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Rising property values leads to village pay raises



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August 13, 2014 - By Meg Peters

Review Staff Writer

Over the last couple of years Lake Orion property values have increased ever so slightly, and village employees are now getting a little slice of the pie.

Village council approved a 2.5 percent wage increase for non-union employees at the council meeting on August 11, the first increase in a number of years. The raises will be effective immediately.

"We saw a 2.7 percent increase this fiscal year on our taxable values that allowed us to provide a modest pay increase after five or six years of pay freezes," Village Manager Darwin McClary said. "Anybody who's been trying to sell their house knows the values of their homes have been going up."

Total taxable values of village buildings and properties have increased by about $2.1 million since 2013 and $3.9 million since 2012. The total taxable value of village properties in 2014— a summation of both real and personal property—is $109,724,880.

McClary, Village Clerk Susan Galeczka, Police Chief Jerry Narsh, Police Lieutenant Harold Rossman, Department of Public Works Director Jeff Sears, Finance Director Alice Bryce, and Treasurer Shelly Lalla will receive the 2.5 percent increase based off their current wages. Wage increases have already been appropriated in the 2014/15 budget.

The new wages for the increased positions are as follows: village manager—$68,675; clerk—$51,250; treasurer— $19.48 per hour; finance director—$19.48 per hour; DPW director—$51,250; police chief—$62,628; police lieutenant—$26.65 per hour.

A total of $5,703 in increases have been set for full-time positions and 48 cents in increases per hour per part-time position (treasurer and finance director).

The village attorney was not included in the pay raise because it is not a village position but contracted through another agency.

McClary and Galeczka based the percentage increases off Michigan Municipal League wage and salary data for comparable communities in population, square mileage and community taxable values.

Council also established the first ever formal salary ranges for each aforementioned positions, which will fluctuate year to year based off of the Detroit Consumer Price Index.

"We have to tie to our local inflation area index to ensure our salary range is accurate," McClary said.

The range will establish a minimum and maximum salary for each position in order to provide monetary reference to interested village applicants during job recruitment, he explained.  

Although the ranges will fluctuate, wages for each position will remain constant.

For example, the village manager's salary was set at a minimum of $65,000 per year, a maximum of $79,000, which could both change, and was increased from $67,000 to $68,675 with the pay raise.

In light of the Village Hall redevelopment project occurring at the old senior center on Church St, some of the council members felt the increases were not enough.

"Obviously we have the money so it's difficult for me to say why not put them at the top of the salary range where they belong," councilman Dave Churchill said at the meeting.

Lake Orion's pay increase follows a trend traceable in many townships, cities and villages in and surrounding Oakland County, which largely is a result of the economy making a comeback and the restrictions of Proposal A.

Established in 1994, Proposal A limits municipalities to taxing properties based on the taxable value of the property, or about half of the assessed value, which can only increase each year by whichever is lesser: the rate of inflation or five percent. In other words, it limits how much the taxable value can increase to be taxed on.

Therefore, as taxable values have slowly increased over the years, government revenues generated from those increases have risen even slower while still maintaining operations and

Orion Township non-union employees received a 3 percent pay raise in February, the Village of Oxford approved a 1 percent pay raise for all union and non-union village employees in April, full-time Oxford Township officials received varying pay raises in February, Brandon Township officials approved a 4.15 percent wage increase in December 2013 among other employee raises, and the City of Farmington hills approved a two percent increase and four new hires in June.

Real Estate Agent Eric Mann from Liberty Way Realty in Lake Orion said growing taxable values is a result of good economies in all of North Oakland County, including Lake Orion, and higher demand for housing.

The supply last year was low and the demand was high. That's what boosted the cost," Mann said. "There would be a lot of competition for that property so homes would sell for more than was priced if it was too low. If it was listed kind of high, it still sold at that price."

Currently village homes valued at a lesser price are selling quicker than more expensive homes, he said.

"The numbers of raw sales are so small in the village we get a wide fluctuation," he said.

In January 2013 the village sold an average of $192,000 in property or about four homes, whereas in January of 2014 about $161,000 was sold in sales, or about three homes.

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