Sun Beginning to Shine on Wayne Once Again
In today’s news I found some good signs that our economic woes may be on the mend. According to the Associated Press, new home sales in June posted the fastest increase in more than eight years. Buyers seem to have taken advantage of bargain prices, low interest rates and a federal tax credit for first-time homeowners.
The Detroit Free Press reported that dealers across metro Detroit were being flooded with customers who want to see if they qualify for the program the Car Allowance Rebate System. That’s the federal program which provides vouchers through registered dealerships to anyone replacing a car or truck that averages less than 18 miles per gallon in combined city and highway driving and is less than 25 years old. Bill Demmer of Jack Demmer Ford said they had more than 70 deals pending.
And, Ford Motor Company posted a profit. In a Detroit News story, Ford’s management is quoted as saying that the company posted a profit of $2.3 billion for the second quarter. That is a major turnaround from the $8.7 billion loss it reported for the same period a year ago, even though the profit was largely due to one-time gains related to its debt reduction moves. And, even with those special items removed, Ford is said to have surprised Wall Street with a pre-tax operating loss of $424 million for the second quarter of 2009, excluding special items. That is a $609 million improvement compared with the second quarter of 2008.
These facts are good news for our community — and we need some good news!
After more than 34 years with the City of Wayne, I can attest to the fact that we have never had to deal with a tougher time than we have lived through over the past few months.
You know that nationally, home values have drastically declined. In Wayne, our home values have dropped by nearly 15%. Ford Motor idled operations at the Michigan Ave. facilities, to refit for new and expanded production — which is good for Wayne’s future — I point out. But, for today, Ford’s decision also cut the City’s tax base by 25% in one year. Finally, due to the economy, the City’s pension portfolio also took a major hit, declining some 20%.
All this adds up to a $4 million loss in revenue and a multitude of serious challenges for the City. And, while we planned for a decline in revenues prior to this fiscal year, we did not anticipate the depth of the loss we have incurred.
I am proud to say that we have met those challenges straight on and will continue to meet them as the economy dictates, one day at a time.
Our City department heads, working closely with Finance Director and Treasurer, Tim McCurley, City Council and me, have brought our budget into line. To do so, we:
- Cut department budgets
- Retired, or reduced to part time, 41 full time employees
- City personnel — both union and nonunion — voluntarily froze and/or reduced their wages
- Identified and sought various grants
- Reduced office hours
While you will not notice a reduction in police and fire department services, over the next few months, you will notice the cuts in the Parks and Recreation Department, the DPW and library.
We have much of the hard work behind us now, with more to come, but we will overcome these economic woes. I see the signs in the news today. The clouds are beginning to thin and the sun is coming through once again.
John J. Zech
City Manager