New Pension/OPEB Reporting Requirement Released

Following the year-end passage of pension/OPEB legislation that implements the recommendations of Governor Snyder’s Responsible Retirement Reform task force report, Treasury released late today the reporting requirement documentation which ended up as the main component of Public Act 202 of 2017.

This afternoon’s Treasury announcement is included in Numbered Letter 2018-1: Local Government Retirement System Annual Report. This guidance includes links to a fillable reporting template (Form No. 5572), detailed instructions, and frequently asked questions.  Each of the documents can also be found on Treasury’s Local Retirement Reporting web page.

Under this new law, the linked pension and retiree health care reporting is due six months after the end of a local unit’s fiscal year. For those that have already filed their 2017 audited financial statements, this new report is due by Jan. 31, 2018.

Additional information from Treasury is expected in the coming weeks regarding “underfunded status” waivers and the corrective action plan process under the still-to-be-established stability board.

Communities are encouraged to direct questions via email to their office at LocalRetirementReporting@michigan.gov or visit Michigan.gov/LocalRetirementReporting.

Chris Hackbarth is the League’s director of state & federal affairs. He can be reached at 517-908-0304 and chackbarth@mml.org.

Year-End Legislative Wrap-Up

While last week’s House and Senate adjournment merely marks the mid-point of this two-year legislative session, that did not mean that the Legislature coasted into their holiday break.

Highlighted by the intense activity surrounding OPEB reform, both legislative chambers pursued aggressive agendas in the final days before adjourning.  Numerous bills that the League was tracking and engaged with experienced some measure of action:

The now 13-bill OPEB package was signed by Governor Snyder this week as Public Acts 202-214 of 2017 and takes effect immediately.  New reporting requirements under the bill are expected to be phased in over the next year, with some reporting expected due as early as January 31, 2018.  The League will work to update member communities as more information becomes available in the next couple of weeks.

Senate Bill 110 clarifies that municipalities implementing plans to increase the supply of below market housing are not violating the Rent Control Act (PA 226 of 1988) by offering voluntary incentives. This League-supported legislation was introduced in February and received a committee hearing this last week of session. It’s anticipated the bill will receive another committee hearing in early 2018 and be voted out.

Two economic development proposals of key interest to municipalities were also voted out of the Senate during the last week of session.  Similar to legislation that died at the end of 2016, the Senate sponsor introduced Senate Bill 393, which consolidates all tax increment financing authorities, excluding Brownfield Redevelopment Authorities, into one act with added transparency and reporting requirements.  Senate Bill 469 would reinstate the Michigan Historic Preservation Tax Credit.  Both of these bills were voted out of committee and out of the Senate last week and have been referred to the House Tax Policy committee where they are expected to receive committee consideration in the new year.

The League was also pleased with the Governor’s signature on legislation allowing urban grocery store projects to access funding from the community revitalization program this week. The House and Senate coordinated efforts last week on House Bill 4207 to provide State Rep. Andy Schor with one last Public Act before he resigns to take over as mayor of the City of Lansing.

Three different proposals related to the new Personal Property Tax system also saw movement before the recess, with Senate Bills 570-573 being finalized and sent to the Governor.  These bills provide for a much needed local mechanism to address late-filed business exemption applications.  Senate Bills 590-593 were voted out of the Senate and were referred to the House Local Government committee.  These bills, promoted by the League and reported from the Senate committee earlier this fall, would essentially hold communities harmless from any reduction in their debt limit due to a reduction in their property tax base from now-exempt personal property.  Finally, House Bill 5086 was developed between local government groups and the Department of Treasury to address a host of technical and minor policy issues related to the continuing implementation of the new system and the need to align the statute with the practical realities of managing and administering the new law.  This bill moved nearly unanimously out of the House last week and will be considered by the Senate Finance committee in early 2018.

Finally, a League-supported proposal to allow for the voluntary coordination of election duties and functions moved this month as House Bill 4671 received overwhelming support in the House and is now awaiting further action before the Senate Elections & Government Reform committee.

Infrastructure and technology issues also experienced a flurry of lobbying and negotiation over these final weeks of 2017.

