agenda - City of Midland

AGENDA City Council Planning Retreat January 16, 2016 9:00 A.M. City Hall, City Council Chambers 333 West Ellsworth Street

Time

Item

Presenter

9:00

Countywide Road Millage & Projects

McManus

9:45

Mall Area Traffic Engineering

McManus & Kaye

10:30

BREAK

10:45

Pension & OPEB Costs

Stone & Keenan

11:30

Upcoming Labor Agreements – CLOSED SESSION

Stone

12:00

Dow Dioxin Remediation Update - LUNCH

Mary Draves & Steve Lucas

1:00

Electronic Communications Strategy

Tisdale & Keenan

1:45

City Council Terms & Election Cycle

Branson & Tisdale

2:30

BREAK

2:45

FY 16-17 Budget Projections

Keenan

3:30

Council Directives for FY 2016-2017

Donker

casual attire is recommended

Midland County Road Millage 2016 Renewal

Road Millage Renewal • November 2016 General Election • Consider ballot issue to renew existing county wide 1 mill that expires in 2016

Road Millage Renewal • Local governments in Midland County receive revenue to maintain our streets from two principal sources. • Shared gas and weight taxes received from the State of Michigan. • The voter-approved county road millage that has been levied for approximately 44 years is the second source. • Second mill approved in 2014

Road Millage Renewal Three Primary Sources • • •

Gas and Weight Tax 50% County Road Millage 1 25% County Road Millage 2 25%

• Also Federal Funding on a competitive basis

Overall Street Fund Needs • 2016/17 Projected Operational Maintenance • $2.1M (majors) + $1.6M (locals) = $3.7 M • 2016/17 Pavement Management Needs to keep system from a decline (Deter. Curve) • $2.2M Majors • $2.1M Locals • Total $4.3M

• Total Needed

$ 8.0 M

Funding History and Needs

Road Millage Renewal • Citizens of Midland have supported a 1 mill county wide road millage since about 1980. • 4 year periods. • In 2014 voters also supported an additional 1 mill toward roads. • That money is available for use in Feb. 2016.

Road Millage Renewal • With that additional mill we told the voter of Midland that we would use it toward higher level repairs and we are doing that. • We also told voters in 2014 that the buying capacity of one mil doesn’t go as far as it did in 1980. • Also we have a 25% larger network since 1980. • We accumulated a backlog of projects.

Road Millage Renewal • Construction costs have outpaced available revenue and the road condition is worsening.

Road Millage Renewal Tax Billing Year*

Fiscal Year

Due/Collected

Total Millage

Expiration Dates

2014

2014-15

Feb. 2015

1.0000

12/16

2015

2015-16

Feb. 2016

2.0000

12/16 & 12/18

2016

2016-17

Feb. 2017

2.0000

12/16 & 12/18

2017

2017-18

Feb. 2018

1.0000

12/18

2018

2018-19

Feb. 2019

1.0000

12/18

2019

2019-20

Feb. 2020

?

?

Road Millage Renewal The following table estimates distribution of one mill: Entity • • • •

City of Coleman City of Midland Village of Sanford Midland County R.C.

Totals

Amount

Allocation (%)

0.49 63.88 0.74 34.89

$17,861 $2,328,535 $26,974 $1,271,800

100.00

$3,645,170

Road Millage Renewal • Act 51 Money • C.R.M. 1 • C.R.M. 2 Total

= $4.1 M = $2.1 M = $2.1 M = $8.3 M

• Total Need $ 8.0 M • Towards Backlog $0.3 M/ year

Losing One Mill

Road Millage Renewal



Road Millage Renewal • By not renewing one of the two mills our forecasting reports from our pavement management system indicates that our gap in funding from current sources would be $1.7 M per year, to keep the street system condition from a decline.

Road Millage Renewal • 2016/17 Projected Operational Maintenance • $2.1M (majors) + $1.6M (locals) = $3.7 M • 2016/17 Pavement Management Needs to keep system from a decline (Deter. Curve) • $2.2M Majors • $2.1M Locals • Total $4.3M

• Total Needed $ 8.0 M • Total Available $ 8.3 M 6.3 M(including both road millage) • Towards Backlog $0.3 M/ year • Gap of $1.7 M

Road Millage Renewal Construction Project Priorities 2016 - 2020 Street_Program

0

0.25

0.5

1

1.5 Miles

Road Millage Renewal Construction Project Priorities 2016 - 2020 Street_Program Base Priority Renew Millage

0

0.25

0.5

1

1.5 Miles

Road Millage Funding • The street system is a community asset that needs to be protected and road millages are a crucial source of income.

