Lansing City Council Approves Deficit Eliminition Plan

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Lansing City Council Approves Deficit Eliminition Plan

CREATED Jun. 26, 2012

The public called the Lansing City Council meeting "S.S.D.D.": same stuff, different day. The council approved another deficit elimination plan, this time in the amount of $1.8 million.

"It's very disappointing, we have to start as a city getting creative as to how we approach these things," said Lansing City Council President Brian Jeffries.

The council approved selling the land known as "Parking Lot #2" to Lansing Community College for $1.2 million, and using $600,000 of reserve funds to make the plan work.

"I don't think there was opposition to the sale, what concerned me was that we're not only having to sell it, but we're having to earmark where those monies are going to go, and it's going for a deficit, which I don't think was something anyone had in mind when we talked about it," Jeffries said.

According to Mayor Virg Bernero's office, the deficit is mostly due to an income tax shortfall. Bernero's administration said they projected that back in April, but the council was just presented with the deficit plan, which offers a catch 22. If the council approved the plan, then it had to approve the sale of the parking lot, or else the deficit wouldn't be reduced.

"Bringing it forward to us at the last minute like this, we have no choice," Jeffries said.

Most council members felt the same way. Councilwoman Judy Washington called the situation "disgusting."

"It's like the family who has had their income cut in half and nobody alerted anybody, so all of a sudden, we're having this huge yard sale to pay off our utility bills," Washington said. "It's not necessary, it should have been brought forward earlier, in my opinion."

Another hot topic at the meeting: the contract with the Board of Water and Light, set to expire in five days.

Jeffries proposed an amendment to make it a one year contract at 5 percent return on equity, rather than five years. He said he wanted the opportunity for discussion over the next year with BWL about gradually increasing the return on equity to the city.

"Right now, in my opinion, we've got the taxpayer subsidizing some of the operations of the Board of Water and Light to the extent they're artificially keeping low the rates that the board charges," Jeffries said.

Jeffries said the national average for public utility companies of BWL's size is about 6 percent return on equity, and he thinks Lansing could get there eventually. However, his amendment did not pass, and the original agreed upon contract from July 1, 2012 through June 30, 2017 was approved.