Talks of New Utilities, Financial Health Team Emerge During Discussion About City Priorities

The city will look to assemble a financial health team and could ask residents to pay a couple new utilities, city officials said at the Tuesday, March 11 discussion-only City Council meeting. 

The discussion centered around a progress report on priorities council set at the start of last year. This was the second half of the progress report, as council heard an update on its other five priorities at a meeting last month. 

The priorities reviewed this week include: Improving finances, environmental stewardship, celebrating diversity, increasing housing options and relocating utilities underground. 

Goal six: To strengthen the City’s financial health by reducing its unfunded pension and retiree healthcare liabilities by at least 20% and encourage expansion of its revenues.

The city has received a string of bad news about its finances in recent months, but at the March 11 meeting City Manager Robert Belleman delivered a positive announcement, as the city has made progress on funding its pension liability. 

Belleman said the city recently found out that as of the end of 2023, its pension liability was 67% funded, up 4% from the end of 2022. Belleman said the mark is only 1% shy of the city’s best ratio, recorded in 2009. It also shows the progress the city has made since its low-point of 52% funded in 2019. 

“We’re going in the right direction, albeit slow,” Belleman said. 

Previously, Belleman told ELi the plan would ideally be at least 75% funded. In 2018, the city received approval from voters to implement an income tax, largely to help chip away at the unfunded pension liability. 

Still, the city faces significant financial challenges, with a recent analysis showing it is running at a deficit in its general fund. At the March 11 meeting, Belleman said the city will soon look to assemble a financial health review team made up of city residents. 

The team will provide advice to staff and council on how to operate within the city’s resources and continue to make progress on the unfunded pension liability. Belleman said the search process for the committee will likely open up in April, after a draft of next fiscal year’s budget is completed. 

Goal 7: To be responsible stewards of the environment by reducing or eliminating reliance on carbon and reducing activities that adversely impact climate change.

Climate change has brought several large rainstorms that have overwhelmed the city’s infrastructure and caused widespread flooding in recent years. Finding a way to reduce flooding has been a top challenge tasked to council. 

Infrastructure fixes are expensive, so council is once again discussing the possibility of adding a stormwater management utility to charge residents for. 

The idea comes from Ann Arbor, which charges a stormwater utility fee to its residents. However, the question of if the fee is a legitimate utility to maintain the city’s storm drains and sewer system, or an illegal tax that would need to be approved by residents, is being clarified in court. 

Councilmember Erik Altmann said that an appeals court ruled in Ann Arbor’s favor, however the Michigan Supreme Court could opt to take up an appeal on that ruling. If the court rules in favor of Ann Arbor, East Lansing officials may go ahead and install a local stormwater utility fee.

Altmann said courts may provide clarity on the matter within a year.

Also discussed during this section of the meeting, Belleman hailed the city’s two new electric vehicles that have been deployed, and highlighted the city’s invasive species management program that has been aided by volunteers. 

“[The] environmental stewardship program held 17 volunteer workdays, which totaled 540 hours of volunteer time to remove invasive species,” Belleman said. 

Goal 8: Foster a thriving culture that celebrates diversity in City sponsored events, activities, and programs by increasing the number of events and engagement of constituencies. 

After Belleman gave an overview of the action items under this priority, Councilmember Mark Meadows said he was concerned about the lack of progress on a goal to provide cultural education to community members and city board and commission members. 

“I think this is a very important thing for us to be promoting within the community,” Meadows said. “Especially given the national opposition to providing real history.”

Belleman said he is unsure why progress on the goal has stalled but he knows there are “plans and programs” that are being worked on that align with this goal. In response to a followup question from Councilmember Dana Watson, Belleman clarified that Diversity, Equity and Inclusion Director Elaine Hardy is the point person for this goal. 

Mayor George Brookover said he thinks the progress report may be underselling advancements made on this priority.

Brookover said through his role as liaison to the Seniors’ Commission, he has seen progress on accessibility to the Hannah Community Center and education on challenges underrepresented groups face. 

Goal 9: To increase housing options and affordability by constructing 1100 housing units over 5 years.

While this category showed little progress, Belleman said the report was put together before a city committee carved out funding for a pilot program to assist low-to-moderate income renters with a security deposit and first month’s rent payment. 

The pilot program will use Community Development Block Grant funding, though the scope of the program will be limited to a few participants in its first year. 

Goal 10: To enhance the city’s skyline and utility reliability by relocating utilities underground.

Altmann, who has been an advocate for relocating utility lines underground, said he doesn’t think this is a project that could happen in the near future. He said he thinks officials need to start discussing burying power lines, so a path to completing the goal can be carved out.

During the discussion about this goal, Altmann said he thinks the relocation of utilities can be paid for by charging a power utility to residents.

“I don’t think we would plan to build our own plants,” Altmann said. “What we would basically be doing is establishing a regulatory authority that would buy wholesale power and then retail it to our residents, and perhaps beyond.”

He continued to explain that he thinks East Lansing residents are aiding the Lansing government by purchasing power through the Lansing Board of Water and Light.

“Board of Water and Light is a municipally owned utility, owned by Lansing,” Altmann said. “They [BWL] contribute $25 million a year to the Lansing city budget… Some of that 25 million a year is contributed by East Lansing rate payers, so we are essentially subsidizing Lansing city government.”

Meadows, whose experience on council goes all the way back to the 1990s, said creating an electric utility was discussed in the early 2000s. He said he can’t remember exactly why the idea stalled, but he thinks it may have been due to a state statute. 

Meadows suggested Belleman look into the previous effort to create an electric utility to see if there may now be an opportunity to move forward with the idea.