While Fire & Police Cut, Taxpayers Paid Over $1.5M Dollars For City Employee Cell Phones

by P. D. Lesko

The City of Ann Arbor cut the collection of Christmas trees to save $34,000—a move that has led to Christmas tree dumping in parks and even in the Huron River. The city also stopped leaf collection to save $280,000. In 2011, A2Politico wrote about the fact that city managers were pushing service cuts while compensating themselves with millions from the city’s General Fund for car allowances, cell phones, expensive meals out and travel to luxury resorts, such as various spas, as well as the Grand Hotel on Mackinac Island. In that 2011 piece, Third Ward Councilmember  Stephen Kunselman commented that the issue of whether city staff should enjoy such a wide variety of perks costing taxpayers millions has already been addressed. He commented via email on the issue of perks for city staff members in light of cuts to police, fire and other citizen services: “I have been under the impression that these issues have been addressed where needed; if they haven’t then they will be if there is any impropriety.”

A search of the Council minutes back through 2008 revealed no resolutions by any City Council member related to the issue of staffer perks such as meals out, stays as luxury resorts and spas, car allowances to staffers with desk jobs, or the cell phone spending. In response to questions about the cell phone allowances paid out between 2009 and 2012, Kunselman did not respond to a request for comment.

The fact is that there have been improprieties. The city’s auditor has repeatedly caught Ann Arbor’s CFO Tom Crawford (total cell phone allowance $6,528) sleeping on the job. In 2006 and again in 2010 the auditor cited Crawford’s department for sloppy controls over city-provided credit cards. The auditor randomly sampled charges paid, and found that 25 percent of the time there was no documentation. In 2013, the city’s new auditor found that employee expenses were being paid without documentation, and that city employees with car allowances were also being reimbursed for mileage (double-dipping). It was revealed that City Attorney Stephen Postema (total cell phone allowance $5,712) was among those bilking taxpayers. In a 2013 letter, Crawford assured auditors that “controls” had been put in place to keep double-dippers from repeating their scams. However, years earlier the city’s auditor had caught then City Administrator Roger Fraser misusing his city-issued credit card and charging the city for mileage while receiving a $400 monthly car allowance.

Fifth Ward Council member Mike Anglin is running for re-election. He had this to say in response to A2Politico’s questions about the cell phone perk: “As Ann Arbor moves towards spending reductions, all items of the budget need to be examined as to their benefits. A guide in this direction would be a commitment to providing services to the tapayers. Spending that does not meet this criterion needs to be examined and discussed through the Budget Committee, and City Council at large. As a member of the Budget Committee I will bring these issues before the City’s CFO so that other Council members can be aware of them and take needed actions. Savings to the Budget will allow for increase in services to the community.”

Anglin’s newly-elected Ward 5 colleague responded quite differently. Chuck Warpehoski wrote in an email: “According to the City Administrator, the City does have a cell phone and pager policy. I believe that there are valid reasons for some City employees to have cell phones, and I believe that the Section Area Administrators are better positioned to evaluate a particular employee’s need for a cell phone than is Council.”

It’s 2013 and despite continued cuts to services, cuts to police and fire, and hikes in fees for parking, parking fines, water, sewer, solid waste and city programs, cell phone allowances for city staffers, many of whom have desk jobs, continue to be paid out. In fact, between 2009 and 2012, the amount paid annually for cell phone allowances almost doubled. According to data provided by city officials in response to a Freedom of Information Act request from A2Politico, between 2009 and 2012, Ann Arbor taxpayers forked over $683,352 to city employees for cell phone allowances alone. According to city records, 196 of the city’s 709 full-time employees receive a monthly cell phone allowance. To view a list of city employees who received cell phone and car allowances between 2009 and 2012, click here. The monthly allowance, however, is only the beginning. The city’s six monthly cell phone bills run 200 pages, and include charges for data, texting, calling packages and any overages incurred.

Verizon currently charges $40 per month for 700 minutes of calling, with texting and data extra. Texting and data plans cost between $70-$100 per month, depending on the number of texts sent and the amount of data transferred (uploaded and downloaded). Thus, each city-owned cell phone could be costing in excess of $1,680 per year in addition to the phone allowances. What this means is that taxpayers could be paying, in addition to the $218,702 in phone allowances paid out on 2012, an additional $329,280 in calling, texting and data charges. Conservative estimates would, then, put the total amount spent on city-owned cell phones given to staffers in 2012 alone between $420,000 and $520,000 per year.

