Dear Farmington Residents,

For those of us that grew up in Michigan, we have experienced turbulent economic cycles and survived.
I believe this developed a toughness which guided us through the last several years as the automotive industry restructured. All organizations, both private and public, made substantial and necessary changes to adapt during these difficult economic times.

The City of Farmington made its share of changes with personnel reductions, employee benefit changes, and work restructuring to improve efficiency. The intent was to maintain the overall millage rate, maintain the same high level of services, and maintain our investment in our infrastructure. City Administration felt we were on our way toward achieving this objective but now, in late 2008, it appears we need to do much more.

The contraction of the financial markets that started in the fall of 2008 has had a devastating impact not just on southeast Michigan, but nationally and even globally. One of the consequences is the dramatic rise in home foreclosures. In 2000, the City of Farmington had one recorded home foreclosure. As of December 2008, there are seventy (70) homes in foreclosure within the City of Farmington.

The good news is that relatively speaking, this rate is low compared to many communities in southeast Michigan. The bad news is that this is a dramatic jump and it impacts our community in many ways. Another consequence is that home owners realize that the dramatic changes in the economy have dramatically reduced their property values. In 2008, for the first time in over fifty years, the City of Farmington saw its taxable value drop. We anticipate that this will continue for a few more years.

The home foreclosure problem is a challenge that municipalities have not experienced and really don’t have a good model to address the problem. The problem manifested itself in a number of forms. Aside from the trauma of families being displaced from their homes, the problem resulted in declining property values and property maintenance. Given the wide reaching impact of home foreclosures, there isn’t much an individual city can do to change the overall housing market.

What we can do is focus more on property maintenance on homes that have been foreclosed and abandoned. With enhanced code enforcement focused specifically toward these homes, we feel the city can help mitigate the impact of declining property values. We also want to maintain the perception of Farmington as a safe and desirable place for families. Relying on historic real estate principles, all things being equal, homes in a safe and well maintained community command a higher price.

The City of Farmington is working to develop a program that is focused on this problem. The purpose of the program is to improve the aesthetic appearance of abandoned and foreclosed homes, to help improve the property values of surrounding home owners, to make sure that once the home is reoccupied that it is in a habitable condition, and finally to make sure that the program is structured so that it is not a burden on tax payers.

The City Council in early 2009 will be enacting ordinances designed to implement this program. We will communicate its details further in the quarterly newsletter that is distributed with the utility bill, on the City website, with newspaper press releases, distribution to the Neighborhood Watch groups, and programs on Channel 15 Brighthouse Cable Television.

As mentioned earlier, our budget objectives are to maintain the high level of services to residents and businesses, to maintain our commitment to improving our infrastructure, and to maintain our overall millage rate. Certainly, given declining property values, and that property taxes represents 56% of the source of funds for the General Operating Fund, we have much more to do.

In early 2009, City Council will be considering further budget reduction alternatives. To date, we have reduced staffing levels and made changes to employee benefits which allowed us to maintain service levels and infrastructure investment. The challenge to continue to meet these objectives will be much greater but it is imperative that we find a way.

We greatly appreciate the community support we have received over the years. It is what makes Farmington a great place to live and work.

Vincent Pastue
City Manager