On August 2, voters living in the City of Ypsilanti will be asked to weigh in on a 2.3 mill tax that, if passed, would raise approximately $10,006,548 over the next 14 years in order to pay down debt related to the City’s purchase of 38 acres of riverfront property, referred to collectively as Water Street. Following are my rough notes on the subject, as typed during a public forum on the subject hosted by The League of Women Voters and the Ann Arbor – Ypsilanti Regional Chamber earlier this evening. If you’re not the reading type, feel free to scroll to the end, where you’ll find video of the entire event courtesy of Jesse Miller.
• Three people are sitting at the front of the room. Steve Pierce is representing the anti-millage side. Ypsilanti Mayor Amanda Edmonds and Jelani McGadney are representing the pro-millage side. [McGadney is a legislative aide to Jeff Irwin, who, prior to that, worked for both John and Debbie Dingel.] Susan Smith, of The League of Women Voters, is standing to their right. She’s moderating. After allowing opening comments, Smith ask two questions of each side, and then opens things up to questions from the audience, many of which, to be honest, don’t seem all that relevant to the matter at hand… but I’ll get to that later.
• Before we get into what was covered during the forum, here, by way of background, is a little of the history… In the late 1990s, Cheryl Farmer, who was Ypsilanti’s mayor at the time, and members of the Ypsilanti City Council, decided that it would be in the City’s best interest to begin buying up downtown riverfront property from the scrap yards, manufacturing companies, foundries and auto repair shops that owned it, in hopes that a developer might be persuaded to come in and partner with us to build something that, in their opinion, would better serve us in the long term. While we were successful in acquiring the parcels, the redevelopment of the brownfield never happened. While we were able to secure grants to tear down the buildings, and do some degree of remediation, developers never came forward, and the property remained vacant. By 2006, when the associated bonds were consolidated, we were $15,740,000 in debt. And, when interest was included, the payments owed for the life of the 25 year loan totaled $29,434,535. Since 2009, the City has paid $8,761,810 on this debt. And, just this past spring, the debt was refinanced again at a much more favorable interest rate. This time, by applying a $3 million grant, and making a lump payment from City savings, we were able to get the total debt down to $14 million. And that’s where we are right now as a community. We’re facing $14 million in debt, and we need to find a way to pay it.
• Edmonds, in her opening statement, stresses the fact that this proposed millage is supported unanimously by the members of City Council. This, she tells us, rarely happens. She also mentions that, if passed, homeowners won’t see a net increase in their taxes. This, she says, is because the proposed 2.3 mill tax will be replacing a 2.3 road repair millage that will be expiring after 14 years. This new millage, she goes on to say, is absolutely necessary, as the debt associated with Water Street threatens to bankrupt the City at a time when we’re just starting to get our footing again. Edmonds says that we’ve cut what could be cut in the City budget, and that we’ve done good work to lessen the burden, but that passing this millage is the only way to put the debt behind us once and for all and move on as a community to focus on things that really matter.
• Edmonds says that we’ve gotten our annual debt payments down from $1.38 million to approximately $924,000, by paying off some of the principle, and refinancing the rest at a much better interest rate, but that we still can’t afford to pay that out of our annual operating budget. If this millage passes, she says, it will raise between $600,000 and $700,000 a year to put toward that debt. The rest, she says, can be paid from our general fund budget, which is about $14 million a year.
• It’s not mentioned during the debate, but this Water Street debt reduction millage, according to MLive, “would mean a homeowner with a property assessed at $50,000 would pay $115 annually, or $9.53 a month, for the next 14 years,” if approved.
