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Wednesday, May 23,2012

With veto pen, bridges burn behind him

Distrust, accusations of thwarting the legislative and collective bargaining process sum up budget cycle 2012. Oh, and the city's finances are still grim.

by Andy Balaskovitz

As Mayor Virg Bernero delivered verbal blow after verbal blow to the City Council’s budget amendments Monday night, 1st Ward Councilwoman Jody Washington looked on in disbelief. And disappointment. With a little confusion on the side — as if to say: “Really?”

The freshman Council member’s emotions stood out. Her colleagues looked on rather expressionlessly as Bernero spoke — as if they had seen it before.

But based on Washington’s rebuttal, the mayor’s speech had a galvanizing effect on her (the three-minute clip is on YouTube). She said the process was “nothing but adversarial.” 

“We didn’t get information until the last minute thrown at us. I found out information from reporters I should have found out from other places. I frankly am disgusted with the entire process,” she said. 

The Council went on to approve its amended budget by a 5-3 vote, with Council members Kathie Dunbar, Tina Houghton and Jessica Yorko opposing. Bernero was critical of it primarily because it relies heavily on $1.5 million in extra annual payments from the Board of Water & Light in lieu of taxes (which he says is “all but a certainty” to result in higher utility rates for customers). Brian Jeffries, Carol Wood, Derrick Quinney, A’Lynne Robinson and Washington reasoned that the increased payment from BWL is still below the national average for similarly sized utilities, and that the move frees up millage money for more police officers and firefighters and reduces the number of proposed furlough days from 26 to six.

Yes, the mayor has veto power that will likely stand against an override, which requires six votes. But he hasn’t done himself any favors in securing a simple majority for the future. Particularly, depending on support from Washington seems out of the question, and now  Robinson and Quinney’s backing also appears further out of reach. Quinney said Monday he’s “sick and tired” of the “bully tactics” and working with the administration through the media. Robinson said Tuesday night, “I take definite offense at being lumped together as all liars.”

And then there are the unions representing most of the more than 800 city employees. Over the past week, the Council heard from heads of the UAW, Teamsters, the Fraternal Order of Police and the Firefighters union who all carried a similar message: We’ve given up plenty since Bernero took office in 2006, yet the mayor wants more — and is doing so in a way we believe is antithetic to the collective bargaining process.

“When you talk about transparency, this budget was never talked about with the unions — it was presented,” said Kitty Lipsky, a city employee and Teamsters representative. “It’s basically at the point now where we take it or we walk. That’s not negotiating in good faith.”

“We have been trying to meet with the administration to talk about some of the stuff we’re reading about in the newspaper on furlough days,” added David Vincent, a city code compliance officer and a Teamsters steward.

Chief of Staff Randy Hannan noted at the end of Monday night’s meeting that conversations about pension and health care reform have been “ongoing for quite some time” and that “actual negotiations of budgeted changes don’t happen until after a budget is adopted.”

Bernero responded in an interview Tuesday: “I have a job to do. I have to balance the budget. I’ll worry about the relationships later.”

But for all of the accusatory speeches that made Monday’s Council meeting a rather interesting one, will it mean much if Bernero keeps his veto word and Dunbar, Yorko and Houghton stay loyal? That leaves the actual subject of the city’s finances. Here are a few highlights:

•  The administration is projecting a deficit at the end of the current fiscal year, which may be more than $1.2 million. Selling the city-owned parking Lot 2 to Lansing Community College, a deal announced Monday, for $1.21 million, will help patch that deficit. But dipping into reserves isn’t off the table, either, Bernero said. Because layoffs, employee concessions and furlough days isn’t practical given that the current fiscal year’s budget must be balanced by June 30, the crosshairs move to the reserves, which have dwindled from about $13 million to about $7 million over the past three years. Last year around this time, the deficit was $1 million.

•  Recent studies have suggested the city contribute $3 million more a year to its retiree health care and pension systems, up from $4 million it does now, underscoring the “corrosive” effect pension and health care costs are having on the budget, Bernero said.

•  The city’s Tax Increment Financing fund is “bankrupt,” Jeffries said Monday night. While the TIF Authority, which oversees a district covering downtown meant to capture increased tax revenue from new development, has committed to paying off $1.6 million for the upcoming fiscal year with its reserves, it can’t do it after 2013. That potentially leaves the city on the hook for $1.6 million annually starting in fiscal year 2014.

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