Frequently Asked Questions
I have received many questions from residents about this Tuesday’s vote. Here are a few that I think might be helpful to all residents to consider.
Q. What exactly are we voting on?
A. The Township is seeking a 10-year renewal of its 1.2401 general fund millage. This millage was originally voted in 2009 and like most municipal millages, must be voted on for renewal. At current taxable values it will provide $5 million in revenue for the Township. As has been past practice, the entirety of this millage will be used to fund police, fire, and dispatch operations.
Q. How much of my current property taxes does this represent?
A. This millage represents about three percent (3%) of your total property tax bill each year.
Q. I already voted absentee, but I want to change my vote. Can I do that?
A. Yes, please come into the Clerk’s office by noon on Election Day to collect and spoil your old ballot and receive a new one. Call the Clerk’s office with any questions: (248) 433-7702
Q. The ballot question indicates that this is a “General” millage and that the funds can be used for any township purpose. I thought this was for Police and Fire?
A. Because the original millage from 2009 was put forward as a “General” millage, in order to renew it the Board had to put it forward with exactly the same language. But, over the past 10 years, all $50 million or so that was raised by that millage went to public safety, and it has been exclusive to public safety over the last 5 years. Basically, the funds are transferred from the General Fund into the Public Safety fund. Since the Public Safety budget will continue to rely on those funds any future attempt to reallocate them would require cuts to Public Safety, and what Board would willingly cut public safety? Moreover, the Board attempted to convert this millage to a dedicated source of revenue to public safety last August with the Special Assessment, but that was turned down by the voters.
Q. Why are we voting on this now rather than after the conclusion of the comp and benefits study? How do we know we need the money if we don't know how much our comp package should be worth?
A. The comp study will not move the needle to the tune of 10% of our budget. This millage is 10% of our annual budget without which we would have to cut 15-20% from our active labor costs (since retiree costs and other overhead are essentially fixed.) We already know we need the money because it has been part of our budget going back years. Again – this is a renewal, not an additional tax. The compensation, classification, and staffing study will be used for longer range planning in compensation, benefits, and staffing.
Q. Are we “over-taxed” relative to our neighboring communities?
A. Here is a snapshot of how we stack up on “core” millages – those relating only to general operations, roads, and public safety - which excludes things like parks, senior services, safety paths, lakes, etc. You’ll note that Bloomfield Township compares favorably on our tax rate compared to neighboring communities, and this includes the 1.2401 millage being renewed.
Q. Do we spend more on public safety than neighboring communities?
A. There has been a chart going around showing Bloomfield Township as an outlier spending more per capita (per person) on public safety than neighboring communities. That chart comes from Munetrix, a local public sector data services company. And what they do is pull data from lots of sources and try to fit it into similar “boxes” of information to make comparisons. But not every community reports their budget in the same way, which makes comparisons challenging. But here is the data that I have pulled together by actually analyzing the budgets themselves of each community for comparison purposes.
Public Safety Spending by Community (Dollars per Person)
We are on the higher end of spending per capita, that is true. But shouldn’t we compare the populations being serviced and ask ourselves if our population might require more resources? For example, an older population? Our median age in the township is 50, placing us as one of the older communities around. Certainly this bears some impact on public safety spending. We also get more for our spending: we are regularly regarded as one of the safest communities in Michigan.
Public Safety Spending by Community (Dollars in Millions per Square Mile)
More importantly, I think that public safety spending is more determined by the area covered rather than the size of the population. If we have more square miles wouldn’t we require more police and fire to cover that area? So I organized the communities’ data as public safety spending per square mile, and here’s what I found. Clearly, we are right in the mix of community spending.
Another thing that is relevant is that we have several major thoroughfares going through our town, such as Telegraph, Woodward, Square Lake Rd. and I-75, which have higher incident rates requiring more resources from our police and fire.
Q. The Township has $400 million in debt and only getting higher. This is almost $10,000 per resident! Significant changes need to be made to rein in this spending.
A. The debt being referred to is the retiree liability (legacy costs). It is a combination of the pension and OPEB liabilities. OPEB stands for Other Post-Retirement Benefits, which are the retiree healthcare program we have. Both benefits are closed to new hires; the pension was closed in 2005 and the OPEB plan was closed in 2011. Those types of plans are sometimes called “defined benefit” plans as the township is on the hook to deliver a promised benefit. The newer employees are on so-called “defined contribution” plans where the township has to make a promised contribution and then the employees can invest those funds as they see fit. The $400 million number being spread around is the combination of the pension and OPEB future liabilities. The actual number is closer to $330 million. But they often forget (intentionally or not) to mention that the township has $225 million in invested assets to pay those future liabilities. And we are contributing $2 million per year into the OPEB trust to fund that liability, on top of paying the current year’s expenses (so no money is leaving the trust each year). Beginning in 2033, once the pension bonds are retired, an additional $6 million will be available to pay off the remaining OPEB liability. Based on this funding schedule, the OPEB trust will be fully funded by 2050. Keep in mind that both the pension and OPEB liabilities (the $325 million) are going to be paid out over the next 40 to 60 or so years, not all coming due at once soon - as some may be implying.
