Capital Improvements on Hold and Parking Fees May Rise as City Faces Budget Woes

You are on, ELi's old domain, which is now an archive of news (as of early April, 2020). If you are looking for the latest news, go to and update your bookmarks accordingly!


Thursday, April 28, 2016, 11:50 am
Chris Root

Above: The Avondale Square project, the City's debt payments for which will come to over $300,000 in Fiscal Year 2017. Photo courtesy City of East Lansing.


On Tuesday, in its second special session to consider the Fiscal Year 2017 budget, four members of the East Lansing City Council focused their attention on funds for human services (including migrants and homeless people), capital improvement, and parking. (Mayor Pro Tem Beier was absent.) East Lansing’s Fiscal Year (FY) 2017 runs from July 1, 2016, through June 30, 2017, and as ELi previously reported, Council hopes to adopt the budget for FY 2017 on May 24.

Capital Improvement Fund:

Proposed capital improvement projects of about $200,000 to be carried out in FY 2017 include engineering and replacement of the boiler at Fire Station #1 ($49,000), replacement of basement pipe hangers and support for the Hannah Community Center pool ($16,000), and City Hall sidewalk replacement to comply with Americans with Disabilities Act (ADA) requirements ($100,000).

Debt payments on the Avondale Square housing project will cost about $311,000 in FY 2017 – about $192,000 on a City-issued bond plus $120,000 on a federal loan that is being paid for from the City’s Community Development Block Grant ("CDBG") for FY2017 (see below for details on the CDBG).  Avondale Square is a neighborhood development of newly-constructed affordable houses located across Burcham Drive from Marble Elementary School. The project has been controversial because it has run a significant deficit, which the City now estimates at $1.2 million over the life of the project.

At City Manager George Lahanas’ request, most of Director of Parks & Rec Tim McCaffrey’s presentation was spent discussing the more than $1 million of projects that will be deferred during the next year in order to rein in the FY 2017 budget.

Projects to be deferred due to budget problems include, for example, an engineering study for replacing the exterior freight elevator at City Hall (which has not been replaced since the building was constructed in the 1960s), updating the egress lighting and fire alarm system at City Hall, new covered bike parking at City Hall, condition assessments of City Hall and Fire Station #1, replacement of the leaking roof at the historic building located in Valley Court Park, replacement of the largest section of the roof of the Hannah Community Center, and painting, carpeting and installing automatic doors at the 54B Court.

When asked by Councilmember Woods which deferred expenditures were the most important, McCaffrey pointed to the reinvestment in the Hannah Community Center (for replacing sections of the roof, for example) to protect the approximately $10 million that the City has already invested in this building.

Parking Fund:

At Tuesday’s special meeting, Council members also discussed myriad issues concerning the City’s automobile parking system, which has expenditures of $6.5 million planned for FY 2017. The largest upcoming project is major rehabilitation of the underground garage on MAC Avenue at the Marriott Hotel. The City also plans to purchase a new Parking Access Revenue Control (PARC) system that will eventually eliminate cashiers at parking lot exits.

The parking system has been significantly in debt for years, and the East Lansing Parking Fund requires a large annual infusion from the City’s General Fund, as happens in many other municipalities. In addition, since July 2015, the number of transactions at parking facilities has been down by 4% compared to the previous year; by the end of the current fiscal year, income from this source may be as much as $100,000 less than had been expected.

A report prepared for the City by consultant Carl Walker considered ways to increase parking revenue. The main change that is being discussed for implementation in the near future is extending evening hours of operation of parking meters from 6:00 pm to 9:00 or 10:00 pm, which is conservatively estimated to bring in $80,000 more in parking revenue. Members of Council have also been discussing increasing parking fees for special events.

Mayor Meadows sought to put the financial challenge of the parking system in stark perspective by pointing to the annual loss of about $1 million, compared to the plan to increase revenue by $80,000 by extending the hours of metered parking. He asked, “Do we have a plan to get us to [financial] equilibrium in city parking?”

