Part one- Police Department Referendum. Fund public safety services or outsource the Police Department?

Part two-Michigan’s and Sylvan Lake’s dilemma due to the Headlee Amendment and Proposal “A”And Actions already taken by Sylvan Lake.

This November, residents of Sylvan Lake will be asked to vote on a Public Safety charter amendment that will allow the City to levy up to 5.0 mills for 10 years.

The revenue generated from the millage is needed to fund Public Safety which includes Police, Fire, EMS and Dispatch services.

It allows Sylvan Lake to maintain the police force and the city through 2017 and beyond even with our most negative projections.

The savings generated by outsourcing police only delays the need to ask for approval of a smaller millage if our projections are correct.

If the current proposal fails it is projected a millage of 2-3 mills will be needed within three years to avoid major deficits even with the police outsourced.

Full Time Police Chief Full Time Lieutenant One FT Patrol officer (reduced from 3 FT) Part Time officers are used to fill remaining

positions minimizing cost to the City. Unpaid Reserve Officers used to augment

existing patrol and services.

Reserve Officers donate their time to the City of Sylvan Lake. ◦ They wish to donate their time for community service and enjoy being

involved with law enforcement.◦ They need hours of service to maintain their accreditation.

All Reserve Officers have graduated from an approved academy and paid for this training on their own.

They have completed at least 40 hours of on the job training with a Certified Police Officer.

They are another set of eyes and ears in the City.

They wear a Sylvan Lake Uniform and Badge

They patrol the streets, trail, bridge over Telegraph and our parks and businesses, and perform many additional duties.

In July they provided over 500 hours to the City at no cost to the tax payers – this included the July 3rd Fireworks where 22 officers were on duty.

Patrol in and around Sylvan Lake On weekdays there are generally 2 or 3 officers on

duty (including the Chief) and various unpaid reserves; patrolling, performing investigations, traffic control, appearing at the prosecutors office and court, training, planning, responding to calls and requests, and clerical duties.

On afternoons, midnights and weekends, there is generally one paid officer and various unpaid reserve officers on duty.

Patrol in and around Sylvan Lake There are typically two duty rosters during the week on

days. 7 a.m. – 3 p.m. (2 or 3 officers)All patrol. The Chief patrols and the additional

officer is specifically tasked with traffic and commercial vehicle enforcement.

Patrol and Administration. The chief is performing administrative duties, one officer on patrol and one part time officer tasked with traffic and commercial vehicle enforcement.

The officer tasked with traffic and commercial vehicle enforcement is revenue neutral due to the revenue generated from tickets.

Patrol in and around Sylvan Lake Afternoons-3 p.m. – 11p.m.

Patrol by either a full time or part time officer.Additional patrol is sometimes provided by a volunteer

reserve officer. Midnights-11p.m. – 7 a.m.

Patrol by either a full time or part time officer.Additional patrol is sometimes provided by a volunteer

reserve officer.

Current Cost  Current Police (Inc. Dispatch and Cap. Outlay) $ 570,000Approximate Attorney Fees for prosecutions $ 18,000Current Fire Dispatch $ 15,000Total Current Cost $ 603,000

 Approximate Revenue from fines and seizures $ 100,000Current Net Cost $ 503,000

Outsource to:◦ Oakland County Sheriff◦ West Bloomfield Township◦ Bloomfield Township◦ Waterford Township

Shared Services:◦ With Keego Harbor – Outsourcing to Oakland

County Sheriff or combining departments

◦ Out sourcing police services can reduce public safety costs if police patrol is reduced. Low transition costs since police services would be

provided by an existing police department.

◦ Shared services Shared services with Keego Harbor were estimated to

reduce costs by approximately $30,000 per city if one patrol officer was assigned to Sylvan Lake 24/7.

High cost for transition since a new department must be formed.

◦ Outsource police services to Bloomfield Township.

Contract amount determined by the taxable value of Sylvan Lake and then multiplied by Bloomfield Townships public safety millage for police services.

Projected millage of 3.1146 mills to determine contract amount.

Provide patrol in and around the city and provide other police services as required.