Q. Why do we have such a large OPEB liability as compared to neighboring communities?
A. The short answer is we are one of the oldest developed communities in Oakland County and as such had a sizable employee base in the 50's, 60's, and 70's when those benefit packages rose to prominence. As to why the liabilities were not funded back then, I am at a loss; it has vexed me for years, even before I ran for the Board in 2016. My best guess is that since the law did not require funding of retiree healthcare liabilities and the powers-that-be at the time found it politically expedient to keep taxes low and not fund them. It is frustrating to say the least. But for most of the communities around us, they have lower liabilities because they were developed much later and did not really have meaningful employee bases until the last 30 years. And in one case in particular, West Bloomfield, they have sold OPEB Bonds to fully fund their OPEB liability, similar to how we sold pension bonds to fund our pension plan.
Q. Why don’t we consider transferring road responsibility to the county before cutting police and fire? How much would that save? What would be the disadvantages?
A. If we eliminated the roads division that would save about $1 million annually. The downside is that we would be reliant on the county for snow plowing and salting during the winter and patching and repairing during the summer. It would be a markedly lower level of service than our residents are currently used to.
We could also seek to transfer the road millage into a public safety millage – that would require a vote of the residents.
Q. I have no confidence in the current administration. A No vote will send them a message.
A. While you may not like this Board, or persons on it, the time to change leaders is in August and November of this year. By voting to slash 10% of the township’s budget you will force this Board to make harmful cuts to the services that we count on: police and fire chief among them. It’s kind of like the old expression: cutting off your nose to spite your face.
Q. But the employees only pay $16 a month for their healthcare. Shouldn’t they pay 20% according to the state law? Why should the taxpayers pay more in taxes to subsidize such a lavish benefit?
A: The current employee healthcare contributions were negotiated into the union contracts at the last contract renewal and were awarded under binding arbitration. The Township was seeking to close its retiree healthcare program (OPEB) and move employees from an expensive PPO plan into a high-deductible plan with an HRA. The tradeoff was lower premiums. However, the number being bandied about for what the employees pay is just for premiums, and does not include copays, coinsurance, and deductible. In the aggregate, the township’s increases in employee healthcare spending have been dramatically lower than national averages for both public and private sector employers. The state law referred to (PA 152) gives municipalities three choices in funding employee healthcare: (i) 80/20 split, (ii) “hard cap”, and (iii) opt-out to negotiate your own arrangement. The township was already under contract for the arrangement and since it was proving to provide lower healthcare inflation, it is what we have stuck with. Since the union contracts are currently being renegotiated, I would expect some changes in this regard. Finally, I would suggest that people consider healthcare costs as employees do, part of a broader compensation package. When you take a job, you consider not just the salary that you will be paid, but also the benefits you receive and the cost to you of those benefits. It is generally accepted that when you work in the public sector you receive a lower salary than you might get in the private sector, but excellent benefits. So it is misleading to just “cherrypick” this particular employee benefit, without looking at the rest of the benefits offered and the salary paid to our employees.
Q. Some are claiming that we owe $12 million in a judgment over water & sewer rates. Can you explain this? Why have other cities settled cases for far less?
A. The water lawsuit is a long, complicated story. But it boils down to how a city/town can calculate its rates, specifically as it relates to depreciation, system water loss, fire hydrants, and township water use. The judge in the case, in our view, erred because he has never dealt with a complicated municipal matter and did not understand the process that must be used in setting rates. The judgment is far less than $12 million, but in our view will not hold up on appeal. In our appeal we have been joined by both the Michigan Municipal League and the Michigan Townships Association who reviewed the case and agree that we have been setting rates legally and appropriately. They have filed amicus briefs in our defense. The law firm that is representing the plaintiff has been filing class action cases all over the state in the hopes of extracting large settlements from municipalities. Some have settled rather than fight. The one most often cited is Birmingham, which settled for $2.5 million. However, their case was different in that it dealt with storm water runoff, not the issues in our case.
Q. Why should taxpayers be asked for more money when the employees get lavish perks like free cars?
A. This is another example of “cherrypicking” a single benefit out of the mix of compensation offered by the township. Of all the vehicles that the township owns and uses for delivering services, there are 8 cars that have come under fire. Three are used by the Township’s elected administrative officers (Supervisor, Clerk, and Treasurer) and five by department heads. These cars are provided to those employees as part of their overall compensation packages. And despite some people calling them “luxury cars”, 7 of them are Fords and one is a Jeep – hardly luxury brands. We must not “cherrypick” one employee benefit without looking at the total compensation of an employee, which includes salary, healthcare, retirement, paid time off, and in some cases, an automobile benefit. The Board has studied this particular benefit, and looked at the cost of providing the vehicle, versus using a fleet management company, versus just providing a car allowance. The current method has proven, time and again, to be the most cost effective way to provide this benefit. Now, the issue might be with the benefit itself. We will take a look at compensation across the board for these 8 positions and determine if a car benefit is appropriate. But in the meantime, that benefit has been provided as part of a total compensation package, and its removal would constitute a reduction in pay. And at least for the three elected officials, state law prohibits reducing an official’s compensation during their term in office. (those terms will expire this November)
Q. I heard that if the millage does not pass the labor contracts currently being negotiated will get postponed? If so, until when?
A. Labor laws require the Township to negotiate with the labor unions in good faith. The millage renewal not passing would not impact the timing of the contract negotiations as any postponement would require both sides to agree. There is absolutely no guarantee that all the unions would agree to this. In fact, one of the unions has already given notice that if the Township does not negotiate in good faith now they will file a grievance for unfair labor practices in court.