DEMOCRATIC CLUB

TDC NEWSLETTER

FEBRUARY 2010

SPECIAL TROY ELECTION EDITION

What’s Inside?

COMING EVENTS…………………………………………….…………….…………2

• TUESDAY, FEBRUARY 9, 7 P.M., TROY LEADERSHIP COALITION RALLY FOR THE TROY MILLAGE—TDC SUPPORTING THIS EVENT IN LIEU OF OUR FEB 17 GENERAL MEETING

NEWS FROM OTHER DEMOCRATIC AND ALLIED GROUPS……………......................5

• JUST THE FACTS: THE TRUTH ABOUT THE TROY MILLAGE

EDITORIALS…………………………………… …………………..……………...8

1. TROY AND GOOGLE

2. FRUSTRATION, DEBT, AND TROY

3. SOME UNFORESEEN IMPLICATIONS OF THE SUPREME COURT DECISION ON ‘CITIZENS UNITED’

Put together by volunteer labor working at home in our “spare” time

 

 

Current Events

TLC Public Rally For The Millage, Tuesday Feb 9 at 7:00 P.M.

The Troy Leadership Coalition in conjunction with the youth-created ‘Vote Yes on Troy Millage’ Facebook page is pleased to announce a Keep Troy Safe rally at the Troy Sports Center (1819 E. Big Beaver, west of John R), 7 p.m. Feb 9, 2010.

Meet the youths that created the most active blog on the Troy Millage issue.

Come find out what you can do to help get the millage passed so we can Keep Troy Safe and Save the Troy Library, Community Center, Museum and Nature Center. The public is welcome and there is no admission charge

The Troy Democratic Club is supporting this event in lieu of our General Meeting originally scheduled for February 17.

There are so many events leading up to the election on February 23rd, the Board felt this was a good way to collaborate with TLC without consuming another one of your evenings. Please join us for information, fellowship, and refreshments to learn what else we can do to bring success for the February 23 Millage Election!

JUST THE FACTS: THE TRUTH ABOUT THE TROY MILLAGE

Provided by members of the Troy Police and Command Officers Associations -Vote February 23rd!

Is it true that although the City millage rate may increase by up to 1.9

mills, my overall 2010 tax bill will still decrease compared to 2009?

• Yes, assuming no changes to other taxing jurisdiction millage rates, except for the 1.9 M.ill City proposal. There are examples the effect of the 1.9 Mill proposal on eight different valued homes available on the City of Troy website (www.troymi.gov).

How much wil'l the increased millage cost me?

" The estimated average residential 2010 Taxab!e Value wil! be $103,000.

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If the millage does not pass, the average resident will see an overall reduction in the total tax bill of $430.

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If the 1.9 millage passes, the average resident would still see an overall reduction in the total tax bill of $392.

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This amounts to a difference of $38 over 2009 City levy.

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Over the five-year period in which the millage will be in effect, the average resident will pay approximately $130 in increased taxes to maintain most City services, including police and fire service.

I keep hearing that my City taxes on my home will increase 29% with

the passage of the proposal. (;an that be true?

• No! Your City tax bill will not increase by 29%!!! While the Operating Millage may increase by 1.9 Mills with the passage of the proposa~ , Operating millage is only 70% of the total City taxes you pay. You also pay Capital, Debt, and Refuse taxes to the City. The current total City millage rate is 9.28 Mills. Taxes are a function of Rate (Mills) times Value (Taxable Value), or T =R * V. This is important to understand.

A 1.9 Mill City increase is 20% above the 2009 'Rate' , not 29%. However, coupled with an estimated 12% drop in the average Taxable 'Value' the actual change in City taxes is 3.4%. ($1,151.54/ $1,113.73 =1.0339). Not 29%, not 20%. It's 3.4%. While the Rate may increase by 1.9 mills, the Value has decreased. Thus, the overall change is neither 29%, or 20%, but 3.4%. And this is only on the City portion of your tax bill, which comprises only 27% of your total tax bill (30% with millage).

How does the City of Troy's millage rate compare to other full service cities in Oakland County? And how would it compare if the 1.9 Mill proposal passes?

• Troy has the lowest millage rate of any full service city in Oakland County. If the 1.9 MiI~ proposal passes, Troy would have the 3rd lowest millage rate of any full service city in Oakland County.

Why all of a sudden do we need to make these difficult decisions?

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One major reason is the State mandated a switch to a i-year sales study for commercial/industrial properties This moved the projected reduction in Taxable Values up 2 years.

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Real estate property values have declined dramatically causing a significant decline in the City's primary revenue source.