Bloomfield township is divided into 4 patrol areas.

Sylvan lake would be patrolled by the squad car patrolling the northwest portion of Bloomfield Township. DTE is included in this area.

Patrol – 67 Sworn Officers Bachelor’s Degree minimum educational requirement

Traffic investigation 2 K-9 teams 48 Full time officers 13 Civilian dispatchers Animal welfare clerk 2 Animal control officers Court officer to transport in–custody detainees

Investigative services 1 Lieutenant (Detective Section) 1 Sergeant (Detective Section) 6 Investigators (Detective Section) 1 School Liaison Officer 1 Community Liaison Officer 1 Narcotics Enforcement Team Officer 1 Special Investigations Unit 1 Multi-Jurisdictional Task Force 1 Civilian Identification Technician 1 Civilian Records Clerk / Secretary 1 Civilian Records Clerks 1 Civilian Records /Property Clerk 13 Sworn Officers 4 Civilian Personnel 17 Total Investigations Division

Bloomfield(Inc. Dispatch)

Police Proposed $ 260,000Dispatch Proposed $ 25,000Add'l Fire Dispatch - est. for BT Incl. in Fire ContractTotal Proposed Cost $ 285,000

 Cost that will remain if Outsourced  Ordinance Officer $ 14,000OPEB - greatly reduced $ 4,000Total remaining Cost $ 18,000

 TOTAL COST IF OUTSOURCED $ 303,000

Current Cost Sylvan Lake 

Current Police (Inc. Dispatch and Cap. Outlay) $ 570,000Approximate Attorney Fees for prosecutions $ 18,000Current Fire Dispatch $ 15,000Total Current Cost $ 603,000

 Appx. Revenue that will be lost $ 100,000Current Net Cost $ 503,000

 Total Proposed Cost to Bloomfield Township -$ 303,000

 TOTAL ANNUAL SAVINGS $ 200,000

The two-mill increase that was approved by Sylvan Lake voters in 2009 is no longer producing any real increased revenue to the city.

Why? The taxable value of property has decreased dramatically which in turn reduces revenue.

Assumptions: 2% Inflation (put on most expenditures)1.25% Rate of return on investments8% Decrease in taxable value for 2012-13, 5% Decrease in 2013-14, 3% Decrease in 2014-154-year rolling trend for most remaining line items (Rev. and Exp.)20% Decrease in State Shared Revenue in 2011-12 and no change thereafter

Actual Budgeted Projected Projected Projected

Fiscal Year 10-11 11-12 12-13 13-14 14-15

Total Revenues $1,387,566 1,310,530 1,202,651 1,166,431 1,145,074

Total Expenditures 1,373,683 1,347,014 1,361,966 1,430,327 1,450,058

Current Year Addition (Reduction) 13,883 (36,484) (159,315) (263,896) (304,984)

Prior Year Ending Fund Balance 443,849 457,731 421,248 261,933 (1,963)

Ending Fund Balance $457,731 421,248 261,933 (1,963) (306,947)Ending Fund Balance as a % of Current Year Expenditures 31.11% 31.3% 19.2% -0.1% -21.2%

Assumptions: 2% Inflation (put on most expenditures) 1.25% Rate of return on investments8% Decrease in taxable value for 2011-12, 5% Decrease in 2012-13, 3% Decrease in 2013-144-year rolling trend for most remaining line items (Rev. and Exp.)20% Reduction one year ,then no change in State Shared Revenue

Actual Budgeted Projected Projected Projected ProjectedFiscal Year 10-11 11-12 12-13 13-14 14-15 15-16

Total Revenues 1,387,566 1,310,530 1,587,677 1,536,565 1,508,534 1,510,697

Total Expenditures 1,373,683 1,347,014 1,421,966 1,490,327 1,510,058 1,574,817

Current Year Addition (Reduction) 13,883 (36,484) 165,711 46,238 (1,524) (64,120)

