Wayne residents could see an extra $200 to $300 on their tax bills next year if language for a new levy is authorized by members of the city council and then approved by voters in November.
The 8 mills proposed for five years would fund the police and fire department retirement plans. Wayne has been in a deficit position for contributions to the retirement plan for several years and was ordered by the court to levy 13.13999 mills on the city winter tax collection. The court order came after the Municipal Employees Retirement System of Michigan (MERS) sued the city for the arrearage in contributions.
City officials opted not to defend the MERS court action in what was characterized by critics as a "friendly lawsuit" forcing the financial liability onto taxpayers.Earlier this month, members of the city council directed the city attorney to prepare language for the November ballot requesting voters to approve up to 8 mills to fund the retirement obligations. The millage would fall under provisions of state Act 345 which gives communities the authority to create new tax levies specifically to fund police and fire retirement plans.
According to officials, Wayne has 170 retirees collecting pension benefits with only 80 employees contributing to the fund. Several years ago, the city offered early retirement to employees in an effort to cut labor costs in the city which may have had an impact on the fund imbalance.
Officials said that the proposed millage, if approved by voters, would prevent another large tax levy by order of the court if MERS sues again. With voters approval of the new proposal, members of the council could decide annually whether to levy the full 8 mills depending on the outstanding MERS liability.
Officials attempted to persuade voters to approve an Act 345 millage request in 2013 and 2015, but the proposal failed at the ballot box. According to city officials, there is not sufficient tax revenue collected in the city to fund the pension obligations. If approved by voters, the collected 8 mills would also improve the balance in the city general fund, currently being used to pay the pension obligations.
Councilwoman Kelly Skiff cast the only no vote April 6 for the authorization of the ballot language.
