Ludington City Council Meeting October 22, 2018: Costumed-Tax Party

[XLFD]

The last Ludington City Council meeting before Halloween was replete with a couple of scary issues of public policy and an even scarier bit of crazy talk from Third Ward Councilor Les Johnson at the very end showing a frightening lack of intelligence on his part.  Those two issues were a raising of three rental inspection fees and a vote to show the City's intention of considering entering into a lease agreement with the Harbor View Marina-- where the previous leaseholder escaped without penalty over five years before their lease expired because expenses were destined to overrun their revenues for the foreseeable future.

If our city leaders cannot understand basic economics like the vacating Harbor View LLC, how can they be expected to figure out why money coming from the State's Waterways Fund is money coming from taxpayers?   Can't they see that under that mask of free money gifted by the state's grant faeries is money actually taken from taxpayers who can't say "no" without risk of imprisonment?  But let's review the whole meeting before going there first.

After the usual routines that come at the beginning of the meeting, public comment started off and finished with a trio of older gentlemen commenting on the rental inspection fee increase.  This began with Tom Tyron: (2:45 into the video below) 

"As you know all the low cost housing, subsidized housing, is exempt from your fees, and the only one that get your fees are the independent landlords, of which I am one.  And I consider the only reason you are raising this fee probably is because Scottville is getting more than you are.  You're probably jealous, so you have no need to do this, it's just passed on to the tenants; it's just a needless expense.  Thank you."

Even the Michigan Municipal League, the friend of city hall, notes that a fee is actually a tax when it is not a user fee, but rather a revenue-raising involuntary payment forced on the public.   I followed with a closer look at the program, and how a closer look was not only denied to the public, but also to the councilors.

October 22nd, 2018 Ludington City Council meeting from Mason County District Library on Vimeo.

XLFD:  "The council is expected to pass a resolution tonight that would increase two rental tax rates by 100% for a program that was set up to be revenue neutral. They offer nothing to justify the increase in their packet other than the resolution itself that "the revenue produced at the current rates is not sufficient to cover the costs of the program". It seems counterintuitive when one thinks that the second time through, re-inspecting units that have already been certified for occupancy would be cheaper.
Michigan law states that a city with a rental inspection program must provide a complete accounting of the previous years expenses and revenues of such a program when it is requested. Under the concept of transparency, why isn't the rental inspection team not providing the city council with this data for the three years this program has been in existence so this council can make an informed decision on this doubling of rates? It's not in the packets, there is no indication that the B&L Committee members were given this accounting of the program at their meeting on the 18th.
So what is the rationale of doubling these tax rates? At the committee meeting, which does not follow many facets of the Open Meetings Act, it was noted that three landlords for whatever reason did not allow the City to inspect their rental units. These gentlemen respect the rights established by the Fourth Amendment in the Bill of Rights for their tenants, our city leaders do not. It was noted at the meeting that "Funds have been allocated in the Rental Inspection budget to cover attorney fees that will be required to follow up with those property owners who will not cooperate with the inspection process."
Provided that these three statesmen related that their tenants denied their consent for the city's agents to invade their home, the City has no cause of action against them, and the money used, from the City's rental inspection fund would be misused to do so. By state law, the City cannot hold a landlord accountable if a tenant does not grant consent. Likewise, the City shouldn’t penalize the sheepish landlords who have cooperated by raising their taxes in order to needlessly persecute their peers.
City protocol prohibits the inspector from contacting tenants directly, so if Carter, Doug or Ben are unreasonably prosecuted for respecting their tenant's rights, our legal team will need a lot more revenue from the rental inspection fund to get themselves squared away. I thought if these intrusions were denied, the City would just run to the magistrate to get administrative warrants? I think it's rather unethical for the City to double landlords fee rates, just so we can make the City's [Mayor invoked the three minute rule before I could get in the last part of my sentence]  ...attorneys rich at the expense of our small business owners."

Chuck Sobanski followed, expressing the hope that the fee raises would not be an annual occurrence, and asked whether the two rental units going up [at the bowling alley block and the Depot] would face these fees/taxes.  The local paper noted three citizens spoke up about the rate increase, but only quoted Sobanski's hope and question.  Neither the councilors or the City of Ludington Daily News (COLDNews) would answer the question or alleviate the hopefulness.

