Early this year, we began hearing the city send up warnings of financial difficulties coming up in 2018 for the first time; coincidentally, this followed the revelations released by freshman city councilor Brandy Henderson that some were actively researching and proposing to establish parking fees at Stearn's Beach.
The City of Ludington projects their budgets three years into the future, so one would expect them to notice a substantial potential shortfall (where expenditures are greater than revenues) as early as three years before that year arrives. In the fall of 2015, the budget for 2016 (with projections for 2017, 2018) was released without any mention by City Manager John Shay In his budget message of any projected difficulties.
In next year's budget message delivered on Nov. 28 2016, he briefly noted that they could not maintain a 25% balance in the general fund in 2018 and 2019 "due to little revenue growth and increasing expenditures, especially pension costs." Immediately after this budget message, the city council decided to unanimously vote to opt out of Act 152 of 2011, a law made in order to "limit a public employer's expenditures for employee medical benefit plans", as they have done every year since that law was passed-- in order to devote more public funds to providing high quality health insurance to city employees and their families than what is legally allowed otherwise.
In February, it came to light that the city was devoting more public funds in researching whether it would be profitable for them to charge for parking at Stearn's Beach, due to Councilor Henderson's interactive Facebook page. The public was shocked and a vast majority came out against the fees; at the same time, many officials were shocked at Henderson's release of the information before they could spin a narrative of how this would be good for Ludington and their visitors.
The City of Ludington News (COLDNews) came out with their usual city-friendly spin on February 17: "While looking over budget projections for 2018 and seeing a predicted shortfall of $264,000, members of the Ludington City Council began looking for ways to increase revenue in order to continue providing the same level of services without going into debt. In a February MCP editorial against parking fees, Rob Alway repeated that figure.
On April 4, the COLDNews continued the story: "...in late 2016 when members of the council looked over budget projections for 2018 and saw a predicted shortfall of $264,000. The councilors then began looking for ways to increase revenue in order to continue providing the same level of services without going into debt."
If a lie is repeated often enough without refutation, people begin to believe it. This is a methodology that John Shay and his propaganda unit at the COLDNews have used often over the last ten years. Barring any additional revenue-creating schemes concocted by city leadership, is this $264,000 shortfall inevitable?
The 2017 Budget displays the actual annual city expenditures along with the projections for 2016 to 2019 of the last few years, and does note the $264,000 figure on page 11:
Shay has said the city's budget has been relatively flat over the years, you will notice they project a modest bump in the projection for 2018 of budget expenditures. The previous ten years (2008-2017) minus one time costs, show that the average yearly expenses are $5,449,200, the average for the last five actual figures (2011-2015) is even smaller at $5,444,800. The $5,856,700 is 7.6% greater than the average of those actual budgets, and nearly $300,000 over 2016's budget. Let's also note that raw revenues are still projected to modestly increase over the period, even when the additional revenue ($1.73 million) in 2017 for the fire station is taken out:
Minus the fire station money, the 2017 revenues are about $10,000 greater than the 2018 revenues, and generate about that much in surplus. What causes the additional $250,000 in 2018 to appear; where is that extra money going?
Without getting too much into the minutia, about $50,000 is going for a 1.5% pay raise for most city employees and the increased fringe benefits they receive. With such a dire budget forecast should such a raise even be considered? They may have no choice depending on their agreements with the public service unions. As noted by Shay, the generous pensions granted will also take a toll. If the 1.5% pay raise for the next year is also eliminated, the entire deficit projected for 2019 turns into a modest surplus.
In 2018, another $100,000 is going for a one-time contractor cost to dredge PM Lake at the public boat ramp at Copeyon Park. Will this even be needed with the high lake levels? Lake Michigan is at near record levels, causing the road out to the adjacent Ludington Yacht Club to be underwater the last couple years.
Without micromanaging the rest of the budget, there is an incredible amount of waste established into the budget. We spend $93,000 just to retain and contract with three separate attorneys/law firms to shoulder what Scottville pays one attorney/law firm to do for a tenth less. The main attorney from a Grand Rapids law firm was caught overbilling the city for a period of over three years without any repercussion.