Our advocacy efforts combined with a broader coalition opposing legislation which would have preempted most local control over private telecommunication provider line relocation projects.  We were able to delay action on House Bill 5098 that was being pursued by the industry before the end of the year.  This proposal remains alive, however, and we will continue to work to block further action on this bill.

The discussions surrounding the proposed industry roll-out of small cell technology is quickly becoming a big issue for municipalities. Small cells are low-powered antenna nodes that have a range of up to 2 miles and are installed for the purpose of relieving congestion for wireless users. The term “small” refers to the footprint of the device. Small cell devices can be mounted on their own 40’ poles, or on existing utility or street light poles. Senate Bill 637 was recently introduced that would create a new act that allows for small cell technology to be consider a permitted use both inside and outside the right-of-way with limited exceptions. The bill would severely limit local control around siting, impair municipal ability to protect the public health, safety and welfare of residents, and hinder local government’s ability to manage the ROW, potentially leading to a significant increase in the number of new poles within our communities.  Supporters of this proposal are looking for a statewide regulatory structure that is similar to the Metro Act and the Video Franchise Act.

The League is opposed to the language as introduced but working with the Chairman, Senator Mike Nofs, of the Senate Energy and Technology Committee to improve the bill. To do that we have extensively researched legislative efforts in other states, discussed the issue with several communities and municipal attorneys, and looked at the Distributed Antenna System (DAS)/Small Cell License Agreement created by the Grand Valley Metro Council.

League staff have met with Chairman Nofs and presented alternative language based on our research and conversations with members. This viable alternative to the introduced legislation strikes a balance between local control and the nationwide deployment of this new technology. The telecommunications industry will continue its push for the bill when the legislature returns next year in the hopes of quick action . We have asked the Chairman that this issue not be rushed and that all parties be brought to the table to discuss this bill and our alternative.

The Michigan Municipal League is also participant on the Lead and Copper Rule Stakeholder Workgroup that is assisting MDEQ with recommendations to address modifications to the Administrative Rules promulgated pursuant to Michigan’s Safe Drinking Water Act, 1976 PA 399, as amended. The ongoing discussion continues to be about how to best protect the public from lead exposure.  Unfortunately, the preliminary draft rules add additional burdens to community water supply systems that run counter to the principles of asset management and may ultimately hinder the protection of public health. In addition to the League, there are more than a half dozen community water suppliers, the American Water Works Association, public health departments and others participating on this work group.

The draft rule would reduce the action level from 15 parts per billion down to 10 parts per billion, require communities to map their existing system to identify the presence of lead, require that a community water supplier be responsible for the replacement and cost of private lead service lines, along with many other requirements that could pose significant financial and logistic hardships on a community. The League has taken a stance that we are not opposed to determining how much lead is present in water systems or the need to systematically begin removing lead from systems, but it cannot be done in such a way that causes a financial hardship or conflicts with the Headlee Amendment or the Bolt decision.

Link to the Preliminary Draft Rule: 2017 Preliminary Draft Lead and Copper Rule

Link to the DEQ Summary Document: Summary Lead and Copper Rule Requirements

The Governor has requested this issue be placed on an aggressive timeline and a finalized draft rule is expected by the first of the year. Should our concerns not be addressed through the stakeholder process, communities will need to be prepared to offer public comments on the rule in early January. In the meantime we will continue to work with those stakeholders that have common concerns with the process and draft rules to make the necessary adjustment to help prevent exposure to lead while still allowing for the efficient management of our water supply systems.

The Legislature is scheduled to return to full session on January 10, 2018, with the Governor’s final State of the State message and the Fiscal Year 2018-19 budget presentation to follow shortly thereafter.

Chris Hackbarth is the League’s director of state & federal affairs. He can be reached at 517-908-0304 and chackbarth@mml.org.

State House Considering Revenue Sharing Package

The League's Chris Hackbarth testifies about the proposed revenue sharing bills Tuesday, Dec. 5, 2017 in the House committee along with officials from the Michigan Association of Counties and Michigan Townships Association.

