By Simon Albaugh – Yemeni American News
HAMTRAMCK, Mich. – In its second budget work meeting, City Officials presented the work that was done over the past year. Drawing from reports from the various city departments, City Manager Kathy Angerer offered her optimistic look at what was accomplished over the past year. That optimism was underscored by a big paycheck, affording the City of Hamtramck an extra $2,132,652.
Washington D.C. allocated $2.1 million as part of the COVID-19 stimulus bill that recently passed. According to City Manager Angerer, this will offset the loss of GM and other revenue losses, but not solve everything for the city, “so the need for a sustainable revenue stream remains a top priority,” reads a slide of the presentation.
Kathy Angerer warned that this is not an annual paycheck, but a one-time award as a result of the pandemic. At this point, the city officials are under the impression that this cannot be used to fulfil some of the city’s debt obligations, which has drained the general fund balance over the past few years.
“The complete guideline isn’t out for the $2.1 million, but that is going to be a direct allocation to the city,” Angerer said. “We anticipate that we should have that in under 60 days, and that it will go directly into our general fund. All we know is a little bit.”
Many revenue sources for the City have been impacted by the COVID-19 pandemic. With the courts closed and police officers limiting interactions, and income tax revenue negatively impacted, the city’s general fund balance is dwindling faster as a result of the pandemic.
In the previous City Budget Work Meeting, representatives from Plante Moran, a financial consulting firm, provided a stark set of options for the city administration. In their forecast, the city would run out of money in the year 2024 if the city did not find a way to produce the funds necessary.
The solutions that Plante Moran outlined were dire, with the city needing to either cut up to 40 employees from the payroll or raising taxes for city residents. So far, in the last city council meeting, Councilmembers voted to put a millage on the ballot to raise the funds.
The millage that will be on the ballot in August is identical to the previous millage in 2019 that would have used the money to fund Hamtramck’s debt obligation to the Municipal Employee’s Retirement System of Michigan. This debt obligation has been a difficult expense for the city to overcome.
In the last meeting, once city councilmember asked what went wrong in the city’s financial history. Financial consultant Brian Camiller said that the mistakes that were made were unforeseeable.
“The answer to your question is the same answer as many or most of the cities in Metro Detroit who’ve gotten themselves into trouble in the last 20 years,” Camiller said. “The benefits that were promised 50, 60 years ago, these plans that were started back then, at the time were affordable. But as people lived longer, the draw of those benefits once people retire became longer and longer, it became a system that wasn’t sustainable.”