In East Lansing Budget Battle, It’s Arts Versus Social Services

Above Clockwise from upper left: Mark Meadows, Erik Altmann, Aaron Stephens, Ruth Beier, Shanna Draheim, Tom Yeadon.

Council Member Ruth Beier said it was time to retract the claim that East Lansing is the “City of the Arts.” Mayor Pro Tem Erik Altmann agreed. And in the end, Haven House, an East Lansing shelter for homeless families, was awarded $7,000 in special funding – but not without an awkward moment for the City Attorney, related to the infamous retaining wall.

All that happened at this Tuesday’s pair of East Lansing City Council meetings.

This Tuesday’s 5 p.m. budget work session of Council focused on the budget for Parks & Rec. Just as the meeting appeared to be ending, Council Member Aaron Stephens conveyed a wish – which he endorsed – of the Arts Commission. (Stephens is the Council liaison for that commission.)

Stephens asked that cultural arts grants funding be increased from $10,500 to $17,500.

These are funds doled out annually by the Arts Commission to support local arts programming, including, for example, the East Lansing Art Festival, the East Lansing Film Festival, the Summer Solstice Jazz Festival, Pump House Concerts, and more. There are always more requests than the grant funds can cover.

Along with Stephens, Assistant Director of the Department of Parks, Recreation & Arts Wendy Wilmers-Longpre explained that the cultural arts grants budget used to be higher, and that it has been flat for many years.

But Beier objected to the idea of increasing funding for cultural arts grants.

Beier referred to Council’s earlier tough decision to completely eliminate funding to all social service agencies (except Capital Area Housing Partnership), saying to Stephens, “You cut all those grants and you have the temerity to ask for funding for the arts? That makes us look like heartless humans.”

Stephens asked, in response, why the City is increasing money for communications (public relations) while cutting social services.

Beier responded that an arts program is not needed to run a city.

A tense discussion ensued, with Beier saying that if more money was potentially going to go to the arts, she wanted to reopen the discussion of the human services budget.

Altmann agreed. He said that much time and energy was spent convincing citizens to vote for the income tax, “and this was not part of that discussion.” He said that what Stephens was looking to do – increase funding to arts when this had not been specifically put into the income tax proposal – “makes people not trust government when we ask for new revenues.”

Stephens said that Lansing gives $140,000 in arts grants, and, “If we don’t invest in the arts, I don’t think we are a City of the Arts.”

“I suggest we retract that claim,” responded Beier, with Altmann agreeing.

Council Member Shanna Draheim noted that the discussion of the Parks & Rec budget involves extensive discussion of specific tradeoffs in terms of what will or will not be funded. She alluded to the fact that the Parks & Rec department is, in fact, the Department of Parks, Recreation & Arts, even though the discussion up to that point had focused heavily on funding for sport-related activities.

Beier then brought up the Percent for Art program, which matches funds from developers of new East Lansing projects with funds from the City’s budget to provide for public art works.

According to the Percent for Art law (Ordinance 1339), each year the City Council must appropriate into a Public Art Fund “an amount equal to one percent of the cost to the City’s general fund of all public facilities or city capital improvement projects unless public art is not legally permissible due to the constraints imposed by the funding mechanism.”

Finance Director Jill Feldpausch indicated there is currently about $88,000 in the Public Art fund, but said it would soon go down by $50,000. That’s the cost of a new sculpture set to be installed in Valley Court Park, called Lemongrass.

The Percent for Art law doesn’t allow for using the Public Art Fund for festivals and other live programming, so that money can’t be shunted to use by, say, the festivals. Beier criticized this law, saying East Lansing should not be the City of Arts but the City of Aspiring Sidewalks.

“I like art, but we can’t fund the pensions,” she said.

Altmann said it certainly seemed better to spend $7,000 (the amount by which Stephens proposed to increase the cultural arts grant budget) on services to help homeless people get out of the City’s parking lots.