• Pierce, who identifies himself as a “lifelong Democrat”, Obama supporter, and mass transit loving LGBT advocate, responds by saying that we have to reject higher taxes, as they threaten our long term viability as a community. Our property taxes, he says, are already the 7th highest in the State, and they continue to rise. Since 2007, he says, they’ve gone up by 22%, and it’s driving away families and businesses. The City, he says, has attempted to raise taxes in the past to pay off the Water Street debt, claiming that not doing so would be catastrophic. In each case, though, he says, we’ve survived. He goes on to say that passing this millage would negatively effect property values, and force property owners to raise rents on their tenants. This, he says, will disproportionately hurt people who are already struggling financially. He says that we should prioritize paying off our debt without a millage, instead of spending money on things like train platforms, riverside trails and pedestrian bridges. He says that we’re spending more now than we did three years ago, which illustrates how little discipline City Council has. And, he says, this will only get worse if we pass the millage. If we do, Pierce says, City leaders won’t have any incentive to rein in costs.
• Edmonds points out to Pierce that, yes, we did spend more this year than in years past, but that was because we made a large payment toward our debt principle, as doing so would save us a considerable amount of money in the long run. She also pointed out that much of what the City has done recently has been made possible by grants, not by a desire on the part of City Council to spend indiscriminately, as Pierce had suggested.
• Pierce says that, several years ago, when the City tried unsuccessfully to pass an income tax to pay off the Water Street debt, those behind it warned that, if the attempt should fail, our police and fire departments would be decimated. The fact that this never came to pass, he says, proves that the City exaggerates in such instances. Edmonds responds by saying that we did, in fact, lay off several public safety employees, and that it would have been much worse if not for federal public safety grants, which we won’t have access to much longer. We’ve been able to shield ourselves from the worst of it for a few years now, she says, but we won’t be able to do it forever.
• Pierce is asked how he would solve the problem. He responds by saying that, if the City were more transparent, and more open to the suggestions of the people, it would be easy. He doesn’t, however, offer any specifics. At some point toward the end, he says something to the affect of, “We can pay off this Water Street debt with what we have right now.” If Pierce was referencing the $5.3 million or so we currently have in the City’s savings account, he apparently wasn’t listening to what Edmonds said earlier in the evening, when she made it clear that, according to State law, we have to keep a certain amount in savings. If we drop below that floor, she said, it would trigger action from the State. On our current trajectory, Edmonds says, we have two years until our debt payments will cause our savings to fall below that level.
• Pierce says that much of this could have been nipped in the bud, if only the City had listened to residents. In 2003, he said, a lot of residents stood up against the Water Street development vision put forward by the City. He says a member of City Council responded by saying, “We can’t stop this project, we’ve spent too much already.” They should have listened, he said. The same, according to Pierce, happened in 2007, and in 2012, when the people stood up against tax increases. They could have brought everyone to the table and made a new plan, he said, but they stayed on the same path.
• When it comes time for questions from the audience, a number of people in red “Stop City Increasing Taxes” t-shirts line up behind the mic. For the most part, they share anecdotal stories intended to reinforce the notion that our City leaders are incompetent and untrustworthy. One points to a quote from a member of City Council during a budgeting meeting, as reported by MLive, about the City Manager not being able to immediately account for $1.2 million in the City budget. Another points to the fact that a City Council member recently filed Freedom of Information Act (FOIA) request with the City, as he couldn’t otherwise obtain information that he was looking for. The underlying implication was clear… Our City leaders think they know better than you. They’re secretive. Everything is handled behind closed doors. No one cares what you think. They just want your money. And they’re both inept and wasteful… All of this, by the way, could very well be true. I just would have rather we spent more time talking about the facts relative to our current debt situation, and the options available to us as a community, and less on selling a narrative about how secretive and inept our elected officials are.
• Jelani McGadney had the final word. Here’s some of what he had to say… “I heard the statements that have been made… (What the Mayor has offered) is a solution. Tonight, this is the only solution that has been discussed. This is the only solution that has been put on the table. And that’s something very important. When you’re having a debate, it’s always best, when you don’t agree with one side, to have a solution to pair it with, so we can have further discussion about what is meaningful and what will move us forward. And tonight the only solution that has been offered is the one that has been offered by our Mayor and by our City Council… Our ability to be nimble, to be thoughtful, to have the mechanisms to move us forward, is going to be on the basis of this millage. I’m not somebody who believe in discussing doom and gloom, because ultimately I believe that we do have a positive future. But I also know what happens when cities do start having to cut, and to cut, and to cut. In my day job, I work in Lansing. I know what happens when cities go into bankruptcy, insolvency, or experience an emergency manager. Those are not solutions that Ypsilanti should, or needs to, experience. Because those solutions, from my understanding, and from the way that I’ve seen things, have not produced a bright future for those communities.”
