Our City is Not Going To Look The Same..

The Mayor speaking as a resident (wink) made a passionate plea to the residents by yelling. Understandable considering what’s at stake. Yes the city is in trouble yes the city needs money in-order to keep running at something that resembles the city we now live in. Several things got brought up at the ccm October 25 2011 and Headlee Override was the main dish on the menu.

So many terms got mentioned at this last meeting Proposal A, Headlee Override, Roll Back, and Roll Up. Listening your head can spin. Here is my feeble attempt at understanding what all of it means I hope it will help.

This is the html version of the file http://www.mml.org/pdf/opp/opp_headlee_override.pdf.
Google automatically generates html versions of documents as we crawl the web.
Page 1
Headlee Roll Back and Headlee Override
Introduction
The term “Headlee roll back” became part of municipal finance lexicon in 1978 with the passage of the
Headlee Amendment to the Constitution of the State of Michigan of 1963. In a nutshell, Headlee requires a
local unit of government to reduce its millage when annual growth on existing property is greater than the
rate of inflation. As a consequence, the local unit’s millage rate is “rolled back” so that the resulting growth
in property tax revenue, community-wide, is no more than the rate of inflation. A “Headlee override” is a
vote by the electors to return the millage to the amount originally authorized via charter, state statute or a
vote of the people and is necessary to counteract the effects of the “Headlee Rollback.”
Impact of Headlee Amendment
Since the passage of the Headlee Amendment, units of government are required to annually calculate a
Headlee roll back factor. The annual factor is then added to Headlee roll back factors determined in prior
years resulting in a cumulative Headlee roll back factor sometimes referred to as the “millage reduction
fraction.” This total “millage reduction fraction” is then applied to the millage originally authorized by
charter, state statute or a vote of the people. In summary, the actual mills available to be levied by a unit of
local government is the product of the authorized millage rate times the total millage reduction fraction. This
is known as the “Headlee maximum allowable millage.”
Impact of Proposal A
Prior to Proposal A legislation passed in 1994, local governments were allowed to “roll up” their millage
rates when growth on existing property was less than inflation. “Roll ups” were a self-correcting
mechanism that allowed local governments to naturally recapture taxing authority lost due to Headlee roll
backs in prior years. A local government could only “roll up” its millage rate to the amount originally
authorized by charter, state statute or a vote of the people.
Additions to taxable value (such as newly constructed property) are typically excluded (or exempt) from the
Headlee roll back calculation. The 1994 General Property Tax Act changes did not specifically define
“uncapped values” (increases resulting primarily from property transfers) as exempt.
Result
Although it might appear that a community with an annual increase in uncapped property values would
benefit monetarily, uncapped values are treated as growth on existing property and trigger Headlee roll
backs. For local governments levying at their Headlee maximum authorized millage, rolling back the
maximum authorized millage rate reduces the revenue that would have been generated from these
increased property values. The increase in the taxable value of property not transferred is capped at the
lesser of inflation or 5 percent. Even though the taxable value of a particular piece of property increases at
the rate of inflation, the millage rate for the entire community is “rolled back” as a result of the increase in
the total taxable value of the community. The net result – a less than inflationary increase in the actual
dollars received from property taxes. Consequently, the 1994 change to the General Property Tax Act has
prevented local governments from being able to share the benefits of any substantial market growth in
existing property values.
Based on System Failure: Michigan’s Broken Municipal Finance Model. Prepared for the Michigan Municipal League by Frank W.
Audia, Partner and Denise A. Buckley, Associate, Plante and Moran, PLLC, March, 2004

