taxes « A2Politico: Ann Arbor Politics Grilled To Perfection

May 28, 2010

The Politics of Economic Development: Let’s End Taxpayer Support of Crony Capitalism & Chart A Better Course

Filed under: economic development, taxes — Tags: 21st Century Jobs Fund, Ann Arbor SPARK, Carsten Hohnke, Downtown Development Authority, Labor & Economic Growth, LDFA, Main Street Area Association, Michigan Department of Energy, Michigan Economic Development Corporation, Ned Staebler, Richard King, Samuel L. Goldwyn — A2 Politico @ 11:51 pm

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The Michigan Economic Development Corporation is taking a beating in the Press. In case you don’t know, the MEDC is a state-funded entity that gives tax credits and tax dollars to venture capital firms, individuals and businesses through a variety of programs aimed at job creation. The results, alas, have been uneven. The MEDC did create in-house jobs for two local politicos — 53rd District House Wanna-be Ned Staebler, and Fifth Ward City Council member Carsten Hohnke.

As if my natural proclivities toward the sensible use of tax money weren’t sufficient, it was revealed in March 2009 that the MEDC had approved giving $9.1 million in tax credits to the business of a convicted embezzler. Mistakes happen, and less than a week after the national media got hold of that bit of news and used it to make MEDC look as though it were run by the Three Stooges, the Michigan Legislature rushed through a bill that called for background checks of applicants who want to live large off of MEDC largesse. Now no crooks needs apply. At least crooks with criminal records. Crooks who haven’t yet been caught, and crooks-in-training are still welcome to fill out the application, go through the process, and take their chances in the MEDC multi-million dollar giveaway sweepstakes.

In November of 2009, I blogged about the tendency of the people at the MEDC and it’s creation, Ann Arbor SPARK, to focus on “promised jobs” when putting out press releases and glossy annual reports. Since the whole point of the billion dollar job creation machine is to create jobs, the jobs damn well better be created, right? Why is focusing on “promised jobs” a problem? Because to quote (with a slight variation) Samuel L. Goldwyn, promised jobs are as good as the paper they’re written on. The latest newspaper piece about Michigan’s billion dollar corporate welfare industry was published on May 23, 2010 in the Detroit Free Press. Titled “Bold experiment produces few jobs,” reporter Katherine Yung writes:

Four years after Michigan launched the 21st Century Jobs Fund to diversify its economy and create jobs, the first of two major initiatives under the 10-year, billion-dollar program have generated mixed results so far. A handful of small companies that received loans look promising, a handful have failed and only a small number of direct jobs have been created. Venture capital firms outside the state that were awarded millions have been slow to invest in Michigan businesses. And the majority of the grants, loans and investment dollars went to recipients in one city: Ann Arbor.

According to research published in the Free Press, only 1,147 direct jobs had been created, about 33 percent of the jobs promised, according to a report from the MEDC. Free Press reporter Yung writes, “Excluding jobs created by the research projects, most of which are temporary, only 935 direct jobs have been added.”

In 2006, Ann Arbor SPARK received $8 million dollars from the MEDC under the auspices of the $134 million dollar 21st Century Jobs Fund. Between 2006 and 2009, according to a March 2009 presentation to City Council by then LDFA Chair Richard King (the LDFA contracts with SPARK and sends tax dollars to SPARK through a tax increment financing scheme), about 600 direct jobs had been created in Ann Arbor, all of which would have otherwise been created without giving a dime to the LDFA and SPARK. According to information from the Michigan Department of Energy, Labor & Economic Growth, since 2008 Ann Arbor has experienced a net loss of 5 percent of our city’s jobs. Since 2006, the year Ann Arbor SPARK received its $8 million dollar grant from the MEDC, Ann Arbor has lost 9.5 percent of its jobs.

In this election season, local politicos will tout the fact that Ann Arbor’s economy isn’t as bad off as it could be thanks to their valiant efforts. The Detroit Free Press and reporter Yung offer an alternative plot-line. Since 2006, the MEDC has funneled two-thirds of the $137 million dollars spent in 21st Century Fund business loans, and millions in grants to one city in the state of Michigan: Ann Arbor. Since 2006, Ann Arbor’s economy has, in part, been propped up by state tax dollars in the form of loans and grants to local start-up businesses, only handful of which, according to the piece published in the Detroit Free Press, are doing well. State revenue sharing might have fallen by $350,000 per year between 2006 and 2009, but over the same period the MEDC poured millions in tax dollars per year into Ann Arbor via the 21st Century Jobs Creation loan/grant programs.

