Ludington City Council Meeting, October 14, 2019: What TIF it wasn't legit?

[XLFD]

The month of Halloween's first Ludington City Council meeting foretold ill tidings coming for the next two. Whereas most months have only two meetings, a special session was called for and approved for Thursday, October 24, 2019 at 5 PM in order to pass an ordinance allowing a new 15 year Tax Increment Financing (TIF) Plan to go into effect before the old plan expires.

Ludington DDA TIF Plans when done correctly should be scary enough for an informed electorate, as they effectively seize a portion of the property taxes that people in the downtown district pay each year; that money is lost to the taxing authorities they would normally go to. The newest incarnation of the plan seems to follow the old plan in generating revenue, just under $50,000 per year is taken from the coffers of the county, the community college (WSCC), and mass transit (LMTA).

The rest (a little over $20,000) is taken from the general fund of the city; the sum is given to a DDA that has not been transparent through actions and expenses. They plan on using the lion's share of the money generated by the TIF for altering the James Street Plaza into a 'new and improved' variant just like they have done about every other year on the whims of their membership. Oddly enough, the new TIF doesn't even generate enough cash over 15 years to get the money they say is needed for the project, only about 40% of what they need.

That doesn't matter, our city intelligentsia have decided that this idea is the saving grace for downtown Ludington's economic development. The council would not do anything with this topic other than set a hearing for that special meeting and introducing it as a first reading. I had other plans when it was clear that they had not properly prepared the plan according to state rules.

But before I weighed in on public comment about the TIF Plan, the council went through the preliminaries without Chief Barnett's presence or invocation, his new stand-in was Sergeant Steve Wietzerkowski. Mayor Steve Miller proffered public comment, and another Steve got up to be the first commenter, Stephen Von Pfahl. Von Pfahl (2:30 in) implored the council to consider the needs of the citizens when considering the marijuana dispensary issue in the future, and offered some statistics over the next three minutes in favor of having dispensaries. That's when I offered my comment.

XLFD: (5:55 in)  "On August 26, I formally informed the council in my public comments that they had not established a citizen's council for their amended TIF Plan and by state statute that a public hearing on that plan could not be held until 90 days after formation of such a group. To your credit, you finally established the citizen's council at the next meeting on September 9th and thus by the clear wording of the statute, you could not hold a required public hearing on the proposed TIF Plan until December 8th. By statute, the TIF Plan could not be passed until after the public hearing was held, which makes approval of any amended TIF Plan earlier than December legally impossible.

Even if this council was to knowingly break the law by trying to vote on the plan presented tonight at a special meeting on or before October 25th, they would find themselves in violation of another statute. At the meaningless "public hearing" held on September 23rd, the public and other taxing authorities were presented with a 45 or 46 year plan, capturing at a 12 or 20% rate, and raising $4.7 or $9.4 million depending on what part of the plan you believed.

Tonight you are being presented with a 15,16, or 45 year plan, capturing at a consistent 12% rate, and raising either $1.1 or $4.7 million, depending on which part of the plan you believe. Somebody greatly modified the plan by up to 31 years and up to $8.2 million of value. Such modification must be formally approved by the city council, noticed and given a new public hearing according to statute.

The lack of exactness and rigor throughout last meeting's TIF plan and the much different TIF plan presented at this meeting should be further cause of concern for those assembled here tonight whose name are attached at the front of it and those who are anticipating voting for it at a special meeting on or before October 25th fully knowledgeable that the law prohibits that action at that time. [END]"

Before getting off this topic, much later, at 1:15:35 into the meeting, City Attorney Richard Wilson addressed some of my concerns when they did the first reading:

"We had a comment earlier today that there are provisions in the new re-codified tax increment financing statute that allows us to move forward with this plan even though the Development Area Citizen's Council did not get organized as quickly as it should have gotten organized under the statute, there is an escape clause in the statute that allows us to move forward. DACCs are problematic in every municipality that I have ever represented. It's hard to get people to volunteer to do these things. The notice requirements are very odd; you have to publish five days in advance in the newspaper just to have a meeting of [the DACC]. So, we had some hiccups, there's no denying that early on, but in my opinion, the [2019 TIF statute] does allow us to move forward with this, and that is of course up to council, not to me. Just to respond to the earlier public comment."

