Bike Trails to Build Community

I just got back from a tour of three great bike trails in Michigan and I came away excited about the opportunity for Owosso to promote tourism, strengthen our downtown, provide healthy recreation, bring the region together, and even promote early childhood learning. In three days, I biked the Hart-Montague Trail, Michigan's oldest rails-to-trails conversion, the Betsie River Trail that ties Frankfort, Elberta, and Beulah together, and the TART trail that is a centerpiece in Traverse City. Besides a sore rear end, I gained an appreciation of how good design and thoughtful planning can take advantage of these regional trails to build community.

All of the trails we rode are at least 15 miles long and attract a range of users. We saw other tourists like ourselves who purposefully travelled to bike the trails, locals out for exercise, kids on their way to somewhere, moms with strollers, and maybe even a commuter. We shared the trail with other bikers, runners, in-line skaters, and walkers. We saw solo folks with headphones, families on an outing, and friends talking away as they walked. These trails are used by a wide variety of people.

As we visited with folks, everyone spoke highly of the trails and their benefit to the community. One person shared with us how the trail had been opposed initially, but was now widely supported. Increased crime, use by a "bad element," or other fears had not materialized. All of the cities, and many of the businesses, along the trail had built special paths and installed directional signs to attract users to make a detour off the trail. Clearly, the communities along the trails value the economic development opportunities the trails create.

We were impressed with how the cities of Frankfort, Montague, and Whitehall had linked the trail to their downtowns. In Hart, one end of the trail was extended to link it to a municipal park and campground. Traverse City is located at the center of the TART trail and pulls people in from multiple directions. At the south end of the Hart-Montague Trail, a new trail extension, signs, public art, and attractive plantings pulled us into downtown Whitehall where we did some shopping. As we explored further, we learned that the City had used state grants, downtown tax increment funds, and local school funds to extend the trail through town to a park, library, and the high school. They also had a special stretch of the trails where families could take along pre-schoolers and stop at special stations where they could interact with their children and aid in their development. These trails provide a wide array of benefits.

Owosso has the opportunity to replicate these community development successes. First, we have an existing and long-standing trail along our riverfront that connects to Corunna. We can build on the foresightful work of our predecessors that put the James Miner Trail in place. Second, a significant trail is being developed that will run from Ionia to St. Johns to just outside Owosso. Finally, there have been discussions about developing a trail from Corunna to Durand, that if linked to the Miner Trail could provide a trail connection between the Grand Trunk Depot and the Steam Railroading Institute. I believe there are four steps we should take as a community and a region:

1. Protect and improve the James Miner Trail between Owosso and Corunna in conjunction with Caledonia Township and the Owosso Community Airport;

2. Support the completion of the Clinton-Ionia-Shiawassee Trail and come up with a plan with Owosso Township to finish, extend, and connect the trail into downtown Owosso;

3. Work with other local governments and community groups to investigate the options for converting to a trail the abandoned rail line between Owosso, Corunna, and Durand;

4. Develop effective signage and other publicity to promote the use of the trail by both tourists and locals in the community.

None of this is easy. It will require planning, cooperation between jurisdictions, partnerships with community groups, and the raising of both private and public funds. However, if communities smaller than ours in northwest Michigan can realize the development of such great trails, I am convinced that Owosso and our neighbors could pull it off as well. In the end, it will help build our community.

How Best to get a Public Opinion

I want to ask your opinion about asking your opinion. Since before I was elected, I have sought out public input through this blog, a facebook page, e-mail updates, and purposeful encounters with the electorate. Seven months into my tour of service I have come to appreciate the questions, suggestions, and feedback. However, the June 21 meeting of the Owosso City Council has raised some questions for me about the role of public opinion in local government.

You may have been at the meeting, or read about the big discussion of the plan of the Michigan Department of Transportation (MDOT) to convert south M-52 to a three lane highway. MDOT has proceeded with this plan because of a request from the City of Owosso several years ago, and because their experience has shown that single lane roads with a center turn lane are safer than highways with two lanes in each direction. However, there has been a large and vociferous expression of public opinion in Owosso against this plan, and the City Council voted 4-3 to request MDOT to keep M-52 a four-lane road. The final decision will be MDOT’s to make.

I voted against this recommendation, but I support the decision of the Council. Since then, I have been thinking a lot about my role as your representative and how to best consider public opinion. I think there are four key choices to be made, or balances to be achieved, and I welcome your input on any or all of them.