These are tax dollars that could have gone instead to education, infrastructure (think Stadium Bridges and the state’s crumbling roads) or been spread among the state’s established small and medium-sized businesses to foster expansion. Instead, millions were given in corporate welfare to start-ups in just four industries: advanced manufacturing, alternative energy, life sciences, homeland security and defense. The result was that Ann Arbor came away with a net 9.5 percent loss of jobs in our city, while ex-Pfizer employees and University of Michigan faculty members who launched businesses that were funded through the MEDC “jobs creation” program promised to create new jobs, until their start-ups crashed and burned. Since 2006, local politicos have dined out and run on the successes and expansion of Ann Arbor’s labor market—including those promised jobs. The thousands that have been promised, but have not yet materialized.

On June 3rd, I’ll be speaking to the members of the Main Street Area Association. In preparation for the meeting, I’ve been talking to the Main Street business owners. I wanted to know whether the merchants who own small and medium-sized local businesses think our city is a place that works to foster the expansion and growth of established businesses. The word from Main Street? A resounding “No!” Ann Arbor’s city government, according to many of the Main Street merchants, works against local business. All whom I spoke with pointed to most recent obvious bungle: the extension of enforcement of metered parking. Many also believe the Downtown Development Authority is failing in its mission to support the downtown business district.

So what can be done to make Ann Arbor a more attractive home to existing local small and medium-sized businesses, and a magnet community where existing small and medium-sized businesses would choose to relocate and bring with them actual new jobs?

First, we can reverse the wrong-headed extension of parking meter enforcement before it damages the bottom lines of businesses in Ann Arbor. In Oakland, California, the City Council there extended parking meter enforcement until 8 p.m. in July of 2009. The move was reversed in October of 2009 after a recall effort to oust the entire city council was launched, and 5,000 signatures quickly collected. According to a piece published in the San Francisco Chronicle on October 7, 2009, an Oakland, California council member was quoted as saying, “Clearly, the parking regimen has been very unwelcome. As bad as our budget problems have been, it’s clear this is unacceptable. People don’t like feeling we’re balancing the budget on their backs.”

According to research on local economic development from the World Bank, most local economic growth is generated by small- and medium-sized businesses that are already established in the community, not from throwing money at start-ups, regardless of the industry. What our city government can do in Ann Arbor is to provide a helping hand to these existing local small and medium-sized businesses in the form of advice, support and resources. Ann Arbor doesn’t need to offer tax breaks, or subsidies through the Downtown Development Authority, the city shouldn’t be in the business of floating loans or handing out grants. Rather, local government should focus on making sure that merchants needs are clearly understood, and that our local government works with established small and medium-sized businesses and not against them:

1. For starters, the city needs to survey existing firms to figure out exactly what the challenges are that these local companies face doing business in our city. I got an earful going shop-to-shop, and that’s cathartic for the merchants, but an actual needs-based survey would give us a solid beginning toward a more synergistic relationship between local government and local business.

2. Next, Ann Arbor should implement a program to streamline local bureaucracy. We should begin by reviewing existing regulations and laws, consult with stakeholders and develop necessary remedial plans. A program to minimize the complexity, costs and bureaucracy associated with permit approval processes, for example, will improve the chances for our local small and medium-sized businesses to thrive and grow.

3. Another opportunity to help existing local businesses thrive is to offer technical advice and assistance. This can include broad-based management and marketing programs, to more specialized support. The focus here should be on providing accredited, demand-led, technical assistance that can be paid for on a fee-for-service basis.

4. As opposed to skimming tax dollars from education, and spending the bulk of our economic development money on launching start-ups, almost half of which fail after 5 years, money that has been allocated from the General Fund to SPARK and the LDFA should be spent on recruiting established small and medium-sized businesses to Ann Arbor.

