Hazel Park’s budget seeks savings in Fire

By: Andy Kozlowski | Madison - Park News | Published June 12, 2013

HAZEL PARK — The average Hazel Park homeowner can expect savings on their city tax bill in fiscal year (FY) 2013-14, but the new budget is balanced on the assumption that around $700,000 in savings will be produced by the Fire Department, either through concessions, layoffs and/or contracting services with a neighboring community.

What’s in the budget
The overall budget for FY 2013-14 weighs in at $27.3 million, up from the FY 2012-13 amended total of $26.5 million.

Of this, the general fund budget is $12.3 million, up from the FY 2012-13 amended general fund total of $12.1 million.

Around $293,000 is being tapped for general fund use of fund balance. The city had nearly $908,000 in cash reserves, as of June 30, 2012.

For the Hazel Park homeowner with an average taxable value of $20,349, the city portion of the tax bill will be $646 in FY 2013-14, down from $716 in FY 2012-13.

This funds the 19.5-mill general fund operating millage, the 9.8-mill police and fire special assessment, and the 2.4-mill garbage millage. The city gets $1 for every $1,000 of taxable value, times the millage rate.

There are no service reductions in the budget, which was unanimously adopted by Hazel Park City Council in May. Nor are there any consolidations, since past cuts have already resulted in many staff members handling multiple responsibilities.

This is on top of an across-the-board 5 percent cut in wage and benefits, effected in previous years and now permanent, and a reduction in hours that has City Hall running on a 32-hour work week. 

There are no layoffs currently planned.

“However, if we get to the end of the fiscal year and the financial picture becomes bleaker than expected, then layoffs become possible in every single department,” City Manager Ed Klobucher said.

Where potential layoffs are concerned, members of the Fire Department are already on the chopping block.

City in crisis
“Again, this is a result of declining property values,” Klobucher said. “The general fund millage and police and fire millage, combined, are generating less revenue now than they were from the general millage alone before the police and fire millage in 2011.”

The situation would be even worse if the police and fire millage had failed, he said.

“That’s why I’ve been screaming from the top of my lungs the last 11 years that Michigan’s system of municipal finance is broken,” Klobucher said. “We’re starting to see stabilization, and even a bit of an uptick in property values, having hit rock bottom and hopefully climbing back. But even if Michigan’s property values were magically restored today to pre-crash levels (before 2008), it would still take more than 20 years for us to get back to the revenues we were receiving then.”

Klobucher explained this is due to the interaction between the Headlee Amendment and Proposal A, which states the city can only receive the rate of inflation or 5 percent — whichever is less — from the existing tax base.

“And obviously, Hazel Park is fully built out, so our tax values are in a vice,” Klobucher said. “When our property values go down, the city takes 100 percent of the loss, and we can only get back a fraction of any improvement.”

The Fire Department
Faced with this bleak financial picture, Klobucher is looking for significant cuts wherever he can find them. For the FY 2013-14 budget, he has issued an ultimatum to the Fire Department: produce $700,000 in savings, or the city will do it for them.

If the city steps in, it would mean either an unspecified number of layoffs in the Fire Department, and/or contracting services with a neighboring community. Klobucher has previously indicated Hazel Park is in talks with the city of Warren.

Klobucher is not asking the Police Department for similar sacrifices, since they already accepted a 2.5 percent cut in wages and benefits, and a 50 percent reduction in holiday pay, on top of the across-the-board 5 percent pay cut accepted by all departments.

Chris Kenny, president of the Hazel Park Professional Firefighters Union, said the union has a long history of working with the city to balance the budget, and is sympathetic to the city’s financial situation. They’re willing to make concessions such as a 2.5 percent cut in wages and benefits, he said.

However, he cautions that some context is necessary: The city charter dictates there should be one full-time uniformed firefighter for every 1,000 residents in the city — a city that, as of the 2010 census, had around 16,500 residents. To do otherwise, Kenny said, would pose a risk to the firefighters and the citizens they protect.

Currently, the department has 17 members, total. Six left in the past year, due to a perceived lack of job security in Hazel Park, Kenny said. Their departure created a savings in itself. On top of this, the union agreed to reduce their staffing levels from three seven-member shifts to three six-member shifts, reducing the cost of overtime from two members to one.

“We have always been at a minimum with staffing levels, doing more with less,” Kenny said. If staffing levels dropped below charter limits, he said, there would not be enough staff to provide (advanced life support) services in Hazel Park. “Once you go below a certain number, it becomes dangerous for everyone involved. You can only cut so much.”