Mother’s Day Meditation – What Do We Owe the Future?

A friend wished me a happy Mother’s Day in advance yesterday.  I replied that, as a childless person whose mother and mother-in-law are both dead, it didn’t mean much to me.  She replied “Oh, but you’re the mother of the city.”

This was a rather jarring image which I immediately put aside.  But in today’s New York Times I read yet another diatribe by Thomas Friedman about “mortgaging our children’s future”.  And there was also a semi-humorous but rueful discussion of Gen X‘s midlife crisis.  (They are now in their 30s and 40s.)  And it hit me.  I’ve been spending my entire career in public life trying to protect the future.  Not my children, not your children, but those who will occupy our place a generation from now (30 years is a good approximation).  If worrying about the future of those to come makes one a mother, I’m your worrier.

Since this is a meditation (some might call it a rant), I’ll step aside from my usual practice of documenting every statement and linking to as many original records as possible.  I’ll just tell the story. (Much is from my service as a Washtenaw County Commissioner, a member of the Board of Commissioners, from 1997-2004. I actually recycled most of those records but memory still persists.)

Here are the sources of my worry.  First, local governments began to mortgage the future beginning in the 1990s and certainly in the decade we are just finishing, by taking on obligations for the next 30 years.  That’s right, for an entire generation.  In the past, millages were often for 5 years at a time and bond issues were characteristically for 15 or 20 years.  Suddenly we started hearing of millage, bond proposals, and other obligations, for 30 years.  A couple of examples:  the Ann Arbor Greenbelt millage ballot measure was for 30 years, as was the proposed TIF arrangement for Broadway Village.  (That development has collapsed of its own weight but is showing signs of renewed life.)  The Ann Arbor DDA charter was renewed for 30 years, committing all TIF (tax increment financing) from the downtown area for that period.  The new parking garage under the Library Lot will apparently be paid off in 2035 (only 25 years, what a relief).  This list is by no means complete, but you get the idea.

Second, decisions have been made that seem to depend on wishful, or worse, magical thinking.  This is what I also refer to as linear or “what could go wrong?” thinking.  For example, during the housing boom, the county budget director repeatedly and yearly came out with budget forecasts prefaced with the statement (in writing!) that “the best predictor of the future is the past”. I objected to this more and more vehemently but glaring across the podium had little effect.  The county engaged in obligations based on the supposition that the increase in property values (and county revenues) would continue on an upward climb indefinitely?  Although I was continually digging in my heels, the county administrator continually proposed expansive building projects and other enterprises (the county is now supporting a number of “economic development” agencies and projects that are, to my mind, of questionable value).  We built a new administrative building at Ann and Main and then a huge new building on Zeeb Road (it is now for sale/lease).  We paid to build a Head Start school building in Superior Township (it was not our responsibility).  We built a homeless shelter at much greater cost (millions and millions) than we should have (among other things, we had to pay a bonus to the banks who owned the worthless piece of property because we took it by eminent domain and had to make up a complete new set of working plans after the completed plans were deemed illegal; the building was in the floodway).  We renovated the old administration building (which was working ok) to make a “world-class” set of offices and meeting chamber.  Over and over we heard that budgets were rosy, right up through the period when the state revenue sharing began to fail and we had to start laying off workers.  When I asked the administrator what we would do if, contrary to the projections, we entered a deflationary period, he replied, “that hasn’t happened in my lifetime”.  Now the county has been going through budget cuts that have meant a severe paring of many good functions, that actually served the public.  It has been painful to watch.

A third point is that many of these public decisions have been based on a growth model rather than on a sustainable modelSustainability in its original definition was “meeting the needs of the present without compromising the ability of future generations to meet their own needs”.  This is a core belief and philosophy of mine.  But it isn’t very good for making money.  Our local governments have been development-oriented for years and real estate interests, allied with the building trades, have had an interest in making sure that we keep on building.  Unfortunately, most systems do not allow for unending growth; growth is simply not sustainable (in a different sense) indefinitely.  Eventually the whole house of cards comes down. We saw that on a national level in the last couple of years.  But the county and to some extent the city are based on a continued development model in order to continue increased revenue.  Policies have been adjusted accordingly.  While on the county Board of Public Works I worked hard to stall or modify a proposal to install a new sewer system and water supply system in the western part of the county.  It was to be based in Sylvan Township near Chelsea.  Because our Huron River phosphate allowances are over the top, the sewage effluent was channeled to Jackson County.  Of course the whole point was to enable much more development in that area (rural development has been hindered by lack of water utilities).  In a what-can-go-wrong scenario, a group of developers promised to make the bond payments.  That’s right, the county sold full faith and credit municipal bonds to support the project that was really to benefit sprawl development – and development that would especially favor a group of developers.  Predictably, the cost of making bond payments ended up falling back on the township, and recently the county has refinanced the bonds.  According to a story by the Ann Arbor Chronicle, assurances were still being made that the county taxpayers would not be “stuck” with the payments as the county refinanced the bonds this year.

