The State Budget and Owosso

As Michigan crawls its way out of the recession, the State faces difficult budget decisions. Owosso too is trying to find its way forward economically, and how the details of the State's budget are worked out could make our community a partner in--or a victim of--the State's recovery plan. Governor Rick Snyder proposes a major overhaul of fiscal planning at the State level, and several weeks ago introduced his new budget. Job growth is his primary goal, and to achieve this objective he proposes major cuts and restructuring of taxes on businesses. He also proposes significant reductions in several areas of State expenditures. According to the official budget document (click here), "the financial models of our state and local governments are unsustainable. Service duplication, debt, public employee compensation and unfunded retirement obligations are impacting the long-term fiscal health of state and local governments. Governor Snyder believes Michigan and its public institutions must correct course, stop spending money they don’t have, and implement pragmatic solutions to the economic and fiscal problems that exist." How will this budget effect Owosso?

Revenue Sharing. First and foremost to the City of Owosso, the Governor proposes a reduction in statutory revenue sharing. If approved by the Legislature, this will result in about a $461,000 cut in the City's revenues (which were budgetted at $6.7 million for this year). Untouched, because it is written into the State Constitution, is over $1 million in state aid the City receives. Revenue sharing was implemented to compensate local governments for not imposing local sales taxes. In other states, many cities have their own sales tax or receive a set percentage of sales tax revenues. In Michigan, statutory revenue sharing favors older cities with higher populations of lower-income residents.

For Owosso to weather the (estimated) seven percent (7.0%) cut in its revenues, it will likely be necessary to reduce labor costs, either through the elimination of positions or the reduction in pay and benefits. Governor Snyder's budget message suggests that the benefits municipal workers, as a whole statewide, receive are out of line with the private sector. While City spending on infrastructure improvements like sidewalks are sometimes identified as a source for budget cuts, these have generally paid for through state or federal grants, or specific local assessments. The City's unrestricted revenues are mostly dedicated to labor costs. There is little else to cut in the City's budget.

The Governor has proposed to restore in the State budget about two-thirds of the statutory revenue sharing, but distribute the funds through a new incentive program that would reward cities and townships for "best practices" which may include funding for regional cooperation. The specific details of this program have not yet been announced, nor is it clear whether local governments will be rewarded for existing, or future, best practices. The details of this program will determine how big a financial hit the City of Owosso takes. If we are recognized for existing regional cooperation (e.g. water), or given the opportunity to combine services (e.g. public safety), then perhaps we will thrive under this new program. If the program is designed primarily for urban and suburban communities that occupy one metropolitan area, then Owosso may not recover much or any of its lost revenue sharing dollars. Given the goal of job creation in the State, I would favor incentives that reward local governments that participate in robust economic development efforts (for instance, the City has committed at least $15,000 annually to the Shiawassee Economic Development Partnership for several years).

Job Growth through Tax Cuts is the primary goal of the budget, and the Governor proposes to do away with the complicated Michigan Business Tax (MBT) and replace it with a flat six percent tax on corporations. Those businesses organized as partnerships and other limited owner structures will be exempt from most State taxes. This promises to be a boon to small and new businesses, and the Governor believes that "economic gardening" will result in broad and deep job growth. He also proposes to do away with targeted tax credits that are given to specific companies in exchange for commitments to create new jobs. This past approach of "picking winners and losers" benefitted our area with several expansions of manufacturing plants and other businesses that bring in dollars to our community. It is unclear whether these new jobs would have been created locally without these tax incentives, and it is unclear whether the proposed tax reforms will attract or spur equal or greater job growth. What is clear is that the changes would favor many locally-owned businesses and improve the economics for the creation of new jobs. To fully capture the benefits of the tax changes, we (the City and its many partners) will need to emphasize assistance to entrepreneurs and small businesses.

