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Nov 02

Q5

Comments (0) 2:45 PM posted by admin |

Q5: If the tax passes, projections suggest that by 2013 expenses will again outstrip income. What can be done between now and then to better prepare Ypsilanti for the fiscal challenges that may be waiting?

City Council’s number one priority needs to be removing barriers for the development of the Water Street Project. Water Street bond payments account for $3.4M worth of debt between now and the end of FYE 2012 ($854K in FYE 2010, $1.237M in FYE 2011, and $1.271M in FYE 2012). City Staff has already suggested that there is nearly $1M worth of demolition that needs to take place as well as another $3.2M worth of environmental remediation. Not included in these figures are the cost of creating new infrastructure (roads, sewer, and water) nor does it include the potential of re-installing the railroad spur that ran down North Lincoln Street to the ACH property. That liability was calculated to be between $1.75M and $2.25M back in December of 2002, but those figures do not include railroad signalization and pavement crossing improvements at three grade crossings; franchise utility costs; acquisition by fee simple or easement of a portion of land at the southwest corner of Park Street and Norfolk Southern’s main track; or acquisition by fee simple or easement of a portion of land at the south end of Park Street near the existing ACH lead track. The terms of that agreement were for 25 years.

This short-term liability is more than $6M and still doesn’t include infrastructure and possible railroad-related expenses.

If City Council cannot adequately progress the project and enter into contracts that shift significant costs to a developer, deep cuts will be required in the budget, with or without an income tax, in order to pay for this undertaking.

City Council needs to continue with regionalization efforts.

City Council needs to make sound, financial decisions. We need to better understand the ramifications of tax breaks before granting them. We need to enter into contracts that do not put us at a financial disadvantage (See Chidester Place, LLC PILOT).

City Council needs to remove barriers and make Ypsilanti a better place for industry to locate. We bemoan the notion of Motor Wheel closing. The reality is that in 1973, Motor Wheel went from 1,000 employees down to 300. By the early 80s, the facility was effectively closed, running only a skeleton crew until its ultimate closing in the 90s. General Motors, which does engine testing at Motor Wheel, paid over $50K in personal property tax this summer (with $20K of that going to City services). It would be an interesting study to see when was the last time Motor Wheel generated $50K in personal property taxes.

The Crown Vantage paper mill was torn down and redeveloped by Edwards Communities through policy created by a previous City Council. Even though Ypsilanti is more than 60% rental property, it was replaced by an apartment complex that did not have to follow guidelines for other rental properties in the City (because it’s a planned unit development). Penn Place has the ability to rent out rooms whereas bordering houses (that rent out rooms) are not zoned for in the rest of the City.

Policy decisions have helped to shape the kind of City we live in today.

The old Ford née Visteon née ACH LLC plant has been threatening to close its door since 2005. We should have been planning for this. In fact, one solvency plan was created that eliminated ACH revenue by 50% in FYE 2006 and the remaining 50% in FYE 2007, but that was not implemented. For FYE 2007, we did remove all 100% of the ACH revenue. We will miss the revenue when it is gone, but we have budgeted for its disappearance.

Twelve years ago, Ypsilanti used to be “The City That Works.” Now our motto is “Pride. Diversity. Heritage.” Personal property taxes are very important to our revenues. We need to attract more industry.

The State needs to fix their structural deficit, and we need to help lead the effort for that change.

Finally, we need to engage the residents in order to better understand what they expect from City Council. A lot has been made of this vote. It has been played up in some circles as people voting on what level of services they want to have. While I often oversimplify things, even this goes beyond me. Residents expect solutions to their problems and we need to be able to better understand their problems rather than paternally dictate their needs to them. Quality of life means different things to different people. We need to understand those differences.

If we can’t accomplish these things, we won’t be prepared for future finanical challenges.

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