Mayor Mark Meadows suggested that the issue of cutting social service funding versus the issue of what to fund from the City’s Parks, Recreation & Arts budget was sort of apples and oranges, given the two pots are for different purposes.

He said the issue was whether to increase the East Lansing cultural arts programming, and said he did not see a problem with the idea of the $7,000 increase. But, he said, he would like the Arts Commission to take over running the local festivals, something he has said before.

But Beier was not satisfied, calling the cutting of social service funding while increasing art funding “bullshit.”

Meadows answered, “I don’t think it is bullshit. I think it’s a legitimate request.”

“They are all legitimate requests,” answered Beier.

So ended the 5 p.m. budget meeting.

Council then moved on to the 7 p.m. meeting, where the issue came up again during discussion of the last items on the agenda. That involved discussion of what the City should do with the approximately $500,000 in funding coming from HUD for the Community Development Block Grant (CDBG) funding.

CDBG funds can be allocated locally for certain community development activities, including, for example, rehabilitation of housing, rebuilding of sidewalks, street paving, support of local human service agencies, and so on. Each year, HUD allocates a certain amount of funds.

As ELi explained last month, CDBG funding in East Lansing has been controversial not only because of City Council’s decision to stop using CDBG funds for social services like Haven House and Meals on Wheels, but because $134,330 in CDBG funds were illegally used to construct a retaining wall along the City Attorney’s private property.

The retaining wall funding led to a federal fraud lawsuit and the City having to pay back those funds.

CDBG funding is also wrapped up in another local controversy, namely in that it’s being used to pay off the City’s debt on the Avondale Square project.

While Mayor Mark Meadows, who spearheaded that project, continues to defend it as a success, it has cost taxpayers $5 million more than originally intended – with taxpayers subsidizing each Avondale home to the tune of about $200,000.

The proposed CDBG budget presented for this week’s 7 p.m. Council meeting called for directing about $300,000 of the approximately $500,000 in the federal funding to the remaining Avondale Square debt.

But $10,000 was also set aside, in the proposed budget, for Capital Area Housing Partnership (CAHP), a social service agency that works to provide affordable housing. Mayor Meadows sits on their board, and CAHP was also integral in the Avondale Square project.

At this week’s 7 p.m. meeting, one other social service agency came forward to ask that City Council reconsider their needs: Haven House. They asked that, like CAHP, they get a bit of East Lansing’s CDBG pie.

Meadows tried to recuse himself on the vote on this, given that he sits on CAHP’s board. But, against his wishes, Altmann and Draheim voted against recusing him, saying since his service was voluntary, he had no financial conflict of interest.

With a failed vote to recuse, Meadows stayed in his seat and continued with the discussion of what to fund from CDBG. But, he made very clear, he would be “far more comfortable not voting on this.”

Then, City Attorney Tom Yeadon cut in, saying that he now “recollected” that CDBG funds come with strict conflict of interest rules, such that the Mayor had better be recused by Council.

Yeadon did not, in conjunction with this, mention that his own conflict of interest is what caused the scandal and lawsuit over the CDBG funds used to construct the retaining wall.

Altmann thanked the City Attorney “for jumping on that” point about the conflict of interest rules.

The remaining four members of Council passed the CDBG budget as proposed.

Council then went on to discuss the proposed City budget and tax rate.

At that point, Beier moved to take $7,000 out of the City’s fund balance to give the money to Haven House.

That was, not coincidentally, the precise amount Stephens had earlier proposed as an increase for the cultural arts grants budget.

Altmann seconded that motion.

Draheim said she was still not in favor of using municipal budgets to fund external social service agencies. She said it was a hard issue, and that she is a “huge supporter” of Haven House, but said she didn’t want to go back to having the City fund external social service agencies.

The vote went 4-1 in favor of giving Haven House $7,000, with Draheim voting against.

A majority of Council (Stephens, Draheim, and Meadows) indicated that they do want to see $7,000 extra in funding for next year for cultural arts grant programming. The final vote on the Fiscal Year 2020 budget is expected to happen at Council’s meeting on May 21.