A2Politico: Ann Arbor Politics Grilled To Perfection

March 8, 2010

The Politics Of Hide & Seek: Finding Money in Plain Sight

Filed under: money — Tags: , , , — A2 Politico @ 5:53 pm
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At the moment, because Ann Arbor City Council and Mayor have for so long rewarded the City Administrator with generous raises, lump sum payments and the ability to turn unused vacation days into big bucks, despite the fact that Ann Arbor’s budget has been sliding inexorably into structural deficit, we have a City government that is run like Italy before the unification of 1860. We have the Republic of Solid Waste complete with a Doge. There is the City State of the City Fleet, and the Kingdom of the Two Sicilys (Water & Sewer). At the moment, the City Administrator Roger Fraser and CFO Tom Crawford present Mayor and Council with financial data designed to help Council members decide whether it’s better to burn to death or freeze to death. (Just for the record, I’m never one to just choose from such false alternatives.) My First Ward Council member Sabra Briere recently circulated a budget priority “survey” that let participants choose between being subjected to the Iron Maiden, the rack, or thumbscrews. Reading her “work” took me back to a bone-chilling exhibit of implements of torture I saw once while living in Rome. 

The correct answer when presented implements of torture is to choose none of them, right? 

But that Mayor and Council members would study their budget documents more closely, as well as the more easily understood CAFR statements, the city’s audited financial statements. Alas, there is a long-standing tradition among our elected officials that they simply choose from among the implements of torture presented to them as the City Administrator and CFO seek to plug the “budget gaps,” even when it ultimately turned out there were no budget gaps in the General Fund, as was the case in 2003-2008. 

Let me tell you a little secret. There are millions of dollars sitting around in the funds of the various city-states of our city government. 

But we can’t touch that money, right? Wrong. Council can pass resolutions to move money among and between the majority of the city’s funds. The exception are funds created for money generated by millages for specific purposes, such as the parks and streets millages. Of course, in 2007, Mayor and Council members did vote to take parks millage money and use it, for instance, to pay for police to patrol the parks. The local chapter of the Sierra Club went at City Council with ergonomically designed pitchforks, and forced the politicos to return the hundreds of thousands of dollars snatched from the parks millage fund. As an example of the penchant they have for moving money between funds, Council and Mayor  ”seeded” the city’s Economic Development Fund (created in 2007) with $2.1 million from the General Fund to pay for 400 parking spots for Google—400 parking spots for the 200 employees they’ve hired, as opposed to the 1,000 jobs they promised to create by 2011. 

Council may move money legally and quickly from among many other non-millage funds. It’s just that the political will is weak, and in the case of most of the current Council “majority,” basic understanding of finance is even weaker. If your Council member starts taking about “buckets,” that is fiscal malarky spoon fed to them by the City Administrator. So it would be entirely possible for Mayor and Council to order the return of tens of millions in fund surplus money to the funds from which the money was allocated, including the General Fund. 

Want a couple of examples from the FY 2011 budget and the city’s audited statements? Of course you do, because it’s almost too incredible to believe.

According to the FY 2011 budget, at the moment, there is a $10 million dollar surplus sitting in the city’s Solid Waste Fund. Yep. Just sitting there, waiting to be spent. How’d the surplus get built up? Solid waste service fees have increased 40 percent since 2006. That $10 million dollar surplus came from overcharging taxpayers. The Water and Sewer Fund is sitting on an equally large surplus, but that surplus can’t be returned to taxpayers because the system has outstanding bonds to pay off. However, Council can certainly decrease the fees charged to residents for water, sewer and storm water service until such time as the surplus is significantly reduced.

This last example is the best one. When you’re strapped for cash, and up to your neck in budget “gaps,” what’s the first thing you do? If you answered, “Spend $6 million dollars on brand new cars and trucks,” you win a new pick-up with those cool rims that spin backwards. In fiscal year (FY) 2009, the city’s Fleet Fund was appropriated $6 million dollars for new motorized bling. Coincidentally, in the same month and year, that’s almost exactly the same amount that was spent to fund the early retirement of 25 of the city’s most experienced police officers in order to “save” money. In FY 2011, the Fleet Fund is asking to spend $8 million dollars on some new, cool rides. According to the FY 2009 audit, the Fleet Fund had a $10 million fund balance, with about $8 million of the fund balance in cash and investments. That’s $10 million just sitting there waiting to be spent. 

That’s a cool $20 million dollars sitting in the treasuries of the various Ann Arbor city government city-states.

You know what I think? It’s time to return these surplus millions to the various originating funds from which they were allocated, including the General Fund. Then, more importantly, it’s time to unify the city-states under a central government through which funds are allocated much more judiciously, and with exponentially more financial savvy. Until these financial and managerial fiefdoms are disbanded, and the departmental multi-million dollar fund surpluses dealt with as equitably as possible, the bureaucracy will do whatever it is allowed to do to feed itself and protect its fund surpluses, including cutting services, raising taxes and selling parkland.

Freeze to death or burn to death? Neither, thanks.

I’d start by making a list of all of the departmental fund surpluses and crafting a plan and a resolution to lower fees so as to make sure departments don’t build up future multi-million dollar surpluses. Surpluses, such as those from the Fleet Fund, and other similar fund surpluses, should be immediately moved to the General Fund, and from there used to fund public safety services. As for the Republic of Solid Waste, I’ll work to return the multi-million dollar solid waste surplus money to the taxpayers in the form of a one-time credit (about $200 per residence). Then, we’ll figure out why solid waste expenses are up by 50 percent since 2005, but our services have been reduced. 

There’s lots to do, but there’s also lots of money to fund our services. It just takes the financial savvy to know where to look. Before Council votes to cut a single service, they need to focus on reallocating the fund surpluses that are sitting there in plain sight.

Popularity: 11% [?]

March 7, 2010

The Politics of Negotiating: You Never Get What You Deserve

Filed under: city council, city services, fire, police, unions — Tags: , , , , , , , , , , , , , , , , — A2 Politico @ 6:50 am
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The following was posted to AnnArbor.com on February 28, 2010:

City officials say it’s been a challenge getting the needed concessions from labor unions, specifically with the police and firefighters unions, whose members enjoy premium-free health insurance.

“We are still struggling with labor contracts that were heavily one-sided that were decided back in the ’70s and ’80s,” said Mayor John Hieftje. “We’ve been working very hard to try to do more. Employees are contributing more to their health benefits, but not nearly what they need to be.”

So, the current serious problems between the current City Council, Mayor and City Administrator and our unions are really the responsibility of Mayor Al Wheeler—D (1975-1978), Lou Belcher—R (1978-1985), Ed Pierce—D (1985-1987) and last but certainly not least, Jerry Jernigan—R (1987-1991)? 

Bollocks.

Fantasies come in all shapes and sizes, and some are more elaborate than others. Mayor Hieftje’s latest fantasy is that our city “is still struggling with labor contracts that were heavily one-sided that were decided back in the ’70s and ’80s” and that he’s been “working very hard to try to do more.”

Let’s make something very clear: The longest serving members of Council, Mayor Hieftje, Fourth Ward’s Marcia Higgins and Margie Teall, along with Ward Two’s Stephen Rapundalo, have among them a collective 30+ years sitting on the former City Council Budget and Labor Committee. In case you’re wondering, that’s the committee that, until this year, oversaw negotiations with the city’s unions. Oh, those elected officials didn’t position themselves across from the union representatives and hammer out agreements. That’s the responsibility of the City Administrator. So, naturally, he relies on a lawyer to do the actual negotiating. A lawyer from the City Attorney’s office? Nope. Ann Arbor’s Mayor and City Council have approved hundreds of thousands of dollars over the past decade to hire consultants to negotiate with the unionized employees.