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While the bulk of the residential foreclosure crisis has passed, bank sales of those foreclosed properties have forced a further reduction in residential Taxable Value.

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Real estate property values are expected to continue to be flat and not increase.

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State-shared revenue continues to decline.

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Two years ago City Management communicated that the City was heading into difficult financial times .

Will the City really need to close the Library, the Museum, the

Nature Center and the Community Center as well as layoff 47

people in the Police Department if the millage fails? Is this just a

scare tactic?

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Yes, if the 1.9 millage proposal fails, City Management will submit a budget that will close the

Library, Museum and Nature Center, and will lay off 47 police employees.

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Yes, if the 1.9 millage proposal fails, City services in all areas wili lbe cut to a bare minimum, and

the quaiity of life services and public safety will, in fact, be dramatically impacted.

• No, it is not a scare tactic.

What has the City done over the past several years to cut costs?

Staff Reductions

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Reduced workforce by 63 fulil-time employees in the last 6 years.

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This equates to almost 13% of the full-time workforce.

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The 13% reduction includes a 5% reduction in Police Department staffing and 17% in non-Police areas.

Changes to Employee Health Insurance

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Eliminated Traditional Coverage; plan options include HMO or PPO starting in 1992.

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Premium cost-sharing by employees.

Changes to Employee Pension Plans

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Defined Benefit (DB) Plan replaced with Defined Contribution (DC) Plan for new hires in all employee groups, starting in 1998.

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Employer Contribution to DC Plan reduced for all groups starting in 2003.

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Retiree Health Insurance replaced with Retiree Health Savings (RHS) Plan for new hires in all

employee groups starting in 2006.

Changes to Employee Benefits

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Eliminated longevity pay for new hires for all empJoyee gJ OJJpS beginning in.1993.

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Eliminated tuition reimbursement for non-union employees in 2008.

Other Efforts to Cut Costs and Generate New Revenue

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In the face of this financial challenge , the City's 6 unions have expressed a willingness to negotiate wage and benefit concessions. Several, including police employee unions, have already agreed to these concessions.

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The City win utilize Federal Energy Efficiency and Conservation Block Grant funds to make a variety of efficiency upgrades to City facilities including heating and cooling improvements and purchasing hybrid vehicles.

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Seeking vendor and consultant concessions.

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Reduced operating supplies.

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Restricted employee training and associated costs.

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City departments have implemented innovative ways to generate new revenue, including increasing administrative fees.

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Troy's Fleet Division contracts with 7 neighboring communities and the Troy school district to maintain and service their vehicles.

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Troy Police provides lock-up, dispatch and animal control services for the City of Clawson and

negotiations are underway with other communities to provide similar services.

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EDITORIALS:

Editorial 1: TROY AND GOOGLE

There are two types of companies. In traditional companies, only a relatively small number of (white collar) employee are involved in ‘adding value’ to the product via design and engineering. Most (blue collar) employees in these traditional companies are involved in manufacturing or assembly or shipping, and are viewed by managers as a ‘cost center’. In these traditional companies, a sign of efficiency would be to keep the lower level ‘white collar’ and all the “blue collar” costs as low as possible. Of course, unions were formed so that workers could negotiate with management from a more even level. GM is a good example of a traditional company. When John Witt, who spoke for the Anti-Save Troy position during the recent TLC Forum, made very clear his position that the City was not cutting its employee’s salary and benefits sufficiently; he was effectively acknowledging that he views the Troy city employees as only adding cost to the city, as being effectively a ‘cost center’ and subject to cuts. This is what people who state that “Troy should be run like a business” usually mean. He derided the furlough days accepted by the several public safety groups as not being a deep enough cut. And he used his prior experience as a management-based labor negotiator to (allegedly) substantiate his opinion. The facts argue otherwise.

What his comments actually revealed is his narrow view of modern American business. For he completely ignores the second type of company: the type in which almost all the employees, regardless of collar color, add value to the product. Google or Apple are prime examples of this type of modern business, in which almost all the employees are a ‘profit center; and they are absolutely not vulnerable to cost cuts. What is diagnostic about these companies is that almost all their profits stem from the creative Imagineering of their employees. An Apple iPhone contains ~$175 worth of parts in it (assembled by low wage Asian workers) but costs AT&T ~$600; thus 71% of the sales price represents Apple’s gross profit – and that is due to the creativity of Apple’s domestic employees. The newly released iPad is likely to follow the same path. No wonder they’re so profitable! There is still a hierarchy in these companies – no one doubts that Steve Jobs leads Apple. But it is flatter and works in both top->down as well as bottom->up and side<->side modes. And Google goes Apple one better, for Google doesn’t even make anything but rather uses its algorithms to create enormously profitable services in the form of searches and collects on the ads. Google is famous for treating its employees in what some might seem as a luxurious manner. If John Witt proposed to increase Google’s efficiency and profits by cutting their employee’s salary and benefits, they would laugh at him for his ignorance and show him the door.

