In a recent letter to the editor the writer asked several very good questions that deserve a response.

Before addressing the specific questions, a little background on some of my management philosophies might be helpful.

I’ve run my own company successfully since 1970.

In a few months that will be just 40 years.

During that 40 years I’ve managed it through seven distinct economic downturns, recessions, depressions, whatever you want to call them. That’s an average of a severe economic challenge every five to six years.

Each one of those economic events lasted 18 to 36 months.

Let’s call it 24 months each on average that the economy presented a significant challenge.

That’s 14 years out of the last 40, or more than one third of the time, that we’ve been economically challenged in the last 40 years.

Through those times I’ve had two firm policies.

First: We’ll do everything we can to increase revenue, but sometimes it just isn’t possible.

During those times when it’s not possible to raise revenue you must reduce overhead to match your income. This can be done in a variety of ways, such as paying less for material, examining how things are done to see if processes can be changed to become more efficient and, ultimately, reducing staff.

Running any enterprise, whether it’s a business or a city, demands continuous improvement by improving processes and reducing costs.

When I was first elected mayor in 1997, the City of Dowagiac had 88 fulltime employees. Today we have 57.

That’s a reduction of 31 persons (35 percent). We’ve been able to do this with virtually no reduction of services because we’ve invested in computer technology and are continually assessing our processes to see if there’s a better, less expensive, way to do things.

The second cornerstone of my management philosophy in difficult economic times is that you must always be investing for the future or you won’t have a future.

The natural order of things is that they are constantly deteriorating. Whether through use or neglect, things wear out and become obsolete. That process can only be reversed through the investment of time and money.

Without that constant investment, any enterprise, be it a business or a city, will stagnate and decay. The management of any enterprise must be done in such a manner that appropriate investment capital is available at all times.

So, in a nutshell, I always strive to match expenses to revenue and to have appropriate investment capital available.

At the beginning of the 2008-2009 fiscal year the city budgeted a $60,000 general fund deficit. I’m pleased to report that we ended the year with almost a $100,000 surplus.

We did that by improving our processes so that we became more efficient.

That allowed us to reduce staff levels, which combined with other cost-cutting initiatives, wiped out our projected deficit and created a surplus.

The fiscal year we’re in now is going to be even more challenging, but we’re continuing to reduce expenses at every level in every department.

We’re working with other government agencies to combine operations to reduce costs and we’re constantly reassessing our processes to see how we can streamline them to save money and improve our delivery of services.

And we’re continuing to build for the future. The city has acquired several properties over the last few years, including the recent purchase of the former candy store on Division Street and the right-of-way access to the Witko Lakes behind the airport.

The acquisition of each of these properties is part of a strategic long-term development plan for Dowagiac.

We’re already working with private developers and financial institutions to place those developments with “for profit” companies that will do these developments and get them back on the tax rolls at a much higher valuation than the original buildings that are being taken down.

Also, with each of the buildings that the city has purchased, the purchase price has been negotiated to be paid over time and not in a lump sum, which helps with cash flow.

As a side thought, it’s often less expensive to buy assets when times are tough than when the economy is doing well.

Downturns can often prove to be an excellent time to buy for those who have capital.
The purchase of these strategic properties goes back to the management philosophy I stated earlier: Economic downturns are an ongoing fact of life. You can never stop investing for the future or you won’t have a future.

When it comes to buying city vehicles, everything from lawn mowers to police cars to fire trucks is on a fixed replacement schedule.

Years ago the city began setting aside an appropriate amount of money each year to assure that the funds would be available, when needed, to buy the necessary and appropriate equipment; we also started doing that for computers not too long ago.

As a result, the city always has money in the bank to fund these purchases and to make sure our grounds crews, police officers and firefighters have good functional vehicles and that the city’s computers are state of the art. This avoids having to borrow from a bank or raid our general fund for these purchases.

As far as the loss of manufacturing jobs and the viability of the city are concerned, I find this a very interesting dynamic.

While the loss of anyone’s job is a wrenching experience for the person or persons directly impacted, the evolution of the workplace and the types of jobs it has to offer is an ever-changing dynamic.

Historically, Dowagiac has been a blue-collar community whose jobs have been of the traditional manufacturing variety.

As everyone knows, the town built around manufacturing.

In its early history, the Dowagiac Grain Drill Co. and the Round Oak Co., which in 1910 employed about 1,500 people, were two of those early enterprises.

As recently as the 1960s, Rudy/Sundstrand employed more than 1,000 persons. But those days are gone. I would not expect to ever see another manufacturer in Dowagiac employing more than 1,000 people.

What we are seeing instead is a continuing loss of those old-line manufacturing jobs, and, while there will always be some of those jobs, they’re not going to dominate the employment landscape as they once did.

Instead, the largest area employers are now in education, the Dowagiac public schools and Southwestern Michigan College, and health care, Borgess-Lee Memorial Hospital and its physicians group, and the soon-to-be-renovated Dowagiac Nursing Home.

These four entities represent almost 1,000 jobs.

Fifty years ago only Dowagiac Union Schools and the hospital existed, and they had far fewer employees than they do today.

Why is Granger, Ind., just across the state line from Cass County, viewed as such a great place to live?

It’s not because of the manufacturing jobs in their community.

There are few, if any, manufacturing jobs available in Granger.

It’s almost entirely a bedroom community.  I believe instead it’s about the perceived quality of life. Nice homes, safe streets, excellent schools and good recreational opportunities.

As we examine Dowagiac and its inevitably changing employment patterns, for us to be a truly outstanding city where people with a choice will choose to live, it will be because we’ve created a superior quality of life.
That means outstanding schools, health care, housing and recreational opportunities.
All of these endeavors require vision, leadership and capital.

Wherever it’s appropriate, your city government is attempting to provide that vision, leadership and investment.

To run a fiscally responsible city that’s working hard to create a better Dowagiac requires an experienced and capable city manager.

I believe our current city manager is one of the best in the state and is doing an outstanding job.

However, someone with that advanced education, years of experience and proven capabilities isn’t cheap.

We pay our city manger more than most communities pay theirs, but we expect more than most communities, including many much larger than us.

One of the criteria we apply when assessing our city manager’s performance is whether or not he is paying back a significant portion of his salary by his clever and creative approach to managing our city.

The difference between our projected deficit and actual surplus last year more than paid the city manager’s salary.

Lastly, on the issue of property taxes, a relatively small part of your property taxes are for the city.

The majority of your tax dollars go to other entities such as the schools, county, SMC, library, Dial-A-Ride, etc.

Speaking only for the city, we levy less millage today than we did 12 years ago.

In 1997, the city levied 17.07 mills. Today, we levy 16.102 mills.

A number of years ago, voters throughout the state adopted Proposal A, which caps a property owner’s taxable value and limits its increases to the rate of inflation or 5 percent, whichever is less.

For most city taxpayers this has limited their city property tax increases to the State of Michigan’s approved rate of inflations and any voter-approved millages.

Most property in the city has increased in value over the last 10 years, so the actual dollars paid in taxes in most instances has gone up, but the mills levied by the city has actually gone down.

I hope these comments help provide some insight and a better understanding of the management of your city.

I’d urge anyone who has a question or concern to contact me, one of your other elected officials or the city manager or write a letter to the editor. All are effective means of communication.

Mayor Donald Lyons
City of Dowagiac