Road Millage Funding • Gas and weight tax revenues have remained flat for several years and the State of Michigan has recently taken action. • Will/should start to see an increase over five years starting in 2017.

Midland County Road Commission Needs

Road Millage Funding • Midland County Road Commission has similar concerns and more severe road conditions. • They estimate that 50% of their local roads are poor and 33% of primary roads are poor. • Midland County Road Commission works closely with the surrounding townships and plans to cost share with the townships.

Election Schedule

Road Millage Funding November General Election: • Mid-July: deadline for submitting agenda items for the upcoming Finance Committee Meeting • Late July - Finance Committee • Early August - Board of Commissioners meeting

Road Millage Funding • Early August: deadline for submitting agenda items for next upcoming Finance Committee meeting • Mid -August - Finance Committee • Mid - August - Board of Commissioners meeting (last chance to get on November ballot) • August 16th - Ballot wording certified to County Clerk

Questions

City Council Strategic Planning Session January 16, 2016

Table of Contents • • • • • • •

Background 2005 Traffic Study Community Input Process 2006 Then Action Plan 2008 Economy Collapse New Traffic Counts and Projected L.O.S. Summary and Next Steps

Background

Strategic Planning – Mall Area • Project Priority Report • Resurfacing of Eastman Avenue on the schedule

Strategic Planning – Mall Area

History

Strategic Planning – Mall Area • The Midland Mall, Meijer's , Joe Mann Boulevard and other developments were came to life in the 1990-1992. • Average Daily Traffic on Eastman Avenue was 8,000 1990 and they climbed to 30,000 in 10 years. • Airport Road added to US 10 Ramps

Strategic Planning – Mall Area • • • • • • • • • • •

Bob Evans Toys R Us/Qdoba Office Max Lowes Staples Home Depot Gordon Foods Walmart Pier One Fazoli’s Damon's Applebee's Bennnigan’s Burger King Motels Belle Tire Hampton Jefferson Wackerly Plaza Businesses along Wackerly

Arby’s Kohl's MC Petco Best Buy Bed Bath and Beyond Logan Steak House


Strategic Planning – Mall Area • Early 2005 as part of a series of community roundtables Eastman was brought up as significant concern for residents.

Strategic Planning – Mall Area • Began looking at the Eastman corridor and hired DLZ to do a traffic study: • Existing Conditions Assessment • Improvement Alternatives

Traffic Study



Strategic Planning – Mall Area • Three Practical Alternatives • Signalized intersections with narrow boulevards • Roundabout intersections with narrow boulevards • One way pairs • Costs $10.4M to $12.7 M

Strategic Planning – Mall Area One Way Pairs $12.7 M


Strategic Planning – Mall Area Narrow Boulevard with traffic signals $11.8M


Strategic Planning – Mall Area Narrow Boulevard with Roundabouts $10.4 M


Community Process


Strategic Planning – Mall Area • Expensive Projects • Looked at Interim Solutions • Kezziah Watkins (P.R. Firm) hired to do public input sessions • Fact gathering from community • Meetings at the Mall • Eastman Avenue Design Series


2006 Then Action Plan

Strategic Planning – Mall Area • EADS/Community Decision : • Phase in The Boulevard and Intersection Improvement Alternative • Involves intersection improvements and additional lanes but no boulevards • $3.8M (2005 Numbers)



Strategic Planning – Mall Area • Joe Mann Boulevard Options • Roundabouts with Center Median • Five Lane Option • Specific Plan not determined

Strategic Planning – Mall Area • Then schedule was set • December 2006 – Approval to get engineering bids • Jan/Feb 2007 – Fund design work and hire consultant • May 2008 Budget for right of way • May 2009 Finance Construction and R.O.W.


Strategic Planning – Mall Area • Properties in red more significant business impacts than the ones acquired. • On Joe Mann and Jefferson we determined R.O.W. needs and worked with businesses to set back further.

2008

New Traffic Counts and Projected Level of Service


Strategic Planning – Mall Area Date/Street

Eastman

Joe Mann

Jefferson

2005 2010 2015 Old Projection New Projection

25000 27000 26000

10500 13000 14000

15700 15200 15700

40000

18000

20000

30000

18000

20000

Strategic Planning – Mall Area • For Eastman Avenue • Eastman Avenue Traffic Counts Stabilized • The Interim alternative selected in 2005 if implemented would provide decent levels of service until 2040.

