News Story

Hamtramck: Giving Raises and Going Bankrupt

City of Hamtramck officials say the city is “dead broke” and will run out of money sometime in March. Yet city documents show that 11 police department employees were paid overtime of between $24,000 and $34,460 during 2010.

Hamtramck City Manager Bill Cooper said that the overtime was part of a new “traffic enforcement” program that paid for itself “four or five times over.”

The city also had eight more people on payroll in 2010 compared to 2007 and saw total payroll climb from $7.3 million in 2007 to $7.9 million in 2010, not including benefits. While Hamtramck considered bankruptcy, it gave its union workers annual raises of 2 to 3 percent, according to Cooper.

“What that is saying to me is that city managers are proclaiming financial emergencies, but are not effectively controlling their costs,” said Mackinac Center for Public Policy Fiscal Policy Analyst James Hohman. “Hamtramck is crying poverty, but it seems to be a self-driven poverty.”

Cooper said the city is expecting to run out of money sometime in March.

“That means we will be dead broke,” he said. “We won’t be able to pay any bills.”

In the past year, Hamtramck’s AFSCME employees received a 2 percent raise, while the police and fire employees got 3 percent pay increases. Cooper said he approached the unions twice about concessions but was turned away.

John Bondra, the Hamtramck police union president, said the first time they were approached to renegotiate, they had just signed a new deal six months earlier.

“We weren’t happy we had just negotiated raises and now he wanted to take everything away,” Bondra said. “Our union has always been willing to sit down and talk.”

Bondra said the city should consider raising more revenue.

“Everyone hates to raise taxes, but for public safety, some citizens are willing to do it,” he said.

One police employee had $34,463 in overtime, and it raised his total salary in 2010 to $97,245.

Hamtramck is located within the borders of Detroit, but is an independent municipality. It is located about five miles north of downtown Detroit and has a population of about 23,000, according to the 2000 census. The city was in state receivership from 2000 through 2007. The median income for a household in the city was $26,616.


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Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.