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Public act 345 millage proposals information

The City of Wayne is placing two in any year on each dollar ($8.00 per
ballot proposals before the City's $1,000) of taxable value of all prop-
electors that would give the option of erty in the City, for a period of 5
creating a police and fire retirement years, all contingent upon the ap-
system pursuant to Public Act 345 of proval by the electors of a City Char-
1937. ter amendment authorizing the
transfer of police officer and fire-
Why is the city asking fighter members from the current
for this millage? employee's retirement system to the
At the peak of the 2008 national new system created under Act 345?
recession, city employees were of- It is expected that approximately 8
mills will be levied in 2023 and will
fered a higher pension if they retired and the city has reduced spending Proposal NO. 1 raise the sum of approximately
early. Due to the influx of new re- across the board significantly. De- Shall Chapter 19 of the Charter $3,266,160.00.
tirees into the system, long-term in- spite these efforts and sacrifices, of the City of Wayne be amended so (The Public Act 345 Board mem-
vestment returns being less than there is no other option to avoid the that police officers and firefighters bership is governed by MCL 38.551
anticipated, extended life expectan- current situation. In 2020, the are excluded from the retirement and consists of: (1) Treasurer; (1)
cies, and other reasons, the un- MERS System sued the City of system established by the City Char- Fire Department Member; (1) Police
funded pension obligation has risen Wayne for not meeting the pension ter, effective with the 2023-2024 fis- Department Member; (2) Additional
significantly in the last 14 years. For obligation due to budget constraints cal year, and instead become members appointed by the legisla-
example, the annual required contri- which equated to a 13.1399 mill levy members of a separate retirement tive body or another person or body
bution to the Municipal Employees' on the winter taxes. It is the city's system under 1937 PA 345, as authorized by the city charter to ap-
Retirement System (MERS), rose hope that another judgement levy amended, and that accumulated con- point administrative officials in any
from $1.8 million in 2010 to $7.8 will not be necessary in the future if tributions to the current employee's city affected by the provisions of the
million in 2022 (see graph below). the PA345 proposals are approved retirement system made by or on be- act.)
During this same time, the city lost by the electors. half of such officers be transferred to
nearly 45% of its tax base and has the Act 345 retirement system? This To go into effect, both proposals
not fully recovered since. Primarily What is Public Act 345? charter amendment shall not be ef- must pass.
due to these reasons, rising pension AN ACT to provide for the estab- fective unless the electors approve If both proposals pass, the City
costs, reduction to property taxes, lishment, maintenance, and admin- the establishment of a separate re- Council has the ability annually, to
and the state withholding billions of istration of a system of pensions and tirement system under said Act 345. determine how many mills (up to 8)
dollars in revenue sharing that retirements for the benefit of the per- will be needed to ensure that the pen-
rightly belongs to the cities, the city sonnel of fire and police depart- sion payment obligations are met for
has found itself in a position that it ments employed by cities, villages, Proposal NO. 2 police and fire. That means, the City
cannot afford to pay 100 percent of or municipalities having full paid Shall the City of Wayne, Wayne Council can make the determination
the required pension contribution. members in the departments. County, Michigan, be authorized to to collect anywhere from 0-8 mills,
In Michigan, making the required establish a separate retirement sys- depending on whether there is a gap
pension contribution is not a choice, tem pursuant to Act 345 of 1937, as in funding. This option will be avail-
but an obligation mandated by state What is being proposed amended, for the benefit of police of- able to the City Council for a period
law. The city has continued to do to the city’s electors? ficers and firefighters employed by of 5 years beginning in 2024. The
everything possible to avoid this mill- The two proposals will be on the the City, create a board of trustees to millage would be collected on the
age. Properties have been sold, Tuesday, November 8, 2022, General manage and operate the system, and winter 2023 taxes. Any millage fund-
staffing is still at a minimum, the em- Election ballot, and will propose the be authorized to levy a new tax annu- ing that is collected can only be used
ployees took concessions in their following amendments to sections ally in an amount sufficient to fund for police and fire pension payments
contracts, retiree healthcare has 19.1 and 19.3 of Chapter 19 of the the system in an actuarially sound and cannot be used in any other
been reduced to a monthly stipend, Wayne City Charter: manner, but not to exceed 8.00 mills manner.

The Wayne Dispatch · November 2022 · 13