Intersection Projections - Eastman

• Eastman and Airport • Currently D • With Interim solution B

• Eastman and Wackerly • Currently D • With Full Interim Solution C

• 20 Year Projections


Strategic Planning – Mall Area • Joe Mann and Jefferson • Traffic projections – still growing • Expecting additional movements from east over time • Potentially new large developments could lower level of service • Need to start dealing with this area

Intersection Projections – Joe Mann

• Joe Mann and Jefferson • Currently C • Estimate that in 5 years will be a D with standard growth • With Kroger D or E in 2017

Summary and Next Steps

Eastman • Traffic Has stabilized • Small Incremental Improvement with right turn lane at Airport Road • Mill and Fill Eastman • Establish new estimate ($3.8M) • Still a costly project • Right of way needed

• Work with MDOT to potentially shift away from Speedway • Monitor for right of way opportunities

Eastman

Joe Mann • Establish long term solution to work towards. • Roundabout/Boulevard or 5 lanes

Joe Mann • Potential incremental solution: • Look at Signal timing small changes • Two Northbound turn lanes • Will require an additional westbound lane that can drop off short of Eastman • Longer east bound right turn lane • Some R.O.W. acquired • Setback for expansion • Estimate $1.1M

Joe Mann and Jefferson


End

Civilian & Police/Fire Pension & Other Post Employment Benefits (OPEB)

Attributes of Public Pension • Protected by State Constitution. Prohibits amending benefits received by retirees or earned by employees.

• Benefits protected contractually through collective bargaining agreements. Changes must be negotiated.

• Public Safety personnel do not participate in Social Security.

• Public Pensions are not covered by Employee Retirement Income Security Act (ERISA) or the Pension Benefit Guaranty Corporation (PBGC)

Pension & OPEB Funding-Why it Matters • GASB requires disclosure of funding levels in financial statements. Pension in 2015, OPEB in2018

• Potential impact on credit rating and increased cost of financing.

• Increased pension & OPEB obligations reduce dollars available for general fund expenditures.

• Intergenerational equity: Unfunded pension liability costs are not paid by the generation of tax payers receiving the services.

• Pension funding is under review at State & Federal level.

Pension Funding-We’re Not Alone

• Nationally, median funded percentage for public pensions is 70%

• All MERS employers – Median funded percentage: 75.6%

• Among top 10% of MERS employers (includes Midland)– Median funded percentage: 68.2%

• Midland MERS plan currently at 60.2% funded and Police/Fire is at 73%.

Summary of City Retirement Benefit Plans Benefit Plan

Type

Expense

Civilian Pension (MERS)

DB

2015-16: $5.6 MM 2016-17: $6.3 MM

457 Match

DC

$298,000

401a Plan

DC

$274,000

Police & Fire Pension

DB

2015-16: $2.5 MM 2016-17: $2.8 MM

Retiree health benefits

DB

$5.1 MM

Employee Health Savings Account (2%)

DC

$137,000 Civilian: $110,000 Police & Fire: $27,000

MERS Civilian Plan Developments in last 10 years • Closed DB plan on June 30, 2005; new hires enrolled in DC (now at 50/50 DB/DC)

• After implementing change, we learned of steep increase due to accelerated funding schedule

• After the 2008/09 market crash, we asked for help to mitigate the financial impossibility of meeting these accelerated obligations – the MERS board responded with “option B” amortization schedule to slow it down

• Elected “option B” amortization schedule beginning with 2012 valuation

•

MERS Civilian Plan What’s Changed Since Last Year

• City has independent actuarial review of MERS

plan. • MERS adopts new actuarial assumptions in 2015 to include changes in assumed rate of return and life expectancy tables. Results in significant impact on unfunded liability • City meets with MERS CEO & Account Manager to discuss options • MERS & City collaborate to develop solutions

Cost Impact of Unfunded Liability & Changes in Actuarial Assumptions Millions

Unfunded Liability Amortization Schedule 9.0 8.0 7.0 6.0 5.0 4.0

3.0 2.0 1.0 0.0 Year 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Original UAL

Alternate UAL

Actual UAL portion of ARC

MERS New Assumptions Projected

MERS Civilian Pension Plan Percent Funded

MERS Civilian Plan Options/Solutions • Working directly with MERS on solutions. • Currently limited options to change closed DB Plan. • Benefits addressed through collective bargaining process.

• Increase payments beyond annual required contribution. • Bond all or portion of unfunded liability • Levy millage to cover all or portion of unfunded liability

Public Safety Employees • Midland Police & Fire Retirement System under Public Act 345

• Modified plan in 2011 for future hires • • •

Reduced benefit multiplier Increase in retirement eligibility (later) Limited scope of eligible compensation included in benefit calculation

Police & Fire Pension Plan

Police & Fire Pension Plan

Police & Fire Pension Plan Defined Benefit Retirement-Contribution Rate

Solutions Police/Fire Pension

• Created Public Safety Pension Task Force to collaboratively address funding issues.

