State of the City

State of the City Address   
12 July 2011  
Royal Oak Mayor, Jim Ellison   

Mayor Ellison's State of the City Address can be seen on WROK Royal Oak's Government Access Cable TV channel. Channel 10 WOW & Channel 17 Comcast or on YouTube: http://youtu.be/i7t7v6t1Hvc

Good afternoon, ladies and gentlemen, and thank you for joining me here today.  Before I begin my remarks, I would like to acknowledge and thank the Royal Oak Rotary Club and President, Cheryl Murray, for continuing the tradition by hosting us today.  I would also like to take this opportunity to congratulate Paul Glantz and his team on the successful opening of the Royal Oak Emagine Entertainment complex, and thank them for making this fabulous venue available for this year’s State of the City Address.
 
>>Announcement of the State of the City
 
Royal Oak is in a state of transition, and it will be our efforts, yours and mine, that will determine in which direction we choose to steer our City.  On one hand, to the benefit of the greater metropolitan area, GM has repaid its TARP loans and Ford has regained its top-selling status in the US market - due in large part to the efforts and sacrifices of labor leaders and union bargaining units.  On the other hand, economic necessity has led to implementation of Governor Snyder’s Emergency Manager program in Benton Harbor, Pontiac, and other less fortunate communities than our own.  While in the short term this latter development may help to forestall city-by-city bankruptcy in a state that was facing significant economic downturn years before the Country’s latest recession, this loosely constructed program allows for the State to disregard the voters’ choice in their own communities.  I must join with other local elected officials throughout the state in urging caution and restraint on the part of the Governor as he moves forward with this program.
 
Now, as everyone here today knows - despite obvious budgetary issues - Royal Oak currently remains economically strong and culturally vibrant.  On the strength of our financial management practices, we still remain in the top 10% of all governmental units in S & P’s administrative ratings.  On the strength of our boutique shopping, eclectic dining, and entertainment offerings, Royal Oak has built itself into a popular destination city unique in the area.  To our credit, many diverse businesses continue to seek out Royal Oak - including our venue today, the newest Emagine Entertainment complex -  as well as the newly-revitalized Arts, Beats and Eats festival.  I regularly have discussions on multiple fronts with developers who are looking to locate offices, restaurants and hotels in our community.  This tells me that business people continue to look at Royal Oak as a sound investment.
 
Nevertheless, in accordance with City Manager Don Johnson’s proposed two-year budget, the city services which make up the framework for Royal Oak’s success, cannot be sustained at current or comparable levels without additions to our revenue stream.  Most City departments have accepted substantial reductions in staffing , while working diligently to maintain the quality of service that our citizens have come to expect.  But additional streamlining is still on the horizon.  Ladies and gentlemen, Royal Oak is strong, Royal Oak is stable, and Royal Oak is the place to be in Southeast Michigan.  Royal Oak is also in a place of transition, working creatively to address the ongoing needs of our citizens, our City services, our positive growth and our continued success.
 
The city that Royal Oak is transitioning to will have to be a leaner, more efficient city; the citizenry, the staff, and the Commission will all be asked to bear with the birthing pangs which must accompany the successful emergence of this new Royal Oak.  The last time I gave this address, I said that Royal Oak would prove to be a model for recovery throughout the metropolitan area, and I stand by that sentiment.  I have always believed that our strength as a community lies within our people, but, just as recovery for Detroit has meant a re-imagining of the industry with which it identified, an ongoing Royal Oak as a destination can not revert to the bedroom community you or I grew up in.  This does not mean that we should de-emphasize the strength of our neighborhoods or schools.  Instead, we must use our strengths as an entertainment & cultural destination to continue to attract new residents who can join us in calling Royal Oak home.  I will continue to work toward - and am excited to experience with all of you - the City we will turn out to be.
 