The MEDC isn’t taking the criticism of its lack of results, and failure to create large numbers of actual jobs, quietly. On May 26, 2010, the entity’s 17-member executive committee issued a statement which read, in part:

“We are deeply concerned that the recent surge of unwarranted criticism leveled against the MEDC will undermine Michigan’s efforts and ability to attract business investment,” MEDC’s executive committee said in a statement issued to the Michigan Legislature and the media. “All states are in fierce competition for stable, well-paying jobs – across all sectors and industries. Political in-fighting is a clear warning to business that a state lacks a cohesive climate for economic development and a clear signal to invest elsewhere.”

The state-wide media have finally clued into the fact that the Emperors at the MEDC have no clothes, and are beginning to question whether these tax dollars could be better spent. I’m still waiting for the local media to notice the naked truth about Ann Arbor SPARK, but I have my doubts this will happen any time soon. On May 20, 2010, it was announced that AnnArbor.com Executive VP Laurel Champion was named the Treasurer of the Ann Arbor SPARK Board. On May 23rd, the MLive.com site picked up Yung’s May 23rd Free Press piece and reprinted parts of it on the MLive.com Michigan Job Search page. Interestingly, all mention of the MEDC’s funneling of two-thirds of the 21st Century Jobs Fund money to Ann Arbor start-ups/companies was edited out of the MLive.com piece.

On May 25, 2010, AnnArbor.com’s business reporter Nathan Bomey posted a piece titled, “MEDC says ‘unwarranted criticism’ threatens economic development efforts.” Bomey’s post made no mention of the May 23, 2010 Free Press piece, nor did it link to the May 23rd MLive post.

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May 7, 2010

The Politics of Poultry: Some Thoughts On Chickens Roosting

Filed under: DDA, developers, taxes — Tags: 4 Eleven Lofts, Ashley Terrace, Broadway Village PUD, Concentrate Media, Constance Crump, Downtown Development Authority, Ed Shaffran, Georgetown Commons, Joseph Freed & Associates, Liberty Lofts, Mary Jo Callahan, Near North, Planning Commission, Stacy Greggorio, Zaragon Place — A2 Politico @ 12:35 pm

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The developer of Ashley Terrace, Joseph Freed & Associates, just defaulted on $18 million dollars owed to its lender. The lender is doing what lenders are wont to do when borrowers get neck deep in missed payments—they’re foreclosing. Joseph Freed & Associates also operates 4 Eleven Lofts, student housing that opened for business in the Fall of 2009. During 2009-2010, 4 Eleven Lofts were leased at 45 percent occupancy, according to a January 2010 piece titled “Ann Arbor rental vacancies up, officials say,” published in the Michigan Daily. In that piece, Stacy Greggorio, general manager of 4 Eleven Lofts, was quoted as saying she expects occupancy to increase…..“As of the end of 2008, we had leased 4 Eleven Lofts to approximately 45 percent for the 2009-10 term, but by the end of 2009 we have already reached 65 percent occupancy for 2010-11.”

In January 2010, U.S. office vacancy rates hit a five-year high of 16.5 percent according to reporting from Bloomberg, and according to a piece posted to AnnArbor.com in January of 2010, local office vacancy rates were 17.62 percent. Meanwhile, the developer who brought us the still unbuilt 690,000 square foot Broadway Village PUD fantasyland whose site plan has been given seven years worth of extensions from the city, told readers of that January 2010 Michigan Daily piece that “he expect[ed] the market to turn around in the near future and that [r]etail, office and residential vacancies downtown or near downtown [were] basically near normal and the healthiest in the state.”

Another local developer offered a more realistic perspective. According to a May 2010 AnnArbor.com post, “Ed Shaffran was among those who cautioned against overbuilding. He said…that the Ashley Terrace foreclosure appears to signal what he warned against: New construction downtown could only be built at a price that would effectively price a typical unit out of the range of most buyers.”

A cluster bomb has exploded and the pieces are strewn far and wide.

In 1990, downtown Ann Arbor experienced a rash of foreclosures on major properties, and it took a decade for the downtown real estate market to rebound. Then, came the misguided and clearly failed notion that downtown density should be created by subsidizing private development with public tax dollars—all in the name of New Urbanism and density. New Urbanism in Ann Arbor has been nothing but an excuse to repeat urban planning mistakes, subject our town to another rash of overbuilding, with the added twist of saddling taxpayers with debt from tax increment financing (TIF) schemes (such as the TIF capture districts created just for the Broadway Village and the Georgetown Commons sites). It was the same cycle that we saw in the 80s—minus the gift of public money to private developers.