The League’s Chris Hackbarth testifies about the proposed revenue sharing bills Tuesday, Dec. 5, 2017 in the House committee along with officials from the Michigan Association of Counties and Michigan Townships Association.

Following the introduction last week of the 16-bill OPEB reform package, three additional bills were introduced in the House to create a structure that attempts to address the chronic under-funding of revenue sharing for local units of government.

Lead by chief sponsor, former Walker city mayor, Rep. Rob VerHeulen, House Bills 5314-5316 do three main things:

 

  1. Creates separate city, village, township (CVT), and county Revenue Sharing Trust funds to protect against future revenue sharing reductions. These trust funds would receive dollars earmarked directly from Michigan’s sales tax to provide the funding for statutory revenue sharing for CVTs based upon the current budget appropriation amount (approx $248 million for CVTs).
  2. Provides an initial attempt at increasing revenue sharing by growing the current statutory appropriation by $100 million over the next 20 years from the sales tax. The bills would divide these new funds ($5 million/year) equally between counties, cities, villages, and townships.
  3. Secures future Personal Property Tax (PPT) reimbursement revenue that is available above what is needed for 100% reimbursement, as an additional down payment on revenue sharing restoration.

The League’s Chris Hackbarth testified Tuesday about the bills in the House Competitiveness Committee along with officials from the Michigan Association of Counties and Michigan Townships Association.

The League supports the bill package in concept and continues to advocate for a plan that restores the revenue sharing cuts of the past decade and distributes dollars appropriately. The three bills were voted out of the House committee Tuesday and await action on the House floor.

Rep. VerHeulen issued a press release about the package and explained it would be funded through Michigan’s sales tax and would give a level of security to local communities in the case of an economic downturn.

“There have been compounding factors that have all led us to where we are at right now in areas across the state,” VerHeulen stated in the release. “Our communities face a funding crisis. They cannot make reliable payments into retirement systems for their employees, including police and fire, and money is often being diverted away from vital public services in an effort to keep up with funding those retirement benefit plans or other budget necessities.”

The bills could be considered in the full House by the end of the year.

Posted by Matt Bach, the League’s director of communications, on behalf of Chris Hackbarth. For details contact Hackbarth at chackbarth@mml.org.

Stay Tuned: OPEB Revisions Forthcoming and We May Need Your Help

UPDATED (10 a.m., Dec. 6, 2017): The League has been told to expect substitute versions for the 16-bill OPEB reform package sometime this morning or later today. The original package of bills, as introduced Nov. 30, was approved without support from Democrats in House and Senate committees Tuesday and have been tentatively scheduled for action on today’s House and Senate agendas. The League continues to actively press for amendments to the bills that would address our concerns. Please stay tuned as the League may ask you – our members – to contact your lawmakers to support or oppose the forthcoming revisions.

The League's Chris Hackbarth, right, testifies about the proposed OPEB legislation with officials from the Michigan Association of Counties and Michigan Townships Association.

The League’s Chris Hackbarth, right, testifies about the proposed OPEB legislation with officials from the Michigan Association of Counties and Michigan Townships Association.

FROM 4:30 p.m. Dec. 5, 2017: The League’s Chris Hackbarth and Anthony Minghine testified this morning and this afternoon in opposition to the introduced versions of the identical OPEB (Other Post Employment Benefit) bill packages in the Michigan Senate and House committees. Negotiation on these bills is ongoing and we are working diligently with the Governor’s Administration and House and Senate leadership staff to address our concerns. They have been receptive to our input so far and we are waiting for revisions that should reflect the input we have provided.

We testified Tuesday in both committees alongside officials from the Michigan Association of Counties and Michigan Townships Association. League member and Port Huron City Manager James Freed also testified. We continue to work and propose changes to the complex 16-bill package. The Senate Michigan Competitiveness Committee approved each of the bills, along with a related technical amendment, along party lines in 4-1 votes and sent them to the full Senate for a vote. The Senate adjourned for the day and may take up the package possibly later this week or next.

Port Huron City Manager James Freed testifies about the OPEB bill during a state House committee meeting Tuesday morning.

