A2Politico

January 10, 2011

The Politics of Money: DDA Not Able To Pay For Fifth Ave Parking Garage With Parking Revenues. Property Tax Money To Be Used.

Since 2009, members of City Council, as well as members of the Board of the Downtown Development Authority, have assured jittery taxpayers that Ann Arbor could absolutely afford the Fifth Avenue Parking Garage. No tax dollars would be used, officials chanted over and again, much like nervous Buddhists in search of a mantra. The parking garage, which was engineered at significant extra expense, to support at 20-story building atop it, will cost close to $50 million dollars. The project, when brought to Council for a vote in 2009, was supported by every member, with the exception of Ward Five Council member Mike Anglin. It was revealed in emails released to the public via Freedom of Information Requests, that the parking garage was built, primarily, because politicos wanted a hotel/conference center built atop it, not because there was a pressing need for more parking downtown. Financial experts have long predicted that parking revenues could never completely cover the cost of the bonds floated by the DDA to complete the project.

That didn’t deter every incumbent who ran for re-election this past Fall from swearing on stacks of bibles that the bonds for the parking garage  were going to be paid completely with “parking revenues.” 

First Ward Council member Sandi Smith told AnnArbor.com in July 2010 that:

In the case of the parking structure, Smith says, the project will pay for itself with revenue from users of the parking system.

On October 30, 2010, John Hieftje fibbed to AnnArbor.com that:

The parking structure is expected to pay for itself from parking revenues.

The DDA’s web site even has a handy FAQ page that promulgates this whopper.

2. Are tax payer dollars being used to construct this new parking structure?

No. The parking structure portion of this project will be paid for entirely by the DDA’s parking revenues. No tax payer dollars will be used. The users of the public parking system are paying for the construction of this new parking facility.

The DDA Board finally came clean to the public at the January DDA Board Retreat.

Vivienne Armentrout, who blogs occasionally at LocalInAnnArbor wrote about that meeting, and pointed out that the DDA Board is now planning to use tax money to pay for the Fifth Avenue Underground Parking Garage.

Armentrout writes in her blog entry:

The blockbuster news from my perspective today was that the payments on the bonds to finance the 5th Avenue underground parking structure will be made for the next 5 fiscal years from TIF funds. That’s a total of $8,481,047 transferred from the TIF fund into the parking system. 

On January 7th I  sent this email to DDA staff member Susan Pollay:

I have a quick question. At the Retreat, it was settled that the DDA would use several million in TIF (tax) money to fund the 5th Ave parking garage. There is a FAQ on the DDA web site that says this:

Are tax payer dollars being used to construct this new parking structure?

No. The parking structure portion of this project will be paid for entirely by the DDA’s parking revenues. No tax payer dollars will be used. The users of the public parking system are paying for the construction of this new parking facility.

There is a banner at the project site that says “Your Parking Dollars At Work.”

What’s the scoop? 

Here’s what Susan Pollay emailed back:

Pat,
As you know, Mayor Hieftje has been in treatment for his addiction to whoppers since, well, forever. Once he gets the candy cravings under control, staff here at the DDA will lobby to send him to U of M, where he will be treated for a variety of complaints (mostly about Newcombe Clark, Jennifer Santi Hall, Rene Greff, Karen Sidney, and A2Politico.)

So, you asked about the Fifth Avenue Underground Parking Garage funding plan. Sandi, Carsten Hohnke and John obviously were unconscious when they spoke to the media. That happens more than you might image! I’m sure you saw the 2008 Report the DDA Board prepared on funding for the structure. From that 2008 report, it’s clear that the DDA Board never planned to fund the project completely with parking revenues. 

I don’t know who wrote that FAQ page on the DDA web site. Wait. It was. Me. Hey! What’s a little FAQ between friends, right?

As for that banner at the construction site that claims the project is being funded wholly by parking dollars, that was DDA Board Prez Joan’s [Lowenstein] idea. She initially suggested a banner that read: “Yo, Sulkers! Your Tax Dollars At Work.” I thought that message might be a teeny bit provocative. So, Joan and I put our heads together and settled on the completely misleading banner language instead of the horribly insulting banner language. 

I don’t know what Sandi, John and Carsten were thinking when they told the public and press over and over and over that absolutely no tax money would be used to pay for the parking garage. Oh, alright. I know what they were thinking. They were thinking something along the lines of: “If we tell the truth, voters are going to get really mad and, possibly, realize that tax money used on the parking garage project should have been used for police or some other piddling service. So, we’ll lie. Who’s going to catch us? AnnArbor.com? We’re all in bed with the Acorn’s government reporter Ryan Stanton.” LOL. That last part’s mostly a joke (I think). 

