City is in line for a financial boost

City finances will get a break through a major influx of funding through the state to help reduce the city’s pension costs. However, the financial boost is for one-time only.

By Charles Sercombe
Hamtramck’s financial woes are getting a major fix.
But it’s only temporary.
Gov. Gretchen Whitmer recently announced that the state is allocating $750 million to “underfunded municipal pension systems.”
Hamtramck is included in that list of communities.
At Tuesday’s city council meeting, Sue Feinberg of the Municipal Employees Retirement System (MERS) said the city could receive about $17.6 million.
The city still has to apply for the financial aid, Feinberg said, and it won’t come until next summer or so.
“There are a lot of bugs to work out,” Feinberg said about the funding source.
City Manager Kathy Angerer said that what is coming will boost the city’s pension funding from being at 45 percent to 60 percent of what’s needed to being fully funded.
The city’s payment to the pension fund this year requires $5.7 million out of its $18 million budget.
Angerer, who is leaving her position this Friday (July 15) for a new job, obviously welcomed the news.
“We have worked hard to communicate to leaders in Lansing about the challenge of the pension obligation. I am so pleased that the State of Michigan finally recognized and the legislature came to agreement to relieve the burden the underfunded pension obligation is for our city and others and using the one-time available funds to do so,” Angerer told The Review.
“This is so good for Hamtramck. I will leave my tenure as city manager knowing that this problem is on its way to being solved.”
While this is indeed a one-time allocation, according to a state press release, there will be leftover federal funding that could be tapped into in the future.
“With billions in revenue still available, there is opportunity going forward to equitably invest those remaining resources to ensure Michigan is an attractive place for talent and supports thriving communities in ways that benefit everyone,” said Whitmer in the press release.
That isn’t the only funding coming to communities through the state. The other allocations include:
• $16 million to fund a 5 percent ongoing and 1 percent one-time increase in revenue sharing, resulting in one of the largest increases in the last two decades
• $75 million for blight elimination
• $31 million for city and village streets
• $94 million for road and bridge construction
• $30 million for a public safety academy assistance program
• $11 million for community policing
• $3 million to fund economic development efforts in rural communities, through the Office of Rural Development
Posted July 15, 2022