Hamtramck Releases Tentative Budget Changes Amid Threat of Bankruptcy


By Simon Albaugh – Yemeni American News

HAMTRAMCK, Mich. – In its third budget work meeting, the Hamtramck City Council released a tentative budget with amendments by the City Manager. The amendments are intended to relieve some of the financial stress that has resulted in a dwindling general fund over the past several years.

Without the amendments, City Controller Susan Hendricks explained that the city is expected to lose money at an alarming rate, with the General Fund Balance at $6.2 million at the end of 2020. “The budget, as it is now, says that we will end 2021 with $2.7 million in fund balance,” Hendricks said. “We know that there will be changes to that, but that’s where it is right now.”

With no changes, the city government will be at $300,000 by the end of 2022, making 2023 the year that the city of Hamtramck goes bankrupt, if nothing is done about the situation.

Over the next few weeks, City Administration, along with City Council, will be amending the budget further in order to try and free up more cash for the city’s operations. But while the city is working through the details, Hamtramck’s administration is hoping that two major increases will help alleviate Hamtramck’s financial stress – Federal dollars and the upcoming millage vote.

The Federal Government recently approved a massive stimulus bill that appropriated over $2 million for Hamtramck’s government operations. City Manager Kathy Angerer has been careful to make no promises about where that money will go, saying it’s unlikely that the money will be spent this year.

The wait is for federal guidelines to be released on where the money could be spent. In the last Budget Work Meeting, Angerer says that it’s unlikely the money can go to funding MERS – the municipal employee retirement system of Michigan, which has caused a bulk of the financial strain for the City of Hamtramck.

For that funding, the city is hoping that residents will consider a millage in order to fund MERS. The Millage will raise taxes substantially, but as Mayor Pro-Tem Fadel Al-Marsoumi stated:

“I know you voted before and [the bond proposal] failed, but after being presented with the facts and with information, you see that this is vital and this is crucial. This isn’t a ploy or a strategy to increase your taxes because of bad spending. Instead, this is a protective action because if we do go to a judgement levy, ladies and gentlemen, it’s inevitable that our taxes will increase, more than what we’re proposing.”

 

The tentative Budget Summary was presented at yesterday’s Budget Work Meeting.

 

The budget itself shows that the cost of running the city is rising. According to City Controller Susan Hendricks, this was not a surprise. The cost of insurance for municipal workers is on the rise, as a result of Civil Unrest around the country. Salaries for public safety workers are on the rise as Officers and Firefighters continue to grow through the ranks, with union-mandated pay raises that come with the growth.

Cost-saving measures are hard to come by, as was pointed out by Plante Moran’s representative in the first Budget Work Meeting. The most profound budget cuts would need to come from shaving off the salaries of workers.

This is difficult since many city departments are operating with only one or two workers. The savings would need to come from public safety departments, Brian Camiller of Plante Moran points out.

Many complications already have made this a difficult option. So for the City of Hamtramck, all hopes are on the Millage proposal. Voters will be considering the tax increase on Aug. 3, along with a new City Councilmember and the next mayor of the city.

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