As I said, these notes are both rough and incomplete. If you were there, please leave your own thoughts. It would be much appreciated.
30 Comments
Thanks for the report. Again I believe this is a solution I can support.
If Mr. Pierce hadn’t asked the moderator to read a statement at the beginning announcing him to be a lifelong Democrat, I’d classify what I saw last night as straight-up Tea Party.
Steve said that Water Street was a mistake from the start, and that the city should have never been in the business of real estate speculation. He neglected to mention, however, that he supported the acquisition of the Water Street properties.
I am deeply unsatisfied with both sides of the debate. We have intelligent and business minded citizens that can offer more solutions than what we have currently and yet they aren’t speaking up.
Ypsilanti is going to face tough times in the near future and high taxes will not help, nor a bumbling Emergency Manager sent from the House of Snyder.
WEMU conducted a few interviews after the event.
http://wemu.org/post/debate-over-water-street-millage-held-emu
I wish someone would have asked the following question of the city. “If this millage passes, and we have more flexibility with regard to what we do with the space, might it be possible to reconsider the inclusion of a subsidized housing development?”
I’m tempted to buy into the whole “They said the sky was falling the last two times they said we needed to raise taxes, but nothing happened” thing. There’s some merit to it. When our backs were against the wall, we found a way to make it work. We got creative with our refinancing, we cobbled together grants, and we cut where we could. And, if we give the City more money, that incentive will be greatly diminished. At the same time, however, I don’t feel as though the “anti” campaign has offered anything in terms of a solution. They’ve said, we can come together and come up with a creative solution, but they haven’t given any indication what that might be. They’ve implied that further cuts could be made, but they haven’t identified them. And we’ve still got to come up with $924,000 a year, which we can’t do. As the Mayor said, within two years, this will force us to dip into our savings to the point that the State will get involved in our affairs. Given that, I don’t know what choice we have if we want to stave off receivership.
Mayor said: “We would not have supported this [tax] as a council if this was a tax increase”.
In my opinion, repeating this phony-and-ringing-untrue- statement, as has been done by the mayor and supporters, will insure that people will vote against the tax. I would rather the mayor and the supporters would just call it like it is, because like Mr. X said, this tax might end up being the best long term option for the City.
I think Steve is right that our higher property tax rates are a disincentive for people with money to move to Ypsilanti. Ironically, it was that very problem which was part of why the city wanted to bring in new development in the first place. It was a risk and unfortunately things didn’t work out.
Since we arent likely to fix the problems at the state level that disadvantage older cities over growing areas, our choices are to keep taxes as low as possible while forgoing services or to increase our tax to help pay off the debt. I am leaning towards raising taxes for this for now but I hope we can think about what can be done once this debt is paid off. I hope that voting for the tax will put the city in a better negotiating position.
My alternate plan is to win that big megamillions and buy that property to build the dog friendly condos of my dreams ;)
Lynne,
And yesterday your plan was to confiscate everyone’s money across the nation and redistribute it equally so that those in Ypsilanti could live beyond their means. About as likely as you hitting the Lotto.
Thinking about what could be done once the debt is paid off? (assuming that the tax passes) By that time the roads will be in horrible shape and you’ll need all the millage, plus more, to fix them. At some point all Ypsilanti residents will realize that there is no hope for ever having either lower taxes or increased services.
Full disclosure: I am a renter who resides in Ypsi Township so, you know, not my money on the line at the moment. I do think the fact that the millage is simply replacing an existing, expiring tax is an important one to keep in mind, but I also understand that residents want a break from all of the taxes.
