Archive for June, 2012

Public transportation in the City of Detroit

June 25, 2012

In late April, Mayor Dave Bing proposed a budget for the City of Detroit that included $250 million in spending cuts. The mayor proposed a decrease in the subsidy to the Detroit Department of Transportation (DDOT) from the current $55.6 million to $43 million in fiscal year 2012-2013 (see related Detroit Free Press article). This week’s blogs considers DDOT ridership and operating expenses from recent years.

According to information the DDOT submitted to the National Transit Database (NTD), in 2010, the City of Detroit allocated $67.7 million dollars to the DDOT, which accounted for 40 percent of the DDOT’s $168 million operating expenses.  Note that NTD information is reported by calendar, not fiscal, year.

This graph displays the DDOT’s operating expenses from 2000 to 2010. Operating expenses increased from $155.9 million in 2000 to a peak of $189.1 million in 2004. Following 2004, however, there was a decrease in operating costs in each of the following six years. In 2010, the DDOT’s annual operating expense was about $161.5 million, roughly $5 million more than its 2000 level.

Given inflation, this represents a substantial decline in revenues. This is visible in the above graph, which displays each year’s operating expenses, adjusted for inflation. Operating expenses are presented in constant with what the dollar was worth in the year 2000. 

Ridership patterns during the same period are not aligned with those of expenses. For 2000, the DDOT reported 44 million annual unlinked trips. The term “unlinked trips” refers to the number of “passenger boardings.” For example, if someone’s commute required three buses, that person would board three buses during the course of their commute and, therefore, account for three unlinked trips. After 2000, the number of annual unlinked trips decreased each year, reaching a low of 34.7 million in 2004. Between 2005 and 2010, ridership numbers fluctuated. The number of unlinked trips in 2010 was 36.7 million.

Another way to consider ridership is to examine the average weekday unlinked trips. This graph displays the average weekly unlinked trips on DDOT from 2000 to 2010. The same overall pattern is visible: The data on the DDOT’s average weekday unlinked trips and the annual number of unlinked trips reported by the DDOT shows highs and lows in the same years. For example, the years 2000, 2006, and 2009 had higher numbers of unlinked trips that years 2004, 2007, and 2010. However, while there was a 17 percent decrease in annual unlinked trips from 2000 to 2010, there was a 21 percent decrease in the average weekday unlinked trips.

Another way to consider ridership is to examine the average weekday unlinked trips. This graph displays the average weekly unlinked trips on DDOT from 2000 to 2010. The same overall pattern is visible: The data on the DDOT’s average weekday unlinked trips and the annual number of unlinked trips reported by the DDOT shows highs and lows in the same years. For example, the years 2000, 2006, and 2009 had higher numbers of unlinked trips that years 2004, 2007, and 2010. However, while there was a 17 percent decrease in annual unlinked trips from 2000 to 2010, there was a 21 percent decrease in the average weekday unlinked trips.

In previous blog posts Detroit’s substantial decline in population has been highlighted. Viewing ridership data in conjunction with the population reveals that while total ridership has declined from 2000 to 2010, ridership per Detroit resident has increased. In 2000, there were 46.3 unlinked trips per person; there were 51.36 in 2010. Similarly the average number of weekday unlinked trips per person increased from 0.16 in 2000 to 0.17 in 2010. Both of these increases occurred despite real declines in the budget.

For comparison purposes, we present a comparison of the DDOT to the transit agencies of four cities with similar population sizes. Baltimore is served by the Maryland Transit Administration which has a 1,795 square mile service area, in contrast to the DDOT’s 144 square mile service area, which covers little more than the City of Detroit itself. It should be noted that Detroit’s suburbs are served by a separate transit system. In contrast, the service areas of the comparison transit agencies are either regional or metropolitan.

In 2010, Detroit had the second highest operating expenses and ridership of these five cities. Baltimore, the city with the highest expenses and ridership, had approximately 3.5 times the operating expenses and 2.4 times the number of annual unlinked trips as Detroit.