Expert Opinion versus Popular Opinion. The difference between these two was stark on the issue of M-52’s restriping. The meeting started with a traffic safety engineer from MDOT presenting data and analysis showing three lanes would result in 25 to 40 percent less accidents and would do so without any decline in level of service (i.e. no backups or delays. Her professional opinion from 14 years of experience was in favor of the three lane idea. Popular opinion was contrary and strong, with over 20 people making public comments against the three-lane proposal. The choice was clear: listen to the informed, expert opinion or go with the frequently expressed opinion of Owosso voters.

As a City Council representative, I find this kind of choice difficult. I believe that my job is to make decisions that are in the best interest of the City, and when a large number of people speak out against (or for) a policy, I want to heed their will. On the other hand, I know that many of the issues we face are complex, with significant financial, legal, or technical issues to consider. For this reason, I tend to give weight to comments made by informed experts, whether that be our experienced City Manager, legally trained City Attorney, or MDOT traffic engineer. Likewise, I tend to give extra attention to testimony made by members of the public when they clearly have experience with an issue. For instance, I listen closely to a youth baseball coach when upgrades to our ball fields are being considered. But how much weight should we give to one expert as opposed to the input of many interested voters?

Direct Democracy versus Representative Government. The idea that everyone has a voice is a bedrock of American democracy and the right to vote. Since we cherish the right to vote, there is a popular idea that key local issues should be put to a vote of the public. Someone suggested that the M-52 lane decision be on the ballot, there have been letters to the editor suggesting that all tax and fee increases be voted on by the public, and there is strong public opinion that any change in burning regulations be put to a vote.

What local issues should be voted on? Or, if it were possible to take a poll on every issue, how should the results be used? On the M-52 issue, it was suggested that the results of a Facebook query should guide the City Council decision. Small local governments in New England still use a town hall meeting, where all voters in attendance at an annual meeting are given a vote to approve the budget and make key decisions. If public opinion should carry the day on local decisions, what is the most effective and equitable way to measure that public opinion?

When I was younger I lived in California and was excited about the use there of ballot measures to decide matters of public policy. At the local level, the propositions on each ballot were given a letter starting with “A” and one time we got to vote on Propostions X, Y, Z, and AA. Quickly, not only did the number of decisions become overwhelming. I also learned that local and state governments had difficulties responding to changing circumstance, because laws adopted as a ballot proposition could only be modified or repealed by another vote.

Instead of lots of public votes, Michigan laws and Owosso practice tilt toward representative democracy. That is, the local electorate chooses seven City Council members who are given the job of making decisions for the entire community. As your representatives, we take the time to read a lengthy board packet of material twice a month, conduct additional research on issues, attend meetings and listen to public testimony. We take into consideration a variety of opinions, and try and make a decision that we believe to be in the best interest of the community. We are not required to poll the citizens, or give every voice equal weight, or even listen to input outside of meetings. But all of us value public input. The questions are two: how do we best get input? And what should we do with the input we get (especially when it conflicts)?

Voiced Opinion versus the Interests of the Unrepresented. I am committed to the idea that public input is desirable and necessary, but am not sure how best to determine the will of the electorate. Or do we need to seek it out at all? City Council meetings are open and the public is given the opportunity to speak both at the beginning and the end of the meeting (although State law only calls for one place on the agenda for input). In addition, certain actions require a public hearing to be held. Are these comment periods sufficient opportunity for public input, or should we seek out more?

Over 20 people spoke at the meeting when we considered the M-52 issue, and all of them spoke in favor of keeping the highway at four lanes. It was pointed out that there are thousands more residents in Owosso that did not speak; do we need to try and guess at their interests? I heard from several people who favored the three-lane proposal, but who did not speak at the meeting; should we consider their opinion? In addition, several people who spoke at the meeting reported that they did not live in Owosso, but they had businesses or owned property in the City. Should we consider their opinion more or less than an Owosso voter? What about those who do not know they have an interest in the issue or cannot speak? In this case, who is speaking for the victims of automobile accidents that might be prevented? In other cases, such as investments in our water system, who is speaking for the future residents of Owosso, who may not even be born yet?

Quantity versus Quality. The final balancing to consider is between the volume of public opinion and the content of the input provided. When a lot of people speak out on an issue, and speak out forcefully, I take notice. If people care enough about an issue to take time to come to a City Council meeting, we should listen to what they have to say. At the June 21 meeting, the Council voted to extend the 30 minutes normally allotted to public comment so that everyone would have an opportunity to be heard. On the other hand, when opinions are repeated frequently they start to become statistics, with so many “for” and so many “against.” How much public testimony is enough?