At core, much of my frustration and worry is based on a view of local government and its relation to local residents that is not shared by those in power.  As I expressed in an earlier post, I believe that we should run our local government like a household.  Here’s what I said:

But I think we should be running our local government like a household.  In a household, you save money during the good times so that you can tide yourself over during the bad times.  If one of the children is at an age when he costs a lot (maybe he is outgrowing his clothes too fast), you don’t jettison him, but cut the rest of the household expenses (hamburger instead of steak) to support him.  You certainly don’t buy a Mercedes, then complain about how much that kid costs.

And like a household, we should not be taking out a big mortgage on the house and leveraging it in investments that may be speculative or helpful only to a few people.  (We should not be spending it on new toys either, like that sink for money named WALLY.  And by the way – the Greenbelt millage has already been at least half spent, during the time of highest land prices.  They bonded against the millage proceeds and took the cash upfront.) Again, we have seen the result of such behavior both for individuals and for government over the last couple of years.  If we owe anything to the future (to all those who will be living in this city in five, ten, twenty, or thirty years), it is not to spend their inheritance – the assets of the city.  (That would include public lands and infrastructure.)  And we should not encumber them with debt that will make it difficult for them to maintain a reasonable life in a good community.

So please, wear your galoshes and make sure you have bus fare to get home.  I’ll worry.

UPDATE: The Sylvan Township sewer deal went really sour, leading to a lawsuit by the developers against the township, and now reports that the township is in real trouble after a decision in the Washtenaw County Circuit Court. We may be looking at the first township bankruptcy in Washtenaw County.

SECOND UPDATE: The saga continues.

Explore posts in the same categories: civic finance, Sustainability

6 Comments on “Mother’s Day Meditation – What Do We Owe the Future?”

  1. susan wineberg Says:

    I love reading your columns…you have a great way of summing everything up and seeing it in perspective. That is a real talent.

  2. Alice Ralph Says:

    I worry too, Vivienne. I try to limit, use and dispell my worry. One way is to be informed about the sources of worry and I thank you for your help on that. The big picture that you draw in each blog nudges me forward to positive action. Just like mothers often do. So, having already jumped in the puddle (running for District 11 County Commissioner) I’m saving money for a rainy day and taking the umbrella just in case. Thanks for the reminders.

  3. KJMClark Says:

    Hey Vivienne, I didn’t know you had a blog. Cool.

    OK, mostly agreement, but a few quibbles. First, this crash was utterly predictable, for no other reason than the generation that were adults during the last crash are long gone. As Rogoff and Reinhart’s latest book points out, for at least the last 800 years we’ve had financial crisis after financial crisis. Each time things were “different”. The real change was that after the Great Depression people put in place laws that kept things stable for two generations.

    I expected a crash from the dot-com bubble. The fed neatly dodged that implosion by inflating another bubble. At the time, I expected a 70s style stagflation, with as I said from 2005-2007 “more stag than flation.” I expected stagflation because peak oil was likely to send oil prices into triple digits. We didn’t get stagflation because unions have been busted and labor couldn’t pass along price increases in contracts. Instead the oil prices triggered a financial crash that was building anyway.

    So agreed, we’re most likely headed toward Japan, with a significant chance of real deflation, and still an off chance, fading each day, of modest growth. All of us Cassandras should have saved our breath, because the majority was going to mess this up no matter what we said. Prof. Gramlich tried to tell Greenspan, and he was ignored as well. So much for that.

    Now a quibble. Wally may look like a waste of money now, but in a decade the folks in Brighton and Howell are going to be begging for alternatives to driving their cars with $7-10 gallon gasoline. The IEA has made it pretty clear that they think we’re headed for serious problems. There’s a reason gas prices haven’t dropped back to $1.20 a gallon even though we’re in the worst recession since the great depression. A Chinese economic crash, which is looking more and more possible, might alleviate the problem of peak oil for a while and Iraq may bring on production fast enough to lower prices as well, but oil production won’t rise much from where it is now, and then will start falling.

    Lets get together for lunch in a decade and see where things stand. I’m betting we’ll be in about as much hurt as now, in part because oil and gas prices will have gone up while just about everything else, particularly wages, will have gone done.

    And we need to have things like Wally to deal with climate change as well. Really, Wally is where we need to be headed with transportation, and greater urban density, along with strong urban parks, is something else we need. We aren’t going to solve climate change and deal with oil production declining with a transportation system that’s almost entirely dependent on oil and produces a third of our greenhouse gas emissions. It’s going to take a lot more than Chevy Volts to deal with those problems. It’s going to take a return to rail, particularly electrified rail, and thinks like biking, walking, and buses. We need to get started somewhere. How would you solve those problems?

  4. varmentrout Says:

    Thanks, good to hear from you again.

    I like the idea of WALLY and all other rail. But the cost to us locally of putting it together in a form that would really fill the hoped-for function is prohibitive. I’ve had experience as a rail commuter and I don’t see the components that would be needed coming together here.

    How we will solve the problems of climate change and declining oil production locally is worth a good long discussion all on its own. Part of that would have to be considering what the structure of our local economy will be. Apart from the UM, will we have employment centers here that would justify either a lot of commuters or an increased, densely packed population? Many assumptions and factors to chew on.

  5. […] spend money based on the most optimistic future scenario: I wrote about this concern in a blog post in which I related some of my frustrations with  financial decisions made by Washtenaw County […]

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