>>Finance
Last year, taxable value declined by 9%, and Oakland County projected another 9% decline for this year.  In fact, real estate values may already have bottomed out in Royal Oak, and taxable value decreased only 2.5% for 2011-2012 – which translates to a difference of over $1 Million for the general fund.  This does not mean we can expect to see great increases in future taxable value.   No matter how much property values rise, taxable value can only increase by the rate of inflation or 5%, whichever is less.  We expect assessment and taxable value to remain flat for some time beyond the next two years of decline.

Thanks to some tough decisions on the part of the City Commission, City Manager Don Johnson, our departmental heads, and the various bargaining units and departments, we have approved a balanced budget that looks ahead two years without a tax increase. This budget, however, does not deliver the level of services that our residents desire, deserve and have come to expect. In order to deliver that level of service, I believe that it will be unavoidable that we ask the voters to consider a tax increase. The level of services needed, cost of those services, and projected revenue based on taxable value, will determine the amount of increase needed.  I do not expect this process to be completed until early 2012.

Nevertheless, on the issue of new taxes, the Commission has been very clear.  Financial sustainability will be built upon both increasing tax revenue and on reducing expenditures, and we feel it would be premature to seek the one without the other.  Now, while we have made great strides with a number of our employee bargaining unions, we have yet to reach a mutually acceptable agreement with the police or fire unions – though recent discussions have been encouraging.  Until we are able to secure concessions from these last two groups, we will not ask the voters for a tax increase.  I want to let all of our city workers and Department heads know how much I appreciate your continued dedication to collective bargaining, and I want to extend my thanks to you all for the sacrifices and concessions you have made for the good of your community.

 >>Police and Fire
 
Concerning the police and fire departments, both faced significant staffing reductions this last year, in accordance with city budget reductions, and both have employed creative thinking to slow further reductions.  With the granting of monies from the SAFER grant, the numbers of our fire staff are secure for at least two years.   Additionally, thanks to some creative usage of state forfeiture funds, the police department will be able to recall one officer lost to layoffs, by assigning that officer to the Oakland County Narcotics Enforcement Team (NET). By making that officer exclusive to the NET team, monies from our state forfeiture funds can be used to pay for that position.
 
In the current budget, the Police Department has been reduced to 66 sworn officers, and has had to deal with the cuts by refocusing their efforts on core responsibilities.  Over the last few years, they have eliminated the Traffic Safety Division, the Directed Patrol Unit, the Crime Prevention Officer, and decreased the number of detectives, but have rolled many of these responsibilities into the patrol division.  Departmental operations have been streamlined and every officer’s responsibilities have increased.  However, more broadly, the last year saw a substantial reduction in regular patrol staffing, at the cost of some of our capacity for proactive policing; at this point, the effects of this reduction have not yet been felt.
 
The Royal Oak Police Department handles many special events throughout the year, capping off the summer was, of course, Arts, Beats, and Eats.  The success, from a public safety stand point, cannot be understated.   There is not another city our size that handles an event anything like Arts, Beats, and Eats.  The amount of time and effort that goes into planning and managing this event is extensive.  When you consider that this event takes place a mere two weeks after Dream Cruise, a major undertaking in its own right, the performance of the police department is even more impressive.  In fact, the police department handles one special event after another throughout the entire summer.  From an outside perspective, it would appear that handling these events is easy because we rarely have any major problems.  I can tell you that the opposite is true.  The reason we rarely have any problems is because of the professionalism and competence of our police department in preparing for these events.  Like I said, no other city does anything like it and there is a reason these events choose to come to Royal Oak as opposed to going elsewhere.
 
The Fire Department has had a turbulent year, with the run volume for the department increasing by 13% over 2000 levels while at the same time suffering staffing decreases of 22%. The fire suppression personnel have had to do a good job at learning to cover all districts within the city more efficiently.  However, thanks to a $2.5 Million grant through FEMA’s Staffing for Adequate Fire and Emergency Response program, significant lay-offs have been temporarily forestalled.  This grant has allowed the fire department to secure for at least two years the positions of 10 fire fighters.  The increased staffing let us cancel plans to privatize ambulance transport which means we will continue to collect over $900,000 per year from ambulance billings.   This means the grant is actually valued at $4.3 million to Royal Oak.  In addition, since Governor Snyder has not completely eliminated Statutory State Shared Revenue, our budget (and the conditions of the SAFER grant) will allow the city to hire four new firefighters in the next few weeks.
 
