State of the City: Despite Challenges, Saline Remains Healthy and Vibrant

Despite facing what she called the toughest budget in her 20 years of elected office, the Saline's foundation remains strong, Mayor Gretchen Driskell said during Monday's State of the City address given at the city council meeting.

Driskell pointed to Liebherr Aerospace's expansion as positive news for the city. Faurecia's purchase of the Automotive Components Holdings automotive components business is also viewed as good news, Driskell said, considering ACH once planned to shutter the factory.

The city is positioned for future industrial growth, Driskell said, noting Liebherr owns 54 acres behind its facility and the city owns 20 acres of land available for development. Driskell said Saline positioned itself for success by creating business parks and industrial parks.

She pointed to the new Michigan Main Street program as something that will bring positive outcomes for many years to come.

Still, Driskell said, the city faces challenges, such as the city's commercial strips are underutilized. But, Driskell said, the empty storefronts will fill as the economy continues to improve.

Another threat, Driskell said, is the state government's desire to eliminate personal property tax, which accounts for 22 percent of the city's taxable value. She said Lansing has shown it is not reliable when it says it will replace revenues, and eliminating personal property taxes would force the city to reduce staff and erode city services.

The city is healthy because of its active citizens, Driskell said, pointing to the citizens who took on community initiatives like the Celtic Festival, the What So Proudly We Hail flagpole project and the Red Barrel drug disposal project.

"We have had a continuous goal of improving community involvement for as long as I can remember. Some of the changes in the last decade include televising council meetings, an interactive city website, quarterly newsletters, and biannual citizen satisfaction surveys. An informed and active citizenry makes for a stronger community," Driskell said. "An informed community makes the best decisions and is vested in our future."

Here is Driskell's speech, in full.

Good evening.

During my tenure as mayor, it has been my privilege to report to you semiannually on the State of affairs of our fair city. In reviewing my first state of the city from January 1999, I find we have made great progress. Then, as now, we recognized the importance of maintaining and building a vibrant, healthy city and the value of community participation.

I am honored to share with you the strengths our city relies upon and the challenges we have before us today.  Our community is positioned to weather the projected decrease in our revenues due to the foundation we have built together, our partnerships with businesses and surrounding townships, our decade of investment in our infrastructure, and the continued commitment of our citizens, city employees and council to work toward an ever improving community.

A strategic priority of the city has been to have a proactive economic development stance. This policy has resulted in development ready parcels which assist in recruitment of new businesses.  Saline now has over 300 acres of business parks with businesses from diverse industry sectors, most of whom are growing and creating new jobs.  

Specifically, Liebherr celebrated their fourth expansion of 33,000sf in June, resulting in a 133,000sf building that houses their aerospace and gear making business.  They have 54 acres behind the building and are well positioned for future growth . Additionally, the sale of the ACH business has been completed and Faurecia is in the process of investing in new equipment and reorganizing the plant floor. We had been hoping for a successful sale as ACH notified us in 2008 that they would be selling or closing the plant this year.

The city still has over 20 acres (valued at over $2M) available for development as the economy improves. Our goal historically has been to have at least 45% of our revenue come from nonresidential revenue but in the last decade the ratio has declined to 39% projected for next year. In order to have a healthy economy here and keep residential taxes lower we need to continue to look for opportunities to grow, recruit and retain businesses in our community. To that end we recently contracted with Ann Arbor SPARK, our countywide economic development agency (and a nationally recognized econ dev organization) to assist us in developing a formal implementable economic development plan.  Programs from this plan could range from development of a local entrepreneur support group to business attraction to home based business workshops. The information gathered will help us focus our ever shrinking personnel resources on priority opportunities for economic growth.

Additionally, this year our city was fortunate to be accepted into the Michigan Main Street Select Level program. The national Main Street program is a proven commercial revitalization approach that leverages our local resources to create a non-profit organization that partners with the city to improve our downtown, by working on design, promotion, economic restructuring and volunteer recruitment. We are the 17th city in the state to achieve this status and I commend the volunteers who worked tirelessly to put together the winning proposal. Our new main street manager, Kelly Idzikowski, is at work developing the systems and framework for a successful program. Watch for the many positive outcomes from this program in the years to come. 