Page 2

Page 3
Sample Headlee Override Ballot Language
The City of Olivet Additional Operating Millage Millage Proposal
Shall the City of Olivet, for the purpose of general operations, levy up to 1.1218 mills ($1.1218 per thousand dollars of
taxable value on all real and personal property) for a period of five (5) years, 2001-2005, inclusive? The intent of
this request is to restore the total City operating Millage at maximum allocated rate of 15 mills authorized by the
Charter of the City of Olivet.
The 15 mills has been reduced by required Millage rollbacks in recent years to 13.8782 mills. If approved and levied
in its entirety, this additional Millage would raise an estimated $13,608 for the City of Olivet.
City of Dearborn Heights Headlee Override Millage Proposal
Shall a “Headlee Override” be adopted so that the current limitation on the amount of City taxes that may be levied
against all taxable property in the City of Dearborn Heights, Wayne County, Michigan be increased
• Up to 8.5 mills from approximately 6.798 mills ($8.50 from approximately $6.798 per $1,000 of taxable
value) for general operating expenses,
• Up to 3 mills from approximately 2.3991 mills ($3.00 from approximately $2.3991 per $1,000 of taxable
value) for sanitation/rubbish, and
• Up to 2 mills from approximately 1.5993 mills ($2.00 from approximately $1.5993 per $1,000 of taxable
value) for police and fire protection?
If approved and levied in its entirety, this millage would raise an estimated maximum amount of $3.57 million for the
City in 2002 by allowing the City to levy the maximum mills previously approved by the voters and authorized by the
City Charter and Sate law which have been reduced as required by the Michigan Constitution of 1963.
Huntington Woods Millage Increase Proposition
Shall the City of Huntington Woods, Oakland County, Michigan, be authorized to levy, in 2004 and thereafter, an
additional 6.1829 mills on each dollar ($6.1829 per $1,000) of the taxable value of all property in the city, thereby
allowing the levy of Charter-authorized millage for general purposes in excess of the limit to which it was reduced
by Section 31 of Article IX of the State Constitution of 1963, all of which tax revenues will be disbursed to the City of
Huntington Woods; provided, that the City shall not be authorized to increase the levy of the City’s Charter-
authorized millage by more than one-half (0.50) mill in 2004, or by more than an additional one-half mill each
year.
Above is what I found on the web to explain what some of the terms tossed around mean. Before Proposal A the city would have been able to “Roll Up” without coming to the taxpayers for a vote. The Mayor at the last council meetings was very upset. I have already gotten a call from a lady who would not give me her name, but was not happy at all with the way he “yelled.” As I said there is a lot to worry about our city is not going to look the same. The difference is to what extent, Headlee Override passing or not will make the difference in how much of a change we as residents are going to see.
Many are asking for the plan, the plan was first brought up at one of the town hall meetings by councilwoman Marge Horvath. At the CCM on October 25 two people spoke to this and asked where is the plan? Well short and simple there is no plan. From what councilwoman Horvath and council chair Baron said after sitting with the Mayor it became obvious that it would be a much longer process then they thought. Councilwoman Horvath said “we can not nail it down.”  I kind of thought the whole council would be at that meeting. I all so thought that the council said they were suppose to have meetings every week about this. I might have misunderstood something at that council meeting when they agreed to put it on the ballot.
One man said “how can you ask us to pass it when you do not have a plan in place you should have a plan in place.” The council went on to say that every department would have to make cuts. It would be hard for every department to come up with a plan not knowing what we are looking at. The man said back why not do it, go to every department and have them come up with a plan for the HO passing and a plan if the HO does not pass.
Some things the Mayor did shine a light on there has been a 10% reduction in pay for all elected officials in the city for 2 years. Not every union has taken the 10% pay cut, employees have taken pay cut after pay cut. No Headlee money will be going to any pension fund. There will be DPW, Police, Fire, and small Recreation Department with some senior programs if the HO passes. He Yelled into the camera that it is “Vital” that the residents pass this.
November 8 is the day I hope you are all able to make a decision that your comfortable with. Try to get as many facts as you can to base your vote on.  We are not going to know where the money in the general spending portion of the HO is going. Except that 67% of it will be going to salaries. There is no plan on what cut’s with or without HO the city will make. Knowing all of that the city does need money “they are not making it up.” To use someones comment here on the blog. I respect everyone’s stand on this no matter what way you are coming down on it.
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29 thoughts on “Our City is Not Going To Look The Same..”

  1. Bitsy08, Yes, I do think they should relay that information to us if they have it. I’m just saying that we have no idea what has been said by the mayor, if he has even asked them for ideas. I’m sure they would have to have SOME ideas of additional cuts they could make but determining what those may be may be difficult if they aren’t given enough information (ie. what dollar amount they need to cut). We have been told that there would be extremely deep cuts to police/fire service and possible closure of rec/senior centers. For me, that’s enought to make my decision to vote YES. I realize it isn’t enough for everyone. I just would like people to not confuse their distrust/disgust of the mayor and his administration with the needs of our city, that’s all I’m trying to say.