Typically, at public hearings I find myself listening for new information, novel arguments, or a perspective not yet shared. While I welcome all public input, I find a conversation with a voter more valuable than a brief comment or a long harangue. If several people are involved in the give and take of an extended dialogue on a topic, I tend to learn more about an issue. My recent invitation to “Walk and Talks” on the day of City Council meetings have produced some good discussions; interestingly the one on June 21 had people favoring a three-lane approach.

None of Us Alone is as Smart as All of Us Together. In the end, as I think about public opinion, I come back to a commitment to open, representative democracy and a belief in the wisdom of teams. I think it unworkable, and probably unwise, to put every issue up to a public vote or for the City Council to depend solely on the counting of public opinions. The democratic process that chooses seven people to make decisions for the entire City has proven to be a good method for soliciting, weighing, and evaluating public opinion. However, the process only works well if every elected official is open to receiving input from a variety of viewpoints, and if they are committed to listening with an open mind to that input. I believe that the members of the current City Council have this commitment.

Importantly, each Councilmember comes from a different background and has a unique set of acquaintances and a network of contacts. Sometimes the uniqueness of a councilmember comes through as an individual bias for or against certain public policy issues. However, with seven representatives soliciting input and measuring public attitudes, we are likely to get not only a variety of voices, but a variety of perspectives from which to evaluate the opinion of the public. Most importantly, the success of representative democracy depends on the willingness of the seven member of the City Council to honestly share their interpretations of the public interest and to debate one another on the merits of the issue. It also requires a councilmember to recognize that they are sometimes wrong in their decision, or at least be willing to accept the decision of the majority.

In the end, and most of the time, I believe the shared decision-making responsibility of our local government both reflects well on the full range of opinion and serves the best interest of Owosso. I believe that the present City Council desires to represent all of the public fairly and, most importantly, wants to serve well the future of our community.

Your Opinion Sought. On this, as with all issues, I welcome your input. I have posed several questions, and while I have tried to answer some of them, I am interested in your opinion. How should the Council best gauge the public interest?

George Hoddy's Legacy

At the age of 105, George Hoddy has passed away (you can read the Argus Press news story here), but I know his influence on our community is not over. I have known George since I returned to Owosso 15 years ago, worked with him on the Team 21 effort and other community endeavors, and met with him regularly. After encouraging me in my run for City Council, he would call me up with suggestions and I welcomed the chance to sit with him and hear the perspective of someone who came to Owosso during the Depression and who had a lifelong commitment to creating jobs, encouraging business growth, and building up our community. I learned two important lessons from George, and I believe there are two important parts of his legacy we need to continue.

Lessons Learned. When I think of what I learned from my talks with George, two main points will stay with me:

1. Care about the Institutions of the Community. George was an incredibly loyal man. He was loyal to his company and the people who worked for them, and he was loyal to the community in which he and his employees lived. He recognized that a successful business needed a successful community and he worked hard to either support, transform, or create the organizations and institutions that made this community work. He joined the hospital board to ensure there was good health care for his employees; he ran for the school board because he felt the community needed a strong education system; he recruited Baker College to Owosso because there was a vacant property and because he knew such an education institution would support both education and business. He donated, he made calls, he lobbied elected officials, and he served (for years and years) because it was the right thing to do. His was the era when commitment meant more than joining a Facebook page, when change occurred not because of a letter to the editor, and when loyalty meant sticking with people and organizations even when they were out of favor.

2. Common Sense Makes the Most Sense. It is easy to get caught up in policy debates, political posturing, personal gossip, and media spin, but George never was. He always had a no nonsense approach to issues that was borne out of his training as an engineer and his experience as a businessman. Sometimes he offended people, sometimes he was rebuffed, but you always knew where he stood; his common sense logic was always clear. Frequently, the power of his presentation was sufficient, but even when he did not gain his objective, he was never defeated. He was not ever deterred from his goal, when I knew him, of industrial development and job creation. The last time I saw him, he told me "Give 'em Hell! Don't let them give you the run-around."

