The Politics of Priorities: Firefighters, Police or Capital Improvements?
On Sunday February 7, 2010, citizens read in AnnArbor.com that our City’s General Fund is projected to come up $5.2 million dollars short due to falling property tax revenue. The bulk of the cuts proposed to close the fiscal gap will impact public safety. City officials informed taxpayers that, “On the chopping block are 20 positions in the Fire Department and 17 in the Police Department.”
Cutting emergency and other citizen services is an absolutely unacceptable and unnecessary solution to closing this projected gap in the budget. We should also remember that since 2003 City Administrator Roger Fraser has repeatedly predicted there will be losses in the General Fund, and when the actual numbers have come in, the city’s General Fund has registered surpluses. The only exception was 2009, when Fraser projected a $10.4 million dollar General Fund deficit related to the early retirement of 27 police officers, and the cost of the police/courts building. That projected loss was inflated by $2 million dollars. Such consistent inflation of losses brings into question the budgeting processes used, as well as the fiscal assumptions relied upon by the City Administrator when making budget predictions. This is a serious issue that needs to be resolved. Projecting loses
I have over 20 years of experience in finance as the CEO of a national higher education publishing group headquartered in Ann Arbor. I’ve studied the City’s budget, its audited financial statements, as well the Budget Impact document released to City Council members on Friday February 5th. There’s an obvious alternative to cutting services in order to close that budget gap.
Cut Capital Improvement Projects NOT Police and Firefighters
The City’s Economic Development Fund is slated to contribute over $5 million dollars for the Fuller Intermodal Trasportation Station (FITS). Thus far, the only source of revenue for the Economic Development Fund has been a $2.1 million dollar transfer from the General Fund. The City’s General Fund pays for our emergency services. FITS was described in the Ann Arbor Observer by the city’s Transportation Director, Eli Cooper, and by the Mayor, as a gamble. I’m not a gambling woman when the safety of our citizens and the jobs of our police and firefighters are on the line. At the moment, FITS is a proposed 1,000 car parking garage for U of M, bus stop, and parking for a few bikes. Our city doesn’t have the cash on hand to partner with the University on the FITS project. It’s irresponsible to lay off police and firefighters so that millions can be diverted from the General Fund to the Economic Development Fund to pay for a parking garage for U of M employees and visitors. The remaining money in the Economic Development Fund should be transferred back to the General Fund.
When the current administration approved the police/court facility bonds in 2008, Ann Arborites were assured the projected expenditure wouldn’t impact the delivery of services. Today, thanks to the city’s inability to sell a parcel of land included in the project’s financing package, the project faces a $3 million dollar shortfall. In 2009, Ann Arbor lost 27 police officers through $6.7 million dollar early retirement offer—some of our most experienced police officers. It’s time to economize significantly, wherever possible, on the design, finishes and furnishings of the police/court facility, and to look for additional savings on that project. In addition, the downtown library underground garage project should be suspended. It represents an absolutely unnecessary capital expenditure.
In the recently released 2008-2013 Capital Improvements Plan, the plan calls for cuts to improvements in parks, street repair and the sanitary sewer system, and a $5 million dollar increase to alternative transportation, the FITS project. It’s called robbing Peter to built the FITS for the University of Michigan.
We have 187 miles of roads that are classified as in poor condition. The Stadium bridges are, literally, falling down. Because the repairs of the bridges were put off, our city lost $750,000 in federal funding, and now must use its road repair money on the bridge.
Here’s how we can clean up this mistake.
I’m in favor of halting the Library Lot underground parking garage project. According to officials from the SEC, those Library Lot bonds may be repurposed. We could, then, use half of the Library Lot bonds to reconstruct the Stadium bridges. We could then invest the remaining bond money in Treasury bills for the mandatory five year waiting period before the bonds could be repaid early. There will be a penalty for early repayment ($4-$8 million dollars). The Downtown Development Authority has $14 million dollars, collectively, in its Parking and DDA Funds. The penalty not covered by the interest earned over the five years the bond money was invested in T-bills, would be made up by taking the money from the DDA’s funds. Taxpayers would save, approximately, $50 million dollars over 30 years.
The Stadium bridges would be reconstructed. Our street millage money would, then, be freed up to repair our crumbling streets.
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