CITCOM Budget Meetings

2008-2009 Budget Deliberations

27 May 08 Budget Meeting
Second Assistant City Attorney to be hired
Subject to formal approval of the 2008-09 budget, the City Commission has authorized the hiring of a second Assistant City Attorney. The hiring was approved, 5-2, with Commissioners Semchena and Andrzejak voting no during CITCOM's 27 May 2008 budget meeting. The position had already been included in the 2008-2009 budget presentation, but City Attorney Dave Gillam's first formal request to fill the slot was rejected at a regular CITCOM meeting earlier this year.

The predictable polar positions were not long in coming forth: At one end, "They caved. A hiring freeze should be a hiring freeze. No exceptions." At the opposite end, "It's about time. The way those guys are going, the city is going to be sued a lot. By businesses and by residents. We're going to need the new attorney." [Note: In this context "those guys" refers to CITCOM and to three administrative departments: Planning. Zoning, and Engineering.]

Between the extremes is another set of polar opposites concerning the role of Chuck Semchena: At one end, his performance while City Attorney is praised by those who think of him as ridding Royal Oak of those Japanese massage parlors, and of shutting down Woodward Avenue's shady motel row, and of winning or reclaiming money for the city from other agencies. At the other end, "Under him, the attorney's office had four lawyers and two clerks. He was always at-odds with the Court. The office's in-house reputation was lousy. The Teamsters organized the office. He was almost fired."

Commissioner Andrzejak's no-vote is caught up in the ongoing street talk about the changing tone of CITCOM meetings. He is praised for "sticking to his principles" whether addressing Gillam's request, the budget in general, liquor licenses, Internet filters, or massage practitioners. Others criticize his "principles" as too often being "just his gut-feelings, wherever he's coming from, not reasoned judgment."

As Commissioner Lelito said in his recent VersagiVoice conversation, "It is impossible to make everyone happy. 'Once you accept that fact, it becomes easier to address each issue on its merits.'”

29 May 08 Budget Meeting
Court battle livens up dull meeting
At one end of the 29 May 2008 budget meeting Mayor Ellison praised commissioners and staff for exhibiting flexibility in handling an unusual request. Near the end of the meeting, he firmly shut down a shouting match between a commissioner and a 44th District Court judge. In between, CITCOM was able to accomplish enough to dispose of the need for yet another budget meeting.

At the very beginning, CITCOM unanimously agreed to the Semchena/Miller recommendation to address a selected few agenda items before opening the meeting to Public Comment. The "flexibility of which Ellison spoke referred to the overall handling of the request by a TV/Hollywood-type firm to proceed with several days of filming in Royal Oak, although the firm had not followed city procedures, including filing a 30-day notice or some such. The city manager, city attorney, and police chief found ways to accommodate this request (which might well attract more business from this portion of the entertainment industry), if CITCOM approved. Andrzejak seemed to be leading the opposition to granting the exception, suggesting negative impact on retailers and "disturbing our life" among his objections. And, there was some of the grumbling about Staff not moving fast enough and not providing enough information which has become characteristic of this particular CITCOM. In the end, though, only Miller voted no.

Next came decisions about placing requests from three non-profit civic organizations back in the budget. Two requests were approved unanimously: Royal Oak Youth Assistance and Woodward Avenue Action Association. The vote was 4-3 vote to approve the request of the Royal Oak Community Coalition, with Drinkwine, Ginotti, and Andrzejak voting no. [MARY ELLEN SAYS THIS MAY BE WRONG: SHE'S CHECKING]

Discussion about Capital Projects, and Engineering, and Water and Sewer proceeded dully, bringing forth the usual glazed eyes from trying to follow CPA/Bookkeeping explanations.

The exciting part of the meeting was the discussion about the 44th District Court's budget.
For context, operating here are 1) CITCOM's apparently genetic irritation with any serious and formal disagreement with CITCOM's preferences (Think DDA and Library, as well as the court); 2) The years of tension-cum-animosity between the court and the city attorney's office while Semchena was City Attorney; 3) What more than a few city hall observers see as a general dislike of the court by more than one commissioner, which preceded Semchena's election to CITCOM.