They budget $15,000 just to have one attorney serve as FOIA Coordinator, one who has helped launch at least three FOIA lawsuits due to violating the act. The additional contracted agent of the city only adds a bureaucratic level of handling FOIA requests, but the city apparently wants to be able to legally defend their unlawful non-disclosures of records. It doesn't help their image, wasting $15,000 of taxpayer funds to do this while attacking citizens who ask for public records dealing with the city's misuse of funds or spotlighting officials behaving inappropriately.
They recently told us it costs just under a half of a million to upkeep Stearn's Park, when it was more like a tenth of that to upkeep it at high standards, the majority of their money used for other park areas and supporting fulltime public service union workers who have fringe benefits cresting 3/4 of their generous wages.
So when our city manager (or any other city official) declares that doomsday is on the way if you don't give more of your hard-earned money to them, look them in the eye and tell them that their doomsday is of their own making due to the city's mismanagement over the last dozen years.
None of what the city budget proposes address the issue of the $7 million shortfall in unfunded pension liabilities.
Exactly where and when do they plan on addressing this issue?
The answer is never. At least not this crew.
They don't have the balls to ask the taxpayers to pony up the $7 mil. shortfall. That is $7M in addition to the current $35M for WT/WWTP improvements.
So they kick the pension liability can down the road, letting it become someone else's problem.
Why not? Shay n' company will be kicking back on a warm beach somewhere while our children and grandchildren will be held as tax paying sharecroppers by the city to pay that debt.
They should all be in prison for misappropriating the taxpayers money into their own pockets and self interest. If they hit a roadblock they make a law to let Shay use his pen to make it legal. This is criminal.Of course Barnett won't say anything, he just sit there and wait for his cut. And, intimidate,harass, and investigate those who try to unravel their wrong doings. Disgusting!
Meanwhile, the main culprit, Shay, and his buddy Barnett, have already made over $1.5 Million each for their part in this scam, and are becoming richer every year now till retirement. The LPD alone is a $2 Million/yr. affair that could use some vital cuts right away, but no, just let them get bigger and more costly now and into the future. It's a pitiful way to address any budget shortfalls.
This is all the responsibility of the Council. They control the money. Add up the overpriced water tower painting, any money that was spent on the maritime museum, the money that will be spent on the Ludington St beach demolition, the wasteful FIOA budget spent on withholding information, the unneeded new fire station, the high wages and benefits that city employees enjoy that the taxpayers cannot come close to earning themselves, the fiasco that will soon be built at the old bowling alley site and a whole host of other areas that are siphoning off taxpayers dollars, including no bid contracts that are given to cronies of officials that result in excessive expenditures for the taxpayers and we end up with an incompetent financial mess that the citizen of Ludington are forced to pay for.
No big surprise that Kaye Holman was chairman of the Finance Committee for most of the years that Shay has been in office. Remember this pearl of wisdom from April 13, 2015:
Councilor Kaye Holman: "Well, I have soapboxes all over the place. I'm the chairman of Finance (Committee) as many of you know. And in this week's finance (report), against my better judgment, we authorized a payment of a bill to Carlos Alvarado, who is our Freedom of Information person (Coordinator), for a total of approximately $2437, which covers six weeks of FOIAs (FOIA requests) by Mr. Rotta. Six weeks. That is $400 a week, and over a period of a year, which I'm assuming will keep on going, because I have no reason to think it won't, that's $200,000!
Will somebody besides me please, please, get angry. PLEASE get angry. Two hundred thousand taxpayer dollars..."
City Attorney Wilson: "Um, think your math is a little...
Holman: "My math is terrible, I went to Ludington High School." (cross talk of Holman and Wilson) OK, it's $20,000, that's still... oops, I can't say that word. It makes me really angry. I don't care how much it is, it's too much. It... I'm not giving up. Wait till I start coming, after I get off this board (council), and I start coming to public comment.
This was the main oversight John Shay had in his budgeting and purchases.
You'll see a lot of extra waste when I start publishing the city's credit card invoices this fall and the deception they use in the finance records to justify these expenditures of public money. Before the city justifies raising one extra dime in taxes or fees to knock down projected deficits, they have a lot of fat to burn first.