Loss of Development Incentives. In the debates about taxes and spending, much less attention has been given to the potential loss of specific tax credits that have been key to new growth in Owosso. We have been fortunate in recent years to have several new projects built in Owosso, including the Comstock Inn, Woodward Station, and the under-construction Lebowsky Center. All of these projects have been made possible by the Brownfield Tax Credit, which the Governor's budget proposes to eliminate. Going forward, redevelopment of the downtown will depend on not only the Brownfield Tax Credit, but also the State's Historic District Tax Credit. Owosso went through considerable effort last year to put into place a historic district in its downtown, and in response we have already seen several property owners move forward with new storefronts or major reconstructions. Much of this private investment is made possible by the presence of the tax credits, which provide equity investment and improve the opportunities for financing (which has become quite difficult in the last few years). Loss of these development incentives would hurt Owosso's efforts to spur economic development.

The argument against "picking winners and losers" does not apply to these two tax credits, as they are available to any business who develops in certain areas. The Brownfield Tax Credit was put in place to encourage revitalization of downtowns and urban areas, many of which were contaminated in the past and for which there are extensive clean-up costs (this was especially true at the site of the Comstock Inn). Without this tax credit, there would be more empty, blighted lots in Owosso and throughout the state. Without this credit, state policy would push new development out into "green" fields with attendant environmental impacts. The Historic Tax Credit is even more limited in its area of application, but helps developers offset the higher costs of restoring older buildings. Both tax credits are major tools in helping cities like Owosso rebuild its tax base. If we lose revenue sharing dollars from the State, it becomes even more important to increase our tax base through redevelopment.

Summary. The Governor has called for "shared sacrifice" to put Michigan's fiscal house in order, and it would be unrealistic and unfair for Owosso not to do its part (there are also other impacts of the budget on education, health care, and other sectors of our community). And the Governor has the right primary goal in encouraging job growth. If successful, the changes in taxes and spending will restore Michigan's economy and that will do more for Owosso than any particular job program or new development. However, it is important that State adopt a plan that makes Owosso a partner in economic recovery. I believe our greatest contributions can come through creating a vibrant community that provides a platform for entrepreneurs. This platform would consist of a support system for small businesses and manufacturers, a growing downtown, and a community with a high quality of life. Owosso is building this platform for growth, and it seems appropriate to ask our Governor, and our legislative representatives, to adopt a budget--and accompanying policies--that allows us to be partners in, and not victims of, the State's recovery plans.

Regional Cooperation

The City of Owosso and its neighbors have taken some important steps to improve regional co-operation, and the timing could not have been better. Two weeks ago the City Council approved an agreement with Owosso Township that puts in place a process for sharing the benefits and costs of a municipal water system. The next night, Governor Rick Snyder, in his state of the state speech, proposed that local governments consolidate services with their neighbors to reduce the cost of government. He also proposed to use State revenue sharing as an incentive to spur such coordination.

The Governor's proposal has yet to be defined, and yet to be approved by the Legislature, but the idea of regional cooperation among cities, townships, villages, counties, school systems and other units of local government has been gaining more attention and credibility in recent years. Of course, Governor Granholm proposed something similar during her time in office, and the idea never went anywhere. Additionally, there is much concern over the decline in the funds the State allocates to local governments. Revenue sharing was implemented some time ago as part of an agreement whereby the State restricted the ability of locals to levy sales and other taxes. In many states, a portion of sales tax revenues go directly to the jurisdiction in which the sale took place; revenue sharing in Michigan was supposed to be a more equitable alternative. The system worked well until the State started cutting back the payments to local governments. Now, many local officials resist any attempt by the State to further reduce or restrict these funds.

In Shiawassee County, there have been both failures and successes in regional cooperation. The recent water agreement came after decades of controversy and debate. There will now be a water system that encompasses all of Owosso and Corunna and the more developed portions of Owosso and Caledonia Townships. This will accompany the well-functioning Mid-County inter-governmental system that coordinates wastewater collection and treatment. And there have been specific cooperative actions to support new development as well as mutual aid agreements for public safety services througout the region.

