Second Anniversary Update From Township Supervisor O'Leary

It’s been 2 years since the Home Team was elected to serve you on Washington Township’s board.  We hope that this update will help you know how local government is funded, what our challenges are, and what our progress is on our 6 promises to you. 

How Local Taxes Work

Note that the vast majority of your property tax bill is collected for other governmental units like the Romeo Community Schools, Metro parks, and Macomb County.  These taxes, which are outside of our control, total 21 mils if you have a homestead and 39 mils without.  We have no place in managing these operations, their budgets, or their boards.   

Our board manages 7.5 mils (General Fund, Fire and Ambulance, Police, Library and Park Rec/Star).  This is slightly favorable compared to Chesterfield, Bruce and Shelby and is half of Clinton and Romeo (Romeo is an historic village with certain needs). Our rates are higher than Macomb (which operates a primarily paid on call fire department) and Ray (which has no police).

Our Current Financial Challenges

Due to falling property values, we expect next year’s tax revenues will have fallen 16% from their peak in 2009.  Eventually declines may be substantially in excess of 30% for the General, Fire/ALS, Police, Library and Park and Rec funds.  Consumer spending has negatively impacted State sharing of sales tax revenues.  Interest has declined by 90% from the peak year of 2008 due primarily to declines in interest rates.  Reductions in construction and high residential vacancy levels (8-9%) have significantly reduced water and sewer charges and building fees.  The Building Fund lost money each year since it was formed 5 years ago until the current year which should finally show a mild profit due to substantial cost cutting.

When we took office, the township had a staff of 62 excluding paid-on-call fireman.  Five people hired in just prior to our arrival.  Staff are represented by 7 different unions.  The prior board entered into multi-year contracts granting annual pay raises and generous benefits, including post employment medical (OPEB).  The township had allowed itself to accrue an unfunded liability of $7 million for OPEB that it had NO WAY of paying.  It had ongoing costs of over $1 million each year for OPEB.  In addition, major infrastructure investments had been neglected in the Fire and Water funds.  The township was operating year to year without a long-term view regarding how to maintain and improve service levels while managing costs.

For example, the Fire/ALS funds appeared to have millions of savings when we took office until we took into consideration that we don’t collect taxes until ¾ through each year (requiring working capital) and the fact that we had unpaid OPEB liabilities.  These made the real savings minimal.  After we eliminated unpaid OPEB liabilities through union negotiations, we were able to use the freed funds to fund our portion of a new fire station without taxing residents for it.  This only partially solved the ongoing problem that revenues are dropping as property values drop, resulting in future budget deficits.   We recently made leadership changes to the department to evaluate options to reduce ongoing operating costs. 

Given rising costs and rapidly declining revenues and working capital requirements, our General and Fire and Ambulance Funds would have had less assets then liabilities (bankrupt) by now had no action been taken by our board.  The Building Fund was already bankrupt when we took office and was receiving loans from the General Fund to stay afloat.  Water/Sewer was staying afloat based on tap-in fees that are now disappearing with the housing market.  As a result of all of this, our attention has primarily been directed toward a long-term financial turnaround plan which is gradually moving the funds away from insolvency.

Our 6 Original Promises to You

Financial Stewardship

Reduced staffing levels over 14% from what we inherited without impacting most services - General (18.6%), Building (50%), Water/Sewer (8.3%) and Fire/ALS (5.8%).  Remaining staff absorbed the work of some contractors, resulting in more savings. 

Renegotiated union contracts to eliminate OPEB and modify medical benefits resulting in the elimination of the $7 million unfunded liability and reduction of over $1 million per year in operating costs.

Froze elected officials salaries three years in a row and eliminated OPEB for elected officials.

Obtained a $1.5 million grant to help fund a new fire headquarters that will serve us for 50+ years.  Exploited market conditions to acquire land previously out of financial reach.  Finished under budget and one month early (1^st in the nation to be complete).

Converted to a lower cost workers compensation, liability and property insurance provider, saving over $100,000 per year.

Obtained an $85,000 grant for LED lighting.

Obtained competitive pricing on major purchases by bidding items on the Michigan Intergovernmental Trade Network.

Reduced online and newspaper publication costs through disciplined process management.

Cancelled several vehicle leases.

Reduced cost of phone services by restructuring agreements.

Saved taxpayer funds by redirecting Community Development Block Grants to township brick and mortar projects.

Negotiated a lower price, single source service agreement for office equipment and eliminated over 50 different machines.

Coordinated main repairs with County road improvements to reduce road re-paving costs.

Replaced the township engineering firm with a more competitive firm that provides improved service.

Expanded collaboration with Bruce Township by assisting with assessing and water service, saving funds for both towns.

Resolved Mayfair fees ($14,000) and multiple years of unpaid water bills ($40,000) left uncollected by the prior administration.

