Municipal Office Center

SPECIAL MEETING OF THE 100 McMorran Blvd.

PORT HURON CITY COUNCIL Port Huron, MI 48060
810-984-9725
www.porthuron.org

Monday, May 1, 2017 5:00 PM Conference Room 408

Agenda

A. CALL TO ORDER

B. ROLL CALL

Mayor Pauline M. Repp

Mayor Pro-Tem Anita R. Ashford
Councilmember Sherry L. Archibald
Councilmember Ken D. Harris
Councilmember Teri Lamb
Councilmember Rico A. Ruiz
Councilmember Scott R. Worden

C. PUBLIC COMMENT

D. RESOLUTIONS

Discussion on the proposed Police Department and Fire Department millage and the
Department of Parks and Recreation millage.

1. RES #17-053: Authorizing the City Clerk to schedule a special election to be held on
August 8, 2017, for a proposed Charter amendment to levy a millage to provide funds to
be used solely to support the operations of the Police and Fire Departments.

2. RES #17-054: Authorizing the City Clerk to schedule a special election to be held on
August 8, 2017, for a proposed Charter amendment to levy a millage to provide funds to
be used solely to support the operations of the Department of Parks and Recreation.

E. MISCELLANEOUS BUSINESS

1. Any other business that may come before the City Council.

F. ADJOURNMENT

The City of Port Huron complies with the Americans with Disabilities Act and Title VI. If auxiliary aids
or services are required at a public meeting, please contact Susan M. Child, City Clerk, City of Port
Huron, 100 McMorran Blvd., Port Huron, Michigan 48060, 810-984-9725, at least three (3) business
days prior to any such meetings.

Updated 4/28/2017 3:19 PM

 D.1

RES #17-053
Authorizing the City Clerk to schedule a special election to be held on August 8, 2017, for a proposed
Charter amendment to levy a millage to provide funds to be used solely to support the operations of
the Police and Fire Departments.

WHEREAS, the City of Port Huron Police Department and Fire Department provide valuable
services to the residents of the City in the form of police and fire protection; and

WHEREAS, to promote the general health, safety and welfare of the residents of the City of Port
Huron, there is a desire to provide increased funding to support the operations of the City of Port Huron
Police Department and Fire Department; and

WHEREAS, in order to provide increased funding to the City of Port Huron Police Department
and Fire Department it is necessary to request the electorate of the City of Port Huron approve a three
(3) mills levy for five (5) years, commencing July 1, 2018, through June 30, 2023, by amending the City
of Port Huron Charter;

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Port Huron
hereby proposes to amend the Charter of the City of Port Huron by adding Section 7-2(c) as follows:

Proposed Charter Amendment

(c) In addition to the twelve (12) mill tax provided for above, the City shall have the
power to levy an additional ad valorem tax in an amount not to exceed three (3) mills for
five (5) years for a period commencing July 1, 2018, and expiring June 30, 2023, as such
tax rate may be adjusted from time to time by operation of law, for the purpose of
providing funds to be used solely to support the City of Port Huron Police Department
operations and Fire Department operations.

and

BE IT FURTHER RESOLVED that the proposed amendment shall be submitted to the qualified
electors of the City of Port Huron at a special election on August 8, 2017, and printed on the ballot in the
following form:

Submitting Dept: City Manager RES #17-053 May 1, 2017

Packet Pg. 2
 D.1

CHARTER AMENDMENT PROPOSITION

POLICE DEPARTMENT AND FIRE DEPARTMENT MILLAGE

Shall the Charter of the City of Port Huron, St. Clair County, Michigan, be amended to
permit the City to levy an additional ad valorem tax in an amount not to exceed three (3)
mills for a period of five (5) years, commencing July 1, 2018, and continuing through
June 30, 2023, for the purpose of providing funds to be used solely to support the City of
Port Huron Police Department operations and Fire Department operations? If approved
and levied it is estimated this millage would raise $$1,640,028.00 in its first year.

BE IT FURTHER RESOLVED the City Clerk shall forthwith transmit a copy of the proposed
Charter amendment to the Governor of the State of Michigan for his approval and transmit a copy of the
foregoing ballot designation of such proposed Charter amendment to the Attorney General of the State
of Michigan for his approval as required by law; and

BE IT FURTHER RESOLVED the Charter amendment proposal, substantially in the form set
forth in this resolution, shall be, and the same hereby is, ordered to be submitted to the qualified electors
of the City of Port Huron at a special election to be held on the 8th day of August 2017, or as soon
thereafter as permitted by law, and the City Clerk is hereby directed to give notice of the election and
notice of registration therefor in the manner prescribed by law and to do all things and to provide all
supplies necessary to submit such Charter amendment to the vote of the electors as required by law; and

BE IT FURTHER RESOLVED the proposed Charter amendment, together with the question,
shall be published in full, as a part of the notice of election; and

BE IT FURTHER RESOLVED the proposed Charter amendment in full shall be posted in a

conspicuous place in each polling place; and

BE IT FURTHER RESOLVED that the canvass and determination of the vote on said question
shall be made in accordance with the laws of the State of Michigan and the Charter of the City of Port
Huron.