Can, and should, there be more regional cooperation, or even consolidation, of governmental services among neighboring jurisdictions in Shiawassee County? The arguments in favor of the idea include the opportunity for cost savings in infrastructure, equipment, and staff. As well, regional cooperation might bring better planning and coordination of governmental activities that improve the quality of life and promote economic development. A decade ago, Team 21, championed by George Hoddy, made these arguments. On the other hand, there are concerns about giving up control and accountability of governmental services. Would a City Council be able to direct its staff and services in ways that would best serve the residents of the community?

What seems to be spurring the discussion of regional cooperation now is the opportunity to reduce the cost of government. There seems to be little interest in raising taxes at the state or local level, and with the economy sputtering, state and local revenues have declined. Even with signs of a slight economic recovery showing, revenues will lag for some time (see this earlier blog post). It's clear that costs need to be cut, and the opportunity for sharing services potentially offers a way to maintain services while cutting costs. However, local governments may need some statutory push or financial pulll to inspire local officials to reach across municipal boundaries. At the local level, careful attention needs to be paid to ensure that any cooperative agreement benefits all parties, is open to public scrutiny, and truly allows for more to be done with less. Nonetheless, regional cooperation will be a goal for 2011.

Owosso and its neighboring jurisdictions of Corunna and Caledonia and Owosso Townships have in place several working regional partnerships; the recent water agreement strengthens these relationships. Hopefully these will be recognized in any state budget or legislative change that seeks to reformulate revenue sharing. In any case, the recent work of local officials to increase trust and communication will put the mid-county region in a better place to pursue effective regional cooperation in the near future.

I was honored to be State Representative Ben Glardon's guest at Gov. Rick Snyder's State of the State address. Said Glardon "This is a truly historic time in Michigan, and the governor's business-style approach is exactly what our state needs to get back on solid footing. The governor talked about specific goals with expected results. With huge state budget deficits that seem to continue year after year, we must find new ways to properly budget taxpayer dollars, and Snyder's emphasis on value for our dollars is spot on."

Change is Coming to Lansing

"If you want something different, don't keep doing things the same way," was how Doug Rothwell put it at the December 13 Summit of the Center for Michigan and the Business Leaders for Michigan. This was on the same day that Rothwell was named to be the new chair of the Michigan Economic Development Corporation (MEDC) by Governor-Elect Rick Snyder and outgoing Governor Jennifer Granholm who took the unprecedented step of jointly appointing a mostly new board to run MEDC. I was fortunate to be at the Summit, and I came away inspired and a little anxious after Rick Snyder spoke to the audience. Change is coming to Lansing, and the implications for elected officials and engaged citizens are profound.

"We are going to be bold" said the new Governor, and while he recognized that turning around the economy of Michigan will require a marathon of persistence, "our sprint will be at the beginning, not the end of the race." I have known Rick Snyder for several years now, and while he has a reputation of being cool and cerebral (i.e. a nerd), he was more fired up and passionate in this speech than I have ever seen him. "Get ready" he said, "it is time to stand up." While his speech was short on specifics, the day was filled with numerous speakers, and here are some things I think we need to prepare for:

Jobs and Economic Development were the #1 issue on everyone's mind. A first step was the remaking of the MEDC, and the Governor-elect and several Republican speakers stressed that government does not create jobs. The Michigan Business Tax (MBT) will be reformed in significant ways, but it also sounds like that specific tax incentives and other industry-targetted economic development efforts will be abandoned, or at least de-emphasized. Doug Rothwell noted that Michigan has the 48^th most burdensome business income tax among states. While he said that cutting taxes is not a long-term economic development strategy, in the short term state government has limited options to spur new private investment quickly. And, a big cut in business taxes would also get Michigan international attention because it is unexpected.

A business location specialist, Ron Pallina, who is author of a new book, Selling out a Superpower, said "We need to understand that we are competing with other nations. Companies say, 'we want to stay in US, but for us to stay here we need the least cost environment.' Today business location is a case of economic survival." His top three recommendations for Michigan: lower corporate taxes, create a right-to-work state, and foster more cohesion in the economic development team of elected officials, MEDC, and local economic development teams. "Michigan is not as well coordinated or speedy in its response to the need of employers."

