Date: July 30, 2003
To: Michigan Land Use Leadership Council
From: Michigan Local Government Management Association, Public Policy Committee
Subject: Suggested Action Items
The Public Policy Committee of the Michigan Local Government Management Association (MLGMA) has been monitoring the work of the Michigan Land Use Leadership Council with interest. Our Association has been at work in this area for a decade and, most recently, was part of a funding and oversight group that enabled the “Michigan MetroPatterns” study to be completed and released early this spring.
The Committee wishes to address the following points and suggests them to augment the work the Leadership Council has committed to in its working draft.
Partnerships:
Local governments do their best work in partnerships, and such arrangements should be formally encouraged in public policy. By working cooperatively, cities, villages and townships can realize economy of scale savings, provide more advanced solutions, provide more cost effective solutions, serve their customers more fully, perform better land use planning, and accomplish better economic development.
Recent examples that highlight these points include:
· The Grand Valley Metropolitan Council
· The Water/Sewer Partnership that serves nine communities and 300,000 customers in the Grand Rapids area under an innovative contract that created an urban service district for each community, created an urban utility boundary for the region, allocated economic costs to land use decisions, and formed the Utility Advisory Board and Urban Cooperation Board.
· The formation of a Joint Biosolids Processing Project by the Cities of Wyoming and Grand Rapids that will enable both communities and their customers to transition to a Class A biosolids conditioning and reuse operation at a fraction of the cost of doing it alone.
· The City of Midland’s Midland Urban Growth Area Policy that has created a rational land use pattern through carefully planned utility investments.
· The Interurban Transportation Partnership that has joined six core cities in Kent County into a thriving partnership that has expanded the service area and allowed them to move toward advanced transportation concepts in the future.
· The joint Convention/Arena Authority formed by Kent County and the City of Grand Rapids to manage the VanAndel Arena and DeVos Place Convention Center.
· The Kent County Stormwater Task Force formed to create stormwater management standards and uniform strategies to benefit the entire region.
· The Regional Environmental Planning Agency formed to collectively develop environmental policies and standards to protect the quality of life and environment in West Michigan.
Communities that consistently find ways to cooperate to provide seamless service to residents in Centers of Commerce should be encouraged and rewarded for doing so.
Septage:
The current and future impacts of septic tank proliferation are consistently underestimated.
In the present:
· Septic tanks fuel consumption of land at rapid rates due to development of large lots, both by necessity of land area required and flexibility to develop ever outward.
· They are a current environmental liability based upon the “shall issue” approach adopted by many regulators. The Michigan Department of Environmental Quality and the Michigan Water Environment Association reports that over 1.2 million septic tanks are in operation in Michigan today. This number is growing at the rate of at least 25,000 new septic tanks per year. Over 50% of new building permits for single family residences are issued for homes served by septic tanks.
· The “Michigan MetroPatterns” report estimates that there are more than 200,000 homes on septic systems in the Detroit Metro Area.
· Disposal of 120 million gallons of septage on land or elsewhere occurs annually with little to no oversight. Waste haulers can dispose of waste with impunity.
· Operation and use of on-site wastewater treatment facilities (septic tanks) is not regulated. Discharges are not sampled. Septic tanks are not routinely tested to determine their level of function.
· Entire subdivisions are constructed with septic tanks that are guaranteed to fail over time.
In the future:
· Additional multi-billion-dollar environmental clean ups similar to that experienced by the local units of government in the Lake St. Clair area will be required.
· Homeowners living in septic tank subdivisions will be increasingly faced with the cost of conversion to the public sewage system at substantial cost. Often times, the local unit of government is asked to solve the problem.
For reasons of community health, efficient use of resources, and environmental protection, the following steps should be considered:
· An inspection cycle should be established that requires testing of discharge and functioning of on-site wastewater systems at least every three years. This should be augmented by a due- on-sale inspection program. Failed systems must be replaced.
· Owners of such systems should be assessed a monthly readiness-to-serve charge, payable to the designated regional wastewater treatment authority that will accept septage. This charge will ensure that treatment facilities are available when needed, defray the cost of past and future capital investment in treatment facilities, and ensure that septage is properly disposed of by wastewater professionals.
· Wastewater Treatment facilities will also assess a disposal fee for the treatment of septage.
· The “shall issue” approach should be tempered by improved guidance on issuance of on-site disposal permits.
Schools:
The “Michigan Metropatterns” report reinforces that school quality is a predictor of sprawl and central city distress.
For the Commerce Center strategy to work effectively, special attention must be paid to the needs of schools that meet certain criteria within Commerce Centers.
In response, and in return for a performance guarantee, additional targeted resources should be focused on those school systems and their local units of government in a way that encourages strategic partnerships and improvement among these five areas:
1. A focus on academic performance and achievement
2. Centering systems that support families and children in school facilities
3. Building strategic partnerships
4. Establishing new methods of operation
5. Providing focused facility financing tools to create a quality learning environment
The Public Policy Committee supports the innovative idea of designating Commerce Centers as proposed in the “Principles and Recommendations for Urban Revitalization” draft report.
Careful examination of the interpretation of the handling of the taxable value cap implemented as part of Proposal A could augment the Leadership Council’s recommendations. It was not the intent of Proposal A to treat increased SEV derived from the sale of a property as a deduction on the adjustment side of the Headlee Millage Reduction Formula. The effect of this for taxing units is that each increase in SEV generated through the sale of a property actually counts against any growth in the community thus lowering property tax revenue for all taxing jurisdictions, including the State of Michigan. This practice disadvantages developed communities in relationship to communities where new development is occurring and puts a premium on the type of growth that creates sprawl. For Commerce Centers to be truly effective this should be addressed.
For example, in Huntington Woods, the SEV for a home that existed in 1994 has increased 84% as of 2003. Taxable value has remained relatively constant with minor adjustments for inflation. When this house is sold, the new value will count against the total taxable value of the City of Huntington Woods. Newly constructed homes in communities that are not fully developed would have a home added to their tax base at 100% of its value, not the severely discounted value in place in Huntington Woods.
The City of Cadillac has just completed an exhaustive study of its full revenue stream over the past ten years. This report includes an analysis of various initiatives such as Proposal A, the Headlee Amendment and Truth-In-Assessing and how they have cumulatively impacted local property tax revenue. It also examines revenue sharing payments and the various changes to how this source of revenue has been funded by the State over the same time period. This study has revealed that, in every single case, the municipal revenue stream has not kept pace with inflation. As a healthy, vibrant and growing community, these findings are alarming. The long-term implications are clear and demand a permanent solution at the State level. The Commerce Center approach is well positioned to address this concern.
Thank you for your consideration of these comments. If you have any questions, please contact Eric DeLong, Public Policy Committee Chairman at (616) 456-3119.
cc: MLGMA Public Policy Committee
MLGMA President