Communities protest Oakland County rate spike for assessing services

ORCHARD LAKE — Communities that contract with Oakland County for assessing services are raising concerns — and in some cases, changing vendors — after a narrowly divided Oakland County Board of Commissioners voted to raise rates.

There are 19 cities and 13 townships that contract with the Oakland County Equalization Division for assessing services, which determine taxable values. The county charges communities on a per-parcel basis. The contracts are for a three-year period, beginning July 1.

The increase affects each community, averaging an increase of 75% the first year and nearly 92% the third year. An optional “smoothing method” raises the rates more gradually, averaging 26% the first year and 140% the third year.

In Farmington, the increase without smoothing is 52% the first year, and more than 66% the third year.

Farmington City Manager David Murphy shared his thoughts about the increase.

“Certainly, I’m disappointed,” he said. “We’ve always had a great working relationship. They (Oakland County Equalization Division) do a fantastic job for us, and I just wish they would have given us a little more notice.”

Murphy explained how Farmington will absorb the 52% increase.

“Obviously, we’ll have to take it out of our general fund balance,” he said.

Some municipalities see changing vendors as an option.

“I don’t know. That’s certainly something we’re going to have to look at,” Murphy said.

He continued to praise the relationship Farmington has had with the county.

“We’ve always had a good working relationship with them, and I hope something can be worked out,” Murphy said. “Perhaps something can be done about the cost. They’ve offered a smoothing (option) over three years, but perhaps something else can be done.”

However, in Orchard Lake, the increase without smoothing is 7.75% the first year, and nearly 18% the third year. It’s a modest increase, compared to other municipalities that had double- and triple-digit increases.

Orchard Lake City Manager Gerry McCallum explained why his community saw less of an increase.

“The city is fortunate, in a way,” McCallum said. “We have (already) been paying a larger amount than other communities for assessing services.”

He explained this is because of the large homes, sprawling properties and substantial structures in Orchard Lake. In addition, the assessing service also handles the city’s tax tribunal cases.

“When (other communities) see a double-digit increase of assessing services … it’s kind of hard to digest, especially when most of our budgets are in place,” McCallum said. “If they had phased it in a little softer, it would have been more acceptable to the communities, and easier for them to absorb.”

According to McCallum, it’s not only the contract for assessing services with Oakland County Equalization that has seen an increase, but others, as well, including contracts with the Sheriff’s Department and Marine Patrol.

“We’re not only being hit in one department, but in multiple departments,” McCallum said.

That being noted, the city manager said Orchard Lake currently has no plans of changing vendors for assessing services.

“Oakland County Equalization has done a great job for us in the past,” he said.

 

Elsewhere in the county
Another example is in the city of Hazel Park. Here, the Year 1 increase without smoothing would be an eye-watering 112%, rising to nearly 133% the third year. In neighboring Madison Heights, the rate increase would be 74% the first year, rising to roughly 90% the third year.

Hazel Park was billed roughly $124,400 for assessment services in 2024; with the increase, the same bill in the new budget would be over $263,700. For Madison Heights, the 2024 bill of nearly $229,800 would be just shy of $400,000.

Officials there were outraged by what they saw as an inexplicable increase, one with little warning.

“This huge increase doesn’t make any damn sense,” said Ed Klobucher, city manager of Hazel Park. “We understand that in an inflationary environment, there may need to be reasonable increases, but this is an absurd increase with no notice, no heads up, no alternatives. It’s a really poor way to do business with local units of government that have been faithful customers (of the county) for years.”

Oakland County Commissioner David Woodard, D-District 1, chairs the county board. He explained the rationale for the increase at a meeting of the Madison Heights City Council April 28.

“The cost of providing this service is roughly $6.5 million. The amount of revenue that’s been coming in from these contracts after a complete overview is, I believe, less than $4 million,” Woodward said. “So, there’s a massive deficit there.”

He noted the cost increase would help cover many “indirect costs” associated with assessment work, such as HR support to process dedicated staff for each project, the space and equipment required to do that, associated printing and postage costs, and more.

“We are not in the business of making a profit,” he said. “We’re in the business of fiscal responsibility, making sure we’re covering the cost.”

Shortly after the county’s decision, some cities began exploring other options. At its City Council meeting May 12, Madison Heights switched to a new vendor: Assessment Administration Services LLC.

