Southeast Michigan Council of Governments

1. Southeast Michigan Council of Governments

2. Structure of Today’s Meeting • Confirm we’ve captured the problem • Make sure we’ve identified the solutions • Brainstorm on action steps • Confirm and expand on those provided • Prioritize • Leadership/responsibility

3. Structure of Today’s Meeting • Small group discussions • Note taker/facilitator • Overview of process

4. Challenges • Be constructive, not “whiny” • Craft solutions and action steps that aren’t about getting more money

5. Description of the Problem

6. Description of the ProblemRate/revenue base is declining

7. Description of the ProblemRate/revenue base is declining

8. Description of the Problem Inadequate revenue to maintain what we have Trend of Lane Miles in SE MI 2004 - 2008

9. Description of the ProblemUnderinvestment is an increased cost, not a savings Cost of Pavement Management

10. Description of the ProblemOutdated revenue formulas

11. Description of the ProblemWe have more than we need, so right size 1970 4.7 million people 2020 4.4 million people 2000 2.9 million jobs 2020 2.5 million jobs

12. Description of the ProblemFiscal resources constrained, not temporary Median Household Changes: 2000 – 2008 • Income: down 16.1% • Total housing costs: up 18.1% • Spending on Utilities: up 21.2% • all figures in 2008 dollars • Taxable property value: declining ≈ 20%

13. Description of the ProblemFiscal resources constrained, not temporary • Taxable Property Value – Real Dollars

14. Description of the ProblemFiscal resources constrained, not temporary • Taxable Property Value – Real Dollars 2011 138B

15. Description of the ProblemFiscal resources constrained, not temporary • Taxable Property Value – Real Dollars • Assumes: • 2.7% annual inflation • Annual growth in property value is at least 2.7%

16. Description of the ProblemFiscal resources constrained, not temporary • Taxable Property Value – Constant Dollars (2000) Reality is: In constant dollars, revenue is capped where your taxable value bottoms out – but …

17. …what about growth?Must differentiate type of growthTax revenue = rate x base

18. …what about growth?Must differentiate type of growthTax revenue = rate x base

19. Description of the Problem What’s our future??? • Taxable Property Value – Constant Dollars (2000)

20. Most likely scenario?(1-5 years) • Doubled vacancy rate (2000-2008) • Glut in housing • Continued job loss, slow job growth • Declining wges • Continued population decline • Household size increasing …. What’s your likely scenario?

21. Description of the ProblemNeeds and expectations drive costs • Level of congestion • Peak water needs • Peak energy needs • Frequency of sewer overflows • Reducing carbon footprint • Etc., etc., etc.

22. Components of the Solution

23. Components of the Solution Restructured revenue collection systems Others: TBD Strategically invest funds to maximize all infrastructure performance Holistic view of needs and outcomes Cost of different levels of service Collaboration amongst providers

24. Proposed Action Steps Restructured revenue collection systems • Seek commitment to true cost of service • Frame true cost of service principles • Examine revenue generation potential reflecting new realities • Other

25. Proposed Action StepsHolistic view of needs and outcomes • Reestablish targeted outcomes based on “full view” instead of by area of interest • Benchmark decisions based on how they contribute to agreed on outcomes

26. Proposed Action Steps Collaboration amongst providers • Seek formal agreement to cooperate from service providers • Identify specific issues on which to cooperate • Service areas; new, existing • Maintenance/asset management • Other

27. Proposed Action Steps Cost of different levels of service • Investigate changes to public expectations • Explore alternative approaches for meeting regulations • Examine costs of alternatives

28. Proposed Action Steps Strategically invest funds to maximize all infrastructure performance • Connect economic development plans and service provider plans • Inform service providers where service will be needed • Regional Economic Strategy? • Focus services where infrastructure capacity exists

29. Structure of Today’s Meeting • Small group discussion on 3 parts • Not consensus—get ideas out • Summary and discussion by large group • We’ll compile for next meeting.

30. Structure of Today’s Meeting • Small group discussion on 3 parts • Not consensus—get ideas out • Summary and discussion by large group • We’ll compile for next meeting.

31. 1st Group DiscussionDescription of the Problem10 – 15 minutes • What should be added, deleted or modified? • Why?

32. 2nd Group DiscussionComponents of Solution10 – 15 minutes • What should be added, deleted or modified? • Why?

33. 3rd Group DiscussionAction Steps20 – 30 minutes • What should be added, deleted or modified? • Why? • What additional details should be included? • What is the priority of action steps? • Who should lead implementation?

34. Southeast Michigan Council of Governments