Grosse Pointe Shores lowers millage rate for new fiscal year

GROSSE POINTE SHORES — In an era of ever rising costs, Grosse Pointe Shores has managed to reduce its millage rate for the 2024 to 2025 fiscal year, which starts July 1.

During a meeting May 21, the Shores City Council unanimously approved a new budget and tax rates; the tax rate is declining from 18.0863 mills to 17.8029 mills.

As Finance Officer Dale Krajniak noted, the budget includes money for an additional public safety officer — bringing the total from 15 to 16 — as well as increased pension funding. In addition, roadwork funding is increasing from $325,000 in the 2023 to 2024 fiscal year to $625,000 in the new fiscal year.

“That’s a significant increase from the prior year’s funding,” Krajniak said of the road repair allocation.

The general fund for 2024 to 2025 is just under $7.6 million. Krajniak said reserves — of just over $2.9 million — represent a fund balance of 38%, which exceeds the city’s benchmark of having a fund balance of at least 25%.

“That’s a very healthy fund balance and gives you some latitude” in case of an emergency expenditure, Krajniak said.

And while officials acknowledge Shores residents pay extremely high prices for water and sewage disposal, those rates are dropping a bit in the 2024 to 2025 fiscal year, from the 2023 to 2024 rate of $6.50 per unit of water to $6 per unit of water, and from the 2023 to 2024 rate of $10.04 per unit of sewage to $8.04 per unit of sewage in 2024 to 2025. The council also unanimously approved the new water rates; those take effect July 1.

Krajniak said the rate reduction is “an incremental (change) in the right direction.” He said the flat fee residents pay on the water and sewer bills has fallen in the last few years as well.

“I think our water bills are ridiculous,” Shores resident Dr. Rob Fishman said. “It’s to the point where I don’t water my grass (anymore).”

Fishman said he hasn’t watered his lawn in two years. He said he received a $1,400 water bill one quarter, while one of his neighbors had a $4,000 water bill and another had a water bill for $2,500.

“I think Grosse Pointe Shores is one of the best places to live in the world … but our water rates … are unjustly high,” resident Clyde Sutton said.

Dr. Robert Lee said the city should assemble a group of citizens to look into the water and sewer rate issue, similar to a blue-ribbon committee that was formed a number of years ago to explore cost-saving measures across the board in the city.

“What they did tonight was just a drop in the bucket,” Lee said after the meeting of the decrease in water and sewerage rates.

City officials say one of the reasons the water and sewerage bills are so high in the Shores is that many other cities include costs to maintain these systems in their general fund, so residents are paying for these services, in part, through their tax bills. In the Shores, the water and sewer fund has to be fully self-sustaining, covering not only water and sewerage usage charges, but also water mains, sewer lines and the like.

City Councilman John Dakmak said the Shores recently completed an $8 million water main project.

“That’s work that had to be done,” Dakmak said. “These were 100-year-old water mains.”

Not only were the mains old and in need of replacement, but Dakmak said they were also too small. Small mains can cause reduced water pressure and make firefighting more difficult.

Krajniak said approximately 80% of the water bill goes toward fixed costs.

The city is trying to lower its costs by making repairs to the system, such as fixing cracks that lead to stormwater or lake water infiltrating sanitary sewer lines.

“I think we’re making improvements,” Mayor Ted Kedzierski said. “We’re making strides. … Everything is being openly and transparently done. There’s no easy solution here. The economies of scale just aren’t there” the way they are in a community with more households.