Council Considers Redirecting Low-Income Funds to Placemaking Projects; Gets Update on Lead Pipes

This week’s meeting of City Council was “discussion only,” with two of the four main items taken into closed session out of the public eye: negotiations with the police patrol officer’s union and continued discussion of City Manager George Lahanas’s job performance. 

What the public was allowed to see in open session at the Oct. 11 meeting were discussions of the use of funds from the U.S. Department of Housing and Urban Development (HUD) and the Department of Public Works’ progress on replacing lead lines delivering drinking water to East Lansing homes.

Council may redirect funds meant for supporting low-income people to projects designed to energize public spaces.

Matt Apostle, Community & Economic Development Specialist for the city, made the first presentation. He explained City Council is going to have to decide very soon how to redirect money that had been set aside from HUD Community Development Block Grant (CDBG) funding.

About $61,000 had been expected to be used for down payment assistance to people in the low-to-moderate income range who are looking to buy homes in East Lansing. 

The grants have been offered at up to $30,000 per household. But Apostle told Council, “Due to our current market conditions, no one has successfully utilized these funds since May 2020.”

Few houses are available for sale in East Lansing, Apostle said, and those that are cost too much for people who qualify for the grants, even with the down payment assistance. 

This means the approximately $61,000 left in this category has to be “spent or reprogrammed” by Nov. 3, 2022, or it will be forfeited.

Apostle assured Council that if an eligible applicant came forward for this down payment assistance after that $61,000 is reallocated, they could still get assistance from $237,077 still unused in the city’s fund allocation for home rehabilitation assistance.

In fact, Apostle said, the city has so much money left over from CDBG assistance that HUD is requiring a total of $289,242 be spent or forfeited by May 2, 2023.

He recommends the city take a total of $120,000 (including the $61,000 left in the down payment assistance program) and put it toward two “placemaking” projects designed to create more exciting public spaces.

If Council approves his recommendations, $40,000 of the $120,000 will go toward the “soft costs” (including design and engineering) associated with the new farmers market pavilion. 

The city has received a million-dollar grant from the Michigan Economic Development Corporation for that project, and the city has to find a way to match that million-dollar grant. This $40,000 expenditure would count toward that match obligation. 

City staff want to spend the other $80,000 on “public lighting in eligible census tracts (which includes downtown).” 

This issue requires a little explaining: 

HUD identifies “eligible census tracts” that can benefit from CDBG (low-income) grants by looking at where pockets of poverty appear to exist. But HUD doesn’t distinguish between college students with “low incomes” from the rest of the low-income population. 

Consequently, because so many students live in East Lansing’s downtown – including in studio apartments that cost over $1,000 per month – HUD treats East Lansing’s downtown as a low-income (poorer) area.

The City of East Lansing has long taken advantage of the downtown being an “eligible tract” to use CDBG funds to pay for infrastructure in the area, including new sidewalks. (In one well-known case, the City used the funds to pay for a new retaining wall along the City Attorney’s private property – a misuse of funds that led to the Department of Justice suing the City on behalf of HUD.)

In this case, city staff want to use $80,000 to “increase late-night safety” downtown, but they don’t want to go with boring, utilitarian lighting. Instead, they see it as an opportunity for placemaking. 

They  propose buying special lighting to “create opportunity for increased public space activation downtown” – to try to attract more people downtown and to make downtown feel more exciting.

During City Council’s discussion, this plan of taking low-income housing money and putting it toward public placemaking didn’t sit well with Councilmember Dana Watson, who said this wasn’t going to make East Lansing a more affordable place to live. She disclosed she was a recipient of down payment assistance years ago and said she “wouldn’t be here” (in East Lansing) were it not for that.

But staff couldn’t come up with an easy and fast way to use these funds on low-income housing needs. At this point, it looks likely the funds will be redirected to the proposed projects. 

The expectation is a public hearing on the matter on Nov. 1, 2022, at City Council followed by approval by Council.

City staff are struggling to meet state requirements for replacing lead pipes.

As ELi has previously reported, in response to the Flint Water Crisis, the State of Michigan is requiring all municipalities to complete a “final comprehensive inventory” by Jan. 1, 2025, of pipes carrying drinking water. The goal is to identify pipes that could leach lead into drinking water by then and to have all problem pipes replaced by 2040.

Here, the enormous task of inventorying and replacing lines is falling to the City of East Lansing’s Department of Public Works staff and contractors they are hiring. 

And it has not been easy, DPW Deputy Director Nicole McPherson and Infrastructure Administrator Ron Lacasse told City Council. Poorly-kept records, pavement and landscaping that obscure access to the pipes, and property owners who are either uninterested or reluctant to participate have hindered progress.

City staff have been working steadily on the problem for years and years, trying many means of engaging property owners including door hangers, letters, notices of problems, billing inserts, knocking on doors, and offering evening and weekend appointments. They have done surveying and replacement when other jobs opened up opportunities to deal with issues. 

But it hasn’t been easy or cheap. Lacassse estimates the cost to the City of replacement, when they find a problem pipe, ranges from $4,000 to $7,000 per property, not counting city staff time.

Councilmember George Brookover asked if staff had any estimate of what the total cost will be to the city of this state mandate. McPherson and Lacasse indicated it is difficult to provide an estimate when they still aren’t sure how many pipes need replacing and how complicated the replacements will be. 

The costs of this work is currently being covered by water bills issued by the East Lansing – Meridian Water & Sewer Authority (ELMWSA), and that’s part of the reason water bills have been rising. McPherson told Council she is hoping low-interest loans can be obtained from the Drinking Water State Revolving Fund for this work and that those loans will eventually be forgiven.

Property owners who want to know how to check their lines and water can learn more from this dedicated city webpage. You can find the slide presentations from this week’s meeting at the posted agenda and also watch the meeting’s recording online.