The George Hoddy Legacy. We are all sad to lose George from our community, but the testament of our devotion to him will be how carry on some of his work. He was the end of an era, but we should not think of his passing as the end of a way of life. Rather, we should be committed to continuing on those things he stood for. For me, two pieces of his unfinished work will be a focus:

1. Support for Entrepreneurs. George Hoddy was a sparkplug, a risk taker, and a hard worker. He was smart, and he applied himself diligently to see his business ideas realized. This is the definition of an entrepreneur, and we should appropriately remember George in the same way we think of Henry Ford, CS Mott, and Charles Kettering (who recruited George from Ohio State). While George was part of the history of American, and notably Michigan, industrialism before, during, and after World War II, we should not think of his passing as the end of entrepreneurialism in our State or our community. The nature of business is changing: away from automobiles to health care and renewable energy, and away from manufacturing to knowledge- and service-based industries. But we still have, and need, business people (yes, women as well as men) who have good ideas and have the moxie to realize them. Our role, as a community, is to help create an environment that spawns entrepreneurs, and as public and private organizations, that provides support to those willing to start a new business. George Hoddy was brave enough to start a business in the Depression; who will be the George Hoddy of this generation in this time and place?

2. Regional Cooperation. I got to know George Hoddy late in his life when we worked together on Team 21 at the end of the 20th century. George understood clearly that new business growth depended on local government doing two things. First, cities and townships need to provide the infrastructure necessary for industry, in particular water and wastewater services. Second, local government needed to be efficient in the use of their revenues to get the most out of the taxes paid by business. George was no fan of government, and he told me several stories of his frustrating experiences at City Hall, but I never heard him suggest we could do without government; nor did I hear him complain about paying taxes. He just had a simple expectation that government should work effectively to meet the needs of local businesses.

After long years of personal experience, and then witnessing disputes between the units of local government in mid-Shiawassee County, George had a common sense solution: the Cities of Owosso and Corunna, and the Townships of Owosso and Caledonia should either merge into one local government (George liked the name "Curwood"), or at least cooperate closely in the construction of infrastructure and the provision of municipal services. Using his good name and his effective powers of persuasion, he brought a number of individuals from businesses and private organizations together with elected officials and staff from the local units of government. His logic was clear, and he was encouraged by several studies from MSU and the testimony from various experts that showed how much could be saved by combining services. What he did not anticipate, nor could he fully understand, was the level of distrust among local officials and their resistance to change. In the end, the strong attachment elected officials had to their particular units of government hampered Team 21 from achieving the objectives George hoped.

In retrospect, and ironically, George Hoddy in his nineties may have been ahead of his time. Now, as local governments are facing their own fiscal challenges, and as our economy becomes more dire, the benefits of cooperation may now be apparent to more people. But distrust and resistance persists. If we want to honor George Hoddy, we should strive to bring about regional cooperation among our units of local government. George Hoddy is gone, let's hope his good ideas, his approach to issues, and his loyalty to institutions can become his legacy to this community, a community which is not defined by policitcal boundaries.

Laying a Foundation for Future Growth

"The State of Michigan is beginning to experience modest economic growth," says the State Treasurer while reporting that sales and income tax revenues are now heading in a positive direction (see details here). Economist now think, and politicians now hope, that the worst is behind us. If the economy is soon to recover, the question for Owosso is "Are we ready?" A small municipality like ours cannot change the overall direction of the economy, which is largely driven by national polices and international forces. However, when the economic flow increases as the depression melts away, will Owosso be in a position to channel some of the run-off for positive growth here?

The City of Owosso has long been committed to economic development with a number of talented city staff helping out private companies that want to grow. As well, the City has supported the Shiawassee Economic Development Partnership and remains one of its largest financial supporters. SEDP, made up of both local governments and private businesses, plays a key role in helping both existing and prospective businesses grow in our community by working with developers, investors, and other government agencies like the Michigan Economic Development Corporation (MEDC).

Building on this history, there are three new steps underway that will help Owosso be in a position to take advantage of the economic recovery:

1. A new tax abatement policy

2. New infrastructure

3. Main Street program.

And there is one more step that the City needs to take to be fully ready: a new master plan.

1. Tax Abatement Policy. The City Council is scheduled on June 7 to adopt a new policy to encourage economic development in Owosso. Local government has few tools to incentivize job growth, but state law authorizes cities to grant a reduction or elimination of property taxes in several unique types of cases, such as industrial development, re-use of contaminated infill "brownfield" sites, and some other redevelopments. These tax breaks can help reduce the cost of new facilities, subsidize new equipment investments, and help improve the financial viability of a new venture. On the other hand, tax abatements cost the City precious revenue.

