Ypsi City Council discusses manager resignation

The Ypsilanti City Council meeting Tuesday night came on the heels of Interim City Manager John Hansen’s resignation on Feb. 3.

The city charter provides “in an emergency, the city clerk can serve as interim manager until the next city council meeting.”

Mayor Paul Schreiber explained Hansen’s departure created an emergency, and to that the evening’s agenda included taking the next step. The current city clerk is Frances McMullan.

The council held public hearings and passed the first of two readings unanimously, a five-year financial plan, a proposal to hold an election on adopting a Water Street debt service millage and a proposal to hold an election on adopting a uniform city income tax.

All three steps are needed to keep the city’s budget from drowning in red ink. The city projects a $6 million deficit in fiscal year 2017 if nothing changes.

Over the five years of the plan, the annual deficits would total over $21 million, without the debt service millage and the uniform city income tax.

Sarah Demmon and Morgan Cox, both recent graduates of Eastern Michigan University and residents of Ypsilanti, presented a resolution to the council from the Millennial Mayor’s Congress. Ypsilanti is the only community in Washtenaw Countyparticipating in the Detroit metro area Mayors Millenial Congress.

Demmon and Cox reported “millennials” seek six major desirable qualities in their living environments: a stable and growing economy providing abundant jobs; regional transportation that is accessible and includes transit as well as walking and biking; representative, efficient and effective government; education at the secondary and higher levels that is affordable and equitably available; a community that is vibrant, compact and filled with mixed uses; an environment that uses alternate energy, and includes parks and recreational facilities.

City Clerk and Interim City Manager Frances McMullan presented the city’s financial projections for the next five years.

Director of Administrative Services Dave Kowal explained the assumptions used to create the five year projection: continued decline in the value of real property; a continuation of the state’s personal property tax; stable staffing levels in the city with neither additions nor reductions; continued increase in fire and police pension contributions by the city; and continued increase in contributions to health insurance.

The first public hearing was on the Water Street bond. All four speakers supported the millage, essentially saying they would rather pay slightly higher taxes than pay through the reduction of police and fire services.

Next came the public hearing on the city income tax.

Speakers had mixed reactions: three speakers were opposed and felt the two issues should be presented at separate times. Four speakers were in favor of the tax.

The final public hearing was on a five-year financial plan.

All of the speakers supported the plan, and each praised the council and city staff for having the foresight and courage to face the financial future.

The council voted unanimously, on the first reading, to adopt a five-year financial plan.

The council voted unanimously, on the first reading, to hold a special election on May 8, 2012, on whether to adopt the Water Street debt service millage. The estimated millage is 4.94 mills (per $1,000 of taxable value). This is estimated by the city to cost the average homeowner $170 a year.

The council voted unanimously, on the first reading, to hold a special election on May 8, 2012, on whether to adopt the uniform city income tax ordinance. The tax would impose “an annual rate of tax on corporations and resident individuals of 1 percent, and on non-resident individuals of .5 percent, effective January 1, 2013.”

In other actions, the mayor reminded the audience council has signed a letter of intent with the county parks and recreation department to proceed with plans for a recreation center on the Water Street site.

Mayor Schreiber also reminded the audience city policies and practices provide for added pay when an employee takes on added responsibilities.

On the consent agenda, four resolutions were adopted: to adopt the Millennial Vision and protocol for the City of Ypsilanti; to approve a contract with MDOT for 2012 Congestion Mitigation and Air Quality Equipment Replacement Project; to authorize execution of the Adoption Agreement, amended cafeteria plan and renewal contract with BASIC for administrative assistance of the city’s flex plan; and to authorize the city to continue to retain Hartford Insurance to provide 457(b) deferred compensation services to city employees for 2012.

The council also approved a resolution to approve financing and other related requests for Hamilton Crossing Phase II. Hamilton Crossing (formerly known as Parkview) is completing its first phase; the first six-unit building is ready to be occupied, and the second, eight-unit building, will be ready next week.

The resolution was needed to resolve concerns of the Michigan State Housing and Development Authority (MSHDA), in order to secure financing.

MSHDA cannot finance City owned property, and wanted to be sure the city wouldn’t become the owner unless the city had its own financing. A second MSHDA concern was the Planned Unit Development phase be kept separate from the first phase.

Using MSHDA’s tax-exempt bond financing brings $2.8 million in equity to the project and facilitates construction on the next phase.

On motion by Mayor Pro Tem Lois Richardson, the matter was tabled until the next meeting.

The penultimate resolution reflected a great deal of staff work: approving the FY 2012-2013 budget priorities.

The priorities were to place the city income tax proposal and the Water Street Millage on the ballot, to consider a storm water utility, reduce FY 2012-13 general fund budget expenses by $650,000, attain collective bargaining concessions from employee unions, balance FY 2012-13 general fund budget by using a fund balance contribution of $620,000, to create a street light special assessment district, to convert street lights in the city to LED lights, to sell surplus city assets, and to continue internal reorganization and cooperative intergovernmental relationships.

The resolution passed unanimously.

The final resolution was to appoint City Clerk Frances McMullan as interim city manager. When council was satisfied there would be adequate staffing to carry out all duties of the clerk’s office, the resolution passed unanimously.


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