Submitting Dept: City Manager RES #17-053 May 1, 2017

Packet Pg. 3
 D.2

RES #17-054
Authorizing the City Clerk to schedule a special election to be held on August 8, 2017, for a proposed
Charter amendment to levy a millage to provide funds to be used solely to support the operations of
the Department of Parks and Recreation.

WHEREAS, the City of Port Huron Department of Parks and Recreation provides various
recreation and entertainment opportunities to the residents of the City at several venues, which currently
includes, City parks, beaches and the McMorran Civic Center; and

WHEREAS, to promote the general health and welfare of the residents of the City of Port Huron
and to allow for continued recreation and entertainment opportunities there is a desire to provide
increased funding to support the operations of the City of Port Huron Department of Parks and
Recreation; and

WHEREAS, in order to provide increased funding to the City of Port Huron Parks and
Recreation Department it is necessary to request that the electorate of the City of Port Huron approve a
one (1) mill levy for five (5) years, commencing July 1, 2018, through June 30, 2023, by amending the
City of Port Huron Charter;

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Port Huron
hereby proposes to amend the Charter of the City of Port Huron by adding Section 7-2(d) as follows:

Proposed Charter Amendment

(d) In addition to the twelve (12) mill tax provided for above, the City shall have the
power to levy an additional ad valorem tax in an amount not to exceed one (1) mill for
five (5) years for a period commencing July 1, 2018, and expiring June 30, 2023, as such
tax rate may be adjusted from time to time by operation of law, for the purpose of
providing funds to be used solely to support the operations of the City of Port Huron
Department of Parks and Recreation, which currently includes, City parks, beaches and
the McMorran Civic Center.

and

BE IT FURTHER RESOLVED that the proposed amendment shall be submitted to the qualified
electors of the City of Port Huron at a special election on August 8, 2017, and printed on the ballot in the
following form:

Submitting Dept: City Manager RES #17-054 May 1, 2017

Packet Pg. 4
 D.2

CHARTER AMENDMENT PROPOSITION

DEPARTMENT OF PARKS AND RECREATION MILLAGE

Shall the Charter of the City of Port Huron, St. Clair County, Michigan, be amended to
permit the City to levy an additional ad valorem tax in an amount not to exceed one (1)
mill for a period of five (5) years, commencing July 1, 2018, and continuing through
June 30, 2023, for the purpose of providing funds to be used solely to support the
operations of the City of Port Huron Department of Parks and Recreation, which
currently includes City parks, beaches and the McMorran Civic Center? If approved and
levied it is estimated this millage would raise $$546,676.00 in its first year.

BE IT FURTHER RESOLVED the City Clerk shall forthwith transmit a copy of the proposed
Charter amendment to the Governor of the State of Michigan for his approval and transmit a copy of the
foregoing ballot designation of such proposed Charter amendment to the Attorney General of the State
of Michigan for his approval as required by law; and

BE IT FURTHER RESOLVED the Charter amendment proposal, substantially in the form set
forth in this resolution, shall be, and the same hereby is, ordered to be submitted to the qualified electors
of the City of Port Huron at a special election to be held on the 8th day of August 2017, or as soon
thereafter as permitted by law, and the City Clerk is hereby directed to give notice of the election and
notice of registration therefor in the manner prescribed by law and to do all things and to provide all
supplies necessary to submit such Charter amendment to the vote of the electors as required by law; and

BE IT FURTHER RESOLVED the proposed Charter amendment, together with the question,
shall be published in full, as a part of the notice of election; and

BE IT FURTHER RESOLVED the proposed Charter amendment in full shall be posted in a

conspicuous place in each polling place; and

BE IT FURTHER RESOLVED that the canvass and determination of the vote on said question
shall be made in accordance with the laws of the State of Michigan and the Charter of the City of Port
Huron.

