City Leaders Offer Primer on Saline's Financial Situation

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 07/27/2013 - 19:23

City of Saline officials offered a primer on the city’s financial outlook at a town hall meeting Thursday morning at city hall. City Manager Todd Campbell, Treasurer Mickie Jo Bennett and Mayor Brian Marl led a discussion about the city’s financial picture and talked about the circumstances that led to the passage of .75-mill tax increase in the recent budget.

The meeting, the first of two town halls scheduled, was held at 8 a.m. Besides city council members and employees, there were four citizens in attendance. (A second town hall is scheduled for 6:30 p.m., Aug. 6, at the Saline Senior Center.)

City officials provided historic context for the recent budget. They spoke of the downsizing that has taken place during five straight years of declining taxable values, cuts in state revenue and increased costs for things like fuel.

Mayor Marl said after years of voting for spending cuts, layoffs, putting off projects and purchases, wage freezes and drawing down the city’s fund reserve, the only way to preserve services was to change the revenue picture.

“As a council member I voted for four all-cuts budgets. We eliminated positions, guaranteed pensions, enacted wage freezes and deferred capital investments. But the economic reality is that we are at a point where we needed to do something profound. We needed a paradigm shift,” Marl said. “I’m willing to forgo $65 a year (average additional tax levy) so that we can have the city services and amenities citizens have come to expect. There were cuts that could have been made. We could have reduced the number of officers at the Saline Police Department – but that’s not acceptable in my book. We could have cut infrastructure, but that costs more in the long run.”

Marl said the city continues to work on the expenses side. He said the city is working with unions and employees to put off step-increases in pay. The city is also working with Swisher Realty to sell off city owned land and add it to the tax rolls.

Still, even with the tax increase, there are financial landmines for the city. While city officials are happy to see Faurecia investing in the old Ford plant, the global automotive components giant is attempting to drastically reduce the amount it pays in taxes. The city may also be harmed if the personal property tax is eliminated.

In recent years, the number of fulltime city employees dropped from 69 to 57. It’s the smallest workforce in 23 years, Treasurer Bennett said.  Back in 1990, before the Rec Center was even built, the city had 53 employees. The city has eliminated five DPW positions, two police department positions, an assistant engineer, a code enforcement employee, a clerical position at the Rec Center, the building department secretary, the deputy treasurer and the finance director. Bennett said the workforce has been cut by 13.5 jobs since 2007

The city’s new millage rate of 16.28 is slightly lower than Ann Arbor’s (16.45), higher than Milan’s (14.40) and much lower than Ypsilanti’s (35.49).

Between 2002 and 2006, the City of Saline raised property tax rates by more than 50 percent, even as taxable values rose by more than 40 percent. As a result, the average Saline taxpayer saw their city property taxes more than double in four years, jumping from $737 to $1,590.

What was the reason for raising the tax rate so much as property values were skyrocketing?

“We were curious about this too. The only thing we found explaining it was that the city was worried about the possibility of the Ford plant being shut down,” said Treasurer Mickie Jo Bennett, who was the city’s payroll clerk at the time.

The city feared Ford Motor Company, which was worth close to 10 percent of the city’s annual tax revenues, was going to close its Michigan Avenue factory and leave town. City leaders decided to start raising revenue to build a rainy day fund. Ford Motor Company, of course, sold its business to Faurecia which, while downsizing, appears to be committed to a Saline operation. But while one financial catastrophe was avoided, a new stress emerged. The economy collapsed. Property values and tax collections plummeted. State revenue sharing decreased. At the same time health insurance and fuels and material costs rose.

“The problem we were preparing for didn’t materialize. But something completely unanticipated came about and we were fortunate to have the cash reserves,” said Saline City Council member Linda TerHaar, speaking at Thursday mornings townhall meeting on the city’s finances.

In 2007, the average taxable value reached its peak at $105,776. That year, average city taxpayer paid $1,642 – far more than the $737 paid in 2002.

 

Average City Taxes

Tax year Taxable Value City Millage Average Tax Paid Increase or Decrease Percent change
2002 74.07 9.96 737    
2003 79.868 10.96 875 137 18
2004 88,096 12.95 1,140 265 30
2005 97,717 13.72 1,340 199 18
2006 102,443 15.53 1,590 250 19
2007 105,776 15.53 1,642 51 3
2008 101,957 15.53 1,583 -59 -4
2009 94,163 15.53 1,462 -121 -8
2010 90,776 15.53 1,409 -52 -4
2011 86,539 15.53 1,343 -65 -5
2012 84,660 15.53 1,314 -29 -2
2013 86,561 16.28 1,409 94 7

 

 

Tran Longmoore's picture
Tran Longmoore
Tran Longmoore is a veteran community journalist. He is founder and owner of TheSalinePost.com. He is co-publisher of The Saline Post weekly newspaper. Email him at [email protected] or call him at 734-272-6294.

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