MANISTIQUE — A proposed special assessment that would affect all property in the city of Manistique was tabled by the Manistique City Council Monday, after a petition was submitted by residents opposing the assessment.

The special assessment, which would levy an estimated 2.5 mills ($2.50 per $1,000 of taxable value) on all properties within the city’s borders. On average, a home in Manistique has a taxable value just under $28,000, bringing the total cost for the average homeowner to about $70 annually. The special assessment would bring in roughly $158,214 in the first year for police and fire protection costs and expenses.

Typically, millages are presented to voters as ballot questions. However, Act 33 of 1951 allows for a special assessment to be used to fund police and fire protection services. Beyond the fact a special assessment bypasses a ballot question, the primary difference is that a special assessment is levied on a district, which is a designated area of the city. In the case of the special assessment proposed in Manistique, the district matches the city’s borders, and all properties would be subject to the special assessment.

The idea of the special assessment was presented because the city is facing a shortfall in the general fund for the current fiscal year, which will end June 30. The shortfall will likely trigger a negative net position finding in the next city audit, essentially alerting the state’s treasury department that the city has more liabilities than funds to pay them and is in financial distress.

By law, communities must pass balanced budgets and maintain a postitive net position. When a general fund goes in the red, cities must develop what is known as a “deficit elimination plan” and file it with the state. That plan outlines the steps the city will take to get back into the black, which could include levying special assessments.

It has taken years and multiple outside factors to get the city into its current financial position.

“It’s due to a lot of factors,” said Manistique City Manager Corey Barr. “Inflation is one of the big ones, but just our taxable value in the city of Manistique is less than it was in 2008. In 2008, we were at $65 million taxable value, and we’re currently sitting at $63 million in taxable value. We’re one of the very few communities in the state that had that much (stagnation) or deficit of taxable value. It just usually doesn’t happen.”

Typically, a community increases its tax capture in two ways: either a property that has been owned for an extended period of time is sold, “uncapping” the maximum amount that can be collected from a property; or a property is developed in some way, which both uncaps the taxes and increases the underlying value of the property itself due to the value of the development.

However, Manistique has a few things going against it. According to Barr, every lot in the town that is buildable already has some sort of building on it, like a home or store. That prevents new homes from being built and adds additional demolition costs for businesses looking to relocated to the city.

“There’s very little new construction, which would help taxable value,” said Barr.

While inflation affects the rate of construction as well, individual homeowners are also feeling the burn of current economic conditions. Some of those residents submitted a petition to the city in opposition to the assessment.

The petition has been sent out for legal review to verify signatures. In response, the council voted Monday to table discussion of the assessment to a future meeting.