Madison Heights City Council adopts budget for FY 2024

MADISON HEIGHTS — The city millage rate will drop by half a mill for the new fiscal year, beginning July 1, now that the Madison Heights City Council has adopted its budget.

The council approved the package, 6-0, at its regular meeting May 8. The only member absent was David Soltis, but he said after the meeting that he also would have approved it.

Mark Bliss, the mayor pro tem, described the budget as uneventful.

“The last place in our job where we want there to be any drama is the budget, and this budget was the least dramatic in some time,” he said. “In many ways, this is just an extension of what we’ve been doing the last four years, with increased revenue from our focus on economic development, increased investments in our parks and recreation, and continued investment into public safety.”

Weighing in at $61.9 million, the overall budget is a decrease from the amended FY 2023 total of $81.4 million. City Manager Melissa Marsh attributes the difference to changes in retiree benefits, as well as the fact that FY 2023 bore the brunt of construction costs for the new Civic Center Plaza, which included a renovated City Hall and library, along with a new Active Adult Center between them. The city also renovated Fire Station No. 2.

The millage rate is 25.5288 mills — one-half mill less than FY 2023. The city collects $1 for every $1,000 of a property’s taxable value, multiplied by the millage rate.

The millage rate includes the general fund ($38.8 million), which supports police, fire and EMS, the court, general administration, parks, library, recreation, the city clerk and elections. The rate also includes special millages such as neighborhood road improvements, solid waste, senior citizens, police and retiree benefits, and the drain debt. The fire station bond debt will no longer be levied.

While the overall millage rate is decreasing, taxpayers will see an increase in their water and sewer rates. Water rates will increase from $3.27 per unit to $4.26 per unit, while the sewer rate will increase from $3.69 per unit to $6.30 per unit.

In terms of fund balance, Marsh said that in fiscal years 2019-23, the city kept it higher than usual ($14.1 million) to cover prepaid expenditures and planned infrastructure maintenance related to the projects at Civic Center Plaza and Fire Station No. 2.

Now, the city anticipates the assigned fund balance will be reduced to $5.6 million by the end of FY 2024, which meets the required minimum fund balance of 16% plus one year of debt payments. Marsh said her staff was mindful of this policy, which the city established in its citywide strategic plan. The budget for FY 2024 was also balanced with an additional planned use of $10,000.

The new budget includes $9.5 million for capital improvements, with $4.1 million for work on major and local streets, $220,000 to install streetlights on the west side of Dequindre Road where none currently exist, and $1.4 million for water and sewer service line replacements.

Staffing levels will be maintained in the police and fire departments, and a new part-time code enforcement officer will supplement the two full-time officers. Nine police vehicles will be replaced, along with the heating, ventilation and air conditioning system at the Police Department. In addition, the Fire Department will receive a new quint — a combination fire engine and ladder truck.

The city anticipates general fund revenues of $39 million in FY 2024, including a $2.1 million transfer from the retiree benefits trust. Overall, this represents an 8.7% increase from the amended budget revenues for FY 2023.

Marsh said the city’s public services remain strong, due in part to Proposal MH, which voters narrowly approved in 2019. While that proposal was approved for 14.3 mills, the city has only levied the amount deemed necessary, which has been 12.8 mills.

Those funds have been invested in city assets such as the capital improvement projects at Civic Center Plaza and Fire Station No. 2, as well as staffing and equipment.

The city also continues to invest heavily in the parks. In March 2021, the city finalized its master plan for parks and recreation, and in FY 2022, the general fund budgeted park improvements at nearly $551,000, with another $792,000 for FY 2023. For the new fiscal year, that commitment continues with $675,000 budgeted. The plan is to maximize its value with grants, when possible.   

More specifically, the funds include $200,000 for phase-funded ballfield light replacements, which may be bolstered by a $550,000 grant that the city has requested. They also include $230,000 for improvements at Rosie’s Park, another $88,000 for refurbishing basketball courts, $27,000 for sustainability projects to restore the tree canopy, and $50,000 for “special projects.”

The special projects fund was proposed by Bliss several years ago. The money set aside there can carry over into future budget cycles, where it can be used to match grants, or even to buy new major amenities for the city outright.

“Should the economic climate turn into a recession, having those funds set aside will still allow us to bring new things to our parks for our residents to enjoy,” Bliss said. “It’s that kind of planning and forward thinking that helps set us apart from other communities.”

The budget for FY 2024 also includes $11,000 for the library’s new makerspace and $5,000 for other library equipment; gateway entrance signage that will be partially subsidized by private donors; and the creation of a neighborhood improvement program offering eligible residents home repairs and code enforcement education, covered by a $1.1 million grant.

“But my No. 1 priority, and I think council agrees, is public safety,” said Roslyn Grafstein, mayor of Madison Heights. “That includes our police, fire, and our (Department of Public Services), who make sure our roads are safe so that police and fire can reach us when needed.”

But she also sounded a note of caution.

“Inflation is just hurting everyone, the city included. Our expenses are going up. I also think we’re going to see a recession,” Grafstein said. “While property values are stable now, there are rising interest rates and many unknowns. So, there’s an expectation that we may see a decrease in property values over the next few years. It could be a similar situation to 2008, but not as bad. So, we just want to be cognizant of that, and be prepared.

“The big thing is we’re not looking to add many new staff right now; we don’t want to be in a position where we hired someone and then have to cut them. And like everyone else, we’re struggling to find workers anyways,” Grafstein said. “So again, inflation has increased our expenses and we’re keeping an eye on our staffing levels, but public safety remains most important.”

Madison Heights City Councilmember Quinn Wright said that he appreciates the “hard work and dedication” of the city manager and staff who prepared the budget.

“It’s clear that a lot of thought went into developing a plan that balances our expenses and revenue while focusing on our key priorities for the next fiscal year and beyond,” Wright said in a text message. “In an inflationary market, it’s important that we are prudent with our spending while still finding ways to move the city forward. I believe this budget achieves that balance and demonstrates our commitment to fiscal responsibility.”

Bliss said he also feels optimistic about the city’s financial prospects.

“When we go through our budget and planning processes, we are looking several years into the future. I think it’s a huge testament to our city manager, our staff, and our council from the last six years that we’ve been able to achieve so much,” Bliss said. “We are strong enough that we can weather a storm, if needed, and I think that should provide a lot of confidence to our residents.”