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Wednesday, March 13,2013

Kids in the Hall

Financial Health Team: Cities are screwed, now let’s fix it

by Andy Balaskovitz

Monday, Feb. 4 — Two members of the mostly mayoral-appointed Financial Health Team briefed the Lansing City Council tonight with a simple message on the team’s progress: Lansing, along with every other urban area in Michigan, is part of a broken municipal funding system.

And unless the city makes serious efforts to control long-term costs, it’s staring bankruptcy in the eye a few years down the road.

“Your task will not be easy,” said former Mayor David Hollister, who is heading the team tasked with making short- and long-term recommendations for fixing the city’s budget. A third subcommittee of the group will make recommendations for regional and perhaps consolidation strategies, he said.

In the short term, Lansing faces a $9 million projected deficit heading into the next fiscal year that starts July 1. Hollister, who was joined tonight by fellow team member Bob Emerson, characterizes the fiscal situation as a series of mostly downward trends.

“I call it the challenge of the arrows,” Hollister said, with arrows trending down in the following areas: population, housing values, property tax revenues, state-shared revenues and personal income. Which arrows are trending upward? Costs for retirement, health care and infrastructure, he said.

“There’s growing consensus that the system is broken,” he said, adding later with a hint of optimism: “This can all be fixed. This is not rocket science.”

Still, specifics about the team’s recommendations — which will be made public in about a month, Hollister said — are scant. However, Hollister and other team members have said to the media that “everything is on the table,” and recommendations may involve privatizing or outsourcing certain services, such as waste management.

The idea of selling the Board of Water and Light, Lansing’s publicly owned utility, was floated in a Lansing State Journal article over a week ago. That idea has been rejected by Mayor Virg Bernero, City Council President Carol Wood and several city employees and residents who spoke out at a public forum Thursday.

Hollister said after Thursday’s forum that it’s uncertain whether selling the BWL will make it into the team’s list of long-term recommendations.

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