The balance in the Parking Fund would improve if the ticket revenue from cars parked at expired meters (amounting to $270,000 in FY 2015) were moved from the General Fund, where they are now deposited, to the Parking Fund, but this accounting maneuver would not yield any actual new income for the City.

Human Services Fund:

On Tuesday night, the Council also received recommendations from the City’s Community Development Advisory Committee for how to allocate a CDBG of $402,504 from the federal Department of Housing and Urban Development (HUD). East Lansing is an “entitlement community” that receives CDBG money each year. Eligibility is based on “the extent of poverty, population, housing overcrowding, age of housing and population growth lag in relationship to other metropolitan areas,” according to the HUD Exchange.

While East Lansing can expect to receive CDBG funds each year, the size of the CDBG grant – to East Lansing as well as other local governments – has been steadily declining. For example, the $402,504 CDBG to East Lansing for FY 2017 is 35 percent less than the $625,535 it received nine years ago, in FY 2008.

Fifteen percent of the CDBG funds are recommended to be allotted to Human Services programs provided by six non-profit agencies. The City’s Advisory Committee decided to give priority to local programs that provide various types of emergency assistance and not to give to programs that only distribute educational information.

The proposed FY 2017 grants, totaling $60,375, are to:

  • Child and Family Charities, for child abuse prevention, in the amount of $5,000;
  • EVE, Inc., for shelter and services needed due to dating and domestic abuse, in the amount of $6,000;
  • Haven House, a homeless shelter, in the amount of $29,775;
  • Legal Services of South Central Michigan, in the amount of $4,000;
  • MSU HEP/CAMP, services for migrant workers, in the amount of $6,600;
  • MSU Safe Place, for survivors of domestic abuse, in the amount of $9,000.

In addition to these grants from CDBG funds, the City of East Lansing also provides grants to human service agencies from one-half of one percent of the General Fund. The General Fund amount for this purpose is proposed to amount to $47,542 in FY 2017, the same amount as in FY 2016. The Community Development Advisory Committee has recommended grants to 13 of the 19 organizations that applied. The Committee recommended a minimum of $2,000 for these grants, due to the high administrative costs for both City and agencies.

Sixty-five percent of the CDBG funds, totaling about $262,000, is projected to be spent for “public services” related to community development. The largest amount, about $120,000, is for the annual payment due on a $1.2 million loan for Avondale Square from HUD.

Roughly another $82,000 of CDBG funds is proposed for sidewalk repairs that can be spent in lower-income neighborhoods of East Lansing. The remaining $60,000 in CDBG funds is proposed for Capital Area Housing Partnership programs for helping lower-income East Lansing residents with their housing needs.

Council members discussed the high cost of administering the CDB grants to human service, non-profit organizations. Substantial administration is necessary to comply with HUD guidelines. Amy Schusler, East Lansing Community Development specialist, told Council that each grant requires 40-50 hours of staff time, including by the City Attorney to prepare contracts. Twenty percent of the CDBG funds are used for administrative costs, which must be accounted for in detail to HUD.

Councilmember Erik Altmann asked for data about whether the City’s administrative costs were fully covered by the CDBG administrative amount of $80,500 (20% of the CDBG to the City). Staff is preparing a response to the question.

Another cost of administering these ever-declining grants to non-profits is the staff time and citizen volunteer time spent in the public input and recommendation process conducted by the Community Development Advisory Committee. This body met seven times to make this year’s recommendations, and Councilmembers Shanna Draheim, Susan Woods and Mayor Mark Meadows suggested that ways to streamline this process be considered as part of the new five-year Consolidated Plan, required by HUD, on which the City is currently seeking public comment.

Next steps:

The next City Council work session on the FY 2017 budget will be on Tuesday, May 10 at 5:30 in Conference Room A at City Hall. It will focus on the funds for utilities, streets, and solid waste. The meeting is open to the public.


Reminder: If you wish to communicate to Council on matters before the City, you can speak at Council meetings during the “public comment” period or write to © 2013-2020 East Lansing Info