Port Huron City Manager James Freed testifies about the OPEB bill during a state House committee meeting Tuesday morning.

As most League members are probably aware, the League has been working for nearly two years on major municipal finance reform through our SaveMiCity initiative (go to saveMicity.org for details). The SaveMICity efforts has been looking for revenue, structure, and cost solutions to make our municipalities more fiscally sustainable. OPEB has been identified as our most significant budget cost driver in need of reform. Therefore the OPEB discussion happening now in the state Legislature is extremely important. For many months, League staff have been working with the legislature and governor’s office to help craft solutions to the OPEB problem.

The 16-bill package (House Bills 5298-5313 and duplicate Senate Bills 686-701) has pros and cons that League staff continue to assess to determine if these reform bills will provide necessary tools for communities to better manage these costs while remaining true to our fundamental beliefs –  that communities need the ability to provide reasonable benefits to their employees and retirees without crowding out essential city services.

The League's Anthony Minghine testifies before a state House committee.

The League’s Anthony Minghine testifies before a state House committee.

There are many parts of the bill package that the League supports, but we are also working to address a number of concerns that exist within the bills as introduced. Chief among them is the use of the Emergency Management (EM) law as the enforcement mechanism to address any impasse situation in the OPEB reform process. The League’s Anthony Minghine, deputy executive director and chief operating officer, testified that the use of the EM law is a “broad overstep” to the problem. Specifically, the League has raised concerns over the inclusion of language in this package that opens PA 436, the Emergency Manager law to add in a new provision for an emergency management team to be appointed in communities where the community and its bargaining units are unable to come to agreement on a local corrective action plans designed to address an OPEB or pension funding situation that exceeds specified funding and budget spending thresholds.

Port Huron City Manager James Free talks with the League's Anthony Minghine during the Senate committee hearing Tuesday afternoon.

Port Huron City Manager James Free talks with the League’s Anthony Minghine during the Senate committee hearing Tuesday afternoon.

View details about the OPEB bills in a previous blog that the League’s Chris Hackbarth, director of state and federal affairs, posted Thursday, Nov. 30, and updated yesterday here.

While it appears that both committees will be moving their respective bill packages to the floor today we anticipate changes to these bills before any further action and continue to actively press for amendments to the bills that would address our concerns.

Matt Bach is director of communications for the Michigan Municipal League. He can be reached at mbach@mml.org.

League Testifies on OPEB Bills, Continues to Work on Revisions

The League's Chris Hackbarth, right, testifies about the proposed OPEB legislation with officials from the Michigan Association of Counties and Michigan Townships Association.

The League’s Chris Hackbarth, right, testifies about the proposed OPEB legislation with officials from the Michigan Association of Counties and Michigan Townships Association.

UPDATED (4:30 p.m. Dec. 5, 2017): The League’s Chris Hackbarth and Anthony Minghine testified this morning and this afternoon in opposition to the introduced versions of the identical OPEB (Other Post Employment Benefit) bill packages in the Michigan Senate and House committees. Negotiation on these bills is ongoing and we are working diligently with the Governor’s Administration and House and Senate leadership staff to address our concerns. They have been receptive to our input so far and we are waiting for revisions that should reflect the input we have provided.

We testified Tuesday in both committees alongside officials from the Michigan Association of Counties and Michigan Townships Association. League member and Port Huron City Manager James Freed also testified. We continue to work and propose changes to the complex 16-bill package. The Senate Michigan Competitiveness Committee approved each of the bills, along with a related technical amendment, along party lines in 4-1 votes and sent them to the full Senate for a vote. The Senate adjourned for the day and may take up the package possibly later this week or next.

Port Huron City Manager James Freed testifies about the OPEB bill during a state House committee meeting Tuesday morning.

Port Huron City Manager James Freed testifies about the OPEB bill during a state House committee meeting Tuesday morning.

As most League members are probably aware, the League has been working for nearly two years on major municipal finance reform through our SaveMiCity initiative (go to saveMicity.org for details). The SaveMICity efforts has been looking for revenue, structure, and cost solutions to make our municipalities more fiscally sustainable. OPEB has been identified as our most significant budget cost driver in need of reform. Therefore the OPEB discussion happening now in the state Legislature is extremely important. For many months, League staff have been working with the legislature and governor’s office to help craft solutions to the OPEB problem.