Fiscal Distress in Metro Detroit Part II

June 18, 2012

On this chart, and throughout these posts, the higher the score a jurisdiction receives the more fiscally distressed it is, and this chart compares the City of Detroit’s fiscal distress scores to the average fiscal distress scores of the “first ring” and “outer suburb” jurisdictions for the period 2006-2009. By examining a jurisdiction in relation to an area’s urban core, one creates the distinction between first ring jurisdictions and their outer suburb counterparts.  Metro Detroit’s first ring jurisdictions are those that are geographically adjacent to the City of Detroit and are generally within five miles of the city. Such examples of first ring jurisdictions are Allen Park, Ferndale, and Warren and examples of outer suburbs are Belleville, Clinton Township, and Birmingham. First ring jurisdictions tend to have older housing stock, more demographic volatility, and relatively little room to grow.  In general, these municipalities face a statistically significant greater level of fiscal distress relative to their outer suburb counterparts; this significance has been demonstrated above 5 percent. For the period 2006-2009, Detroit’s fiscal distress score was at least 2 points higher than the average score of the first ring jurisdictions, and more than double the average score of the outer suburbs.

Although “first ring” jurisdictions tend to fare worse fiscally than their “outer suburb” counterparts, the discrepancy is more pronounced for particular indicators.  This chart reveals population loss (Indicator 1*)  to be the apparent primary driver of this discrepancy, and that nearly all first ring jurisdictions are afflicted by it. According to the information, 97.3 percent of first ring jurisdictions are affected by population loss while 39.8 percent of outer suburbs experience it. Another discrepancy is visible for Indicator 4, which focuses on the increase in general fund expenditures as a percentage of taxable valuation. In this case, 16.2 percent of first ring jurisdictions have seen an increase in this indicator while only 2.3 percent of outer suburbs have.

*The fiscal distress indicators are the following:

•Indicator 1: Population Growth
•Indicator 2: Real Taxable Value Growth
•Indicator 3: Large Real Taxable Value Decrease
•Indicator 4: General Fund Expenditures as a Percent of Taxable Value
•Indicator 5: General Fund Operating Deficits
•Indicator 6: Prior General Fund Operating Deficits
•Indicator 7: Size of General Fund Balance
•Indicator 8: Fund Deficits in Current or Previous Years
•Indicator 9: General Long-term Debt as a Percent of Taxable Value

This above chart reveals that nearly all of Metro Detroit’s “first ring” jurisdictions experienced a flat, but high, rate of population decline between 2006 and 2009. During this same time period the outer suburbs saw an increasing percentage in population loss from 2006 to 2008; that number dropped though from 2008 to 2009. This chart also suggests that Wayne County’s relatively poor performance on this indicator (Indicator 1) is due to its relatively high percentage of first ring jurisdictions compared to Oakland and Macomb counties.  Wayne County is made up of about 43 percent of first ring communities while Macomb County is made up of about 19 percent and Oakland County has about 23 percent. Therefore, Wayne County is made up of about 57 percent of outer suburb jurisdictions, Macomb County has about 81 percent and Oakland County has about 77 percent.

Declines in property value and other losses have affected jurisdictions’ real taxable valuation (Indicator 2*). But, unlike population loss, this problem deeply afflicts both “first ring” and “outer suburb” jurisdictions.  The chart above illustrates this parity, and its endurance from 2006-2009.

Public water supply withdrawals in southeast Michigan

June 16, 2012

Michigan derives its water from the Great Lakes Watershed and a portion of this water is withdrawn for public supply.  According to the Michigan Department of Environmental Quality, public water supply refers to the diversion, treatment, and distribution of water for residential, public, commercial, and industrial consumption.  It generally excludes agricultural, thermoelectric, and self-supplied water for industrial use.  This chart illustrates the source of these withdrawals in 2006, the most recent year of verified data.   According to this chart, water from the Great Lakes were used for 76 percent of Michigan’s water supply withdrawals in 2006, ground water was used for 23 percent of the withdrawals and surface water was used for 1 percent.

The vast majority of Michigan’s public water supply was derived from the Great Lakes in 2006, and only small fractions of the total water supply was derived from surface water (streams, inland lakes, etc.) and groundwater.  However, these proportions change when looking at southeast Michigan.  The chart below illustrates the greater reliance on Great Lakes water for public supply in the 10-county region of southeast Michigan.  These counties draw 91 percent of their public water supply from Great Lakes sources, compared to the statewide percentage of 76 percent. A smaller percentage of southeast Michigan’s withdrawals come from groundwater (7%) than the state as a whole (23%).  Reliance on surface water is small and relatively equal to the state at large.

