City Council Discusses Financial Health Team and Sets Hearing on Density Downtown

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Saturday, January 9, 2016, 11:12 pm
Chris Root

At a four-hour special meeting of the East Lansing City Council this Saturday morning, January 9, the Council began a discussion with City staff of strategic priorities for the City. We will have a separate report on this discussion when the slide presentations by staff are posted on the City’s Granicus system.

The most significant news from the meeting was that the City is moving ahead to create a Fiscal Health Team, an idea raised by Mayor Mark Meadows at the Council meeting of December 15, 2015. The concept is borrowed from the eighteen-member group of the same name that has been studying Lansing’s finances for the past two years, chaired by former Lansing Mayor David Hollister.

Meadows first suggested creating this team in the context of Council’s discussion about the City’s large debt, but the mayor and other Council members made it clear at today’s meeting that the team should have a much larger mandate.

The mayor said he wants the team to look at revenue, legacy costs (pension and health care commitments to retirees), and infrastructure so the Council can fashion a sustainable approach to the City’s finances. City Manager George Lahanas said that, in recent years, the City had taken just one approach to respond to shrinking revenue, namely increasing efficiency (partly through staff attrition), building up reserves, and then spending small amounts of reserves to address the large issues of legacy costs and infrastructure. Trying to out-efficiency ourselves out of these large financial problems won’t work, Lahanas said. The Mayor said we need to “press reset and look at the whole picture.”

Mayor Pro Tem Ruth Beier agreed that the mandate for the Financial Heath Team needs to be broad, including all aspects of revenue and expenditures. Revenue from various sources, rates for various government services, tax increment financing (TIFs) for proposed development projects, infrastructure, and legacy costs all need to be included in her view.

Meadows said the team will be comprised of seven members, not be limited to East Lansing residents. He said that Lahanas had talked with someone very prominent in the area who had agreed to work with the City and that he (Meadows) has talked with some people with expertise about pensions who also are willing to assist.

The plan is for the team to work with a group of City staff and also with Eric Scorsone, an economist at MSU, and Joe Heffernan from Plante Moran. Scorsone is Director of the new MSU Extension Center for Local Government Finance and Policy; Beier is meeting with him this week. Heffernan has conducted the City’s financial audit for a number of years and has participated in the national process for setting and implementing standards for the Governmental Accounting Standards Board (GASB).

Finance Director Mary Haskell said she believes convening a Financial Health Team is a good idea. She cautioned that her staff will be very busy over the next few months preparing the next budget and the City’s five-year financial projections. Staff can take time to help establish the team, but the team will be addressing long-term issues and its findings cannot be expected to inform next year’s budget.

Councilmember Shanna Draheim asked about the timeline of this Team, but no one gave an answer.

At today’s meeting, Council also set a public hearing for the City Council meeting on February 2 on Ordinance 1348 that would set a minimum height of four stories for any buildings in the B3 zoning area downtown – roughly described as the area along Grand River Avenue and Albert Street from Peoples Church to Collingwood Road (see map here).

A moratorium has been in effect for more than two years in this area on new buildings less than four stories, so City staff decided a change to the Ordinance should be considered now rather than waiting for this decision to be made as part of the Comprehensive Plan, which will be discussed with residents this spring. Staff memos and the language of the ordinance are available in the January 9 Council meeting agenda.

A February 2 public hearing also was set on Ordinance 1347, which would require a Special Use Permit for multiple-family dwellings containing more than four bedrooms.

At the meeting today, Council also approved a resolution accepting the terms of the Bailey Community Center Project Agreement Conversion Amendment for a Michigan Recreation Bond Fund Grant for this project. The resolution also designated the property on the northeast corner of Abbot Road and Albert Avenue as a park, as specified in the Conversion Amendment Agreement regarding the Bailey Community Center. (Read our earlier report about this conversion of “No Name Park” into an official park.)

There will be no Council meeting this Tuesday, January 12. The next Council meeting is scheduled for Tuesday, January 19.


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