WHO BUSTED THE BUDGET FOR THE CITY OF GRAND RAPIDS AND HOW THEY DID IT! PART V

THIS IS THE LAST IN A SERIES OF ARTICLES BEING PRESENTED GIVING PEOPLE A HISTORY AND SNAPHOT OF WHY GRAND RAPIDS IS IN FISCAL TROUBLEThey run from January to April 2010 and I wrote them for EMPLOYEES POSITIVE VOICES but they were spot on with some predictions and show it's not the unions fault but our leaders elected and appointed. In this one I take the Manager and Commission to task for proposals and cuts out of touch with our citizens especially coming ONE WEEK after voters gave permission for the tax increase by a small margin. Greg, George, and Company did eventually see the light but only after the public roared. It is a warning for us to keep them honest, transparent and responsive to the citizens of Grand Rapids.  Our leaders using common sense to form public policy would be helpful too.

GRAND RAPIDS STREET LIGHT TAX NOT A BRIGHT IDEA

BY RICK TORMALA EPV JUNE 2010

On Tuesday, May 4, 2010 the citizens of Grand Rapids went to the polls and by a slim margin approved taxing themselves increasing the city income tax rate in the name of public safety. No mandate, no you’re doing a wonderful job as fiscal stewards, no ringing endorsement of the way our elected and appointed officials are running our City. I believe the voters simply came to the conclusion Grand Rapids was no longer safe and we needed to increase our police and fire staffing levels.

Just one week later not only was the infamous street light utility tax a discussion topic at City Hall, but Manager Greg Sundstrom was threatening to shut down the six city pools and halt park maintenance. Good thing the voters weren’t aware of the parks department scheme, I mean proposal, or the results could have been different. How tone deaf to the concerns of our citizens are the people running Grand Rapids? To be fair the City Manager always had the street light tax on the table, because the Mayor and Commissioners never told him it was unacceptable, but closing pools is something most people didn’t expect, especially when they were casting their votes to help the city out.

I’m proud of the voters that approved the income tax increase. Their actions were unselfish and clear evidence of their willingness to sacrifice even in the midst of economic turmoil to help make our city a better place. But I also have deep respect for the voters turning out in opposition to the proposal. I know they too love our city and in large numbers sent a clear signal to City Hall also. Live within your means! Together their message is powerful and grounded in common sense. Sacrifice and live within your means. Listen up Mr. Manager and Commissioners, the people are making sense and showing you the way! Though maybe it’s a novel idea to our leaders?

Mayor Heartwell needs to really listen to the public before limiting himself and the Commission to only what he calls “repugnant” choices. A careful and transparent examination of the budget, a rational reordering of priorities, imaginative critical thinking and truly embracing our voters’ message of sacrifice and fiscal responsibility would give our leaders a number of reasonable alternatives to the obnoxious choices with which they now struggle.

If the Commissioners really don’t want to slap our taxpayers in the face and steal summer from our children there are other options. It only takes will and leadership to set Grand Rapids on the right track. Oh, but it also means the Commission must lead and the Manager implement their budget and priorities!

First an outline of the street light tax, though the Orwellian description of it is as a street lighting “fee,” our clever citizens understand its real purpose! It is quite the bureaucratic masterpiece. Bismarck would be proud! I can see consultants around the country salivating at selling this tax, I mean revenue enhancing tool, to desperate city councils throughout the land. Of course consultants are just city bureaucrats supplementing their fat pensions, but I digress.

I will save you the suffering of reading the actual ordinance language though it is available for masochists on the City website and I do applaud them for their transparency, but not for the legally obtuse language. However I’ll provide you with the straight talk translation. If you own property in Grand Rapids with an adjacent street light you will be charged money.

How much will depend on street footage and the type of neighborhood you live in, but the greater your frontage the higher your costs. It won’t be good for residents, businesses, non-profits, apartment complexes, or houses of worship. I guess it won’t be good for anyone except the tax collector again displaying the bureaucratic brilliance of the plan! To be fair it is expected to raise over $3 million annually for a city desperate for money, but to me the entire idea is misguided and unfair to taxpayers, especially when there are other alternatives. Maybe if we taxed those little light bulbs that appear over the heads of city bureaucrats when they get these bright ideas we would make a fortune, well on second thought probably not.

Touching on the absurdity of cutting parks department funds and closing pools, the Manager and Commissioners need to stop and really think about what helps us maintain a quality of life in this city. Many parents bought homes close to pools and parks with the intention of using them. So did many residents without children counting on them for recreational opportunities or relishing the pure joy of green space. You certainly don’t have to live near them to enjoy them. They’re the part of the soul of our neighborhoods.