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There are two types of cities. Cities are organizations just as are companies. There are traditional cities and there are modern cities. The traditional type of city performs traditional services in a non-efficient manner, and doesn’t deliver full value to its citizens. It usually relies on a top-down, hierarchical command style of control whereby a few elected and/or appointed individuals decide all the details of everything that will be done by the many minions and hired hands. Cost cuts are routinely made by firing or furloughing these ‘blue collar’ employees. New Orleans or Detroit may serve as examples of this type of high-tax, low-value city government. The modern city, on the other hand, provides both traditional and innovative services in a forward looking fashion. There is an interactive collaboration by the City Manager with the employees so as to pragmatically determine the best way to deliver services to its residents. Columbia, MD and Troy are examples of modern low tax/high service cities. Troy is an exemplary city as judged by all the awards and citations the City’s employees have won for we citizens, and I will not enumerate them again here. Citizens who have taken the Troy Academy series of classes have seen first-hand the efficient manner in which the City delivers its services.

But surely an efficient city should be efficient even if some people are laid off? Let us use the Troy Police Dept. as a test case. The Troy Police Dept is particularly well known and respected for their efficient efforts in keeping this city the safest city in Michigan. But if the millage fails, then the City will lay off 47 police officers (25% of the total) plus 4 Fire dept personnel. In the Police Dept alone, this will (according to slides 44-47 of the City Manager’s Report to Council of 9 Sept 2009) entail the elimination or reduction of:

• one road patrol shift,

• animal control,

• juvenile control unit,

• traffic safety unit,

• criminal intelligence unit,

• narcotics enforcement team,

• community services section,

• public information officer,

• directed patrol unit,

• special investigations unit,

• investigations supervisory personnel,

• training section

The Troy Police are efficient because they are composed of an integrated network of specialized units working together. If we eliminate or reduce all of the above, then we will have a broken network. And there is no way that a broken network can function as well as a complete network. The remaining police officers will have to do without the support services that modern professional police practice dictates as necessary. Even if their morale is not shaken, we will have taken away their tools and we should not be surprised if their effectiveness drops. If you were a police officer, would you want to

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do without your criminal intelligence unit? Or your narcotics enforcement team? And if you would not want to do without such support, then why do you think your police can do without them and still maintain their prior high level of service?

• If you are a small business owner, do you want the Troy police to be less efficient in guarding your store or office against burglars or shoplifters?

• If you are a concerned parent of a teenager, do you want the Troy police to be less efficient in keeping an eye on rambunctious kids and steering them away from trouble? Or would you rather have to raise bail for your son or daughter who did a stupid action because they were hanging out on the corner, instead of at the Community Center?

• What makes you think that our well-trained police officers will not be recruited by other cities? What makes you so sure that we will not lose to other cities all the experienced individuals on the force on which we have spent so much time and money to train? They are good. Why should they not go to a city that appreciates them?

If the cuts to the Troy Police listed above are the lightest to any unit, and their efficiency falls, then we can only imagine how the efficiency of the entire City will fall if the millage fails. DPW? Shovel your own street. Library? The academic performance of Troy students will fall and fewer scholarship dollars will flow to your children or your neighbor’s children. Pay your full tuition. And so forth. We will lose the premium services that distinguish Troy and have made it a destination city. If the millage fails, Troy will become a great place to be from.

All this so you can save some money? How much money will you save if you vote against the proposed 1.9% millage? Despite the false claims of the Anti-Save Troy movement, Troy delivers these services with the LOWEST millage rate of any full-service city in Oakland County. If the 1.9 mill proposal is passed, Troy would have the 3rd lowest millage rate of any full service city in the county. Passing the millage and SAVING TROY will cost the average homeowner ~$38 in the first year and probably ~$130 over a five-year period, after which the tax will expire. Should the millage not pass, then your services will collapse. The ~12% premium your Troy house enjoys because it is in a low-tax, high-service city will disappear. Your house will lose an additional 12% of its value. All this to save $130 over the next five years? Cutting off your nose to spite your face does not make fiscal or emotional sense.

