It's a Wonderful Life, in Owosso

After being elected to City Council, I begin to see many things in a new way, including old holiday movies. If you are a regular viewer of the great Frank Capra holiday movie "It's A Wonderful Life" starring Jimmy Stewart and Donna Reed, I invite you to watch it this year thinking about how communities work, and the role we each play in the health of the place we live.

In addition to inspiring thankfulness for one's family and friends,"It's a Wonderful Life" has a primary message spoken by the angel Clarence: "Each man's life touches so many other lives. When he isn't around he leaves an awful hole, doesn't he?" Of course, we may feel that more acutely in a small town because there is less chance, for good and bad, to be anonymous. But what we do here makes a difference.

But there are other messages to find in the movie for Councilmembers, community volunteers and committed citizens. At the end of a year when the economy has not been kind to Owosso, I am thinking about how people can work together to help neighbors become homeowners. While the movie follows the frustrated dreams and redemption of George Bailey, the sub-story is about the Bailey Building and Loan. While stodgy and struggling, the Building and Loan was a community-based institution whereby local people were not only encouraged to save up for their own financial dreams, but those savings were made available to their neighbors in the form of mortgages. It was an organized way for neighbors to help neighbors, including immigrants, the poor, and the powerless.

In the last few years, we have discovered the housing finance system, which we thought of as local and relationship-based, had become the plaything of speculators, large impersonal institutions, and short-term investors. This created space for the greedy, both among homebuyers and lenders. Housing, which had been the reward, for and reservoir of, personal savings, became a source for unchecked spending and personal debt. After the weak foundation of this new housing finance system cracked, the housing market built upon it could no longer stand. The result in Owosso has been several hundred foreclosures, personal employment and financial opportunities lost, and declining property tax revenues. It feels as if Potter left Bedford Falls and moved to Wall Street.

The challenge for Owosso and other small towns is to rebuild the local-to-local systems that made the customers of the Bailey Building and Loan homeowners. Fortunately, we still have good local lenders, and some community organizations committed to improving housing quality and affordability. We need these and other groups to come together to find ways in which we can use our local resources to help our residents become homeowners and occupy the vacant homes that are found on almost every block of our town. I am hoping the City of Owosso and its new housing program can help be a catalyst and leader in this effort.

There are some other lessons from "It's a Wonderful Life" remember Sam Wainwright, the local business climber who makes it big in New York? Well, he stays in touch with George Bailey, and it's George who recommends the use of a local vacant factory to house a new business venture. We too need to build the contacts with our many alumni who move away and find success elsewhere; let's encourage them to make investments in Owosso, or perhaps even move back home.

Finally, the thing Owosso has never lost is its ability to raise up talented young people of character, just like George Bailey. And just like Bedford Falls, we take pride in our high school graduates and we love to help them achieve their dreams, whether they be college, travel, entrepreunership, or some form of service to their country or community.

Despite the tough times in Owosso, we are not Pottersville. Let's always remember the difference one life makes, and all the lives that each of our lives touches. Think how much more of a difference we can make if we are deliberate in the care of our relationships, the exercise of our values, and our love for our community. "Merry Christmas you old beautiful Building and Loan!"

Tough Budget Choices Ahead

The City Council has begun the process of putting together a 2010-11 budget and the first signs warn that there will be difficult decisions to be made. For reasons explained below, Owosso faces a $2.4 million shortfall on a general fund budget of six to seven million dollars. The good news, if there is any, is that we have begun the budget process early to allow for lots of input and for discussion of options and priorities. The City Charter requires the City Manager to submit a budget in April for adoption in May. We have a lot of work to do before then.

In January, City department heads will submit their budget needs for the necessary staff, equipment, and training to carry out the responsibilities of their offices. They will use their best judgement to determine whether police cars and other capital investments need to be replaced, new staff hired, repairs made to equipment or facilities, and investments in City infrastructure undertaken. Past analysis predicts that these costs of maintaining the City will increase about $1.1 million next year. This so-called "structural deficit" can, and will be, trimmed as the City Manager and his team put together a budget, but doing so is an implicit decision to defer investments in what keeps Owosso going.

In addition to the $1.1 million structural deficit, six factors are combining to make next year's budget difficult:
1. Local property tax revenues will decrease $250,000 as a result of declining property values and a declining tax rate. The State's Headlee amendment and other reductions have lowered the property tax in Owosso from 14.5 mils in 2001 to 13.4 mils now.
2. State revenue sharing will decrease $250,000 as a result of Michigan's difficult budget realities. In the last six years, annual support from the State to the City has declined $600,00, and further reductions may yet hit us. We should all contact our representatives in Lansing to recommend against such cuts.
3. State transfer payments for road repairs will decline $100,000; the City's share of state taxes collected on gas and vehicle weights no longer are sufficient to meet local road maintenance needs.
4. Pension obligations to retired city employees are anticipated to rise $200,000.
5. Contractual obligations to city employees will require a $200,000 increase in wages and benefits.
6. An old landfill that the City of Owosso used needs to be cleaned-up and the City's share of those costs may be $300,000.

While these predictions may not be as severe as outlined above (on the other hand, revenues may decline further and exacerbate the budgt picture), the City needs to plan to make $2.4 million in reductions in its planned expenditures in 2010-11. The City Manager believes he can continue to find efficiencies that could yield significant savings. Tough decisions will also need to be made about what capital improvements and other long-term investments to scale back or postpone. Still, to deal with the shortfalls it will likely be necessary to reduce spending on the current services the City offers.

One option is to cut spending across the board, and given that a large part of the City's budget is spent on personnel, then such a cut could be quite negative on our employees.


As you look at the existing expenditures (see pie chart), the largest portion of general fund revenues are dedicated to public safety (police, fire and ambulance) and a proportionate budget cut would have the biggest impact on these important services. Thus, the comprehensive evaluation now begun may offer some valuable ways to reduce the cost of the programs without sacrificing the quality of public safety programs (see previous post, "Optimizing Public Safety").

What do you think? The budget is complicated, with multiple revenue sources, legal requirements, and contractual obligations all limiting the options available. Still, some questions can be asked and answered now, and your input will be important:

• Do you observe any areas of City Government where funds can be saved? Do you see waste? What services could be delivered more efficiently?
• In your opinion, what City services could be scaled back with the least negative impact? That is, if we have to cut, what would you willing to do with less of?
• What investments in equipment and facilities are the most critical and cannot be deferred?
• In previous years, the City has spent general funds on street repairs (in addition to state funds for roads) to address critical transportation needs; should we continue this practice?
• Only 3% of the city budget goes to park maintenance and improvements; should this be increased? And if so, from where do we redirect dollars?
• Owosso has recently been successful in getting a variety of grants, but frequently they require some small outlay of general funds; should we continue to leverage our dollars this way?
• Should the City pursue a Headlee override to restore property tax rates to earlier levels?
• In our economic climate, are there options for revenue increases that would be acceptable, or should we continue to live within our (declining) budget?
• Would you be willing to pay additional taxes for roads? parks and a pool? public safety?any other special benefit?

Again, we are early in the budget process and I start out being a novice and without any particular bias. So, please educate me where you can. Or if, like me, you don't have much specific knowledge, let me know what your priorities and concerns are. Thank you for your continued participation.