Before that, the city council unanimously approved resolutions between the City and the Lake Michigan Carferry and between the City and City of Manitowoc that would allow the FASTLANE grants to be implemented for dock repairs on both sides of the lake, pending Governor Snyder's approval, as explained by the city attorney.  It would allow up to $50,000 to be reimbursed back to the City, primarily for the city attorney and grant writer, Heather Tykoski to feast off of.  

At around 17:40, the second big issue of the night was discussed where we hear Interim City Manager Steve Brock "We will make certain that no taxpayer money goes into it, either the existing marina or [Harbor View] marina, if we ever do get to a point where we enter into some sort of lease..."  Consider that statement, it preceded the resolution to show intent to enter into discussions with the DNR and investigate the aspects of such a lease arrangement, which was passed unanimously. 

At 22:20 in, the Tree Inventory was discussed and a presentation was given by Lee Mueller of the Davey Resource Group which performed a tree census over trees in the City of Ludington found either in parks or in the street right-of-way.  All for the low price of over $20,000, you can decide for yourself whether this was a waste of taxpayers' money (unless you view, like Steve Brock and Les Johnson, that state grants coming from taxes are not from taxpayers).  The presentation showed graphics found in the city council packet beginning on page 26.   

Shortly thereafter, succeeding the police activity report, the rental inspection [tax] rate increase was read and passed without discussion, explanation or answers to the concerns of either of the three citizens who spoke.  A lot of unverified figures were thrown around, all left out of the councilor packets for the other councilors to make an informed choice.

Then came the second comment period succeeded Brock saying again at 44:15:  "...there are no tax dollars in [the West End Project] either, it's all been grant money raised, and so we're trying to raise more grant money for that.  As for the buzz in the community that we're wasting taxpayer money in the West End, we don't need that... there's no tax money in it."

The major part of the West End Project, $300,000, is funded by a MI DNR Trust Fund Grant.  Technically, this fund is mostly royalties collected by the state by granting use of public property to private interests (usually mining interests).  It's debatable, but mining royalties operate much in the same way as taxes.  This is without debate, it is money taken from private taxpayers that is more than a user fee and that has all the aspects of a tax.  That set up my last public comment at 45:00 in, the only public comment at this time.

XLFD:  "Harbor View's impending transition is a perfect example of why government should stay away from the private sector. The state spent millions and millions building harbor view marina and then let a private firm reap the benefits for nearly twenty years. The LLC is now pulling out because it is in their best financial interest to do so, and so we the taxpayers are effectively stuck with an unsustainable public marina that much less than 1% of us use.

City leaders embrace the concept of leasing this marina despite the blatant fact that loads of public money will need to be put into maintaining it, more than what will be returned at least in the short term by its operation, despite it's negligible utility to the public it will supposedly serve. The City is trusting that the state's taxpayers will fund this needed maintenance, but this is by no means assured, or should it be.

In my estimation, building and running a public marina is a form of corporate welfare, where the wealthy few who can afford nice watercraft and slips are able to benefit from a huge outlay of public funds that never gets recouped. Yet, as it has been since the inception of the city marina, Ludington has plenty of private marinas to fulfill the needs of our locals and our tourists, and has expanded through history to meet that need without using any public funds. In fact, they have expanded the tax base unlike the soon-to-be two city marinas that return zero in tax revenue, and spend a lot more in operation and maintenance than they take in. Harbor View currently brings in over $70,000 in property taxes alone, for now.

The two public marinas would be failed business models if they actually operated in the private sector, where you can't rely on a never-ending supply of taxpayer money to keep you afloat after you make asinine business decisions."

After a couple of FYIs followed, Councilor Les Johnson made a declaration about my lack of intelligence.  

"I would just like to reiterate that these marinas are not using taxpayer money.  I don't know how many times we have to say that.  They're not using taxpayer money, in fact, they have put money back into the community, more so than what any taxpayer has put into it, so I would just like to make sure that you realize that, Mr. Rotta."

