City manager report
Cooper explained that Klein removed a resolution regarding a Headlee override in favor of a report from him. He has put a lot of time into how best to approach it, and talked to department heads and the unions about what he might be covering.
During the budget process, he was asked to prepare a projection for the next 3 years. At the time, he projected a $800,000 surplus in 2010, a deficit of $1.1 million in 2011, and a deficit of $1.3 million in 2012. The primary cause of the deficit at the time was a reduction in payments from Wayne County on the jail PILOT and an increase in retirement payments to the retirees of $300,000 per year.
The increased payments on the PILOT were the result of a lawsuit that the city filed against the county to assure payment under the PILOT agreement. The city temporarily received $2 million dollars per year due to back payments. In 2011, the payment will return to the original amount of $1 million per year. Unfortunately, the back payments have been used to offset the cost of operations, something that should not have been done.
Due to recent developments at American Axle, the projections had to be modified. The projected surplus in 2010 is now $300,000, and the expected deficits in 2011 and 2012 are $1.6 million and $1.9 million. AAM has paid $500,000 per year in income taxes.
Cooper looked at many things in regard to the impact and ways to discuss it. There is a potential for the elimination of lot mowing, board-ups, alley clean-ups and other services. He looked at eliminating reserve accounts, insurance reduction, and elimination of training and travel. Salary freezes and wage reductions look easy, but are not necessarily easy to implement. Staff may be cut in all departments, and the DDA, events coordinator, and even Community and Economoic development may be cut. Nothing is sacred.
Increasing revenue with more fees, taxes, and grant funding will be considered. A Headlee override is an example of something that may need to be done at some point, but it was premature to address this as an option. He is also looking into using some of the budget stabilization fund. It won’t solve all the problems, but will give the city a chance to defer some of the impact. Reductions in revenue, organizational changes, and increases in revenue might not save enough. Cuts to police and fire may not occur, or in excess of 5 people could be cut from each department.
Most of this analysis was compiled in 4 days and is not complete. It is premature to give more details because it could raise unnecessary concerns and add to confusion. He felt it would be irresponsible to try to explain things that may not be part of the final implementation plan. We are facing substantial budget cuts in the next two years, and a thorough analysis is needed. Analysis started 4 weeks ago. Just about all cuts besides staffing have been discussed. It will take another 45 to 60 days to present something logical and thought out to the council.
Cooper is not a politician and is not running for office. He is appointed by the city council, but some of the things he has heard and read concern him. Claims that taxes will be cut are reckless given the financial condition of the city, as are claims that more police officers will be put on the streets. Cutting taxes in the near future would be suicide. Costs can’t increase until a solid plan is in place.
The good news is that the city will pay off a major bond issue in 2012, saving the city around $400,000 per year. Two major developments will be operating, one of them being a generator of income for the city.
Cooper invited candidates to talk with him and learn about city finance and other issues. He serves the citizens under the guidance of the city council, whoever those people may be.
Klein thanked Cooper for the report, “knowing that it was pushed on you.” He said that Cooper had left out GM’s pending tax appeal, and that the city would lose $3 million dollars in revenue if their appeal stands. Cooper said they currently pay $4.3 million, and if they got the full 80% they are requesting, it would drop to $1.7 million. Klein said the state might give GM a 30-40% reduction. Majewski corrected that his statement was complete conjecture, as she was in a meeting with state officials that morning, and they gave no hint whatsoever as to what might come out of the tribunal. Cooper added that the City of Detroit, Hamtramck, and Wayne County are fighting the appeal together to keep things the same.
Algazali thought that was the first time the city manager had explained that the city will have a deficit. He didn’t want to wait until the last minute to address problems, and suggested 5-10% pay cuts. Cooper said it is only 6 weeks into the fiscal year, and he intends to have a full plan in place by the middle of the year.
Stackpoole asked when the tribunal meets. Cooper said there is no firm date. There are a lot of attorneys involved, and it could take some time. Allen added that the school districts are also involved, though Allen Brothers is not.
