EASTPOINTE — Come fall, Eastpointe voters will be asked to decide on three proposals that, if passed, will help the city offset the millions it has lost in property tax and state-shared revenue in the past five years.
Council approved three ballot proposals for the Nov. 5 general election, which, if passed, would amend the city charter, reduce pension costs and override the Headlee Amendment.
The first proposal allows the city to levy a maximum amount of 20 mills for general operations — an increase of .83 mills from the current 19.17 mills that are levied for general operations in Eastpointe now. City officials estimate that for the majority of Eastpointe homeowners, the increased cost will be less than $50 a year.
A mill is worth $1 for each $1,000 in taxable value, so .83 mills are worth 83 cents for each $1,000 of taxable value. For a house with a taxable value of $45,000, it would cost $37.35 in property taxes per year.
“We want to be able to get that .83-mill increase now and get back to 20 mills, which is the max operating revenue we can have,” said Mayor Pro Tem Bill Sweeney.
The first and second proposals go hand in hand. In order for the city to increase the millage, voters must also approve the second proposal, which overrides the Headlee Amendment to allow for a maximum of 20 mills for general operations.
If the first proposal passes and second does not, the city will not be able to increase the millage. If the second proposal passes and the first does not, the city will be able to override Headlee, but it would have to go back to voters at a later time to get the millage increased.
Council unanimously approved the first two proposals at the regular meeting May 21.
“It will bring in about $300,000 total, annually,” City Manager Steve Duchane said of the proposal for the .83-mill increase. “If the third one passes, it will save the city at least another $300,000 annually. We are trying to go to a more efficient pension system by assigning this to the statewide pension system called MERS. It depends on a couple variables, but we will save somewhere between $300,000 to $400,000.”
The third proposal would allow the city to contract with a third party, the Municipal Employees’ Retirement System, to manage the pension system.
“It’s a statewide system so there is more money in the case, so to speak, but the charter says the employees must belong to the old city-run one,” Sweeney said. “Under the current system, we pay more for retirees’ pay and benefits in a year than we pay in present employees’ pay and benefits in a year.”
Sweeney added that the switch to MERS would not result in the loss of pension for current retirees.
“We are legally obligated to pay that pension; even if we had to borrow the money, we have to pay retiree pension,” Sweeney said. “Retirees are actually more protected than present employees because we can’t lay off retirees.”
Council approved the proposal with a 4-1 vote at the May 21 regular meeting. Mayor Suzanne Pixley cast the dissenting vote.
Pixley could not be reached for comment at press time.
“If all three proposals pass, we are looking at a total net revenue gain and reduction of cost over $600,000,” Duchane said.