Nevertheless, this grant must be regarded as a temporary reprieve and not as a solution to our public safety budget problems.  We still need to find a model for delivering police and fire services that we can afford into the future.  Public safety is the most important service we provide but we cannot continue to spend over 150% of our general operating levy on police and fire services alone.  We must find a more cost effective model.
 
To that end, the City Commission last night, supported Mr. Johnson’s proposal to engage the public safety consulting division of the International City/County Management Association to conduct a complete independent review of our police and fire operations, which they have recently done for both Novi and Troy.  They will look at staffing, shifts, number and location of stations, use of part-time and volunteer personnel and other issues.  They will also examine alternative service models such as combining police and fire functions or contracting with the Oakland County Sheriff’s Office for police services. We must be able to look at all opportunities and ideas to help us keep the level of service to our residents at the level they expect and deserve.
 
I wanted to also acknowledge the contributions of recently retired Police Chief Chris Jahnke and Fire Chief Pat Mulligan for their efforts in guiding their departments through this transitional period. I have all the faith in the world that Interim Police Chief Corrigan O’Donohue and Interim Fire Chief Chuck Thomas will continue to work on keeping their departments the best in the area.
 
>> Community Development
 
Obviously, fire and police are not the only departments that make Royal Oak work, and neither were they the hardest-hit in this most recent budget.  No department was hit harder with layoffs than the Building Department.  With layoffs, attrition, and promotions, Code Enforcement has been reduced to two full-time inspectors, which is having a noticeable impact on code enforcement in the city.   

In some slightly better news, however, the State Construction Code Fund has been turned around financially by the replacement of the three City employee trade inspectors we lost to layoffs with outside contractors.  Last year, we had to transfer almost $600,000 to fill this fund; this year the fund did well and next year will be able to return a quarter of that sum. This is particularly noteworthy because the building department has noticed an increase in new home construction in the city. New home permits in 2010 were triple those issued in 2009.  So far in 2011, those numbers have gone up by half again.

 
The Planning Department has reviewed a number of projects this year, including the Emagine Theatre, multiple projects by Amber Properties, Cantina Diablo, Olga’s Kitchen, Tequilla Blue/Club 526, Kroger - which is on tonight's Planning Commission agenda for review - and Pizzeria Biga, which the Planning Commission will be reviewing in August.
 
Even with staff reductions and the retirement of City Engineer Elden Danielson, the Engineering Department has had a busy year overseeing the completion of numerous projects to improve city infrastructure.  These included improvements to the water main downtown, and asphalt resurfacing along Main St. and Lincoln, including curbing replacement and sidewalk ramp replacements, paid for in major part by State and Federal funds.  They are also inline to receive approximately $2.6 Million in Federal stimulus funds for projects through the year 2011.

Based upon increased workload and decreased staffing, Mr. Johnson is recommending that we take a serious look at combining the operations of Planning, Engineering and Building into a single Department of Community Development.  He believes this has operational advantages as well as financial advantages.  If done right, it will provide a smoother and quicker permitting process which will help make Royal Oak more “business friendly.” I support Mr. Johnson in this plan.
 
In some good news for our substantial pedestrian population, Engineering will begin working on a new city-wide sidewalk repair program next year, which will span the next six years.

And speaking of impassable sidewalks, February 2011 ranked among the top five snow falls on record.  Our ever diligent DPS worked tirelessly, handling our snow events as well as 68 water main breaks - 22 of which happened in the month of February alone - in a timely manner.  I had the opportunity to ride with the snow plows during one of the big February storms and will tell you that it was an eye opening experience for me. I don’t believe enough people appreciate the talent and skill required to manipulate a large snow plow through 8” of snow and a slalom of cars left in the street.
 