We’ve certainly gotten what we paid for, if the Mayor is to be believed: one-sided labor agreements. You know why? For starters, until recently the city’s labor union PACs could be counted on for political donations. In summer of 2008, First Ward’s Sandi Smith, Second Ward’s Tony Derezinski, Third Ward’s Christopher Taylor and Fifth Ward’s Carsten Hohnke, all put their hands out and took, collectively, thousands from the firefighter’s PAC. Taking money from a local union group with which you’re expected to negotiate and vote on contracts is a conflict of interest. The donations were perfectly legal, mind you. However, the Council members should have exercised better judgement, propriety and common sense.   

The other reason that we’ve ended up with one-sided labor agreements is that the Mayor, City Council, the City Administrator and the contractors hired to “negotiate” our union labor agreements have negotiated one-sided contracts, and voted to approve one-sided contracts. This comes from a piece about the city’s union woe’s posted to AnnArbor.com on February 28, 2010:

AFSCME President Nicholas Nightwine, who heads up the city’s largest labor union, acknowledged his bargaining unit historically has shared little of the cost of health benefits. For instance, AFSCME employees never paid deductibles for their health insurance until their last contract—and they still don’t pay premiums.

“But when we negotiate a contract, both sides sign off on the agreement,” Nightwine said. “So the city has not given us anything that they have not signed off on giving us. We don’t make our own wages or benefits.”

Nightwine is absolutely right: it’s a well-established rule in business that you never get what you deserve, you get what you negotiate, and our city’s unions have negotiated our City Administrator, Mayor, City Council, and their highly-paid hired negotiating guns right under the bargaining table. In turn, the results of those “negotiations” have been approved by the City Council’s Budget and Labor Committee members above, then by the other City Council members.

At any time in the process, any of our elected officials could have spoken up and asked why the contracts on which they were voting to approve allowed AFSCME employees to skip making contributions to their health care premiums. Of course, that would’ve required studying the contracts to understand them. It might take a law degree to write a labor contract, but it doesn’t take a law degree to read and understand a labor contract. It takes a command of English, patience, and the ability to use a table of contents to get to the juicy parts, such as wages and benefits. 

Yes, it would have caused a ruckus to have pointed out problems in the proposed final versions of the contracts brought to Council for approval, and it certainly would have left the City Administrator red-faced, but what’s more important than negotiating an equitable contract on behalf of the taxpayers? For some, it’s more important to try to sell the public a bill of goods that the problem with union contracts reaches back to the days of platform shoes, Casey and the Sunshine Band, and President Ford. 

Is the cause of the city’s financial mess the result of the pay and benefit packages of some current unionized employees? No, of course not. Overhead unrelated to those salaries and benefits has risen 35 percent ($34 million dollars) since 2006. Annual debt payments have ballooned from $950,000 per year in 2005 to $3.9 million dollars per year in 2010. 

Are the city’s unionized employees a bunch of spoiled brats with outsized pay and benefit packages? As someone with extensive experience analyzing labor agreements for both employers and employees, I can tell you the responsibility for the final version of any contract between our city and its unions rests with Mayor, Council and the City Administrator. Nick Nightwine is absolutely right that AFSCME doesn’t make its own wages and benefits. The union negotiated them. AFSCME officials negotiated the pants off of Marcia Higgins, Margie Teall, Mayor Hieftje, Stephen Rapundalo and Roger Fraser. Not a single other Council member over the past decade has been willing to say that the members of the City Council’s Budget and Labor Committee had no clothes. 

The Budget and Labor Committee was recently split into two entities. Mayor Hieftje took himself off the Budget Committee, but remains a member of the newly created Administration and Labor Committee, along with Tony Derezinski, Marcia Higgins, Margie Teall and Stephen Rapundalo. And now we have the absurd assertion from the five of them that they have “been trying to do more” to bring down costs of unionized labor. Four of them couldn’t do it as long-time members on the Budget and Labor Committee, and Council member Derezinski has the worst attendance record of any member of City Council; he can’t be counted on to show up to meetings, or important votes. 

The firefighters recently gave voluntary salary concessions, and then woke up to read in the newspapers that the deal was for six months, and that there are still layoffs planned to close the ever-present “budget gap.” Negotiating in bad faith, and with more hubris than verifiable factual data, will do little than destroy any hope of working with our city’s organized labor. I expect the City Administrator and current lot of Council members to have little luck winning voluntary concessions from any of the city’s other unions. 

Why should we care if our unionized employees are utterly disgruntled? The Dickensian model of employee management went out with the Triangle Factory Fire, and management science studies from the 1920s that first definitely linked employee morale with productivity. Put simply, low employee morale costs our city millions every year in decreased productivity. The damaged relationships with our unionized employees cost additional millions, because those employees are disinclined to give salary and benefit concessions voluntarily, or to open their contracts in times of serious and real fiscal emergency. 

Since 2003, (with the exception of 2009) city staff has sent budgets to Mayor and Council, and our elected officials have approved budgets year after year which have had projected inflated deficits in the General Fund. When the actual numbers came in, there were General Fund surpluses. The inconceivable consistency in miscalculating General Fund revenues aside, unionized employees are asked to rely on this data during negotiations. It should come as no surprise that they are increasingly disinclined to do, and suspect they are being deliberately fed inaccurate financial information. 

There is binding arbitration in the case of police and fire union negotiation impasses, but in reality Act 312 is a dangerous spin of the Roulette Wheel for any Michigan city. Act 312 does not allow the units to strike. Instead, there is a legally-mandated arbitration procedure. In 2009, Ann Arbor’s patrol officers union went to binding arbitration and won $673,000 in pay raises. 

So what’s the solution? It’s going to take some significant changes in how our city approaches labor negotiations. It’s going to take hard work to repair the severe damage done to the relationships between Ann Arbor and its labor unions. On the up side, there’s a pretty simple formula to ending up with equitable union contracts: first, City Council members must make sure that the City Administrator negotiates equitable labor agreements, then Council members will have to read the agreements carefully before voting in favor of them.

Instead of doing the Hustle, it’s time for elected officials and city staff to take responsibility for the labor agreements they negotiated then voted in favor of supporting.

Popularity: 12% [?]

March 5, 2010

The Politics of Percentages: Public Safety As Political Fodder

Filed under: crime, fire, police — Tags: , , , — A2 Politico @ 2:08 pm
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We got some good news from Police Chief Barnett Jones, according to a piece posted to AnnArbor.com on February 25th. Crime is down. Crime is down nationally, according to the latest FBI Uniform Crime Reports. According to the post on AnnArbor.com, “The Ann Arbor Police Department released unofficial year-end crime statistics for 2009 last week, showing a total of 3,182 crimes in eight major categories: murder, assault, arson, burglary, larceny, motor vehicle theft, robbery and rape.” In typical Ann Arbor politico fashion, the focus was on the percentage. In 2008 there were 3,429 crimes and in 2009 there were, according to the unofficial figures, 3,182 crimes. The difference between the two numbers is, yes, 7 percent. The reality is that in our town in 2009 thousands of people were victimized. 

Here’s a graph compiled by AnnArbor.com showing crime statistics between 2002 and 2009:

Crime

I have a question: why would the Police Department release unofficial statistics? Where’s the fire? Well, the City Council is going to have to close a $5.2 million dollar deficit in the General Fund’s budget. The fiscal year begins in July, and police officers’ jobs are on the chopping block this time; there has been no talk of early retirement for them this time around. In July 2009, after the early retirement of 25 of the force’s veteran officers, Chief Jones was quoted in the Press as saying, “Ann Arbor is just as safe as it was before. I am tired of people saying our community is not going to be safe. We’ve got police officers here that are stepping in and filling the gap. We’ve been cutting police officers since 2000, and has crime run amok because people are leaving? No.” Now, some six months later, he was quoted as saying our city can’t afford to lose a single additional officer or  ”it could hinder proactive policing methods that have helped solve crimes in neighborhoods—like a rash of burglaries on the Old Northwest Side officers investigated and put a stop to this past fall.”