• Benefits addressed through collective bargaining process.

• Increase payments beyond annual required contribution.

• Bond all or portion of unfunded liability.

Retiree Health (OPEB)

• Provides health coverage to 392 retirees. • Pre-65 and Post-65 retirees • Eliminated for new hires – covered by retiree health savings account.

• Civilians hired 2005 and later • P & F hired 2011 and later

• Contractually obligated benefit levels.

Retiree Health Contributions GASB 45 Government employers required to report cost of retiree health insurance in financial statements.

Retiree Health Cost Containment Measures Adopted •

Plan design changes

• • •

Increased prescription drug co-pays

Significantly increased retiree premium contributions

• •

PPO versus Traditional plans in retirement

All new hires as of 1997

Eliminated retiree health insurance & adopted retiree health savings account.

• •

Civilian new hires in 2005

Public safety new hires in 2011

Retiree Health Considerations

• Ability to change benefits limited by contractual obligations

• Cost containment changes made to date were negotiated on a go forward basis and did not impact existing retirees.

Retiree Health Future Cost Containment Considerations

• Medicare Advantage Plan for Post-65 retirees. • Offer existing retirees voluntary irrevocable move to lower cost/better benefit PPO Plans

• Offer buy-out program for employees still eligible for retiree health.

• Bond for unfunded liabilities • Potential elimination of “Cadillac” tax in ACA could positively impact unfunded liability.

Recent Actuarial Report Valuation Date Actuarial Accrued Liabilities Valuation Assets Unfunded Actuarial Accrued Liabilities % funded Annual Required Contribution

Act 345 MERS 12/31/14 12/31/14 78,167,136 135,879,912 57,054,450 81,836,794 (21,112,686) (54,043,118) 72.99% 60.23% 2,557,242 6,263,424

OPEB 6/30/14 TOTAL 85,125,933 299,172,981 39,331,790 178,223,034 (45,794,143) (120,949,947) 46.20% 59.57% 5,069,409 13,890,075

A variable rate 30-year line of credit

Review of City of Midland Remediation Project January 16, 2016

Today’s Purpose • • • •

Brief review of work completed to date Discuss Dow’s remaining obligations Discuss future requests from City Question and Answer

Midland Resolution Area (MRA) ~1700 acres ~1420 Residential properties ~ 420 Non residential properties

Work Plan • Obtain access from residential property owners for work. • All work done only with the expressed consent of the property owner • Sample property for Dioxin TEQ • Remedy if property greater than 250 ppt – Remove top 12” inches of soil – At owner’s discretion preserve non-replaceable plants and large mature trees – Replace with new soil, plant and establish a new lawn, replace landscaping including shrubs, flowers and bulbs – Return to conduct follow-up maintenance (e.g. watering) until yard is properly established

• Work anticipated to take 6 years to complete

Remedy

Remedy

Remedy

Remedy

Remedy

Remedy

Remedy

Remedy

Remedy

Remedy

Remedy

Residential Sampling/Clean up • Project Status – 1635 properties sampled – 132 properties required remedy – 12 residential properties denied access

• All field work complete by year end 2014. • Three years ahead of schedule

Project Stats • • • • • • • • • • • • • •

5,000+ Man Hours Sampling 40,000+ Man Hours Remedy Removed 45,000 CY Soil 6,100 Round Trips With Trucks Removed 350 Trees in a Residential Setting Placed 4,000 Plants and Trees Installed 2,500 CY of Mulch and River Rock Placed 160,000 LF of Irrigation Placed 700 CY of Concrete 600,000 SF Sod Replaced or Installed over 2,000 Feet of Fence Moved Significant Amount of Personal Property Daily Traffic Control Including DOT Lane Closures Over 20,000 Miles of Local Construction Traffic

Project Team

Dow’s Remaining Obligations • •

• •

• • • •

Periodically request access to 12 residential properties where access has been denied. Upon access complete sampling and remedy as required Monitor non-residential property within the MRA (~ 400 parcels) for change in use to residential. Upon change work with property owners to obtain access, sample and provide remedy as required Monitor City of Midland Agricultural Zoned property for presence of farm animals for human consumption Implement a “Miss Dig” program to monitor excavations at untested properties within the MRA. Provide educational materials and assistance to owners to ensure excavated soil is properly managed Record Restrictive Covenants on Dow Owned property within the MRA prohibiting residential use and controlling soil movement off the property. Record Restrictive Covenants on Dow Owned Agricultural property within City of Midland prohibiting raising farm animals for human consumption. Apply for an Environmental License from MDOT for MDOT right of way within MRA controlling soil movement Submit request to City of Midland for specific additional controls.

