A2Politico: Ann Arbor Politics Grilled To Perfection

September 7, 2010

A2P Grillin’ the Media: AA.com ‘Dog Bites Man’ Campaign Finance Coverage

Filed under: Mayor Hieftje, political reporting — Tags: , , , , , , , , , , — A2 Politico @ 8:00 am
VN:F [1.9.3_1094]
Rate this posting
Rating: 5.0/5 (4 votes cast)

It was recently revealed that a certain German Fuhrer was of Jewish and African heritage. To read the piece from Time magazine, click here. To ponder the monstrous nature of the revelation, click nowhere. Just sit there.

On August 1, 2010 in a piece posted to AnnArbor.com, John Hieftje said,  ”I think it’s [the opposition] a Tea Party-like movement. Very similar to the Tea Party, we have people involved in this movement who have never been involved in city government, never even applied to serve on a board or a commission, and yet they want to lead the city.”

I’m not, of course, comparing Hieftje to Hitler. I’m merely pointing out that irony comes in all shapes and sizes, that some local politicos shovel the Schwachsinn faster and deeper than others, and that uncovering the truth takes careful analysis and a look at the candidate’s campaign finance forms, well, not just a look—which is what AnnArbor.com recently did—but a really close look and a willingness to connect some pretty obvious dots. 

“Candidates in Washtenaw County spent thousands on campaigns, new finance reports show,” trumpets the AnnArbor.com September 3, 2010 headline. Dog bites man campaign finance coverage. Woof. Yawn. Scratch. 

For kicks, AnnArbor.com’s Ryan Stanton includes a few graphs about a campaign finance violation “revelation” in his post:

His [Hieftje's] reports also show somewhat of an oddity — a $6 donation from his campaign to the Ann Arbor-based nonprofit Ecology Center, accompanied by a letter from Heiftje’s campaign treasurer, Leah Gunn.

Gunn acknowledged the campaign violated state law by accepting an anonymous $6 contribution, which she characterized as “money in the dish,” and reporting it. The remedy for these types of situations, according to state law, is to donate the money to a 501(c)3 nonprofit organization, and Hieftje’s campaign chose the Ecology Center.

“It was me entirely,” Gunn said by phone, taking credit for the campaign finance violation. “I should have known better, but at least we did have a remedy.

The campaign finance violation “uncovered” by Stanton in September happened in July, actually, and was revealed in the initial campaign finance filings. Whatever. It’s six bucks. It’s the creepy, treacly reporting of County Commissioner Leah Gunn taking “credit” for the campaign violation that is almost the best part of the piece. 

Almost. 

Buried, in the middle of the AnnArbor.com post is this sentence: “Hieftje took $1,000 from the Michigan Regional Council of Carpenters.” Woof.

First of all, the $1,000 donation John Hieftje “took” from the Michigan Regional Council of Carpenters on July 29, 2010, was reported as a “late” donation in the post campaign filing. That the donation was made “late,” meant it could be kept secret until after the election. A curious sort might wonder why the union gave the money “late.” Here’s one possible explanation. The busy carpenters at the over-budget Temple to the Three Judicial Dieties/Herbert Dreiseitl Water Sports building couldn’t put down their T-squares long enough to make out the $1,000 check to John Hieftje.

Here’s a more plausible explanation. Arranging for “late” donations is a way to hide them until after the election. In fact, John Hieftje has a long history of getting “late” donations from PACs. It goes back to his first mayoral campaign: Disclosed on 10/30/2000: donation from the Ann Arbor Area Apartment Association, PAC candidate account; donation from the Transport Workers Union PAC.

But why would Hieftje need to be sneaky and hide the Michigan Regional Council of Carpentars donation?

Because while John Hieftje and his political pals were running as the pure-blood “progressive” Democrats, Ann Arbor’s mayor and First Ward Council candidate Sandi Smith were taking money from a union whose PAC supports Republican candidates and county Republican parties. It’s tough to sell your fairytale facade as the uber-progressives with donations from a PAC that supports Republican candidates mucking up your campaign finance disclosure forms. Just ask Representative Pam Byrnes, whose campaign for State Senate was derailed in Ann Arbor by a postcard put out by a Republican-financed PAC supporting her candidacy. 

On Labor Day, a piece in the Detroit Free Press about the Michigan Regional Council of Carpenters appeared. Titled, “Breaking with Dems, carpenters union planning to back Snyder,” it was reported that: “The carpenters union supported Republican Dick Posthumus’ gubernatorial bid in 2002, and has given money to Oakland County Executive L. Brooks Patterson and the Oakland County Republican Party. John Hieftje, Dick Posthumus, and L.Brooks Patterson. There’s a picture worth $1,000 words, don’t you think? Union officials from the  Michigan Regional Council of Carpenters held a press conference on Labor Day to announce that the group’s PAC was backing Republican Rick Snyder whose running mate, Brian Calley, favors making Michigan a right-to-work state. Go figure. 

Of course, since his self-proclaimed successful “reorganization” of Ann Arbor City government, John Hieftje has worked hard to bring Ann Arbor closer to winning an award as Michigan’s first right-to-work city government—all thanks to the large number of temporary employees hired each year, and by voting to exempt the city from its own Living Wage Ordinance.

On July 29th John Hieftje took a “late” $1,000 donation from a union PAC that supports Republican candidates, and two days later he was whispering in the ear of the local media about a supposed “Tea Party-like” movement looking to oust the “experienced,” uber-progressive Dems already in office.

To ponder what it means to play the part of the hypocrite with amazing alacrity, click nowhere. Just sit there and repeat after Hizzoner: Aber ja, mein leibchen!  

Popularity: 5% [?]

August 23, 2010

The Politics of Backdoor Privatization: Ann Arbor Residents To Pay $100,000 Each to Serve On All Volunteer Fire/Police Departments

Filed under: Mayor Hieftje, city council, city services, infrastructure — Tags: , , , , , , , , , , , — A2 Politico @ 11:18 am
VN:F [1.9.3_1094]
Rate this posting
Rating: 5.0/5 (8 votes cast)

This piece, below my comments, comes from Salon. I thought Alyssa Battistoni’s perspective was refreshing, and her look at backdoor privatization captures exactly what is going on in Ann Arbor. Here, in Lake Woebegone-on-the-Huron, where all the men have Ph.D.s, all the woman have Ph.D.s, but are doing “research” on their books at home while raising their children, all of whom are above average, backdoor taxation and backdoor privatization of services are on the rise. Of course, AnnArbor.com’s Simple Simon reporting of Hizzoner’s wild logic that fewer police and firefighters are needed because our city’s “crime rate” has dropped, and firefighters need to hook up to a hydrant less and less has done wonders to assure the plebes that Rome will never burn, or that Alaric will never breach the 100 percent organic, free range city walls and sack the Temple of the Three Judicial Dieties. 

As we all know, those foolish enough to question the fairytales about police and fire safety told by the elected leaders of our city are misleading the public shamelessly, and looking to spark needless alarm amongst the oldsters who, yes, might need to dial 911—if they could find the eleven on their phones, that is. Here’s what we might overhear in the Executive Wash Room at City Hall: the reporters and editors at the New York Times and WSJ are all Tea-Baggers who’ve never even done a shred of work at a single quality news publication!  

Heck, John Hieftje and Roger Fraser are just a single AnnArbor.com government news story away from being able to claim that their systematic decimation of our police and fire coverage has actually resulted in less crime and fewer fires. Yes, fair people of Ann Arbor, if we got rid of our police and fire departments, Ann Arbor, could be just a heartbeat away from winning awards as the only town in the entire United States where there are absolutely no reports of crime made to sworn officers, or reports of fire emergencies made to trained firefighters. As the Police-Court Tin Can goes further and further over-budget with more and more 10-0 votes to allocate General Fund money to the Black Hole of a project by elected leaders, look for City Council to propose the Ann Arbor all volunteer police and fire departments.

A “study” on the switch to all-volunteer police and fire departments prepared by city staff, and given three thumbs up by Roger Fraser, will provide the usual quality research to Council and the public. The report will outline that in Madison, Seattle, Portland, Oz and Wonderland, volunteer police and fire fighters are required to buy their own fire trucks and police cruisers, and volunteers pay their respective cities $100,000 per year each. Volunteer police and firefighters will be appointed by Mayor and Council from among members of PAC, the Housing, Planning and Environmental Commissions. Katherine Talcott, who was hired part-time to administer the Percent for the Art Program, then hired full-time to administer the same program—with her salary being paid from the city’s water-sewer slush fund, will be appointed the Police/Fire Chief. Her appointment will be made just as soon as German (con) artist Herbert Dreiseitl gets an installation for a new fountain for anyone, anywhere completed. 