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  2. They have hinted that the Eton Center will close regardless of whether the HO passes because it needs maintenance and the City does not own the building. I don’t think they want to put those votes in jeopardy by saying it outright, though.

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  3. WRONG ! IF THEY GET THE MONEY THEY NEED THERE GOING TO SPEND JUST LIKE THEY HAVE THE LAST FOUR YEARS. ON NOTHING. THEY CANT CUT DOWN OLD TREES FIX THE HOLES IN SIDE STREETS THAT HAVE SPENT MORE MONEY ON BULL SHIT THEN TAKING CARE OF THE CITY BEFORE THERE GOT IN THIS MESS.SO (VOTE NO) AND MAYBE THEY CAN GET THERE SHIT TOGETHER. AND HAVE A VOTE IN FEBURARY AND TELL THE PEOPLE WHAT THERE ARE GOING TO LOOSE.LOOK DOWN FORD ROAD THE OVER SIZE BOATS PARKED IN FRONT OF HOMES THE COMPANY TRUCKS, CAMPERS ,IN FRONT THEY CANT MAKE THEM TAKE THEM TO A STORAGE LOT. I HAVE CALLED A NUMBER OF TIMES AND THERE STILL THERE.IF WE START TO CLEAN UP DEARBORN HEIGHTS IT WONT LOOK LIKE DETROIT.SORRY (MY VOTE IS NO).

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  4. Dear Anonymous48125: Don’t you think if they have tentative plans they should relay that information to us? Or maybe you think we don’t have a right to know. Once again my words have been misinterpreted. But you say on the one hand it would be hard for them to submit a plan or plans and then on the other hand – perhaps they have submitted plans to the mayor. I wasn’t talking about submitting anything yet. I said I thought each department head had an IDEA where he/she would make cuts, if needed. IF – and that’s a big IF – they have submitted plans to the mayor, then we at least have the right to know that tentative plans have been submitted that will be finalized and discussed after the vote. Of course, I would BET our mayor hasn’t taken it that far.

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  5. Bitsy08, It would be difficult for the dept heads to submit any plans for additional cuts to the mayor if they don’t know what numbers they are looking at. We have no idea what they have been told. It’s possible they HAVE given plans to the mayor, we really don’t know, do we?

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  6. Thank you, Vegas Lady.

    As far as the department cuts, I’m not talking – again – about what the mayor and the council has said. I believe each department head HAS THEIR OWN IDEA about what cuts they will make to present to the mayor and council. That is, if the mayor and the council every deem it necessary to ask each of them. Not everyone listens to the talking head.

    I’ll repeat myself again. We need to start a recall campaign after the vote. I’m hoping that even if we don’t do that, the mayor won’t be here in 2015. Anyone who would vote for him again is seriously in denial.

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  7. What I read was that a good deal of our police and fire will be cut and parks and rec will be closed if it does not pass. If the state does not take over that is,

    If it does cuts will still have to be made, which will probably in parks and rec in part.and maybe other areas. But at least I know the city will be intact to a degree. I cannot say it will be if it fails. That is specific enough for me.

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  8. Bitsy08, I believe we heard of some of the cuts that will likely take place if the HO doesn’t pass. Cutting police officers, closing a fire station, laying off firefighters and outsourcing EMS were some of the items mentioned. I agree with “who do you like” in the fact that I’m sure it takes time trying to put together city budgets. Plus, we don’t really know what the department heads have been told by the mayor, do we?

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  9. They have been running the city like Susie’s lemonade stand for years. They have been giving away the store. Cuts are coming if it passes or it doesn’t pass. The mayor has known about this problem for months this is not a couple of weeks thing. When the Mayor requested the HO be put on the ballot he should have been prepared with this is what happened and two sets of plans to get out of the crisis. As the council said that night he knew for months the HO was his intention.The people most surprised by this were the taxpayers.

    By the way the Mayor projects by 2015 the city will have an 18 million dollar deficit. Only a 3 million dollar revenue loss. The rest of the deficit is spending. The HO being 3 million doesn’t put a dent in the deficit.

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  10. EVERYONE who is worried about this city turning into Detroit if we don’t pass this millage needs to understand that Detroit is that way because of failed leadership.

    In fact, their millage is MUCH HIGHER than ours right now and has been. More money is not the answer to this, better leadership is.