Future Requests • •

•

Request permission to access/sample remaining City owned property within MRA (Water Treatment Plant and Business 10/Grand Curve area) Request amendment to Farm Animal Ordinance to provide notice to DEQ prior to modification or lapsing of ordinance or awareness of property owner refusal to comply Request approval of Memorandum of Agreement between Dow and City – Dow to Provide City: • • • •

Current listing of MRA Eligible properties Maintain Financial Assurance and provide documentation to City Assistance as required for unusual soil management expense Indemnification against certain claims arising from implementation of agreement

– City to provide Dow • • • •

•

Notice of request for land use changes within MRA Notice of certain property ownership change within MRA Notice of proposed change to farm Animal Ordinance Agreement to follow certain soil management practices on City owned property and Road/Utility projects within MRA

Request approval of restrictive covenants on City owned property within MRA if testing demonstrates dioxin TEQ greater than 250 ppt. Covenant would have similar provisions to those recorded on Dow owned property within MRA.

Approximate Timing • Dow submitted RAP and other regulatory documents to DEQ on January 8, 2016 • DEQ will complete review RAP • DEQ requires a Letter of Intent from City of Midland staff indicating they are prepared to submit requests to City Council with a recommendation for approval • DEQ will submit RAP for public comment after completion of review during 1st Quarter 2016 • Anticipated final approval of RAP by DEQ is mid April • Dow will initiate request for described actions following appropriate City procedures within 30-60 days of RAP approval

Discussion

Electronic Communications Strategy City Council Planning Retreat January 16, 2016

Here’s What We’re Doing…

Social Media / Facebook

MDN

Mlive.com Television City Website

Radio Direct Mail Word of Mouth

Here’s What We’re Doing… • Print: • #1 – MDN / news releases & media alerts (200/year) • City Calendar (18,500 homes) • #5 – Direct Mail At Your Service Newsletter (2-3xs/year, 18,500 households)

Social Media / Facebook MDN

Mlive.com Television City Website Radio Direct Mail

Word of Mouth

Here’s What We’re Doing… • Electronic #2 - Website • 89,753 website visitors over past 6 months • E-subscribe

(1,344 separate subscribers, 26 different subscriptions)

• Action Line Requests • On-line payments

Here’s What We’re Doing… • Electronic

#2 - Website

• City Hall News, e-newsletter 1,095 weekly subscribers

43% open rate / industry average for government = 33%



Word of Mouth

Here’s What We’re Doing… • #3 - Social Media

• Facebook 10 city-related/departmental pages reaching nearly 30,000 followers in total City Hall FB just this week celebrated its 7,000th follower • Twitter (5 city-related department accounts reaching 2,571 followers) • YouTube – YouTube video library contains 454 videos captured from C15

Here’s What We’re Doing… • #3 - Social Media • YouTube – YouTube video library contains 454 videos captured from C15



Word of Mouth

Here’s What We’re Doing… • #4 - Television • City in 15 • MGTV Programming

(boards and commissions, special programming)

• Message Board

• Streaming Video / on demand accessed 11,853 times in past six months



Word of Mouth

Here’s What We’re Doing… • #6 - Citizen Engagement (word of mouth) • Citizen’s Academy – 10 years, 203 graduates, another 30 this year. • Leadership Midland • Your Voice… Your City Citizen Engagement Program (2014) • Parks Master Plan (2014, 2009) • National Citizens Survey Benchmarking (2011) • Budget Round Tables (2008, 2005, 1997) • Meetings in a Box (2007) • Eastman Ave. Design Series (2006) • Sewer Roundtables (1997)

How We Get It Done… • Staff Support • Libby Richart • Selina Tisdale • Patty Wilke • MCTV (Beacom, Richardson, production intern) • department assistance

Trending Now…

Trending Now… • Video / visual plenty … talking to our citizens through visual/video plenty website, YouTube, Facebook, Twitter • Social Media scheduling and tracking – Hootsuite

Trending Now… • Take the city into LinkedIn • Two way conversational communications - information gathering, - instantaneous feedback

