Ypsilanti staff offers glimpse of budget without income tax and Water Street revenues
Ypsilanti now has a snapshot of what its budget picture will look for the next two years if the proposed income tax and Water Street debt retirement millage are rejected by voters on May 8.
Among other immediate changes, the city would likely be forced to cut seven firefighters and four other employees, and would have to pull $620,000 out of its savings to cover its expenses.
Schreiber
Tom Perkins | For AnnArbor.com
“We’re dipping into reserves and cutting public safety at the same time,” Mayor Paul Schreiber said of the proposed budget. “We already cut the police department quite a bit, and we really got nowhere else to go.”
Interim City Manger Frances McMullan gave an overview of the city’s budget in a presentation at council’s May 1 meeting. No council action was taken.
It includes $12.2 million in revenues and $13.7 million in expenditures in fiscal year 2013. Revenues are down 2.6 percent from fiscal year 2012 and expenditures are down 5.85 percent.
Council will have three budget meetings throughout May. and there will be a first reading of the proposed budget on June 5. A second and final reading will be on June 19.
McMullan said the city has applied for a grant that could save six firefighter positions for two years, though officials aren’t yet sure whether they will be awarded those funds. Wage reductions through furlough days also are set to continue.
The proposed budget includes a projected 6 percent drop in taxable value, which brings its cumulative drop in taxable value over the past five years to 33 percent.
The Ypsilanti Police Department.
Steve Pepple | AnnArbor.com
The budget recommendations also call for the city to reduce its general fund expenditures by $650,000, sell any extra assets and seek concessions from its unions during upcoming contract negotiations.
The city also will likely renegotiate post employment benefit packages to help control retiree costs. The police and fire pension millage is set to increase by 1.1 mills to 7.4 mills next fiscal year. That cost is expected to continue to balloon.
The city could also charge a stormwater utility fee, which has been discussed in recent months, without voter approval.
“The two-year budget doesn’t have the things we’re looking at over the long term,” Schreiber said. “The cuts to the fire department is just one step, and the next step after that is more cuts, and what’s next after that step down that road - hopefully we don’t have to find out.”
Comments
Glen S.
Fri, May 4, 2012 : 6:03 p.m.
@ Ypsi Veteran All good points. Another of their so-called solutions: "We have urged restructuring of health benefits, as permitted under Michigan law. It is not even on the radar." Reality Check: The State now mandates that public employees pay 20% of the cost of their health insurance costs, including here in Ypsilanti, so this is *already* happening. Basically, this document is nothing more than a "wish-list" of ideas that SOUND good -- if you don't understand the details -- but, in reality, most of these ideas don't stand up to closer inspection -- let alone research. All in all, I think this list may help everyone to understand better why the "no" side continues to refuse to debate: They know their "solutions" to the budget mess aren't really solutions, at all, and they don't want voters do discover the truth.
eastsidemom
Sat, May 5, 2012 : 7:25 p.m.
Naysayers shoot down any ideas as unworkable basically because they are stuck in their own thought process, cannot see the forest for the trees.
YpsiVeteran
Fri, May 4, 2012 : 10:25 p.m.
Macabre, no, most people around here do not. They pay towards their benefits, but that's about it. Not all employers offer health insurance, but many, many do. Retirees who were previously employed get Medicare, and just about everybody else, including employees of Dollar General and Panera Bread and Best Buy and Macys and Costco and EMU and GM and Chrysler and Ford all get medical benefits that they are not paying 100% of the costs for. That's the real world. Also in the real world, insurance companies are driving up the costs of health care, not employees.
Macabre Sunset
Fri, May 4, 2012 : 8:08 p.m.
And in the real world, people pay their own health-care costs. If I had the opportunity to purchase a Cadillac health plan for 80% off, I'd do it, too. But that's not reality for a small business.
YpsiVeteran
Fri, May 4, 2012 : 4:45 p.m.
(Cont'd from above) Also, if the city does away with pensions for police and fire, it has to opt back in to social security, which will mean paying into Social Security for each employee. "We have urged restructuring of health benefits, as permitted under Michigan law. It is not even on the radar." Again, the above is patently false. The city has already completely eliminated retiree health care for all incoming employees. All police and fire employees, and I believe the rest of the city's staff, are now paying a full 20% of their health care premiums, and further health plan modifications are part of ongoing contract negotiations. A reasonable person has to ask him- or herself what the agenda is behind a group that deliberately continues to forward misinformation.
