Royal OakJuly 19, 2012
Royal Oak seeks 3.975 mills for Nov. ballot
By Chris Jackett
C & G Staff Writer
After years of dwindling budgets and property values, along with municipal cuts, the Royal Oak City Commission is seeking a five-year, 3.975-mill public safety millage.
If voters approve the issue, destined for the Nov. 6 ballot, the city plans to levy 3.475 of the 3.975 mills for the 2012-13 and 2013-14 fiscal years before levying the full amount for the last three years, ending June 30, 2017. Royal Oak officials say this would allow them to add a limited number of positions to what they point out are already-slim staffing levels.
“Now, we have a government we simply can’t afford,” Commissioner Jim Rasor said at the July 16 City Commission meeting. “It’s really not a tax increase, it’s more of a tax restoration. We can’t maintain the services this city needs without this support.”
Rasor noted the city budget has been cut by 35 percent since 2005, resulting in 97 full-time staff reductions throughout City Hall. It has been especially damaging to the Police Department, which takes up the largest portion of the budget and has had to cut more than 15 positions in recent years.
About $22.99 million of the $34.93 million city budget is dedicated to public safety, which also includes the Fire Department, in 2012-13.
If the proposed millage passes, the department could add five positions and reorganize its structure to be more efficient, officials say. An assistant city attorney could also potentially be added.
If the proposed millage does not pass, the 2013-14 general fund budget would need to be cut by an additional 14.7-17 percent, equivalent to $4.8 million. That would drain the remaining fund balance in a single year and likely result in additional cuts to for things like code enforcement, which currently has two officers instead of the five it employed not too long ago.
To just maintain current operations with a fund balance of 10 percent, a 2- or 2.5-mill increase is needed to close the $4.8 million gap.
“It would be extremely unwise to try to maintain less than 10 percent. The city relies on it for cash flow purposes,” City Manager Don Johnson said. “We would still be below average amongst our neighbors and within Oakland County.”
If passed, the city would levy a total of 15.2011 mills for the first two years and 15.7011 mills for the last three years. The city currently collects taxes based on 11.7261 mills, the second-lowest rate in Oakland County, behind Troy. The average is 16.984 mills. Due to declining property values, city officials estimated residents are paying 30-35 percent less in property taxes than in 2005.
If passed, the 3.975 mills would garner $7.95 million in the peak years, costing the average Royal Oak homeowner $269 more per year, or roughly 74 cents per day.
Although several commissioners discussed the troubles an increase could pose for seniors or disabled residents living on fixed incomes, as well as the possible need for a new entertainment or property tax for businesses to help offset costs to residents, the City Commission unanimously agreed and voted that the millage was necessary to maintain and build upon services within the city.
“It’s a modest request,” Mayor Jim Ellison said. “(Getting) 3.97 (mills) today is not what 3.97 would’ve gotten us 10 years ago or 20 years ago.”
For more information on the proposed millage or city budget, visit www.ci.royal-oak.mi.us.
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