Conversation Beyond Social Media… • On-line engagement with citizens • … alternative to costly & time-intensive surveys for gathering input • ….complements and enhances other public input processes like public hearings & open houses • … not the time-consuming, physical-participation of focus groups or roundtables • ... interactive • …measureable • …free from intimidation, bullying and conversation hijackers

Open Town Hall – Citizen Engagement Platform

Open Town Hall – Peak Democracy • $7,000 for a 1-year subscription • Design and embed the cloud-based service into our website; • All information technology resources including servers, bandwidth, back-up, availability and security; • Staff training & best practices guidance; • Staff support on a topic-by-topic basis; • Participant authentication confirming email address, geo-coding street address, monitoring IP address and browser cookie) to maintain the integrity of your feedback; • Comment monitoring; • Alert city staff to and strategize reconciliation of uncivil behavior (i.e. fraudulent participation or disruptive comments)

Open Town Hall – Peak Democracy

• Unlimited use across all departments and any community conversation we want to dialogue about • Can be focus-group specific to a particular area • Participants can be registered or unregistered (anonymous) • 12 different ways to configure a topic •

Dot exercise, rankings, charrettes, $ allocation exercise for budgets

• Subscriber list • Kiosk Mode

Open Town Hall – Peak Democracy

For small staffs, this platform provides a huge advance in online engagement without the need for additional personnel • Excellent push-button analysis/reporting capabilities and word searchable content • Access to other clients’ topics and templates • PD assistance with best practices and introducing topics • Peak Democracy filters the feedback for: • Undue influencers, Activist influencers, NIMBY, Fraudulent • PD monitors input to make sure its free of profanity, personal attacks, and impertinent comments – helps insure civility (sometimes not the norm in social media)

Electronic Communications Strategy City Council Planning Retreat January 16, 2016

City Council Terms & Election Cycle City Council Planning Retreat January 16, 2016

City Council Terms & Election Cycle • Moving City Council Elections from Odd Year to Even Year • Staggering and Extending Council Terms

Moving City Council Elections from Odd Year to Even Year • City Charter: Sec. 10.4 … a nonpartisan regular city election shall be held on the Tuesday following the first Monday in November in each even year… • 1973 State Election Law: moved local elections to the odd years and superceded our City Charter. • 2005 State Election Law: changes so that local elections could be held in either the odd years or the even years, and provided a mechanism for making the change.

Moving City Council Elections from Odd Year to Even Year • Ballot History of November Odd Year (City Council) Elections: • 2015, one contested race • 2013, one contested race • 2011, no contested races + MPS Board election • 2009, one contested race • 2007, two contested races + Midland County proposal • 2005, no contested race (write-in candidate W3) • 2003, three contested races • 2001, two contested races • 1999, one contested race

Moving City Council Elections from Odd Year to Even Year • Costs:

• Each City Council election costs the city approximately $20,000+ • Ballots and programming costs + election worker costs • Council elections utilize supplies purchased in bulk like voter envelopes and forms • This cost does not include staff time

• Moving the council elections to even years would not necessarily eliminate these costs in the even years, but it would eliminate the costs in the odd years • $20K could have been saved in FY 2015-16, 2013-14, 2011-12, etc.

Moving City Council Elections from Odd Year to Even Year • Process to Move: • State Election Law allows a local municipality to change to even-year elections by holding a public hearing and passing a council resolution that would provide for: • a one-time extension of the seated council terms by one year in order to synch with the new election cycle • moving to an even year election cycle

• We recommend that a longer and more robust public input process be undertaken

Moving City Council Elections from Odd Year to Even Year • Process Example: • Public review and input process, 2016; • Public hearing and council resolution, 2016; • Current council terms extended by one year, serve until November 2018; • Council election for two-year terms in 2018, 2020, 2022, 2024, etc.

Moving City Council Elections from Odd Year to Even Year • Pros of moving to even year elections: • Cost savings in the odd years ($20K) and minimize workloads • Minimizes the potential of running an election with a single-issue ballot • Higher voter turnout for council voting • Cons of moving to even year elections: • Extension of council terms by one year (onetime) • Council candidates could become part of a more complicated ballot

Staggering and Extending Council Terms

Staggering and Extending Council Terms • City Charter says:

Sec. 3.3 –

The terms of office of Councilmen and of the Constable shall be for two (2) years … • Process: To change the City Charter, a ballot proposal would need to go a vote of the citizens

Staggering and Extending Council Terms • In 1972, City Council appointed a Charter Study Committee • Recommended staggering and extending the terms of councilmen from two to four years • Ballot Proposal November 1972, two separate proposals: 1. Stagger the terms of councilmen 2. Extending terms of councilmen to four years (both proposals depended on the passage of the other to be effective)

