Thursday, June 4, 2020

E.L. Council discusses 'unsustainable' 2019 budget plans at work session

April 12, 2018
Members of the audience listen intently during the City of East Lansing budget meeting on Feb. 20, 2018 at 54B District Court. (C.J. Weiss | The State News)
Members of the audience listen intently during the City of East Lansing budget meeting on Feb. 20, 2018 at 54B District Court. (C.J. Weiss | The State News) —

At City Hall, officials took a deep dive into the preliminary 2019 general fund budget during the first scheduled budget work session on Tuesday. 

It's almost cliché to say at this point — East Lansing's pockets are emptying, and fast. Departments are already operating at or below bare minimum levels, according to finance director Jill Feldpausch. The high levels of cuts are expected to hit crucial departments, like public safety.

There are 14 full and part-time positions the city intends to remove with the 2019 budget, but many of them are already vacant. These positions include five sworn police officers — including a school resource officer — two firefighters and paramedics and a finance assistant.

More than 6,500 contingent employee hours are also planned to be cut, mainly from the police cadet program and City Hall interns.

Feldpausch's presentation put it bluntly: Given the high levels of cuts to necessary services, the 2019 plan for the city's general fund is "not sustainable" in the long term.

Councilmember Ruth Beier interrupted the presentation for a moment to let attendees know this fact was unprecedented in her experience in city government.

"In my 25 years of work, where I look at a budget or an audit at least five times a day, I have never seen that sentence (that the budget was unsustainable)," Beier said. "What we have is so succinctly and perfectly stated. This is not a sustainable plan; this budget is not a plan that will work." 

Beier elaborated and said continued cuts at these levels would eventually leave the city with so few police and fire personnel that public safety would essentially be an impossible task.

At the city council meeting that immediately followed the work session, Mayor Mark Meadows said, like any other organization, personnel costs make up an overwhelming portion of the city's operating costs. The cuts to personnel are simply the most effective way to balance the budget, Meadows said.

The city will also cut support to the Community Relations Coalition, a non-profit that aims to connect the MSU community with permanent East Lansing residents, by $23,000. CRC officials declined to comment on the matter at the time of publication.

Property values have also risen over the previous year's levels — which could be seen as more of a curse than a blessing. The Headlee Amendment to the state constitution forces city governments to reduce property tax rates if property values increase more than the rate of inflation.

That funding can only be restored if put to a vote, an option the city has been pondering since public budget discussion sessions were held earlier this year.

Feldpausch said new growth, as seen in the new Costco on Park Lake Road and MSU Federal Credit Union headquarters' expansion, is a positive sign. New developments do not force property tax adjustments under Headlee, Feldpausch said.

Yet even with the increases, expected revenues for 2019 won't reach 2007 levels. If the city had experienced "modest" revenue growth of 1.5 percent year since that time, East Lansing would expect to see $41.7 million in revenue for the upcoming budget.

"Costs are just increasing much faster than revenue, especially on the healthcare and pensions side," Feldpausch said. 

Nearly 85 percent of the city's investment in capital outlay — public improvements that will last beyond just one fiscal year — will be funded through grants instead of directly by the city.

For example, all but $35,000 of a $385,000 project to replace air packs for the fire departments will be funded by grants.

Meadows urged residents to not place blame regarding the city's budget troubles, whether that be on past city councils, current officials or the residents themselves — who failed to enact an income tax last November that would've brought in approximately $5 million annually.

"We have a problem and we have to fix it, and the blame is irrelevant," Meadows said. "We have to get this taken care of if you want your city to continue to be one of the best places to live." 

The next budget work session is scheduled for April 17, where Human Services, the Capital Improvements Fund and the Parking Fund will be discussed in-depth. Council will adopt the 2019 budget and tax rate at its meeting on May 22.


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