Lincoln Park at it Again

The taxpayers of Lincoln Park have just turned down the inclusion of PA 345 into their charter in May. The Emergency Manager, Brad Coulter will not take NO for an answer and has placed the question again on the November 3, ballot. The language is below:
This proposal creates a separate funding stream to generate new tax revenue for a Police
Officers and Fire Fighters pension system.

Shall the City of Lincoln Park, County of Wayne, Michigan, be authorized to establish a
Retirement system for the benefit of police officers and fire fighters, create a pension
board, and levy taxes annually in an amount sufficient to fund the system, but not to
exceed six (6) mills in any year, on each dollar of taxable value (maximum $6.00 per
$1,000) for all property in the City, all in accordance with the provisions of Michigan
Public Act 345 of 1937, as amended?

They have limited the request not to exceed six mills in any year but that can amount to an increase of $300 per year on a house with a taxable value of $50,000. It lets the City of Lincoln Park keep the money taxpayers have already voted for those purposes in Lincoln Park’s general fund budget to spend on other things.
The State of Michigan has 1,773 cities, villages and townships. Only 45 of them have approved PA 345. There is a very good reason for that. While establishing the retirement system is optional, once created, the local government must provide benefits under the terms of the Statute. There is probably as many interpretations of the statute as there are those offering it. The taxpayers lose.
Some of the problems with funding pensions, are caused by the municipalities themselves. Because they can never have enough money they find ways to extract it from the taxpayers any way they can. Sometimes it is by early retirement for the employees, which drains the pension fund and relieves the general fund, which is part of Lincoln Park’s problem. The next step may be a Deferred Retirement Program (DROP) which pushes the collection of the monetary portion of the benefits forward and transfers the other benefits to PA 345. Then they hire the employees back as contractors thus relieving the general budget from those costs.
In 2013 the top 20 wages in Lincoln Park were as follows:

1 Police  HAWK, BRIAN     232,247.06
2 Fire     LEWIS, SCOTT   149,320.05
3 Fire    VANCE, DOUGLAS B    138,125.84
4 Police KOLAKOVICH, RICHARD 122,558.97
5 Police POWERS, MICHAEL L 120,565.33
6 Police LAVIS, JOSEPH D 115,004.35
7 Fire    WRIGHT, ROBERT 110,511.05
8 Fire    HEIM, STEVEN 110,440.45
9 Fire    PRINZ JR, MICHAEL S 110,427.35
10 Fire  PERRY, BRANDEN 110,376.90
11 Fire  HENDRICKS, MICHAEL 107,230.46
12 Fire  MARTIN, STEVEN 96,721.45
13 Police KERR, SCOTT 96,187.66
14 Police WEIR, VINCENT M 95,537.64
15 Fire   FRASIER, JAMES R 95,315.21
16 Police STACHO, JEFFREY M 93,279.84
17 Fire   DYER JR, AL 92,080.18
18 Police SANT'ANGELO, WILLIAM 91,980.30
19 Fire   JEWELL, BRYAN 91,974.86
20 Fire  HARPER, MICHAEL 91,961.77

This amount includes overtime and is part of the past but could easily be contractually a part of the future. While they will never admit it, because it is illegal, I have known a number of police and firemen over the years that bragged about the fact that they would work their time off to manipulate overtime for themselves and their friends. I have been told that they do not do that in Lincoln Park and that it is only a result of understaffing. I find that difficult to believe. If you have access to the internet I suggest that you read the contracts that are listed on the city website.
Please do not be deceived and surrender your right to vote on future taxes to a pension board that you do not elect. Remember this change is permanent. If housing starts to increase in value, the amount of dollars you pay will probably only go up with no benefits of the Headlee rollback.

IMPORTANT INFORMATION for all Allen Park Voter/Taxpayers!

 By Tim O’Brien

The Allen Park Emergency Manager

recently released a video of FAQ’s to

answer some “Frequently Asked

Questions” about the 6¾ mill tax increase

she has placed on the August 6th ballot.

State law does not permit public officials

to use tax money to advocate a tax

increase so the questions and answers

were carefully selected.

But before you vote on August 6th you should also consider the Frequently Avoided Questions

Q. How much will this millage cost the average Allen

Park homeowner?

A. As our Emergency Manager says: 74¢ a day. But

thinking of it as “less than the cost of a cup of coffee

or a soft drink” is, ironically, exactly what financial

planners warn people against doing! This tax increase

will cost the average homeowner $270 per year —

$2700 over the ten years it will last. Or to put it in the

most familiar context, an additional $22.50 a month

into mortgage escrow for the next decade. Assuming,

of course, a house with an SEV of $40,000.

 
Q. Will this millage go exclusively to providing police and

fire services?

A. That is a meaningless distinction. The city has only

two checkbooks -- one for water and sewerage and

the other for everything else. The basis of the claim is

that since 6¾ mills will generate almost $5 million in

annual revenue while expenditures for public safety

are more than twice that amount, it can be said that

the money raised is being spent there. That, of

course, frees up $5 million that went for police and

fire services last year to be spent on other things. It's

the same shell game that was played on voters years

ago when they approved a state lottery on the promise

that the revenue generated would go to education.

