2006-2007 Budget Dialogue

Reacting to public opinion --
City Commission should act more like the School Board?

It has been suggested that the Royal Oak City Commission would do well to mimic the Royal Oak School Board, as CITCOM addresses budget matters: You know. Listen -- or pretend to listen -- to the objecting public, then do what you have already thoroughly studied and have decided has to be done.

It is probably unfair to suggest that CITCOM lacks courage because several of its members are obviously uneasy about the Normandy Oaks situation. This and previous city commissions have acknowledged but resisted public input on occasion. Consider an example or two.

  • Resident- and business-reaction to CITCOM's drive to raise parking income and other user fees has been heavily weighted against such increases. CITCOM continues to approve them anyway.

  • Week after week, public comment was overwhelmingly against widening Main Street north of Eleven Mile. It would have been financially irresponsible for CITCOM to reject the project because of the strong, essentially emotional, anti-mood of voters, and the commission wisely approved it.

Perhaps the closest parallel to the Normandy Oaks brouhaha was the year 2000 battle about a Human/Gay Rights Ordinance. For several weeks, Public Comment was one-sided, with the pro-ordinance community attending en masse and dominating the dialogue. CITCOM opted to place the issue on the ballot, and voters defeated the ordinance.

About Normandy Oaks, the suspicion is that gut-level emotion re green space would defeat any attempt to sell the golf course. I'm not so sure, but I will withhold further comment until after Saturday's CITCOM work session about the budget.

Returning to the comparison between CITCOM and  the School Board, I think it  would be a good idea for CITCOM to adopt the Board's 3-minute limit for each speaker in Public Comment. -- FJV: Jan 2007

On budget
City Commission displays no vision, no strategic grasp
Except for Commissioner Stephen Miller's exasperated reminder that "We need a revenue stream," the Royal Oak City Commission displayed neither vision nor strategic grasp concerning the city's budget.

Performing the bookkeeping equivalent of an editorial committee proofreading a manuscript, the commission  approved a "balanced" budget by once again stealing from an enterprise fund and, this time, hoping for good news out of ongoing and future collective bargaining. Unless the re-appointed committee studying the city attorney's office suggests privatizing that operation, there will have been no substantive move to restructure city government, nor any substantive move to increase revenue. 

Instead, the commission assumed a save-paper-clips mindset and addressed departmental operations in micromanaging mode: 

  • Asking in excessive detail about such matters as how individual police assignments will be implemented and whether Parking Enforcement hours are affected by intoxicated individuals.

  • Getting so involved in discussing DPS operations that they wanted specifics about grass cutting schedules and manpower.

  • Being upset because of operational/legal limitations on the commission's control of line-item expenditures for the district court, after approving the court's total budget for the year.

  • Getting confused over how and when DDA funds move into and out of the money-mix, when dealing with such matters as the multi-source compensation for Planning Department personnel and the line between downtown-only and city-wide services. (Ultimately, isn't "DDA money" city money?)

I have previously commented on the institutional, not individual, lack of courage of this commission, Perhaps the best/worst manifestation of that lack of courage came when the City Manager was apparently ordered to remove the Normandy Oaks sale from the agenda, after it had been placed on the agenda at the request, one must assume, of the subcommittee assigned the task of reviewing the Normandy Oaks bids.

This commission earns a failing grade for adding still another year of indecision to budget-making, despite excellent documentation and guidance by city staff.

Taking up Commissioner Miller's point:

  • Put the Normandy Oaks bid(s) back on the agenda, and let's give the concept at least as much attention as we've given to the fence ordinance and to the "No Parking" signs on West Harrison.

  • Assign a committee, including citizens, to take a serious look at the pluses and minuses of selling City Hall and leasing it back.

  • Downsize the DDA.

  • Adopt a resolution, Issue a formal statement, making it clear whether or not the long-range goal is to restore city staffing and services to their former level. Stop making ad hoc decisions and stop setting ad hoc policies. 

Do something.
Start now.
Don't wait until the next budget cycle. -- FJV: 28 June 2006

Readers say
Several readers, in and out of City Hall, had something to say -- mostly off-the-record -- about last week's comment which opened with the paragraph above. Even those who feel that VersagiVoice was too hard on the commission prefer not to be identified, because of the split among city hall denizens, employed and volunteer. The identified comment, immediately below, captures the flavor of both the disappointment and the hope expressed by readers.

I read your column and agree with you; "Where is the vision for the future of Royal Oak?" 
I remember and still have the article Steve Findley wrote for the Tribune back in c)1995. Steve and I were talking at the Christmas Tree Lighting party and I was telling him of my vision of a Civic Center (Police, Court and City Hall) being built across the street near where the Farmers Market is. Steve wrote "Kevin has a vision," and continued about the city closing Hamilton Court, tearing down the old Social Security Bldg and some houses and building the new court, police station and city hall there. It never happened but at least the court was built and will be there for the next 100 years.

I would love to hear someone in authority talk about another vision for our great city. -- Kevin Sutherland

12 June 2006
The 44th District Court, Inspection & Code Enforcement, Planning, DDA, and City Attorney Office were among the departments reviewed by the city commission. Dollars aside, one hears interesting and useful tidbits as the department heads interact with the elected officials. Examples:

The Court has an excellent 91% collection record, including capturing $652,000 from gong after cases up to 7 years old. . . . There are 764 current probationers. . . . Random substance abuse testing is conducted on occasional Saturdays, Sundays, and holidays. . . . Appropriate probationers are assigned community service tasks.

