Grosse Pointe Shores tax rate remains same for 2019-20 fiscal year

By: K. Michelle Moran | Grosse Pointe Times | Published June 26, 2019

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GROSSE POINTE SHORES — Grosse Pointe Shores will start the 2019-20 fiscal year July 1 with a budget that reflects the challenges facing many municipalities in Michigan.

City Councilman Bruce Bisballe, chair of the Finance Committee, said the budget “reflects the increased costs” in areas like utilities and health care for current employees and retirees. Approved by the City Council by a vote of 5-2 May 21, the budget retains the 2018-19 tax rate of 17.7031 mills. The general fund budget of nearly $6.4 million is about 2.9% lower than its 2018-19 predecessor of almost $6.59 million because this year “there are no park renovations” at Osius Park, Bisballe said.

“The budget … represents a carryover of the existing tax rate, with no increase proposed,” Bisbale said.

A modest amount of road maintenance, the purchase of a public safety vehicle and equipment, and the hiring of a part-time Parks and Recreation director are among the expenditures this year.

Property taxes account for the bulk of the city’s revenue, at 77.8%. Because of the 2008 recession and housing market collapse, the Shores — like other communities in Michigan — has lost a tremendous amount of revenue. Although housing values have rebounded since then, officials say the taxable valuation of the Shores is $62 million below its 2008 peak, and the Shores has lost almost $1.1 million in tax revenue over the last decade as a result.

To its ability, Bisballe said the Shores is funding retiree pensions and benefits to be in compliance with new state requirements, and he said they should be able to remain compliant for at least the next couple of years.

“The budget’s … tight,” Mayor Ted Kedzierski said. “We have challenges. The challenges are in things that are very hard to get your hand on. … Our biggest challenge is post-retiree benefits.”

City Council members Matthew Seely and Tina Ellis cast the votes against the budget.

“I would like to see more cuts across the board on all items,” Ellis said after the meeting.

Seely likewise felt there were places the city could have reduced its expenditures. In a few years, he said, the Shores won’t be able to meet the state’s standards for retiree pension and health care funding levels, so he felt that city officials should make cuts now and “start accumulating that” to cover those funding requirements.

“I just want to make sure that we don’t have to raise taxes,” Seely said after the meeting. “Let’s make sure we do everything we can to do our due diligence.”

Bisballe said the council does review the budget line by line, and it makes cuts wherever possible.

“We are the only Grosse Pointe that made (our) employees pay 20% (toward) their health care costs,” said Bisballe, noting that this started about eight years ago. He said it has had a negative impact on recruiting new employees, “but we had to do it.”

Kedzierski thanked Finance Officer/Treasurer Rhonda Ricketts and other department heads for all they have done to keep expenses as low as possible. He added that the city is still looking for ways to reduce costs.

“We’re not done yet,” Kedzierski said. “We’re going to continue to explore (our options).”

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