The Downtown Development Authority (DDA) will be tapped for $2 million dollars per year to pay for the extra management of the Ann Arbor all volunteer police and fire departments. 

Former members of the Downtown Development Authority will go before Council seated in shopping carts, talk about their objections to the back-room dealings that resulted in, well, things they can’t really elaborate on because, well, they might like to be appointed to another board or committee in the future. 

Enjoy the Salon piece. I did.  

 

 

 

It has come to this: Parents are now being asked to send their children to school with their own toilet paper. And not just toilet paper, but all sorts of basic items that schools themselves used to provide for kids. It’s all part of a disturbing trend, highlighted by the New York Times last week, of cash-strapped public schools — their budgets eviscerated by state cutbacks — shifting more and more financial responsibility onto parents.

Privatization meant transferring responsibility for entire programs or functions to the private sector. But with the drastic budget cuts that states have been forced to make, responsibility for public services and programs is literally being forced into private hands one roll of toilet paper at a time. We’ve entered the era of backdoor privatization.

On the surface, these stop-gap measures don’t seem unreasonable. After all, it’s hardly new for parents in well-off school districts to chip in for supplies, music classes and even teacher’s salaries in an effort to minimize the effect of school budget cuts on their children. What is new, though, is the extent to which families are being asked to contribute basic items. This may be too much to ask of parents who are struggling to pay their own bills — especially since they’ve already paid taxes that are supposed to support the public school system.

Nor is backdoor privatization a phenomenon limited to local schools.

Public university systems are increasingly emulating private universities by turning to wealthy alumni for donations — even as tuition rises because some legislators see hiking it as a way to raise money for their fungible state budget items.

Missouri, Georgia, and Arizona have been forced to slash their transit budgets and services, leaving hundreds of thousands without a way to get to their jobs, or to a doctor, or school. This has forced thousands of people to revert to private modes of transportation.

Many states have also cut funding for fire and police departments, resulting in slower emergency response times and diminished crime investigation. Fire department cuts have exacerbated the trend in wildfire-prone areas (among those who can afford it) of hiring private firefighting companies to protect homes, heralding a return to the 19th-century practice in which private firefighting companies raced each other to put out blazes and collect their reward.

Some towns have even started to shut off street lights to save money on electricity bills.

This backdoor privatization diminishes the quantity and quality of the services available to the general public while nurturing the growth of a parallel profit-making infrastructure for those who can afford supplementary services.

Presumably, such budget cuts are temporary, a product of the recession. But it’s not hard to imagine a future in which, say, ever-strapped state and local governments decide to follow the private sector’s lead in taking advantage of new “efficiencies.” In fact, some schools are already refraining from hiring needed teachers despite receiving federal dollars to help tide them over for the year. And even temporary cuts can do a lot of damage: Public transportation reductions, for example, can force people to give up jobs that require them to commute to work.

Certainly, some budget cuts are necessary in difficult economic times. But when we decide it’s better to turn off street lights and shut down bus lines than to raise taxes on the rich, reduce charitable tax deductions, or create a value-added tax, we are deciding that the quality and availability of the public goods should be determined by the amount individuals can pay — and not the amount a rich nation can afford. It’s a choice that undermines not only our claim that we value “ordinary Americans” as equals but also our ability to produce the healthy, educated, productive population on which our future prosperity depends.

The best-case scenario is that the impact of these cuts will help people understand just what their tax dollars are paying for and spur greater consciousness about the relationship between public spending and public goods. Now that shortages of teachers and books are spreading to suburbia, we’ll decide that shortfalls in education funding are unacceptable after all.

The worst-case scenario, though, is that reduced public spending on essential goods and services will continue to hollow out our infrastructure and reduce our capacity to meet the needs of most Americans. And that rather than have a real conversation about which public goods we consider essential and what we’re willing to do to pay for them, we’ll gradually starve core programs until working- and middle-class Americans grow accustomed to a lower standard of living while better-off Americans pay out of pocket for benefits that everyone once enjoyed.

Here’s hoping for a wake-up call.

Popularity: 20% [?]

July 28, 2010

The Politics of the Pen: Dirty Political Tricks Versus Poise & Grace

Filed under: Mayor Hieftje, campaigns, elections, political reporting, politicians, politics — Tags: , , , , , — A2 Politico @ 11:54 am
VN:F [1.9.3_1094]
Rate this posting
Rating: 4.9/5 (18 votes cast)

A letter to the editor to AnnArbor.com from Ann Arbor voter, Wendy Cooper

Patricia Lesko Has Shown the Poise and Grace of a Leader

“The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy.”-Martin Luther King, Jr.

Our community faces unprecedented challenges now and in the foreseeable future. How has Mr. Heiftje handled the challenges to this point? By eliminating 37 positions from the fire department; 83 positions from the police department; increasing per capita debt by almost 64 percent; increasing parking fines and more than doubling his salary. When faced with his first serious challenger in years, he responded by using political antics and ad hominem attacks on his opponent. When controversy arose over the state of the city or the fact that he is spending over $800,000 dollars on fountain art in front of the over budget city hall building – rather than save public safety jobs – instead of taking responsibility for his decisions he responded with his usual, “It’s not my fault, I feel really bad for those guys, but it’s not my fault.”

In contrast, Ms. Lesko has from the beginning of her campaign focused on ways to restore the positions in public safety lost by Mr. Hieftje’s budget cuts. Her message won the support of the police and firefighter unions early on; even though she made it clear she would not cut any sweetheart deals with them in exchange for their support. When faced with challenges regarding statements made during her campaign stops, she admitted when she was mistaken and corrected the statements. She has continued to focus on the issues that are important in this race and over time some of her statements, especially regarding the loss of positions in the fire department proved premature but true. If she was guilty of anything it was having the ability to see through the political gamesmanship being played by her opponent.

We have all witnessed over the last few weeks the heavy damage that can be leveled by the press when they react without researching the facts behind the story. Shirley Sherrod, lost her reputation, her job, and her dignity when the press picked up on a story written by a reporter with a hidden agenda. It was discovered only after the damage was done that her statements were taken out of context and the statements that didn’t support the message the reporter wished to convey were conveniently left out of the story. The parallels between Ms. Lesko’s treatment by the local press and the Sherrod story are unmistakable. The reporter covering Ms. Lesko, rather than go to city documents for verification, went to her opponent and government officials that report directly to her opponent – hardly trusted sources.

Ms. Lesko has shown that she recognizes at its most basic level the government is here to protect the community it serves and to do that it needs to work with the departments that provide those services. She has also made it painfully clear that the years ahead will force us to make tough decisions – unpopular decisions – and she has stated many times she is not afraid to make those tough decisions while working to build a consensus in the government. Hieftje, on the other hand, seems to be obsessively worried about being popular and voting with the consensus.

It’s time to let Hieftje know that the voters in Ann Arbor are smarter than he gives us credit for, and that we won’t fall for his political antics.

When you vote on August 3rd, ask yourself the following:

Do we really want our Mayor working for the largest land owner in the City? Is he able to remain objective when both he and his wife are employed by the University?

Do we want a Mayor when challenged to say, “It’s not my fault, I can’t do anything about it?”

Or, do we want our Mayor to accept responsibility for his/her actions and work on a solution?

Do we want a Mayor that spends over $850,000 dollars on fountain art in front of his over budget new office building while slashing city services and public safety jobs?

Do we want a Mayor that is prepared to spend millions to assist the University in building another parking lot while the Stadium Bridge and surrounding roads are in major disrepair?

We can’t fall for the dirty political tricks pulled by a candidate that fears for his future. Ms. Lesko has shown over and over that she will not sacrifice others to advance a personal agenda as Mr. Hieftje has done. She has faced challenges and controversy throughout the campaign and each time she has refused to back down or to do something just because it might earn her a few more votes. We owe it to her to listen to her message and not the rhetoric.

Popularity: 58% [?]