Prior Year Ending Fund Balance 443,849 457,731 421,248 586,959 633,197 631,673

Ending Fund Balance 457,731 421,248 586,959 633,197 631,673 567,553

Ending Fund Balance as a Percentof Current Year Expenditures 33% 31.3% 41.3% 42.5% 41.8% 36.0%

Assumptions: 2% Inflation (put on most expenditures) 1.25% Rate of return on investments8% Decrease in taxable value for 2012-13, 5% Decrease in 2013-14, 3% Decrease in 2014-154-year rolling trend for most remaining line items (Rev. and Exp.)20% Decrease in State Shared Revenue in 2011-12 and no change thereafterNecessary improvements budgeted and Planned

Assumptions: 2% Inflation (put on most expenditures) 1.25% Rate of return on investments8% Decrease in taxable value for 2012-13, 5% Decrease in 2013-14 3% Decrease in 2014-154-year rolling trend for most remaining line items (Rev. and Exp.)20% Decrease in State Shared Revenue in 2011-12 and no change thereafterNecessary improvements budgeted and Planned

Actual Projected Projected Projected Projected Projected ProjectedFiscal Year 10-11 11-12 12-13 13-14 14-15 15-16 16-17

Total Revenues 1,387,566 1,229,349 1,100,787 1,066,569 1,047,954 1,048,921 1,070,070

Total Expenditures 1,373,683 1,318,014 1,099,700 1,110,878 1,121,821 1,141,678 1,171,175

Current Year Addition (Reduction) 13,883 (88,665) 1,087 (44,308) (73,867) (92,758) (101,105)

Prior Year Ending Fund Balance 443,849 457,731 369,067 370,154 325,845 251,979 159,221

Ending Fund Balance 457,731 369,067 370,154 325,845 251,979 159,221 58,116Ending Fund Balance as a %of Current Year Expenditures 33% 28% 34% 29% 22% 14% 5%

2% Inflation (put on most expenditures) 1.25% Rate of return on investments8% Decrease in taxable value for 2012-13, 5% Decrease in 2013-14, 3% Decrease in 2014-154-year rolling trend for most remaining line items (Rev. and Exp.)20% Decrease in State Shared Revenue in 2011-12 and no change thereafterRemoved All revenue generated by Police Department and Attorney fees associated with prosecutions.

Assumptions: 2% Inflation (put on most expenditures) 1.25% Rate of return on investments8% Decrease in taxable value for 2011-12, 5% Decrease in 2012-13, 3% Decrease in 2013-144-year rolling trend for most remaining line items (Rev. and Exp.)20% Reduction one year ,then no change in State Shared Revenue Removed All revenue generated by Police Department and Attorney fees associated with prosecutions

Points to consider when looking at the cost to you.

◦ Eighty percent of city properties have seen a reduction in taxable value in the last three years. If your taxable value and assessed values are close or equal to each other, the reduction in taxable values of 9.5% in 2010 and 11.4% in 2011 along with an additional 8.0% projected in 2012 will reduce your current tax bill.

◦ The net impact of the millage would be very minor. It is possible that some property owners could still see a decrease in taxes paid.

This is based on average changes in taxable values. Some properties may have decreased more or less

Some properties may increase if there is a gap between Assessed and Taxable Values