Submitting Dept: City Manager RES #17-054 May 1, 2017

Packet Pg. 5
ESTIMATED MILLAGE REVENUE:

Police Dept. & Fire Dept. Millage (3 Mills)...................... $1,640,028

Parks & Rec Millage (1 Mill) ........................................... $ 546,676

RESIDENTIAL SCENARIOS:

Communication: Millage slides (RESOLUTIONS)

Monthly* Annually
Median City Home:
SEV $50,380; Taxable $25,190
Police Dept. & Fire Dept. Millage $ 6.30 $ 75.57
Recreation Millage 2.10 25.19
Total $ 8.40 $ 100.76

Mean City Home:

SEV $70,480; Taxable $35,240
Police Dept. & Fire Dept. Millage $ 8.81 $ 105.72
Recreation Millage 2.94 35.24
Total $ 11.75 $ 141.96

$100,000 City Home:

SEV $100,000; Taxable $50,000
Police Dept. & Fire Dept. Millage $ 12.50 $ 150.00
Recreation Millage 4.17 50.00
Total $ 16.67 $ 200.00

* Rounded

Packet Pg. 6
 Future effect of both millage proposals passing
$2,104,000

Public Safety Enhancements

3 Additional Officers,

Communication: Millage slides (RESOLUTIONS)

$351,000

Protection of Current
Services, $1,753,000

Packet Pg. 7
 Estimated Property Tax Revenue from Approval of 4 Mills
$2,184,000

Communication: Millage slides (RESOLUTIONS)

Parks, Recreation and Culture - 1 Mill,
$546,000

Public Safety - 3 Mills,

$1,638,000

Packet Pg. 8
 GENERAL FUND
BUDGET YEAR 2018-2019
(POTENTIAL CUTBACKS IF MILLAGE FAILS)

Wage Benefit Other Total

Cost Saved Cost Saved Savings Cost Saved Reason for Change
Wages, Benefit and Related Costs

Fire Department $ 295,000 $ 274,350 $ 30,000 $ 599,350 Layoff Five Fire Fighters/Close One Fire Station
Police Department 100,500 93,465 33,904 227,869 Layoff Two Police Officers/Reduce Vehicle Fleet

TOTAL WAGES, BENEFITS AND RELATED COSTS $ 395,500 $ 367,815 $ 63,904 $ 827,219

Total
Cost Saved
Other Items

Communication: Millage slides (RESOLUTIONS)

Code Enforcement $ 175,000 Reduce program by 50 percent
Fire Department 14,750 Estimated Training, Uniforms and Subsistence for 5 Fire Fighters
Police Department 6,130 Estimated Training, Uniforms and Liability Insurance for 2 Police Officers
McMorran 315,000 Close or transfer ownership of McMorran Place
Recreation 165,000 Eliminate Staff and Close two City Pools (Sanborn and Court)
Recreation 250,000 Cut Recreation Staff and Programming at City Parks and Palmer Park Center

TOTAL OTHER ITEMS $ 925,880

TOTAL POTENTIAL CUTBACKS $ 1,753,099

GENERAL FUND
BUDGET YEAR 2018-2019
(COMMITTED ENHANCEMENTS IF MILLAGE PASSES)

Total
Wage Benefits Other Cost Reason for Change
Wages, Benefit and Related Costs

Police Department $ 150,750 $ 140,198 $ 50,856 $ 341,804 Add Three Police Officers/Increase Vehicle Fleet

Other Items

Police Department 9,195 Estimated Training, Uniforms and Liability Insurance for 3 Police Officers

TOTAL COMMITTED ENHANCEMENTS $ 350,999

TOTAL DIFFERENCE IN BUDGETED EXPENDITURES $ 2,104,098

NOTE: The City has already planned the removal of annual assistance to the Museum of $80,000 for utilities following the Roof Replacement and Electrical Upgrade projects.

Packet Pg. 9
 Future effect of failure of both millage proposals
$2,104,000
Public Safety Enhancements
3 Additional Officers,

Communication: Millage slides (RESOLUTIONS)

$351,000

Cuts to Current Services

Public Safety,
$1,023,000

Cuts to Current
Services
Recreation,
Parks and
Culture,
$730,000

Packet Pg. 10
 Real Property Tax Revenue
$8,000,000

$7,000,000

$6,000,000

$5,000,000

$4,000,000

$3,000,000

$2,000,000

$1,000,000

$-
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017* 2018*
*2017 and 2018 are budgeted amounts
 2001 $ 5,139,620
2002 $ 4,900,085 State Shared Revenue
2003 $ 4,464,536
2004 $ 4,296,200 (Constitutional & Statutory/CVTRS)
2005 $ 4,130,995 $6,000,000
2006 $ 4,072,107
2007 $ 4,034,411
2008 $ 3,899,728
2009 $ 4,014,222 $5,000,000
2010 $ 3,381,001
2011 $ 3,333,047
2012 $ 3,356,487 $4,000,000
2013 $ 3,185,463
2014 $ 3,290,323
2015 $ 3,381,808
2016 $ 3,358,146 $3,000,000
2017* $ 3,460,000
2018* $ 3,400,000
$2,000,000