Doug Rothwell also called for state investment in business incubators: "We need entrepreneurialism to grow our economy, but it takes time."

Budget Reforms. Michigan faces a $1.5 billion structural budget deficit in the coming year, and there will be short-term pain in addressing it. No one talked specifics, but I fear for the impacts on local revenue sharing which represents 25% of the City of Owosso's revenues. A lot of attention was given to the cost of public employees. This is a particular challenge for local governments, where employee compensation represents a majority of their costs; for the state, labor costs are only about 10% of the budget. Legacy costs for retired workers are also a looming challenge that could "eat up the entire stream of new revenues" according to Jeff Guilfoyle of the Citizens Research Council. There are $50 billion in unfunded pension and health commitments in the State, which is equivalent to $5,000 for every Michigan resident.

Solutions for budget reforms centered around multi-year budgeting and shared services. Robert Daddow of Oakland County advocates for the State to go to a multi-year budget. This will provide more stability, certainty, and understanding, especially to local governments and school districts. Oakland County has a three year budget. It gives local leaders more time to realize savings and solve problems; it spurs long-term thinking and avoids one-time budget fixes and gimmicks. Also, he stressed the importance of local governments to provide timely accounting reports to board and the public on a monthly, quarterly, and annual basis. This year Owosso started providing detailed budget reports on a monthly basis; our budget however is an annual one.

Jack Poll, Mayor of Wyoming, the second largest city in Kent County, stated his belief that local governments can achieve cost savings and efficiencies through shared services. He cited the opportunities and challenges with doing this around firefighting services in Kent County. The primary stumbling block is reaching agreement on the desired, or acceptable, level of service. "We need an effective model and standard to measure ourselves against," he said in asking for the State to help facilitate service sharing. "We need to get the legislature to clear the decks to allow for inter-municipal cooperation."

Education. Mike Flanagan, Superintendent of Public Instruction for the State of Michigan, believes that local school districts should share services too. He does not see a need for the consolidation of local districts, but recommends that non-instructional services such as transportation be delivered by intermediate service districts. He also suggested putting in place statewide health insurance, benefits, and a salary schedule. He said that these changes would allow local boards and administration to focus on student achievement, rather than on labor issues and the delivery of services.

Beyond this discussion, there was little attention given to K-12 education. Rather, there were several calls for increased investment in early childhood education, which provides significant long-term benefits for kids. For every dollar invested in early childhood education, $17 will be returned in lower services and increased revenues. Higher education was also touted. John Austin of the Brookings Institute reported that Michigan is 50^th in the relative share of state budget allocations to higher education. He recommended that we leverage our world-class institutions for economic growth, citing the positive examples of the Research Triangle in North Carolina and Austin, Texas. "Universities are engines for local economic development, the growth of the state, and our global competitiveness."

Place-Making. John Austin also called for investments in the quality of life in Michigan. He noted that the growing regions of the country have world-class cities with culture, good transportation infrastructure, and a talented workforce . He also called for investments in our natural assets as a way to retain and attract an educated workforce: "Michigan is a beautiful state, but the beaches have got to be clean and the parks need to be open; Colorado has had great influx of talented people because of its natural resources. Our youth, our college graduates want to be part of sustainable communities and work in green industries; they do not perceive Michigan as a place for this – in fact, we have been antagonistic."

Bi-Partisanship. The day ended with a call for cooperation and action. Democratic State Senator John Gleason said that it was "time to put blame aside. Now is a unique opportunity for the State of Michigan. We have been too partisan in the Legislature. We cannot put forth our best effort because of the peripheral powers and parochial interests." Republican Jase Bolger, the new Speaker of the House, said that "our problems are too profound to let partisanship get in the way." Governor-elect Rick Snyder called all legislators "my partners" after being thanked by the Democrats for his efforts to reach out to them.

