DEARBORN – Mayor Jack O’Reilly presented a financial plan that is expected to reduce expenditures to match the city’s declined revenue. The plan was announced at a forum that was held on Jan. 27 at the Henry Ford Centennial Library.

Mayor Jack O’Reilly

O’Reilly announced potential millage rate changes. The current rate is 13.62 mills. That number could increase to 15 mills, the charter max, and the newly proposed max is 18.5 mills. City officials must obtain consent from voters in order to raise the rate beyond 15 mills. One mill brings in $3.5 million in revenue and represents $49.51. In recent years Dearborn’s finances have become a problem that have required ongoing actions.

 As a result of decreasing housing values, the city lost its greatest source of income. Raising the millage rate helps cover lost revenue. “We are pretty much tied to property values,” O’Reilly said.  The number of city employees is expected to decline by 18 percent. Nine hundred and eleven total positions will be reduced to 743. The number refers only to general employees. Firefighters and police officers will not be affected according to a Dearborn spokeswoman.

 The presentation displayed an outline of how the tax dollars of residents are distributed. City services account for 32.9 percent, Dearborn schools, state and education get 38.4 percent and Wayne County is given 14.7 percent. O’Reilly says 168 full-time city employee positions were eliminated between 2001 and 2011.  The action has saved the city about $12 million annually.

Dearborn and Dearborn Heights city officials have been working together and considering condensing facilities including libraries.  “We must take further action, doing nothing is not an option,” O’Reilly said. A three-year budget plan will be adopted. “Three-year budget plans won’t be pretty,” he added. Despite fewer resources, city officials will strive to make Dearborn a desirable place to work and do business. Part of the financial plan includes assuring core services are provided at a high level. The plan also states services that are, or can be, provided by the private sector or other entities must be eliminated.

Selling the popular Camp Dearborn recreation area has been considered as well. O’Reilly says the city is working closely with companies that are willing to invest in it and add attractions. He says one wakeboarding company is seeking to invest in the camp.  According to the mayor revitalizing the camp could bring about $500,000 in revenue annually. “We think there’s a real opportunity to make money there,” he said.

About 400 student housing units are also expected to be built in fall 2012 according to O’Reilly, which would benefit the city financially. He said an agreement had been reached to build dorms on the far western end of the Fairlane complex along Evergreen Road.

In 2010, a third early-out retirement program was offered to reduce staffing, and all newly hired general employees were no longer eligible for retiree healthcare.

The new initiatives the mayor discussed were formed by a community task force which submitted recommendations to the mayor and city council regarding ways to address the declining tax base that has resulted in decreasing revenue, along with obligations to retired employees.

The committee consists of 31 representatives from the business, neighborhood, service club, union, school, and commission sectors and is broken down into subcategories of administrative efficiencies, image and development and personal and revenue enhancements. The structural deficit of the city is $20 million and will continue growing if not addressed. Attempts to fix the problem currently represents approximately 20-25 percent of city expenditures.

O’Reilly said he remains committed to turning the budget problem around, but it will be far from easy.

“We can’t not do some very dramatic things in order to get where we need to be,” he said.