The City of Owosso has crafted a policy that ensures that tax abatements are given to economic development ventures that represent major investments, create jobs, and provide higher wage jobs. The formula for tax breaks is a little complex, but in sum, the more jobs created at the the highest wages get a waiver on property taxes for more years. Companies with a long history here, and/or those that hire Owosso residents are also rewarded with longer abatements. The goal is to help encourage and assist economic development and job growth in Owosso, but do so in a careful way that ensures that decisions to forego tax revenues are made in an equitable manner that provides the greatest benefit for our community. As the economy recovers and the private sector begins to look at new investments, the new tax abatement policy will hopefully attract and encourage businesses to grow in Owosso.

2. New Infrastructure. We look to private businesses to create job growth, but government has a role to play in providing a well-equipped community to support new development. This means not only good tax policies and effective public services, but also sufficient and well-designed roads, water systems, and other public infrastructure. Owosso has been putting in place several platforms for new growth. Most visibly they include new sidewalks and streetscape improvements in our downtown. Local businesses have asked for, and are contributing downtown tax dollars to, these public upgrades. As the economy recovers, and entrepreuneurs look to start or expand a business, downtown Owosso should be an attractive location. Likewise the improvements to M-52, one of our major entryways into town, will make the entire City a more appealing community.

Often overlooked, our water and wastewater systems are an important infrastructure as well to support economic development. Several industries have located here because of the quality, supply, and low cost of our water delivery system. Recent water rate restructuring made by the City Council, which will be continued in the next budget, ensure that there will be adequate investment in the upkeep of this water system (see earlier posting; click here). The City in conjunction with our partners Corunna and Owosso and Caledonia Township, have begun to look at our wastewater treatment plant, which is now more than 30 years old. We will soon need to make upgrades here to maintain this necessary economic infrastructure in our community.

3. Owosso Main Street Program. When it comes to our downtown most of the attention seems to be given to new sidewalks, building upgrades, and other visible improvements like the new flower baskets. While these are important, there are other things going on that also help lay the groundwork for economic recovery of commercial business in our community. Owosso is participating in the Main Street Program, a comprehensive local effort supported by the Michigan State Housing Development Authority (MSHDA) and linked to national expertise on downtown revitalization. While public infrastructure and urban design are an important component of this effort, the Main Street Program also focuses on the economic structure of downtown to ensure complimentary and mutually beneficial growth of retailers. Technical assistance with marketing, customer service, and promoting the right mix of businesses are all part of this effort to encourage economic development downtown. All of this helps both existing businesses to grow and new enterprises to start.

Our community is at its best when people collaborate and work to support one another. The Owosso Main Street Program is a prime example of such an effort with businesses working together with community members and local government to promote business growth. The addition of the arts community with a reconstructed Shiawassee Performing Arts Center (the Lebowsky Center) further strengthens the partnerships. The creation of a downtown historic district (see earlier posting here) will aid the Owosso Community Players in their efforts, and create further economic incentives for downtown property owners to upgrade their buildings and invest in new growth.

A Master Plan. The primary power that local government can use to help, or hinder, private economic investment is its land use authority. The zoning decision to allow for a new development of a particular kind (e.g. retail, industrial, office) in certain places can encourage, deter, or just direct growth. Likewise, particular requirements on new development that protect the public health, safety, or welfare (e.g. driveway locations, fire safety concerns) may impose some costs on a construction project. It is important that the City of Owosso use these tools in an equitable, effective, and efficient way. The policy tool that guides these important land use decisions is the Master Plan. A Master Plan also provides specific guidance on where to make important infrastructure investments in roads, utilities, and other public facilities; these decisions can also have a significant impact on growth and economic development.

Sadly, Owosso has only a 1969 plan adopted for the mid-county area. An update is needed. The City set aside funds in its 2009-10 budget for a new master plan, but the city was unable to initiate this activity. Now, planning consultants are being interviewed, the City Manager is looking for a new Community Development Director to help with the process, and the City Council is committed to seeing a new plan put into place. Under State law, the responsibility for developing the plan rests with the City's Planning Commission. The adoption of a new Master Plan for the City of Owosso will give our community a policy foundation for encouraging economic development.

In the end, economic growth comes from individual decisions to invest, expand, and grow, but local government can both set the stage for the private sector as well as play a role as a partner. With strong and clear policies--and a plan--in place, the City will be best positioned to benefit from the economic recovery we all hope is underway.