If we have 125 police officers, we’re going to be fine, just fine. If we have 124, well, “it could hinder proactive policing methods.” As for the firefighters, they’re in more trouble than they ever imagined possible, because thus far there’s no one standing in front of City Council saying that with 89 firefighters instead of 90, the response rates will fall below recommended levels, and our insurance companies will jack up policy rates for our homes and businesses. That is, of course, if we don’t roast alive in our flaming boxes waiting for the trucks to respond so that there are the three firefighters required so as to send one of them into the burning building to rescue us. 

We’re waiting longer for fire response, and according to a police officer whom I spoke with, it can now take 60 minutes for the AAPD to respond to a non-emergency call. So say your house is broken into, but the thief is long gone with your television, iPod and computer. The police will come and take the report, but respond more slowly than in past because, yes, we have fewer police officers. So why do we to invest in keeping police staffing levels steady if crime is down? Heck, if and when crime goes up, we’ll just beef up the force to deal with any uptick, right? Wrong.

Public safety services are meant to be both proactive and reactive. In other words, we have police to both investigate and deter crime. The gamble with the decade-long “streamlining” of our police department, then, is that Ann Arbor’s finest won’t be called on to quell disturbances in multiple areas of town at the same time. It’s a calculated risk. We have firefighters to both respond to blazes, and to keep fires that do get started from spreading and causing exponentially more damage. As anyone who has watched a campfire knows, all fires eventually burn themselves out once the fuel has been exhausted. The gamble in Ann Arbor, then, with 90 firefighters, is that the Michigan Theater doesn’t burn to the ground and take the entire block, in the middle of which it sits, right along with it. 

Yes, crime is down is our town, according to the unofficial figures, and that means fewer residents were victimized in 2009. It’s good news, particularly since there was a significant jump in crime between 2007 and 2008. We should keep in mind that the total number of crimes committed in 2009 still outpaces 2007, and that the “downward trend” constantly relied on and referred to by Mayor Hieftje didn’t begin until 2005, and crime spiked again in 2008. So, are we safer because “crime is down 7 percent,” and the Michigan Theater has not burned to the ground?

Yes and no. Why? Because while comparing Ann Arbor  to itself is a somewhat useful exercise, an even more complete picture emerges when we compare Ann Arbor to other communities. First, when you look at the drop reported in the unofficial numbers released by our Police Department as compared to FBI data gathered from towns with similar populations, there’s a different and more complete story that emerges. For example, in cities with populations between 100,000 and 249,999, in 2009 arson was down 10.2 percent, whereas in Ann Arbor arson is up by 7.5 percent. Nationwide, in cities the size of Ann Arbor, robbery was down 9.3 percent, but down by 6.5 percent in our city. Rape was down 3.1 percent nation wide, but in Ann Arbor it’s down 1 percent. On the other hand, assaults and motor vehicle theft in Ann Arbor were down significantly more than in other similarly sized cities around the U.S. Wait before you breathe a sigh of relief. When we look by region, Ann Arbor’s drops in crime play out even less impressively. In the Midwest, rape dropped 7.5 percent and motor vehicle theft dropped 21.4 percent. Had Ann Arbor crime rate decreases kept pace with regional drops, we would have had fewer motor vehicle thefts than reported in 2009, and fewer burglaries. 

To simply announce that “crime is down by 7 percent” overall, to tell citizens that we’re safer, and that crime continues on a downward trend is little but the equivalent of Reaganomics applied to local crime statistics. The reliance on isolated statistics that are compared to absolutely nothing but crime in Ann Arbor itself tells the part of the story that will play well in the Press and with the public—who trust that our officials use such data to communicate meaningful information about the quality of life in our city.

That’s not the case in this instance, and perhaps it would be political suicide to announce that Ann Arbor’s crime rates don’t compare favorably with those of similarly sized cities nationwide in some categories, and that Ann Arbor’s crime rates don’t compare favorably regionally in some categories, but it would be the truth. Right now, the truth is however the data can be spun, massaged and, in some cases, invented. It then becomes the responsibility of citizens and the Press (under the best of circumstances) to investigate the percentages and statistics presented, as opposed to having frank and open discussions about real successes and real public safety problems illuminated by the presentation of comprehensive, as opposed to cherry-picked, data.

The bottom line is that, yes, crime is down in Ann Arbor (unofficially), and that means fewer residents of our city were victimized. However, crime was down even more in other similarly-sized cities, and that brings up some questions about why. Do the crime rate discrepancies between Ann Arbor and those other cities exist because we have dozens fewer police officers than we did a decade ago? 

It’s a discussion we need to have.

Popularity: 20% [?]

March 4, 2010

The Politics of Food: Local, Sustainable and Elitist? (With A Poll)

Filed under: food — Tags: , , , , , , — A2 Politico @ 1:07 am
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On Tuesday, I facilitated two group discussions at the 2010 Local Food Summit. I got an invitation to attend from one of the organizers, and volunteered to facilitate. The Summit sold out, as it were, and 200 participants attended. At the facilitator training session I went to, Jason Frenzel included a draft agenda along with a sheet titled “Dealing With Difficult People.” 

I have about a decade of experience in the college classroom, and about 20 years of experience moderating, facilitating and speaking at a variety of higher education conferences. I couldn’t imagine the Local Food Summit participants would be more difficult to deal with than a college sophomore who has neglected to attend class, turn in assignments, and realizes that a low grade will have an adverse impact on her/his GPA. I miss teaching college sometimes, just not that part of it. 

I led the discussion of two groups of incredibly enthusiastic people. Before we broke up into our smaller groups, there was about an hour of introductory presentations by the organizers. There was the usual whipping the choir into a frenzy, and there was also an interesting presentation that focused on Local Food Victories. Jeff McCabe, who serves on the Board of the People’s Food Co-op,  where I’ve been a member since the 80s, spoke about the local food movement and the challenges it faces.

The first challenge, of course, was made obvious by the composition of the audience. There were 200 people who could take off in the middle of the work day, in the middle of a work week, to attend the meeting—myself included. That’s a huge leg up. Next, there were 200 people who were passionate about local sustainable agriculture. It’s always exciting to be in a room filled with like-minded people. On the other hand, there’s nary a basic assumption challenged at such gatherings of like-minded people. 

For instance, Jeff McCabe talked a lot about the jobs that would be created if those of us within Washtenaw County would just spend 10 percent of our food budget on local food. He wasn’t specific about the kinds of jobs. I know that some of the newer CSAs around Ann Arbor, that have no volunteer time requirement from members, have resorted to using low-paid migrant laborers on their farms. Farming is a brutal business, and migrant labor, just as on larger, industrial farms around the state and country, is being used to improve the bottom line for the local farmers. It’s hard, though, to out your friendly local farmer for using low-paid migrant laborers to pick your local, organic lettuce. I’m not interested in creating these kinds of jobs.

One issue came up in both of the group exercises that I facilitated:

1.  That people have to be “educated” that the local food movement isn’t “elitist.”

Anytime you have to “educate” people about the fact that a movement isn’t “elitist,” the chances are very good that the movement is, well, in danger of being elitist. Who can take off in the middle of the work week to attend an eight-hour-long Food Summit? People with a certain level of job privilege, the unemployed (there were scholarships available to attend the event), retirees, and people for whom the Summit was a working event, farmers, for instance, who had the opportunity to display their food, and share their talents. 

Yes, people need to be educated about the positives associated with eating locally. However, it would be a good exercise to have given those in attendance at the Summit an imaginary family of four to feed, $300 for the month in food stamps, and to have told them to buy local, organic, non-processed food. Poor people eat what they can get. I volunteer for Food Gatherers (the whole family does), and packing up food boxes is an education. My partner makes deliveries monthly to local distribution centers, and the people are lined up and waiting when the Food Gatherers truck and shipment arrives. The only local food movement at the Bryant Community Center is the line of recipients that snakes past the piles of food to be distributed. Women at a nearby prison grow fresh produce that is picked up by Food Gatherers for distribution. It’s not used at the facility.

