrift.

    One is more diligent collection of delinquent water accounts against local business owners and residents. This could be accomplished by more vigorous enforcement of shutoff notices. Kyle Tertzag did this while he was City Manager to the delight of many.

    Secondly, unpaid city income tax accounts need to be more seriously enforced.

    Lastly, vacant land owned by the city needs to be auctioned off and placed on city property tax rolls.

  3. Nasr Hussain

    June 16, 2019 at 8:41 pm

    From 2009 through 2013, Pontiac was under the oversight of an Emergency Financial Manager appointed by the state government. The Emergency Manager was authorized to make day-to-day executive and financial municipal decisions. The position was not subject to the usual checks and balances, nor to election. The first and second managers, Fred Leeb and Michael Stampfler, were appointed by Michigan Governor Jennifer Granholm. The third manager was Louis Schimmel, who was appointed by Governor Rick Snyder.

    In order to balance the budget, state-appointed emergency managers drastically revised labor union contracts with the city, sold off city assets such as parking meters, and privatized most public services. The Oakland County Sheriff’s Office handles all police (saving $2 million a year) and nearby Waterford township has responsibility for fire protection (saving $3 million). Pontiac sold its water treatment plant for $55 million, and outsources garbage collection, animal control, vital records and street maintenance. Many people working in City Hall are employed by contractors. The city payroll has declined from 600 to 50 employees. The Silverdome Stadium, once valued at $22 million, was sold for $583,000 (it would end up being demolished in December 2017). The emergency managers reduced the city’s annual spending to $36 million from $57 million, and erased almost all of its long-term debt.[21]

    In August 2013, Schimmel resigned as Emergency Financial Manager. Schimmel now serves as part of the four-member Transition Advisory Board for the city.[22] Other members of the board include Deputy Oakland County Executive Bob Daddow, Rochester Hills Finance Director Keith Sawdon, and Ed Karyzno, administrator of the Michigan Department of Treasury’s Office of Financial Responsibility.[23]

    More info on Wikipedia

  4. Dennis Nowak

    June 23, 2019 at 10:13 pm

    Perhaps we need another emergency manager like Cathy Square to dictate control of the city’s finances.

    Even though residents grumbled about having her in control the bottom line was she re-structured the city back to “profitability” – surplus resulting in cash reserves.

    Square was a GOP appointee who worked fiscal magic.

    Same with Katrina Powell – who ruled with an iron fist. Remember how she battled city vendors and placed a number of city officials on administrative leave?

    Lou Schimmel ruled Hamtramck a number of years ago and residents are better off due to his leadership.

    State receivership has historically been a good thing for Hamtramck.

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