Dog Park Effort Shows How to Do It

Our community is at its best when people come together to get things done. Such community-building can be a formal, organized effort like the Owosso Main Street program which is authorized by State law and supported with local revenues, or an informal coming together of like-minded people who want to make a change for the better. I learned more about such a grassroots effort when Jeff Selbig and I took my dog for a walk on Saturday.

Jeff and some friends have been working to create a dog park in Owosso. Such public gathering spots have become popular in other cities because they allow pets to get some exercise, and they allow for both owners and their canines to socialize with one another, which is healthy for the dogs and helps build community among humans. Dog parks can be simple fenced-in playfields of an acre in size or elaborate doggy playgrounds with toys and landscape features that allow dogs to explore and exercise. No matter what the size or design, both people and dogs have come to appreciate them. It seems like we are all busy these days and even though electronics allow us to connect to others, people increasingly seem to look for places to talk to others face to face. Dog parks offer the chance for dog owners to share their interests with one another.

The supporters of a dog park have been meeting regularly (most Monday evenings at 7:30 p.m. at Guido's Coffee Shop in the Woodard Station building) and have formed a Facebook group (click here) under the name Owosso Bark Park. They have more than 400 fans. This group has worked hard to look at locations, dog park design and operations, rules and liability issues, and community concerns. Currently, the preferred location is Adams Park on the north side of Owosso (that's Jeff in the phtoto showing off the site to my dog Rambo). Fund-raising efforts have also begun and plans are being made for a Wag'n Walk event on Sunday, June 6 to raise money and awareness. If you would like to be involved in any part of the dog park effort, send an e-mail to owossobarkpark@gmail.com.

The Role of Local Government. I believe local governments need to pay attention to the actions of its residents and be responsive when people come together to get something done. The City of Owosso has a parks plan and an active Parks & Recreation Commission, and this community body has expressed its support for a dog park. Especially given this endorsement, I believe it is the role of the City to find ways to lend its assistance to the Bark Park organizers. Of course, the City has a responsibility to solicit the opinions of the whole community, look carefully at the design and operation costs of a dog park, put in place rules, and protect the liability of the City and park users. However, the City should make sure it is not creating any unnecessary roadblocks as it carries out its duties. Even better would be for the City to find a way to support this and similar efforts.

Sometimes local officials get enamored with their own positions and plans, municipal power in general, or particular ideologies. However, while we need to bring our own experience and knowledge to bear on decisions of policy and public investment, we should keep in mind the community groups who are working hard to make improvements. I think the best strategy for moving Owosso forward is to foster, encourage, and support citizens who come together with a commitment to a cause. Communities become strong when people feel like they can be a part of things and make a difference. The Owosso Bark Park is a testament to the positive power of people.

I urge your involvement in the Bark Park effort, or other group efforts to improve our community. I welcome your feedback on the dog park idea or any other City issue.

Budget Challenges are Here to Stay

Recently, most Owosso property owners received news of a tax break when they opened their 2010 Notice of Assessment. The taxable value of homes in our City went down an average of about 6 percent. Upcoming tax bills from the City (which also reflect school and county taxes) will be going down for most homeowners, but the amount of the decrease varies. As individuals, this is welcome relief at a time when all of us face a difficult economic situation, too many residents struggle to find a good paying job, and record numbers of homeowners are trying to stave off foreclosure. Having our property taxes go down will be a help in these tough times.

However, when we look at the reduction in property taxes from a city-wide standpoint, we see both some immediate problems and some long-term challenges. Well over half of the City's General Fund revenues come from the local property tax. The drop in property values results in a reduction of about $230,000 in revenues this year. This follows a $110,000 drop last year. In fact, the recent reductions in property values take the City back to a revenue level they earned in 2004. The following table outlines the State Equalized Value (SEV) and the taxable value of property (in millions of dollars), the tax rate (millage) and property tax revenues (also in millions) for the last seven years. The taxable value of property lags the SEV because of Proposition A, which limits the rate at which property tax assessment can rise. The millage rate has declined slightly over time because of the Headlee amendment, which limits the rate at which city tax revenues can increase. In any case, the decline in tax assessments while offiering relief for property owners, puts a burden on the City of Owosso to cut expenses commensurate with the drop in revenues (click on the "budget" label to the right to see more background on how this comes at the same time as other financial challenges to the City).