YpsiVeteran
Fri, May 4, 2012 : 4:43 p.m.
Some of the ideas on the website recommended by Mr. Pierce are good ones. However, there is a great deal of misinformation and outright falsehood mixed in. For example, from the website: "We suggested re-evaluating police services to maximize the return on dollars spent. We supported this position with data, factoring in the public safety contributions by EMU and the Sheriff. As most of the police leadership is retiring at the end of the year, we have a unique opportunity to save $500,000 annually, while increasing the average number of road-patrol officers on each shift. Again,this was a non-starter, threatening a sacred cow." What exactly does "factoring in contributions by EMU and Sheriff" mean? Doing away with YPD entirely and contracting with EMU and/or the Sheriff to provide police service? How exactly does that "save $500,000 annually"? Is it Mr. Pierce's position that EMU and the sheriff will provide those services for free? Currently, the sheriff is charging $150,594 per deputy, or what the sheriff calls a "police services unit." He is proposing increases to that amount of 1% over the next three years. Where exactly is the savings coming in, especially if the contention is "increasing the average number" of officers per shift? This is also not factoring in whatever EMU would charge. "We have pushed for defined-contribution (401k) benefit packages to stop the "pension tsunami" about to hit our shores (itself caused by unwisely generous concessions)." The above is patently false. Even if every police and fire employee currently working switched to a 457 plan today, the city still has pension costs. "Stop the pension tsunami" is outright misrepresentation. Current employees have to work longer to be vested and, I'm not entirely sure about this one, but I believe they may also be paying more than the current 10% into the pensions. (Cont'd)
Joe
Tue, May 8, 2012 : 2:41 a.m.
it's not a prediction anymore than someone assuming they will be collecting their next pay check. It's a contract with the unions. Those numbers arent made up. They are contractual obligations, and unless the unions give huge concessions they WILL be realities.
YpsiVeteran
Tue, May 8, 2012 : 1:10 a.m.
Robb is also predicting the future, a worst-case scenario, and he may be right. My opinion on the advisability of either/both of the ballot proposals is based on my assessment of the situation, and not on anyone else's predictions of the future. I don't support blindly supporting the status quo any more than I support voting no out of spite and unhappiness with the past.
Joe
Mon, May 7, 2012 : 6:44 p.m.
And it's amazing that you don't see the relevance of the past decisions. The status quo is not a solution. Ypsi is not asking for these tax increases to make the city better, or improve the terrible schools, or anything. It's asking for a ridiculous amount of taxes (on top of an already ridiculous amount of taxes) just keep the city running like normal for a few more years. It doesnt solve the cities problems, and actually makes them significantly worse, as it will deter new business and investment. It's a bad plan, if you can call it a plan at all.
Joe
Mon, May 7, 2012 : 6:38 p.m.
from Councilman Brian Robb: "By FYE 2017, a Water Street debt retirement millage will add 5.9971 mils to your taxes. In addition, the Fire & Police pension millage will have risen to 15.2972 (an increase of 8.974 over today's millage rate). That's a 14.9711 increase in the next five years."
YpsiVeteran
Mon, May 7, 2012 : 6:12 p.m.
Sorry, Joe, but you can't predict the future any more than I, or anyone else can. The number of people in the YPD/YFD pension plan is relatively small. The age of those in the plan currently is getting up there. New, and presumably future, employees don't even get a pension, so after currently eligible employees are retired, there won't be any more people being added to the plan. The amount the plan is underfunded right now can easily be wiped out with a few good years in the stock market, just as easily as it became stressed by the recent stock market downturns. I don't know, and neither do you. It's amazing to me how many people continually revert to the past, again and again, when discussing this topic. IF the city did this, and IF the city did that....IF IF IF. IF the city had eliminated its police department years ago, against the wishes of its citizens, there's no telling what the cost per deputy would be today. Those deputies have retirement benefits, and the sheriff is passing off the costs to the communities that hire them. Do you understand? The rest of the county is not going to subsidize the retirement costs of deputies that are dedicated to the Ypsi city limits. Why do you think Ypsi Twp. "gave back" most of its dedicated deputies? "IF" can be debated until we're all blue. It's not reality and it doesn't have a thing to do with solutions to today's problems.
Joe
Mon, May 7, 2012 : 5:17 p.m.
YpsiVet, you say "Currently, the sheriff is charging $150,594 per deputy, or what the sheriff calls a "police services unit." However, if Ypsi would have adopted the deputy plan long ago (it's been proposed many times), you would not be facing the crushing weight of the police and fire pensions that will continue to rise, regardless of your vote on these 2 proposals. The police and fire pensions will be astronomical in the coming years. And again, that is not a "prediciton." Unless the unions give a major concession, it is already scheduled to balloon.