July 16, 2010

The Politics of Taking Credit For Everything: A Look at the Incumbent’s Web site

Filed under: Mayor Hieftje, city services, elections — Tags: , , , , , , , , , , , , , , , — A2 Politico @ 7:57 am
VN:F [1.9.3_1094]
Rate this posting
Rating: 4.9/5 (8 votes cast)

On May 30, 2010, AnnArbor.com’s Ryan Stanton sent me a private email telling me that I should let him know what I thought my opponent should be “called out on.” It would be patently unethical for me to email back and forth privately with Stanton concerning what I think the Mayor needs to be called out on, so I thought I would include the several thousand people who read A2Politico in the discussion. 

On June 29, Wendy Cooper, a writer evidently fed up to the gills with what she referred to as “some of the worst reporting I can remember,” posted “Bias in Coverage of Mayoral Race Unconscionable” to AnnArbor.com. Last August, AnnArbor.com claimed a Sunday circulation of about 52,000. In less than a year, 10,000 paying subscribers have jumped ship, right along with the accompanying annual revenue. Tony Dearing reported to the Yale Forum on Climate Change in April 2010 that AnnArbor.com attracts 200,000 unique visitors per week, the same number of uniques he reported in January 2010 to A2Politico.com. 

While doing A2Politico.com, I have several times scooped AnnArbor.com. The first time was when Mayor Hieftje made his perpetual claim that “crime was down,” and I went to the FBI web site and provided links to crime statistics that contradicted the Mayor’s claims. That September 14, 2009 blog entry was picked up by AnnArbor.com. 

Since Ryan Stanton asked, let’s look together at John Hieftje’s web site. The site is up. Well, mostly. Someone commented to me recently that he thought the mayor was waiting for federal and/or state funding to get construction on his web site finished.  

From the incumbent’s web site: “I led City Council in setting the policy for the complete re-organization of the City bureaucracy, now saving taxpayers over $15 million per year.”

IRS tax returns show that Ann Arbor paid the same in wages to its employees in 2009 as it did in 2003—except we’re paying more money to 200 fewer employees. Furthermore, vested employees who are taken off the city’s payroll, move to the city’s pension fund, where there is now a $190,000,000 unfunded liability. 

The incumbent’s reorganization of the “bureaucracy” (really the City Administrator’s reorganization, but as James Leonard wrote recently in the Ann Arbor Observer, Mayor Hieftje doesn’t have any problem taking credit for the work of others) has resulted in exploitative hiring and employment practices. Ann Arbor hires full-time temps by the dozen (lots of them women), pays them low wages, gives them no benefits and keeps them out of city unions which would bargain better working conditions and pay. Thanks to the incumbent’s “reorganization,” Ann Arbor city government has become Walmart on the Huron. The National Organization of Women slammed the retailer for: “sex discrimination in pay, promotion, and compensation, wage abuse…and discouraging workers from unionizing.” The same thing is happening in our town, encouraged by our City Administrator, and embraced as a political plus by the incumbent and Fourth Ward Council member Margie Teall (who is also taking credit for spearheading the “reorganization” and for millions in savings on her web site).

Exploitative hiring and employment practices have a human impact. I recently met a full-time temporary city employee. A single mom, the woman has worked for Ann Arbor for several years and earns $10 per hour without benefits, or the hope of a raise in pay. Her job has been posted year-after-year, so there is no question that the city needs an employee to fill the position on a regular basis. It’s time to revoke our city’s exemption from its own living wage ordinance. Either we admit openly that our city is choosing to engage in exploitative hiring and employment practices, or we must put an end to the practice of relying heavily on full-time temporary city employees, and relegating them to the ranks of the working poor.  

Then we have this claim: “We developed one of the best recycling systems in the nation, thus reducing landfill waste and saving taxpayer funds”

One of the best recycling systems in the nation only processes 35 percent of its materials from the city of Ann Arbor. The rest come from surrounding communities. As for the incumbent’s claim of reducing landfill waste, the city’s own website and a June 2010 piece in the Ann Arbor Observer by Dave Gershman, make clear that in Ann Arbor the amount of material going to the landfill has increased since 2004. This graph is from the city’s web site:

Compost

According to the chart above, the total number of tons recycled has stagnated since 2002. Let me put this another way, the total number of tons hauled by Recycle Ann Arbor hasn’t increased substantially since 1998.

The taxpayer funds saved as claimed by the incumbent? 

Ann Arbor taxpayers foot the bill for the trucks, fuel, and repairs of Recycle Ann’s Arbor’s collection vehicles, purchased for $225,000 each in 2004. 

Look again at the chart above at the number of tons recycled.

By 2008, the cost to taxpayers to have Recycle Ann Arbor haul virtually the same number of tons of material to the MRF that the company hauled in 2003, had risen from $766,000 to a whopping $1.6 million dollars. City Council approved the payment of $1.8 million dollars to Recycle Ann Arbor for fiscal year 2010. It’s time to stop the practice of awarding no-bid contracts, such as the one awarded to Recycle Ann Arbor. No bid contracts don’t benefit taxpayers.

From the incumbent’s web site: “Fought successfully to increase new bike lanes and sidewalks, thereby enhancing pedestrian access and reducing greenhouse gas emissions.  Ann Arbor’s bike lane system grew by 600 % in just 5 years with more miles coming on line each year.”

Here’s a photo of a bike lane on Wall Street.

Compost

When John Hieftje was elected, Ann Arbor, which is 27.7 square miles, had 8 miles of on-road bike lanes. There are 42 miles of bike lanes, now. Boulder, Colorado boasts 300 miles of bike lanes, and the island of Manhattan, at 22.9 square miles, has gone from 200 miles to 400 miles of bike lanes since 2006. Both Hieftje and Fifth Ward incumbent Carsten Hohnke are taking credit for the expansion of the bike lane system. Neither, of course, is taking responsibility for the sorry state of the either the roads or the in-roads bike lanes, such as the one above. We need to not only repair our roads, but examine the policies in place that shape the Capital Improvement Plan (CIP), policies that have resulted in CIPs that have neglected the Stadium bridge, and resulted in our city having the third worst roads in Michigan. We also need to re-open the current CIP and focus more of the money allocated to road repair.

The incumbent claims he:

Championed the Greenbelt initiative. 

500 volunteers worked on the Parks and Greenbelt Millage initiative, and the incumbent, according to Greenbelt organizers, dropped not a single piece of literature, nor did he make any donations to the Greenbelt initiative that he “championed,” according to donor statements filed with the State of Michigan. He was described by those who did champion the Greenbelt as having done “very little work.”

This next claim is classic Hiefje:

Established budgets that have allowed City Government to weather the long recession with a millage rate that is lower today than it was 10 years ago;

He has repeated this over and over during our debates. Technically, it’s the truth. So why are our property tax bills up, up, up? Because as any good politico knows raising taxes will get you bounced out of office during the next election cycle. Raising fees for services, water, sewer, storm water and solid waste, however, will provide millions yearly in additional revenue, while allowing the incumbent to take credit for “a millage rate that is lower today than it was 10 years ago.” 

Fee hikes have been substantial:

2002 Water charges to residents: $13.262 million

2006 Water charges to residents: $16.881 million

2009 Water charges to residents: $18.971 million

 

2002 Solid Waste charges to residents: $7.3 million

2006 Solid Waste charges to residents: $9.6 million

2009 Solid Waste charges to residents: $12.1 million

Here is a list of the various departmental fund surpluses from the city’s most recent audited financial statement:

Water — $9.3 million

Sewer — $44.7 million

Street Repair Millage Fund Balance — $19.4 million

Stormsewer — $5.2 million

Solid Waste — $8.9 million (allocated to the single-stream recycling conversion)

Fleet Surplus — $7.5 million

IT — $4 million

Project Management — $1.5 million

Central Stores — $1.6 million

Total unrestricted fund surpluses: $93,100,000

It’s time to roll-back water, storm water management, sewer and solid waste fee increases, and return as much as possible of the millions built up in those various funds to the General Fund, and directly to the taxpayers.

This next one is, perhaps, most indicative of the lengths the incumbent will go to stretch the truth:

Has been a champion for the Allen Creek Greenway. The City is working with the Arts Alliance and the Allen Creek Greenway Conservancy to create a Community Art Center and Greenway Park out of the old county and later, city maintenance yard at 415 West Washington.

