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You Ask, Patch Answers: City Manager Replies to More Millage Questions

Royal Oak's City Manager Don Johnson answers questions about the Nov. 6 public safety ballot measure.

 

"You Ask, Patch Answers" is where we strive to find answers to all your questions—big, small and in-between—about the town we live and work in.

Whether it’s something you’ve always wondered about, some information you just can’t put your hands on or a sudden curiosity, we want to hear it.

Send your queries to judy.davids@patch.com or leave them in the comments section below, and I will do my best to dig up an answer for you. You also can call me at 248-231-4667.

Public safety millage questions and answers: Questions and comments have been pouring in to Royal Oak Patch since the Royal Oak City Commission unanimously voted to start the process to put a referendum on the ballot this November asking the voters for a public safety millage of 3.975 mills over five years.

To answer readers' millage questions, Patch has ran a series of Q & As with Interim Police Chief Corrigan O’Donohue. This week, City Manager Don Johnson jumps in to answer questions on the ballot proposal.

[Read more answers to your millage questions.]

I would like to know what is driving the need for additional code enforcement personnel. If it is mainly complaints by neighbors about rental properties, then why are we not raising the cost of a rental license to cover the anticipated added expenses versus raising everyone’s taxes?

I guess that depends on what you consider “additional.”  Not long ago, we had six people in code, five of whom were code enforcement officers.  Today, we have two.  The proposal gets us two more, or four total. Code enforcement in Royal Oak is a far bigger job than two people can perform adequately.  Right now, we only respond to complaints and we are not keeping up with those.  Code enforcement should be proactive with the officers actively looking for problems.  That isn’t happening now. 

We have a rental inspection program which is paid for by license fees. Such fees cannot legally be set higher than necessary to pay for that inspection.  We cannot set the fee higher to pay for anticipated future violations.  

The suggestion that code violations are just a “rental” issue is totally false.  We catch most rental violations as part of the inspection process and we inspect all (registered) rentals regularly.  Most complaints are about owner occupied homes.

I recently paid my July 2012 tax bill. If this tax increase passes, when will the first bill be due? In December? Will this be billed every December, thereafter? Or will the second time billed be in July 2013? This affects my mortgage payment amount, especially if I receive an additional tax bill for December 2012, and July 2013.

The first bill would be due in December and I anticipate we will keep this in December as long as we have a December tax bill. If the other taxing authorities that levy in December can ever be moved to July, we would move this to July as well and eliminate the cost of the additional billing.

Is the city going to get the increased revenue generated from the Downtown Develpent Authority (DDA) district any millage increase will result in? I believe the way the DDA works, the revenue from property taxes in the Central Business District to the general fund is capped at the level it was when the DDA was formed. If we pass a millage increase, the DDA will be getting a windfall?

That’s not quite how the DDA works.  It is the taxable value of the DDA that is capped, not the revenue.  The net result, however, is the DDA will capture some of the millage increase.  Taxes on the original value go to the City, taxes on the increase in value are captured by the DDA.

What agreements does the city have to get some or all that increase to the city's general fund versus the DDA?

There is no agreement already in place specifically dealing with revenue generated by the proposed millage increase.  We do have agreements that call for the DDA to pay $375,000 per year for police patrols, the debt service on the court building ($519,200) and the debt service on the South Lafayette Parking Structure ($496,280).  These three items total almost $1.4 million.  In addition, the DDA pays for many downtown services that would otherwise be a city responsibility.

Does the city have a plan, or savings, to fix our residential streets? If not, will a seperate millage be needed to fix the streets in our town? If a separate millage is needed, how much and when?

Royal Oak does not currently spend any property tax revenue or any other general revenue on streets.  Street maintenance is paid from “Act 51 Revenue,” which we get from the state.  The state collects it as part of vehicle registration fees and the tax on gasoline and diesel fuel.  It shares it with local governments on the basis of population and miles of major and local streets.  We have, in eligible areas, also used some of our Community Development Block Grant money for street paving.  Very little of Royal Oak qualifies for CDBG funding and that is a declining revenue anyway.

We do have a growing problem with the condition of streets in Royal Oak (and everywhere else in Michigan).  The money generated from the gas tax is a declining revenue as population falls and vehicles get better fuel economy.  What we receive from the state is not enough to maintain our roadways and the condition of many of our streets is evidence of this.  The proposed millage does nothing to solve our street repair issues.  It cannot be spent on streets.

Long term, this question will have to be addressed.  The Governor has proposed changes in the gasoline tax which could provide increased local revenue.  If this doesn’t happen, or if it proves inadequate, we will eventually have ask the voters whether they are willing to pay to fix our streets ourselves.  This could be in the form of a road bond or a millage.  

Related Topics: Don Johnson, Public Safety Millage, Public Safety Millage Q & A, and elections 2012

Geof Vasquez

9:20 am on Monday, October 15, 2012

Why do the Mayor & City Commissioners call this a "Public Safety Millage" when:
- any tax revenue it generates goes to the General Fund and can be spent for any purpose?
- the firefighters' unions have have not endorsed it?

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SEAN WILSON

9:41 am on Monday, October 15, 2012

Mr. Vasquez: Both the police officers' patrolmen union and the firefighters union have endorsed it, have been at every town-hall meeting helping to answer questions about it, and were out off-duty this weekend spreading literature to answer questions about it.