The 16-bill package has pros and cons that League staff continue to assess to determine if these reform bills will provide necessary tools for communities to better manage these costs while remaining true to our fundamental beliefs –  that communities need the ability to provide reasonable benefits to their employees and retirees without crowding out essential city services.

The League's Anthony Minghine testifies before a state House committee.

The League’s Anthony Minghine testifies before a state House committee.

There are many parts of the bill package that the League supports, but we are also working to address a number of concerns that exist within the bills as introduced. Chief among them is the use of the Emergency Management (EM) law as the enforcement mechanism to address any impasse situation in the OPEB reform process. The League’s Anthony Minghine, deputy executive director and chief operating officer, testified that the use of the EM law is a “broad overstep” to the problem. Specifically, the League has raised concerns over the inclusion of language in this package that opens PA 436, the Emergency Manager law to add in a new provision for an emergency management team to be appointed in communities where the community and its bargaining units are unable to come to agreement on a local corrective action plans designed to address an OPEB or pension funding situation that exceeds specified funding and budget spending thresholds.

Port Huron City Manager James Free talks with the League's Anthony Minghine during the Senate committee hearing Tuesday afternoon.

Port Huron City Manager James Free talks with the League’s Anthony Minghine during the Senate committee hearing Tuesday afternoon.

View details about the OPEB bills in a previous blog that the League’s Chris Hackbarth, director of state and federal affairs, posted Thursday, Nov. 30, and updated yesterday here: http://blogs.mml.org/wp/inside208/2017/11/30/legislature-introduces-opeb-reform-proposal/.

While it appears that both committees will be moving their respective bill packages to the floor today we anticipate changes to these bills before any further action and continue to actively press for amendments to the bills that would address our concerns.

Matt Bach is director of communications for the Michigan Municipal League. He can be reached at mbach@mml.org.

House and Senate Reach Agreement on Revenue Sharing Increase in Upcoming Budget

A joint House/Senate conference committee met this morning (June 8, 2017) and approved a revenue sharing proposal for the upcoming 2017-18 state fiscal year.

Lead by former Walker mayor, State Rep. Rob VerHeulen and State Sen. Jim Stamas, the budget report included a 2.5% increase ($6.2 million) in funding for those cities, villages and townships that have been receiving statutory revenue sharing. This increase, alongside the expected improvement in sales tax collections that are estimated to improve Constitutional revenue sharing payments by more than $40 million, would reverse last year’s overall revenue sharing decline and provide the first increase on the statutory side in more than three years.

It should be noted that this morning’s conference agreement on SB 142 (http://www.legislature.mi.gov/documents/2017-2018/billanalysis/House/pdf/2017-HLA-0142-7AA49F7E.pdf) was developed without any input from the Snyder Administration or the Department of Treasury, as the Administration and Legislature continue to haggle over Legislative leadership’s desire to include a closure of the MI Public School Employees Retirement System as a part of the spending for the upcoming budget year.

This means that while both chambers have consistently supported increases for cities, villages and townships throughout this year’s budget development process, the Administration did not originally recommend any increase and could resist the proposed increase if this version is presented for his signature without an overall deal in place on the MPSERS situation.

League members should contact the Governor’s office and urge his support for this proposed increase and for a long-term plan for restoration of the devastating cuts of the past decade.

Posted by Matt Bach on behalfof Chris Hackbarth. Hackbarth is the League’s director of state & federal affairs. He can be reached at 517-908-0304 and chackbarth@mml.org.

Michigan Municipal League, Chris Hackbarth Named Among Top Lobbyists in State

The Michigan Municipal League and our own Chris Hackbarth, state and federal affairs director, were both recognized this week for being among the top lobbyists in the state.

The recognition of the League and Chris making a real impact in Lansing politics was part of the 2017 Capitol Insider Survey done by MIRS News Service and EPIC-MRA. .

