The Virtue of Accountability Illustrated

[XLFD]

In the pledge of allegiance, Americans not only pledge allegiance to a red, white and blue cloth rectangle, but also to the republic for which it stands. The idea of a republic in which power is held by the people and their elected representatives can be, and has been, corrupted since the time of the founding fathers establishing the republic in 1776. This has especially been the case with local governments, particularly at the municipal level.

Traditionally in the first 130 years of the republic, federal and state governments served as a model for their municipal counterparts, with an executive branch led by one person (President-Governor-Mayor) and a legislative branch made up of many elected people (Congress-state congress-city council). At each level, checks and balances exist between both branches.

Starting in 1908, some cities experimented with adding city managers to the mix. The council-manager government form was created in part to remove city government from the power of the political parties and place management of the city into the hands of an outside expert who was usually a business manager or engineer, with the hope that the city manager would remain neutral to politics of the city. Both mayor-council and council-manager forms of government have strengths and weaknesses, the most common of each are listed here.

In Ludington and other cities, unelected, mostly unaccountable city administrative staff wield enormous power over local decisions through their control over process because of the current council-manager form of government. Even though they may originally come from other areas and may currently live outside the city limits and have really no vested interest in city politics, they have an inordinate amount of say in what happens in the city corporate.

Tough political considerations that should come into play are overlooked. Tough political decisions that fly in the face of local reason are decided outside the realm of the council chambers. The mayor and city council rarely have to assume any political accountability for the 'administrative' and 'executive' decisions made, the deflection to city staff can always be made, people who cannot generally be affected by a disgruntled electorate.  An excellent reason why councils and mayors have welcomed the council-manager form over the last century.  The politically tough stuff is handled by an individual who cannot lose his job at the ballot box.

Acknowledging that Ludington's newly-hired city manager is more than competent and capable at his job, the recent experience with an unauthorized 1% Property Tax Administration Fee (PTAF) illustrates exactly why the council-manager form of government so often fails the locals in Ludington.  Elected officials are able to dodge any kind of accountability.

The notion of a 1% PTAF appears to have been introduced by former Interim City Manager Thievin' Steven Brock back at a committee of the whole meeting of the council on 11-19-2018. Lying Steve Brock told all officials that revenues are up, so it would be a perfect time to raise even more new revenue by applying a 1% PTAF to tax bills; hey, all the surrounding communities are doing it.

Looking through the meeting's minutes, Councilors present including current councilors Winczewski, Johnson and Bourgette had nothing to say about the PTAF either way. The very next Monday, the full council heard Brock's introduction and presentation of the 2019 Budget, the minutes of that meeting include him telling all present that the revenues include the 1% PTAF, applied even when all other revenues were trending upward. In both cases, he uses the word 'apply', which does not signify any formal action need be taken by council, this time he says it will raise $44,000. The three current councilors present at the previous meeting were in attendance, as was Councilor Lenius, all who remained mute on the added fee. This time Lying Steve Brock stated most taxing jurisdictions in Mason County rather than all.

The next meeting had Brock once again presenting the budget, explaining once again the trend up in all revenues, and the PTAF to be 'instituted', again without inferring any action was needed by council to do so. The minutes verify that:

The video of the meeting shows Brock explaining the PTAF at 15:15 into the meeting, and the council passing the budget unanimously at 33:00 in. There is nothing commented on about applying or instituting the PTAF in between or after, by any of those four councilors already mentioned (or others).

Nothing more was heard about a 1% PTAF until citizens began receiving their tax bills at the beginning of September. On two local watchdog social media sites, taxpayers wondered where a new line item appeared on their tax bill. I took one look at these bills and my first thought was: "I've been to all council meetings, they have never approved this tax-fee and they must." A quick check on state law and a double check of meeting minutes confirmed my suspicions, but I concurrently sent a FOIA request to the city manager asking for the resolution or ordinance that the city council passed to authorize the 1% PTAF.

He had to admit there was none, and though he was not going to be attending the next meeting, he did make sure it was put on the agenda and passed along that the city attorney said that it would be within the council's power to impose it after imposing the levy. An hour before the city council meeting on September 9th, the Finance Committee met where they discussed the 1% PTAF. The budget which reflected $44,000 in revenues from the PTAF was at first reduced to $37,000, and then increased to the actual $120,000, which is a gain by the City of over 3% over its normal property tax revenues. The committee would ultimately not make a recommendation to council, only suggest moving to discuss the issue:

Which brings us to the meeting which illustrates why political accountability matters, and why citizens should demand it more often. The four councilors present at the previous two council meetings where the PTAF was presented offered opinions this time, rather than sitting mute to a fee that they believed would be imposed by city staff without the council's active participation. After strong public comment came out against the PTAF with zero support shown, the three who were at none of the earlier meetings (Serna, Rozelle, and Brandy Miller) all came out strongly against the resolution under consideration on principle.