Dan Calderone is a friend who is the lead farmer at the Food Gatherers’ garden on Dhu Varren Road, in front of the Food Gatherers building. Last year, Dan grew and harvested thousands of pounds of fresh produce for distribution. Even then, the poor take what Dan gives them, not necessarily what they feel like eating in any given week.

Our family ate strictly local (Michigan/Great Lakes) for six months, and our food bill skyrocketed. We have an 800 square foot raised bed veggie garden, and try very hard to skip the out-of-season produce. Next Spring, we’re joining the few in Ann Arbor who are chicken owners, and I was sorry to have missed the beekeeping presentation at the Food Summit. We tapped our sugar maple trees yesterday, and by the end of March will have made enough maple syrup to last about 9-10 months. 

I enjoyed the Food Summit and was impressed by the thought and organization that went into the all-day local food-a-palooza. I saw lots of familiar faces and friends, and thoroughly enjoyed the group discussions I facilitated. I’ll definitely attend next year. I hope that I’ll see the same familiar faces from the Ann Arbor local food movement scene, and an audience that includes people who will help those in our local food movement question some of those assumptions about how best to open the local food movement up to those on the outside of it. The education component, I think, needs to go both ways for the movement to grow and draw from the larger community.

Popularity: 27% [?]

March 1, 2010

The Politics of the Pen: 1,082 New A2 Politicos Interested in the Issues

Filed under: City Hall, Mayor Hieftje, city services, money, police, political reporting, politics, taxes — Tags: , , , , , , , , , — A2 Politico @ 9:35 am
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I was at the YMCA last night for the kick-off of the Strong Kids Fundraising Campaign. I raised money for the Campaign last year, as well, and was throughly impressed by the structure and organization of the Campaign. This year, like last year, Joe Upton tops the organizational chart of participants that you’ll see posted on the wall at the Y. Upton and his family own Malloy Printing, to which we moved a good portion of our book printing business several years ago in an effort to bring work home to Michigan, and pump dollars into the state’s economy. 

Scholarships for kids to participate in programs sponsored by the Y are crucial, particularly in these tough economic times. There are many, many people with the same desire to help see to it that kids who wouldn’t otherwise be able to participate in YMCA programs, due to their parents’ inability to pay, are able to do so. Demand for scholarships at the Y has risen sharply, as you can imagine. I’m looking to almost double what I raised last year, or to bring in about $1,200. It will be a small part of the $200,000-$300,000 we raise total, but that’s the whole point—everything raised matters. 

Those of you who’ve been reading this blog know that I like to set goals. I wanted to see if, together, we could get 5,000 people reading A2Politico within five months. We got pretty darn close: 4,734. Thanks to everyone who passed on the link. 

Since I consider this blog to belong to those who stop by and read it on a regular basis, I thought you might like to know that in February, A2P added the most new readers ever, 1,082, for a total of 7,024 readers. We’re closing in on our 2,200th comment. Each entry averages 14 comments. 

Last night at the YMCA event, a Y staffer came up to me and thanked me for entering the Mayor’s race and for writing A2Politico. The staffer said that, at lunch with other Y employees, they talk about the entries and, before knowing the identity of the blogger, spent time trying to figure out who A2P was. I got a compliment on the research that goes into the entries, and the “connect the dots” quality of the work.  

The topic of Friday’s A2Politico connect the dots piece showed up in AnnArbor.com on Sunday. It’s probable that AnnArbor.com government reporter Ryan Stanton and I have been thinking about some of the same issues (more than probable), money primary among them. I was delighted to read that the City Council and City Administrator are finally talking frankly about the two areas that I consider crucial to the economic health of Ann Arbor: employee costs and retiree benefits.

We’ve been told for years by elected politicos and politicos running for re-election that the city has realized “savings” from negotiating co-pays on employee health insurance premiums. In the AnnArbor.com piece we read from Mayor Hieftje:

“We are still struggling with labor contracts that were heavily one-sided that were decided back in the ’70s and ’80s. We’ve been working very hard to try to do more. Employees are contributing more to their health benefits, but not nearly what they need to be.”

Recently, the City Administrator, in a presentation to City Council, presented a chart that showed $25 million in “savings” from the 256 person reduction in our city staff. Sunday’s AnnArbor.com piece demonstrates quite clearly that contrary to “savings,” our elected officials and City Administrator have consistently let employee costs rise since 2002. At the same time, the cost of running government ballooned by $34 million dollars (35 percent) between 2006-2010. While our city bled money, we had elected officials and their endorsers claiming that taxpayers have enjoyed “remarkable” financial leadership from our local politicos that has resulted in “reduced costs” and “increased efficiency” in government. 

It is any wonder there are “struggles” between our elected officials and our labor unions? 

I can tell you from conversations I’ve had with unionized employees that our current Mayor and Council and City Administrator will continue to “struggle” to get concessions from unionized employees for one simple reason: a complete lack of trust. Shuffling money around and between the many funds in our City’s labyrinth of a budget for the past decade, inflating deficits, creating the impression that the budget “expert” was a single City Council member (who quite obviously was not, judging from the results), claiming “savings” and “increased efficiency” when there were none, resulted in intense mistrust on the part of our city’s unionized employees. Quite frankly, they feel they’ve been deliberately misled, and money has been hidden. The books are not open to them, and they are routinely refused access to financial data by city officials.

How do we go forward? The City’s elected officials have had a plan to bring the cost of city employee retiree benefits into line since 2005. The Mayor appointed a Blue Ribbon panel to look into the program (a good move), but then never implemented the panel’s suggestions. Now, we have to re-examine the panel’s recommendations (it could be that some are outdated) as quickly as is practicable, then tackle the dragon that is the single largest line item in the city’s budget: city employee pension and retiree health care benefits. I think we should move heaven and earth to keep the financial promises made to past employees, with some obvious changes, such as adjusting health care co-pays. As for future retirees, it’s quite clear that we must completely redesign the program.

Unfortunately, at City Hall the mantra is still “revenues are down.” Yes, they are. However, let’s get real. Spending on overhead is up. Way up. Out of control up 35 percent since 2006. Debt payments are up, as well, to $3.9 million per year, from $900,000 in 2005.

The way to get a handle on the bleeding is to put a moratorium on all non-essential spending, particularly before any further cuts are made to our city’s human capital. Let’s start with the million dollar line items: Is the Fuller Transportation Station essential spending, or are police officers? The money for the station is being diverted from the General Fund, which pays for public safety services. Did we need to spend $6.4 million to change to ecologically regressive single-stream recycling at the moment? Just because the money is budgeted, and the politicos behind the move, Fourth Ward Council member Margie Teall, the Mayor and Fifth Ward’s Carsten Hohnke are all up for re-election, doesn’t mean we need to spend it.

Savings accumulated from the solid waste millage could be returned to taxpayers in the form of credits.

Local politics hits us all right where we live, so to the 1,000 new readers of A2Politico.com, I extend a warm welcome. I look forward to reading your comments about how our money is being managed by those at City Hall. What do you think we should be spending our tax dollars on?

Popularity: 28% [?]

February 25, 2010

The Politics of Management: Paying More For Less

Filed under: Mayor Hieftje, city council, money — Tags: , , — A2 Politico @ 10:38 pm
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Most people who live in Ann Arbor don’t have the time or the inclination to get overly involved in the minutia of city government. People are busy spending their days getting done what they need to get done to get the bills paid. Politics isn’t a passion for many, and the thought of running for an elected office probably never crosses the minds of most folks. After all, there are about 10 million people in Michigan, but only about 1,500 mayors. There are just 40 Michigan state senators.  