“It’s gratifying to see others recognize what we already know – that the Michigan Municipal League and our excellent staff does an outstanding job representing our members at the state level,” said League CEO and Executive Director Dan Gilmartin. “It takes a lot of hard work, attention to detail and an enthusiastic and supportive membership to be effective in Lansing. Receiving this recognition shows that with the support of our members we are making a difference in Lansing.

The survey ranked the League in the top five in the category of “most effective membership organization” in the state.

In the individual category, Chris was also in the top five in the category of “most effective lobbyist for an association.”

“Chris is a real asset for the League, for our members and for Michigan,” Gilmartin said. “I’m extremely proud of Chris and his team and how we fight on behalf of our communities.”

The 2017 MIRS EPIC/MRA Capitol Insider Survey included completed responses from 479 legislators, lobbyists, staff members and other insiders in and around the state capital. It was conducted online from May 12, through May 19, 2017.

Legislative Committee Orientation Event at Capitol Teaches Ins and Outs of State Politics

League staff John LaMacchia and Chris Hackbarth at the Legislative Committee Kick-Off Orientation Thursday.

League staff John LaMacchia and Chris Hackbarth at the Legislative Committee Kick-Off Orientation Thursday.

(View more photos here)

About 60 local municipal officials from throughout the state were at the state Capitol Thursday in Lansing for the Michigan Municipal League’s Legislative Committee Kick-Off Orientation. The first-time event for the League was highly successful as members from the League’s various legislative policy committees heard from state lawmakers, League staff and communications experts.

The League makes policy decisions based on the input from its five League policy committees that are broken into topics – energy, environment and technology (chaired by Brighton City Manager Nate Geinzer); land use and economic development (chaired by Lake Isabella Village Manager Tim Wolff); municipal finance (chaired by Howell City Manager Shea Charles); municipal services (chaired by Novi City Manager Pete Auger); and transportation infrastructure (chaired by Farmington Hills Public Services Director Gary Mekjian).

The event was hosted by State Rep. Dan Lauwers in the Speakers Library in the Capitol across the street from the League’s Lansing office. Lauwers welcomed the group to the Capitol and was followed by League CEO and Executive Director Dan Gilmartin who thanked the members for their services on the policy committees and explained how important their work is to the League’s success as an organization.

State legislators speak at the Legislative Committee Kick-Off Orientation Thursday.

State legislators Rep. Christine Greig, Rep. James Lower and Sen. Ken Horn speak at the Legislative Committee Kick-Off Orientation Thursday. Kyle Melinn (left), co-owner of MIRS News Service, was moderator of the panel discussion.

Other event speakers were League staff members Chris Hackbarth, director of state and federal affairs; John LaMacchia, assistant director of state and federal affairs; Jennifer Rigterink, legislative associated; Emily Kieliszewski, member engagement specialist; and Shanna Draheim, policy director. There was also a panel discussion moderated by Kyle Melinn, news editor and co-owner of Michigan Information and Research Service (MIRS) and featuring State Rep. Christine Greig, House Democratic Floor Leader; State Rep. James Lower; and State Sen. Ken Horn.

Local officials listen to a presentation at the Legislative Committee Kick-Off Orientation Thursday.

Local officials listen to a presentation at the Legislative Committee Kick-Off Orientation Thursday.

Policy committee members from throughout the state attended representing the following communities: Village of Beverly Hills, City of Novi, City of Flushing, City of Gibraltar, City of Wyoming, Village of Copemish, City of Dexter, City of Center Line, City of Howell, City of Southgate, City of Grosse Pointe, Village of Chesaning, City of Livonia, City of Taylor,
City of Brighton, City of Charlotte, City of Westland, City of Woodhaven, City of Springfield, City of Dearborn Heights, City of Ann Arbor, Village of Mendon, City of Grand Blanc, City of Menominee, City of Midland, City of Berkley, City of St. Clair Shores, Village of St. Charles, City of Ovid, City of Monroe, City of Ann Arbor, City of Hazel Park, City of Douglas, City of Farmington Hills, City of Mt. Pleasant, City of Hamtramck, City of Alma, City of Hastings, City of Farmington Hills, City of Grandville, City of Dexter, City of Adrian, City of Rochester Hills, City of Orchard Lake, City of Cadillac, City of Rochester
City of Plymouth, City of Wayne, Village of Cassopolis, City of Dexter, City of Milan, City of Midland, Village of Sparta, City of Alpena, City of Saline, City of Gladstone, City of East Lansing, City of Clio, Village of Lake Isabella, Village of Blissfield, and Village of Quincy.