Years ago parks were the jewels of Grand Rapids and an integral part of our community and were treated and financed as such. We learned to swim and play sports in them. During the winter we skated, not downtown, but at most parks throughout the city. Wherever we lived we could walk to one. Park caretakers were goodwill ambassadors and our guardians, many became neighborhood institutions. Ask anyone raised in Grand Rapids during the ’40s, ’50s, ’60s and even the ’70s and I bet they can match a park with the name of its caretaker. Yet now a home-grown Manager is prepared to carry through on the dismantling of this once great system.

We can’t tolerate that any more than we could tolerate the cutting of our police officers and fire fighters. A city must be safe first of all to make it livable, but a city without a vibrant parks system is not a livable city. Think of what the Manager is proposing for our pools. I’ve seen it before, closed pools filled with rain water turned into million dollar bird baths. Also bear in mind these closed pools will have to be “opened” at least for a few days this summer to make sure things are running correctly even if our children will be barred from using them.

Now that I’ve highlighted our problems where are all the solutions? I thought you would never ask!

First let’s address the Mayor and Chamber of Commerce’s mantra of blaming the workers and calling for cutting wages and benefits as the solution to everything. Baloney! This city is in trouble because of how it is run, rather than how its employees are compensated. Understand I am willing to have a frank discussion regarding wages and benefits and support concessions when needed, but all this talk about pensions is going after low hanging fruit instead of using strategic thinking to address the costly and structural inefficiencies that are the real financial problems busting our budget.

Again I am not afraid to have a frank discussion over what is better — a defined benefit or a defined contribution plan. In fact we will have one in this paper, but it will be a fact based discussion of the truth and some may find it surprising.

When you hear the city pension plan being attacked and held up as outrageous who do they cite, our top paid managers. That is where the problem is and if we removed the unnecessary ones and watched how much we pay them things would change. The public doesn’t know how much is paid to match a number of managers’ pension contributions. Sometimes the City match is in double figures — far greater than what rank and file workers receive but that is an article for another day.

Back to possible solutions to the city budget woes.

Embrace sacrifice and living within your means. You know the drill — freeze all travel for Mayor, Manager, and Commissioners unless they are coming back with a check with at least six figures. Every penny counts is one of the things the electorate are demanding. Sell the Mayor’s car and take away Greg’s $700 a month car allowance. If you have to tax lights suck it up and sacrifice yourself, citizens have done enough. Let me applaud the elected officials’ pay cut — which I admire them for and is a case of leadership by example. They must understand it is only a start.

In a true spirit of truth and transparency place up on the city’s website in an understandable and clear fashion the contracts of all the appointed officials along with the money spent by the Mayor, Commissioners, and all top management over the last two years and currently with an explanation where, why, and how money is spent. As always I recommend voting on and examining publicly every position and expense the city has and eliminating the non-essential ones. Middle management and upper management must be thinned and people let go not demoted or renamed. No one is being fooled. Really if this Commission could prioritize needs over wants in our budget and order the Manager to implement sound fiscal policy a lot of the problem could be relieved.

Now finally a way to raise significant money, put bids out to lease and run our parking system except for the cash cow City/County operation below the government complex that feeds our general fund. You know this was suggested before and there were significant entities ready to bid, unlike the travesty of the so called “Mystery Project” that wasted thousands of tax payer dollars and ended up with no bidders, just embarrassment. The proposal was fought by the Parking Commission and city management and the City Commission lacked the will to proceed and because of their failure and inaction we have raised taxes.

But what was a good idea then is a great one today when the city is in the worst shape ever financially. To not fully explore a venture like this and instead choose increased taxes and devastating service cuts would be unconscionable and a failure by the Commission of their fiduciary responsibility to our citizens. Here is the policy question. Must the City run the parking system and why? The answer is the City must try and provide safe, affordable, and accessible parking for its citizens.

It also has a legitimate concern about where development takes place and has used its control of parking system property to manage and assist development. I have no quarrel with and support these elements of our parking policy, but none of that requires the City itself run the system or not lease out the property and dissolve most of the department. Last time it was brought up bureaucrats told us we would lose millions that we collect in revenue, but failed to mention all of that goes to run the system not to cover the general fund deficit.

Putting out bids we could write a proposal allowing a private entity to lease and operate most of our system, but bind them contractually to have the parking prices set by the City Commission. We could also insist if they built something on the properties they would have to maintain the same number of parking spots. For ramps we owe money on they would have to assume or pay off the debt and the surplus in the parking system would be turned over to us.

Even a take back clause and a penalty could be included. It might be possible to clear $25 million or more of profit from such a lease arrangement, plus the surplus, and the annual income from income tax and maybe even a payment in lieu of taxes from the leased property. With sound budgeting of needs we could fund priorities like police and fire staffing, parks, pools, planning, neighborhood services, and infrastructure. We could go back to the future and rebuild our parks making them neighborhood assets once again.