Money is what economists call a "fungible

commodity.” Just as one glass of punch is like every

other one dipped from the same punchbowl, one

dollar is just like every other one taken from the same

general fund. There is no way to ‘earmark’ it.

Q. Have residential property taxes really decreased 28%

in the last five years?

A. That's difficult to answer without knowing how the

calculations were made. But what does it matter to

individual homeowners in any case? The important

question is: Has your property tax bill decreased 28%

in the last five years?

Q. Are home values predicted to continue to decline?

A. Not unless recent trends suddenly reverse and values

start down again. The Zillow real estate website

shows current Year-over-Year selling prices for

homes in Allen Park at +12.4%. The Trulia website

puts the Y-o-Y number at +17.7%

Q. If this millage passes, will no additional tax increase

requests be made? Also, if fiscal stability is restored,

might this increase even be rolled back?

A. Both are speculations, not commitments. There is

nothing in the proposal that even hints at either one.

Q. If this millage proposal fails, what changes in city

services can residents expect as a result of the fallback

"Plan B"?

A. That's impossible to say. However, whether or not the

dire predictions are a 'scare tactic’ as some have said,

consider the warnings from public officials before the

last proposed millage increase — that if it did not

pass, the city's recreation center would close. The

millage failed. Stop by the rec center and interrupt all

the activities there to ask if it’s closed.

Q. Isn't that because operation of the rec center was

given over to a private company?

A. Indeed. And that certainly suggests what will actually

happen if this millage fails. At the top of the list of

services ripe for turning over to a private provider is

EMS. In this era of fireproof everything and smoke

detectors in every building the function of the fire

department has become primarily providing an

ambulance service. This doesn’t require a full-time

staff of 28 and such expensive equipment as, for

example, our 100-foot ladder truck. (In fact there is

the only one building in the entire city tall enough

where this specialized vehicle could ever even

possibly be needed -- which is probably why the only

action the truck has ever seen is in parades.)

 
Q. What has been done to reduce the $3 million per year

cost of providing health insurance for the city's 220

retirees?

A. Nothing yet. However, beginning in the new fiscal

year prescription co-pays will be increased to $10 for

generic drugs, $20 for preferred brand name drugs

and $30 for all others — from long-standing co-pays

of $1, $2 and $5 respectively. In addition both

current and reired employees will begin paying 20%

of the premium for their health insurance plans (that,

incidentally, will provide coverage that — like the copays

— will be closer to what most taxpayers have.)

Q. Have current employees been switched over from

"Defined Benefit" pensions to 401(k) type "Defined

Contribution" pensions?

A. No. And even though this — along with the goldplated

health insurance plans — is what bankrupted

two of the Big Three, it isn't clear how or when the

transition even can be made. Although government

employees — city and county, along with teachers —

are the only workers who still have this open-ended

benefit, ever increasing life-spans have made the cost

of funding it so enormous that the system cannot

afford to allow current employees to rto redirect

retirement savings into their own 401(k) accounts.

The contributions they make under the current

system are essential to continue paying benefits to

retirees.

Q. Hasn’t anything been cut from this year’s budget?

A. Yes. Pay for the mayor and council was cut by 50%

for an annualized savings of $24,000 and curbside

pick-up was transferred from DPS to trash contractor

Republic Services for an additional $200,000 per year.

A.

Q. Do appointed city employees really get 90 days of

annual sick leave?

A. Yes. Though that three months of sick time per year

will be changed to 12 days per year beginning with

the next fiscal year.

 
Q. Has the pension "spiking" been stopped?

A. No. Though this is something else that is scheduled

to be eliminated next fiscal year. In the meantime,

however, at least three — and perhaps more — city

employees will be using the (borderline fraudulent)

tactic of banking all of their vacation, comp time and

unused sick days to and converting them into cash to

enhance their last year's salary. The 2.9 pension

multiplier is then applied to this artificially inflated

pay scale to calculate their retirement benefit — a

“spiked” amount they will then draw for the rest of

their lives.

Q. 2.9 multiplier? Isn't that higher than average?

A. Higher than average? It is the highest in the entire

state! It is double the typical 1.25 to 1.5 range.

Adjusting it down to 2.25 is another change to begin

next year. Strangely, this is still 50% higher than the

1.5 pension multiplier that is part of Governor

Snyder’s “Best Practices” program for local

governments. Perhaps we can get our EM to confer

on this with the person who appointed her.

 The Bottom Line

Our experience with an Emergency Manager makes you wonder why people were so worried about giving an unelected official so much power. The Allen Park E.M. has done almost nothing to address our structural deficit. No property sold. No bonds renegotiated. No consolidation of services with other cities. No staff reductions. Not one provision of one labor contract has been revised. The only

substantial steps she has taken is to borrow another $2 million, and then put a proposal on the ballot to raise taxes by $5 million a year for the next decade.

They will only raise our taxes as a first resort!I

 

I need both the funding and some volunteer help to do the lit drop the week before the election.

Any help you can offer -- or point me to -- with either or both will be greatly appreciated.

TOBrien@SmallGov.us  

 313-359-7820

 Small Government Committee _ PO Box 118 _ Allen Park, Michigan _ 48101They