At a June meeting of the Greenway citizen volunteer group and candidates running for office, Margaret Wong, an architect and long-time Greenway supporter, did a very thorough presentation about the Greenway, and explained that the Greenway group has “partnered” with the city for five years. Partner means little more than politicos take credit for being “champions” of the Greenway that doesn’t exist. Wong explained that several of the parcels necessary to complete the Greenway had been for sale within the past few years, but that city officials, such as Greenway “champion” Mayor Hieftje, had passed on the chance to allocate Greenbelt money on making the Greenway a reality. When he tried to take credit for having passed a “resolution” that dedicated three city parcels necessary to complete the Greenway, he was quickly corrected by a Greenway citizen volunteer that his resolution had been “non-binding.”

The Ann Arbor Skatepark group is now in the purgatory that is the dreaded city “partnership.”  That partnership is two years old. Fifth Ward incumbent Carsten Hohnke at debates this election season has twice trotted out “city support” of the skatepark. 

Both the Greenway and Ann Arbor Skatepark projects should be accreted by the city and funded. The skatepark could be funded through the parks millage. The Greenbelt millage money should be used to complete the Greenway. 

This last bit of political exaggeration on the part of the incumbent is, perhaps, the most egregious of all. During our debates, the Mayor has, repeatedly, taken credit (as has First Ward Council member Sandi Smith) for “doubling the number of beds at the shelter.” Officials at the Delonis Shelter estimate they serve 1,500 homeless individuals per year. The “emergency” funds allocated by both Ann Arbor City Council and the Washtenaw County Board of Commissioners provided shelter to a fraction of the 3,000 people in need throughout the county. (The County financed shelter for 10 families, and the City allocation bought 60 more beds.) The “emergency” funding left the majority of the homeless out in the cold, literally. Finally, the money used to double the beds was a one-time allocation. John Hieftje and Sandi Smith take political credit for “doubling” the number of beds at the shelter, but conveniently neglect to mention the doubling was funded just once.

Over the past 4 years, Ann Arbor has built just 15 new units of affordable housing per year. The Chair of the Ann Arbor Housing and Human Services Board, Ned Staebler told City Council in last Fall, “This [Ann Arbor] is not the kind of place where we let people freeze to death on the streets.” Since 2007, he has been the Chair of the city’s Housing and Human Services Board. Staebler’s Board advises City Council on the “needs of the city’s low income residents.” Evidently, adequate housing and a significant bump in the number of shelter spaces were not among the pressing needs of low income residents in Ann Arbor this year. Or last year. Or the year before that one. 

The best way to avoid crises, is to anticipate potential problems. It’s a simple management strategy applicable to the most complicated of situations, such as flood risk management, homelessness, infrastructure fiascos such as the Stadium bridge, and our crumbling roads.

For instance, it’s going to get cold again. So, city government needs to be talking about how we’re going to deal with the ever-increasing problem of homelessness now. There are cities, such as San Francisco, that have a 10-year plan to abolish chronic homelessness. The plan may not be perfect, but at least there is one. We need a similar plan, and the same kind of proactive government that routinely takes responsibility for missing the mark, and gives credit to those who’ve earned it for real successes, not invented ones, such as “doubling the beds” at the homeless shelter, and “reducing waste to the landfill.” 

I went to the Georgetown Mall Citizens Committee meeting recently and read among the materials that at the April 2010 meeting of the group, the city attorney present had been tasked with bringing to the next meeting samples of blight ordinances which might be used to force the property owner to clean up the six acre Georgetown Mall mess. Three months later, the attorney showed up with not a single sample ordinance. Neither the Mayor, nor Fourth Ward Council member Margie Teall, both of whom attended the meeting, found the lack of follow through worth an apology to the many citizens gathered around the table. These people are concerned with blight and rising crime at the deserted Georgetown Mall. What neighborhood residents achieved at their meeting with the Mayor, Teall, a city planner, and a city attorney was, exactly, zero concrete action on the part of city government to help rectify the problem.

Then, again, the six acre parcel at Lower Town on Broadway has been allowed to remain blighted for years. There is obviously more concern on the part of current elected officials with downtown, than with the city areas outside of downtown, or the city as a whole. This has led to the south side of Ann Arbor looking more and more like Flint, and is again, indicative of a style of governance that is myopic and reactive, instead of responsive and planned. Downtown vibrancy is important, but not to the exclusion of entire swaths of our city and the people who live there. The incumbent has an entire section of his web site devoted to “Downtown” in which he proclaims: “In his next term, Mayor Hieftje will continue to work closely with locally-owned merchants to insure a vibrant downtown that is easy to access for residents.”

What he suggests is a roadmap to socio-economic segregation and eventual economic disaster for our city, as the number of blighted areas outside of downtown increase and those already blighted remain blighted. The site permits, TIF zones, and zoning changes made to facilitate the failed pie-in-the-sky developments at Georgetown Mall and Lower Town need to be rescinded. Without a helping hand from the local politicians, the developers will feel more pressure to sell the parcels, perhaps at a loss, but that’s why they call it speculative development. Is it more important that the Mayor’s political donors recoup their investments, or that blight in Ann Arbor is eradicated and sustainable development encouraged? I know my answer to that question.

Oddly enough, it was a politico to whom Hieftje gave a glowing endorsement in 2009, former Third Ward Council member Leigh Greden, who best summed up the incumbent’s penchant for self-aggrandizing in a December 17, 2007 mid-Council meeting email to Christopher Easthope titled: “The script is back….But short.” Greden writes an invented dialogue that includes this bit of actual insight and foreshadowing:

John Hieftje: “I call this meeting to order. I just returned from an important conference of Mayors in Oscoda. I was the only attendee. I gave a speech to myself praising Ann Arbor’s LED and rail programs. If the Mayor of Grand Rapids had been there, he would have praised me.”

At the recent July 1st NCPOA debate, according to coverage from the AnnArborChronicle.com, the incumbent opens the debate thusly:

Hieftje also began with thanks all around. He then said that he would tell the audience a little bit about “what he’d been up to.” He’d begun the week on Monday with the Urban Core Mayors. [The Urban Core Mayors is a forum developed in 1992 and includes the mayors of the following cities: Ann Arbor, Battle Creek, Bay City, Dearborn, Detroit, Flint, Grand Rapids, Jackson, Kalamazoo, Lansing, Muskegon, Pontiac, and Saginaw.] He said that the mayors of the cities sat around and talked about what’s going on in their cities….

Of course, on his web site the incumbent assiduously avoids pointing out what is actually going on in the city he had led for almost a decade. He does the same thing at debates. The millage is down. The LED lights are up. Life is good. So go bag your leaves and count yourself among the fortunate. There are, after all, cities with no leaf collection at all. 

There’s no need to point out that the cities without leaf collection service are in the tropics.

Popularity: 50% [?]

April 14, 2010

The Politics of Parking: Revenue Enhancement Versus Turnover, the Cage Match

Filed under: Mayor Hieftje, city council, city services, money, taxes — Tags: , , , , , , , , , , , , , , , , , , , , — A2 Politico @ 5:56 am
VN:F [1.9.3_1094]
Rate this posting
Rating: 5.0/5 (7 votes cast)

At the Ward 1 meeting, the room at the Northside Community Center was bright, cheery and not nearly filled to the capacity it is when needly neighborhood residents come out twice weekly to pick up food from the pantry located there. On AnnArbor.com, reporters David Jesse and Tina Reed continued on with what I consider some of the most important reporting being done locally. It’s a series titled: “Ann Arbor’s Hidden Poor.” Jesse and Reed have been reporting on the “hidden poor” in Ann Arbor intermittently for several months now. As a rule, their pieces don’t attract the number of comments say, a piece about the real estate woes of U of M coach Rich Rodriguez would, but that could be because people are simply at a loss for words when it comes to realizing that there are, yes, poor people struggling to feed their children, keep their homes, jobs and dignity in one of the most prosperous cities in Michigan. 

In the course of walking door-to-door over the past few days in the modest neighborhoods around Wines School, I saw empty houses and talked with residents who were struggling to pay their property taxes thanks to lost jobs. There was an AAPS teacher unsure whether she and her son would be in Ann Arbor next year thanks to cuts proposed in the upcoming AAPS budget. She pieces together a full-time salary from several part-time jobs. The modest neighborhood through which I walked is beloved by its residents, but the edges of the cohesion are beginning to fray.