Later Wilson would explain what tax increment financing is and is not (and doing so accurately), but here he is of the opinion that state law has an escape clause, but doesn't really say what that is other than saying that there are some odd requirements, and implying that odd requirements can be ignored like a "development area citizens council shall be established at least 90 days before the public hearing on the development or tax increment financing plan." (MCL 125.4221).

Doesn't sound like a very odd requirement to me, especially when 'shall' means 'must' in legalese, and it's only one of other reasonable requirements they have bypassed due to the community development director's neglect of duty to get this TIF amendment advanced in an open, competent, and honest fashion. Councilor Brandy Miller would also point out a couple of more 'typographical' errors in this meeting's plan while offering that the previous 46 year plan had others.

I had forecasted that the city council would barge headlong into pushing the plan forward by setting a date for a special meeting and passing the illegitimate ordinance and they didn't disappoint. I really didn't need to adjust my second comment made at the end of the meeting, and after a brief comment by Steve Von Pfahl about how democracies work and why that worked in favor of dispensaries (start an initiative then):

XLFD: (1:28:00 in) "The City appears as if they will ignore state law by trying to adopt this meeting's amended TIF Plan at a special meeting, so allow me to offer a few caveats if they do. If such a plan is adopted at any time before December 8th, I will contact the state treasury department seeking redress, if the measures they take do not validate current state law, I will seek alternatives to preserve the taxes in the coffers of the city, the county, along with the local college and transit authority that this plan seeks to "capture".

Those taxing authorities will use it for public purposes, this plan though unclear in many ways has a harder time claiming that. The 15 year TIF plan appendix projects the TIF will raise about $1.1 million, and will have $2 million of that going for paving parking lots and alley and $2.5 million going towards Legacy Park construction. I'm afraid to let you in on a little secret: You can't get $4.5 million out of $1.1 million.

Frankly, considering that the public was told in no uncertain terms that Legacy Park construction would be done without public funds and that the conditions of the worst downtown paved parking lot is better than Ludington's average local street, the $1.1 million would better serve the public if the money remained with the four taxing authorities savings accounts. Thank you. [END]

Even if the process wasn't tainted by glaring errors throughout, that should be the question at the forefront: Does the public purpose of the TIF justify taking $70,000 plus a year away from other local taxing authorities which provide fire protection services, law enforcement, public works, secondary education for the community, public transportation, etc. Is remodeling a street right-of-way once again and repaving parking lots in better condition than our streets a higher public purpose? To me, it's a no-brainer; to them, it's follow the no-brainer wherever she may lead.

And now, the rest of the meeting

The TIF issue aside, the rest of the fairly long meeting didn't have a lot of controversy. The Finance Committee trotted out first presentations of ordinances making three year contracts to clean their floor mats and provide senior services. They accepted the low bids on two other contracts for a strategic planning service and for replacement bubblers at the marina (FC Chairman Johnson noting that the marina fund would be used for the purchase). The city's marina board is strictly advisory which is why the council needs to approve 'emergency' purchases that arise.

A surprisingly interesting part of the reports was for a deer cull to decrease the deer population in the city. They related what was said at the recent committee meeting, and it looks as if they plan to budget up to $15,000 per year to cull 30 deer. I hope this comes before the public for discussion because deer culls as described just don't work that well and at $500 or more per head, it's hard to justify the expense.

The degradation of South Rath Avenue was discussed and it will remain closed due to high water issues. City Manager Mitch Foster related another issue dealing with shore erosion just south of the Loomis Street Boat Launch stretching to the nearby sidewalk. Related, the city was still investigating narrowing the scope of engineers hired by the city down to a more manageable number like three firms, and perhaps doing this with other contractors routinely needed for services.

The council approved $164,000 for hydrogeological testing around the wastewater treatment plant's old lagoons, which will be taken out of service. The City is rather mum about these issues, but it seems that if the contractors had found a lot more sludge than they were expecting, that the membranes in these ponds probably deteriorated over the last four decades and possibly contaminated nearby groundwater. This was more of a forced vote.

They also approved a $35,000 contract to effectively work on the next master plan with WMSRDC, a Muskegon firm that will develop one just like LIAA from Traverse City did in 2014/2015 for a bit less, but still too much. Don't you wish our leaders could get somebody locally who knows the character of the area already to do this task? This is where we get some of the crazy ideas like Legacy Park and the West End Project.