Councilor David Bourgette admitted the ball was dropped and since proper channels weren't followed, he thought they could not approve it at this time.  A change of heart.

Councilor Les Johnson explained that a couple of years ago it seemed reasonable, but he didn't feel it was correct to do so right now.  A change of heart.

Councilor Joe Lenius pointed out that the City only got about a third of the tax bill for themselves, the rest was for county, LMTA, WSCC, and school taxes. The PTAF snuck up on the council, and they may have dropped the ball.  A change of heart.

Councilor Winczewski admitted that the rest of her fellow three councilors heard of the PTAF and thought it was a good idea at the time, explained they didn't know there needed to be a resolution made, and so it was never done. She thought this might be a good way for the City to get some extra money for improvements, like redoing playground equipment or getting new snow fences. This PTAF money would go for the 'fee for handling those taxes' (huh?!). She wanted a cost analysis done and a bunch of answers-- she didn't ask for that before.  A change of heart.

The city council agreed not to consider the resolution for passage, thereby absolving them from voting for or against this tax-fee. Citizen Chuck Sobanski thought this was rather cowardly of them and said so in the second public comment. It was, but most of the other citizens present did not want to tempt fate and see whether those four councilors who tacitly agreed with the PTAF throughout this time, would change their vote now.

So in review, when it was understood that the city manager would wave a magic wand and have the treasurer apply or institute this 1% PTAF on taxpayers and bring all that extra money in, these four councilors affirmed by their silence that this was a good thing. When the topic came before them again and they realized that citizens would hold them accountable for their vote, they chickened out of their approval because of political expedience.  

"How could I win re-election when I voted for this effective 3% property tax raise to be imposed on citizens who are all against it, especially when officials are saying over and over again that they do not need the extra money it would generate?"

Ain't accountability grand?

[Du Wright]

Thanks for the overview and recap of the property tax administrative fee, XLFD. I like that Mitch Foster admitted that it wasn't properly voted without making you jump through hoops like previous administration probably would have. I love accountability and that the councilors listened! What is a bit concerning is the new $120k figure. How was that overlooked before, if you could explain, please?

[XLFD]

You may be happy to learn that I have sent multiple FOIA requests across multiple Mason County taxing jurisdictions to find out the meeting minutes of when their board/council/commission passed a resolution or ordinance to adopt the property tax administration fee.  I totally expect to find that many of them will not have such records in their files, and therefore if they have imposed a PTAF without such approval they owe their constituents some big bucks. 

Consider that if you had property in a township since 1983 when your township treasurer 'applied a PTAF without board approval and consider that they may effectively have taken around 3% more of your taxes than they should have over the last 35 years.  They would owe you more than a year's worth of taxes.

To answer your great question about the numbers involved, here is my reasoned guess as to why those changed.  Brock's budget crew of 2018 saw over $4.4 million in property taxes already collected in 2018, and figured incorrectly that the amount they should get for a 1% PTAF in 2019 would be roughly $44,000, which is 1% of that.

The incorrect guess of $37,000 was made on the presumption that the City would get its share of the PTAF proportional to the other taxing authorities they collect for.  As noted by Councilor Lenius, less than a third of the taxes collected by Ludington go into their coffers, so somebody thought the PTAF would have the same distribution-- but it isn't, this would all go to the City for its collection, ergo since they collect roughly $12 million in taxes, their 1% PTAF would actually be $120,000 just for them.

The use of the three changing figures to describe the amount does not give me a lot of confidence in the mathematical prowess of our staff in trying to institute this tax-fee.

[Du Wright]

Thanks very much for that explanation, XLFD. Your reasoned guess makes sense. Although I thank the new manager and mayor for acknowledging the error in not voting on the issue, and correcting it and the procedure to answer issues is a move in the right direction, I hope they are quicker at using proper procedures. I can't help but agree with Chuck Sobanski's comment to do their job and research and get things right in the first place. If they can't figure out stuff, then I hope they answer your and citizens questions sooner. That is not only their job, but if they listen, a lot of issues would be solved before they become big problems.

Thanks again for your mathematical and analytical skills, the desire to do right and fix that which is wrong.

[XLFD]

The City of Scottville looks to be well served by its new city manager.  She replied to my FOIA request effectively the same day the request was received and gave me not only the minutes of the meeting where their resolution was passed but the resolution itself.  Somebody had indicated that Scottville only applied the PTAF to winter taxes, by the only passed resolution, which hasn't been repealed, they should be collecting it for summer too.

[XLFD]

Hamlin Township has shown that they quickly enacted the 1% PTAF back in 1983.  

[XLFD]

PM Township passed their 1% PTAF in the year 2000, according to the records they sent me, and have not repealed them since:

Minutes11-14-2000.pdf