DPS office has also absorbed the Recreation Department staff, who have moved their operations from the Salter Center to better utilize personnel and reduce operational costs. The Boys and Girls Club has taken over the responsibilities of maintenance of the Salter facility in a move that has benefited both the city and the club.
 
Royal Oak Sandlot League, Royal Oak Youth Soccer and Royal Oak Youth Football and have all seen growth in participation, The respective organizations have also increased their participation in partnering with the city to enhance and improve our playing fields by purchasing items like new bases, soccer nets, field paint, fertilizer and improving dugouts and benches at various fields throughout the city, enabling many young people the opportunity to participate and enjoy sports programs.
 
The Royal Oak Hockey Association saw an increase at the younger ages and beginners clinic, and the learn to skate program averaged 200 skaters per session.  Suburban Ice - our new arena management company - is aggressively marketing the Lindell Arena through Facebook, Twitter and their own web site. Residents will see new programs this fall for families, as well as all of our traditional programs from our community organizations thus keeping the Lindell arena a true community ice arena.
 
The Recreation Department boasts the largest Metro Detroit city softball program with 98 teams and an estimated 1500 players.  This summer their dedicated staff of young teachers will supervise 500 day campers spread out over a 9 week program.  
 
Finally, our dedicated pickleballers have offered intergenerational programming. Seniors and children have been getting together twice a week at the Whittier pickleball courts to teach and learn the sport of pickleball.
 
I wanted to highlight the Recreation Programs because they are an indicator of the opportunies offered to our residents at all age levels that further define Royal Oak as one of the best cities to locate and raise a family. It is also indicative of the help that these independent sports groups contribute to offset expenses to the city.
 
I’d also like to acknowledge the Royal Oak Historical Society and the Royal Oak Historical  Museum under the watchful eye of curator, Muriel Versagi, for their efforts in truly preserving Royal Oak for future generations. The museum is now up and operating out of retired Fire Station #2 on Webster Rd. A visit to the museum should be on every Royal Oaker's agenda.
 
>>City Hall
 
Belts have been tightened at city hall, as well, but all of our departments remain committed to providing high quality service in as timely a manner as is possible.  City Attorney David Gillam and the Attorney’s Office faced a staff reduction of one-third, but continue to play a critical role in advising the commission and the City Manager on public policies and what were perhaps the two most contentious debates in local memory.  In addition to drafting a new Ethics Ordinance and proving instrumental in contracting with Arts, Beats, and Eats, the City Attorney’s Office worked diligently to research the issues and inform the commission and the public on the legal realities of concealed and open  carry  weapons at public gatherings and possession and use of medical marijuana in Michigan.  As a result of these inquiries, the City Attorney’s office drafted amendments to the Festival Agreement that prevented potentially costly litigation from open carry advocates and advised the City Commission to adopt an ordinance that, while banning medical grow operations, allows qualified patients to possess and use marijuana in their homes in compliance with State law in Royal Oak.
 
The City Clerk’s Office has compensated for staff reduction through the hiring of a few part-time clerks, and continues to provide courteous and knowledgeable service and information to residents and customers.
 
The Clerk’s office oversaw a pilot program involving the use of electronic poll books in the voting precincts, the goal of which is to cut down on wait time for voters at the precincts.  It was a success and the e-poll books continue to be used during all elections.  The election inspectors have enjoyed the use of the new technology and the voters appreciate lines moving faster on Election Day.  
 
Currently, the Clerk’s office is involved with another pilot program with the State of Michigan regarding the filing of death certificates.  If the pilot is a success, death certificates will be filed via e-mail as opposed to requiring funeral directors to come into the office to file paper certificates.  This process will help all those involved including the funeral homes, doctor offices, medical examiners, Social Security Administration, Oakland County and the State of Michigan Department of Community Health, and should cut down on expenses associated with administrative errors.
 