Anyway, Court Administrator Kevin Sutherland, reading from a text, made an introductory statement in which he stressed that the court has contributed millions of dollars to the city's General Fund, one million last year. Sutherland repeatedly stressed that the court is not a city department but is a separate and independent branch of government, along with the legislative and the executive. The 44th's performance as statistically superior among 2-judge district courts in Michigan, the administrator contended, justifies the court's request for a "status quo" budget, neither more nor less than last fiscal year.

Semchena acknowledged that the court is the judicial branch of government, but he is disturbed by the fact that every other department is being forced to make cuts, while the court just keeps going at its current level. He would like to see at least some hint that the court has looked at the possibility of operating with fewer than the 20 fulltime employees it has maintained for years. Sutherland countered with explanation about minimal staffing needed to operate both a Criminal and a Civil division. Semchena quietly but doggedly insisted that the court should provide alternate scenarios, preferably now but certainly next year.

Andrzejak challenged the court's total independence, and Miller took a more aggressive stance, saying, "We set the budget. We don't think of the court as a separate branch of government." Then he questioned "what took so long?" after he had requested a statement of policy from the court in May 2007 and the change didn't happen until February 2008. Sutherland visibly took a deep breath and hesitated for about 30 second before challenging (paraphrased): "Are you telling me you think you have the authority to instruct the court to create a policy?" Miller and Sutherland had a few more exchanges when Judge Daniel Sawicki came forward, sat down, and reinforced the administrator's arguments. Miller, focusing from his point of view on generating revenue, became increasing irritated. Both he and Sawicki did the "Let me finish" bit, and both voices were raised.

When Ellison stepped in to cut off the discussion, Miller complained that he had a question. Ellison maintained, "The question has been answered." and took a few moments to make comments about the overall court operation. When he paused at one point, Miller started to speak, and Ellison said, "I'm not done Mr. Miller." Ellison finished, then called on Miller, who apologized for losing his temper. Semchena ended court discussion by maintaining that the court's status quo budget "creates inequality."

CITCOM took no action to force the court to modify its budget request, so it was included with acceptance and decisions about other agenda items to include in the final budge which Finance Director Don Johnson will submit to the commission.

Hey, it sure beats listening to how time-lags and overlaps justify this or that allocation or budget decision.

[A Comment] Led by Commissioner Drinkwine -- and with long-term decisions in mind -- CITCOM seems to be asking the impossible from Staff. They want want Johnson to quantify the intangible, to create spreadsheets which would show how service will be affected by cuts in each department. Miller suggested it can be done by some sort of mathematical procedure. Johnson and Hoover said they will try to come up with something, but Johnson made it clear there is no way such work can be accomplished before the 2008-2009 budget is submitted.

Semchena wonders whether the math can prove that laving off employees now would be more beneficial than depending on attrition in the future. -- FJV: 30 May 08

2007-2008 Budget Deliberations

09 May 07
At its first budget work session, the city commission made several general observations and asked a few overview questions before engaging with Police Chief Ted Quisenberry. On his part, Quisenberry acknowledged the city's financial plight but maintained pretty much his previous description of the needs of his department. During their general observations, commissioners expressed a desire to review several departments: Information Technology, Human Resources, Assessor's Office, and Recreation.

City Hall Observers fall into four groups as they comment about budget deliberations:

Those who automatically favor the Administration in any disagreement between it and CITCOM.
Those who automatically favor CITCOM in any disagreement with the Administration.
Those who recognize that in any city there will always be tension between the Executive and Legislative branches, so they change sides issue-by-issue.
Those whose lack of faith in government is so deep that they say "a pox on both your houses."

Each group will find "proof" to confirm its mindset in the next several weeks.

Not so clear-cut are residents' perceptions of and attitudes toward individual commissioners or the mayor -- except for a vague but pervasive disappointment with their performance at The Table. Sharp criticism or strong praise for this or that elected official tends to reflect a citizen's personal experience when dealing with that official. Such individual experiences do not congeal into a discernible city-wide evaluation either of commission members or of employed members of the Administration.