Ahmed asked if AAM removed all the personal taxable property from the Hamtramck side. Cooper said they haven’t removed equipment as far as the city knows, and that the city was told that there are enough employees on hand to maintain the buildings until they reopen the facility in 12 to 18 months. They are still paying property taxes and personal property tax, just not $500,000 in income tax. In comparison, GM only pays about $40,000 in income tax.
Ahmed wanted to know how many people are working at AAM. Cooper heard they brought back 230 people. Gordon corrected that they currently have 112 employees, down from 1000.
Gordon asked what Klein meant about this report being “pushed on” Cooper, and why they were discussing it that day. It is an election year and taxes are a big issue. She doesn’t think they need to raise the anxiety level of residents and would rather have waited for a presentation until there was a plan. New people may be elected to the council, and she is not comfortable with people on their way out making financial decisions for the city. She asked how the council could live in fear of being broke when they accepted financial responsibility for a festival two weeks ago that could cost $100,000. Council also approved 1 mill for the fire department earlier in the meeting.
Cooper said the festival will probably cost the city something, but unless it rains for 4 days, most of the money will be recouped. It is very true that the city could be stuck with a lot of costs, but that is the gamble taken to put on a festival. The 1 mill tax is up to the voters. He thinks they can count on the firemen to go door to door. He is hoping that the entire 1 mill doesn’t have to be assessed. Increasing taxes is the last option, but he can’t guarantee that he won’t ask in the future.
Gordon asked about the timing of the presentation again, directing her question to Klein. Klein replied that he knew Cooper and the city controller weren’t being frank because of the election and not wanting to get involved politically. He is no longer a candidate, and the day after the election, a discussion with Cooper made it clear to him what a serious situation the city faces, and others don’t understand. He forced Cooper to be honest by putting forward a resolution to uncap the property tax rate. After discussing his resolution with Cooper and Majewski, they came to an agreement that if Cooper gave a full presentation at this meeting, then Klein would withdraw his resolution from the agenda. Klein has no intention of voting for service cuts in his last months, but he is warning people of the coming storm.
Algazali said the others on council know how serious the situation is, and he knew how serious the problem was when they hired an events coordinator. The city didn’t need a $60,000 attorney bill for the prosecution of Gordon. Klein should have been more serious about waste reduction two years ago.
Public comment
Mohamed Hassan said the fire truck is a safety issue. He saw several police officers sitting in The Clock in the morning, and wanted to know how many hours they get for lunch. He misunderstood the conversation about the attorney and thought the city was behind on paying the bill. He also thought the city manager should be able to solve legal questions himself. He told Cooper to stay out of politics, and wanted to know why the budget projections were not given earlier. He wants to see some high property tax bills adjusted lower.
Gordon clarified that the discussion about the attorney was not about people asking questions or frivolous phone calls. It was only about billing.
Bob Zwolak said we are all aware of the looming financial crisis. GM filed for bankruptcy, and AAM reduced production. Cooper did not address regional cooperation. He criticized that city employees do not live in Hamtramck, and didn’t know why we need a truck when Highland Park has one. He thought they should discuss consolidating services with Highland Park or Detroit. The state is asking for regional cooperation. The county and others have resources, but our city officials try to bypass them and go directly to the top. The governor’s programs haven’t given us anything.
Zwolak suggested that officials should sponsor the festival with their campaign funds. The council owes the taxpayers $60,000 for the witch hunt against Cathie Gordon. We should look at the number of city officials that sue the city for their own personal benefit.
Ahmed asked if the city had contracted out the fire department. Cooper said that we have not. Ahmed said that is why he lives in the city.
Mr. Moracki(?) asked when Joseph Campau was paved North of Caniff. Majewski replied that the county paved it last year. Moracki said manhole covers were paved over, and asked if the city paid CPI to uncover them. The city wasn’t able to access a valve when they needed to, and the county should have to pay for bringing the manhole covers to grade.
Cooper didn’t know the answer, and said he would have to ask the DPW.
Steve Shaya asked if there are grants or 911 funds available for the fire truck and ambulance.
Cooper said the 911 funds are for communication equipment. Grants have been written for the aerial twice, a fire station, and numerous pieces of equipment. A $900,000 truck will never be approved because the funds are being spread around. The millage could be ended early if money is found.