According to Money Magazine, between 2000-2008, our city lost almost 9.25 percent of its total jobs. Unemployment rose from 7.4 percent in February of 2009, to 8.9 percent in February of 2010, according to labor force data from the Bureau of Labor Statistics. In February of 2007, there were 8,847 people unemployed in Ann Arbor. By February of 2010, that number rose to 16,202 individuals, again according to data from the Bureau of Labor Statistics. There are thousands and thousands of Ann Arbor residents struggling with job loss, job retraining, family income declines, and holding on to their dignity by a thread. 

In the 2009 Money Magazine list of the top 100 places to live in the United States, Ann Arbor didn’t crack the top 100. Interestingly, Saline (68), Tecumseh (93) and Plymouth Township (28) did. Compared to the top 10 cities that Money Magazine selected as the best places to live, Ann Arbor fell short in several categories. The median price of a house in Ann Arbor was pegged at $206,707 and the average property tax bill totaled $4,641, a full $1,000 per year higher than in number 1, 2 & 3 cities on the list. Both property crime and personal crime rates were well above those reported, on average, in the top 100 cities that made the list. Ann Arbor has significantly fewer restaurants, bars, movie theaters, libraries than the average reported by the top 100 cities. This last statistic was the most interesting. The median age of a resident in Ann Arbor was listed as 29.2 years old. Within the top 10 towns singled out by the magazine as the best places to live, the media age of residents was between 34.9 years old and 40.9 years old. 

All this being said, and with the caveat that I am a data junkie in my day job (higher education policy and publishing), it’s good to remember that magazines publish features such as these to sell advertising, single copies and subscriptions. Issues such as this 2009 list of the top 100 best places to live is meant to appeal to those looking to relocate obviously (in truth, a smaller and smaller percentage of Americans than ever before, according to data from the U.S. Census Bureau).

At an early-April meeting of the First Ward Democrats, I listened as First Ward Council member and Downtown Development Authority Board member Sandi Smith told neighbors in attendance that the proposed extension of downtown parking meter enforcement until 9 p.m. had nothing to do with revenue enhancement; it was all about increasing “turnover” at downtown parking meters. The politically damaging discussion initiated in December of 2009 based squarely on the idea that extending meter enforcement hours was necessary to generate more money, has morphed into a parking “plan” that revolves around seven “strategies” not a single one of which, by some miracle, mentions increasing revenues.

The first stated “strategy”: Downtown curbside public parking should be managed to create turnover at the most convenient, commercial locations so these spaces can be more easily used by a large pool of downtown users. 

Just in case you temporarily lost your ability to see through a blizzard of a snow job, increased turnover is meant to lead to enhanced revenue generation. Furthermore, City Council foisted off the dirty job of coming up with the brightly packaged gift of increased turnover to benefit Ann Arborites who want to park at a meter, on the Downtown Development Authority, a Board of political appointees, along with Sandi Smith and Mayor Hieftje (elected officials). Keep in mind that those same two elected officials, as members of the DDA, voted to approve the DDA’s new parking plan that calls for extending parking meter enforcement hours until 9 p.m. to increase “turnover.” On April 19th, Smith and Hieftje will walk into City Hall, and on behalf of the citizens who elected them, evaluate the merits of their own plan which they already approved over at the DDA. 

Feeling taken for a ride? You should, but for heaven’s sake don’t park in downtown Ann Arbor. Several of the “strategies” put forth in the DDA’s new report focused on “managing parking” revolve around making it ever so much easier to pay the parking tickets you’ll get. How about paying right at any of the snazzy $15,000 solar-powered parking kiosks where you put your money in to park? In 2008, the city of Baltimore bought 280 of the same kiosks, but paid $8,600 per kiosk. 

In December of 2009, Smith brought forth a resolution to City Council to keep the City from dealing parking on the DDA’s turf, as it were. City Administrator Roger Fraser had proposed installing meters in city neighborhoods in the First, Fifth and Third Wards to generate revenues. Smith’s resolution proposed extending downtown meter enforcement from 6 p.m. to 10 p.m., and giving the revenues from the old YMCA lot (Fifth and William) to the city. In exchange, the DDA’s monopolistic control over parking would remain intact. 

I wrote about the resolution proposed by Smith in December of 2009 here. On December 21, 2009 I wrote:

There are 1,750 curbside meters. Click here to see a map of DDA meter coverage that includes the Council/DDA fantasy projection (in green) of extending parking meters outside of the DDA area into our neighborhoods. In May of 2009, when Council members and Roger Fraser came up with the bright idea to proliferate parking meters, the Ann Arbor News editorialized that the move “smacked of desperation and poor public policy.” On January 3, 2010, AnnArbor.com editorialized that, “…expanding metered parking hours into the evening to bring in $380,000 a year (and even the DDA is skeptical that much money would be generated) is a risky proposition that could backfire. It could ultimately cost the city more in lost tax revenue if it pushes even just a few more merchants to shut down because of lost business.”

On April 19th, the DDA’s parking report (parking hikes dressed up as a favor to Ann Arbor residents tired of having low-paid restaurant workers, bartenders and diswashers take up the city’s 1,700 parking meters) will be presented to Council for its approval. The AnnArborChronicle.com reports that,

“At the DDA board’s joint transportation and operations committee meeting the previous Wednesday, March 31, 2010, committee members hashed through a number of issues related to the parking report. Those ranged from presentational issues to more substantive questions. Among the presentational issues was the question of whether to include parking rates in the body of the report or put them in an appendix. Putting actual numbers in the body of the report, suggested Newcombe Clark, would make the report immediately dated. Transportation committee chair John Mouat suggested putting the numbers in an appendix. Board chair John Splitt feared that if they did not include the numbers for rates, they would lose control of the discussion: ‘They’re real numbers, why not put them in there?’ The rates will be included in an appendix.”

Is it any wonder the parking rate information is being stashed in the index? Talk of parking rates and money, you see, is so far removed from the DDA’s report on parking so as to make the report appear innocuous, at worst. 

In talking with Main Street merchants, it’s pretty clear that they see this proposed meter enforcement extension as an attack on the viability of their businesses. Commenting on behalf of the Main Street Area Association (MSAA) Tony Lupo told the DDA Board that the MSAA had participated in the DDA’s process for soliciting feedback on the parking report. Lupo said that there was overwhelming opposition to extending the meter enforcement hours. However, he allowed that the MSAA understood the context under which extended hours were being considered—the city’s need for revenue.

On April 12th, city staff member Sue McCormick, the city’s public services area administrator, stood before Council and advised them to raise water and sewer rates because Ann Arbor’s $1.40 cost per 1,000 gallons of water and $4.02 cost per 1,000 gallons of wastewater placed the city at second lowest in the state, according to a report McCormick prepared. No matter that Ms. McCormick’s Water and Sewer Fund is already sitting on a multi-million dollar surplus, and that the current budget as proposed has multi-million dollar surpluses built into the allocations proposed for several departments under her direct control:

Stormwater Sewer System — $400,000 budgeted surplus (proposed)
Water Supply System — $2.52 million dollar budgeted surplus (proposed)
Sewage Disposal System — $2.9 million dollar budgeted surplus (proposed)

Our water rates are low, the logic goes among Ann Arbor city staff, so they need to be raised. Our parking fine structure hasn’t been revisited in five years, so went the logic of Roger Fraser and City Treasurer Matt Horning, in November of 2009, so we needed to “revisit” and raise the parking fines (after I questioned in an A2Politico entry the logic behind the need to “revisit” parking fines and the validity of the data in Fraser and Horning’s “study” presented to support their proposal, the idea was dropped). Now, parking “turnover” has suddenly become a problem, so we need to revisit the enforcement hours of metered parking. This kind of logic employed by city staff, and the DDA Board members, unchecked and unquestioned by City Council, simply leads to public policy decisions formulated and based on the supposition that the taxpayers exist to support city government above all else.

Some city has to have low parking fine rates and water charges, right? Evidently, according to our city staff, it sure as heck can’t be Ann Arbor. They need their accumulated and budgeted surpluses and additional revenue from parking.

The DDA’s sham report should be recognized for what it is: a power grab and snow job based on the purely anecdotal stories of DDA Board members like Smith who tell us because the mix of businesses as changed over the past 25 years from retail to restaurant, more blue collar workers are parking at the meters long-term for “free.” Purportedly, the idea behind extended enforcement hours is to move more people who are parking at meters long-term after 6 p.m. into the structures.

It won’t happen. Why?