We should emulate Google and do the exact opposite of what John Witt and his ilk advise us to do. Neither Google nor Apple would fire their employees as a cost cutting move, for it would seriously endanger their ability to support their present and future customers. Their CEOs know that their people are their greatest asset. We should recognize that Troy is in fact a high-service/low-tax city, and that we have the best of two worlds now. We should SAVE TROY by voting for the proposed millage!

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Robert Arking

EDITORIAL 2. FRUSTRATION, DEBT, AND TROY

Watching a televised recent meeting of the Troy City Council, I heard a woman say during the Public Comments section that she was fed up with the trillions of dollars in debt that the Federal Government is accumulating, that she was tired of forking over her family’s money for bureaucrats to waste, and so she was going to vote against the proposed Troy millage. I agreed with the first two of her complaints. But the third one floored me. On the face of it, this is a nonsensical complaint since neither this nor prior Troy City Councils had anything to do with increasing the Federal budget deficits or national debt. Not voting to save Troy because your money may be wasted in Washington may relieve her stress and anger, but it does nothing to improve either her local environment or her financial condition.

This woman is not alone in having these feelings. I heard other angry or frustrated people make statements in which the facts they presented were demonstrably wrong, and others draw conclusions which were not supported by any of the comments they made. Just because someone says something is true doesn’t make it true. And they should be held to account – not for their anger – but for their loose facts. Basing actions on falsehoods doesn’t do teenagers any good, nor does it benefit their frustrated parents. At this meeting, Bill Cowger did in fact draw public attention to the false statements being passed off as true, and pointed out that the perpetrators should not be allowed to continue with their erroneous statements.

Most of us were taught to be polite and courteous, and to avoid hurting people because of their opinions. They are entitled to their opinions but they are not entitled to make up their own facts. The Flat Earth Society proclaims that the world is flat (like a dish) and the only thing that keeps the oceans from spilling over the rim is a circle of giant icebergs that holds in the water. But just because they say such a wrong notion does not make it true. They can say the world is flat but they must be challenged on the truthfulness of their alleged ‘facts’. And the frustrated people who want to vote against the proposed Troy millage because they claim our taxes “…are going up and up, and spending is out of control” should be challenged on their facts, as follows:

• Troy taxes have been falling since 1973, when they reached their peak value of 15.0 mils. As the city developed and value increased, the taxes were lowered.

o In the past twenty years, Troy taxes were cut 9 (nine) times, in 1989, 1990, 1991, 1992, 1993, 1995, 2002, 2006, and 2007.

o In that same twenty year period, they were raised only once, in 1996.

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o Troy has levied the full legally allowable Operating and Capital Millage only once, and that was in 2008, after it had been reduced by the voters to 8.10 mills. .

o IT IS NOT TRUE TO SAY THAT TROY TAXES ONLY GO UP AND UP WHEN THEY ACTUALLY MOSTLY GO DOWN AND DOWN!..

• Troy spending has been cut back ever since 2003

o City workforce has been reduced by 63 fulltime employees (13%)

o Eliminated traditional health coverage, current plans include HMO/PPO

o Pension plan changed to cheaper defined contribution since 1998

o Retiree health insurance replaced with retiree savings plan in 2006

o Longevity pay eliminated in 2003

o Tuition reimbursement eliminated in 2008 for non-union employees

o Several unions have agreed to furlough days

o Reduced operating supplies

o Restricted employee training and associated costs

o Implemented innovative ways to do contract services from other cities for increased revenue from sources other than we taxpayers.

o IT IS NOT TRUE TO SAY THAT TROY CITY SPENDING HAS CONTINUED TO INCREASE AND THAT IT IS OUT OF CONTROL WHEN IT ACTUALLY HAS BEEN STEADILY REDUCED SINCE 1998 WITH NO EFFECT ON OUR SERVICES!

When our fellow citizens use false facts to support their frustrations, we have no choice but to politely call them out on it. Do it by using the factual bullet points above to point out their inaccuracy and mendacity. We will likely not convince them but what about all the quiet bystanders who only hear the frustrated voice of a poorly informed citizen. LET THEM HEAR YOUR VOICE -- AND THE FACTS.

Robert Arking

EDITORIAL 3. SOME UNFORESEEN IMPLICATIONS OF THE SUPREME COURT DECISION

Many observers have commented on the naïveté of the Supreme Court decision regarding the role of corporate money in politics. The below comments were written by a guest writer who is an economist with decades of consulting experience for large and mid-size U.S. and foreign firms. That these comments differ from what most of the commentators say is their point of interest. That, and the folk wisdom “Things which you do not hope happen more frequently than things which you do hope” (Titus Plautus, ~200 BC) R.A.