Dusty Fancher and Dave Waymire speak at the Legislative Committee Kick-Off Orientation Thursday.

Dusty Fancher and Dave Waymire speak at the Legislative Committee Kick-Off Orientation Thursday.

After lunch, the group heard about communications, public relations and the insider’s guide to lobbying from Dave Waymire, partner at Martin Waymire; and Dusty Fancher, partner with Midwest Strategy Group.

To learn about the latest legislative issues involving Michgian’s communities, subscribe to the League’s Inside 208 blog here: http://blogs.mml.org/wp/inside208/ (view subscribe box on right side of page). Learn more about the League’s policy committees here: http://www.mml.org/advocacy/committee/index.html. View additional photos from the event here.

Matt Bach is director of media relations for the League. He can be reached at mbach@mml.org and 734-669-6317.

LaMacchia: Infrastructure Issues in Flint Symptom of Larger Problem

The League's John LaMacchia (center, right) and fellow panelists.

The League’s John LaMacchia (center, right) and fellow panelists.

What’s happening in Flint, Detroit and other cities is a symptom of a larger problem. A problem where cities in Michigan are only allowed to fall with the economy but not to prosper as the economy grows. And it’s only going to get worse if we don’t change the way the nation invests in communities.

This was a key message by the Michigan Municipal League’s John LaMacchia when speaking Thursday in Washington D.C. as part of Infrastructure Week 2016. The Infrastructure Week celebration organized by the National League of Cities and its partners is to raise awareness about the nation’s infrastructure needs. Cities construct and maintain the majority of our nation’s infrastructure and depend on a solid infrastructure network to provide safe and healthy communities, and grow their local economies.

The League's John LaMacchia is in Washington D.C. this week for the National League of Cities Infrastructure Week celebration. As part of his work, LaMacchia (center left) met with U.S. Rep. Dan Kildee (right).

The League’s John LaMacchia is in Washington D.C. this week for the National League of Cities Infrastructure Week celebration. As part of his work, LaMacchia (center left) met with U.S. Rep. Dan Kildee (right).

LaMacchia, assistant director of state affairs for the League, spoke as part of a panel discussion on “Securing Our Water Future: 21st Century Solutions for 21st Century Cities”. Other panelists were Council Member Matt Zone, City of Cleveland, Ohio, and National League of Cities 1st Vice President; Council Member Ron Nirenberg, City of San Antonio, Texas, and Chair, National League of Cities Energy and Environment Committee; Commissioner Heather Repenning, President Pro Tempore, Los Angeles Board of Public Works; Tyrone Jue, Senior Advisor on Environment to Mayor Ed Lee, City of San Francisco, California; Jonathan Trutt, Executive Director, West Coast Infrastructure Exchange; and Clarence E. Anthony, CEO and Executive Director, National League of Cities.

LaMacchia discussed the Flint water crisis and explained how the Flint issue is part of a much larger infrastructure problem in communities statewide.

Some of his key points included:

  • Flint Mayor Karen Weaver and Gov. Rick Snyder agree Flint’s lead-tainted service lines need to be removed. But it will take at least $55 million to replace all the lead-tainted lines. Money for water infrastructure has been put into appropriations bills in the Michigan Legislature and U.S. Congress, but the bills are still making their way through those legislative bodies.
  • The service lines are just part of the problem. The rest of Flint’s water system, from aging water mains to other infrastructure, needs to be totally replaced. The city’s water system loses a large percentage of the water to leaks, one reason Flint has some of the highest water rates in the country. Again, the City of Flint will need help from the state and federal governments to modernize its water infrastructure, a process that is expected to cost of hundreds of millions of dollars.
  • When we look at Michigan as a whole we have neglected to properly invest, maintain and right size our infrastructure.
    The league's John LaMacchia speaks on a panel during Infrastructure Week in Washington D.C. May 19, 2016.