$1,000,000

$-
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017* 2018*

FISCAL YEAR END

*2017 and 2018 are budgeted amounts
 2002 $ 239,535
State Shared Revenue Lost Since 2001
2003 $ 675,084
2004 $ 843,420 (Constitutional & Statutory/CVTRS)
2005 $ 1,008,625 Total - $ 23,414,981
2006 $ 1,067,513
2007 $ 1,105,209 $2,000,000
2008 $ 1,239,892
2009 $ 1,125,398
2010 $ 1,758,619 $1,800,000
2011 $ 1,806,573
2012 $ 1,783,133 $1,600,000
2013 $ 1,954,157
2014 $ 1,849,297
2015 $ 1,757,812 $1,400,000
2016 $ 1,781,474
2017* $ 1,679,620 $1,200,000
2018* $ 1,739,620
$ 23,414,981
$1,000,000

$800,000

$600,000

$400,000

$200,000

$-
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017* 2018*

FISCAL YEAR END

*2017 and 2018 are budgeted amounts
GENERAL FUND HIGHLIGHTS
MERS has conducted an experience study to determine what changes need to be made to their
actuarial assumptions in order to adequately fund pension funds of all of their participants, which
includes the City of Port Huron
The study has shown that three main changes need to be made to ensure that municipalities have
enough assets in their pension plan to provide for the benefits that are expected to be paid.
These changes are:
Adjusting the mortality table because people are living longer
Lowering the assumed rate of return from 8 percent to 7.75 percent (Highly optimistic)
Requiring a shorter fixed amortization period for gains, losses and unfunded amounts. Since 2005, MERS has
been gradually reducing the amortization period to help ensure that pension costs of current employees do
not shift onto future generations
The results of the experience study was applied to our most recent actuarial valuation which
became available during the summer of 2016. The resulting increases in our pension costs is
substantial, profoundly affecting the Citys budget for the next decade. Simply unsustainable

19
 Projection of Future Contributions
$12,000,000

$10,000,000

$8,000,000

$6,000,000

$4,000,000

$2,000,000

$0
2017 2018 2019 2020 2021 2022 2023 2024
General Fund Projection of Future Pension Contributions
35,000,000.00 100%

90%
30,000,000.00
80%

25,000,000.00 70%

60%
20,000,000.00

50%
15,000,000.00
40%
29% 30% 30%
25% 26% 26% 27% 28% 30%
10,000,000.00 23% 23% 24%
19% 21% 21% 22%
18%
15% 14% 16% 20%
12%
5,000,000.00
10%

- 0%
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Total General Fund Expenditures (2% incr./year) Pension contribution (65% alloc. To G.F.) Percentage of total G.F. budget
 Current and Projected Future Budgets - General Fund
$26,000,000

$25,360,000
$25,000,000

$24,589,800

$24,000,000

$23,000,000
Dollars

$22,707,278 $22,727,100
$22,354,400
$22,142,648
$22,000,000 $21,987,278

$21,177,648
$21,000,000

$20,000,000

$19,000,000
2017 2018 2019 2020

Years

Revenue Before Transfers Expenditures

 Projected Pension and OPEB Payments
$12,000,000

$11,292,576
$11,038,824
$10,680,852

$10,000,000 $9,967,656

$9,268,584

$8,586,420
$8,292,576
$8,000,000 $7,900,000 $8,038,824
$7,680,852
$7,123,467
$6,967,656
$6,790,000
Dollars

$6,481,576 $6,406,547
$6,208,634 $6,268,584
$6,000,000 $6,072,743
$5,586,420

$4,900,000

$4,000,000 $4,090,000
$3,709,560 $3,716,779

$2,941,737
$2,779,836
$2,489,132
$2,000,000

$0
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Years

Pension Only Pension and OPEB

Cost of Pension Benefits FYE 6/30/16
$10,000,000
Components of pension costs:
$9,000,000
Normal service costs 1,757,825
$8,000,000
Pension administrative costs 174,267 $7,000,000
Less employee contributions (1,138,153) $6,000,000

Cost of current year benefits 793,939 $5,000,000

Cost of previous years' $4,000,000

underfunding: $3,000,000
Interest on the NPL (~$55 million $2,000,000
@8.25%) 4,366,348 $1,000,000
Amortization of investment & $-
experience differences & changes Actuarially required Pension Contribution that
contribution would stabilize the Net Pension
in assumptions 4,206,788 Liability
Total cost of pensions 9,367,075 Required

Required annual contribution 3,716,779

History of the Pension Plan Funding
160,000,000

140,000,000

120,000,000

100,000,000

80,000,000

60,000,000

40,000,000

20,000,000

-
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Pension Liability Assets (smoothed market basis)