On Thursday, January 8, 2009, Wolverine World Wide (WWW) announced the pending closing of their downtown tannery facility. Since that time, I have been working with WWW to identify the many issues that will be facing our community as the tannery operations are phased out. Initially, the closing of the tannery will reduce the City’s revenue within the sewer fund by approximately 25%. The sewer fund is operated as a separate “enterprise fund,” which relies on sewer rates and charges to fund operation and maintenance of the sewer collection system, lift stations and the newly constructed PARCC Side Wastewater Treatment Plant. We have developed a rate study model showing the rate impact of the tannery closing. I cannot put it any other way but to say that the impact is staggering. According to the preliminary model, it is expected that once the tannery operations are fully phased out that we will need to increase rates by approximately 25%. This equates to approximately $10 per month for the average residential customer. The budget that was built includes very little investment ($50,000) for capital improvements related to the sewer system and the elimination of one (1) position. These numbers are still very preliminary and we will continue to work closely with WWW to identify options for reducing this financial hardship.
From a property tax standpoint, our preliminary numbers would indicate that the City could lose approximately $105,000 in property tax revenue. There are many variables that go into this analysis such as the timing for the potential redevelopment of WWW’s downtown campus. The impact on property taxes cannot be fully determined until we have a detailed schedule identifying the time frame for demolition of the existing buildings on site. I believe that the negative impact on property taxes will be temporary and ultimately we will see complete redevelopment of the tannery property and adjoining facilities into an extension of our downtown business district.
I will continue to keep our residents and business owners apprised of the latest developments through periodic postings on our web page and through my blog. Of course, if any one has questions regarding the impact on our community as a result of the tannery closing, please do not hesitate to contact me at City Hall or via e-mail at email@example.com.