But I know that no matter what happens, people will be upset; mad that they’re continuing to pay really high taxes, or mad when the city goes into emergency management. I’d like to see some of these creative solutions come out from the opposition rather than “we SHOULD have done x” because that’s pretty much the least helpful insight you can give. Sounds like a pretty underwhelming “debate” for an issue people clearly care about. At this point there is only one real option on the table, and that’s to suck it up and pay the millage and get this mess dealt with.
Mark Maynard:
I’d like to know specifics on other options. One side seems to have a plan. The other side doesn’t. What happens when the bills come due if we vote no? What’s still left to be cut? How are we getting that $900k a year?
Also I’d like to be in a position where we don’t just have to take any development that comes along.
No no, EOS. My plan was to redistribute wealth so the people of Ypsilanti could afford to live within their means but with greater means. It is unlikely to be sure but much more likely than winning the lotto.
So yes, by the time this is paid off, our roads will need more work. Maybe by then we will have voted in a better State government and will have put in a better tax system?
Probably not but who knows? At least voting for this tax buys the city some time
I recently moved out of the City and reside in Sup. Twp, now. This is one of the few I’d probably have voted for. It’s just so hard to trust City government to do what’s right, to be prudent, mindful, and diligent. Glad to see Ypsi is down from 3rd to only the 7th highest taxed municipality in the state. But what might help is a long term plan for how to get more middle of the pack once this debt is paid off. It helps that there is a built in sunset on this tax (which was not a part of the city income tax). But any plan to bring about financial health that doesn’t include drawing residents and businesses into the city is no plan at all. I know, easier said than done. But a reasonable balance between taxes and services is certainly part of that.
I’ve now gone through all of your notes from this meeting and as well I sat through a meeting of the WCC CVB on Wednesday with zero mention of the rec center at water street. We have to find a way for that property to be something other than a fiscal black hole. Beg and plead from anyone that would listen to give grants or some kind of money for actual remediation. I would love an actual plan for, not just how to pay off the debt, but turn that debt into a monetary asset. At least a park that the public can enjoy rather than just an empty plot of land with no trespassing signs.
Lynne,
If it’s money you didn’t earn, then you are not living within your means. Sounds like you would like China or Cuba. See how well that works for them. Same low standard of living for everyone.
Hey, these math problems are getting harder all the time! Is it because the robots are getting smarter?
I’m generally on the “yes” side here, though I attended the debate because I do share the concern that high property taxes can be a disincentive to new residents or businesses, and was curious to see if the “no” campaign had a compelling alternative.
I was disappointed, especially in Steve’s comment (near the end of his opening statement) that the millage would be “unnecessary”, because “tax revenues are going up as property values are going up.” This statement is generally repeated on the flyer SCIT handed out.
It would be great if that’s how the property tax worked. Unfortunately, except for new construction, the city’s overall taxable value cannot rise faster than the rate of inflation (0.3% this year, I believe), which means that at best, the city’s tax revenues keep pace with expenditures. (And that requires assuming that total property values rise faster than inflation every year, and never go down; it also assumes that the city’s expenses — wages, health care, fuel — don’t go up faster than the rate of inflation.)
When I discussed this with Steve afterwards, it sounded like he was misunderstanding what things contribute to increases in the property tax revenue calculation. When a long-time resident or property owner sells to a new owner, and the taxable value “pops up” to the SEV? Nope — that results in no net increase to the city’s total taxable value. (It just gives every other taxpayer in the city a tiny break.) Can we increase taxable value faster than inflation, as long as we stay below our voter-authorized, inflation-adjusted peak from before the recession? Nope — while taxable value can go into freefall in a down market, the cap is applied year-to-year on the way up, not against the original total that voters thought they were approving.
This isn’t meant as an attack on Steve — the real problem is that Michigan’s municipal revenue system is completely broken, and these are unintended consequences that are completely counter-intuitive. But if SCIT or anyone else wants to offer a good alternative (and I still would very much like one!), it can’t count on bad data to minimize the impact of cuts.