I was at synagogue last Friday and overheard the spouse of a candidate for County Commissioner ask my partner why on earth I wanted to run for mayor. Good question. Why, indeed? Our roads are some of the worst in the entire state. The Stadium bridges are, literally, falling down. The budget is a constant source of heartburn to anyone with the time to read through the behemoth (a tip: you’ll get more information by studying the city’s audited financial statements). Who wants to work to clean up that kind of a mess? Me. Why? Because while there is a mess to clean up, I see that there is also incredible potential and opportunity to make Ann Arbor an even better place for all of us to call home. I am committed to living, working and raising a family here. What better reason to share my decades of management, marketing and finance experience, step up, and accept the challenge of public service? 

A police officer whom I spoke with recently made a point of telling me about the two surveys of staff morale that found our 750 city employees in desperate need of some serious pep talks, and maybe even a few anti-depressants. We have employees who feel under-appreciated, and are inclined to jump ship. They work under constant threat of layoff. Studies make clear that layoffs do not actually save money, because overall productivity decreases. The top performers who survive a layoff won’t necessarily feel obligated to soldier on. A 2000 study by Roderick Iverson and Jacqueline Pullman from the University of Melbourne, and a 2003 study by Sarah Moore, Leon Grunberg, and Edward Greenberg from the University of Colorado at Boulder, both confirmed that employees were far more likely to quit jobs in environments of repeated downsizing. The likelihood that an employee will quit actually increases the more layoffs he or she “survives,” the CU-Boulder study found.

The City Administrator Roger Fraser recently gave a presentation to Mayor and Council members in which he presented the following graph:

Layoffs

Between 2002 and 2010, Ann Arbor has reduced its work force through layoff, early retirement and attrition by about 30 people per year. This graph purports two facts.

First, that the overall reduction has resulted in $25 million dollars in “savings.”

The second fact is that the number of consultants (contracted services) and temps has remained “flat.”

No one on Council asked to have the terms “savings” and “flat” defined. Should they have? The City Administrator’s financial data should be presumed to be accurate. However, we have to remember that since 2003, Roger Fraser has inflated General Fund deficits in every budget. With the exception of 2009, when the actual numbers have come in, our General Fund has actually finished with modest surpluses. This is a very important fact that would give anyone with experience in budgeting and finance ample reason to question Mr. Fraser very closely when presented with financial data such as the data in the graph above.

How would one go about verifying Fraser’s data? The City files income tax returns just as you and I do. In those returns, are several bits of information that allow us to check Mr. Fraser’s work. 

Here’s a graph with information from the City’s income tax returns filed between 2000 and 2009:

 

Fiscal Year Number of FTE and Contract Employees Claimed Wages Claimed
2000 1,230 $49.6 million dollars
2001 # of employees not recorded on tax return $58.7 million dollars
2002 1,149 $55.9 million dollars
2003 1,102 $54.7 million dollars
2004 1,079 $54.2 million dollars
2005 1,128 $57.5 million dollars
2006 1,104 $60.3 million dollars
2007 1,069 $57.2 million dollars
2008 1,018 $55.3 million dollars
2009 1,029 $54.7 million dollars

You should, of course, have an immediate question: Where’s the purported $25 million dollar “savings” Mr. Fraser told Council has been realized by the “streamlining” of those 239 employees?  The next question is why the total number of employees declared to the IRS doesn’t match information presented to the public by Mayor Hieftje and Mr. Fraser. In December of 2009, Mr. Fraser, in a presentation to Council, told the group that as of December 2009 Ann Arbor employes 756 people.

According to the City’s IRS tax returns, Ann Arbor employs 201 fewer people than in 2000, but spending on wages has increased. In fact, in 2009 we paid about the same to employ 1,029 people as we did to employ 1,159 people in 2002.

We’re paying more for less. We’re getting less for more.

The City Administrator’s data raise many more questions than they answer, and the data are certainly not of the quality necessary to make informed decisions concerning closing projected budget gaps. Mayor and Council have a legal and fiduciary obligation to hold the City Administrator accountable in the performance of his job. Repeatedly presenting incomplete and contradicting financial data to bolster claims of savings that are suspect, at best, is cause for serious concern, close questioning and, potentially, some very frank discussions between Mayor, Council and the City Administrator.  

It is clear to me that, as any good manager knows, profitability is not achieved through a long-term strategy of layoffs. Why not?  Employee morale and productivity drop, as documented in many studies, including the two I referred to above. Over the last decade, Council members and Mayor have run for re-election based on their support of a fiscal strategy that encompassed the systematic decimation of Ann Arbor’s human capital—our police, firefighters, customer service workers, foresters, planners, even our dog catcher is gone. It’s clear from the IRS data that the cost of government has not been reduced by the layoffs, nor has there been any marked increase in the efficiency of city government; we’ve paid millions for consultants and contract workers to supplement the work of our remaining city staff.

It should be clear that further layoffs are not the answer to the fiscal problems facing our city. The answer is to reverse the damage done and rebuild our human capital.

The City’s department managers must be forced to cut out the junk food from the City’s fiscal diet. This means sharply reducing the amounts approved for contract labor and consultants. For instance, Ann Arbor employs both a landscape architect and a forester, yet Council recently approved several hundred thousand dollars worth of contracts for companies to do landscape architecture and forestry work for the City. Our City Attorney’s office has eight full-time attorneys (tip o’ the keyboard to Rick) on staff, yet that office has asked Council to approve close to $400,000 in contracts for outsourced legal work over the past 18 months. In 2009, Ann Arbor spent over $1 million dollars on consultants. 

There’s much more we can do to sort out the fiscal mess that has been created over the past half a dozen years.

The real work will start, and the real savings will be realized, when we reconfigure the City of Ann Arbor Employees’ Retirement System for future retirees—a crucial task put off for a decade, much like the reconstruction of the Stadium bridges, and a good part of the reason our city budget is crumbling, much like our streets.

So what’s it going to take to get our labor unions and non-unionized employees to buy into a complete restructuring of their retiree benefit programs? How are we going to get retirees to pay, for instance, 10 percent of their yearly $7 million dollar health insurance premiums, and to implement a change in benefits to those who retire before 65? How will we ask for an even larger contribution for health insurance premiums from early retired city employees who’re employed full-time elsewhere? How are we going to get employees to agree to accept a change to the age at which they may retire?

For starters, it’s going to new elected leadership at City Hall who is prepared to ask them to do it.

Popularity: 43% [?]

February 23, 2010

The Politics of Transportation: Getting Serious About Non-Motorized Transportation (With a Poll)

Filed under: transportation — Tags: , , , , , , , — A2 Politico @ 11:12 pm
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I know. I know. We live 45 minutes (in light traffic) from the Motor City. Cartown. Cars as status symbols. Cars as sex symbols. Cars are King, and non-motorized transportation is perceived by some as the Court Jester. It’s perceived as the mooching in-laws by others. Money for bike lanes? Money to plow walking paths through parks? That’s money that could be spent, well, on making the commute just that much easier for those who travel by car. 

We’re a long way from the Netherlands in more ways than one. There, 27 percent of all trips are made by bike and walking. In the United States, just one percent of all trips are made by bike and on foot. 

We’re a one car family; maybe yours is, too. We have four bikes and those bikes act, in essence, as our second car between April and November. We take the bus regularly, and walk, as well. As a rule, we drive fewer than 6,000 miles per year. We’re not nearly as virtuous as, say, our friends Chris and Lori, who moved to New York and left their car behind in Ann Arbor. However, it has been six years since we sold our second car and decided to make do with one. 

I have been a commuter bicyclist since I was in my 20s and living in Rome, Italy. I saved up my money and bought myself a spiffy red Olmo touring bike, complete with the requisite bell to which tourists in Rome never seemed to pay any attention. There, from April through December, I biked all over the Eternal City. In winter, I resorted to the dreaded bus/subway system. Oh, the system worked just fine. I preferred to bike because it was faster. On the bus or subway, it took 40 minutes from, say, the Vatican, where I taught, to the nearest Metro stop near my apartment. On my bike, I could zip home in half the time. 

