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Sterling Heights leadership discusses financial future, tax increases

Charts on display at the City forum showed a variety of financial indicators.
Charts on display at the City forum showed a variety of financial indicators.
Photo by Steve Adair 1/27/10

Proposed 1.9 mill rate increase raises $9.4 million in needed revenues and saves 120 City jobs.

Last night when many were tuned into the State of the Union address in Washington, about 200 citizens were on hand at the Sterling Heights High School Performing Arts Center for the second of four City Summits.  The main theme of the night was the need for the administration's proposed 1.9 mill rate increase and the consequences that would result in not enacting it.  The mill rate increase would cover the City's financial needs per their forecast through 2014.

Among needed cuts if the mill rate was not passed would be the elimination of 120 positions, most of which would have to come from the police and fire departments.  A local business owner highlighted the importance of superior police and fire services, noting 'if we want to continue to do business [in Sterling Heights], then it needs to be safe'.  City Manager Mark VanderPool explained that the City had every intention of keeping police and fire staffing at current levels, adding that the City has always and will continue to have a 'strong commitment to police and fire'.

The main driver behind the mill rate increase is the fall of assessed values of homes in the community.  Per Finance Director Brian Baker, most properties will fall in assessed value by 15% this year alone.  This is on top of decreases in assessed values that have been on-going since the real estate market began to plummet in 2007.  While the mill rate would increase under the proposal, Baker notes that actual tax bills would go down for 87% of residents, adding 'I can't think of any other bill that has gone down in my household'.  Assessed values for all properties in Sterling Heights will be available by mid-March.

The proposed plan is not without opposition.  Resident Joe Rimarcik noted the 'City needs to do more with the unions' and that the 'City needs to constrict'.  Rimarcik proposed that the fire department's budget of $17 million is unreasonable compared to other communities in the area and also noted that Sterling Heights should replace the existing full-time department with a volunteer department.  Sterling Heights Fire Chief Steve Kovalcik commented that while the budget numbers in other communities might look better, they 'are not providing the level of service [Sterling Heights] is providing'.  Kovalcik noted that in addition to calls, the Sterling Heights fire department conducts two hours of training a day for their staff, which keeps the department in compliance with state and federal training mandates.  It also saves money in the long run by averting lawsuits that can stem from injuries to firefighters or inefficient firefighting efforts, which result in insurance companies suing fire departments.

On the whole, most of the participants at the meeting appeared to agree with City officials that the mill rate increase was needed.  Mayor Richard Notte echoed sentiments many had at the meeting when he said 'it's quite a dilemma we're in...the state balanced their budget on our backs'.

The City will hold additional City Summits on February 3 and February 10.  Details of the meeting locations and other information can be found on the City Summit website.


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