The new firm offered Madison Heights four times the in-office hours provided by Oakland County, at a cost less than the budget originally planned for fiscal year 2026: $229,980 for the year, with a 4% increase each following year, compared to the county’s anticipated cost of nearly $408,600 without smoothing.

Prior to that, at the April 28 council meeting, Mayor Pro Tem Mark Bliss expressed his concerns about the county’s proposal.

“Imagine that you’re paying rent or mortgage on your house at $1,200, which would be a great rate in Madison Heights. Then you get a call two months before the increase that it’s going up to (about) $2,128. … That’s the problem we’re living in here.

“When we’re planning five years in advance and we’re doing all the work we can to provide the best services we can for residents while keeping taxes as low as possible, being hit with this increase at the last minute is just not OK,” he said. “I bet if you polled the residents in this room, they would be wondering where all the increase in this is going to go, if it’s not going to help citizens like us.”

Melissa Marsh, the city manager of Madison Heights, said the city didn’t receive adequate notice.

“You (Woodward) keep alluding to this March memo, which I did receive; I read it at least 10 times since I got this notification. Nowhere in there does it talk about a significant increase,” Marsh said. “Our budget is pretty well set, and I don’t have any flexible money to spend this. I don’t have a fund balance equal to what Oakland County has. I mean, Oakland County has a fund balance of over $200 million, or 45%. We struggle to pay for our policing services here, and had to eliminate four positions and at least $1 million in capital.”

 

A divided county board
Representing the cities of Madison Heights, Hazel Park and Troy is Oakland County Commissioner Ann Erickson Gault, D-District 3. She voted in favor of the increase. Gault said it wasn’t an easy decision, but she felt it was needed due to rising operational costs.

“I am keenly aware of the financial challenges that our cities face, and I will always try to find a solution that will not burden our communities,” Gault said via email. “That being said, the current assessing rates are unsustainable, and everyone agreed that the rates had to be increased to cover the county’s costs.

“Even with the new rate (of about $30 per parcel the first year), Oakland County assessing services remain less expensive than the average municipal self-managed cost of $33 per parcel,” she continued. “Troy, which I also represent, has its own internal assessing department. Based on its 2024 data, it costs Troy at least $35 per parcel to assess their properties.”

A split Board of Commissioners approved the rate increase at its meeting May 1. The room was tense as the measure passed by a vote of 10-9.

The “yes” votes were David Woodward, D-District 1; Ann Erickson Gault, D-District 3; Penny Luebs, D-District 2; Gwen Markham, D-District 15; Angela Powell, D-District 9; Marcia Gershenson, D-District 11; William Miller, D-District 16; Yolanda Smith Charles, D-District 17; Brendan Johnson, D-District 4; and Linnie Taylor, D-District 18.

Voting against the increase were Michael Spisz, R-District 5; Michael Gingell, R-District 6; Karen Joliat, R-District 8; Kristen Nelson, D-District 10; Christine Long, R-District 12; Robert Hoffman, R-District 7; Philip Weipert, R-District 13; Charlie Cavell, D-District 19; and Robert Smiley, R-District 14.

In all, 32 communities are affected: Berkley, Birmingham, Bloomfield Hills, Clarkston, Clawson, Commerce Township, Farmington, Ferndale, Groveland Township, Hazel Park, Holly Township, Huntington Woods, Keego Harbor, Lathrup Village, Lyon Township, Madison Heights, Milford Township, Novi Township, Pleasant Ridge, Pontiac, Oakland Township, Orchard Lake, Orion Township, Oxford Township, Rochester, Rose Township, Royal Oak Township, South Lyon, Southfield Township, Springfield Township, Walled Lake and Wixom.

Immediately before the vote May 1, two commissioners spoke out in protest.

Cavell said he didn’t understand the urgency in raising rates.

“There is time to talk it out,” he said. “We’re not in a massive crisis where we need money tomorrow.”

Spisz said the extra money will vanish into what he called the “black hole” of the county’s fund balance “and just sit there in the bank.”

“I cannot believe the amount of effort going into screwing our communities. This is nothing but a freaking money grab,” Spisz said. “I hear ya, we want to get those numbers there. But tell me the last time this county has been hurting for money in the last 25, 30 years? We have yet to have a year where we’ve been in the red.”