(For anyone wanting to break their brain further on this stuff, try the report “Michigan’s Great Disinvestment”, by the former director of the Michigan House Fiscal Agency — skip to page 11, subheader “Caught in a Fiscal Trap” if you just want the key part. If you want still more, SEMCOG’s report “Running on Empty” is an independent look at the same problems from a year or so earlier.)
Life long Ypsilanti resident at times in both the City and Township (currently Township) and someone who frequented all of the businesses at one time Water Street/Michigan Ave.
There was no alternative to the city (council) buying that property. They may have been able to do it more smartly, as they have routinely have proven over at least 50 years their woeful ineptness. That said, the people of this city continue to elect the same people and expect better outcomes. There’s a word for that which escapes me at the moment. It also begs the question as to why these same people continue to run for offices which the occupy only to manage the decline? There should be no A for effort here. Succeed or get out.
As for the millage, you have to do it. In fact it should probably be another mil higher so to pay it off in 5 years rather than 14. Bite the bullet.
I do have a question that no council member I’ve asked has been able or possibly willing to answer. Why couldn’t/can’t the city, with the donation of time, trucks, dozers, etc…of local companies/citizens, remove the contaminated soil say 30 yards a month? Over the last 20+ years that would have gotten the site nearly cleaned. I know there is a disposal cost and maybe 30 yards a month in disposal fees is too much. But waiting for some savior to come in and turn this property into more low income housing, or self storage, or some worse is the last thing the city needs.
Best solution, vote them ALL out. Get some good folks, maybe even a republican, elected, and pass that millage.
EOS: “If it’s money you didn’t earn, then you are not living within your means. Sounds like you would like China or Cuba. See how well that works for them. Same low standard of living for everyone.”
China has done phenomenally well since the revolution. “Same low standard of living for everyone”?! Are you fucking joking?! China has more billionaires than anywhere else on the planet, a large upper class, a large upper-middle class, and a huge middle class. Also a huge working class, and still a hundred million or so in poverty. But then, that’s up from SEVERAL hundreds of millions in poverty a few decades ago. The percentage of people in this world in absolute poverty over the past couple decades has declined, and China is responsible for most of the decline. FACT.
The city government has no plan if this millage doesn’t pass. They want more revenue. If they want the revenue, they can impose it on us themselves. I refuse to be a willing participant in dealing with Water Street, and they don’t need my consent to make me pay anyway.
The “anecdotes” referenced by SCIT members (Or as I call them, “facts quoted from the newspaper”) are relevant to the discussion, because they illustrate a pattern of deception. This is a serious problem when those people want you to give them money. The only transparent part of Water Street is that council wants more money from the taxpayers of Ypsilanti.
I’m not interested in willfully giving a dollar to someone who forces FOIA requests on her colleagues who simply want to understand what the hell Ralph Lange is doing. I’m not interested in willfully giving a dollar to someone who explains away false (or non-existent) remediation reports and unknown buried building materials as “stuff moves around”. I’m not interested in willfully giving a dollar to a council who’s only response to Water Street has been to add payroll with zero benefits.
Mayor Edmonds will get her pound of flesh, but I refuse to willingly give it to her.
I was at the event and I heard the exchange about the “missing” $1.2 million in the budget. A man with a SCIT tshirt came to the mic and said something like “According to MLive, someone at a recent City Council meeting said to the City Manager, ‘You can’t account for $1.2 million.'” Mayor Edmonds responded that a lot of things are said during Council meetings that make great headlines, but that $1.2 million was not missing from the budget. She went on to say that audit had shown no problems. If you have more information on this “missing” $1.2 million, please bring it to our attention. Otherwise, please shut up about how this stupid MLive quote “illustrates a pattern of deception.”
“I’m not interested in willfully giving a dollar to someone who forces FOIA requests on her colleagues.”
You are aware, I assume, that the colleague in question — Pete Murdock — is in agreement with the Mayor on this issue.