17 May 07
Because I was attending the meeting of the Charter Review Committee, I caught only the tail-end of this budget meeting, when Human Resource Director Mary Jo Depaolo was describing the benefits of a proposed $20,000 contracted service to develop uniform job descriptions and classification levels which would replace the present mix of uncoordinated department-by-department approach. The commission had been at it for almost three hours by then and were wearily asking questions and raising issues which did not so much address monetary matters as focus on management philosophy.

It is unprofessional and unfair to demand that the Administration (read: the City Manager and Finance Director) recommend specific departmental or personnel cuts, then expect them to remain on the job whether CITCOM follows, ignores, or modifies those recommendations. Corollary: Will each commissioner and the mayor publicly attach his/her name to any recommendation he/she makes to cut this or that position or department?

The City Commission has a thankless task. Nothing they do will be perfect or satisfy all residents and taxpayers, but the hope remains that CITCOM will do something more than attack the budget in bits and pieces. Sell Normandy Oaks . . . Ask for a tax increase . . . Identify departments to be reduced or eliminated.

22 May 07
Actual decisions, as opposed to lengthy discussion, are so slow in coming that the commission is thinking it may need another budget study session after tomorrow night's. In the meantime, an observer would be hard pressed not to have noticed:

The psychological tug-of-war between the commission and the administration, with both parties reluctant to attach their name to specific decisions about reducing or terminating positions or departments.
An exasperated Commissioner Miller reminding his colleagues that they are avoiding making hard decisions to increase revenue or reduce services, except to discuss them in very general terms.
The looks of consternation and irritation, at times, on the faces of the city's normally patient and calm city manager and finance director.
During Tuesday's long reviews of the many subgroups within DPS, there seemed to be as much importance attached to essential as to non-essential services. (The discussion ranged from sewer breaks to yoga classes, from energy efficient traffic lights to the care and keeping of sports facilities.)
The toughest grilling of the evening had to do with Recreation and its confusingly interwoven relationships with Ice Arena, Ball Parks, Soccer, etc.

A couple of interesting possible operational concepts emerged during the long budget session:

□ Instead of reducing the solid waste/recycling millage, use that money to initiate a city-wide cleanup of neighborhoods. Special collections of building material, old picnic tables, chunks of concrete and the like. The work would likely be done over several Saturdays, when vehicles and manpower would not be needed for regular pickup.

□ However much water rates go up, or not, consider billing monthly rather than quarterly; consider using a bank-located lock box to speed payment from the consumer to the city; consider using a split-rate -- a progressive 2-tier rate structure -- which will collect more from other than residential consumers. Apartments, commercial establishments, light industrial facilities will pay a higher rate..

As so often happens during financial discussions, it took a very long time for the commissioners to understand how and why the "sunset" additional charge (through which the Sewer and Water Fund is to repay the General Fund) remains in the proposed water rates. Non-understanding continued even after City Controller Britt Winter left the chamber for 20 minutes and returned with the revised tabulation/calculation the commissioners had requested.

And they're willing to go through all this for twenty bucks a meeting.

24 May 07
Somehow CITCOM seems to have decided to coast through this year's budget deliberations without making any major decisions.

That would seem to explain their wasting time on a lengthy, out-of-control, unproductive examination of the relationship between the Court and the City. Have our elected officials forgotten that there are three branches of government? That -- whatever one's impression of Court Administrator Kevin Sutherland's response-style -- he is right to point out that it is not the function of a court to fund a city? That here and there courts have successfully sued cities which hedged on providing sufficient funds to operate the court?

Then there was the city manager denying autonomy to the Library, despite the fact that it is now funded by an earmarked millage. Hoover's use of collective bargaining complications as his reason was less that persuasive. Some questions suggested that there remains confusion about whether CITCOM has line-item authority over the Library's operation. VersagiVoice has previously suggested that the Library be spun off and made independent. Library Board

CITCOM is better than that. But even the best of individuals and groups have an occasional off-night.

Budget deliberations . . . continued
Last week, VersagiVoice wondered whether the absence of any public comment during the Public Hearing on the budget means residents are indifferent to or resigned about solving the city's financial problems. The ill-natured squabbling during the June 4 meeting hasn't helped, because my interlocutors now want to talk about the behavior of this or that elected or appointed public official, not about the budget itself.

