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.