Since Smith brings up parking meter use from 25 years ago (1984), I thought I might dig up a little data from the era. Data from a 1987 (Ann Arbor had 102,000 residents then) multi-day, observational study done by a University of Michigan researcher found that street occupancy hovered between 95-98 percent day and night. Furthermore, (and interestingly) the study concluded that metered parking was not impacted by the availability of off-street (garage) parking. The average stay was 42 minutes at a 2-hour meter. In 1987, the researcher concludes that:

“One of the major goals of on-street parking meters is to provide short-term parking at a short walking distance close to the final trip destination (i.e., for shopping, personal errand, etc.). As the length of stay becomes shorter, more drivers can utilize this premium limited space, which is so vital to bringing patrons to downtown. Tables 5 and 6 indicate that the average stay was of 41.5 minutes (standard diviation. Also, the median of 40.0 minutes was close in magnitude to the mean. Based on this measure, one has to conclude that the meters seem to do what they were designed for, to provide curb, short-term.” 

Translation: People will circle like vultures for on street parking even if there are 5,000,000 open spaces in the parking garages. It’s the animal instinct— flight, flight or circle for parking. Garage parking signifies a long-term commitment, like an engagement ring. People don’t use meters long-term. They park near their destination for short term periods. At least they did in 1987. Have 25 years, a different mix of businesses, and 10,000 more residents completely changed the parking behavior of people in A2?

It’s time to stop treating Ann Arbor residents like their cash cows, and accepting city staff/DDA proposed fee increases on the flawed logic that Ann Arbor simply can’t have lower charges for services, hourly parking, parking fines, and fees for services and facilities than other communities. Why can’t we? Evidently, because the City Administrator believes, and City Council supports the policy that the DDA, Sue McCormick and other city staff need not only money for operating expenses, but mad money budget surpluses—tens of millions of tax dollars stuffed into the mattresses that are the DDA, Fleet, Water & Sewer and Solid Waste Funds.

Oh, and can I please see a show of hands from those who have little trouble finding a place to park downtown at meters after 6 p.m., and who are tired of being treated like golden geese? 

Mine’s up.

Popularity: 54% [?]

March 26, 2010

The Politics of The Party Line: Out With The Old. In With The True.

Filed under: Mayor Hieftje, city council, city services, money, parks, police, taxes — Tags: , , , , — A2 Politico @ 8:12 am
VN:F [1.9.3_1094]
Rate this posting
Rating: 5.0/5 (5 votes cast)

Be prepared to hear this mantra from certain candidates over the next four months: “We [the city of Ann Arbor] have lost millions of dollars in revenue due to state cuts, the university’s purchase of the Pfizer facility, and massive local property devaluations. As a result, the city must reduce services.” 

As I wrote on January 26, 2010, in “The Politics of Cooking the Books: Ann Arbor as a French Restaurant,” Third Ward Council member Leigh Greden ran his unsuccessful re-election campaign based on the premise presented above. Without talking about the actual numbers, though, it’s easy to hear that explanation of why “the city must reduce services,” and simply accept the inevitable: paying more and getting less is just what happens when Pfizer up and closes, and the city loses “millions of dollars in revenue due to state cuts.”

The city’s General Fund is a train wreck.

Property tax revenues are tumbling down like the walls of Jericho.

Housing prices are falling.

Ok. That last one is true. However, overall city revenues are up, up, up. Take a look at the chart below. All the information is from CAFR statements posted to the city’s web site:

Year Property Tax Revenue State Shared Revenues Business-type Activities Total Revenue Total Expenses Total Debt Service
2002 58,095,088 21,877,296 46,978,051 155,479,402 135,016,056 1,029,598
2006 62,017,866 12,604,477 73,539,483 176,649,150 144,522,183 1,539,263
2009 69,994,107 11,102,183 68,882,686 190,244,281 184,811,290 3,229,523

You’ll note that between 2002 and 2009 property tax revenues rose. Now, look right to the “Business-type activites” column. First, you’re thinking, “what are ‘business type activities’ that bring revenue to the city?” Good question, I’m glad you asked. Those activities include: water, sewer, parking, Farmer’s Market, golf courses, airport, stormwater management. and solid waste (i.e. trash and recycling) removal. 

As I wrote in the January 26th entry: 

Now, those of you who are on a tight budget, perhaps, Krogering more often than you used to, and bypassing Plum Market and Whole Foods, look at the total expenses line. As revenues rose, expenses rose, as well, despite the drop in state revenue sharing. In other words, those in charge of the city’s budget, City Administrator Roger Fraser, City CFO Tom Crawford, not to mention Mayor and City Council who are supposed to oversee the work of city staff, went merrily along and lived large, larger and, by 2009, largest. In other words, the more revenues that could be squeezed out of taxpayers through back-door taxation (raising the rates for those business-type activities), the more Mayor and Council allowed city staff to spend.

It’s really that simple. In business terms, under the current Mayor and City Council’s direction, they allowed the city staff to take the city backwards financially, to raise revenues significantly, and to spend, spend, spend.

Now, let’s throw in the debt service, which has more than tripled, since 2002. It’s clear that by allowing expenses to rise at the same pace as revenues, (referred to as “spending every dime you earn and then some,”) our city had no real money to make debt payments out of revenues. 

What would you do at your house? Would you build an underground parking garage and incur more debt? Would you build a new city hall and incur more debt? Would you rein in expenses related to running government, and defer non-essential capital improvements? 

Voters have a choice this election season, and it’s a simple one: voters can choose to elect candidates with the education, decades of real-world experience in financial management, and the skills to rein in spending, reduce debt and the back-bone to ask staff to budget so that services are funded first, or accept the political fairytale that the Stadium Bridges were allowed to deteriorate and fall down because Pfizer moved, and the State of Michigan gave Ann Arbor $1.5 million dollars less in revenue sharing between 2006 and 2009. 

Our elected leaders are choosing to reduce services at the urging of city staff, as opposed to urging city staff to rein in spending on the cost of operating our city government. In just 4 years, operating expenses in our city rose by $34 million dollars, or 35 percent. At a recent neighborhood gathering, I asked if anyone owned a business, and one woman raised her hand. I asked her what would happen to a business whose overhead rose 5 percent in one year. The woman, a long-time owner of a downtown landmark eatery, replied that such a rise would be cause for immediate action. I then asked what would happen to a business whose overhead rose 35 percent in four years. She answered without hesitation: the business would be at significant risk of going under. 

In this election season, we’re going to hear that our city is facing a crisis, that Ann Arbor stands at the edge of a precipice into which many cities in our state have fallen. Our city is facing a crisis, a fiscal and management crisis created over the past decade by elected officials who neglected to apply even the most basic fiscal controls, or adhere to even most basic principals of sound management as they went about shaping policies and spending the billions in tax revenues generated by charging us some of the highest per capita property taxes in our state, then by hiking our fees for services such as solid waste, sewer and water. Ann Arbor isn’t experiencing serial budget “gaps” because we’ve lost less than 1 percent from our annual revenues from reduced state profit sharing, or even because Pfizer left town and took its tax revenues with it. 

What’s the real reason our “city must reduce services?” Quite simply, our elected officials have not fulfilled the single most important task charged them by our city’s Charter: they have not held the City Administrator Roger Fraser accountable. Instead, at the urging of a small group consisting of the Mayor and four Council members, year-after-year they voted to reward our City Administrator with generous salary and benefit increases even as he allowed overhead costs to skyrocket out of control. Between 2004 and 2009, Roger Fraser was given a total 35 percent increase in his compensation package. In 2009, the City Administrator was rewarded with the option of cashing out 150 hours of vacation time worth around $7,500. Mayor and Council have rewarded our City Administrator as if the name of our town were AIG instead of Ann Arbor. Now, they are choosing to bridge budget “gaps” by “reducing” city services and rationalizing the cuts as necessity born of a “revenue shortage.”

I’m sure we’ll hear some candidates this election season tell us Ann Arbor is at the edge of a precipice, and that politicos with “experience” can keep Ann Arbor from falling over the edge like Flint, Troy, Kalamazoo and (the perennial scare-fest favorite) Detroit. Audited financial statements linked to above show quite clearly to those with the skill to read and understand them that Ann Arbor is not at the edge of a precipice, but rather that our city has more than enough money to fund services—more than enough money to support our parks, pools, and senior centers, and fill our numerous potholes. Ann Arbor has more than enough money to provide citizens with the services which we should be able to expect in exchange for the taxes we are asked to pay.