So some praise Commissioner Miller for providing voters with budget details by publishing his position paper in the Daily Tribune, while others complain that doing so further personalized the controversy. Similarly, City Manager Hoover and Mayor Ellison have been praised and criticized for their uncharacteristically vigorous participation in the June 4 squabbling. Typical of the more reasoned responses to all this is the following comment by former city commissioner Laura Harrison.

I agree with Commissioner Miller. Another year of doing nothing regarding the budget. I become very frustrated. Why does government think that waiting will change things? I don't think this state and all its problems have hit rock bottom yet. Last year I heard no improvements until 2013 and now I am hearing 10 to 12 more years. I am constantly getting the feeling that denial is the mood of the day.

More Budget coverage

Much of what was said in 2004-05 about the city budget pertains today.

2005-2006 Budget Deliberations

Consider consolidation and other hard budget-cutting options
From occasional conversations with some of the individuals involved in or familiar with Royal Oak's budget talks, VersagiVoice comes away uneasy and concerned. What we seem to be hearing is the usual, "Let's just cut a bit here and there until the economy improves again." No, no. What's needed are some substantial and permanent cuts. Voice has repeatedly maintained that everything except Police, Fire, and DPS should be on the table. Even that may not be enough, to judge from reports from other municipalities:

After at least temporarily shutting down its Parks & Rec department three years ago, Mt. Clemens is considering eliminating its Police Department, by contracting with the Macomb County Sheriff's Department, and switching to an all-volunteer Fire Department.

Dearborn, which has long provided very generous quality of life services -- like recreation centers, ice rinks, swimming pools, golf courses -- is being forced to look at choosing between public safety responsibilities and nonessential city services.

Redford Township sees privatization of nonessential services as a way to provide both public safety and quality of life.

Harrison Township has eliminated its recreation department, after residents shot down an earmarked millage request. Now some residents are trying fund-raising to save favored recreation programs -- just as Royal Oakers are trying to save the Animal Shelter.

In Novi, residents -- including a couple of people who serve of the city's rec board -- set up a nonprofit parks foundation to raise money to help with capital improvements for the city parks. It's that or increase taxes, and some residents don't want to do either, complaining, "The parks don't really offer much beyond some swings and slides and most are geared toward little kids."

Livonia is apparently considering raising taxes so that the city can continue to provide its quality of life services. Citing miscellaneous financial and quality of life costs (like residents complaining about the noise from a skateboard park, and the YWCA being harmed by city competition, and "Livonia's debt for fun and games is higher than debt earmarked for a core city service like sewers"), the Detroit News took the unusual step of editorializing: "Voters should resist a tax hike and . . . demand a review of the city's excursion into the recreation and 'quality of life' business."

Then there is that unpalatable old chestnut: consolidation of services for multiple cities. Clawson and Royal Oak come quickly to mind as a starting point.

Plenty of food for thought here. 17 March 2005

Restructure City Government:
Comments about 15 November 2004 Commission Meeting
Voter approval of Proposal A, which amends the city charter to mandate Fire Department staffing levels, puts the City Commission and Administration between a rock and a hard place. Those of us with requests and questions for elected or appointed officials should show a little understanding when our requests or questions aren't addressed as quickly as we'd like.

In that frame of mind, several quiet observations after watching the 15 November commission meeting.

* Repeatedly we heard, "We need to ask people to do more with less."

Why not do less? Why not think in terms of restructuring city government?

Permanently.

Stop thinking that cutbacks are temporary and should be restored when money is again available.

Forget "quality of life" and concentrate on the role of government -- public health and safety.

Privatize or outsource part of Human Resources, for example.
Question -- considering the ever-increasing cost of fringe benefits -- whether it might not be cost-effective to reduce the size and scope-of-work of the City Attorney's office.
Ask why a governmental agency should have anything to do with "recreation."
Could Code Enforcement be converted into a profit center by privatizing it?
Close, then sell, the M&M Senior Center.