This chart illustrates the disproportionate withdrawals of Great Lakes water by the 10 counties that make up southeastern Michigan. St. Clair and Wayne counties rely the heaviest on public water supply withdrawal.  Public water supply withdrawal data in southeast Michigan are thus characterized heavily by the Detroit Public Water Supply System’s intake plan.  By extension, it is important to note that a county’s withdrawal does not necessarily reflect its consumption.

This chart illustrates the 10-county region’s reliance on surface and groundwater sources for public water supply.  While surface and groundwater withdrawals are not negligible in southeast Michigan, they are dwarfed by Great Lakes withdrawals.  Oakland County withdraws the greatest volume of water from groundwater sources at 22.92 MGD. Washtenaw County withdraws the greatest volume of surface water for public supply at 12.58 MGD.

This chart plots the total volume of public water supply withdrawal by the top four counties in southeast Michigan from 1997 through 2006.  Total withdrawal levels have varied somewhat over time, but not substantially.  Wayne County displays a visible decline during this time frame and, despite strains associated with sprawl and population dispersal in this time span, withdrawals for public water supply have not grown in these counties.

To view information related to pollution in the Great Lakes check back with Drawing Detroit.

UPDATED: Michigan unemployment rates

June 15, 2012

According to new data released by the Michigan Department of Technology, Management, and Budget, Michigan’s unemployment rate for April 2012 was 8 percent. These numbers are not seasonally adjusted. However, according the seasonally adjusted data released from the Michigan Department of Technology, Management, and Budget, the unemployment rate for May 2012 was 8.5 percent, which was .2 percent higher than the seasonally adjusted unemployment rate for April 2012. An article from the Detroit Free Press explaining this change can be found here.

Fiscal Distress in Metro Detroit

June 11, 2012

The Michigan Department of Treasury is required by law (PA 72-1990; PA 34-2001) to assess fiscal health scores for all jurisdictions in the state.  To this end, the department collaborated with economists to develop 10 indicators of fiscal health.  These indicators include measurable trends, such as population loss, general fund expenditures, and declines in taxable valuation. A description of all of the indicators can be found here.  Each year, a jurisdiction may earn one point for each indicator on which it exhibits fiscal distress, for a maximum of 10 points.  Using the most recent year of available data (2009), the chart demonstrates that the jurisdictions in the Metro Detroit tri-county area (Macomb, Oakland, and Wayne counties) earned scores ranging from 2 to 8; a distress score of 3 was the most common amongst all three counties.  The State of Michigan notifies jurisdictions earning scores of 5 and above because they are under a financial watch.  In 2009, nearly one third of incorporated cities in Metro Detroit attained fiscal distress scores of 5 or greater.  This was true of 10 percent of townships and approximately 8 percent of villages.

*The fiscal distress indicators are the following:

•Indicator 1: Population Growth
•Indicator 2: Real Taxable Value Growth
•Indicator 3: Large Real Taxable Value Decrease
•Indicator 4: General Fund Expenditures as a Percent of Taxable Value
•Indicator 5: General Fund Operating Deficits
•Indicator 6: Prior General Fund Operating Deficits
•Indicator 7: Size of General Fund Balance
•Indicator 8: Fund Deficits in Current or Previous Years
•Indicator 9: General Long-term Debt as a Percent of Taxable Value

This chart shows the change in fiscal distress score from 2006 to 2009 for Metro Detroit’s jurisdictions by type of jurisdiction (cities, townships, and villages).  It reveals a decline in the percentage of jurisdictions–across all three types–considered to have the best fiscal health, meaning they received one of the two lowest fiscal distress scores, a score of 0 or 1.  Yet, the percentage of jurisdictions attaining the worst fiscal distress scores of 5 and above (indicating that the categorization of “fiscal watch” or “fiscal stress”) remained relatively low, according to the data.  Between 2006 and 2009, no villages in the Metro Detroit area received a fiscal distress score higher than 5 and no cities and townships received a score of 9 or 10 points.