Impact of Prop A on taxes and revenues. State ballot Proposition A, passed in 1994, overhauled and reduced property taxes in Michigan and changed the way we finance education in our state. However, its passage came during a period of relative economic health and steadily rising property values. One impetus for Prop A was the relief it offered from increases in property tax assesments that led to higher tax bills. Prop A contained a provision, reasonable at the time, that the taxable value on one's property should not increase faster than the rate of inflation, or 5 percent, whichever was less. Again, this was good news for existing homeowners, and while it limited the growth in tax revenues for local governments, their revenues still increased annually, and at a rate that could be estimated with some accuracy.

Also, Prop A required the taxable value of a home, upon sale, to be reset to reflect the news sales price (this is now called the pop-up tax ) and catch up on the lag between SEV and taxable value created by Prop A's limits on increased assessment. Again, while this was sometimes a surprise to new homeowners, it did help keep local government revenues increasing, albeit more slowly, over time.

In the last three years, Michigan changed in ways that the authors of, or voters for, Prop A probably never anticipated. First, property values stopped rising, and then dropped dramatically. While at first some people's assessments continued to rise despite the economic malaise, as the taxable value continued to make up the lag behind SEV, by 2010 most homeowners will now see an actual drop in their taxable value, thus the tax savings for individuals and the lost revenue for the City. At the same time that property tax revenues dropped, the housing finance crisis brought the sale of new homes to a virtual stop, and thus there were few new re-assessments from sales.

But the problem will be with us for years. . . Just like a family or business with less income, the reduction in property tax revenues has required the City to review priorities and make some painful cuts in spending. The budget process for the City of Owosso has officially started, and this year promises to be more difficult than last year. However, unlike a business anticipating an upturn in the economy, the City cannot look forward to a quick restoration in tax revenues if and when the economy recovers.

Remember the limitations on the increase in taxable value set by Prop A? They apply whether we are in a boom period or in a recovery period. Thus, if the economy turns around in 2011, home values stabilize and then begin to increase, the most our taxable value can increase is 5 percent; and given (thankfully) the era of low inflation we are in, the cap on increase in assessed value will probably be less. Thus, while it has taken only two years for property values to dive more than 20% it will take at least 4 years, and probably more, for taxable values to recover. The highwater mark for property tax revenues was 2008, it may be a decade until we return to that level.

Given the lasting impact of the recent downturn in property values, it will be necessary for the City to look at long-term reforms and reductions in public services. If there are short-term fixes available, they will only put off the necessity of making permanent cuts in city expenditures.

How much is water worth to you?

Every morning Owosso residents turn on the tap in their sink and fill up a glass of water, or mix up a pitcher of orange juice, or add water to their pancake mix, or just wash their face. We take it all for granted, but almost a billion people in the world do not have access to safe drinking water, and suffer disease as a result. In Owosso, the constant presence of safe, clean, and sufficient water in our homes seems as regular as rain in March. Of course, there is story behind the reliability of our public water system, and the City Council now needs to take action to ensure that this system continues to be a viable resource to our community.

Every day on average the City of Owosso pumps, treats, and delivers 1,600,000 gallons of water to the residents of Owosso, Corunna and parts of Caledonia and Owosso Charter Townships. This is accomplished through the maintenance of six wells, a recently upgraded water treatment plant, over 100 miles of pipes, and the 24 hour attention of a professional staff. The water is high quality, meeting or exceeding all the standards set by the US Environmental Protection Agency. And for this the average household in Owosso currently pays about $200 per year.

Not only does the water system provide us clean water to drink and wash with (and flush our toilets!), but it is an economic development asset. Several industries have located in the mid-county area because we provide high quality water in sufficient volume and at a reasonable price. In an era where parts of the country face serious questions about the continued availability and security of their water, our plentiful water supply in the Great Lakes state is a competitive advantage. Finally, as we as a community wrestle with public safety questions, we cannot forget that a well maintained water system is also a major tool in firefighting and other disaster responses.

As a City Council representative, I had the opportunity to tour our water treatment plant and I came away impressed and thankful for the previous work of my predecessors in office, and the past and current staff of the City of Owosso, most notably Gary Burk, the utilities director. Our community is fortunate that people had the foresight to build and maintain this most basic and necessary municipal infrastructure. We would not easily be able to build or afford it today.