Taxable Value 2009 Taxable Value 2011 New Taxable Value -9.5% in 2010 2012

Tax Description -11.4% in 2011 -8% (projected)$80,000 $64,074 $58,948

State Education 6.0000 $480.00 6.0000 $384.44 6.0000 $353.69County Operating 4.1900 $335.20 4.1900 $268.47 4.1900 $246.99Intermediate School 3.3690 $269.52 3.3690 $215.87 3.3690 $198.60Community College 1.5844 $126.75 1.5844 $101.52 1.5844 $93.40City Operating 6.8941 $551.53 6.8941 $441.73 6.8941 $406.39City 2-Mills 0.0000 $0.00 2.0000 $128.15 2.0000 $117.90Public Safety Millage 0.0000 $0.00 0.0000 $0.00 5.0000 $294.74G&R/Leaf Collection 1.9000 $152.00 1.9000 $121.74 1.9000 $112.00Library 0.2249 $17.99 0.2249 $14.41 0.2249 $13.26Fire Station Bond 0.3768 $30.14 0.0000 $0.00 0.0000 $0.00Comm Center Bond 0.4499 $35.99 0.5360 $34.34 0.5789 $34.12Wa/Sw Infr Bond 1.6282 $130.26 2.2708 $145.50 2.4525 $144.57St/Dr Bond 2.8151 $225.21 3.9541 $253.36 4.2704 $251.73County Drain/Lake Level 0.0100 $0.80 0.0124 $0.79 0.0134 $0.79Community Promo 0.4820 $38.56 0.5980 $38.32 0.6458 $38.07School Debt 1.8500 $148.00 2.2500 $144.17 2.2500 $132.63Admin Fee $25.42 $22.93 $24.39TOTAL $2,567.37 $2,315.73 $2,463.27

City Council will have the authority to levy up to the allowed 5 mills if approved by voters.

◦ The budget is reviewed annually to determine how many mills are necessary for the current and future budgets.

◦ The intent is to keep an adequate but not overly large fund balance (minimum 30% of the annual budget).

◦ If taxable values do not decline, City Council has the option to spread a millage rate that is lower than the approved 5-mills.

This amendment will authorize the levy of new additional millage in the amount of not to exceed five (5.0) mills for 10 years, 2012 through 2021, inclusive, for public safety purposes, including police and fire protection services. It is estimated that if levied, 5.0 mills would raise approximately $385,026 when first levied in 2012.

Shall the proposed amendment be adopted?YES NO

This will be a message to City Council that the residents do not wish to fund their police department.

It is likely that City Council will vote to outsource Police and possibly dispatch services to Bloomfield Twp.

A smaller millage question will be on the ballot in the near future for general operating and capital improvements.

No capital improvements Reduced snowplowing and road repair Reduced general maintenance

Please ask questions and make suggestions. Your views and ideas make a difference. If you wish to view additional information about

why many Michigan cities are in financial jeopardy please stay for some additional information.

We will briefly discuss: ◦ The impact of the Headlee Amendment and Proposal A◦ Budget Reality for the City of Sylvan Lake◦ Budget actions already taken◦ Alternatives for major expenses investigated

Impact of the Headlee amendment on taxes◦ Limits the amount of income generated by taxes for the

city◦ Reduces the millage rate to maintain the same funding

level as the prior year (with some variables)◦ If it’s at maximum, does not allow the millage rate to

increase without a vote◦ There is no mechanism to allow taxes to be maintained if

taxable values decline◦ Will the city get more taxes when the housing values

come back up? NO, since the dollar amount cannot increase per the previous year

Passed in 1978

10.0000

9.2430 9.1760

7.9841 7.9066

7.1948

6.8941

4.0000

5.0000

6.0000

7.0000

8.0000

9.0000

10.0000

11.0000

1978 1983 1988 1993 1998 2003 2008

Mill

s

Changed the way property taxes were calculated Taxable value can increase the lesser of 5% or the rate of

inflation Stabilized taxes Created a gap in taxable value and assessed value Increased sales tax from 4% to 6% Taxable Values became “uncapped” when sold

◦ What is the impact of uncapped values? Uncapped values allow a home to be reassessed to the current value at time of sale thereby transferring a larger part of the city’s taxes to that residence.

◦ Does that increase the amount of taxes the city receives? It does not increase the amount of taxes received but reapportions it by each household.

Passed in 1994

The city of Sylvan Lake has been reducing city expenses for over 15 years to maintain a balanced budget.

The City Manager projected the financial future to City Council in July of 1994 due to the low millage, which was decreasing due to Headlee amendment.

In our current economy, reduced State Shared Revenues and reduced taxable values are adding to our city’s financial shortfall.

The Headlee amendment will only reduce or maintain the millage rate.

For 2011-12, the taxable value for the City is $83,534,930. • The millage rate is 6.8941, generating $575,898 in

taxes.

In 2002-03, the taxable value for the City was $81,633,765. ($2M less) • However, the millage rate was 7.4513, generating

$598,667 in taxes.

