Final budget proposal has smaller tax hike, fewer proposed hires

City Council adopts 2021-22 budget

By: Eric Czarnik | Sterling Heights Sentry | Published May 10, 2021

Advertisement

STERLING HEIGHTS — Sterling Heights residents and businesses will pay a smaller tax increase than initially expected during the next fiscal year, at the expense of some cuts, fewer hires and other issues.

During the May 4 Sterling Heights City Council meeting, members voted 5-2 to pass the proposed 2021-22 budget. Mayor Pro Tem Liz Sierawski, Councilman Henry Yanez and councilwomen Barbara Ziarko, Maria Schmidt and Deanna Koski voted yes, and Mayor Michael Taylor and Councilman Michael Radtke voted no.

Originally, the budget was supposed to also contain a 0.25 mill property tax increase to pay for 13 proposed city administrative staff hires. Officials expected that to amount to around $20 per year for the average homeowner, who has a residence with a $218,200 market value.

But at the April 27 meeting, Koski, Sierawski, Ziarko and Schmidt voted to amend the proposed budget and eliminate that 0.25 mill increase, while directing administrators to accordingly make budget adjustments. Taylor, Radtke and Yanez voted no.  

The councilwomen aired reservations about giving residents higher taxes after a year of COVID-19 challenges for many families.

“The $20 here and the $20 there, and the average homeowner — it adds up,” Schmidt said. “We can’t keep doing this to the residents.”

But Radtke said the city needs to hire more people and that current workers might leave if the city fails to do so.

As a result of that vote, city officials altered the final budget proposal in time for the May 4 council meeting.

During that meeting, Finance and Budget Director Jennifer Varney summarized the overall $228.7 million budget, adding that it is a decrease of 8.3% over last year, with less spending toward facilities improvements, Recreating Recreation items and capital projects. However, more spending will go toward water and sewer infrastructure, road construction, and general fund spending toward police, human resources and technology, she said.

The city’s total millage rate will be 16.6742 mills. However, despite jettisoning the 0.25 mill tax increase proposal, the budget will still include a tax increase. Varney said the overall millage will increase 2.8% compared to last budget year, mainly due to funding police and fire pensions. That increase amounts to about $3.15 per month for the average resident, she said.

Overall, the new budget will include the planned hiring of seven new police officers as well as a social worker. The new police officers will reportedly be funded through savings created by shifting jail services from the city to Macomb County.

The budget amendment that excised the 0.25 mill property tax hike meant that earlier plans to increase staffing by 13 administrative positions were reduced by six positions in the final draft, bringing the new total to seven. No existing employees were cut, Varney added.

To compensate for the removed tax hike, general fund spending had to be cut by around $1.22 million, officials said. Among other things, budget cuts will reduce a general fund transfer to major roads, cut a fire cadet program, reduce the number of police car replacements and reduce a liability insurance fund for lawsuits, officials said.

Varney said a balanced budget will require using $2.1 million in general fund balance money. That will reduce the fund balance to about 24.5% of spending, but recent budget amendments didn’t change that, she said.

During the May 4 council meeting, members continued to debate the budget proposal changes.

Schmidt praised city administrators for “turning a freighter … mid-river” and adjusting the budget proposal according to the council majority’s wishes, while not using any additional fund balance money and keeping the police hires. She called the result “a compromise on everyone’s part.”

Koski said she still wants the city to eventually fill the six proposed jobs that were cut but only when the city has the funds to pay for them.

Radtke called the budget “fundamentally dishonest” and a “shell game,” adding that he isn’t blaming administrators for what they were asked to do. He said that if the city gets sued and has to pay beyond what’s in the reduced insurance liability fund, the money would likely have to come from the rainy day fund. He also said that the city might have to increase taxes in December after the election.

Taylor also criticized the proposal, adding that “we’re deferring payments on these items until later.” He said that, eventually, the city will have to catch up and buy new police vehicles. He also chided the council for deciding not to raise taxes while wanting the “goodies” anyway, adding that the city would need to keep funding the hires in future years.

“We’re shifting money from one account to the other, and we’re calling it cuts,” he said. “We’re not cutting anything. We’re deferring.”

While answering a question from Sierawski, Varney said she believes the proposed budget cuts are sustainable “for the next few years.” City Manager Mark Vanderpool said these cuts were sustainable “for the near future,” but the city will have to review them every year.

See the 2021-22 city budget online at www.sterling-heights.net.

Advertisement