    The League’s John LaMacchia speaks on a panel during Infrastructure Week in Washington D.C. May 19, 2016.

  • For nearly 30 years Michigan has been about 10 million people yet we have increased the amount of infrastructure in the state by roughly 50% and giving little thought to how we would maintain both the old and new infrastructure.
  • Time and time again we have built new water and sewer plants without capitalizing on the existing capacity of a nearby system.
  • This not only speaks to how we have been inefficient in managing infrastructure in Michigan but also how we have disinvested in our communities in general.
  • Why cities are important: Our goal at the Michigan Municipal League is to make Michigan communities places people want to be. Places that can attract a talented work force and businesses. Having placemaking strategies in all communities is important. But it’s hard to even think about creating great places when you’re fighting every day not to drown. How can you attract businesses and a work force if your roads are crumbling, bridges are in disrepair and you’re communities have slashed the number of police officers, firefighters, public works employees and more?
  • The numbers show that some states – particularly Michigan – do not understand the importance of cities as economic drivers. If they did they would be investing in cities. But unfortunately they are disinvesting in cities.
  • According to U.S. Census data all but one state showed growth in municipal general revenue between 2002 and 2012. View chart here.
  • Many want to blame this on a single state recession but the numbers tell a different story.
  • Why is this the case in Michigan – property values decrease in 2008 crash and the Michigan Constitution limits their ability to recover, PLUS revenue sharing to the tune of $7.5 billion over the last decade plus.

LaMacchia concluded explaining Michigan’s system for funding municipalities is fundamentally broken and unless it gets fixed we’re going to see more situations like what’s happening in Flint and Detroit occur in other communities.

Also earlier this week, NLC released a new report called, Paying for Local Infrastructure in a New Era of Federalism. Read a blog about the report by the League’s Summer Minnick.

Matt Bach is director of media relations for the Michigan Municipal League. He can be reached at mbach@mml.org and 734-669-6317.

Committee Approves Dark Store Fix – Contact Your Legislator!

Underutilized Mall in Wyoming (2) dark storesThe House Tax Policy committee today reported House Bill 5578 with a bi-partisan 11-2 vote.  Following multiple committee hearings spanning the past six months, today’s positive committee vote had been anticipated, based upon the amount of work done by the sponsor and local government advocates.

As the committee vice-chair, Rep. Dave Maturen was able to draw upon his extensive appraisal background to educate the members of the committee on the dark store problem and develop the language in the proposal, in conjunction with help from the League and numerous local government organizations and officials.

The language in HB 5578 provides very simple guidance to the Michigan Tax Tribunal that aligns directly with the existing, accepted methods of valuation that all assessors are trained to follow. This proactive acknowledgement of the three standard methods of valuation, coupled with language that restricts the Tribunal from accepting self-imposed deed restrictions as a true sales comparison are designed to restore balance to the decisions of the Tribunal and ensure that these decisions are based on the best data available.

We need your help to ensure that this bill will be voted on by the full House! The Michigan Chamber of Commerce and the Michigan Retailers Association are aggressively opposing this bill and contacting Representatives and Senators in an attempt to block further action on the bill. They claim that the only problem is uneducated local assessors who are over-assessing these large retailers.

Their direct message to legislators is; “Local governments are trying to legitimize their over-assessments and lack of persuasive evidence before the MTT by making scapegoats out of job providers who have successfully challenged their over-assessments and the MTT.”  Your involvement and personal contact with your Representative and Senator are the only way to counteract these attacks and ensure that this critical legislation moves before the Legislature recesses for the summer.  Please contact your State Representative and Senator today to urge their support for HB 5578!

For further information about the bill and the previous committee testimony, please review these Inside 208 articles – “New Dark Stores Solution…”  and “Michigan Municipal League Members Testify…“.  Or visit the League’s Dark Stores Information Page.

Chris Hackbarth is director of state affairs for the League. He can be reached at chackbarth@mml.org and 517-908-0304.