What I have outlined are not “repugnant” options but viable alternatives. If Commissioners Gutowski and Shaffer don’t want to tax our citizens any further here is their chance to put our City on sound financial footing. If Commissioners Bliss and Lumpkins want pools open they can join the push for a sane fiscal policy with creative opportunities. If the Mayor wants real sustainability this is his chance and if Greg Sundstrom doesn’t want to be known as the City Manager that presided over the financial destruction of Grand Rapids he’ll jump on board too! At least the topic should be thoroughly explored.

Urge our elected officials to park the Street Light Tax and turn the lights on to examine leasing our parking system and resizing our management structure. Otherwise we are back to repugnant choices where we all lose.

WHO BUSTED THE BUDGET FOR THE CITY OF GRAND RAPIDS AND HOW THEY DID IT! PART I

THE FOLLOWING ARTICLES ARE PRESENTED TO GIVE PEOPLE A HISTORY AND SNAPHOT OF WHY GRAND RAPIDS IS IN FISCAL TROUBLE
They run from January to April 2010 and I wrote them for EMPLOYEES POSITIVE VOICES but they were spot on with some predictions and  shows it's not the unions fault but our leaders elected and appointed

PART I
Who Busted the City Budget and How do We Fix It?

By Rick Tormala JANUARY 2010 EPV

As I write this article just before Christmas 2009, the City of Grand Rapids is drowning in a sea of red ink with massive job cuts planned for close to 100 city employees including a devastating elimination of 26 police officers and 10 firefighters placing the security and safety of our neighborhoods at risk.

This is a scaled down version of the budget scenario originally proposed by rookie City Manager Greg Sundstrom on November 10th of this year when he announced 125 jobs would be cut by the end of the hard working employees, and requiring residents to pay between $25 and $48 a year to pay for street lights in front of their homes. Yeah, that will happen!

To paraphrase Mayor Heartwell, Greg and the City Commission already blew Sundstrom’s proposal to raise over $400,000 a year by reducing the City’s personal tax exemption from $750 to $650 costing taxpayers less than a couple dollars a year by not realizing Commissioners needed a 45 day waiting period to pass the ordinance by Jan. 1st.

Mayor Heartwell feared citizens’ reaction if he called a special weekend Commission meeting to meet the required timetable. Thus his poor judgment and leadership, along with city staff’s and our leaders ignorance of their own process cost us $200,000 in the final months of this fiscal year.

Citizens would have understood the emergency measure. Your Honor have some faith in the judgment and common sense of our citizens. Imagine the number of jobs that money could have saved.

If all of this confuses you it is typical City Hall math, moving targets hard to pin down when it comes to budget matters. I’ve broken it down as clear as I can with the information available.

Why didn’t the Manager and Commission see this coming? They had to if they really were on top of things. A $24 to $27 million dollar hole doesn’t suddenly appear. Imagine if Greg had announced this the week before the election instead of one week after.  

JJ might have won in a landslide being the only Commissioner to vote against structurally flawed budgets still filled with bloated bureaucracies and sacred cows.

I dare say, if this had been announced in April there may have been multiple candidates running in each Ward for City Commissioner and James Jendrasiak might have been the only incumbent re-elected.

How did we get here?

A terrible economy, falling income and property taxes, a dysfunctional state government stealing millions of our rightful revenue sharing dollars, but City Leaders and Management had a role in our own budget woes by not cutting spending in the right places and prioritizing correctly. It wasn’t the fault of our employees and their wages and benefits. They were unfairly scapegoated by former City Manager Kurt Kimball. Kurt negotiated the contracts and the City

Commission approved them. Then they turned around and unfairly put the blame on our employees. These same employees that helped the City reduce health care costs by millions and recently gave concessions like everyone else.

Fortunately, or unfortunately for some, everything a City Commissioner says in public is recorded as a matter of public record.  About 2004 at a budget meeting I offered to help put on the ballot an income tax increase and promised to campaign for it if 3 of the 5 assistant city mangers(they were paid from $112,000 to $102,000 each not counting benefits), the Office of Our Families (or as it was known then the Office of Children, Youth, and Families) and other unneeded administrators were eliminated and if the firefighters were given daily staffing levels of 57, police officers increased, all of the swimming pools kept open, money to street repair preserved, and if the funding for seniors, veterans, Arbor Circle, Catherine’s Care, neighbor associations and other vital funding in GLR was protected.

My suggestion was met by thundering silence.

