Council Makes $2M Decision on Pensions, Approves Albert Avenue Change, Learns Limits on Federal Funding Plan

East Lansing’s City Council went into closed session for the third week in a row to discuss City Manager George Lahanas’s job performance, with still no public statement on the matter. 

But before the Oct. 18 closed session, Council debated and decided on putting an extra $2 million into the city’s underfunded pension system and to move ahead with a plan to add drop-off/pick-up spots on Albert Avenue. Councilmembers also were informed by the City Manager that a prior plan to spend low-income housing funds on the farmers’ market pavilion design work can’t go through after all. Funding for that will have to come from somewhere else.

The mayor questions if now is the right time to make a big supplemental pension payment.

At the Tuesday Council meeting, Budget and Accounting Administrator Audrey Kincade presented a budget amendment that comes to over $3 million. The largest portion of the amendment calls for taking $2 million from the general fund to make a supplemental payment toward the city’s underfunded pensions. 

Lahanas explained that the available funds come in part from jobs in the city going unfilled. He said it is important to put the extra $2 million into the city’s MERS (Municipal Employees’ Retirement System) account now because the stock market is down and the city is going to lose ground this year on its funded ratio. 

The funded ratio is the amount of money “in the bank” compared to what is owed on the pensions. Like many cities, East Lansing is under scrutiny by the state because it is about $100 million behind on getting to full funding of its pension obligations.

Lahanas said the city had managed to get up to around a 60% funded ratio but that percentage will drop again, and this payment will help it drop less. 

The health of the city’s pension is measured at the end of the year, so Lahanas wants the extra payment made now to “minimize the negative impact” of the economic downturn. This payment would be on top of the city’s already-budgeted $5 million supplemental payment for this fiscal year.

But Mayor Ron Bacon questioned whether it makes sense to put this $2 million into the system when the market may go down even further. He wondered if the city would be making “a negative investment,” with further market losses eating up the extra investment. 

Bacon asked if the city should wait to buy in with more payments when the market is even lower, saying he could see a lot of other ways to use $2 million around the city right now.

Mayor Pro Tem Jessy Gregg responded by saying she didn’t think it was a good idea to question MERS and Lahanas’s recommendation. 

“Down that path lies madness, I feel like,” she said. “We know that we need to put money into our pensions whenever we can and as much as we can.” 

Gregg said the question is not worth “overthinking” because “the stock market is gambling” and the city has to make as many supplemental payments as it can.

But Bacon objected, saying it is worth discussing. He said he was “stunned” to see Council arguing over $40,000 items but “nobody flinched at $2 million.”

Lahanas answered Bacon’s question by saying, “Over time, you’re buying high, you’re buying low, and over time it averages out.” He said MERS was encouraging the city and its other customers to make more payments to make up for the downturn.

After the discussion, Council voted 5-0 in favor of the budget amendment.

Council also votes 3-2 to instruct staff to move forward with changes to Albert Avenue.

Senior citizens have been asking for a designated drop-off and pick-up spot outside of Newman Lofts on Albert Avenue downtown. But as ELi reported, the Transportation Commission voted on Oct. 3 against recommending a plan that would interrupt the existing bike lane for such parking spots.

Seniors Commission member Robert Nelson and Age-Friendly Community Chair Jim Levande spoke at the beginning of this week’s meeting during public comment to urge Council to override the Transportation Commission’s recommendation to consider putting a drop-off/pick-up location in the alley behind Newman Lofts. They urged quick action on the matter and said “don’t put seniors in the alley.”

Later in the meeting, Acting Director of Public Works Nichole McPherson and Director of Planning Tom Fehrenbach presented Council with a slightly amended plan for the area. They stated their desire to hear from Council about what they should do next, given the disagreements between the seniors and bicycle advocates.

Gregg said she thought bicyclists like her are adaptable and can find a way to share lanes with cars, but asked how the city was going to stop the drop-off/pick-up spots for seniors from becoming occupied with food delivery vehicles like those working for Uber Eats and Grubhub. Ferhenbach and McPherson both said enforcement was the only way to stop that problem.