Our city is not at the edge of a precipice; we’re at the end of an era. Come August we’ll have a chance to vote to end out-of-control staff spending that has gone virtually unquestioned and unmonitored by Mayor and Council. We’ll have an opportunity to begin a new era in which Mayor and Council perform the single most important and the most basic task the Charter requires them to do: hold the City Administrator accountable for the performance of his job as the chief executive of our town. 

Popularity: 47% [?]

March 18, 2010

The Politics of Outsourcing: Why Pay More to Recycle Ann Arbor? Good Question.

Filed under: Mayor Hieftje, city council, environment, recycling — Tags: , , , , , , , , , , — A2 Politico @ 6:41 pm
VN:F [1.9.3_1094]
Rate this posting
Rating: 5.0/5 (7 votes cast)

In response to my entry about the City Council move to switch Ann Arbor over to single stream recycling, I had a conversation with a former worker at the city’s material collections facility who pointed out something very important to me: the ideal recycling program contracts and, eventually, becomes unnecessary. Why? Because the ultimate goal is to reduce use of materials.

Reduce. Reuse. Recycle.

In that Holy Trio (at least in my house), it’s pretty easy to forget that “recycle” comes last, not first. Recycling is, for all intents, the last option those committed to environmentalism choose. The first move is to reduce one’s use of materials that can’t be reused. Then, and only then, do we move to the last resort of recycling. It’s a lofty ideal. At our house, we certainly don’t meet the goal of 100 percent diversion of consumed materials from the landfill. We try our best. We have a compost tumbler in the backyard. When they first debuted, we bought one of those nifty City of Ann Arbor compost bins for $25. Those are the same bins that everyone is now going to be required to drop $50 bucks on in order to get leaves picked up. If our neighborhood is any indication,  I have to imagine that city staff member Sue McCormick is still sitting on several thousand of the original 10,000 compost bins she spent several million dollars on not too long ago. We’re the only family with one within a two block radius. 

As I’ve written before, at our house reduce, reuse, recycle is the religion. Thus, my curiosity was piqued when Fifth Ward’s Carsten Hohnke, one of the sponsors of the resolution to move Ann Arbor to single stream recycling, along with Ward Four’s Margie Teall and Mayor Hieftje, was quoted in a November 6, 2009 post to AnnArbor.com written by Ryan Stanton as saying:

This is a smart step forward for us and for our solid waste program. I feel convinced that we’ll see a significant increase in the amount of waste that we’re diverting from landfills and therefore the cost that we incur in taking waste to landfills.

The other exciting part of this is that we’ll have an opportunity to generate additional revenue from a greater volume in the recycling stream and to provide additional services to neighboring municipalities and help spread recycling beyond Ann Arbor.

Increasing the amount of waste diverted from the landfill, however, does not qualify as an increase in recycling. According to the Container Recycling Institute’s 2009 survey which examines single stream recycling: “It is important to understand that diversion from disposal is not recycling. Collection is not recycling. A product is not recycled until it is made into another product.”

Thus, expanding our recycling program on the basis that the investment will result in more materials simply being diverted from the landfill is actually no environmental gain, according to researchers at the Container Recycling Institute. So why the frenzy to throw away millions to divert more tons from the landfill? A look at the following chart from the City’s web site will provide you with an easy explanation as to why city staff pushed single stream recycling, and one of the several reasons why the city’s members of the Environmental Commission, City Council, Recycle Ann Arbor and the director of the Ecology Center pushed the single stream change-over. 

Compost

According to the chart above, the total number of tons of material put into our landfill has actually risen since 2004, and total number of tons recycled has stagnated since 2002. Let me put this another way, the total number of tons hauled by Recycle Ann Arbor hasn’t increased substantially since 1998.

However, there is one area where we have seen a dramatic increase with respect to recycling: the amount of money taxpayers are spending to pay Recycle Ann Arbor to haul our recyclables has skyrocked since 2004, when the City of Ann Arbor granted the non-profit a 10-year contract to haul our materials. That merit-based contract called for the City to pay Recycle Ann Arbor $766,000, according to minutes from the December 15, 2003 City Council meeting. 

This interesting pitch for the use of Recycle Ann Arbor versus our city’s own staff, or a for profit hauling service, to collect our recycling comes from the Recycle Ann Arbor 2005 Annual Report:

Ann Arbor can take pride in its approach to recycling – nonprofit Recycle Ann Arbor started its curbside recycling program 28 years ago and still operates the program today under contract to the City of Ann Arbor. In 2004, the City of Ann Arbor granted Recycle Ann Arbor a ten-year contract that will enable Recycle Ann Arbor to continue providing quality recycling services to the Ann Arbor community.

Many communities hope to save money and streamline the collection process by bundling waste collection and recycling services. Instead, they create a monopoly situation where waste haulers control not only the collection of waste and recyclables, but also the material recycling facilities, allowing them to dramatically increase their rates.

Recycle Ann Arbor realizes that waste hauling companies see little difference between fees for trash services andfees for recycling services. In addition to increased fees, recycling efforts suffer. Waste hauling companies are profit driven, and more concerned with their bottom line and keeping their investors happy, than with the quality of their recycling efforts. The typical profit margin for land filling is ten times more than for recycling, making it in the best interest of any commercial waste hauler not to concentrate on recycling efforts.

Ann Arbor taxpayers foot the bill for the trucks, fuel, and repairs of Recycle Ann’s Arbor’s collection vehicles, purchased for $225,000 each in 2004. Despite the eloquent argument made above against bidding out the contract to for profit hauling companies, or the City of Ann Arbor using its own city-owned recycling vehicles and city staff to haul recycling, Recycle Ann Arbor’s Annual Report pegs for profit hauling companies as “profit driven.” What’s clear from the information that follows is that recycling in Ann Arbor and Recycle Ann Arbor have become equally “profit driven” and the same kind of hauling monopoly the Recycle Ann Arbor Annual Report referenced above urges Ann Arbor citizens to avoid. 

Look again at the chart above at the number of tons recycled.

By 2008, the cost to taxpayers to have Recycle Ann Arbor haul virtually the same number of tons of material to the MRF that the company hauled in 2003, had risen from $766,000 to a whopping $1.6 million dollars. City Council approved the payment of $1.8 million dollars to Recycle Ann Arbor for fiscal year 2010. The November 2009 resolution to move to single-stream recycling includes the following information from city staff to justify the expenditure and support the resolution by the politicos:

Whereas, Implementation of upgrades to the Material Recovery Facility (MRF) to accept single stream recycling provides a number of benefits to the City, including a cleaner community, greater operating efficiencies, overall increases in recycling and rewards to City’s residents for recycling

The following net savings are anticipated as a result of these changes in the recycling program.

 ·       $30,000.00 annual savings in recycling dumpster collection

·      $450,000.00 annual savings in curbside recycling (RAA contract)

·      $450,000.00 annual revenues from merchant MRF users

The 2010 $1.8 million dollar allocation to Recycle Ann Arbor obviously doesn’t support the alleged $450,000 savings touted by the three city staff who prepared (Tom McMurtrie, Systems Planning Unit), reviewed (Sue McCormick, Public Services Administrator) and approved (City Administrator Roger Fraser) the resolution presented to Council at the November 2009 meeting at which Council member Carsten Hohnke touted the “savings” taxpayers would realize by switching to single stream recycling.

Here’s the real kicker. It costs less to pay city workers to pick up the garbage, even with the generous pay and benefit packages provided to them, than it costs to contract with Recycle Ann Arbor to drive the city-owned and maintained trucks to pick up our recycling. This is the same pay and benefit package lamented by the City Administrator, Mayor and Council members as a major source of the city’s financial problems. In fiscal year 2009, actual salary and benefits to city employees for residential garbage collection was $738,093. In 2011, budgeted salary and benefits for city employees for residential garbage pick-up is $789,271.

In 2009, Recycle Ann Arbor spent $809,090 on salaries and benefits for its collection workers, and has budgeted $865,682 for the 2011 fiscal year. In 2009, for the City of Ann Arbor to contract with Recycle Ann Arbor to provide drivers to collect multi- and single-family recycling, the contract labor was $1,580,794 to run eight recycling trucks. The City of Ann Arbor spent $1,171,020 to run 10 city trucks to collect multi- and single-family solid waste. 

