Wayne voters reject joining SMORSA

Hazel Park narrowly approves, Eastpointe rejects

By: Andy Kozlowski | C&G Newspapers | Published August 3, 2016

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HAZEL PARK/EASTPOINTE — Voters in Hazel Park approved the city of Wayne joining the South Macomb Oakland Regional Services Authority during the election Aug. 2, but voters in Eastpointe and Wayne rejected the measure.

In order for Wayne to join SMORSA, all three cities would’ve had to approve. Residents in Hazel Park and Eastpointe didn’t stand to gain or lose anything — their taxes would remain the same either way.

In Hazel Park, it was 51.47 percent (584 votes) yes to 48.53 percent (560 votes) no, and in Eastpointe, 54.2 percent (1,737 votes) no to 45.8 percent (1,465 votes) yes.

In Wayne, Proposal S sought to levy up to 14 mills in the city of Wayne for 20 years, raising an estimated $4.9 million in the first year. Like in Hazel Park and Eastpointe, SMORSA would fund emergency services for the cash-strapped city. However, the prospect of a tax hike did not sit well with Wayne voters, who turned it down by 62.15 percent (1,744 votes) to 37.85 percent (1,062).

“We still participated and tried to help somebody else out. I know it passed by slim margin in Hazel Park and that’s good too, but obviously it failed,” said Steve Duchane, city manager of Eastpointe.

Thus, Wayne will not be joining SMORSA, which now must find another way to fund critical life-saving services or risk falling under state control.

The SMORSA model worked well for Hazel Park and Eastpointe when they found themselves in a similar situation. The two cities approved the fire authority in February 2015, when it was approved by 61 percent of voters in Eastpointe, and by 73 percent of voters in Hazel Park. With fire and ambulance secure, Hazel Park subsequently reduced and renewed its police millage.

And each city still handles its own calls. SMORSA is just a funding mechanism that makes it possible for each city to maintain their own fire departments at a time when municipalities across Michigan have their taxes in a vice.

This is due to the interaction between the Headlee Amendment and Proposal A, which ensure that a city can only get 5 percent or the rate of inflation, whichever is less, from its existing tax base.

In other words, the city takes 100 percent of the loss when property values go down, but can only recoup a fraction of the increase when they go up. Duchane previously explained that if property values were to return today to pre-crash levels (mid-2000s), it would still take 20 years for his city to get back to the level of revenue it received back then.

This is especially devastating to fully developed inner-ring suburban communities that have little room for new construction. Along with reduced state revenue sharing, Hazel Park and Eastpointe found themselves on the brink of financial ruin, but were able to recover thanks to SMORSA.

Duchane conceived the concept for SMORSA with Ed Klobucher, city manager of Hazel Park. It was a gamble with the fates of two cities hanging in the balance, but in the end a solid majority of voters approved it in both cities.

Klobucher credits SMORSA with saving the city of Hazel Park and paving the way for its current success stories, such as record-low crime rates and a flourishing business scene that includes trendy new destinations like Mabel Gray and Cellarmen’s, as well as the massive Tri-County Commerce Center being built at Hazel Park Raceway, currently the largest development project in Oakland County.

Staff writer Bria Brown contributed to this report.