EatKeyLimePie
Fri, May 4, 2012 : 4:08 p.m.
Scare tactics! VOTE NO!!!
Steve Pierce
Fri, May 4, 2012 : 2:33 p.m.
Mr. Sard asked for ideas on what the City should be doing. The problem has not been the shortage of ideas and alternatives to raising taxes, the result being Ypsilanti will have the HIGHEST TAXES in the entire State of Michigan. The problem is the past and current elected officials and their supporters, like Mr. Sard, are unwilling to embrace any new idea not their own. Their solution is the status quo, while repeating the mistakes of the past hoping for a different outcome. Here are some things many of us in the community have been talking about for the past 10 years. Perhaps this can be a starting point for a change in the way we do business in the City of Ypsilanti. "Higher taxes is no substitute for leadership" http://stopcityincometax.com/higher-taxes-is-no-substitute-for-leadership/ On the website is a link to a PDF that you can share with others as well. If you think Higher Taxes is the solution to Ypsilanti fiscal problems, then you already know how you are going to vote. However, if you think we need to begin a new process for municipal finance and setting priorities for how the City of Ypsilanti spends money, then Vote No on Both on Tuesday May 8. Cheers! - Steve
YpsiVeteran
Fri, May 4, 2012 : 1:36 p.m.
Mr. Murdock, why did the city not wait until after a city manager was in place before placing these proposals on the ballot? I'd also like to know why city property owners, who are already paying property taxes, will not be paying the smaller income tax percentage, if the measure passes, rather than the larger one? Wouldn't it make more sense to either exempt property owners from the income tax altogether, or at least charge them less? Why were there no "sunset" clauses added to the ballot language? Of the people who are not in favor of the measures, who are actually giving thought to the situation, the lack of a sunset clause is a deciding factor. What was the council's reasoning on these questions?
greg, too
Sat, May 5, 2012 : 4:48 a.m.
Spot on. Great questions....alas, no answers.
Pete Murdock
Fri, May 4, 2012 : 12:55 p.m.
@Ypsilanti - No conspiracy here. City charter requires the City Manager to present a budget to City Council on or before May 1. Council must adopt a budget in June for the FY 2013 beginning on July 1, 2012. Budget presentations to City Council will be held on Thursday, May 10, Thursday May 17 and Tuesday May 22 starting at 6:00pm at City Hall. Suggestions on the budget are always welcome. From the City Charter 5.02. - Preparation and submission of budget. The City Council shall instruct the City Manager concerning the priorities of the City that the budget for the next year must address. The instructions shall be incorporated in a resolution adopted at the first meeting in February. The City Manager shall submit a proposed budget for the financial operations of the City for the next fiscal year to the City Council on or before the first day of May of each year.
PattyinYpsi
Fri, May 4, 2012 : 12:52 p.m.
My problem with this story is the story itself and how it's written. At the end of paragraphs 1, 2, and 3, there should be the words "according to XXXX" or "XXXXXX said." Instead, the dire predictions about what will happen if the voters say NO on May 8 are stated as fact: Well, now we KNOW what will happen if people vote NO. This is Journalism 101, guys. Don't present speculation as fact--and this IS speculation.
ypsilanti
Fri, May 4, 2012 : 4:42 a.m.
The embodiment of credibility! They release this for the first time on the eve of an election? Really? Must be a coincidence. Couldn't be for political purposes.
greg, too
Sat, May 5, 2012 : 4:46 a.m.
Nah, its not because they saw all the anti tax signs pop up. It is purely for informational purposes only of course....
chris
Fri, May 4, 2012 : 1:06 a.m.
We're not being "undertaxed" now, we were being overtaxed for quite a few years because of the overvaluation of homes during the housing bubble. Now that home prices have returned to normal, governments are going to have to learn to make do with less, just like everybody else.
Steve Pierce
Fri, May 4, 2012 : 12:48 a.m.
T.F. Last I knew it was the firefighters mowed and tended the grass and plants in front of the fire station.
jns131
Fri, May 4, 2012 : 3:24 p.m.
Aren't they next door to each other? Each tending to the other?
Turd Ferguson
Fri, May 4, 2012 : 1:57 a.m.
Mr.Steve, please clean your glasses. I said PD (police department) NOT FD (fire department) yes, the firefighters do most, if not all, their own around there.