Anti-pollution politics rule in Rome now, in place of the Caesars, so the percentage of trips made by bike is on the rise. The city has about 100 miles of on road bike lanes, an additional 33 (20 miles) kilometers of bicycle lanes are designed, and 30 (18 miles) kilometers more are planned. In September of 2009, the Italian Ministry of the Environment allocated 7.6 million Euro ($10 million dollars) as incentive money for individuals to buy bikes. As a result of the program, 70,000 new bicycles are expected to be sold in Italy over the coming year. 

I was talking to a Sierra Club leader, and he described the relationship between the non-motorized community and the City as similar to the relationship between an abused spouse and her/his abuser. The Ann Arbor non-motorized transportation community is glad for the crumbs of attention and financial support it’s given. I’m not sure I agree completely, because I have read posts to the Washtenaw Walking and Biking Coalition listserv in which members have expressed frustration at what they consider the meager financial and political support of non-motorized transportation. Others take the tack that something is better than nothing. Meanwhile, elected officials boast about increases in on road bike lanes by talking percentages. They run campaigns on the awards Ann Arbor has won for being a “bike friendly” community. We’re a “bike friendly” community, but are we a community with a plan and a political commitment to non-motorized transportation? Yes and no.

Let’s start with awards: some such awards to cities are handed out just for filling in the paperwork, others are truly prestigious and represent a win in the face of stiff competition. Awards recognize the hard work of our city staff, not the genius of our local politicos. The real measure of success however, is the daily use of Ann Arbor’s non-motorized transportation system by the people who live and work in our city. Right now, Ann Arbor has 42 miles of bike lanes, and according to data from the City, 2.4  percent of all trips downtown are made by biking and 16.5 percent by walking. That puts us just ahead of Bloomington, Indiana (2.8 percent and 15 percent, respectively), but well behind Berkeley, Cambridge and Iowa City. Over the past decade, about 3 miles of bike lanes have been added per year. In Boulder, there are currently 300 miles of bike lanes. New York City’s Bicycle Master Plan includes 900 miles of bike lanes. 

In Ann Arbor we’ve had a “Build it and they will bike,” strategy. However, the percentage of trips made downtown by bike and on foot has remained relatively unchanged for several years. Why? Because merely charging staff to build bike lanes and walking paths up the sides of major roads leading to downtown doesn’t guarantee people will use them. It’s a strategy based on miles of lanes. Because of chronic underfunding and regressive political policies, those few miles of lanes often quickly become unusable thanks to faded guard lines, garbage cart placement, leaf collection politicies, and snow removal issues. We need to couple the investment in miles of bike lanes with a political commitment to non-motorized transportation policy. This means setting measurable goals that are, well, actually measured and followed up on by Mayor and Council.

In this video (go to mark 17:54) from the City’s web site, we can see the City’s Transportation Manager, Eli Cooper, being (for lack of a better term) raked over the coals by Fourth Ward Council member Marcia Higgns. Higgins, frustrated, at the lack of progress on implementing aspects of the city’s non-motorized transportation plan, wants to know why little has been accomplished in four years. Good question.  

Our city has a plan. It’s had one since 2007. That year, a group of citizens and city staff formulated the 200 page City of Ann Arbor Non-Motorized Transportation Plan.

This comes from the “Vision” section of the Plan: “It is further envisioned that this environment will result in a greater number of individuals freely choosing alternative transportation modes (walking, bicycling, mass transit, etc.), which will lead to healthier lifestyles, improved air and water quality, and a safer, more sustainable transportation system.”

Walking. Bicycling. Mass Transit. 

Mass transit is, of course, motorized. So what’s it doing in the Non-Motorized Transportation Plan? Good question. The answer may help us understand why many of the goals relating to our non-motorized transportation plan have gone uunmet. A look at the percentage and amount of money devoted to non-motorized transportation should give us another clue. This comes from the 2007 City of Ann Arbor Non-Motorized Transportation Plan: 

“The City Council passed a Resolution –R-216-5-04, which includes the annual dedication of 5% of the City’s funds received under Public Act 51, Michigan Transportation Fund (MTF) dollars, toward completing a system of non-motorized routes. This amounted to approximately $350,000 per year out of the total $7 million dollar earmark in 2004-2005. The funds allow for supporting maintenance activities, planning and design of capital improvements and as resources for direct investment in new facilities.”

Five percent is a token amount, not a serious commitment to implementing the recommendations of the Non-Motorized Transportation Plan. So what is the present state of the bicycling environment in Ann Arbor according to our own Non-motorized Transportation Plan? This comes from page 152 of the 2007 report:

“The approach to handling bicycles in the City is inconsistent and incomplete. In older areas of town there are some isolated bike lanes, in newer parts of town bicycles are expected to use sidewalk bikeways. Even together, the on-road and off-road facilities do not make for a complete system and transfers between on-road and off-road facilities are not logical or convenient. In short, there is no cohesive system.”

What to do? First, stop simply throwing money at non-motorized transportation just so that politicos can have bullet points on their résumés and photo ops. Page 167 of the Non-Motorized Transportation Plan lists several strategies which would increase walking and biking downtown, and help Ann Arbor work toward some concrete, if you’ll pardon the pun, and very important environmental goals.

Mass transit should not be included in our non-motorized transportation plan. There is certainly synergy between mass transit and non-motorized transportation, but so long as mass transit is included as a part of our City’s Non-Motorized Transportation Plan, it will continue to be allocated exponentially more staff time and funding. Having a non-motorized plan since 2007, the bulk of the recommendations of which have been ignored, is playing politics with transportation policy and what ought to be a very clear commitment to the environment. I’d like to see us, as a community, work seriously to meet the goals set forth in the 2007 Non-Motorized Transportation Plan.  

Those who crafted the Plan write that they’re unsure why people ultimately refuse to bike in our downtown area. Researchers in the Netherlands have answered that question definitively: bikers of all ages have to feel safe, and both bikers and drivers must be educated about sharing the road. 

Ann Arbor may have won an award as a bike “friendly” community in 2006, but between 2007-2010, we’ve done little but coast on our two-wheel laurels. It’s time to get serious about non-motorized transportation. Let’s increase the funding, but tie the increase to benchmarks which must be met, measurable increases in trips made downtown by bike and walking. Let’s launch a sustained initiative that focuses on education and safety for bikers of all ages. Let’s challenge and inspire city staff to meet the goals set forth in the 2007 Non-Motorized Transportation Plan of increasing from 2.4 percent to 6 percent the total number of trips downtown made by bike.  

Let’s work to become a city of actual bikers and walkers, and not just a place where politicos brag about awards given by people who don’t ride our roads, but rather sift through piles of neatly written applications.

 

 

 

In Summer, what keeps you from biking downtown? This is a multiple choice poll. You may choose as many of the options as apply. If you do or don’t bike downtown, I’d be interested in hearing your opinions on non-motorized transportation in Ann Arbor. Is this a public policy we should fund and pursue more aggressively in your opinion? 

Popularity: 42% [?]

February 21, 2010

The Politics of Money: Capriccio Economico

Filed under: economic development, money, taxes — Tags: , , , , , , , , , , , , , , — A2 Politico @ 1:36 pm
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*Capriccio

February 18th was Ann Arbor Public Schools’ Orchestra Night. All of the middle and high school orchestras came together for a music student-a-palooza that began at 7 p.m. and finished with the last note from the Pioneer High School orchestra at 9:30. My middle schooler’s orchestra played the first notes of the evening. The entire week before, he’d been coming home with tales from the practice room that the orchestra teacher was driving the kids like musical mules in a field of flats and sharps. Evidently, she was making them rehearse and practice—making them play the first measures of their opening piece, Capriccio Espagnol, something like 5,000,000 times. Pre-teens somehow suddenly lose the ability to count: they start at 1 and jump from there to 5,000,000.  

