Setting the record straight on Howell’s Headlee Override request

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City of Howell Mayor Nick Proctor

Every community has them – some residents, only a few, that take contrarian views no matter what the facts are. We’ve all seen them before – folks that are happy to argue that the sky isn’t blue and attempt to distort and misrepresent to argue their case. The recent editorialization by a former city council member is a classic case in point and, left unanswered, some may believe the fiction that was intended to mislead and misinform.

While young and developing my view of the world, I learned early to be very skeptical of those that abdicate intellectual objectivity to argue either for or against something. For some, common sense and objectivity just aren’t part of their vocabulary. It’s true: I simply don’t trust folks that throw reason and objectivity out the window – for whatever reason.

I was encouraged when the author, again a former council member, attended one of the City’s public education sessions. With hopes that facts and reason would prevail, sadly, I see, they didn’t, and a contrarian theme emerged that your city is lying to you about the reality of Howell’s fiscal condition – a condition shared with other Michigan communities.

Those of you who know me personally hopefully realize that I’m not one to purposely mislead or hyperbolize – particularly when it comes to the fiscal stability of the city we all love. So, let’s begin with facts on some of the points raised in the misleading editorial.

As most know, there are two forms of state revenue sharing: constitutional and statutory. While constitutional revenue sharing has seen modest growth, the problem lies with statutory revenue sharing. Had the State fully funded Howell at the statutory levels for the past sixteen years, we would have received well over $4 million in additional funding over those years. That didn’t happen, and the State continues to short change communities on statutory revenue sharing.

Unfortunately, there seems to be no appetite in Lansing to solve the structural municipal finance problems all Michigan communities face. There has been a multi-year effort by organizations like the Michigan Municipal League, Michigan Township Association and Michigan Association of Counties to address the macro issues of state revenue sharing.

You’ve likely heard of the Headlee Amendment to the State Constitution and Prop A – both well intentioned initiatives. However, the economic downturn of 2008 lowered taxable property values drastically. Unfortunately, Headlee and Prop A have no mechanism to allow local municipalities to recover from an economic downturn. As the economy recovered, municipalities are unable to recover from the lowered taxable values to those of the pre-recession value. This dynamic, coupled with the state underfunding municipalities from their statutory levels, helped create the fiscal dilemma Howell, Brighton and a plethora of other Michigan communities face. We are now operating on a tax base equivalent to 2002, while labor costs and the costs of goods and services aren’t the same as 16 years ago.

Your city council has been grappling with this dynamic for the past few years. And I’m proud of our efforts to find solutions to our problems. You’ve likely seen the actions the city has taken to keep things afloat the past several years with reduced revenue. We’ve been able to sustain current levels of service by eliminating needed infrastructure work. However, the status-quo is simply no longer sustainable. In efforts to resolve our fiscal dilemma, your city council agreed that a full restoration of our charter authorized 20 mills was needed – a 4.5 mill increase. When exploring options, we believed a 3-mill public safety assessment would relieve about 880K of general fund revenue to undertake some modest infrastructure improvements. It wasn’t nearly enough, however. With that course of action tabled, we believe asking you, the Howell voter, for what the city actually requires in order to make a significant impact on infrastructure. This shouldn’t be confusing to anyone who’s followed our deliberation.

I was mildly amused that the editorial stated, assuming the override passage, that you can’t be trusted to reasonably assess whether the five-year override yielded sufficient results and to make an informed decision on whether to approve continuation. I don’t know anyone who becomes dependent on a millage increase for this purpose!! Assuming passage, there will likely be no additional debt assumed as it’s council’s intent to only rely upon the additional millage to fund infrastructure work. If debt is incurred, it will be done so to assure debt service can be accomplished should voters not authorize an extension. It is likely, though, that since the City has an eleven-year infrastructure plan, the City will ask voters to consider a five-year extension in 2023.

Speaking of debt, all municipalities use debt as a funding mechanism. I cringe when I hear people claim that the City has mismanaged your money. To the contrary, the City has exercised excellent stewardship of your tax dollars as evidenced by top notch findings in our annual external financial audits, an award winning financial team, and a municipal bond rating of AA-. Bond markets simply don’t lie. Any existing debt that was incurred was for assorted infrastructure projects that simply couldn’t have been accomplished with “cash on hand.” We all take loans out for larger purchases, like a home or automobile. The City is no different. The property purchase to which the editorial referred was part of a larger legal settlement. Those that know of the development process realize that it’s typical for a developer to secure a property while completing the planning process. The City’s approach to this property sale isn’t any different than most private property owners.

And just one additional item of clarity on the assertion that the city contracted for a parking rehabilitation project for $200K over budget. The city received only one bid which was $200K over estimates. The city accepted the bid as future construction would have been during the first year of release of the State of Michigan’s new road money. Should the city have waited, costs were anticipated to rise beyond what we had accepted. Once the project was completed, actual costs were UNDER the bid amount as site conditions were better than anticipated!!

Finally, should the Headlee Override vote fail – your city council will be faced with some daunting challenges. We currently are running a $250K structural deficit in the current fiscal year. We will have to make difficult decisions on targeted service reductions, implementing special assessments to those residents who would directly benefit from infrastructure improvements (likely much costlier than the cost of a vote for a Headlee Override), and/or simply ignoring infrastructure. All services will be on the table for discussion. Be assured, though, your city council is not in the business of making threats or employing bullying tactics. As some have mentioned, we must live within our means – and operating at a 2002 revenue stream means service reductions and/or abdicating repair of our roads to do so.

The Headlee Override Proposal on the ballot this November is an important vote for all of us who call Howell home. It will essentially determine what type city we want – one that let’s its infrastructure deteriorate to a point that it negatively impacts housing prices, the desirability of Howell as a place to raise a family, and the desirability to do business? Or will it be a city that takes care of and has pride in its roads, streets, and low crime rate?

I, for one, am never excited paying more taxes than is absolutely needed. Restoring the City to its charter authorized 20 mills by raising 4.5 mills is absolutely needed if we are to retain a healthy, vibrant city.

The City will be holding its last of four public education sessions at 7 p.m. this Wednesday, Oct. 24, at the LESA complex. I invite all Howell residents to attend to receive accurate, unbiased information on which to base an informed decision on November 6. If you are unable to attend, please contact me directly or any member of your city council for information on why this override is critical to our city’s future. With accurate information absent the misleading rhetorical flourishing and biases of contrarians. I trust in your decision to keep Howell strong and vibrant.

 

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Nick Proctor is the mayor of the City of Howell.