In 1999-2000, our taxable value was $68,434,445. If our projections are correct, the taxable value for the

City will be $68,244,714 in 2014-15. Almost exactly the same as 99-00.

Wouldn’t we get the same revenue?• In 1999-00 the millage rate was 7.7516, generating

$530,486 in taxes.

• However, due to Headlee reducing our millage rate to the current 6.8941, it will generate only $470,485 in taxes.

Yes, if we can wait 20 years.

Oakland County predicted it would be 20 years before we saw the same revenue from taxes that we saw in 2009.

Why? Because even with an enormous resurgence in property values, the Headlee amendment and Proposal “A” limit the amount of additional revenue we receive from taxes.

2015 470,000

2016 484,100

2017 498,623

2018 513,582

2019 528,989

2020 544,859

2021 561,205

2022 578,041

2023 595,382

2024 613,243

2025 631,641

2026 650,590

2027 670,108

2028 690,211

2029 710,917

2030 732,245

2009 was the highest year for income from base taxes at $707,000.

The Revenue from base taxes in 2011/12 is $560,000.

The projected revenue from base taxes in 2015 is $470,000.

The Table on the right shows a projection of revenue from base taxes using on a capped maximum increase of 3% annually.

You can see that we will not see $707,000 revenue from base taxes until 2029 in an excellent economy.

In 2005 city finances were investigated by an outside source. The city was given an excellent review of spending.

Annual review of employee benefits to look for reductions and analyze budget spending to reduce costs. ◦ Over $185,000 per year is being saved by reducing benefits to

employees.

Non-Union Salaries frozen at 2008 level. Utilize outside agencies for maintenance and repair projects to

reduce city internal and capital costs.◦ Leaf Collection (reduced millage rate)◦ Major maintenance and improvements in Water/Sewer/Streets◦ Mowing◦ Assessing – Effective September 1, 2011◦ Building Department – Effective September 1, 2011

Minimized improvements and maintenance to City Hall, Community Center, Parks, and the Clinton River Trail.

Increased Boat Dock Fee to provide approximately $9,000 (70 feet) per year for seawall repair. This is a start, but not adequate.

Utilized over $118,000 of funding from fundraising groups to make approved improvements in the city.

Eliminated 2 full time police officers, covering shifts with part time officers for a savings of approximately $65,000 annually in salary and benefits.

Eliminated Police Summer Park Patrol. Instituted the Police Reserve Program to increase patrol at no cost.

Mow lawns less frequently.

Plow and salt streets much less often.

Made the Community Center available for rent to non-residents

Made the RV Storage Lot available for lease to non-residents.

The City has maintained a minimum staff even with the increased demands of state, federal and local requirements. The staff has decreased by two full-time and one part-time employees, in addition to the reduction in police personnel.

Many tasks that would be performed by outside consultants are performed by employees. Planning consultant activities for example saves approximately $25,000 per year.

New Hires are on a defined contribution retirement plan.

New Hires are on a Health Savings Plan and will not receive health care upon retirement.

Medicare eligible retiree’s are receiving a stipend instead of health care benefits.

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

FY 02-03 FY 03-04 FY 04-05 FY 05-06 FY 06-07 FY 07-08 FY 08-09 FY 09-10

Employee Benefits

Actual Cost with reductions to benefits

Benefits with 10% annual increase

Alternatives for Fire and Medical protection using other municipalities. Due to contractual constraints, there are no better alternatives found at this time.◦ Waterford◦ Pontiac◦ Bloomfield Township

Investigated outsourcing DPW with “Cityworks”, found alternative more expensive.

Investigated city insurance benefit coverage. No additional changes were recommended.

New storm water management required by law. ◦ $20,000 per year.

Prepaid retiree health care.◦ $35,000 per year.

Fire Department.◦ An annual increase of 5% per year. $13,200

FY 2011/12.

Why pay more taxes?◦ Attempt to maintain current Sylvan Lake Police

Department while keeping the city out of bankruptcy.

◦ Keep Sylvan the city we all want to live in