The next Governor also stressed that the reform efforts were not just about government. "We all need to work together," he said. And Phil Power, the visionary force behind the Center for Michigan, called on us to be "all in for Michigan." Given these strong statements, the seriousness of the problems before us, and the passionate commitment of Governor-elect Rick Snyder, I anticipate some radical changes in government in the year ahead. Whatever our line of work or effort, private or public, we need to be clear about our own mission and look for ways to move forward with new partners. It is said that the Chinese character for crisis is the combination of chaos and opportunity. I think there will be lots of both.

Shop Downtown to Build our Local Economy

The other day Joe Borgstrom (of Michigan's Main Street program, and the first director of the Shiawassee Economic Development Program) reminded me of the leaky bucket and its role in the economic health of our community. He also shared some data that reminds us of why we need to shop locally to get our economy going strong and employment as full as possible.

Our community, like all places, has a local economy where people buy goods and services from one another. Money comes into our community (the faucet) from a variety of sources: most importantly are the wages and other earnings from companies that make things here and sell them nationally or internationally; but money also flows into individuals and businesses that provide services to other outside the community; crops grown here and sold on the market also bring income; transfer payments (e.g. private pensions, Medicare, and other government aid) are also a major inflow.

When money comes into the community, it gets spent at the grocery store or other shops, at restaurants, for services like accountants or house cleaners, in buying supplies to run other businesses, to get healthcare, and in the form of donations to local charities or to pay local taxes. And of course when the local shopowner makes a sale, then he or she uses that income to buys goods and services. This is called the multiplier effect and has long been the subject of study by academics and the focus of economic development efforts.

Of course, not all the money that flows into the economy stays here. We make purchases at stores outside our community, we buy services from national companies, we shop online, and we pay taxes to the federal government. All of these outflows are the holes in the bucket. Typically, new dollars turn over several times in the local economy, thus filling the bucket, but they eventually seep out to other places as near as the regional shopping mall and as far as China for that new celphone or other electronic gadget.

The traditional approach of many economic development efforts is to increase the flows into the bucket, and Shiawassee County has done a relatively good job in recent years in supporting the growth of income-generating manufacturing companies; we need to do more, especially supporting entrepreneurs. However, we can also promote the local economy by seeking to plug the holes in the bucket of our local economy.

At this time of year, we can plug some holes and support our local economy by shopping downtown, eating at local restaurants, and making donations to local charities. A study from West Michigan found that when a dollar was spent at a locally-owned business, 68 cents of that dollar recirculated through the local economy. For every dollar spent at a national chain store in the local market, 43 cents stayed locally. These figures vary somewhat from business to business, but several other studies from other communities confirm the economic benefit of shopping locally. What is clear is that when we shop in other counties very little economic gain accrues locally. Online shopping is the worst for the local economy, with only a penny or two coming back to the community in the wages of postal or delivery workers.

After the holidays are over, we need to take a look at our local economy and figure out what other holes we can plug by identifying what retail, entertainment, services, business support, and supplier businesses our community is lacking. When we identify the outflows in our local economy we will be identifying economic opportunities for a local entrepreneur to fill, and if we grow our local businesses, we will grow our local economy.

In the meantime, as you do your holiday shopping, take a stroll downtown, check out our local businesses before getting in your car or online, take someone out for a meal, buy a local gift certificate, or swing by the Shiawassee Arts Center or the Four Seasons gift shop at the hospital or the Steam Railroading Institute. Think too about making a donation to a local charity as a meaningful way to show someone you care (for instance you can participate in Operation Friendship at Arc Shiawassee or buy a theater seat from the Owosso Community Players). When you shop locally, not only will you be supporting the local economy, you might run into an old or new friend out and about. And relationships, whether personal or economic, are what really make our community special. Happy Holidays!

Local Democracy is the Answer

The mid-term election is over; now what? The Republicans, conservatives, and tea party activists are happy; the Democrats, liberals, and progressives are disappointed. However, if either side thinks there will be major change, for either good or bad, in Washington they are wrong. Whether your side “won” or “lost” in this election, you will not be successful in promoting your ideology unless you become active on the local level. It is time for all of us to get busy in our community.

