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Hazel Park City Council adopts budget for FY 2014-15

Future budgets will require new revenues or changes to services

June 11, 2014

HAZEL PARK — After the Memorial Day weekend, Hazel Park City Council adopted the budget for fiscal year 2014-15 by a vote of 4-0. Mayor Jack Lloyd was absent for the vote. The budget managed to resolve a multi-million-dollar deficit, but city officials say future budgets will require a new approach.

Residents can expect to pay the same amount of taxes on the city portion of their tax bill in the new fiscal year, according to Hazel Park City Manager Ed Klobucher.

The budget weighs in at $28,490,000, with general fund expenditures of $13,396,000. Originally saddled with a $2.4 million deficit, the gap was reduced to $960,000 before council filled it with monies from the city’s $1.4 million capital improvement fund, normally intended for buying equipment and fixing roads. The city also has roughly $388,000 in fund balance.

The capital improvement fund may get back more than $200,000 in the coming weeks, since Klobucher anticipates favorable revenues from the district court budget and the city’s self-funded insurance. This would be reflected in a future budget amendment.

The millage rate is roughly the same as before: about 19.5 mills for the general fund, 9.8 mills for the police and fire special assessment, and 2.4 mills for garbage. The trash pickup fee was increased by $10 per parcel, since the millage has not generated sufficient revenue to pay for rubbish removal since the ’90s, Klobucher said.

Hazel Park City Councilman Jeffrey Keeton said that while it was a struggle to balance this year’s budget, he’s more concerned about the next year.

“We’ve cut everything we can possibly cut while providing services the way we provide them now,” Keeton said. “We may have to look at some kind of local revenue. At some point in the future, that’s a distinct possibility. We’ll either have to find revenue to provide services to the residents of Hazel Park or drastically change the way we provide those services.”

An across-the-board 5 percent pay cut is permanently in effect for all bargaining units, and City Hall remains on a 32-hour work week, among other cost-saving measures. Further cuts would start to compromise city services and risk losing talented personnel to other communities. As an inner-ring suburban community — and one more or less fully built out — Hazel Park was hit especially hard when the housing market crashed, although now its property values are starting to rebound. 

Still, due to state policies, the city can only get 5 percent or the rate of inflation, whichever is less, from its current tax base, due to the interaction between the Headlee Amendment and Proposal A. Due to the diminished property values, the city’s millage has been bringing in significantly less revenue than expected in recent years — around $168,000 per mill, or less than half their original value. Police and fire, in particular, would’ve been gutted if not for the special assessment passed by voters in 2011.

“Thank God our residents, in their wisdom, overwhelmingly decided to pass the police and fire millage,” Klobucher said. “Without the money raised by it, we would simply not be able to provide those services.

“What people need to know is that millage is now providing only a fraction of what it originally did,” he added. “Today, the public safety millage and the general millage combined provide about what the general fund alone did back when we originally sought the millage (in 2011).”

Klobucher said the city of Hazel Park is facing three problems beyond its control. Two of the three problems are issues that every city in Michigan is facing: Diminished property values and reduced state revenue sharing. The third is unique to Hazel Park, Klobucher said, and that’s the decline of the racing industry.

He noted how in 1999, the city got almost $1 million in breakage money from Hazel Park Raceway; now, those revenues have slipped to just over $300,000. He said the state is to blame for their one-sided treatment of gaming in favor of casinos. For example, racetracks are limited in what gaming options they can offer compared to the casinos.

“Because of the influence of casino interests in Lansing, state government has been actively hostile to the racing industry,” Klobucher said. “That’s had a very negative effect on the city of Hazel Park.”

All of these factors combine to form Hazel Park’s current fiscal woes. Their revenue streams are simply not what they once were, which is why the city may at some point in the future put forth a millage proposal. The only other option would be to completely revamp how services are provided in Hazel Park.

Long-time Hazel Park residents Linda and Harold Brenizer say they’d be willing to support a reasonable millage proposal, if it were to come to that.

“We understand the math,” Linda said. “We want to support the decisions they (council) make as far as finding more income for the city, to tide us through until the tax base is strong again. It is going up, and while we’re tired and not a high-income family, we’ve never had too little that we can’t share. Everyone has taken concessions, and we feel our service people have given all they can give. Now, it’s time for us residents to rise up and give a little more, because it can’t hurt the city. It can only help.”

Linda said she appreciates the sense of community in Hazel Park and the way everyone is doing more with less. She cited the impressive work of the police during Hazel Park’s Memorial Weekend festivities. Recently, it was also announced that the city is experiencing record lows in crime, thanks not only to new police patrols and a strong presence on the streets, but also due to the work of resident volunteers who report what they see and work with the police to reduce crime.

It’s just one example, Klobucher agreed, of how the city manages to stay strong, even as the financial situation remains a challenge.

“Other cities with greater taxable value per capita than Hazel Park are already under state control,” Klobucher said. “We’ve been able to survive because we work together. It’s the spirit of teamwork between the residents and employees and everyone pulling together to do what needs to be done. We’re holding our own providing great services, because we all work together.”

About the author

Staff Writer Andy Kozlowski covers Madison Heights, Hazel Park, Madison District Public Schools, Lamphere Public Schools and Hazel Park Public Schools for the Madison-Park News.

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