Stackpoole said the council only approved sending the millage to the ballot.
Algazali said applications have been submitted at the last minute.
Bill Meyer thanked the council for the reappointments to the Human Relations Commission. He congratulated the clerk’s office on a smooth primary, congratulated the citizen’s on 22% voter turn-out, congratulated the candidates who won, and especially the Bangladesh community on their involvement. The more people who live in the city, the easier it will be to balance the budget. He didn’t think the council should accept such a dismal report. The city must find revenue, more people, and ways to make the city more safe, fun, and attractive.
A 10-minute recess was called, and a closed session held.
Hamtramck Star
Run out of Ypsilanti since 2005
In response to Mr. Zwolak’s comments:
A city cannot depend on another city for a fire truck or ladder every time we need it’s services. The request will get old, very quickly. We cannot depend on 2 other cities which are plagued with their own financial problems. Highland Park and Detroit fire departments are very busy also, and a ladder truck might not always be available. We cannot risk our citizens lives, by depending on another city, which has their own problems. The city of Hamtramck, needs it’s own functioning, ladder truck. For lack of better words, we should not and cannot mooch off of Detroit or Highland Park, unless it is absolutely needed.
Zwolak criticized that city employees do not live in Hamtramck. Where do Detroit and Highland Park city employees live? Or Maybe he can tell us where the city employees of the Grosse Pointes or Birmingham live. I’m sure not too many of them live in their community. I would really be interested to hear his plan to consolidate services. It would probably be as good as his Kielbasa festival that he ran at Keyworth stadium years ago.
Is there any surplus for 2009? Was there any budget surplus for 2008? 2007?
Thanks,
Don’t other communities regularly consolidate emergency services? Hamtramck is geographically tiny, and if the costs of providing those services can be reasonably reduced by some kind of sharing agreement, then it makes sense. I’m inclined to believe Mr. Zwolak has investigated these things, although I haven’t seen any examples. Hamtramck ‘mooches’ water, and sewage services, so I don’t see sharing agreements for emergency services, unless those services can’t be reasonably provided. I’d love to see some regional co-operation between Detroit and Hamtramck, especially with regards to policing. We share our problems, so sharing our solutions ought to be at least considered, even if just to see if it’s possible.
It would be nice if I could edit my previous post to read
“Hamtramck ‘mooches’ water, and sewage services, so I don’t see sharing agreements for emergency services, unless those services can’t be reasonably provided, as a problem.”
“Sharing” public safety services is great if you want to “share” their problems along with them. Hamtramck doesn’t look like Highland Park or Detroit because what we have works. All “Consolidating” would do is create more problems and increase response times. Go across carpenter and call for an ambulance and see how long it takes then come to the Hamtramck side and see what happens. Same thing goes for police services. And as far as communities in the suburbs providing services to one another that’s a whole different story. Mutual aid is just that….Mutual. Highland Park’s services are not dependable bottom line. And there is nothing mutual about Detroit and Hamtramck Police/Fire/Ems. Hamtramck cannot provide the same amount of resources that Detroit can therefore it is not Mutual. Detroit wouldn’t allow Hamtramck to send units in to back them up. Taking over services is a different story also. If Hamtramck took over Police or Fire services for Highland Park for a fee that might be worth looking into. But I would have to expect that either department in Hamtramck would have to double in size if not more. I’m not sure Highland Park has that kind of stability or financial endurance to withstand such a thing. All in all there is a lot more to everything I mentioned here and this as barely scratching the surface on these issues. There are all sorts of legalities, union negotiations that would need to take place, financial assessments and commitments, etc, etc. Plain and simple….You want good Police/Fire/Ems coverage you need to shell out the money to get it. When you want to look like Highland Park and recieve their services then start paying Police officers $15 an hour with no benifits and make them buy practically everything except their squad car, and let the firehouse turn to shambles so it gets condemned and then put the firefighters in an old warehouse tucked away in an industrial park.
Some services might benefit from consolidation, others not so much.
It seems like nobody’s looking at consolidation that would actually save money through economies of scale. For example: ordering office supplies, human resource management, cleaning services, tax processing, etc.
