MADISON HEIGHTS — In an indication of fine monetary well being, the Metropolis of Madison Heights not too long ago acquired the Distinguished Finances Presentation Award from the Authorities Finance Officers Affiliation.
“This award is the very best type of recognition within the discipline of public budgeting and displays the professionalism and dedication of our finance director and workforce,” Metropolis Supervisor Melissa Marsh mentioned in an e-mail. “It acknowledges that Madison Heights has sturdy monetary insurance policies, a clear and well-organized price range course of and a dedication to long-term planning.”
Particularly, the Metropolis of Madison Heights acquired excessive marks in classes similar to strategic objectives, priorities and points; monetary coverage; debt and capital planning; and extra information and explanations. All different classes have been rated “proficient,” which means the price range meets or exceeds nationally acknowledged greatest practices.
Marsh mentioned town’s price range course of begins every fall with a strategic planning session during which the Metropolis Council critiques a five-year monetary forecast. This course of permits town to plan infrastructure, capital replacements and main purchases, lowering dependence on debt and making certain monetary stability.
“New this yr, now we have launched a ‘price range at a look’ to make essential price range data much more accessible to residents,” Marsh mentioned.
Town supervisor additionally famous that town had accomplished its annual impartial audit carried out by the Rehmann agency.
“The audit confirmed that Madison Heights’ monetary statements are correct and in accordance with acceptable accounting requirements,” Marsh mentioned, including {that a} clear audit displays wholesome reserves, well-managed bills and cautious planning for the long run.
Nonetheless, town supervisor – who himself was as soon as town’s monetary director – sounded a warning.
“General, Madison Heights is financially secure, however like most Michigan communities, we face a number of long-term structural challenges that require cautious planning,” Marsh mentioned. “The principle pressures are pension obligations, inflationary working prices and restricted income development attributable to state-level insurance policies.”
Addressing these factors, she defined that town’s police and fireplace pension system, “whereas bettering,” remains to be solely about 63% funded. This is a rise from 48% just some years in the past, however annual required contributions proceed to rise and can stay an essential issue within the metropolis’s long-term price range. Marsh mentioned having the ability to supply this profit is essential for recruiting cops and firefighters, that are in excessive demand in cities.
Concerning inflation and rising working prices, Marsh famous that prices for well being care, utilities, supplies and contracted companies all proceed to rise quicker than the income coming into town’s coffers. She mentioned medical insurance itself is conservatively anticipated to extend 6% subsequent yr and 5% every year after that. Prices associated to public security and different core companies have additionally elevated – areas that make up the biggest portion of town’s normal price range.
What doesn’t assist the scenario is the lower in income sharing by the state. Marsh mentioned current modifications within the state’s gross sales tax distribution have led to a everlasting discount in income sharing with cities. For Madison Heights, that is a projected lack of $62,000 this fiscal yr and greater than $131,000 subsequent yr and yearly after.
“Income sharing right now has remained nearly unchanged in comparison with 20 years in the past, at the same time as demand for companies and prices have elevated considerably,” Marsh mentioned.
Additional complicating issues for Michigan cities is the interplay between Proposition A and the Headlee Modification – two state-level insurance policies that collectively restrict the quantity of incremental income a metropolis can generate yearly from its tax base to five% or the speed of inflation, whichever is decrease.
“In follow, which means that revenues lag behind actual market development, particularly in years of excessive inflation,” Marsh mentioned. “For instance, whereas property values have elevated considerably, city-approved manufacturing facility capability has been rolled again from 16 factories to 13.5578 in FY 2026, leaving solely 0.1617 factories in capability – solely about $177,000 – to accommodate future will increase.
“Greater than two-thirds of our normal income now comes from property taxes, so these restrictions have a serious influence,” she mentioned. “For FY 2027, this inflation fee, as accredited by the State Tax Fee, is 2.7%.”
How does town take care of this strain?
Marsh mentioned Madison Heights has remained secure due to proactive planning and disciplined monetary administration. The five-year forecast helps establish issues early so officers can regulate accordingly.
“Even underneath these pressures, we ended fiscal yr 2025 in a robust place, with a wholesome fund steadiness – a lot of it intentionally put aside to ‘part’ future capital wants,” Marsh mentioned. “Town has a coverage that requires reserves of at the least 16% of working bills, plus one yr of debt funds, and we stay effectively above that threshold.”
Madison Heights Councilman Quinn Wright mentioned he appreciates the best way metropolis workers approaches the budgeting course of, from implementation to ongoing monitoring.
“It actually units us other than different cities,” Wright mentioned. “I’m more than happy that now we have the precise folks and processes in place to maintain Madison Heights exemplary.”
Madison Heights Mayor Corey Haines mentioned continued administration of the price range will probably be a prime precedence for the council.
“My mindset is targeted on fiscal duty and long-term planning to make sure the continued monetary stability of town,” Haines mentioned. “With the discount in state income sharing, together with doubtlessly greater inflation, we should proceed to give attention to important companies and be certain we plan for the long run. Town supervisor has executed a superb job of transferring our metropolis ahead responsibly.”