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B. Wilsey

11:13 am on Monday, October 15, 2012

Sean, do you even live in Royal Oak? How many of the firemen live in Royal Oak, and how many live outside the community?

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Donald E. Johnson

11:59 am on Monday, October 15, 2012

You are wrong on all counts Geof. None of it can go into the general fund and none of it can be legally spent on anything except police, fire or EMS. A dedicated tax must be used for it's designated purpose. All revenue generated by the new millage will be deposited into a new special revenue fund.

Royal Oak already has many restricted revenues accounted for in separate special revenue funds. These include the library, solid waste, major streets and local streets. Library taxes can only be used for the library. Solid waste taxes can only be spent on solid waste programs. The new tax can only be used for police, fire and EMS. As a member of the Audit Review Committee, you should be very well aware of that.

Don Johnson
City Manager

Bill Shaw

10:39 am on Monday, October 15, 2012

The city of Royal Oak now has an unfunded actuarial liability of approx. $63 million dollars in pension costs and a healthcare liability of $114 million dollars. That's $177 million in unfunded liabilities driving the cities financial crisis.
Sean, here are questions I've asked for years. We agree we love and need police and fire but can we afford $ 153,786 for the average B.U. Member; $144,178 Average firefighter; $164,957 Ave. Sergeant;176,637 Ave. Lieutenant ; $175,034 Ave Insp.. ALS Coord. $194,053 Ave. Captain; $190,777 Aver.Fire Marshall?
Source: City of Royal Oak original Budget 2009-2010 Act 312 Document.
How many firefighters were promoted after 7 members retired prior to the last contract? How did this offset the wage decrease? With only a two year contract that expires June 30, 2013, and the crisis were facing, can public safety B.U.s guarantee there will be no PA 312 binding arbitration invoked?

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Rick Karlowski

11:48 am on Monday, October 15, 2012

The current org chart from the last budget for the ROFD is -

A Chief
An Assistant Chief
3 Captains
6 Lieutenants
9 Sergeants
33 Fireman

Excluding the Chief and Assistant Chief, that is 18 supervisors for 33 fireman. By any reasonable measure, this is extremely top heavy.

Add to that pay (and retirement) structure.

What is the city planning on doing about this?

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Thomas

6:21 pm on Monday, October 15, 2012

Eh, Karlowski again with his FD table. More sour grapes from a failed CC candidate.

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Rick Karlowski

8:07 pm on Monday, October 15, 2012

Don't see you questioning the numbers.

As usual, just name calling from anonymous posters

A. Falkowski

12:25 pm on Monday, October 15, 2012

Why haven't you moved to Royal Oak, Mr. Johnson? I remember you stating that you would when you were interviewed for the job.

How can you be in touch with what happens in the neighborhoods and the downtown after midnight, if you are never in the community at that time?

Are you still planning to move to Royal Oak, or do you choose not to live here? You are the first and only city manager in memory not to reside in our community.

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Geof Vasquez

1:06 pm on Monday, October 15, 2012

In other words, Mr. Johnson, any tax revenues the millage will generate will be sucked into the $200 million unfunded healthcare black hole that is consuming all of the city's financial resources.

Why weren't you blogging this past March to announce the release of the latest actuarial reports showing the unfunded liability (which is a debt Royal Oak citizen's must pay) had grown by some $17,000,000? Isn't a $17,000,000 hit to the city newsworthy? Aren't you obligated to publish all the facts, even when it is unfavorable to the Commission's agenda?

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Thomas

4:13 pm on Monday, October 15, 2012

I am stunned that a member of the Audit Review Committee, Geof Vasquez, is trying to spin the millage and the retirement obligations of the city with half-truths.

Can Vasquez honestly continue serving with under these circumstances?

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Geof Vasquez

4:25 pm on Monday, October 15, 2012

Thomas, if you are seeing any spin, you must be caught up in the vortex that is coming out of city hall.

And why don't you step up and use your real, full name? What are you afraid of?

Russ Showers

5:53 pm on Monday, October 15, 2012

There is no spin that the city has over $100 million dollars in unfunded retiree obligations as mentioned by Mr. Shaw and Mr. Vasquez.

They city commission and city manager don't spend much time talking about it because they don't want to kill this millage request. It is the 800 lb. gorilla in the room, though. Make no mistake.

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Thomas

6:20 pm on Monday, October 15, 2012

You can't even keep the spin straight. Is it $100 or $200 million?

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Russ Showers

8:01 pm on Monday, October 15, 2012

Do you have mental issues, Thomas? I stated over $100 million dollars, which was just repeating numbers reported in the annual budget presentation.

Mr. Shaw's above entry clearly states $114 million dollars in unfunded retiree healthcare obligations. I didn't check his numbers, but ut seems consistant with what the annual budget report lists. That is why I took the safe approach and stated OVER $100 MILLION.

Do you dispute that the city of Royal Oak is reporting over $100 million dollars that is currently unfunded in this area? Because if you are, you have no clue what you are talking about.

Geof Vasquez

8:01 pm on Monday, October 15, 2012

Good point! We want to the city full credit for its financial management accomplishments! The unfunded liability, is about $175,000,000.

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Bill Shaw

9:31 pm on Monday, October 15, 2012

Hello Sean... I missed your reply!

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