Less than two weeks after the City Council created a Financial Health Team (FHT) and appointed its members, the 11-member group held its inaugural meeting yesterday, Monday, February 29. Ten members were present, with only vice-chair Jill Rhode being unable to attend. The team received presentations about the financial challenges faced by the City and made some decisions about how they will conduct their business.
The City Council’s resolution to create the FHT requests that the FHT make recommendations by July 31, 2016 about how to address unfunded liabilities in the City's pension fund and other post-employment benefits. It also sets a December 15 deadline for recommendations on other issues, including funding strategies for replacement and repair of infrastructure in the short- and long-term, development project financial incentives, efficiency and sustainability of City services, and potential sources of revenue.
Sources of additional revenue could include license and permit fees, business and restaurant fees, fines and forfeitures, bonds, real property taxes, personal property taxes, income taxes, and excise fees.
At yesterday’s meeting, City Manager George Lahanas gave an overview of the financial challenges that have faced the City over the last 15 years, and Finance Director Mary Haskell and Assistant Finance Director Jill Feldpausch presented the projection for the City’s income and expenditures for FY 2017-2021. These presentations were very similar to those made at a special meeting of the City Council on February 13.
At both the special Council meeting and FHT meeting, Haskell said that the City “can no longer cut its way out” of its financial problems and that new sources of revenue have to be considered, as well.
At the recommendation of FHT Chair Mike Moquin, each member of the FHT signed up to serve on two of six work groups that will address the following issues:
- City Legacy Costs: pensions and retiree health care
- Real Property: valuation and Headlee amendment
- Development Incentives: necessity and assessment protocol
- Infrastructure Renewal: necessity and funding
- Citizen Services: choices and costs
- Revenue Options: necessity and choices
Team member Ray Vlasin suggested that the FHT adopt protocols about communications right away. The group decided that all requests for comments from the media or the public would be referred to the Chair. Vlasin also spoke about the need to communicate with citizens about these serious financial issues, saying “you need to engage them early and often if you want them to be supportive of the outcome.”
The FHT agreed to add communicating with East Lansing residents to the tasks of the Citizen Services work group rather than creating another subgroup.
An audio recording of Monday’s meeting and the agenda and all presentations and background documents are available at the City’s website.
The FHT will hold its second meeting at 9:00 a.m. on Monday, March 14. At that meeting, it probably will receive presentations about the City’s unfunded pension liability and other retiree benefits. This and all meetings of the FHT will be open to the public, under the Michigan Open Meetings Act.