By Jenny Johnson – Because of a $656,000 budget deficit the city is facing, City Council voted 7-0 to approve two proposals for the May 5 ballot.
The first will ask voters to set up a Public Act 345 pension fund for police and fire fighters. Currently the pension fund is being paid out of the city’s general fund. This means the police and fire departments would have a separate retirement system from the rest of the city’s retirees.
The second proposal will ask voters to approve 3 mills for five years to contribute to the 345 for police and fire retirement costs. If approved this would generate about $1,110,00 million annually and based on an average taxable value/SEV of $50,000 (this is approximately one half the market value of the home) would cost the taxpayer $150 per year.
The city can then use the funds in the general fund for other operating costs.
Councilman John Rhaesa said, “ My one concern is (the road tax) on ballot from the state and we are asking for tax at the same time. Do we really think it is going to pass?”
If the proposals do not pass, the city has to wait two years before they put them on the ballot again.
In 2013 council asked residents to approve a Public Act 345. The measure failed.
Mayor James Hawley said council will have a B-plan in place if Public Act 345 fails again. The plan will include what budget cuts will be made and they will share that information with the residents.
Councilman Albert Damitio said, “If we pass the opportunity in May then we won’t have structural budget for the 15-16 budget year.”
He said it is the responsibility of council “to come to the citizens and let them know what we need.”
There are currently 150 retired city employees drawing pensions from the city. More than half of those are police and fire fighters.
“I don’t think we can step back and say we don’t need these three mills. I think we have to be honest with citizens and put the minimum requirement we need to balance the budget and let the citizens decide,” Damitio said. “If they come back and say no then we won’t have the funds to support the pensions.”
The past few years the city has been balancing the budget with one time money and with savings. The city is running out of savings and need a long- term solution to fund the pensions.
“If you don’t shoot the puck at the net you won’t score,” Damitio said.