We have our challenges right now in the commercial real estate arena with Country Market closing and other commercial strips that are underutilized. However, there are retail business openings on a regular basis once again, and we expect to see a few more storefronts active by the end of the year. The empty spaces will fill as the economy continues to improve.

Over the past decade the city implemented  infrastructure projects that had been in the planning process in the last century. Our significant investment in major capital projects has substantially improved the vast majority of our assets, providing for long term stability and lengthy life spans in our various asset categories. This, in turn, enables us to provide better services to our citizens and businesses. (Water/sewer system upgrades, road system, city hall, DPW building and upgrades to the Recreation Center)

While our foundation is solid, the budget deliberations for this fiscal year were probably the most difficult I’ve experienced in my 20 years of elected office. Our current revenue projection for FY13 reflect budgeted property tax revenues comparable to FY05 and the state revenue sharing below what we received in 1996. The contributing factors of a 20% decline in our property tax revenue in the past four years, a lump sum paydown of the city’s MERS liability in 2011 and the underfunding of state revenue sharing since 2000 (cumulative total of $4M on a $8.5M annual budget) has contributed to an erosion of our fund balance. This will be our most challenging year as commercial values have stabilized and residential values are projected to increase at least 2%. We are currently projecting a fund balance of slightly less than $1M, however we are maintaining an AA- bond rating which is excellent for a city our size.

We have worked diligently in partnership with our employees and other governmental entities to look for cost saving opportunities.  We have eliminated through layoffs or attrition 20% of our workforce, implemented wage freezes, and addressed health care and pension benefits by implementing changes on par with the private sector. Additional opportunities for regional service, such as our fire district, or coordinated grants, such as the new connection to our linear trail at the library, are pursued whenever possible.

The looming concern for our city and many other taxing entities in our community (schools, library, community college) and around the state is the current proposal in Lansing to eliminate personal property tax revenue and replace it without any guarantee. Our experience with state revenue sharing has been that the revenues do not get replaced reliably.  The city ultimately was required to implement a millage increase to offset some of the statutory revenue shortfall.  Currently our personal property taxable value is 22% of our total value and this elimination by the state could significantly impact our stagnant revenues. The city will struggle to make further cuts in staffing without a negative impact on our level of service.

Our city is a healthy vibrant community because of the participation of its citizenry, not only in good governance but as volunteers and supporters.  This past weekend, two citizen-led initiatives were celebrated. The Red Barrel project, started by PACT volunteers, culminated in a location at city hall to collect unused prescription drugs, keeping them from misuse and out of our waterways. The new flag pole at the cemetery, a project that took little more than 2 months to complete, is another excellent example of our community coming together to solve a problem.

Last weekend thousands of visitors came to experience our 17th annual Celtic Festival, an event initiated to celebrate our sister city relationship of 47 years with Brecon, Wales.  This award winning event had over 400 volunteers come together to execute a plan that other volunteers had spent all year working on. In addition,on Aug 10th and 11th we can look forward to our annual Summerfest, another weekend filled with fun activities and opportunities to play together,  which over a hundred volunteers plan and execute in recognition of the importance of community building. The culmination of a years’ worth of planning by our Arts & Culture Committee will result in the dedication of the Sculpture Walk in our downtown area at the kickoff of Summerfest.

We have had a continuous goal of improving community involvement for as long as I can remember. Some of the changes in the last decade include televising council meetings, an interactive city website, quarterly newsletters, and biannual citizen satisfaction surveys.  An informed and active citizenry makes for a stronger community. An informed community makes the best decisions and is vested in our future.

It has been a distinct honor and privilege to represent this community. We, as a city, are extremely fortunate to have had elected officials and city employees that are dedicated to improving our community. And I have been privileged to work alongside them.

I believe the reason we have been recognized as a Top 100 small city several times last decade can be directly attributed to the sense of pride that our community holds. The initiatives and contributions our citizens, businesses and city employees make ensures that the City of Saline continues to be one of the best places to live, work and play.