I read somewhere that email and Xanax don’t mix. As if. Anyhoo, thanks for asking about the garage financing. I wish I could tell you more, but I’m getting a little sleepy. If you have any more questions about the DDA’s mission, ask away and I’ll do my Absolut 100 proof best to….

(Big Yawn)

Susan Pollay

That last part’s mostly a joke (I think). Seriously, the City Council members, at their recent Budget Retreat, were presented with a list of service cuts that is, of course, supposed to scare them into concluding that the only way to keep Ann Arbor afloat is a City Income Tax. They’ll be prodded, pushed, bullied and bullshitted by City Administrator Roger Fraser. We’ll be told that without a City Income Tax, fire and police will have to cut to levels that are below safe standards. We’ll be told pools and ice rinks will have to be shuttered. Roger Fraser will threaten to hold his breath until he turns blue and passes out unless he gets a City Income Tax. 

Fraser is predicting a $2.4 million dollar “deficit.” Of course, part of the problem is that the Police Court Building is $3 million over budget. Instead of cutting costs on that building, City Council members have quietly allowed Fraser to pass along the bill to taxpayers in the form of pretend budget deficits requring, of course, service cuts. One recommendation Fraser did not put foward (which would almost completely eradicate the “deficit”) would be to outsource the city’s legal department. Washtenaw County makes do with one staff attorney, while the city of Ann Arbor pays about $2 million per year to support multiple full-time attorneys (each senior assistant city attorney cost taxpayers $153,296 in 2010). Taxpayers also pay six figures yearly to legal consultants to do the legal work those full-time attorneys don’t want to do (or can’t do) A consultant, for instance, handled the recent lawsuit against the City over alleged Open Meetings Act violations regarding the Fifth Avenue Underground Parking Garage. City Attorney Stephen Postema is especially fond of throwing consultant work to the law firm at which he was an attorney while in private practice (Bodman). 

At the Council Budget Retreat, while speaking out of one side of his mouth, John Hieftje said that, after more than a decade of his ineffectual leadership, Ann Arbor needs to take a hard look at employee benefits. In February 2010, Hieftje told AnnArbor.com that “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.”

Like some religious miracle, all of the “heavily one-sided” 30- and 40-year contracts (standard union contracts are frequently decades-long affairs, after all) between the city and the AFSCME, police and fire unions referred to by Hizzoner in AnnArbor.com are up for renewal in 2011. Let’s hope when Hieftje and the Council members on the Labor Committee negotiate the next 40-year contract with AFSCME, they’ll actually read the contracts before voting to approve them, and get the union members to agree to pay toward their health coverage.

At the first Council meeting in January on the 3rd, while speaking out of the other side of his mouth, Hieftje supported a change to the Code of the City of Ann Arbor Employees Retirement System to  make cost of living adjustments paid by taxpayers to the city’s 800 retirees, and future retirees, mandatory. The change was recommended to Council by the Employees’ Retirement System Board of Trustees. Both Roger Fraser and CFO Tom Crawford sit on the Employees’ Retirement System Board. Final action on that item is expected at the January 18, 2011 meeting.

In the meantime, here’s a link to the 2012 budget documents prepared by city staff. As city budget documents show, property tax revenues rose by $11 million dollars between 2002-2009. Debt service tripled from $1 million to $3 million per year. Roger Fraser, Tom Crawford and John Hieftje have been Fudging the Numbers for far too long.

A2P’s Quick Guide to $40 million in savings you won’t find on Roger Fraser’s list:

Dissolve the DDA (Roger Fraser suggested this in his 2010 Budget Presentation to Council).

Outsource the City Attorney’s office.

Don’t over-budget the IT Department by $2 million dollars in 2012 as you did in 2011.

Don’t over-budget Water & Sewer by $5 million dollars in 2012 as you did in 2011.

Examine the total unrestricted fund surpluses in departments such as Fleet, IT, Sewer & Water, Solid Waste, Project Management and Central Stores. Return 30 percent of all surplus money taken from General Fund between 2000-2010 to the General Fund. 

Cut by 10 percent, then freeze the pay of every top city manager (good for morale). 

Beginning in 2012, increase the retirement age for most city employees to 65.

Beginning in 2012, stop offering city-funded health insurance coverage to future retirees. 

Beginning in 2015, phase out city pension coverage for future retirees. 

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