By Simon Albaugh – Yemeni American News<\/p>\n
HAMTRAMCK, Mich. \u2013 In a narrow vote, Hamtramck City Council has decided to put a millage increase on the August, 2021 ballot. The ballot language is expected to be similar to the previous millage increase that asked for voters to consider funding the police and firefighters\u2019 retirement system back in November. Even though the proposal failed almost 3 to 1, the budget challenge has now become vastly more pressing.<\/p>\n
Last week, Plante Moran delivered a presentation for City Councilmembers about the finances of the city. In their forecast, the city was expected to completely run out of money at some point in 2024 \u2013 if nothing was done about it. Brian Camiller, a CPA with Plante Moran, suggested that one of the biggest challenges for the city was its debt obligation to the Municipal Employee\u2019s Retirement System of Michigan (MERS).<\/p>\n
In order to save the cash needed to avoid financial disaster, Camiller suggested that the $15 million could come from two options: either passing a millage that would pay for MERS, or laying off around 27-40 full-time staff members. City council, it seems, is opting for the former.<\/p>\n
\u201cI know you voted before and [the bond proposal] failed,\u201d said Mayor Pro-Tem Fadel Al-Marsoumi. \u201cBut after being presented with the facts and with information, you see that this is vital and this is crucial. This isn\u2019t 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\u2019s inevitable that our taxes will increase, more than what we\u2019re proposing.\u201d<\/p>\n
It\u2019s unclear if a judgement levy, or court-ordered tax increase for a municipality, will be more than what City Council is proposing, however it does not change that City Council is following the direct advice of financial experts at Plante Moran in the dollar figure they\u2019re asking voters to consider.<\/p>\n
Plante Moran\u2019s Camiller proposed that the biggest challenge to Hamtramck\u2019s finances isn\u2019t mismanagement or bad financial policy. Instead, the biggest challenge is a bill for emergency responder\u2019s healthcare that didn\u2019t account for the increasing length of life over the past half-century.<\/p>\n
\u201cThe benefits that were promised 50, 60 years ago, these plans were started back when, at the time, they were affordable,\u201d Camiller said. \u201cBut as people lived longer, the draw of those benefits once people retired became longer and longer. It became a system that wasn\u2019t sustainable.\u201d<\/p>\n
In Al-Marsoumi\u2019s closing report in yesterday\u2019s city council meeting, he echoed this for the public.<\/p>\n
\u201cWe all heard about why we\u2019re facing these financial issues,\u201d Al-Marsoumi said. \u201cIt\u2019s because of contracts that were established a few decades ago that didn\u2019t account for age expectancy. So we, as officials, can\u2019t stand idly by and do nothing, because that\u2019s going to result in something that may not be reversible or fixed. So I just wanted to clarify that. I know it passed, and I know it\u2019s going to be on the ballot.\u201d<\/p>\n