Detroit exhibits higher levels of fiscal distress than its counterparts in the tri-county region.  This chart shows that, for the period 2006-2009, the City of Detroit consistently scored higher than the average fiscal distress score for municipalities in Macomb, Oakland, and Wayne counties.  Detroit did, however, experience a drop in its fiscal distress score for the years 2007 and 2008—the same time its metropolitan counterparts were, on average, exhibiting increases.

In Metro Detroit’s present fiscal environment, several fiscal distress indicators are more problematic than others, according to the most recent data from 2009. This chart illustrates two indicators that deal directly with taxable valuation—Indicators 2 and 3—are highly problematic across the tri-county region.  Some indicators are more problematic for some counties.  For example, a greater percentage of jurisdictions in Wayne County are afflicted by population loss (Indicator 1), increasing general fund expenditures relative to taxable valuation (Indicator 4), and low general fund balances (Indicator 7) than those in Macomb and Oakland counties combined.  Few jurisdictions demonstrated a problem with general long-term debt as a percentage of taxable value (Indicator 9).

Detroit’s fiscal distress score has been persistently under financial watch from 2006-2009.  During this four-year period, the indicators that consistently characterized the city’s financial distress include population loss (Indicator 1), large general fund expenditures relative to taxable valuation (Indicator 4), low general fund balances (Indicator 7), major fund deficits (Indicator 8), and general long-term debt relative to taxable value (Indicator 9).  Indicators 6a and 6b, which measure prior year general fund operating deficits, contributed to the city’s fiscal distress score in 2006 but were not a factor in 2009.  However, in 2009 the city began to struggle with Indicators 2 and 3, both of which deal with real taxable value declines.  The sole indicator for which the city did not exhibit fiscal distress from 2006-2009 was Indicator 5, which measures current year general fund operating deficits.

None of the Metro Detroit tri-counties were exempt from decline in real taxable valuation (Indicator 2).  This chart shows in the most recent year for which data are available (2009), at least 95 percent of jurisdictions in Macomb, Oakland, and Wayne counties exhibited such declines.  The chart also reveals a consistent upward trend for all three counties over the time period 2006-2009, except for Oakland County which was flat from 2006 to 2007.  This exception resulted in a visible inter-county discrepancy on this indicator that dramatically closed in the two years following. In 2007, 5.3 percent of Oakland County’s communities exhibited declines in real taxable value and, by 2008, the percentage increased to 68.3. In 2007, the percentage was 12 percent for Macomb County and 28.3 percent for Wayne County. By 2008, all three counties saw at least a 35 percent increase in the number of jurisdictions exhibiting a decline. This trend continued into 2009, when 100 percent of the municipalities in Oakland County exhibited declines in real taxable value, as did 96.2 percent of those in Macomb County and 95.2 percent of those in Wayne County.

A key fiscal distress indicator used by the Michigan Department of Treasury is population loss (Indicator 1).  This chart reveals that between 75 percent and 85 percent of Wayne County jurisdictions reported a population loss during the period 2006-2009, with a slight upward trend.  The percentage of jurisdictions in Oakland County reporting a population loss climbed about 10 percentage points from 2006 to 2008 to 58 percent, before declining slightly in 2009.  Macomb County fared best; around 30 percent of its jurisdictions reported a population loss during this period.

A glimpse at Detroit’s crime

June 4, 2012

Since 1987, the number of homicides annually in Detroit has trended downward from its most recent peak of 686 in 1987. For 2011, the 344 homicides recorded by police was an increase over the previous year (310 in 2010). Given the population decline occurring in the City of Detroit – from 951,270 in 2000 to an estimated 685,293 at the end of 2011 – the number of homicides for 2011 (344) translates into a homicide rate of over 50 per 100,000 residents.  Consequently, Detroit’s 2011 homicide rate is at its highest level since 2006 when there were 420 recorded murders.  The 2011 rate was nearly 10 times higher than the State of Michigan and national rates. The 344 Detroit homicides in 2011represent more than half (55%) of all homicides that occurred in the State of Michigan.

The occurrence of robberies generally shows strong correspondence to the local unemployment rate.  In certain cases, such as in 1980 and 1992, the occurrence of robberies increased the year following an increase in unemployment.  However, in 2009, Detroit’s unemployment rate rose to 25 percent from 16 percent the year before. There were about 815 robberies that occurred in 2009 and in 2008 there about 830; this shows a decrease in robberies despite the large increase in unemployment.