Newly-elected Ward 2 Council member Sally Hart Petersen, who ran a campaign for office that stressed her business background, as well as her desire to push fiscal responsibility, thinks paying for cell phones and pagers “reasonable.” She wrote in response to an email asking where she stands on the issue: “The city does have a 9-page policy regarding city-issued cell phones and pagers. Generally, employees who must be available 24/7, or those who must be away from their office to perform their jobs (such as Park and Rec employees) are issued phones or pagers. I assume that employees who must be available 24/7 include senior and middle management. This is reasonable to me.”

Petersen’s Ward 2 colleague Jane Lumm, an Independent, whose popularity is enormous thanks to her consistent and outspoken support of fiscal responsibility and funding citizen services, when told of the amount being spent on cell phone allowances, texting, data and calling plans sighed deeply and said, “Seriously? You’re joking, right? That’s ridiculous!”

The $420,000 to $520,000 paid out of the General Fund for the cell phone perk corresponds to a significant portion of the $2.4 million dollar 2009 budget deficit Ann Arbor CFO Tom Crawford used to justify service cuts and fee hikes built into the budget he’d prepared along with then City Administrator Roger Fraser. In fact, in 2010 Fraser recommended eliminating 14 firefighter positions to save the city $400,000.

When A2Politico asked City Administrator Steve Powers via email whether it was his opinion “that increased spending on cell phone allowances and other cell phone costs and car allowances for city staffers is an expense that should be continued?” He replied that, in essence, the cell phone allowance policy and implementation had little to do with him. He wrote, “As most of the time period of concern predates my arrival in Ann Arbor, I can’t answer your specific questions at this time. When are you planning on running your piece?” When it was pointed out the number of city staffers given cell phone allowances had increased by 25 percent in 2012 (he took over from Roger Fraser in April 2012), Powers back-tracked, again via email: “I believe cell phone expenses should be paid by an employer for employees whose job responsibilities require 24/7 access or being away from their offices to perform their duties. The administrative policy in effect since 2009 provides the purpose and procedures for the city-funded mobile communication expense. I have eliminated vehicle allowances for service area administrators.”

It appears, however, that Powers and the managers whom he supervises aren’t adhering to the 2009 administrative policy. Cell phone allowance money has been paid to 15th District Court Judge Christopher Easthope, a former Ann Arbor City Council member. Easthope, in fact, is among the top three in cell phone allowance pay-outs since 2009, some $6,258 dollars. The administrator of the 15th District Court, Keith Zeisloft, has collected $6,392 in cell phone allowance money. According to officials at the 15th District Court, Easthope is not expected to be on call 24/7, and has never been expected to be on call 24/7 during the course of his duties. Easthope’s colleagues on the bench, Judges Elizabeth Pollard Hines and Joseph Burke got on the cell phone allowance gravy train in 2012. It ‘s not clear whether these taxpayer-funded allowances began before or after Steve Powers took over for Roger Fraser. The list of city employees receiving cell phone allowances includes the names of dozens of staffers who work 9-5 shifts in their offices each day, who are not required to be on call 24/7.

Ward 1 Council member Sumi Kailasapathy is a CPA. She is focusing her efforts on hunting down waste and finding savings in the city’s $320,000,000 budget in order to restore lost services. When asked about whether she supported the expenditure of money from the General Fund for cell phone allowances and city-owned cell phone expenses, her answer was clipped. “No. Send me that information. I want to see it.” Ward 1 Council member Sabra Briere forwarded A2Politico’s email sent to her requesting a comment to the City Administrator, and never responded.

Finding out how much the city is spending each month on calling, texting and data plans for those 196 cell phones is complicated by the fact that according to city officials bills for texting and data plans are not combined, or tracked in a unified spreadsheet. No one at City Hall knows exactly how much General Fund money, total, is being spent to provide 196 city employees with cell phones. A2Politico originally filed a Freedom of Information Act request for the city-owned cell phone text and data plan charges paid between 2009 and 2012. City officials responded that the request would involve combing through, at minimum, 9,600 pages of material to find the texting and data charges and to redact information, as necessary, from the materials related to phones provided to police.