Republican leader John Boehner said on Tuesday night that his party’s task will be “leading the drive for a smaller, less costly, and more accountable government here in Washington DC.” While voter dissatisfaction gave Republicans more seats in Congress, the federal bureaucracy will persist unless conservatives can show Americans how to get by without it.

Americans have shown repeatedly, as they did just two years ago in the Presidential election, that they want a better country. If the Republican party desires to rule in 2012 and beyond, they need to provide a way for Americans to work together for positive change. The tea party reminds us that the Constitution limits the federal government, but that document was written in an era where people banded together in their communities to help one another and looked to state government to regulate commerce. Times have changed in two hundred years, and if we want to return to a federal government envisioned by our founding fathers, we need to increase the capacity of cities, counties and states to solve the problems of today.

The Democrats were beaten in this election, but they are not going away because what motivates them transcends any particular vote. Their commitment to public education, helping those in need, protecting the environment, or other causes gives liberals the drive to create change. Democrats are successful when they show voters how government can effectively address these big issues. They did not make that case on Tuesday.

If Democrats want to regain power, they need to convince more people of the importance of their causes. More importantly, they need to show that government has some ability to solve problems. That is not going to happen at the federal level in the next two years. Progressive-minded activists need to work in their community so that more people understand and come to share their passion for change.

The electorate is angry, cynical and increasingly non-participatory. Less than half of the registered voters in Shiawassee County chose to exercise their constitutional right to vote last week. If either Democrats, Republicans, or independents hope that our democracy will continue to be an effective form of government, we all need to work to restore faith in government and the elected officials who represent us. “All politics are local” said the late congressman Tip O’Neil; thus the best place to start to re-engage voters is at the local level.

So, if you are either celebrating or bemoaning the election, its time to go work in your community. You can take action at the personal, organizational, and/or governmental levels. Personally, we should all try to live out in both word and action our convictions. If you feel like the federal government has failed to stimulate the economy, then think hard about how you might start a business, become involved in the work of the Chamber of Commerce, or at least shop locally. Or if you are frustrated that Congress failed to enact climate change legislation, then commit more fully to a green lifestyle, both as a way to reduce energy use and as an example others.

American history has shown that when people come together they can accomplish great things. Our voluntary sector is better organized than any other country, but they need to step up to the real issues facing the country. If you are opposed to Obama-care, then go to work to start a free clinic for those in our community who are uninsured, or volunteer for Respite or take time off work to help your elderly neighbor who needs help. If you support the health care reform efforts, then go to work to support Memorial Healthcare as a donor or volunteer. The key to health care in our community will be our local hospital, and its independence will be challenged by the health care reforms coming down the road.

Finally, get involved with your school, township, city or county government. That can mean service in an elected or appointed capacity, or it can just mean a willingness to work on making local government more effective. I have come to learn on the Owosso City Council that seven elected officials do not create change in our community; we can only help open doors so that the community can come together to support new businesses, build a new theater, or develop a dog park. Perhaps the best opportunity locally right now is for people to become active in one of the several planning efforts underway that will help chart the future of our community.

Democracy is a participation sport, and neither Democrats nor Republicans, nor any other party, will be successful at governance unless citizens feel like they can participate effectively in government, create positive change in their community, and thus make this a better country. Get involved.

A shorter version of this appeared in the Argus Press on November 6, 2010

Public Art

Those of us who love Owosso, love it because it is unique (perhaps knowing and embracing the specialness of something is the definition of love). We share things in common with other small towns, but the particular mix of buildings, public spaces, and trees clustered around a north-flowing River make our community a unique place. And, according to planners and economists, it is place that will be the marketable resource that brings prosperity back to Michigan. That being so, the question then is, "What makes a place?"