Consolidating public safety is a sure-fire way to equalize safety across municipalities. Since ours is good, our response times and insurance costs would increase.
Solidarity-controlled city council has squandered tax dollars on numerous unnecessary lawsuits, courting big developers, wasteful junkets to state functions, memberships in expensive organizations, usurping control of events, and city hall cosmetics.
Instead of focusing on practical things like basic city services: sewers, water, public safety, and garbage.
Now that they’ve wasted so much of our money, we have to pay additionally to get the things we actually needed, like an aerial platform truck.
Infuriating.
We should have a resolution disbanding the DDA, the EDD, and the Events Coordinator. If anyone, we should hire a grant writer, possibly sharing the position with Highland Park.
I was hoping someone had the info on past budget surpluses.
Solidarity squandared our tax dollars, and I voted all of them in. I wish I could take my vote back. These inept people has approved a ballot measure to raise property tax. I do not think raising tax is neccessary at this time, and I most certainly will vote against it.
No New Taxes.
Steven: Your disbanding resolution is a great idea. Is voter approval required to abolish these? If so, how do we get a ballot measure in? … I am willing to collect some signatures if so required.
Neighbor
Unfortunately an aerial platform truck isn’t something we can do without. Ours is 30 years old and in dire need of replacement.
If, heaven forbid, The Senior Center caught on fire we’d be in serious trouble.
Additionally, we pay for it either way. Our homeowners insurance rates are tied to our fire department’s equipment rating.
If they had better equipment, we’d pay less. The HFD is also more likely to save property this way.
I guess I’m not entirely convinced the city would take monies garnered from a new millage and actually buy the ladder truck – haven’t they been talking about it forever? But I’m completely for the purchase, for the same reasons Steven has stated. Reducing our homeowner’s insurance would outweigh the additional tax by a long shot, I believe. I have no idea how I could possibly figure out if this were true, however.
As for consolidating services, the discussion here on its own merits at least some kind of looking-into. It’s really too bad we can’t convince another group of people (ahem, Hamtramck City Council) to at least talk about it.
Our insurance rating is sort of a nebulous thing. I don’t think there’s a way to calculate it exactly.
In practical terms, would we rather the HFD be able to save our property or have it destroyed and replace it through more-expensive insurance.
I vote for better fire rating.
Of course we need a new firetruck, and this 30 years old truck should have been replaced a while back. I am sure money was there. I believe we had budget surplus for past few years. …If new tax is required for the truck, I’ll wait for the new City Council to decide. Until then, No New Taxes.
There are billions of dollars for Homeland Security in Stimulus Bill. With the dire need of a new fire truck for a densely populated city such as ours, it is hard to imagine stimulus fund won’t be granted.
No New Taxes
Neighbor –
I don’t think anyone is really advocating for more taxes. The no new taxes mantra is fairly useless. I’d be interested in finding out which city expenditures you believe can be cut to get the new fire truck. I’m not being facetious, I am really interested.
From the small discussion on obtaining federal money that I’ve seen at council meetings, I got the impression that there was federal money out there for homeland security investments, but fire trucks don’t qualify. I’m far from an expert, however.
Buying things requires money, and the millage is one of the ways we *could* get a new fire truck, increasing safety for all our residents, tax-loving or not. Simply repeating ‘no new taxes’ is not going to magically free up $400,000 or a new fire truck with a nice long sturdy ladder. In other words, do you have a different solution besides a slogan?
from this very website posts:
$48,550 of video surveillance equipment …
….Shulgon asked why Platinum was submitting $315,000 in bills, some from July. They’ve been paid $532,000 so far this year,
up from $220,000 last year…..
…..[shoppers world] The only thing we’ve lost so far is around $100,000 in studies and legal expenses and one year of city employees neglecting
the Hamtramck investment community……
…..: The resolution was to hire a person to coordinate events in the
city for between $25,000 and $35,000…..