    Passing this millage will only delay the inevitable. Until we get better leadership, the city will continue it’s nosedive.

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  11. Did you notice that after his “rant” the Mayor chose to get up and leave the room rather than listen to another citizen speak? (Thanks to the camera operator for pointing that out!)

    A True Leader would listen to ALL of the citizens regardless of what they had to say.

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  12. Wow. Why don’t you talk down to me some more. Are you running for council? More excuses why it can’t be done. I’m not saying it has to be set in stone but they should have SOME IDEAS as to what will be done. They could have met with SOME of the departments by now. They should have SOME idea what they’re going to do with our money and we have every right to have expected SOME answers by now. Instead all we get is a mayor who yells at us and people who accept obfuscations from the powers that be. I would also bet that the heads of each department know where they’re going to make cuts, if need be.

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  13. Bitsy, there could have been many reasons the powers that be did not make specific plans. If I had to guess, the main problem was simply time. I doubt you can write two citywide budgets in two weeks.

    What if two plans were written and then after the election they discovered that the plans could not be adhered to. How would you feel then? Lied to? Fact is they probably cannot come up with a responsible plan in stone in that amount of time, and saying so is the right thing to do.

    A budget is more than a few people typing out a spread sheet on excel. This is not a budget for Susie’s lemonade stand. City budgets are negotiations with department heads, assessments of services, talking wiith staff, looking at contracts, talking to lawyers, talking to the county and state, assessing revenues and probably other things. All they would accomplish is stir up a good deal of hell and accomplish squat. Should this have been done months ago? Maybe. But the financial hole is very real and will only get worse with each passing month.

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  14. He wants it to pass so that he can still have a job for a couple more years. If he was really concerarned about the city, he would of faced the facts and told the truth years ago as it related to the budget. Every time he is telling a lie he gets loud and red in the face.

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  15. Reading this it seems that they can allocate the milleage to specific causes.
    For example – police and fire, general fund, rubbish/sanitation. If that is the case why is not each issue itemized on the ballot. I think people will gladly pay a bit for adequate (not minimal) police and fire – but frankly the general fund without oversight and explanation is not something that I can support. It amounts to pouring money down a black hole. You can’t hold public safety hostage so the rest of the departments get “saved”.

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  16. Kathy that was bigdog and it came up anonymous sorry i did the log in .i hate anonymous.sorry but you still get my vote.

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  17. As much as I hate “welcome to Detroit Heights”, Dearborn Heights is going to look more like Detroit if this HO doesn’t pass. I would love to see a plan before the November election. It doesn’t seem it’s going to come. But, I will not take the chance of letting this city spiral into receivership. The last council meeting before the election was Tuesday. Still no plan. Maybe this group holding the meeting will have some answers.

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  18. WELL I SAID IT BEFORE WELCOME TO DETROIT HEIGHTS. SORRY SEAN I KNOW YOU HATE IT WHEN I SAY IT. BUT WHAT A JOKE THE MAYOR WAS ON CABLE.ITS TO LATE. I LIVED HERE SINCE 1962.BUT NO WAY IN HELL WILL I VOTE YES. ITS A NO VOTE HERE. MAYBE IF THEY GET THERE SHIT TOGETHER BY FEBRUARY I WILL CHANGE MY VOTE. KATHY ONE VOTE HERE FOR YOU. GOOD LUCK.

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  19. Sean

    It was I jumped when he did it I knew what was going to happen someone had told me, but did not think it was going to be that bad.. Again the Mayor did no favors for his self or the city with that display. He seems to think yelling is the only way he does it all the time and it comes out when he is not getting his way about something. Come on the vote has not happened yet what ever way it goes that is what all of us will have to live with. I wish he would spend some time yelling at his self or kicking his self for not coming forward with this months ago.

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  20. Yelling is an understatement. I watched the meeting on TV and had to turn it down. I thought he was going to blow the speakers. That was insane!

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  21. Lord. More excuses. Can’t nail it down? Why? Because you don’t know if the HO will pass or fail? Then each department come up with two plans; one if it passes and one if it fails. Why is this so hard for them to understand. All we get is excuses. I’ll say it again. We need to broom all of them and start over. It seems the citizens are smarter than the council.

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  22. Kathy
    what happened to the crime alerts you used to post here. Why don’t you post them anymore. It was seems that it was useful for the readers but you choose not to post it….why

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