Used volunteers to assist with clean-up activities at local cemeteries.

Introduced policy requiring approval of the Finance Committee for any forgiveness of debts.

Signed a new deal with the Macomb County Sheriff at reduced rates ($30,000 per year savings).

Moved funds to a higher quality financial institution to protect against loss.

Eliminated a revenue bond resulting in one-time savings of $100,000.

Assigned financially astute persons to the Library board to improve accountability.

Service

Improved your roads by partnering with the County to: apply limestone to Mound, Jewell, 28 Mile, Hayes and Schoenherr Roads; install a permanent street light at Jewell and 27 Mile; obtain a school crossing at Washington Elementary; expand the opticon system to improve streetlight safety during emergencies; provide auxiliary snow removal when County resources are overtaxed; and resurface deteriorated section of Mound between West and 28 Mile.  Obtained County cooperation to pave Jewell (27 to 28 Mile) in 2012, widen Van Dyke between 26 Mile and West to 3 lanes in 2013; and pave Mound (28-29 Mile) in 2014; developed our first road strategic plan to direct future expenditures.

Consolidated offices into one location to reduce costs and improve service.

Updated the ambulance fleet with 2 newer, lower cost models (saving $50,000 per unit).

Hired additional paid on call fire personnel to improve emergency response in a financially prudent way.

Successfully campaigned to keep the 42^nd District Court open, ensuring deputies spend more time in the area. 

Cross trained staff and increased software training.

Cleaned up a long time blight site near the Macomb Orchard Trail.

Acquired 43 acres of future use land with water, sewer, natural gas and a paved road (by 2012).

Performed major repairs to the badly deteriorated fire station on 30 Mile Road.

Worked with Sheriff to reduce trespass on mine areas.

Obtained a grant to improve the safety of the township campus with LED lighting (which will lower electricity costs). 

Maintained hazardous waste collection program by participating with County on costs.  Added e-waste and paper recycling programs in collaboration with Bruce Township.

Created mini-gym in Township Hall for Park and Rec participants.

Conducted school, local and state elections with increased efficiency and enhanced communication to the community.  Extended clerk’s office hours to accommodate absentee voters.

Repaired the entrance to the senior center to ensure better accessibility.

Obtained 4 buses from Smart for the Star Transportation program at no cost to the Township.

Improved features of the township website.

Conducted a walkability audit to identify trail and walkway needs for work with Romeo Community Schools.

Created a Community Media Center to preserve the positive attributes of WBRW Channel 6 while enhancing business focus, expanding operations (including a planned student training program), protecting against liability and defining our legal rights.  Merged the Film Office with the CMC for efficiency.  Held a film festival.  Put governmental meetings and other key community events on line at WWW.WBRWTV.COM so the public can view them when they want to without having to have Comcast service.

Voted against overreaching use of the Macomb Orchard Trail by ITC.

Passed a private road ordinance to protect homeowner’s from bearing unreasonable road repair costs.

Improved transparency by making greater strides to explain issues and decisions at board meetings.

Providing a Favorable Business Environment

Improved certain sign ordinance rules to help local businesses attract customers.

Extended the time that zoning appeals survive to preserve business rights during this slow economic time.

Reduced red tape related to obtaining temporary use permits, certain signs, and other approvals while maintaining standards.

Altered the industrial district requirements to make it easier for certain businesses to locate within the district.

Created a series of promotional videos for our website to attract people to our community.

Opened a film office and attracted several films and commercial projects to the area.

Held the first annual Art and Orchard Festival, allowing businesses and charities to conduct a major outreach.

Resolved a long standing dispute over property lines that encouraged an urgent care center to locate next to Township Hall.

Worked with MDOT and the County to improve signage, communication, and public education during the 26 Mile road project.

Overhauled the land development and utility ordinance.

Kept taxes low for business owners while maintaining or improving services.

Ethical Standards

Instituted a “no gift” policy, turning away gifts or contributing them to charity. 

Eliminated contractors/staff that were not living within the ethical standards set by our board.

Preserve Our Rural Lifestyle

Rejected the massive, poorly planned Mayfair Planned Unit Development that had been fast tracked by the prior board.

Converted from a General Law Township to a Charter Township to protect ourselves from developers who would use annexation threats to force us to accept destructive or poorly planned developments.

Fairness

Directed all businesses through similar approval processes; avoided new zoning consent judgments.

Introduced competitive bidding for major purchases to avoid favoritism.

Eliminated unfair treatment of certain businesses that had occurred previously.

Conclusion

We have more to do but are headed in the right direction.  We will continue to make difficult decisions to ensure that we provide high levels of service while maintaining reasonable tax rates.  Your support during these challenging times is greatly appreciated. 

Paid for by Dan O’Leary (no tax funds used), PO Box 262, Washington Michigan 48094; WWW.DANONOW.COM; dan@danonow.com