You can go anywhere in Michigan--anywhere in North America for that matter--and you will find urban spaces (let's not call them places) that look and feel all the same. They have the standard mix of chain restaurants and big box retailers, they are served by--and serve--the automobile and parking lots abound. They are rarely memorable. In contrast, Downtown Owosso has a unique collection of businesses and storefronts, several areas for public gatherings, and wide sidewalks that make it pleasant to be a pedestrian. Thankfully, street trees and colorful plantings are also returning to our community. Increasingly, Owosso also has some unique artistic statements in visible spots (like the Ed Louch sculpture in front of the Chamber of Commerce; above), and this public art gives the final touch of uniqueness; it gives us character; it makes Owosso a true place.

Increasingly, sociologists and marketing experts find that consumers want something special when they shop, or make a choice about a home, or even invest in a business. In a complex, busy world of instant access and ubiquitous information, we want to find something that we can identify as our own; we want to be grounded. A true place like Owosso gives us that connection and help us to define our community and ourselves. To quote the great writer Wallace Stegner, "if you don't know where you are, you don't know who you are."

We are fortunate that our collection of historic, architecturally significant buildings in Owosso helps us know where we are. However, besides preserving and restoring our historic buildings, we can take several other steps to create a sense of place:

1. Public Art like sculpture and murals are a contemporary statement of uniqueness;
2. Streetscapes that provide energy, color, and pattern with decorations and flowers;
3. Lively Arts with street musicians, and performances in public venues like the Mitchell Amphitheater, and the rebuilding Shiawassee Performing Arts Center;
4. Galleries like the Shiawassee Arts Center and Mootzies;
5. Unique stores and lively shop windows, which are many and on the increase.

Public art in Owosso, at this time, needs some special attention because of the difficulties in completing a planned fountain in the new park at the corner of Ball and Exchange Streets. Of course, a dynamic water feature can also be a uniqueness to a place, but only if care and attention is given to ensure that it is truly different from other fountains. This presents two challenges. First, a fountain and a sculpture are not the same thing, and combining the two into a public artpiece takes a talented hand (or two). Second, fountains can be expensive both to install and operate. The City of Owosso and its Main Street Program have solved the first problem with a unique design by local artist and metalworker Arthur Johns; the second problem is proving to be more challenging.

While some despair at the cost realities, or believe that funds should never be spent on anything so frivolous as a fountain, I believe the answer is to proceed carefully and seek out cost-effective solutions. For the reasons stated above, we need public art like fountains to help keep Owosso's sense of place alive. We want to be neither a museum of historic structures nor a sterile shopping strip defined by cars and concrete. We need to find an economical way to provide for public art; if not the fountain in question, then some other unique statement.

Who should pay for public art like fountains, sculptures, and murals? Frequently such amenities have been provided by private businesses, individual donors, or arts organizations, but I believe it is appropriate for (some) public funds to be spent on the enhancement of our community. In Owosso, municipal government has long paid for street trees, flagpoles, holiday lighting, and attractive public buildings like City Hall. They all help create that special sense of place which is important to our community pride and identity and also the health of our local economy.

The proposed funding for a fountain/sculpture in downtown Owosso is to come from the property taxes paid by downtown property owners who are part of the Downtown Development Authority (DDA) which is now part of the Owosso Main Street program. This special tax increment finance authority was set up several decades ago using a provision in state law. The revenues generated to the DDA are legally required to be spent in the downtown area and must benefit the property owners in that area. Enhancements in the form of public art that help make the downtown unique are a perfectly rational, economically desirable, expenditure of these funds. If a cost-effective engineering solution can be achieved, then a new fountain will help keep Owosso the unique place that we love.

The Wallace Stegner quote comes from an excellent piece in one of my favorite blogs (click here) put out by the Orton Family Foundation that supports true community building.

Housing and Neighborhood Issues

On August 30 the Owosso City Council held a special meeting on housing and neighborhood issues. Below is an edited and updated e-mail I sent out. If you would like to receive regular updates by e-mail, let me know and I will put you on my list.