The awards and recognition that were alluded to during the meeting are:
Distinguished Budget Presentation Award
Certificate of Achievement in Public Accounting Award
Neither of these awards seem applicable to the budget question regarding an unexplained $1.2 million general fund shortfall reported on MLive:
http://www.mlive.com/news/ann-arbor/index.ssf/2015/06/source_of_12m_city_of_ypsilant.html
Interestingly, Ralph Lange was in the audience, but was not called upon to clarify the issue beyond Mayor Edmonds reference to the awards won by the Ypsilanti finance department.
An exciting post which generated important debate.
Hey Alan,
If you prefer China’s economy, you are welcome to join Lynne. I never said that they haven’t made vast improvements just that it still sucks for most. There are a few millionaires at the top of every socialist system, and crumbs for the masses.
Interesting international commentary and analysis from Ypsilanti Township.
“Mayor Edmonds responded that a lot of things are said during Council meetings that make great headlines, but that $1.2 million was not missing from the budget. She went on to say that audit had shown no problems. If you have more information on this “missing” $1.2 million, please bring it to our attention. Otherwise, please shut up about how this stupid MLive quote “illustrates a pattern of deception.”
The article is listed above. There are some great headlines. Personally, I would have gone with Ralph Lange’s “I don’t want to retire a failure.” I’m surprised that Mayor Edmonds doesn’t remember that meeting where Uncle Ralphie bared his soul. If someone said that shocking statement to me in a professional capacity, I’d remember it for the rest of my life.
Even if this 1.2 million was “figured out” some point down the road, you had a public official admitting his ineptitude on the public record. While I am a reasonable person, when you ask me for money under these circumstances, it causes me great discomfort.
Also it bothers me that council has repeatedly looked for ways to free up money in the general fund in spite of our impending financial pain. Take a look at the first LED light proposal, which was just as much about “freeing up money” as it was about changing over lights.
Was there doom and gloom if we didn’t get the lights changed?
Oh yeah!
Did city council somehow manage to fix the lights without freeing up some money in the general fund due to public pressure?
Oh yeah!
What does this have to do with the Water Street debt?
If the millage is passed, the crack Ypsilanti “marketing team” will do the same nothing they’ve been doing for the last ten years…and they’ll be happy if we all go back to our own personal Parks and Recreation episodes, and the sense of urgency will be gone.
In my opinion, there should be no millage, and there should be zero financial flexibility in paying off this debt. That’s exactly what Ypsilanti taxpayers have been saying for years. I’m confident we’ll continue to get a few more believers this time around.
Oh EOS, it isn’t China I think we should emulate but rather Sweden or other northern European socialist democracies. I don’t even want to fundamentally change the system here in the USA as it too is already has plenty of socialized programs. We already are a socialist democracy. I merely wish to socialize more aspects of society than are currently. There isn’t a form of government which has proven in the real world to be more successful than those which blend socialism and capitalism, fwiw.
Might want to watch this Lynne.
https://www.youtube.com/watch?v=zhE_68GMJIk
And check this out as well.
“When Bernie Sanders and his ilk hold up Scandinavia as an exemplar, they are really thinking of a couple of decades beginning in the early 1970s when Sweden and others got their full Sanders on. In Sweden, the effective marginal tax rate topped 100 percent in some circumstances. There is a reason that IKEA founder Ingvar Kamprad fled the country in 1973. Sweden instituted a scheme to confiscate corporate profits and hand them over to labor unions. The idea was, in the words of a Swedish economist, to have “a market economy without individual capitalists and entrepreneurs.”
This was about as logical as it sounded — and delivered predictable results. The socialist golden years weren’t so golden for economic performance. Entrepreneurship plummeted. Job creation and wages sputtered. The Scandinavian story the past few decades has been a turn against socialism. Taxes have fallen, and markets have been liberalized. Kamprad returned to Sweden.”
http://www.nationalreview.com/article/425800/bernie-sanders-socialist-success-sweden
That is far too complicated for many American liberals. It would require that they be up on current events. And maybe read.
All you have to do is ask yourself one question. “What side is Steve Pierce on?” Then just do the opposite.
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