As outrageous as it may seem even to broach such notions, that is the kind of hard thinking needed if the city government wants to avoid these financial crises which seem to occur every eight years in many cities. (FJV: 18 Nov 2004)

Ongoing: Commenting on the City of Detroit's financial woes, newspapers are saying things like, "Having ignored for decades that it must restructure city operations . . . the day of reckoning has arrived." Notice that word, "restructure." The real world is catching up with head-in-the-sand dreams of "getting back to normal," instead of redefining "normal." (FJV: 22 Nov 2004)

Think in extremes when deliberating the City Budget.
One extreme, of course, is to raise taxes and to continue or expand all existing programs and departments. The other extreme is to reduce, eliminate, privatize the City Attorney's office, Human Resources, City Clerk's Office, Recreation, Building Inspection -- everything except Police, Fire, and DPS.

Adopting that second extreme mindset as its starting point, the Reform Government of New Zealand did such things as:

Reduce the number of employees in the Department of Transportation from 5,600 to 53.
Reduce Forest Service from 17,000 to 17.
Eliminate the Ministry of Works, from 28,000 to 1.
Establish a 10% consumer tax and eliminate all other taxes: capital gains, property, etc.
Replace driver's license renewals with a license good until age 74, dependent on annual medical checkups to assure competence to drive.
Sell off telecommunications, airlines, irrigation schemes, government printing offices, insurance companies, banks, etc., "the things that simply don't belong in the government."

"But you killed all those jobs," proved not to be true. According to Former New Zealand Cabinet Minister Maurice P. McTique, "The government stopped employing people in those jobs, but the need for the jobs didn't disappear."

McTigue spoke during a seminar at Michigan's Hillsdale College, and his talk was summarized in the April 2004 issue of the college's publication, Imprimis. Although the details of New Zealand's fiscal venture apply to a country, not to a city, that country's experience shows what can be accomplished by adopting an extreme mindset when approaching budget problems.

As Mayor Ellison said about the debate concerning the Fire Department, "what if" scenarios are not recommendations. In that vein, VersagiVoice mailed a copy of McTigue's presentation to the Mayor and to each Commissioner and encouraged them to make copies available to appointees on the several Budget/Service Delivery committees.

FJV 04 Aug 2004

Commissioner Marie Donigan is wise and correct to warn against any substantial re-structuring of City operations/departments -- as part of budget-work -- before a new City Manager is hired and has been in place for at least a few months. Those who remember the wholesale purge of the administration when Cowan became mayor hope not to see Staff morale drop as it did then. Speaking of budget, what a problem the commission has: to use available cash, or not, as it takes the time to consider whether restructuring is really necessary or whether there will be plenty of money around when the economy turns up, as it always does.

The City Commission deserves an A-plus for its focused questions during the May 17 budget study session. Commissioner Capello's occasionally irritating CPA-approach to problem-solving was especially helpful, as was Commissioner Drinkwine's continuing curmudgeonly attitude toward the DDA. And Commissioner Ginotti hit repeatedly on examining the impact if all of the several funds were "zeroed-out" for one year.

Two diametrically opposed perspectives became obvious -- expressed by both the commission and the residents who spoke during Public Comment. At one extreme are those who insist on holding on to all cash reserves because you never know when catastrophe will strike.

At the other extreme is the mindset which maintains that so-called "rainy-day funds" should be spent "when it's definitely sprinkling." This thinking points out that catastrophic budget events seldom occur "anyway, Rome, London, Chicago, and San Francisco all recovered from catastrophic fires!"). This group contends that the cash reserves obviously sitting in the several city funds should be tapped now; cutbacks and layoffs can be avoided while the commissioners study and put in place long-term fiscal policies.

One suspects that the commission will find a way to allocate part of the reserves to the 2004-2005 budget.

FJV
18 May 2004

About the City Budget
Here is an issue about which the extreme philosophies are easy to identify, but the middle ground is hard to define or agree upon. When we learn that the Commission's Budget Study Session will be hearing about cuts and about "revenue enhancement," for example, the differing philosophies emerge.

Libertarians know that "revenue enhancement" means increased taxes and new user fees, and they remind us all that the role of local government is to provide police, firefighters, and public works. Everything else is optional, so sell all idle property; shut down Parks and Recreation (Harrison Township did); get out of sports; consolidate; privatize.*

Liberals on the other hand, think in terms of government contributing to quality of life and of government helping solve personal or family or social problems and of providing or subsidizing social goods like Latch Key. People with that mindset are less resistant to tax increases.

