Sep 2009
Shorelines Answers Raise Questions
September/17/2009 11:43
The recent edition of Shorelines distributed to residents contains the city’s answers to twenty frequently asked questions about Shores fiscal issues. Some of the answers provided do not appear to coincide with reality.
The first example is the “No” answer to Question 3:
WAS THERE ANY INFORMATION REQUESTED BY THE FINANCE COMMITTEE MEMBERS THAT WAS NOT PROVIDED?
At a prior council meeting Council member Kedzierski made it very clear that the city would not accommodate his request to review the general ledger in advance of the vote to raise our taxes. It would have seemed that all council members would have wanted to inspect this as part of their due diligence. The answer provided by the city is disingenuous, and the fact that Councilman Kedzierski was not allowed to readily access this information at his request is inexcusable.
Question 6a asked: WHAT ARE THE CURRENT SALARIES FOR CITY MANAGER AND DEPARTMENT HEADS?
Please review the chart below to see how the answers provided by the city gel with reality, as defined by the employees 2008 W2 forms:
| POSITION | CITY ANSWER | 2008 W2 Line 5 wages |
| Finance Director / Treasurer | $95,181 | $145,471 |
| Public Safety Director | $92,909 | $113,119 |
| DPW Director | $79,569 | $101,371 |
| Parks and Recreation Director | $69,889 | $94,679 |
In view of these marked discrepancies between the city answers and the W2 forms, one has to be curious what is going on in Grosse Pointe Shores with benefits, sick time and overtime when such generous base salaries bear no relation to actual W2 income.
Residents are also told that the new city manager’s salary is $98,000. The complete answer of what his cost to the taxpayers is should include the other benefits provided in Mr. Vick’s contract, which include 4% of salary for a deferred compensation plan, an annual bonus of up to 4% of his salary, credit for 15 sick days and 20 vacation days at the commencement of his employment, a $550 a month vehicle allowance, a moving allowance of up to $25,000, plus $3500 annually for professional conferences and education, and additional “reimbursement for fees, dues and expenses of local activities and organizations”. On top of this, Mr. Vick is provided with the same generous pension city plan that other Shores employees get, with credit provided for his prior years of service in other communities.
To me, the most duplicitous answer is that provided to Question 18: WHAT IS THE IMPACT ON THE TAXPAYERS OF GROSSE POINTE SHORES OF THE NEW MILLAGE RATE?
The answer indicates, “ The net effect between the 2008 and 2009 decreases taxable value and the one mil increase is $68,677. When this amount is divided by the number of properties in the city the tax increase is less than $57 per parcel.”
This answer is great example of faulty logic. By law, your property taxes are supposed to go down as housing values plummet! Considering the “net effect” between your 2008 and 2009 taxes bills eliminates this property tax relief from consideration, and does not reveal the true impact of the increased millage that five of the seven Shores council members voted to take out of your pocketbook. The 1 mil of increased taxes they voted for equates to $331,080 in more revenue for the city, or an average $302 increase for each of the Shores 1096 households. That is the true impact of the increased millage rate. Piling on a higher tax burden on the backs of homeowners faced with rapidly declining property values, and then trying to justify it with the logic that many homeowners were going to have a lower tax bill anyways adds insult to injury. The truth is 100% of Shores taxpayers are paying higher property taxes then they would have without this millage increase of nearly 7%.
In looking at these and other answers provided in the Shorelines, I can appreciate why our city has been placed under fiscal watch by the State of Michigan. In closing, I highly recommend residents review a thought provoking article by former state representative Leon Drolet entitled Help Rescue Michigan on the Michigan Taxpayer’s Alliance web site. As the article points out, “POLITICIANS WILL FORCE CITIZENS - NOT BUREAUCRATS - TO BEAR THE COSTS OF THEIR BAD DECISIONS”. The situation in the Shores is a model for the problematic issues discussed. Hopefully taxpayers will band together and work to insure these problems are solved both at a local level in Grosse Pointe Shores, and at a state level as well.
Shores Under State Fiscal Watch!
September/08/2009 20:22
Like many Grosse Pointe Shores residents, I was quite surprised to read in the Sunday, September 6th edition of the Detroit Free Press, that the State of Michigan has placed our city under fiscal watch. The article entitled “Financial Turnarounds Not Easy” is posted for your review on the Shores Recall Web site.
Note that the other municipalities included in the same fiscal boat as the Shores by the Michigan Department of Treasury include Detroit, Ecorse, River Rouge, and Pontiac. All of the Grosse Pointe municipalities except the Shores were deemed to be managing their financial situations appropriately.
It is instructive to look on the Michigan Department of Treasury web site that explains the methodology and purpose of their fiscal scoring system. The purpose of the grading system is to “provide State officials, local officials, and the general public with objective, measurable, and straightforward information concerning the degree of, or absence of, fiscal health in units of local government. This information provides the public with information that may not be publicly displayed from their local officials… It is similar to the school district report cards available for all Michigan school districts.”
The state’s grade for Grosse Pointe Shores was based on general fiscal indicator scores from 2007. One has to wonder just how much worse things would be today, with our precipitously declining property values and tax revenues. Also, the Shores outcome probably would have been even worse if issues specific to our city like our harbor debt and the unfunded pension and health care liabilities were included in the state analysis.
Another item of interest you can find on the Michigan Department of Treasury web site is the 2008 Village of Grosse Pointe Shores 2008 Financial Report. As you peruse this document, read the letter on internal control sent by the auditor to the Shores council in 2008. Note the number of significant deficiencies in internal control and other material weaknesses the auditor cited in the report!
After reviewing the information on the Michigan Department of Treasury web site, I find the Shores financial situation even more disturbing. In view of the inflated salaries paid to certain high level Shores employees that have recently come to light, shouldn’t taxpayers demand a higher level of performance and at least a passing grade when it comes to the fiscal status of our city? Why did the mayor and the incumbent council members let things get to the point where the state now has the Shores under fiscal watch? While citizens are promised we get nothing but the best in the Shores for our tax dollars, this certainly does not appear to be the case for the financial health of our city.
As the Free Press article relates, problems like this may be corrected only when residents hold their elected leaders accountable. The city’s failing fiscal report card from the state of Michigan provides yet another reason why Grosse Pointe Shores taxpayers need to band together and support the upcoming recall effort.