Bloomfield Hills OKs tax increase, eyes millage for Baldwin

By: Erin McClary | Birmingham - Bloomfield Eagle | Published May 18, 2011


BLOOMFIELD HILLS — The Bloomfield Hills City Commission decided to raise the city’s tax rate from 9.05 to 9.85 mills May 10 in order to obtain a balanced budget for the 2011-12 fiscal year, officials said.

At the same meeting, the commission agreed upon a counter offer to submit to Baldwin Public Library, with which the city has been in negotiations for library service. The counter offer would levy 0.3 mills for three years for library services — but only with the approval of voters come November.

The 0.3 mills would bring in around $220,000 a year, officials say, which equates to just less than $150 per household.

Baldwin recently turned down a $166,000 offer from Bloomfield Hills for library service. That was a counter to Baldwin’s initial request of roughly $380,500 a year for three years from the city for library services.

The library had not accepted the recent counter offer at press time, so official ballot language — which would have to be approved by August — had not been decided.

The City Commission approved the city’s budget, which included the 0.8-mill increase, 4-0. Commissioner Michael Zambricki was absent.

Bloomfield Hills Finance Director Lisa Dolan, who recommend the millage increase, said it’s the city’s “mission and responsibility” to strive for a balanced budget. Even with extensive cost-cutting measures, she said, declining property taxes are a problem.

“Balancing next year’s budget was impossible without raising the millage rate,” she said May 10. “A millage increase does not mean that your taxes will increase. …. We know from Oakland County that your taxable value on average is going to go down by 8 percent.”

One mill is $1 per every $1,000 of taxable value. Based on declining home values, some residents will not see an increase in their tax bills with the rate increase, Dolan said.

Bloomfield Hill’s operating millage rate is capped at 14 mills. Voters do not have to approve any increases that would bring the rate up to less than that.

While the city was able to reduce its expected $9.3 million in expenditures by $700,000 in cuts, tax revenue loss is still expected to be $587,000. Dolan said the city’s fund balance is at about $4 million.

“Only $1.6 million of that is expendable,” she said. “We would like to reserve that fund balance level, maintain our AAA bond rating and continue the road projects.”

Of the extra 0.8 mills, 0.35, or about $260,000, will go toward the city’s road maintenance program.

The remaining 0.45 mills are expected to bring in $300,000 of what the city will have to make up in lost property tax revenue for 2011-12, said Bloomfield Hills Mayor Pro Tem Sarah McClure. The measure would allow the city to avoid dipping into its fund balance. Additional cost-cutting measures are expected to make up for a remaining $287,000.

“We’re still going to try to find additional cost savings. However, we still had to make up for that $600,000 loss,” McClure said.

Expenditures are expected to be about $8.6 million in 2011-12.

As for the library millage, McClure explained, that 0.3 mills is the minimum a community can levy and still receive some of the state’s library funding. She noted that the last two millages Bloomfield Hills voters shot down for services with Bloomfield Township Public Library were nearly double that rate.

“The current commission decided to try to see if Baldwin would come to some agreement,” said McClure. “It’s a win-win for both: bring (Baldwin) revenue and give our residents library services there.”

The commission was considering rolling its last offer to Baldwin of $166,000 into its budget, but Baldwin rejected that proposal, and the city did not want to spend any more than that without consent from voters, she said.

Bloomfield Hills residents, since 2003, have been reimbursed by the city for purchasing library cards from Troy Public Library for $200. Troy was slated to close May 1, but has extended the closure to an undetermined date.

“Troy isn’t closing right away, which gives us more time to negotiate,” McClure said.