>>Library and IS
 
Now, with resources getting harder to come by, the citizenry have a responsibility to stay involved and informed, and to that end, the Library and Information Services are working harder than ever to keep residents connected and in-the-know.
 
In fact, in this economic climate more Royal Oak residents are turning to the library for their information and entertainment needs.  Even with the significant decline in monies from the 2003 millage which funds the Royal Oak Public Library, Library resource utilization in up 35% since its extensive renovation in 2006/2007.  Additionally, the library was able to add 10 new public internet computers through a federal ARRA grant in 2010 in support of their mission to provide free internet access to more residents.  In the name of greater access in this age of new media, the library offers programs for all ages, information resources in non-traditional formats, and free passes to museums, cultural hotspots, and state parks.  Thanks to the generosity of about 700 individual donors, the library has been able to continue to provide its services without seeking additional taxpayer funds, and remains a strong and vital part of our community.
 
The Friends of the Library are sponsoring the Time Capsule project “Snapshot Royal Oak, 2011”, which is due to be buried in a ceremony on October 1st of this year in honor of the City's 90th birthday.
 
Our information services department is also doing their part:  the City’s streamlined web site serves over 2 million page requests per year, and the News Blast now has close to 1800 subscribers.  They, too, are venturing into social media, with beachheads on Facebook and Twitter.
 
Civic-minded residents are enthusiastic about looking over the documents which come before the various committees which make up Royal Oak government, and we in the city are dedicated to transparency in government.  To that end, IS provides online access to almost every agenda item for the City Commission, DDA, Traffic Committee, and the LCC.  This project has the added benefit of saving the city thousands of dollars on paper costs.
 
Finally, we are approaching the fifth full year of successful synergy between IS and WROK, our local cable access channel.  Webcasts of meetings for City Commission, Planning Commission, Zoning Board of Appeals, LCC, and DDA are all available online in our video archives as another means of opening avenues of communication, increasing transparency, and improving dissemination of information in and with the community.

>>Closing Remarks
 
The last time I presented the State of the City, I warned that with decreasing tax revenue and outside income, it would be likely that the sorts and quality of services that the City would be able to offer would likely decline in the near future.  And that has come to pass.  At that time, the housing market was in free fall, the auto companies were teetering on the edge, and the innovative film initiative was just in its infancy.
 
Since then, some important developments have arisen. The housing market in Royal Oak, as indicated by numbers of new building permits being issued and  from what my real estate sources tell me, has bottomed out and is once again reviving; thanks to the concessions of the auto unions and hard-won acknowledgments that we aren’t living in an exclusively muscle carred Motown any longer, the auto industries are stronger than they have been in years; and unfortunately, the film initiative has been retired before its time, even as it was serving its intended purpose for our city and our business owners.  
 
The old way of doing business was premised upon infinite growth of both worker base and foreign market, both factors that we ought to have recognized as inherently unsustainable.  Since the constriction of the market, the services we have been able to offer have decreased and have grown more reliant upon individual contributions and labor concessions – and this too is unsustainable in the long term.
 
 So, ladies and gentlemen, we find ourselves in a state of transition, and the direction we end up heading is in our hands.  I look forward to working with you, the residents, business owners, and social boosters; as well as with my associates on the Commission; our City Manager Don Johnson; the heads of Department; and our dedicated city workers.  We have weathered economic hardship, and our relative success has helped to slow the constriction of our neighboring communities.
 
Creativity, firmness, and future-looking decision-making will be key to charting our new path, and the worst, it must be said, may still be on its way.  So it is all of our responsibilities, yours' as well as mine, to keep Royal Oak vital and relevant; and with everyone working to that common goal, I look forward to seeing just what we will become.

Let me take the time to thank all the department heads and City Manager Johnson for their help in gathering information for todays State of the City address, but most importantly, my eternal gratitude to my wife Jodie and my son Jake for all their contributions in preparing this speech.

Thank you