The city manager gave an update on various issues involving Harbor Front Marina, an MDOT meeting, and the proposed priority based budgeting. At the very end, the city clerk notified everybody that a postcard will be sent out letting them know they can absentee vote without a reason. The meeting was then adjourned, with CM Foster predicting the Green Bay Packers would beat the Detroit Lions that night.

He was right, but he had quite a bit of help from the officials.  I must be more of a Lion's fan than a Packer's fan, because I can never seem to get much help from officials.

[stump]

   On the subject of the lagoons membranes , Who is the contract going to for that? is it the same contractor who just got a extra MILLION BUCKS  for under estimating the sludge removal?   $164,000. seems over the top for testing ground water .

[XLFD]

I kinda thunk that was excessive too.  The various records regarding this contract with Fishbeck, Thompson Car & Huber (FTCH), the same brainiacs doing the rest of the WWTP engineering, that procedure description & contract begins on p. 84 here.    

The procedure entails having a subcontractor dig the wells and then have FTCH oversee the testing.  I definitely would have liked to see the competitive bidding process used, if just to make it so that FTCH would have to better explain why it costs the $164K they propose.  There is no breakdown of the expenses anywhere to be found, the reason for going bidless was never discussed at council and if Mitch Foster doesn't want to be compared to John Shay, he better give a better reason than there is "no guarantee that the cost would be significantly lower."  I and discerning councilors should want a clear reason why it will work out better.

The city charter infers bidding is to take place for such expenditures and section 2.4 of the city code says:  "Competitive bids for all purchases and public improvements shall be obtained where practicable and contracts awarded to the lowest responsible bidders."  It adds "when it is clearly to the city's advantage to contract without competitive bidding, the city council, by affirmative vote and upon recommendation of the city manager, may so authorize".  The city councilors serving on the committee didn't even try to make that point.

The charter and code makes it clear in literal interpretations of them that the city council should have a separate discussion and vote when they decide to forego competitive bidding, rather than enter into a large contract without using competitive bidding without a care of the process.  

[Freedom Seeker]

Sad, sad, sad and more craziness in no bidding contracts and failure to follow city charter. Thanks X for enlightening the public.

[Willy]

Thanks X for all you do in gathering and posting this type of information. Most people would have no idea what is going on even if they attended the meetings due to the technical nature of the information. Speaking of the boat launch, west end project as well as the City Marina, I did some photo taking and discovered that all these unnecessary boondoggles are going to bite the citizens in the rear very hard if the water continues to rise. What we are experiencing now shows the short sighted ideas and wasteful construction Ludington's  leaders have piled on the backs of the taxpayers.

The photos below are of the new and wasteful [some might say stupid] west end project which seems to be in the process of replacing the need for the new water park the City is planning to waste more money on. If the water keeps rising get ready to pay hugely for this unwanted piece of sh_t in order to save it. The fools who were behind this have created a monster. Just hope the water level goes down.

Below is the City Marina. Rising water levels will force altering the docks by raising them at much expense. Also the very expensive walkway is in jeopardy if the lake level continues to rise. Another thoughtless and expensive addition that will only burden the taxpayers if repairs or alterations are required.

And let us not forget the collapsed walkway at the boat launch which will be costing a minor fortune. Maybe this time an engineer can approve the construction.

[XLFD]

Thanks a bundle for posting these supplementary pictures and for your other support. Willy.  These boondoggles will continue if city hall continues to try and look cosmopolitan by listening primarily to external voices of experts they consult with to make Ludington better, rather than listen to the stakeholders:  the citizens, property and business owners of Ludington.

All of those city officials don't understand that citizens and visitors alike are upset with money being spent on these whimsical and Quixotic projects.  Thus, while our streets and infrastructure suffer from neglect, they will continue pushing for this crap in the name of 'placemaking', 'resiliency', 'redevelopment' or whatever other buzzword they glom onto. 

[Freedom Seeker]

Looks like disaster at the west end and the other places. Thanks for the photos Willy. Sadly, a picture speaks a thousand words from the public that the city council didn't listen to. So true about the short-sighted agendas being pushed through. Maybe nothing will ever wake up the Council about these crazy decisions until we keep going into debt over the failures. These "free grants" projects are kind of like people winning a free prize on the Wheel of Fortune, but being too broke to pay the taxes to claim the prize.