Staggering and Extending Council Terms • Results of: Ballot Proposal November 1972 1. Stagger the terms of councilmen NO – 225 YES - 121 2. Extending terms of councilmen to four years NO – 238 YES – 110

(both proposals depended on the passage of the other to be effective)

Staggering and Extending Council Terms Example of Process: • Recommendation to stagger and extend terms of councilmen made by City Council • Ballot language prepared for November 2016: “… to stagger and extend the terms of City Councilmen beginning with the November 2017 election: Wards 2 and 4 would serve a four-year term, Wards 1, 3 and 5 would serve a two-year term. All election of councilmen held thereafter would be for four-year terms.”

Staggering and Extending Council Terms What it would look like*: • 2017 Election: Wards Wards • 2019 Election: Wards • 2021 Election: Wards • 2023 Election: Wards • 2025 Election: Wards • 2027 Election: Wards

2 & 4 elected to four-year terms 1, 3 & 5 elected to two-year terms 1, 3 & 5 elected to four year-terms 2 & 4, four-year terms 1, 3 & 5, four-year terms 2 & 4, four-year terms 1, 3 & 5, four-year terms

*could be combined with movement to an even year election cycle

Staggering and Extending Council Terms • Pros of staggering / extending terms: • longer terms, longer learning curve, don’t have to run as often • limit the possibility of a majority of council turning over to every four years (instead of every two years)

• Cons of staggering / extending terms : • Longer terms, longer commitment • Generates a bit of confusion over whose term is up when • Departure from the Midland County Government (2-year terms, not staggered)

Questions?

City Council Terms & Election Cycle City Council Planning Retreat January 16, 2016

2016-17 Council Goal Setting January 16, 2016

2016-17 BUDGET SCHEDULE Meeting Dates • November 23, 2015 (regular): Present budget preparation schedule

• January 16, 2016 (special): City Council Goal Setting Session

• January 25, 2016 (regular): Engineering Priorities Meeting City Council adopt goals

2016-17 BUDGET SCHEDULE Meeting Dates • April 11, 2016 (regular): Presentation of Proposed Budget

• April 18, 2016 (special): Budget Work Session

• April 25, 2016 (regular): Preliminary Public Hearing

2016-17 BUDGET SCHEDULE Meeting Dates • May 9, 2016 (regular): Charter-mandated Public Hearing

• May 23, 2016 (regular):

Cost Trends

2016/17 General Fund

Expense Projections - personnel Type

Amount

Percent

P & F DB Pension ARC

$290,000

11%

Civilian DB Pension ARC

$236,000

10%

Retiree Health ARC

$157,000

5%

Active Health Benefits

$100,000

5%

Total personal service costs

$872,862

3.4%

2016/17 General Fund

Expense Projections – non personnel Type Removed 2015/16 sidewalk enhancement

Amount -$250,000

Reduced Civic Arena transfer

-$75,000

Removed 2015/16 ditch cleaning to Storm Water Fund

-$60,000

I T internal service rates

-$65,000

Golf Course transfer (5/5 @ $540K)

No change

Reserve for contingency ($400K)

No change

TOTAL CHANGE (DECREASE) FOR NON-PAYROLL % decrease in non personnel expenses

-$165,695 -.98%

2016/17 General Fund Expense Projections – Total

Total Expenses 2015/16 2016/17 Increase

$42,561,392 $43,268,269

$

706,877 1.67%

Revenue

City of Midland

Property tax revenue

• Over 80% of General Fund revenue • Taxable value x millage rate • Factors: • Property values • Millage rates • Tax incentives & exemptions (Renaissance Zones, Brownfield Districts, Units of Governments, Not-for-profits, churches, PILOTS)

• Changes in Law

Personal Property Tax Reform

Implementation Schedule

(i.e., 12/31/13 = 2014 tax year for 2014/15 fiscal year) >>

14/15

15/16

16/17

17/18

18/19

19/20

20/21

21/22

22/23

City of Midland

Personal Property tax reform Eligible manufacturing personal property placed in service before 12/31/05 (2006 tax year) and after 12/31/12 (2013 tax year) will be removed from the City’s tax roles. Reimbursement formula: Current year TV – Base year TV = Lost TV x ‘12 millage rate = $$$

City of Midland

Personal Property tax reform Issues: Rolling back to 12/31/12 ignore recent investment as well as recent depreciation. Exempted versus reimbursed Estimated parcels to exempt Expected reimbursed by fomula Additional reimbursed TV Tax value @ 14.5 mills