Johnson is wrong on all counts. First off, here is the municipal marina fund expenses for the City marina  CityMarinaFundExpenses and CMFE2.  Is there any money given back to the community you can find there in those six years?  I just see money used for paying employees their wages, coupled with supplies and maintenance for the City Marina.  Nothing to the community, not a cent of property taxes to the City at all.

And even though the marina is to be ran like an enterprise fund, where they should be self-supporting on the services they provide, they have proven they cannot do so without taxpayer money coming from the State Waterway Fund via Waterway Program Grants.  See this source:

As the MSWF rely primarily on gas taxes and a watercraft registration fee (which inarguably is a tax, an enforced financial charge exacted by a government for the support of its various functions, imposed on watercraft buyers). See also this link where the State is looking to put this tax on small watercraft, but is being challenged by residents and legislators as another 'money grab' by an avaricious DNR.  

So when the City marina applies for grants from the State Waterways Commission for the million dollars plus they want to fix their docks, many hundreds of thousands they want for transient docks, dredging and bathhouses, and tens of thousands for fish cleaning stations and other sundry improvements, they are utilizing taxpayer money, albeit, they steal it from all portions of the state.  A private marina does not have that resource, because a private marina is not a drain on the state, it is a source of income for the state.  

Thus when Brock guarantees us that no taxpayer money will ever go into a city-leased Harbor View Marina, just like none has ever went into the existing marina, he is blowing smoke.  We all pay for these public marinas and they give nothing back other than a summer job for a city official's son or daughter.  The scary mask is removed, and it reveals an even worse monster.

[Freedom Seeker]

Brilliant representation/caricaturization of how it seems our city council operates the budget.  Skipping along the yellow brick road.  Where are the Ruby slippers to take us back home?

[stump]

That is as bad as when Neal declared bankruptcy , he stated the money came from the state, not the tax payers. Maybe the councilors should have a class on how the state gets it's money.  Do they think , Hey, Ludington wants some money for their west end project, go print some up and sent it to them, make that in $100's 

[AQUAMAN]

Well thought out and said stump, thank you!

[Freedom Seeker]

Good analogy, Stump!

[XLFD]

I don't know whether our councilors can read a pie chart, but the one above is from the State Budget Office showing a breakdown of how the state gets its money.  Add the taxes and it's almost 50%, more than a third are from the feds via fed/op/capital grants, and the fed govt. gets over 90% of their revenue from three taxes.  That leaves only about 1/7 of the revenue the State receives through charging for services (user fees) and miscellaneous.  

[stump]

Looks like it's time for a FOIA on the city marina . How much they really take in,wages,fuel, maintenance,repairs, supplies etc. for the last 5 years. That should show whether there is profit without taxpayer funding.

[Freedom Seeker]

Yes, who can make sense of the city budget?  The links you provided, X, are budget outlines aren't they?  Where are the actual output and input (actual expenses and actual income)?

[XLFD]

The provided links were of the actual budget, with categorization of expenses that should match the actual amounts spent (for the left columns, the right columns are future projections).  To my knowledge, the marina board reviews its expenditures each month, so double checking such budget numbers' accuracy should be a simple matter (simple in that they shouldn't try to charge an arm and leg for the info).

[Willy]

One of the things that really raises the hair on my neck is the nepotism displayed when it comes to jobs at the marina. The young people employed during the summer were the teenage children of local politicians and their cronies. Kids whose parents were not connected never had a chance at those jobs.

[XLFD]

And even though their unethical policy was pointed out many years ago by the Ludington Torch, the Ludington City Marina still has not adopted any hiring reforms that would allow an open application process.  Marina jobs are never posted, children of city officials and employees still dominate the roster, and it appears that the remainder are their buddies, just like when Brandy and Chelsea Henderson worked together when their father, Mayor John Henderson was an ex officio member of the Marina Board with the additional power of appointment/termination of MB members.

[AQUAMAN]

Yes, it's been very sickening at best for many years. Is there no way to get this all out to the public for their response on the matter of  hiring municipal marina employees? And spring time postings of the jobs? I think if only 1,000 people knew, there would be Hell to pay for this crapola, thanks.