Although we enjoy the benefits of a sturdy water system built up over 100 years, there are costs to providing water. The City operates six wells, and pumping the water up from an aquifer 100 feet underground takes energy, the cost of which keeps rising. Although the water that comes out of the ground is safe to drink, the City chlorinates it and adds fluoride to protect and promote the health of the community. Our groundwater contains a high concentration of iron and other minerals (as my friends in the townships will tell you). The City softens the water from 509 to 172 parts per million and in the process generates waste lime that is recycled as an agricultural product. Still, handling this material, which softens the water without sodium chloride like home systems, costs about $100,000 annually.

It costs a little over $1.5 million a year to provide and treat our water, maintain the pipes, and provide for billing and administration. Paying people to operate and keep up our water system accounts for about 40 percent of the cost. For instance, the City is required to have an operator present at the water treatment plant at all times. Last year, the revenues of the water system, which includes charges to both residential and industrial users as well as a wholesale rate to the City of Corunna, amounted to $1.4 million. Looking just at operations alone, the finances are not sustainable.

Of course, current operations are only part of the story. The great value of the water system is in its infrastructure that delivers water to the tap in our homes. To have a safe and continuous water supply the City must continue to reinvest in this system. Much of the pipe network is at least 50 years old and some of the pipes predate record keeping. Although the City has limited itself to only the most necessary replacements, an aging system requires constant attention. Earlier this decade, the city replaced and upgraded its water treatment plant and took on debt to make these repairs. To keep up the system, the City has been drawing down a water reserve fund (wisely established and built up in earlier times), but this too is an unsustainable practice.

Owosso’s water system suffers from the same decline our tax base does. There are fewer residents in Owosso than in the post-World War II decades when the system was expanded. And there are fewer industries and commercial users. And everyone has become more frugal and efficient in the use of water for technological, economic, and environmental reasons. The end result is a decline in water usage from 594 million gallons in 2001 to 510 million gallons in 2009. Revenues have decreased proportionately, and the basic costs of maintaining the system must be shared by fewer users.

The first response was to eke out efficiencies in staffing and operations, as well as deferring maintenance. Staffing is now down to a single operator at most times, the minimum required by law. As well, the billing cycle was changed from monthly to quarterly to reduce the administrative costs of collection; this change alone saves the average customer about eight dollars per year. It is hard to find a leaner way to run things.

The responsibility we have as the current stakeholders is to not only pay our own way for the water we use, but to make the necessary investments in the system that will ensure that the next generation of residents have the infrastructure in place to support the community’s health, safety, and economic well-being. This does not mean any major upgrades in equipment, but it does require that aging pipes be replaced and the system maintained in working order.

The City Council is looking at fee increases for this year and next. While we would all prefer not to take this step in the current economic climate, water rates have not been raised in five years. Currently, the typical residential customer pays about $50 per quarter. In addition, typical sewer fees for this user are about $63 (our wastewater treatment system is another important infrastructure in need of attention and will be the subject of an upcoming discussion).

The Council will have before it a proposal that will increase quarterly water fees for a typical user to about $64; the associated sewer costs will go up to somewhere around $68. These are average estimates, and because water charges depending on usage and size of service there are great variations in individual bills. Still, the increases in fees will keep our charges below that of other municipalities with water systems similar to ours. For instance, residents in Adrian, which has a few more users than our systems, pay $74 for water and $98 for sewer. The typical Durand resident pay $113 for water and $146 for sewer. More complete data on charges in other communities and the details of the water costs and revenues of our system are available from some very thorough reports put together by engineer Gary Burk. Let me know if you would like to receive the data.

In the end, I feel a responsibility both to the current and future users of the water system to ensure that we both pay for the water we are using as well as set aside funds. The prudent financial move is to ensure an adequate reserve fund for our water system, in case of an emergency. Five years ago the fund stood at close to $2 million, if we continue to deplete the reserve fund it will dip below a million dollars this year. While this sounds like a lot of money, much more could be needed to make repairs in the event of a disaster or massive equipment failure.

Importantly, I feel a responsibility to the future of our community to take care of the water system built up over past decades. Modest rate increases now will enable us to maintain the system, replace pipes, and invest in other needed upgrades. One of the great assets in our community is its infrastructure, and we are derelict in our duty if we only take advantage of that infrastructure without ensuring that it is there for the next generation.
The water rate increases will be undertaken with an eye to minimizing the impact on users but also with a sense of stewardship to the infrastructure. I welcome your thoughts and input.