However, my bassist had not exaggerated a bit. He and his orchestra mates nailed the opening of the piece. In fact, they played the entire piece with a level of technical precision I never expected—there was no fuzzy fingering from the violinists, and nary a missed beat from the basses and cellos. Their orchestra teacher is a young woman who, in my opinion, is one of those teachers. You know the ones. They inspire, push and take a genuine interest in their students. Every school district needs more teachers like her, and to compensate them generously for their devotion to their students, teaching, and the results they get.

Unless you just got back to Ann Arbor from your isolated private island in the Pacific, you know that the AAPS is facing a multi-million dollar deficit. There is a passionate and wide-ranging debate as to why there is a deficit. There is a passionate and wide-ranging debate about how to close the budget gap. District officials floated the idea of privatizing several hundred union jobs. According to a piece posted to AnnArbor.com on February 17th, there are several companies “vying to replace the district’s custodians, maintenance workers and bus drivers, it could save nearly $2.4 million a year.”

I’m going to switch classrooms now. Walk with me.

I was going through the City’s checkbook register, which is now online, and saw a $75,000 withdrawl from the General Fund for Ann Arbor SPARK. I have written about Ann Arbor SPARK several times over the course of the past months. Click here to read my most recent entry about SPARK. Ann Arbor SPARK was created to “incubate” start-up businesses in the Ann Arbor area. It was headed by Republican Gubernatorial candidate Rick Snyder for several years. Our tax dollars don’t fund SPARK directly. That’s what the (Local Development Finance Authority) LDFA is for. Here’s a good description of the LDFA from a January 2009 piece in the now defunct Ann Arbor News, written by  Stefanie Murray, “The LDFA is an Ann Arbor City Council-appointed committee that oversees the capture of part of the property taxes from Ann Arbor’s downtown development district. It gives some of that revenue to Spark and is responsible for overseeing how Spark spends it.”

Sounds pretty innocuous, huh? “The capture of part of the property taxes from Ann Arbor’s downtown development district.” No harm. No foul.

Nothing could be further from the truth.

The LDFA was formed to divert taxes from a single sector: public education. It contracts with Ann Arbor SPARK to “provide services.” In fact, the bulk of the money the LDFA diverts from our public schools goes to Ann Arbor SPARK. Second Ward Council member Stephen Rapundalo sits on the LDFA Board. Fifth Ward Council member Carsten Hohnke sits on the SPARK Board. In November 2009, I wrote about the resolution which Rapundalo brought to Council: “Resolution to Amend the Fiscal Year 2010 SmartZone LDFA Budget for Increased Business Accelerator Services.” In my November 2009 post I wrote:

“Ann Arbor SPARK is the public-private boondoggle supported by Mayor and Council with your tax dollars that has created no new jobs that would not otherwise have been created, according to an April 2009 statement before City Council by the Chair of the LDFA, Richard King.  And SPARK has done it all for you since July 2006 for a mere $3+ million dollars. Who could want less for more? It’s a Bernie Madoff Special—no actual job creation in return for millions in public money. How long will it take the public to realize that they’re being robbed?”

Both Carsten Hohnke and Stephen Rapundalo voted in favor of giving the LDFA $205,000 additional dollars to pass on the Ann Arbor SPARK. Those were dollars taken from the Ann Arbor Public Schools. Here is a link to a video from the City Council meeting at which Council voted 11-0 to give the LDFA and Spark more tax money. You’ll see Skip Simms from SPARK tell Council that all of SPARK’s “incubator” money comes from the LDFA. All of the LDFA’s money is diverted directly from the Ann Arbor Public Schools. Do you understand the connection now?

According to the city’s budget, in fiscal year 2009, the LDFA SmartZone diverted $1.1 million dollars in property taxes from new development downtown. In fiscal year 2010, that amount increased to a projected $1.27 million dollars, and in 2011, the LDFA expects to divert $1.4 million in property tax dollars from our public schools to give to SPARK. 

In this piece, I wrote about the $753,000 in salaries paid to just five employees of SPARK. 

Now, we have the Ann Arbor Public Schools poised to cut over 200 union jobs to save $2.4 million dollars. If the Mayor and City Council dissolve the LDFA immediately, and Ann Arbor SPARK is spun off, in 2010-2011 the AAPS will collect an additional projected $2.67 million dollars in tax revenues. That money, along with some good faith bargaining for concessions from the unions involved could save the jobs of hundreds of long-time employees—custodians, maintenance workers and bus drivers in our community.

Public schools, or so said my son’s orchestra teacher, reflect the soul of a community. I agree with her. Right now, our soul is troubled. Business investment is important, but it can’t come at the expense of our own public schools. It’s time to stop diverting property tax dollars away from the public schools, and realize that owners of established small and medium-sized businesses choose to relocate to communities with exceptional schools, and residents choose to stay in communities with exceptional public schools.

Either our public schools can be given back the LDFA’s $2.67 million dollars and retain hundreds of jobs for custodians, bus drivers and maintenance workers, or Mayor and Council can continue to support a failed economic development system under the auspices of which no jobs have been created that wouldn’t have otherwise been created. Mayor and Council can continue to give public school tax dollars to the LDFA to dole out to Ann Arbor SPARK—an organization that paid five of its employees over $753,000 in salaries in 2008.  

To me, the choice is clear. The time has come to shape new economic development programs that will give taxpayers objectively verifiable and carefully tracked returns on all tax dollar investments—something that has not been done over the past five years. It’s time to get back to the basics, and for our local politicos to face the music: they’ve diverted millions from our public schools to fund the LDFA and, in turn, Ann Arbor SPARK. Dissolving the LDFA and spinning off Ann Arbor SPARK could, actually, save hundreds of existing jobs in our community, and benefit our public schools.

Popularity: 55% [?]

February 18, 2010

The Politics of Parks: Spin, Subsidies and Mulligans

Filed under: money, parks — Tags: , , , , , , , , , , — A2 Politico @ 8:21 am
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One of the jobs I had as I worked my way through college was at a very exclusive country club that shall remain anonymous. I worked in the kitchen, and the tots love to hear me tell stories about the members, kitchen staff, and preparing and serving meals to some of the richest people in metro-Detroit. They love the story about the world-famous architect who got so loaded at his daughter’s wedding that, while swinging a Samurai sword around over his head (don’t ask why he brought one to his daughter’s wedding), lost his grip, and the sword ended up piercing the bass drum of a very surprised band drummer. There was the fellow who made millions in the auto industry who almost decapitated a foursome of club members when he landed his helicopter on the 1st green. He’d dropped in for a cool drink, a pack of cigarettes and to schedule his Saturday tee time. I met Jack Nicklaus, Lee Trevino and Ben Crenshaw when they were in town to play in a major tournament at another country club. 

One of the perks of working at the club was that on Tuesdays, when the club shut down, staff had the opportunity to golf free of charge. When my papers were written, and math problems finished, I golfed in the nice weather. Lefty. My handicap was, well, my inability to get out of the sand traps without taking way too many mulligans. 

Yesterday morning, I attended a meeting of the city’s Golf Advisory Task Force. Tee time was 8 a.m. on the 6th floor of City Hall. On the agenda was Huron Hills Golf course. The course, open to the public since the 20s, is in deficit. Again. It was in deficit in 2008, and as a result elected officials and city staff tried to shop the land to developers. When Ward 2 residents and golfers descended on City Council meetings, putters hefted, Mayor and Council promptly claimed no one was shopping anything to anyone (insert innocent looks here). Then the paperwork authorizing the shopping around of said golf course surfaced and, as you can imagine, there were several elected officials with egg on their faces and lots of lost credibility.