We did protect GLR(General Local Revenue), but the year after I left the City Commission it was devastated by cuts and eventually eliminated tossing out the City’s commitment to social equity and making their triple bottom line for sustainability a cruel joke. I knew if they couldn’t manage less than ½ of 1 % of our General Fund for our most vulnerable citizens we were in trouble. Yet according to the City Comptroller they spent $301,650 that fiscal year on the

office of Our Families!

Several years ago I successfully pushed for the creation of a Citizen’s Budget Committee to review and recommend changes to our budget. They were largely ignored because they took on sacred cows and the Manager’s top heavy middle and upper levels of management. Commissioner Jendrasiak and I both opposed the hiring of multiclient state and federal lobbyists at the combined annual cost of $150,000 out of the General Fund(Now they have reduced it to $130,000 a year).

We have great Congressional staff and elected officials to represent us and on the state level if legislators can’t do it let’s get rid of them. This is a colossal waste of money.

At least one former member of the City Commission and a current Member who voted for the paying of tax money to the lobbyists both received PAC contributions from the state firm we hired to their campaign funds. Even if legal, it is hardly ethical and raises the odor of corruption that has polluted government at all levels.

There was a time when the city spent $66,000 and more for lunches

alone. I pushed it down to $29,000 by the time I left but it should disappear completely. There should be no free lunches on the taxpayer’s dime. Over the last ten years we have spent over a million dollars on the office of Our Families, over $100,000 on the Sister Cities program , around $366,820 for our share of a Customer Service Desk (Can’t every department answer their own phone for customer service?) and thousands on Commissioner and Mayoral junkets as well as hundreds of thousands in wasted consultant fees and memberships.

This explains where we are now and how we got here. We must fund our needs not our wants and get back to the basic services that make our city a great place to live, work, and raise a family.

Our new City Manager Greg Sundstrom is a good man, as is Kurt Kimball, but they have skewered priorities unfortunately rubber stamped at times by City Commissioners.

I applaud Greg’s seeking public input but when he starts wanting people to mow our parks, enforce housing codes and basically volunteer to be unpaid yet taxed city workers he looks out of touch with reality.

Robotically droning out at meetings with the public ... THE CITY IS LIKE AN I-PHONE PLATFORM... WE OWN THE PARKS....WE OWN THE LAWN MOWERS... WE NEED I-PHONE APPS... He sounded more like an electronic droid squawking gibberish on an unknown planet, than an experienced administrator. We need his creativity and years of experience, not BS and buzz words. We have been governed by those for too long. He is the Chief Executive not some technocratic R2D2.

Greg you also can’t cry poverty and then hire an $81,000 a year Assistant to the City Manager no matter how nice he is. IT DOESN’T COMPUTE!!!

How do we fix this problem?

Sacrifice starting from the top. The Mayor surrenders his automobile and the Manager turns down his $700 monthly car allowance. They along with the Commission and every city employee making over $100,000 a year take an immediate voluntary pay cut of 10%. That would be real servant leadership and start to restore credibility.

Slaughter the Office of Our Families, Sister Cities, and all other sacred cows. Freeze all taxpayer funded travel for the Mayor, Manager, and Commission as well as others. Get down to zero based budgeting where every job and program must be proven essential to the core services of the city or eliminated. Vote on every line item so the public knows the truth.  Get rid of unnecessary bureaucrats. I hate to see anyone lose their job and the more they make the harder it will be to find a job in this economy, but face the facts we are the City of Grand Rapids not a tax funded employment agency.

Quit paying around $89,000 a year to the DID! No other governmental entity does.  Have the DDA pay $1 million a year to fund police and fire services. It was a good start with $500,000 this year and I applaud Eric DeLong for putting it in the budget. JJ and I pushed that for years. Lease the parking system to a private entity(except the City County one which is a cash cow for the General Fund) while maintaining control of the parking prices, keeping them affordable and parking spots available. We might net enough income to wipe out the deficit and even have a surplus. It will save us expenses and raise annual tax revenues.

Then if your budget is clean and lean and we still need money place a tax proposal before our citizens for a vote. They love this City but you can’t threaten them with hurt, you just have to tell them the truth. Citizens want transparency, truth and efficiency and should get it from all of their elected and appointed officials.

George Welch built Richmond Park pool during the Great Depression. Our parks once had Halloween parties with costume competitions serving cider and donuts and ice skating in the winter. Our streets were fixed, plowed and salted. The best economic development incentives are good schools, great police and fire protection, recreational opportunities and beautiful parks, vibrant neighborhoods, efficient governmental services, available, safe, and affordable mass transit and a strong infrastructure. We had it all once. We have some of it now. We can have it all again.

Citizens let’s unite and demand real leadership and vision. Leaders on all levels need to get to work helping or get out of the way. Voters are not going to accept anything less any longer. We will build a great city, county, state and nation!!

Let’s hope for a Happy New Year with us all working together to make

our community better.