Budget ax hits city following millage cap hike defeat

Wixom officials convened last week to implement the first round of cuts to offset a $1.7 million budget deficit, after the effort to raise the city’s charter millage cap failed during the Tuesday, Aug. 7 primary election.

“The correct information (on the ballot proposal) was not conveyed to the electorate in a suitable time to make an adequate decision,” said Mayor Kevin Hinkley. “People were confused and thought we would immediately raise the millage from 8 to 12.98 (mills), which wasn’t the case at all.”

Wixom voters defeated the initiative to raise the charter millage cap by up to 4.98 mills by 122 votes.

“It was close, a 10-percent spread,” said City Manager Mike Dornan. “We had to get the word out and get people to understand, but apparently our efforts weren’t good enough.”

The Wixom City Council held a special meeting on Wednesday, Aug. 8, when Dornan and Finance Director Kevin Brady presented a list deficit reduction alternatives.

The list includes the possible elimination of the following: A Finance Department clerk position; 24/7 police and fire station coverage; eliminating parks and recreation and senior services; city events; overtime pay for city staff working at city events; park cleanup; leaf collection; subdivision snow and ice control; equipment repairs and maintenance; capital outlays for police and fire equipment; and facilities repair and maintenance.

There’s also potential for closing the Community Center; not filling three police sergeant positions; postponing fire truck debt payments; and canceling City Hall parking lot repairs.

By implementing all those cuts, the city would save $1.72 million for the 2013-14 fiscal year and $2.1 million in 2014-15.

“No business can survive with the conditions the city has faced,” Dornan said. “But it’s not all bad news. It gives (the city) council direction to meet the deficit in the face of the ballot question failing.”

In a 4-3 vote, the council voted to immediately cut the following items from the city’s budget: The finance clerk position, overtime wages for leaf collection services, capital outlay, and capital improvements. In addition, the council voted to not fill the three police sergeant positions.

“There were a lot of numbers without explanation and not detailed enough for us to make a decision (on all the possible cuts),” Hinkley said. “I think the consensus was more information was needed on items and we will be pondering over the next few days whether to move forward and put new language on the November ballot.”

The council will determine whether to craft general election ballot language in an effort to raise revenues during two scheduled meetings: One that was held yesterday, Tuesday, Aug. 14, and another on Tuesday, Aug. 28.

“Council will decide what services they believe the community wants and the millage amount that can be passed,” Dornan said, adding that some council members want to study the budget further and perhaps form a citizens committee prior to crafting any new ballot language.

“(A committee) would probably come to the same conclusion that funds are necessary, but will embrace it because it comes from the community,” said Councilwoman Lori Rich. “It makes sense. It’s not to suggest the facts are incorrect or council isn’t being objective, it’s just a way to perceive it differently and it has worked in many communities.”

However, such a process takes time and language for the November ballot must be submitted by Aug. 30. Therefore, a special election in February might be deemed necessary.

Dornan noted that Wixom voters should keep in mind that the value of a mill has drastically changed over the last five years.

A mill is equal to $1 for every $1,000 of a property’s taxable value, which is generally equal to half the property’s market value. The owner of a property with a taxable value of $100,000 pays $100 in city taxes under a 1-mill collection.

“The value of a mill five years ago was $1 million (in the city), but with the decline in property values, the value of a mill is now $623,000 — there’s your 38 percent reduction in revenues, not withstanding the reduction in state-shared revenue and the like and the potential of the personal property tax falling off, making it another 17 percent hit,” Dornan said.