Yesterday morning, Second Ward Council member Stephen Rapundalo, was questioned by members of the Ann Arbor Golf Association concerning Huron Hills’ projected $380,000 deficit. As a result of the projected deficit, the Golf Advisory Task Force has been charged with turning a double bogey into a birdie. According to Rapundalo, Council members believe that we can keep Huron Hills open with no “subsidies” from the General Fund. One way to do this would be to make it a “public-private” course. City staff will prepare the requisite RFP, and a vendor will ride into town in an electric golf cart with a plan to balance the course’s budget. This way, no further “subsidies” would need be given to the Huron Hills facility.

Let me state quite clearly that Council’s notion that that city’s recreational facilities are “subsidized” with money from the General Fund is absurd. We don’t “subsidize” recreational facilities; we support them with our taxes. Ann Arbor citizens pay some of the highest per capita property taxes in Michigan. 

As it turns out, the last time Huron Hills was profitable was at least a decade ago, so said the city staff member whom I spoke with. For those who feel up to a little morning challenge, here ’s a puzzle for you. The problem? “Why is Huron Hills golf course losing money?” Here are some facts shared by the city staff members in charge of the course who attended the meeting:

1.  Huron Hills is projected to have a 3 percent increase in overall revenues.

2.  The numbers of golfers using the facility is increasing.

3.  There are plans for an education program for kids and teens at the course.

4.  There are funds earmarked for radio/billboard marketing 

5.  Huron Hills was given a liquor license.

So, why is the course losing money? Please choose one answer from below.

A.  It’s a complete mystery that will never be solved. 

B.  The cost of golfballs has skyrocketed.

C.  There is a $380,000 municipal service charge levied on the course’s operations.

 

If you chose “C”, please bring your irons to the club house for a free cleaning. What is a municipal service charge? It’s the total cost of running City Hall divided by every single department in the city. For instance, the golf staff member explained quite cogently that the city’s IT department sets its budget (at $7.2 million dollars, currently twice the budget of IT departments in similarly-sized cities across the country) and then “charges” departments for its services, network, etc… In fact, in some departments it costs $4,000 per computer per month to support IT. That’s just the beginning. Huron Hills golf course is also charged for $14,000 of the funds budgeted to support the Mayor’s office.

To make a long, and very simple story complicated, Huron Hills golf course is being smothered in municipal service charges. The cost of running City Hall in Ann Arbor has increased by 35 percent since 2006 ($34 million dollars), according to audited statements from the city’s web page. Virtually the course’s entire $380,000 “deficit” is the result of being forced to carry around part of the city’s bloated operating expenses.

So what should be done? If you replied “cut operating costs,” please report immediately to the aversion therapy office in City Hall.

The “correct” answer is for City Council to form a citizen task force, hold monthly 90 minute meetings that use up precious staff time, and charge the poor citizens who actually care about the city’s recreational facilities with performing a religious miracle, to make Huron Hills “profitable.” The next part of the plan is to have Council members tell citizens that City Council members have no further interest in “subsidizing” golf. Well, that should actually come as no surprise, they have no further interest in “subsidizing” police and fire services, either.

The city staff member repeated one “fact” several times during the 90 minute meeting at which just two agenda items were discussed: there is nothing that can be done about the municipal service charge. Is it any wonder, then, that funding recreational facilities and senior centers is referred to by those on Council as “subsidizing?” By jingo, we’re “subsidizing” the retirees. We’re “subsidizing” swimmers. We’re “subsidizing” numerous services for all of the freeloading taxpayers in this city. 

Most of us know there are numerous strategies that can be employed to cut “municipal service charges.” Our family, for instance, eats out less often. City Council could put moratoria on consultant contracts and direct the City Administrator, CFO and IT Director to bring the cost of IT services into line with that of other similarly-sized cities. The mantra that nothing that can be done about the heft of the municipal service charges levied is wrong-headed, and a symptom of wide-spread and systematic fiscal dysfunction on City Council and at City Hall.

Reining in the cost of operating City Hall and, as a result, significantly reducing the service charges levied on Huron Hills is, in fact, is the answer to the problem, instead of the “inevitable” solution that the city needs to craft the requisite RFP, and hire a private contractor to run the course.

As for the Golf Advisory Task Force, coincidentally, there is a member of the group who has had informal discussions with city officials to have his company take over Huron Hills. The representative from the Ann Arbor Golf Association took exception to this situation, and was roundly thrashed (in Midwestern “nice-ese”) for implying that there might be a conflict of interest involved in having someone making decisions about the fate of Huron Hills whose company has had “informal” discussions with staff member Jayne Miller about taking over operations of the course.

I won’t imply it. I’ll say it. The practice of awarding city contracts to those who serve on boards and commissions must be examined closely to rule out conflicts of interest. At the moment, this issue is ignored completely by Council. This practice needs to end.

Eighteen months ago, Council authorized a $300,000 contract for capital improvement projects with Bona & Kolb, as well as Mitchell & Mouat, and two other firms. Bona Chairs the City Planning Commission, and Mouat sits on the board of the Downtown Development Authority. On February 16, 2010, City Council recently amended the original contract to add $100,000 to the contract.  The names of the firms appeared nowhere on the Council agenda.

Mitchell & Mouat were contracted to design the FITS, as well. Are we hiring the most competent contractors, and negotiating the contracts in the best interests of taxpayers, or are we giving city works to the political donors, friends and work colleagues of our elected officials? It’s a question that needs to be asked and answered definitively every single time a contract is awarded to the business of someone who serves on a city board or commission.

To whit, that member of the Golf Advisory Task Force should, indeed, resign. He has tremendous expertise to share, and one hopes he would attend all of the meetings as a citizen. Furthermore, as a citizen, he would be free to meet with city staff to pitch his company and his business plan for a public-private development for Huron Hills golf course. As a member of the Task Force, he has no business pitching his company’s services, and city staff have no business listening to his pitches “informally.” 

In the meantime, it’s time to start the heavy lifting of questioning the City Administrator, IT Director Dan Rainey and CFO Tom Crawford and have them explain why it costs $4,000 per month per computer supplied by the IT Department, and why a city golf course should be charged $14,000 of the cost of running Mayor Hieftje’s office.

Popularity: 64% [?]

February 16, 2010

The Politics of Governing: Should City Council Draft Resolutions That Address International Political Issues?

Filed under: city council, politics, weekend poll — Tags: , , , — A2 Politico @ 5:01 pm
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I was walking Flash (the family’s new Jack Russell pooch) in the woods this afternoon, and ran into a neighbor who’s quite an active local politico. During the course of our conversation about my run for office, she wanted to know where I stand on City Council drafting resolutions at the prompting of citizen groups that comment on international policy issues. We ended our conversation with a promise to get together to discuss the topic further. She’s not the first person to have asked me this question, or to have expressed an opinion about Ann Arbor City Council responding to international policy via Council resolution. Thus far, opinion among those whom I discussed the issue with has been pretty evenly split between those opposed and those in favor of the practice. 

Those opposed object to local political issues taking a back seat to international politics. City Council and Mayor, so say those on this side of the debate, have an obligation to tend to local issues, concerns and challenges. They see devoting time to international politics as a form of political grandstanding. “People in Ann Arbor,” one politico snapped, “may think the town is the center of the universe, but it’s not.” Local people who want to impact foreign policy, so say these politicos, need to write to their congressional leaders. On the other side of the aisle are Ann Arbor politicos who see city government as a way to move federal foreign policy issues one way or the other. They see City Council as a “voice of the people” who bring the issues to the forefront. 

I’ve decided to put up a poll. As always, one vote per customer. If you’re inclined to leave comments, I’d be interested to hear your thoughts on the subject in more detail. What do you think? Should Ann Arbor City Council draft resolutions that address international political issues, or should Council keep its nose our of other people’s political business and tend to its local political issues?

Popularity: 59% [?]

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