….The city council gave money to the MetroTimes Blowout,
assumed bills for the Labor Day Festival for the first time in history, (around $100,000)
….spent $20,000 on landscaping in front of City Hall
…….The Whittie lawsuit cost the city $615,000, plus the cost of city attorneys. The city council is not bound by any non-disclosure agreement, but still
has not explained nor disclosed the settlement to the public.
……..The city website is still useless ( around $30,000 )
Now now, this is not the time or place for actual facts, they get in the way of politics and personal agendas, shame shame…..
hey these guys sell used trucks pretty cheap, a lot less than the $900,000 they want to spend
I completely agree that most of those expenditures were wasteful, although I’m not sure the city could have avoided all of them. It should have. The city website didn’t have to be a waste, but it categorically is.
Are you suggesting we can buy an imaginary fire truck by pretending those huge wastes of money didn’t happen? Or are you suggesting that we can somehow recoup any of it?
well i wont point fingers but it seems lately that the “buy it now pay for it later” mantra applies not just to US consumers. Seriously though, many cities buy high ticket items on a credit basis IE instead of 900,000 dollars they could pay $100,000 a year for 10 years spreading it out.
Right, we have no bond rating, which at this point, is a good thing since this solidarity council would borrow money to spend on shiny baubles.
Guest: Thanks for the info… So much waste, aren’t they?
615K for whittie lawsuit – I wonder where did the money come from!!
rh: Feel free to re-read my previous post. In case it still sounds like “No New Taxes”, then I hope the following clarifies my point:
I do not trust current city council, and I don’t like giving money to people I don’t trust.
Whether there is money for firetruck in stimulus bill or not, grant money is available at http://www.usfa.dhs.gov/fireservice/grants/afgp/index.shtm. This is just one place. I am sure there are others. But, who is seeking?
No New Taxes
1) Other cities won’t sign mutual aid agreements with us if our equipment is not comparable with their own.
2) re: budget “surpluses” – the city spent every nickel they had budgeted, and then spent some money that was supposed to be set aside in the state-mandated “budget stabilization fund” – the fund established to offset future deficits.
3) Other cities, like just about every suburb of Detroit, including Highland Park, have cost-recovery ordinances that recover some of the expense of running a fire department from insurance companies and utility companies. We’re giving them a free ride. I brought this to the attention of the city manager within a month of his arrival here. The firemen have brought it up numerous times.
4) Grants are not available for trucks now. The last time an aerial was given away was two or three years ago when the City of Ypsilanti replaced their 31-year-old truck. (Our fire chief told me that he didn’t apply because he didn’t think we would get it.)
5) The city council has the ability to disband the DDA, EDC, BRA. Prior to their creation, those functions were handled by Wayne County. Wayne County would not go along with bad plans like the Aldi/housing project, and that is why the Hamtramck boards were created. The council gave $15,000 to the EDC last year, and the BRA spent city brownfield money left over from the 18th Street Deli project on testing by AKT Peerless on Shoppers World ($60,000?).
6) 2008 financial report.
7) Fire insurance rates are determined by ISO. The chief said at the meeting that ISO was in town about two weeks ago for the first time in 20 years, and by some miracle, the aerial passed their test. Whatever our new rates will be, we should know soon.
8) It is unknown what the cost of the Labor Day Festival will be. The council gave $5000 to the Metro Times Blowout, and then somehow, the city finance department became responsible for cutting checks to the bars for the Metro Times.
9) If you love the landscaping, stop in and see the building renovations going on at City Hall. I don’t think any fire doors have been installed yet, but we apparently needed to redecorate the first floor and the police chief’s office. The $4 million Schimmel spent on City Hall wasn’t enough.
Thank you everyone for having an enlightened and respectful discussion!
Hillary: Instead of didn’t apply… didn’t think we would get the money for firetruck, I would rather prefer our Fire Chief say that he applied and his request was denied. No Aerial Truck was awarded since Ypsi got one IS NOT a basis for future grant decision. Fed Fire Admin has $510M grant money for 2009 for fire equipments and etc… I didn’t know that Aerial Firetruck was not a fire fighting equipment.
I do not know how the grant application process works, but I assume it requires justification for the request. If the request is persuasive, grant will be approved.
Why do you think a cost-recovery ordinance hasn’t been considered by our city council?