Three Housing Issues

1. Aging stock: about 70% of the approximately 6,700 housing units in Owosso are over 50 years old (note this correction from the first e-mail). Many of these homes are historic, affordable, and help make up a desirable neighborhood fabric. However, if these older homes are not properly maintained they may decay rapidly.

2. Vacant and blighted property: dilapidation, a weak housing market, and foreclosures have left too many houses in Owosso vacant. While there is no easy way to get a count, if 10% of the housing units are vacant that would mean close to 700 homes are empty. City staff estimates that 20 vacant homes have decayed to the point where they cannot be salvaged.

3. Health and Safety: older or poorly maintained homes can endanger both residents and neighbors. Inadequate wiring can present fire hazards, lead paint can endanger children, and blighted property can harbor criminal activity.

Code Enforcement options have been investigated by City staff and they are planning on increasing attention to compliance with the Property Maintenance Code adopted by the City in 1990. Existing building staff will be assisted by police and fire personnel to inspect the housing in the worst shape. The goal is to work with property owners and residents to ensure that homes meet some basic life safety and health requirements. This will help maintain our housing stock, prevent the further abandonment of homes, and reduce neighborhood blight and crime. We heard testimony about the necessity of ensuring quality living environments and encouraging new investment in our neighborhoods.

Rental Housing will be a focus, but there is no desire to be punitive to landlords. Rental housing is about a third of the housing stock, but about 50% of the current code enforcement issues. Several rental property owners testified and expressed general frustration with the City's attention to these issues, but they made few specific criticisms or suggestions. Owosso instituted a rental registration program last year, and there are now 1,924 units registered, which does not yet include all rental property. Fines can be assessed for non-registration, but have not yet been levied. Several landlords expressed their dislike for the $25 annual registration fee, although it was pointed out that registration fees in other cities are in the hundreds of dollars. The City's goal will be to work with landlords, and tenants, to ensure basic life safety and habitability standards.

Housing Rehabilitation Programs are now underway with a grant from the Michigan State Housing and Development Authority (MSHDA). These loans can assist both homeowners and rental property owners make improvements to their housing. In addition, City staff continue to work with housing programs from Shiawassee County, several nonprofit organizations, and private sector lenders, builders, and realtors. While we are off to a good start with these programs, it is clear that we need to look for ways to expand our efforts. In particular, I would like to be sure we are taking advantage of residential energy retrofit programs. The idea of creating new community and neighborhood organizations was also suggested, and the Mayor is currently seeking help on this endeavor.

New Housing is not a focus, as there is no general need at present to add to the overall housing stock. However, we did discuss the benefits and opportunity to provide downtown housing on upper floors and senior and other special needs housing. It was suggested we encourage new housing by rehabilitating some older non-residential properties.

City-Owned Vacant Property may become more of an issue as the City seeks to clean up blighted housing, although a lack of funding will limit these efforts. A draft policy on the disposition of city-acquired property was presented and may be acted on in the near future.

You can form a Neighborhood Watch group - we discussed the link between poor housing and crime and the positive role neighborhoods can play in promoting public safety and improving the housing stock. The Public Safety Department and Councilmember Gary Martenis have made attempts to form Neighborhood Watch groups, but have not had much interest. The Owosso Police has an interest and funding available to support the formation of such groups; please let me, any other City Councilmember or City staff know if your are interested. I believe this could be a useful tool to help improve Owosso.

A Housing Advisory Committee was suggested and the City may form a group of community residents, landlords, lenders, housing experts and others with an interest in Owosso. I volunteered to look into this option, so please let me know if you like the idea, are willing to help out, or have suggestions.

In sum, I think the City Council came away with a much better understanding of the challenges and the opportunities to improve housing and neighborhoods in Owosso. It won't be easy or quick, but I do believe we cannot ignore this issue; failure to protect and preserve quality housing will be detrimental to the community's future. I believe that our City staff has a great deal of knowledge, expertise, and commitment that will be of benefit. If we come together as a community, and not blame one another, I think we can make some positive changes that will benefit all of us who live in Owosso.