Steve Pierce
Fri, May 4, 2012 : 12:46 a.m.
Unfortunately Mr. Sard continues that old saw of EMU, non-profits and churches occupying 33% of all the taxpayer real estate in Ypsilanti. At a recent City of Ypsilanti Town Hall meeting on these new taxes, in which they was to only present "THE FACTS" the city said said it was 40% of the land was off the tax rolls. The City repeated the 40% number in their help wanted ad with MML for a new City Manager. SEMCOG says the number is 22.2% and that includes State, County, Churches, non-profits and EMU. It even includes the Housing Commission properties. http://www.semcog.org/Data/Apps/comprof/landuse.cfm?cpid=4130 By comparison, Ann Arbor is 17%. Then Mr. Sard says Ypsilanti has lost 33% of their taxable value in 5 years. Mr. Sard conveniently forgets to tell you that the 5 years before, taxable value increased by nearly the same amount. In 2002 the Taxable value in the City of Ypsilanti was $310 million. It rose in 5 years in 2008 to $411 million. Then dropped to $309 million in 2011. So while Mr. Sard is arguing for even more taxes now, he was uncharacteristically silent in 2008 when he should have been asking for taxes to be reduced because of the huge spike in property values. But aw heck, why let a few facts get in the way of a good argument. Vote No on Both on Tuesday May 8.
ypsi 1
Fri, May 4, 2012 : 6:01 p.m.
10 years ago there was no Water Street debt to pay. 10 years ago I was paying 30% more in property taxes. With this loss in revenue I am willing to pay more for the same (good) services and in both cases I still won't be paying what I was 5 years ago.
YpsiVeteran
Fri, May 4, 2012 : 1:21 p.m.
ESM, just because you are paying more in overall taxes doesn't necessarily mean you are paying more in property taxes, first of all, and even if you, specifically are, it doesn't mean everyone else is. Overall, "people," collectively, as in the majority of city property owners, are paying less in property taxes. Are you going to pretend they are not?
eastsidemom
Fri, May 4, 2012 : 11:19 a.m.
Wrong YpsiVeteran (what ypsi war did you earn that name in?). Many of us have been paying more property taxes despite losing home value. Every year my taxes have gone up. 300 in 2011. I cannot afford to increase it by 28%. You are simply wrong and misinformed on the facts.
YpsiVeteran
Fri, May 4, 2012 : 2:04 a.m.
Except for the discrepancy in the percentage of tax-exempt property, nothing you've posted disputes or contradicts or proves incorrect anything Glen S. said. So talking in circles for while still doesn't change the facts, which are as Glen S. posted, and still doesn't supply any answers about what workable alternatives you propose. The fact that the city gained taxable value just before it lost it doesn't change the fact that people are paying less in property taxes than they were previously, which is what Glen S. posted.
Glen S.
Fri, May 4, 2012 : 1:09 a.m.
O.K., Mayor Pierce ... please tell us how YOU plan to continue paying for Police and Fire?
margo
Fri, May 4, 2012 : 12:01 a.m.
P.S the city found $ 600 000 on the books since 2003 ...but gave it to ann arbor foundation! Wunder what else is on the books?
ypsi 1
Fri, May 4, 2012 : 5:55 p.m.
Glen S is right. Not city funds to use.
Glen S.
Fri, May 4, 2012 : 12:51 a.m.
Margo ... are you referring to the money that was put into a trust following the closure of the former Beyer Hospital to pay for healthcare education and programs in the Ypsilanti area? If so, my recollection is that the funds may have briefly passed through a City account, but were never really "City" budget dollars to begin with. It belongs to a private foundation, and was passed to a local community foundation to administer.
Bones
Thu, May 3, 2012 : 11:35 p.m.
I am so sick of this. Everytime they need more money to cover the collective screws ups of pure mismanagement. They say we have to cut city and fire personel. It is a scare tactic to make people vote in favor of a bad thing. maybe if those idiots in charge had not spent millions on the firm that they hired to suggest the water street fiasco. And then not bought out the local businesses that were there. Knowing full well that the area was a brown field. We would not be in the mess we are in. They knew this was a blighted area. All they had to do is look at the reason why the city wells were closed down 25 years or so ago. Heavy metal contamination. That is how we got hooked to Detroit water. I say they all should be fired.
Bones
Fri, May 4, 2012 : 10:44 p.m.