While Ann Arbor city staffers continue to be allowed to spend General Fund money on themselves like there’s no tomorrow,  throughout the country, cities and counties are trying harder than ever to make ends meet. The day after Democratic Governor Jerry Brown took office in January 2011, he asked department heads to collect 96,000 state-provided cell phones. A June 17, 2011 piece published in the Long Beach Post reports that, “The Los Angeles County Board of Supervisors directed county department chiefs to review their respective cell phone and data card use following an audit of the Department of Child and Family Services identified $514,000 wasted on phones and devices that were never used or used for what was deemed ‘questionable’ purposes, such as calling other countries.”

In June of 2010 Jim Fouts, Mayor of Warren, Michigan cut the cell phone allowances of all the 125 municipal city employees who had been receiving the money. Fouts also eliminated the monthly car allowances paid to city employees. Fouts told the Macomb Daily, “These are austere times, and sacrifices have to be made by everyone.”

In 2009, Washtenaw County Commissioner Kristin Judge turned in her county-provided cell phone and suggested that Washtenaw County could save $350,000 per year by cutting the cell phone perk. Ann Arbor County Commissioner Conan Smith accused Judge of “grandstanding.” In an October 2009 interview with A2Politico Judge said, “In my opinion, the cell phone budget is one of the most obvious places to find immediate savings. As much as I dislike this statement, ‘Everything is on the table,’ I will continue to look at the entire budget line by line. Some people think commissioners should not look at each line of the budget, but I disagree. I have been accused of micromanaging because I want to see where all the money is going, but I will not vote on $1 unless I understand the purpose of the spending and what we get for that $1. The people of Washtenaw County expect and deserve that from their elected officials.”


Short URL: http://www.a2politico.com/?p=14799

8 Comments for “While Fire & Police Cut, Taxpayers Paid Over $1.5M Dollars For City Employee Cell Phones”

  1. A2P,

    Your 2010 post identifies Ms. Pollay as “one of the most highly paid city employees”. I was under the impression that she is an employee of the DDA, not the City. The DDA has an annual budget of about $4 million, of which it spends about $1.2 million on administration. I would assume that the administrative expenses include salaries and benefits for its staff.

    The DDA is funded with a TIF tax diversion scheme where a portion of the tax for the improved values of properties within the DDA district are diverted from the City, the County, AATA, WCCC and the Library. It is my understanding that the DDA TIF diverts more than $1.5 million from the City’s tax coffers to the DDA’s account. I believe the DDA also receives funds from downtown parking revenues. In other words, the DDA is well funded, in spite of its difficulty keeping its spending within its revenues.

    The DDA is an independent entity with dedicated sources of funding. Why is the City using its scarce resources to pay the car allowance for the DDA’s Director?

  2. Thank you for another interesting read. The article provides a link to a “list of city employees who received cell phone and car allowances between 2009 and 2012″. The last page of that document shows that the Executive Director of the DDA, Susan Pollay, received $3,787 from the City in each year 2009, 2010, 2011, and 2012 as a vehicle allowance. (4 year total = $15,150) Why does our cash strapped City pay a car allowance to an employee of a separate entity?

    • @Jack, I am planning to do a piece on the car allowances, as well. In the May 2011 piece posted to A2Politico about the Ann Arbor city government desk jockey car allowances (http://www.a2politico.com/2011/05/ann-arbor-pays-thousands-monthly-in-car-allowances-and-mileage-reimbursements-to-city-employees-with-desk-jobs/), we read:

      “Susan Pollay is the executive Director of the Downtown Development Authority and on the Advisory Board of the getDowntown organization. She told AnnArbor.com in 2010 that, “The DDA has been a committed supporter of the go!pass program as a partner in the getDowntown program for more than a decade.” In fact, Pollay handed out commuting “awards” last year which included an award for total number of sustainable commutes. Like Stephen Postema, Susan Pollay is one of the most highly paid city employees, earning $94,689. Pollay, who has a desk job, and who lives in Ann Arbor, is also paid a $315.63 per month car allowance. A go!pass for the DDA’s Executive Director would cost taxpayers $5 per year, versus the $3,787.56 car allowance she is paid in addition to her salary and benefits.”

      I am wondering, then, if the data A2P received in 2010 under-stated the amount of Pollay’s car allowance. I’ll check it out with the fine FOIA officer (I mean this sincerely) in the City Clerk’s office.

  3. Thank You for this story!

  4. Go A2P! Thanks for turning over the rocks and exposing the slime to the light of day!

  5. A very good post. In hard times why should taxpayers pay for perks?

    • @Glenn, the perks, one could argue, have made the hard times even harder, as fees have been hiked and services have been cut to pay for them. We’re supporting an entitled city staff rather than dedicating as much money as possible to services.

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