Increased construction in Royal Oak, including 5,000-sq ft homes and commercial properties, is causing operational problems for Inspection & Code Enforcement, which has lost employees at the same time. The department is already in the position of not being able to do what needs doing. . . . There is a need for more inspectors. . . . Rodent control may have to be re-assigned. . . . The retiring department head will serve as part-time director until his replacement is on-board.

The Planning Department has two divisions: The Planning Division accomplishes all the administrative and regulatory functions required; The Housing Division works with Low-income rent and with housing rehabilitation. Compensation for the department's employees comes from three sources: Block Grants, the DDA, and the city's General Fund.

The Downtown Development Authority is well aware of suggestions that it be downsized, but it believes now is not the time to consider returning some of its properties to the city. . . . Most of the DDA's $2.1 million reserves are being held for previous commitments, leaving only about $400,000 uncommitted. 

Even when fully staffed -- before the retirement of Chuck Semchena -- it was common practice for the City Attorney's Office to use outside counsel for matters which require specialty expertise. . . . The annual cost for the contracted Interim City Attorney is only slightly more than the total cost for a single Deputy City Attorney. 

Of the scores of questions asked by the commission, only once or twice was the answer not available from either the department head or the finance director. However, as always when budgets are being reviewed, the dialogue between a commissioner and the financial director occasionally became so confused that the two interlocutors repeatedly interrupted each other in their attempt to overcome the confusion. 

26 May 2006
The 28-slide overview is straightforwardly presented but necessarily contains enough detail to cause eyes to glaze over for a resident who is moderately interested and who has other matters to which to attend. Differing points of view cause varying interpretations of simple facts.

Place slides 19 and 20 alongside each other, for example, and one can quickly visualize the following tabulation after reading that city personnel now number 360, compared with 397 last year and with 416 in 2004-05.

Sector 2006-07 Employed % of Employed % of Expenditures
Police 104 28 33
Fire 65 18 24
Other 191 53 43

Let' see: 28% of the workers get 33% of the General Fund; 18% get 24%. Is that as it should be or does it reflect distorted compensation policies? That will depend, of course, on where one stands on the overall priorities. Do whatever is necessary to replace the lost Police and Fire personnel (including selling Normandy Oaks,) or cut until it is obvious that Public Safety is really being harmed?

So far, early in the budget process, the public seems disengaged. There was not a single speaker during the May 22nd Special Meeting. But, chatting with residents makes it clear that their feelings about specific departments or individuals at city hall determine which parts of the budget get their attention.

Other Cities in a Budget-Bind
 
Introduction
The City of Pontiac's financial problems are severe, and The Oakland Press has month-after-month reported and editorialized about those problems. The magnitude of Pontiac's budget shortfalls and deficits is greater than Royal Oak's, but there are similarities in the causes. A January 21 article in the OakPress surveys how state-appointed emergency managers have addressed the financial difficulties in several cities. Not all of the evaluations and suggestions coming from the state-appointed managers apply to Royal Oak, but enough of them do to make the newspaper's article helpful. The piece was written by Carol Hopkins.
 
To begin
There are no magic bullets, but there are actions which work, over several years, when they are mandated. Among them:
  • Close/privatize/outsource selected departments.
  • Sell surplus property.
  • Dissolve Downtown Development Authority
  • Reduce the pay of elected officials
  • Replace elected officials with an emergency manager
  • Really renegotiate labor agreements. (Apply them to current employees, not just to new hires.)

For Pontiac, an emergency financial manager who worked with Ecorse and Hamtramck, recommends: Close the Department of Public Works, sell all surplus property, close down all tax increment financing districts, and pay off the bonds. About those TIFA districts, Louis Schimmel is quoted as saying, "There are millions going to these authorities. They're swimming in money. That money should go to the general fund and I'd have enough to pay for police and fire."

About selling all surplus assets, Schimmel says, "[City officials] shouldn't worry about the sale price. Sell to private parties you can tax and make your money that  way."

In Ecorse, Schimmel was given authority to replace the elected mayor and council members. He privatized the Department of Public Works, sold its building and equipment, negotiated with the department's 25 employees to terminate their services in exchange for a negotiated finance settlement. Public Works employees retired, were bought out or dismissed.

In Hamtramck, he renegotiated labor agreements, sold the public works building to a private charter school, took over the downtown development authority, and "flat out ran the town," according to Hopkins's article.

Another emergency manager was involved in Flint, and city officials recall massive reorganization and layoffs and "spending cuts on everything." The city shut down rec enters and "any nonessential services were greatly reduced or eliminated." Fees were increased and Council members pay was reduced. The emergency manger, Ed Kurtz, converted the golf course to an enterprise fund.

In Highland Park, emergency finance manager Ramona Henderson Pearson instituted a hiring freeze and suspected elected officials' salaries and benefits. She laid off all police and contracted with the Wayne County Sheriff's Department. In July 2007, the police department was reinstituted, according to the OakPress article.

 

 

2007_08_Budget

Where did that $6.4 million deficit go?

2005-2006 Budget Dialogue

Other Cities with budget binds