Council Capsule: January 20, 2015

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Wednesday, January 21, 2015, 11:32 am
By: 
Alice Dreger

All members of Council were present.

Bailey daycare and community center to be closed: Mayor Nathan Triplett, Mayor Pro Tem Diane Goddeeris, and Councilmember Susan Woods effectively voted to close the Bailey daycare and community center in June of this year. They were opposed in this vote by Councilmembers Ruth Beier and Kathy Boyle, who sought to give the program and the building a commitment through June 2016 to see if an economically sustainable solution could be reached without shuttering the building. Read our special report on this. See our separate report on what approximately 25 citizens said to Council during public comment. Discussion at the end of the meeting suggested the matter will be discussed again at next week’s work session.

Report reveals insights into City’s finances: An annual external audit gave a glimpse into the City’s financial past, present, and future. See our special report.

Recognition of ELHS boys soccer team: Council passed a resolution “saluting” the East Lansing High School boys soccer team on their 2014 Division II District, Regional, and State Championships with 22 wins in one season. The team was present, and Coach Nick Archer accepted the resolution from Mayor Nathan Triplett to a big round of applause. Archer thanked the community for their support and for the dedicated city soccer complex. He also thanked the parents of the team, and noted that senior team captain DeJuan Jones was recognized as an “All American” this weekend in Philadelphia. He is the first player in this geographic area to achieve this honor.

Bond debt management discussed, including existing “Park District” redevelopment debt: Finance Director Mary Haskell asked Council to approve three resolutions allowing her to act on City bonds.

One resolution dealt with the Downtown Development Bonds that were used to pay for the “Evergreen properties” when the East Lansing Downtown Development Authority (DDA) purchased the properties. The DDA paid about $5.6 million for the properties in an effort to support the City Center II project. The idea had been to quickly resell those properties to the City Center II developer, Strathmore Development, so that they could carry out the large redevelopment project. That didn’t happen, and the DDA has been saddled with the debt of the bonds ever since. Although the DDA owns the properties—which means citizens have no direct say on the sale—ultimately the taxpayers of East Lansing are on the hook for the full debt.

The bonds taken out for these properties had required only interest-only payments. That means that, years later, we still owe the principal of $5,655,000. The big payment of the principle is due April 1, 2015. Haskell said we are not allowed to do another short-term interest-only bond, so this debt renewal has to be for a long-term bond issue. It could be paid off at any time, including when the properties are sold.

Haskell said that “quite frankly” the DDA cannot afford payments of more than about $200,000 per year, and this means the City is limited in what type of bonds it can do if they want the DDA to be paying the interest. Her recommendation was a bond structure that allows interest-only payments for the first several years, under the hope the properties will be sold soon. 

An anticipated problem is that the properties are now only worth abut $2.5 million. Councilmember Ruth Beier asked whether the City is allowed to sell the properties for less than the bond. Haskell said yes, because the bond debt is not tied to the assets that are the properties. Haskell made clear that the DDA will have to turn over the money from the sale to the City when the sale of the property happens—the DDA can’t walk away with the money from the sale—but that the City taxpayers, not the DDA, will be on the hook for the amount we are “under water” on these properties.

Council unanimously approved what Haskell was suggesting on this, passing “a resolution authorizing issuance and sale of Downtown Development Bonds, Series 2015, in the aggregate principal amount of $5,655,000.”

In two other formal bond-related resolutions, Haskell was looking to refinance bonds to get better interest rates to save taxpayers money because rates are “so attractive right now.” Mayor Nathan Triplett complimented Haskell in saving the City money. Councilmember Susan Woods misunderstood these refinances to represent a savings of over $4 million; in fact, the savings will come to about $700,000 over the life of the bonds.

These two resolutions, unanimously approved, were: (1) “a resolution authorizing issuance and sale of bonds, in an aggregate principal amount not to exceed $4,600,000, to refund the series 2005 Building Authority Refunding Bonds”; (2) “a resolution authorizing the issuance and sale of bonds, in an aggregate principal amount not to exceed $3,100,000, to refund the series 2005 Downtown Development Authority Refunding Bonds.”

East Lansing’s non-voting BWL representative named: By unanimous vote of Council, Robert Nelson will become East Lansing’s non-voting representative to the Board of Commissioners of the Lansing Board of Water and Light, the City’s major electric utility company. His official work begins in July.

Invasive species grant submission retroactively approved: At last week’s meeting of Council, Assistant Director of Parks and Rec Wendy Longpre asked City Council to retroactively approve a grant submitted to the Michigan Department of Natural Resources for invasive vegetative species management. She said it had been “impossible” to get approval before submission. Council unanimously approved it.

$700K Water Treatment Plant Contract approved: Council unanimously approved a plan for an engineering services contract extension with Tetra Tech Inc. in the amount of $718,988. This is to engineer required changes to the Water Treatment Plant. Director of Public Works Scott House said this is a very complex and important project, and must be done right.

Approved without discussion: The following items were achieved by unanimous vote through a “consent agenda,” which means they were approved as a block without any discussion:

  • A show cause hearing was set for February 17, 2015 related to 1025 Snyder Avenue to deal with the “dangerous condition” of the property. According to the City, the building has been unoccupied and unmaintained for years and now has extensive mold, animal feces, and trash within it. At least twelve neighbors of the property have written to Council asking that it be demolished.
  • Street closures were approved for the Community Relations Coalition’s (CRC’s) Taste of East Lansing event to be held on Saturday, April 25, 2015 from 3-6 pm downtown.
  • Change order was approved for Golder Associates for Burcham Park Monitoring and Remediation, to deal with this old landfill and environmental problems there.
  • A public hearing was set for February 17, 2015 for an application from the Western Golf Association/Evans Scholars Foundation for Site Plan and Special Use Permit approval for the property at 831 East Grand River Avenue to construct a 764-square foot addition to the building, along with site and landscaping improvements.
  • A public hearing was set for February 17 2015, for an application from James Hagen, LLC, for Site Plan and Special Use Permit approval for the property at 927 East Grand River Avenue to add a third story to the existing building to include two three-bedroom apartment units.
  • Council approved submission of a National Endowment of the Arts grant application on behalf of the Great Lakes Folk Festival.
  • Council approved the Park Playground Project as required by the Michigan Department of Natural Resources and authorized the City Manager to sign and properly record said declaration for final payment of the $300,000 grant funds.

 

Other than that: There were no reports from councilmembers, the City Manager, or the City Attorney. The meeting lasted about four and a half hours.

 

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