Brookover expressed exasperation that the matter was still under discussion, insisting the seniors get what they want immediately. There are plenty of alternative routes for bicyclists, he said, and he wants to see seniors who were “invited” downtown to live in Newman Lofts be accommodated as quickly as possible.

But Councilmember Lisa Babcock recommended a triple meeting of the Seniors Commission, Transportation Commission and Age-Friendly Community Committee to try to let them all work out a compromise, an idea Councilmember Dana Watson supported. Both want to see more consultation with all three groups before a decision is made.

Lahanas insisted at this point Council provide his staff with clear direction. With Watson and Babcock wanting more commission input and Brookover and Gregg wanting the Newman Lofts seniors accommodated immediately, Bacon was the deciding vote. He sided with Brookover and Gregg, saying as far as he is concerned, the road changes need to be made “before the snow flies.”

Those low-income housing funds won’t be used for the farmers’ market pavilion after all.

ELi reported last week that Council was being asked to consider redirecting about $61,000 in unused federal funds allocated for affordable housing needs, channeling it and another $60,000 instead to new downtown lighting and design of a farmers’ market pavilion. We reported City staff want to spend $80,000 of the $120,000 remainder funds to put in special artistic lighting to increase safety and draw more people downtown, and want to spend about $40,000 on the farmers’ market pavilion design.

A public hearing on the matter of how to use these expiring Community Development Block Grant (CDBG) funds is planned for Nov. 1, with a decision to be made that night, because the funds must be reallocated by the next day.

At public comment this week, Shaurya Pandya of the University Student Commission came to urge Council to go forward with the plan to use $80,000 in unused CDBG funds for new lighting downtown, insisting it is a matter of safety as “crime is rising dramatically.” He said new lighting is needed so people can “safely celebrate game days” in East Lansing. 

In her councilmember comments on the same topic, Babcock urged citizens to weigh in with ideas of how to use the CDBG funds that will otherwise expire. She said she had heard clearly from a few residents that they want the funds spent on fixing broken sidewalks, but said she wants to hear other ideas as well.

To that, Gregg responded by reminding homeowners that broken sidewalks are their responsibilities legally and financially. 

“If you are finding your sidewalk in poor condition,” Gregg said, “it is actually your responsibility to replace it.” She noted the city has responsibility for other areas, but not outside homes.

Then, in a surprise announcement, Lahanas informed the Council, “We actually have to have a slight change in direction” on the CDBG funds. He said HUD informed the city in an email it isn’t allowed to use the money for the farmers’ market pavilion design. That’s because the city hasn’t first done the required environmental impact review on the idea of the pavilion. 

Now, city staff is still recommending the use of $80,000 for the downtown lighting, but the extra $40,000 that was going to be spent on pavilion design might be spent on sidewalk repair or something else. The plan is still for a public hearing and council decision on Nov. 1.

Council did approve  a plan to pay Viridis Design Group about $54,000 for “community engagement support, refinement/advancement of the architectural programming and designs for the farmers market pavilion and surrounding park improvements project at Valley Court Park based on input from the city, community, and other stakeholders.”

Council also observed several special occasions.

Council passed a resolution recognizing October as Breast Cancer Awareness month. Councilmember Watson took a moment to relate that she received a breast cancer diagnosis at age 37. “Anxiety became my super power,” she said of her own experience. She urged self-exams and concluded, “Cancer sucks and I’m happy to be here today.”

Council also passed a resolution “to wish Henry Nelson a very happy 100^th birthday.” According to the resolution, Nelson is a WWII veteran, a 1947 graduate of Michigan State College (now  known as MSU), a long-time resident and landlord of East Lansing, and a well-known musician about town.

A resolution was also passed celebrating the Chi Epsilon Omega Chapter of the Alpha Kappa Alpha Sorority providing 20 years of service to the East Lansing Community. The resolution states that “the Chi Epsilon Omega Chapter is believed to be the first African American organization chartered or established in East Lansing” and “recognizes the strength, determination and resilience of the women who define this historic organization.”

ELi is bringing separate reports on discussion of city environmental concerns during this week’s council meeting and on a plan to improve Emerson Park.