Now, with the blessing, backing, pushing and shoving of the Environmental Commission, Mayor and Council, we’ve entered into a contract that will require taxpayers to continue to overpay for recycling services. To add insult to injury, Mayor and Council just voted to waste millions to implement single stream recycling in the hopes that it will become the fantasy savings/profit center as pitched by staff to Council, then by Carsten Hohnke to the public through the Press in November 2009. 

The solution to this financial and managerial mess is obvious.

We need elected officials who are absolutely intolerant of conflicts of interest, who read the contracts they vote to approve, and who are prepared to closely question the financial information and pie-in-the-sky promises pitched to them by city staff. The Recycle Ann Arbor contract amended by City Council on March 15, 2010 was not attached to the Council agenda, or provided in the Council packet. Recycling services provided to our city by Recycle Ann Arbor need to be bid out to for profit haulers, or brought in-house, where taxpayers will save hundreds of thousands of dollars. The Recycle Ann Arbor drivers could, in theory, apply for the city jobs that would be created.

Is there any way to get out of the ill-advised Recycle Ann Arbor contract Council just entered into? There may be. I’ll write about how and why in my next entry.

Popularity: 52% [?]

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
VN:F [1.9.3_1094]
Rate this posting
Rating: 5.0/5 (2 votes cast)

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: 32% [?]

February 25, 2010

The Politics of Management: Paying More For Less

Filed under: Mayor Hieftje, city council, money — Tags: , , — A2 Politico @ 10:38 pm
VN:F [1.9.3_1094]
Rate this posting
Rating: 5.0/5 (3 votes cast)

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: 37% [?]

February 5, 2010

The Politics of Neighbors: You Don’t Get What You Deserve. You Get What You Negotiate.

Filed under: Mayor Hieftje, best of A2Politico, money — Tags: , , , — A2 Politico @ 9:16 am
VN:F [1.9.3_1094]
Rate this posting
Rating: 4.8/5 (12 votes cast)

This piece was originally published in February 2009 by the Ann Arbor News.

In January 2009, the Ann Arbor News reported that: “The University of Michigan wants to help the local economy, but giving the city an in-lieu-of-tax payment isn’t the way to do it, U-M President Mary Sue Coleman said.” Mayor John Hieftje responded to Coleman’s comment by assuring taxpayers: “We’re going to continue to work on that.” He’s had a decade to “work on that,” however. Other members of City Council, such as Fourth Ward’s Council member Marcia Higgins, and Margie Teall and Second Ward’s Steven Rapundalo have had almost that long to “work on that.” 

While the current administration accepts fiscal policy dictates from Dr. Coleman, Ann Arbor taxpayers pay for the bulk of municipal services provided to the University of Michigan. To be fair, U of M does pay for a fraction of some of the services it receives. For instance, in 2008 U of M paid $808,232.78 for fire protection. That amount reimbursed taxpayers for about six percent of the total $13 million dollars spent on fire protection.

Pushing nonprofits to make payments in lieu of taxes (PILOT) is nothing out of the ordinary. Around the U.S., college leaders and city councils have hammered out agreements—under the auspices of so-called PILOT Programs—that provide those communities with millions in annual payments. In some communities, PILOT payments are adjusted annually for inflation. Harvard contributes yearly PILOT payments to the cities of Cambridge, Boston and Watertown. The annual $2.8 million dollar Cambridge-Harvard PILOT payment agreement has been renewed every decade since 1968. MIT has made PILOT payments to Cambridge since 1928.

Nearby Boston has one of the most aggressive PILOT programs in the United States. Officials there believe that if nonprofits can afford to build or expand, they can afford to contribute generously toward municipal services. Over 50% all land in Boston is controlled by non-profits, and in 1999 Harvard agreed to pay that city $40 million dollars over the next 20 years in PILOT payments. In smaller cities, such as Urbana, Illinois, elected officials have crafted PILOT programs to counteract the erosion of their tax bases when colleges and other nonprofits purchased additional property. This is what recently happened when U of M purchased the Pfizer buildings and land, a 170-acre parcel; officials estimate that the city will lose 4-5 percent of its total tax base. The $83.7 million dollar general fund, from which our municipal services are funded, will lose $1.4 million per year in tax revenue beginning in 2010. 

Dr. Coleman suggests the Pfizer facility may create 2000 new jobs over the next ten years. However, before the city recoups any lost property tax revenue from home buyers who may move to Ann Arbor for those jobs, the purchase will allow University of Michigan to expand opportunities to increase revenue from patents and licenses that result from its research activities. 

In 2004, U of M spent $752,527,056 dollars on sponsored research expenditures, according to the Association of University Technology Managers (AUTM). That same year, U of M filed 149 patents, executed 73 licenses and options, and took in $10.6 million in patent revenue. That revenue places U of M solidly among the top 20 university patent revenue earners in the U.S. Thus, the Pfizer facility purchase has the potential to catapult the University of Michigan further up the AUTM’s patent revenue list, perhaps closer to the University of Wisconsin-Madison, which earned $47.6 million dollars in revenue from patents and licenses in 2006. 

John F. Ryan is a Property Tax Policy consultant who helped the city of Springfield, MA craft its PILOT program in 2005. Ryan says, “Some organizations recognize the value of services they receive from the local government and are willing to pay their fair share of those costs.”

According to Mr. Ryan, Dr. Mary Sue Coleman’s response to elected officials who recently called for U of M to make payments in lieu of taxes was, well, predictable. Dr. Coleman insists, “the best way for the university to help the city and local economy is to attract new employees who will buy homes in the area and boost business near the Pfizer property.”

Mr. Ryan explains: “For their part, tax exempt entities generally resist calls to begin or increase their contributions to local jurisdictions. They often respond by enumerating the positive beneficial impact they have on the locality, including creating jobs, making local purchases and paying miscellaneous taxes and fees….” 

In Providence, Rhode Island, elected officials aggressively pursued PILOT agreements with four local universities while lobbying for legislation that would have changed the state’s tax-exemption law. Today, Providence collects $3.8 million annually from the University of Rhode Island, Brown, and the Rhode Island School of Design.

In the Midwest, according to a piece in the New York Times, the City Council in Evanston, Illinois “caused a stir when it adopted a tuition tax of $15 a quarter on students at Northwestern University and three other colleges to help pay for city services.” Northwestern officials immediately met with city council members to devise other ways the university might help defray costs associated with the municipal services it receives.

“In many cases…a nonprofit only negotiates a PILOT or some other voluntary contribution after being…faced with the prospect of some other, mandatory tax or payment levied by the local government,” says Mr. Ryan.

Strategies used by elected officials in Cambridge, Providence, Boston and even New Haven, CT, where Yale officials make annual PILOT payments of $2 million per year, demonstrate that Ann Arbor needs elected leaders who can and will craft an aggressive PILOT program. For many years, we’ve been misled into thinking that it simply cannot be done because, according to the fractured logic circulated, the University of Michigan cannot be taxed thanks to its autonomy granted by the state’s Constitution.

A PILOT program is not a tax. It would allow our city government to pursue “good neighbor” payments not just from the University of Michigan, but from other large non-profits in town, as well. For Ann Arbor taxpayers, a PILOT program could very well mean we could see some respite from shouldering the heavy financial burden of having nonprofit neighbors with big plans for everything, in particular, expansion. PILOT payments are voluntary payments, and a PILOT program could bring in $4-$6 million dollars in additional revenue to Ann Arbor. 

A little bit more….

 

 

 

The simple truth is that a PILOT can be negotiated. 

It has been asserted that Ann Arbor has no leverage to negotiate a PILOT. As someone who has spent two decades negotiating agreements with colleges and universities, as well as Fortune 100 companies, I can tell you that’s simply untrue. The truth is that negotiating with the University presents difficulties to certain Council members, and especially the Mayor: they are employees of the University. The Mayor, for instance, is employed as a temporary, part-time lecturer, his wife as a part-time accompanist at the School of Music. Exerting the necessary leverage to win a yearly $4-$6 million dollar payment from the University might very well cost them their part-time, temporary jobs, and the almost $40,000 U of M pays them each year. 

I taught at U of M many years ago after graduate school, and after several years of teaching in Italy. It was a wonderful experience that I have no desire to pursue again, and certainly not while Mayor. Ann Arbor desperately needs a PILOT program, and has needed one for a decade. Our city can have one when the roadblocks to exerting the necessary leverage needed to negotiate one are eliminated.

Popularity: 43% [?]

Older Posts »
Get Adobe Flash playerPlugin by wpburn.com wordpress themes