Farmington Hills Residents Urge Council to Avoid Millage

Farmington Hills officials met Monday in a study session to talk about the possibility of putting a dedicated police and fire millage on the ballot in November.

Even though council members would make no formal decision, a group of residents showed up to let officials know they oppose any new taxes. But officials say without additional revenues, the city's budget will plunge into the red within the next five years.

City Finance Director Dave Gadja presented budget projections showing two scenarios: both 3 percent and 4 percent increases in expenditures over the next five years. Property taxes, he said, will continue to decline over the next few years, which also means a drop in city tax collections. Gadja doesn't expect property values to start rising until 2015-16, and even then, he said, "Once it starts, it will be a much slower rate than in the past."

By 2015-16, he said, the city will be below its target of keeping a fund balance that equals 10 percent of overall expenditures. By the following year, he said, "In theory, we'd have to borrow money to run the city."

Depending on the millage amount and increase in expenditures, a police and fire millage would keep the city at or above its target fund balance, while maintaining the current level of service, over the next five years.

Gadja said the impact on a home with a $100,000 taxable value would be a decline in the amount of money the homeowner would save on property taxes, based on reductions in property value. With no millage, a home of that value would see a $81.98 reduction in taxes; at 2.01 mills, that would drop to $33.83, and at 2.57 mills, to $19.13.

To council member Cheryl Oliverio, that's a tax increase, and many of the residents who attended the meeting appeared to agree with her. Oliverio said she understood residents who complained about losing value on their homes and taking significant pay cuts, because she's in the same boat. She said she looks at the savings on her property taxes as "a little bit of relief for me."

"I would support more of a smaller increase," she said. "I want to be able to stay in my house and to retire some day."

Residents questioned the cost of remodeling City Hall, an $8 million project completed late last year. Mayor Jerry Ellis said officials had set aside funds for 12 years, so the project was built without incurring any debt. What's more, he said, the new building allowed for consolidation of staff, and its "green" features are saving the city in energy costs.

"This building is paid for and it returns benefits to us every day," Ellis said.

Some who attended Monday are retirees who said they've had companies reduce their benefits, while their homes have lost value and Social Security payments have not increased. Maryann Pilszak wasn't impressed when officials said city employees agreed not to take promised 2 percent and 3 percent raises over the past several years, along with other concessions in health care costs.

"My husband took a 50 percent cut working for the airlines," she said. "I think you better look at the real world."

Resident Sally Howland agreed. Her husband retired from Ford Motor Co., which later reduced medical coverage and life insurance benefits. "Why can't you do that with your employees?" she asked. "If I have to find areas (to cut), why can't everybody else do the same thing?"

Although he was clearly outnumbered, former Hills Fire Chief Rich Marinucci, also a Hills resident, said he believes public safety is a component critical to the city's long-term health. If residents don't invest in safety, he said, "ultimately, you pay a lot more than the increase (in millage). If you let it run down, you never catch up."

Council member Randy Bruce pointed out that the city would have to lay off every police officer in order to save enough money to offset the huge deficits coming over the next five years.

"I don't think this is going to be something you can cut your way out of," he said. Bruce and other council members pointed out the deficit is due to circumstances beyond the city's control, like millions in lost revenues from the state and a more than $1 billion loss in the city's overall property valuation.

Council member Mike Bridges stressed that salary cuts and consolidating departments have to be on the table. "In order for the public to be supportive ... I think we've got to have some shared sacrifice."

Ellis said those items are always on the table, but the city's police and fire unions are strong bargaining units. He stressed that salaries are negotiated for 80 percent of city employees, so he couldn't promise anything.

Most council members said they would not support a 2.57 mill question; however, council member Nancy Bates said she couldn't make a decision on any of the numbers until she heard more about the impacts on the city's budget and financial projections.

City Manager Steve Brock will make that presentation to officials at their Aug. 22 meeting. Officials have until the end of August to put the issue on the Nov. 8 ballot. Brock said there is a 1.5-mill public safety levy already in place, and it will expire in 2016. Residents will vote on whether to renew that millage in 2015. 

In addition, he said, officials review the city's millage each year and can choose not to levy all the authorized mills, in the event that property values recover. The goal, officials agreed, is only to keep the city on an even keel.

"We're not trying to tax people our of their houses," council member Barry Brickner said. "I just want to tread water."