In between (there seems to be no real "middle") are the left-leaning or right-leaning pragmatists who look for appropriate short-term and long-term judgment calls based on the current situation and on best guesses about future developments.

It will be interesting to watch Royal Oak City Commissioners deciding between reducing payroll for first-responders and DPW and maintaining quality of life items like animal shelters and sports complexes.

* Personnel costs dominate a city's budget, especially the cost of public sector fringes, like pensions.

FJV
06 May 2004

Can a City cut back like a business when times are hard?
Governors around the country spent money and unwisely (exuberantly?) expanded their fiefdoms during the roaring nineties. Now, many of them are suffering and having to decide between raising taxes or cutting back or some combination of the two. The national government is in somewhat the same fix, although nine-eleven and current concerns about Iraq provide a kind of excuse. And cities, including Royal Oak, are suffering.

In conversations with Royal Oak residents and government officials, business owners and not-for-profit executives, several attitudes repeatedly jump out. Here, in short form, are a few of them.

"Well, we have a rainy day fund, and certainly it's sprinkling, so spend some of the money."

"Think of what a government is supposed to do -- provide for public health and safety -- and what do we really need, as opposed to what we want when we can afford it? Police Department, Fire Department, Public Service Department . . . It's hard to think of other city activities which are essential, rather than just desirable."

"Like what?"

"Like Parks and Rec or Human Resources."

"Cutting X-percent across-the-board is a copout. That avoids having to make decisions and is unfair."

"Does Royal Oak really need a handful of attorneys in its legal department? A similar sized business might have two in-house guys to handle the mostly routine affairs and contract-out the occasional specialized issue."

"Is the Clerk's office over-staffed?"

"Couldn't Code Enforcement be regionalized?"

One noteworthy aspect of these suggestions is that they don't all come from business owners. Even those citizens who shudder at eliminating, say, Parks and Rec, recognize the need to evaluate the cost-versus-need dimension.

As a management consultant, I can't count the number of times I have had to help companies which had grown fat during good times cut back when times turned sour. In most of those instances, what we cut back or eliminated were not needed but were nice to have when the money was coming in. At the extreme are what I call "checkbook managers." When times are good, these managers buy new cars for the owners and sales force, do more advertising than justified, overextend themselves in the civic arena. When the economy slows, these checkbook managers say, "Hold off on paying our suppliers."

That leaves us with the "quality of life" issue. Certainly, Parks & Rec, and golf courses, and hockey domes add to the wholesomeness of a community. Again, though, make the comparison to nongovernmental operations: Businesses, and individuals, drop their country club memberships and stop buying season tickets to the symphony or football game, and cut back on dining-out, because those are wants, not needs.

Frank Versagi
March 2003

City Budget Work Begins
Mayor Ellison opened the first meeting devoted exclusively to the budget by emphasizing that no decisions, preliminary or otherwise, have been made by the Commission.

Then, Finance Director Eva and Interim City Manager Trice showed that everything is being looked at or, at least, should be considered: eliminating some operations; cutting staff department by department; asking city unions to take concessions; revisiting the DDA/City relationship.

During public comment, the Fire Department was stoutly defended by six of the eight residents who spoke.

Questions from a couple of residents and some of the commissioners revealed that there exists confusion about the relationships among and the availability of the several separate funds through which the city operates. (A decade or two ago, $200,000 were found "just sitting" in one non-general fund account.)

One reaction from commission watchers was immediate: "The three incumbent commissioners knew about the financial problems when they approved the expensive police and city attorney collective bargaining agreements. What were they thinking?"

City Commissioners have got to be kidding!
Surfing in-and-out of the televised Commission's Budget Work Session Monday night, one heard concern expressed about perhaps having to let the grass grow in some parks and charging higher fees to adult athletic leagues.

This, when there are real concerns about Police and Fire.

Seldom have elected officials so rapidly made themselves targets for recall.

Over the coming weeks, VersagiVoice will be reporting, and commenting, about the Budget deliberations..

The reports and comments on this page appear generally with the most recent items at the top, and some readers may choose to work from the bottom up. Some items are as early as 2003. The hyperlinks below make it easy to select from the growing list. Also see