(300,261,309) (308,199,372) 7,938,063 >>>

115,102

City of Midland

Personal Property tax reform Issues: reimbursed at lower rate than current millage (14.5 vs. 14.74). Millage rate variances Reimbursed taxable value 2015/16 > 2012/13 Rate Reimbursed less than < tax

Combined

308,199,372 0.24 >>>

(73,968)

41,134

City of Midland

Personal Property tax reform Issues: net taxable value is decreased

City of Midland

Changes in Taxable Value Residential Commercial Industrial / utilities TIF capture IFT NET TAXABLE VALUE

2015/16 2016/2017 978,385,157 985,406,772 432,034,295 430,334,505 774,027,368 496,917,267 (38,853,049) (41,862,990) 2,145,593,771 1,870,795,554 81,180,350 39,885,807 2,226,774,121 1,910,681,361

Change 7,021,615 (1,699,790) (277,110,101) (3,009,941) (274,798,217) (41,294,543) (316,092,760)

2015/16 Revenue Projections Property tax Revenue • CPI is .3% vs 1.6% PY – 2nd lowest since 1995 • Increase in residential property • Aside from PPT reform, TV down 7/10th of 1% - FLAT No changes anticipated for non tax revenue sources

2016/17 Projections 2015/16 Adopted Property tax

2016/17 Estimate

$ 30,504,810 $ 26,252,762

PPT reimburse

Positive (Negative) $(4,252,048)

0

4,160,691

8,841,290

8,841,290

Expenses

(42,561,392)

(43,268,269)

(706,877)

Deficit before carryover

( 3,215,292)

(4,013,526)

(798,234)

1,954,440

1,926,239

(28,201)

(1,260,852)

(2,087,287)

(826,435)

Non tax revenue

Prior Year carryover Remaining deficit Additional C/O found Remaining deficit

1,260,852 -0-

T.B.D. $ (2,087,287)

4,160,691 -0-

(1,260,852) $ (2,087,287)

History of Carryover Use Fiscal Year

Prelim Deficit

Final

2015/16

$2,087,287

?

2014/15

$1,540,015

$1,407,742

2013/14

$1,638,989

$1,355,540

2012/13

$580,000

$552,786

2016/17 Millage to Balance 2015/16 Adopted Operating

2016/17 Estimate

Increase (Decrease)

12.36

13.31

.95

.33

.31

(.02)

12.69

13.62

.93

Library operations

1.00

1.06

.06

Public safety pension

1.05

1.21

.16

Voter approved debt

.26

.28

-

15.00

16.17

1.17

Stormwater Subtotal

Carryover: $500,000 = .26 mills $1,000,000 = .52 mills $1,500,000 = .79 mills

Other items • Judgment bonds $1.6 MM through 2022/23 • Included $275,000 over MERS minimum ARC. Future MERS ARCs could increase 10% annually. • Minimum wage increase on 1/1/16, 17,18 • 2016/17 year #5 in Currie Plan. Plan on savings in 17/18.

Questions

City Council Directives FY 2016-2017

Mission That the inhabitants of the City of Midland may live well through the effective maintenance of public safety, health, and welfare via efficient provision of public services, activities, and enterprises which reflect intelligent opinion as to the needs of the community. Goals

Economic Sustainability

Outstanding Quality of Life

Effective Stewardship of Resources

Council Budget Objectives FY 15-16 Budget Directives

Council Directive Public services, with particular emphasis on public safety, will be maintained at the highest level possible under current economic and budget conditions. Result No changes in scope of services or staffing levels.


Council Directive Millage rate supporting general operations may be increased between 0.35 and 0.5 mills Result Millage rate was reduced from 15.04 to 15.0 mills


Council Directive Options for sidewalk system maintenance will be submitted with proposed budget for Council consideration. Result Adopted 15.0 versus 14.89 millage rate to implement $250,000 sidewalk repair program


Council Directive Unreserved fund balance will be maintained at $5.1 million. Result Unreserved fund balance was maintained at $5.1 million.

Council Budget Objectives FY 15-16 General Directives

Council Directive Report on spending priorities and cost containment strategies within public safety functions. Result Report to City Council August 24, 2015.


Council Directive Report on costs associated with increasing frequency of snow removal activity on residential streets. Result Report to City Council March 9, 2015.


Council Directive Report on implementation efforts associated with community-wide strategic plan. Result Report to Midland County Board of Commissioners and Midland City Council on March 24, 2015.

Council Budget Objectives FY 16-17 Directives Budget Directives • Services goals • Millage target • Fund Balance target

General Directives