June 3 2013 12:00 AM

Mayor’s budget veto stands; Council approves buying property on Ottawa/Butler block for $1


Monday, June 3 — The Lansing City Council didn’t have the necessary six votes Monday night to override Mayor Virg Bernero’s fiscal year 2014 budget veto.

In a 5-3 vote, Bernero’s supporters on Council — Kathie Dunbar, Jessica Yorko and Tina Houghton — argued that even though he vetoed all of the Council’s budgetary changes to his original proposal, the adopted budget plan that starts July 1 was essentially a compromise between the two sides. Namely, that Bernero was willing to increase the annual payment in lieu of taxes by the Board of Water and Light by 1.1 percent to pay for streetlight costs — an idea of his Council opponents last budget cycle.

While Bernero’s budget does not factor in the higher return on equity payment because it needs approval by the BWL Board of Commissioners, Bernero wrote in his May 23 veto notice to the Council that he will “immediately engage” BWL officials for a 1.1 percent increase.

“If these negotiations are successful, I will propose a budget amendment to City Council to make appropriate changes to the FY 14 budget to implement the higher ROE,” he wrote.

Mayoral Chief of Staff Randy Hannan said tonight that the mayor’s budget is a “long-term fix for our city’s structural deficit,” even hinting that there’s a “good chance to go into FY15 with no deficit at all.”

But Councilman Brian Jeffries said Bernero’s budget is anything but a long-term fix. If anything, he said, it contributes to the city’s structural deficit.

“I’m amazed at what I’m hearing tonight,” Jeffries said from the dais. “We’re adding to the structural deficit with this budget.”

He cited Bernero’s plan to spend $1.4 million from the General Fund to cover a deficit in the Tax Increment Finance Authority. A majority of the Council — with support from Jeffries, President Carol Wood, Jody Washington, Derrick Quinney and A’Lynne Boles-Robinson — proposed lowering that to $1 million and having the TIFA repay the city over time for that amount and also have the Lansing Economic Development Corp. make up the other $400,000 with its revolving loan fund. Jeffries also said two new full-time positions — a cold-case detective and a cabinet-level IT department head — will contribute to long-term expenses.

Bernero called the loan plan “legally questionable” in his veto notice and said the Council doesn’t have the authority to require the LEDC to spend those funds because it’s governed by its own board.

“By not overriding this veto, it’s the first time we’re paying out of the General Fund for economic development interests,” Jeffries said tonight. “We have a $1.4 million deficit in our TIFA. It’s broke and it’s going to continue to be that way for the foreseeable future: $1.4 million from the General Fund. … Now we’re going to have city taxpayers, our General Fund, on the hook for years to come with the TIFA and that adds to the structural deficit.”

Elsewhere in the budget, the mayor vetoed the Council’s changes that would have eliminated funding for going to a form-based codes planning system; eliminated positions for Sister Cities and the Office of Community and Faith-Based Initiatives; and eliminated a new cold-case detective position within the Lansing Police Department. See here for more on Bernero’s full veto package.

Boles-Robinson hoped at least some of the Council’s budget changes could be adopted in a sort of “hybrid.” “It would be a disservice to all of us if we blanketly accept a veto of all our changes,” she said.

However, the Council’s vote tonight was an up or down vote on the singular package of Bernero’s veto, City Attorney Janene McIntyre said.

In other business, the Council unanimously approved a resolution to purchase the property at 221 N. Sycamore St. from the state for $1. The property is located at the northeast corner of what’s commonly known as the Ottawa/Butler block, as it’s bounded by Sycamore, Ottawa and Ionia streets and Butler Boulevard three blocks north of the Capitol.

Local developers have tried to redevelop the mostly vacant block for several years. The Michigan Association of Broadcasters recently purchased five acres there hoping to build a new headquarters on the southeast corner of the property. Plans are still up in the air for the rest of the block.

The acquisition gives the city some leverage in “helping to direct any development of that site” in the future, Jeffries said. Or, as Hannan put it, “We can control the (property’s) destiny a little more. … It puts us in the driver’s seat rather than turn it loose to the market.”