Ypsi1 You know. Fort the last 6 years, much like the last 40 years. I have been working and paying taxes to this city. As for not any of the same ones there. I will look into that. I do believe that there are a couple on the council that were there. Either way. Nothing has been done for far too long except pass the buck and try to get the city residents to pay for this disaster. I pay plenty of tax on my house and I might get the street swept once. They hardly salt or plow now, and dont blame it on the light winter either. Police and Fire always are the scare tactic when cuts are to be made. It is strong arm robbery at best. So what do you say? Vote yes or no? I vote NO
ypsi 1
Fri, May 4, 2012 : 5:53 p.m.
You been asleep Bones??? No one is there that did that project!! NO ONE!! Where have you been for the last 6 years. New Mayor and whole new council. If you are going to make a statement, do your research first.
eastsidemom
Fri, May 4, 2012 : 11:14 a.m.
Margo, best idea yet.
margo
Fri, May 4, 2012 : midnight
PUT Solar panel all over the waterstreet park make money and sell it back to DTE, The cityhall has solarpanel also install them on all public building and help pay for the budget,police, fire etcetc
Glen S.
Thu, May 3, 2012 : 10:29 p.m.
More than 1/3 of the property in Ypsilanti is off the tax rolls (EMU, etc.) -- and of the property that's left, the cumulative taxable value has dropped by 33 percent in the just the past five years -- and projected to continue dropping for the next several years ... Why then is it still such a mystery to some people why Ypsilanti is struggling financially, and why City Council is asking voters to broaden the tax base by seeking additional sources of revenue? Ypsilanti has been cutting for over a decade ... and even if the taxes pass, there will still likely be some cuts. While lean, efficient government is a great ideal, at some point, the cuts become "penny wise, pound foolish" -- especially as we prepare to make deep cuts to our Police and Fire Departments. Like the City of Ypsilanti overall, I have seen my taxable value (and my taxes) drop by about 33 percent over the past five years. If the taxes are approved on Tuesday, I would begin to pay a *portion* of what I'm now saving back to help the City continue paying for vital services that protect everyone who lives, works or visits here. To me that seems like a pretty good deal, and that's why I intend to vote "Yes" on both issues on Tuesday, May 8.
Joe
Mon, May 7, 2012 : 5 p.m.
Why should that 1/3 of the city be contributing to city tax rolls. EMU has it's own public safety. I assume the use Ypsi's fire dept, but what other services are the receiving? If EMU is using the fire dept and not paying, then the city should force them to pay a service fee or get their own fire dept. I don't really get why you keep using the "1/3 non taxable land" as a crutch.
nickcarraweigh
Thu, May 3, 2012 : 10:17 p.m.
If the millage fails the police will only work swing half-shifts, Tuesday mornings and Thursday afternoons, to maximize income and best exploit traffic violation hours. Thousands of Ypsilantiers will be forced to endure the rest of the week in terrorized darkness, unwilling to turn on the lights lest they attract roving bands of run-amok thugs intent on mayhem. Once they lay off firefighters the grocery stores will have to close and it will be harder to find somebody to do odd jobs around your house on those off-days. Vote for the millage.
Turd Ferguson
Thu, May 3, 2012 : 10:10 p.m.
Does it include contracts for lawn services to cut the PD grass? Why doesn't the city worker crew cut it? I've seen this on more than one occasion.
jns131
Fri, May 4, 2012 : 3:23 p.m.
Might be some nice person cutting it for them? Otherwise city workers are union and maybe union doesn't want them there?
Macabre Sunset
Thu, May 3, 2012 : 10:03 p.m.
When cities and school boards tackle the issues of skyrocketing pension and benefits costs in a reasonable, fair manner, then and only then can we discuss the tax rate.
YpsiVeteran
Fri, May 4, 2012 : 1:29 p.m.
Chris, profit, by definition, is what's left over after all expenses are met, including payroll. The Big Three were not paying anything out of "profits." They were paying out of revenue, which is what you and I and eveyone else supplies when we buy a car. The public is paying for bonuses and overtime, and everything else. Where do you think any private retail operation gets its money? From what they charge for their products.
chris
Fri, May 4, 2012 : 1:10 a.m.
The Big 3 were paying workers out of their profits. Big difference there.
u812
Thu, May 3, 2012 : 10:54 p.m.
nobody cried about big three bonuses and overtime that high school graduates were making working on the line. Go to College and get an education and become a Teacher.
pete
Thu, May 3, 2012 : 9:58 p.m.
The sky is falling! The sky is falling! Vote NO.