1. Under the Foreign Corrupt Practices Act of 1977 (15 U.S.C. 78dd-1, et seq.) US firms are subject to criminal or civil actions for bribing foreign politicians or officials. No one could argue that this is a perfect piece of legislation, perfect laws do not exist. It may have placed US corporations at a competitive

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disadvantage internationally against their ethically challenged competitors, but it has also protected US firms from endless extortion by politicians and officials at all at all levels of government. “I’m sorry, we can’t do that for it is a crime in our country”, has become the standard reply of American businessmen in the face of ubiquitous demands that the wheels be greased. Up until this Supreme Court ruling US corporations enjoyed similar protection from political extortion by US politicians requesting campaign contributions. The political and governmental interests of corporations have never been along the lines of an unrestricted free market versus universal socialist planning. Like all asset owners everywhere, corporations are interested in much finer points of government actions as they affect their property rights, their cost of operations, and their sales (specifically who wins which government contract to provide exactly what goods and which services). As Jesse Unruh said, “Money is the mother’s milk of politics”. And now politicians from the federal government to the smallest township have a lot more clearly identified mothers. The political system now has unrestrained incentives to expand the role of politics into all and every aspect of the economy. The movement will not be sudden but the competitive force amongst politicians driving them in this direction will be irresistible. The Left fears that Corporations will own the government. I fear that the role of politics within the economy will increase without limit. In a few years traditional K Street lobbying will look like a quaint intellectually academic exercise. The Republican Party fans of Ayn Rand who may believe that this Supreme Court has acted on behalf of John Galt should think again. There is nothing in this ruling that favors honest businessmen interested in open competition in an unregulated competitive market. This ruling only helps the likes of James Taggart and it is his world that we are now heading toward . 2. I am not worried about the Conservatives’ romantic notion of Corporatism, but rather about the extortion of businesses large and small by politicians. With all barriers to corporate involvement in the political process removed, corporations will quickly find that what matters is their ever more competitive involvement in politics, and not in the market. We have a two party system which will also find that it will have to respond as well. Politicians will quickly realize that pervasive involvement in the economy is the best way to maximize the political money that can be extracted from the economy. This decision does for politics what the disappearance of all restraint on executive pay has done for business. Just as executives are primarily interested in how much money they can legally take out of their firm and place into their own private accounts, so politicians will now be interested primarily if not entirely in how much government power they can use to drive money into their campaign process. Liberals tend to have a romantic notion about what government is capable of doing, while Conservatives have equally romantic ideas about the

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workings of the market. But reality is never very romantic. This ruling, and the

ones that will logically follow from it, increases the incentives on politicians to

move into the mob’s traditional business protection racket. Sure, some

corporations will be really good at using politics to make money and some

politicians will be real dupes, but no business will have any refuge from politics.

All business strategy will be political strategy. But then Conservatives may say,

“Hey, that is what American politics and business have always been about”. In

which case, of course, they will then be in complete agreement with the radical

Left.

3. Now that all corporate entities have been forced to become active players in

hard knuckles politics whether they want to or not, and now that every business

of any size is open to political extortion if they do not open their pockets to any

politician who is in a position to curtail their political interests, then it has – alas

- become obvious that the next stage in this country’s accelerating deterioration

will be the corruption of the court system. Salvaging any resemblance of good

government out of Congress appears to be a lost cause now that Latin style

minority party obstructionism has become business as usual; and since the

triumph of incompetence in most executive administrative departments is also

the norm; this leaves the judiciary as the last branch standing. Since the

decisions and actions of the other two branches seem to have become

commodities to be sold to or extorted from the highest bidder, the courts would

seem to be the next leg to crumble. There is an established though not universal

tradition of corrupt judgeships easily purchased and so there is a foundation for

cynical acceptance of such a trend. Any lawyers who might speak out against

such a trend could easily be denounced as anti-American, while those lawyers

simply dedicated to helping their clients achieve their objectives could

seamlessly make the transition to financially based legal deal makers. Police

departments would be quick to understand what was happening and would

adjust accordingly.

The interesting political question is whether there would be public dissent and, if

so, how would it be managed? Should there be protests of any kind, it is

doubtful that the press, what there is left of it, would cover them. As the Chinese

have demonstrated, the internet is easily filtered and cleansed. The only risk

would be hubris on the part of the controlling elite, or their children, that in some

way might offended or outrage the masses. Religion and entertainment seem

more than adequate to keep them pacified. However, this does suggest potential

alternative bastions of power and the possibility of interesting politics. All of

this, of course leaves it up in the air what course the military might choose to

follow

Robert Avila

FutureCrunch LLC., NYC