The foreclosure of Ashley Terrace is a potential gut punch for the Downtown Development Authority. Why? Because the DDA’s rakes in 28 percent of all of its projected property tax capture at the moment from just four properties, Zaragon Place, 4 Eleven Lofts, Liberty Lofts and, yes, Ashley Terrace. If Ashley Terrace is sold at a loss by the lender, a distinct possibility given the present real estate market, Ann Arbor’s DDA will capture less tax revenue. However, in its most recent budget, the DDA projected tax captures of $3.8 million, an increase from $3.54 million. The DDA’s budget is already stretched thin, what with the $2 million recently extorted by the city to shore up Ann Arbor’s tottering budget, $500,000 payments promised to the Police-Court facility bond payments, and projected payments on $47 million in bonds for the underground parking garage being built next to the downtown library.

On top of that, the Board of the DDA got what could only be described as a some electro-shock therapy when they were told recently that parking revenues for the month of March 2010 were down 45 percent over the same period during the previous fiscal year. As a result, the DDA dropped its parking revenue estimate by 10 percent for the current year. With another scheduled rate increase in July, the DDA’s budget for 2010-11 predicts parking revenues will increase to $16.17 million. In 2008, the DDA brought in $14 million parking revenues.

Various politicos have assured Ann Arbor taxpayers that those bonds for the new parking garage will be made from parking revenues. In fact, there’s even a banner across the front fence of the project that proclaims that the underground garage is “your parking dollars at work.” Should the above mentioned downward spiral in parking and tax revenue continue, the people of Ann Arbor can count on repaying the underground parking garage bonds, plus interest, from our property tax revenues. The bonds for the new parking garage are backed by the full faith and credit of the taxpayers, not parking revenues. If the DDA can’t manage to chip in the promised $500,000 to repay the bonds for the Police-Court building for any reason, taxpayers will be on the hook for that money, as well.

So where are all the people who were supposed to flock to downtown Ann Arbor, snap up the new condos, pay $1,000 per bedroom in the new student housing projects, and, generally, turn our downtown into a bustling mini-tropolis? Evidently, someone forgot to tell the folks on Council, who’ve spent the past half a dozen years cramming projects such as Ashley Terrace down the throat of the local housing market, that “If you build it, they will come,” was a line from a Hollywood movie.

The U.S. apartment vacancy rate is 7.8 percent. Thus, the stagnant growth of our population, as well as the current 10-12 percent vacancy rate in Ann Arbor should give us all a very good reason to reconsider the New Urban “vision” that brought us student housing paraded through Planning Commission as “work-force housing,” and “affordable” housing that isn’t affordable by any stretch of the imagination to workers grossing $35-$40K per year. According to the Michigan Daily, Mary Jo Callan, director of Washtenaw County’s Office of Community Development, said even as tenancy remained high in affordable housing units, the rental vacancies in Ann Arbor rose to notable heights in 2009. “Rental vacancy was way up, extremely uncharacteristic of a town near several universities,” Callahan said, referencing how those communities are sometimes shielded, in part, from troubles in the state or national economies.

The vacancy rate information Ms. Callahan shared with the Michigan Daily bodes ill, of course, for the remaining three student housing developments on which the DDA is banking to bring in about one-third of its tax capture revenues. The tax capture money is used to provide services, such as association grants, to the business taxpayers within the DDA area.

While my son was participating in a cooking competition at synagogue recently, a resident of the Georgetown Mall area asked me what can be done to resolve the current mess created by the failure of the 2007 proposed Georgetown Commons development. Not unexpectedly, residents of the area are steamed that Council members didn’t learn from their earlier mistakes with the Broadway Village PUD that resulted in the failure of that TIF capture project. Politicos plowed right ahead, rezoned the area, and turned the convenient, neighborhood retail/office Georgetown Mall area into six acres of blight.

First, we need to stop site TIFs and taxpayer subsidies of private development.

Ann Arbor is a very desirable development destination. The problem is that while Ann Arbor is an extremely desirable and developer-friendly location for multiple types of development, it’s a city led by politicos with a penchant for back-room planning (library lot RFP), sweetheart deals (PUDs), a taste for giving out taxpayer dollars as subsidies under the auspices of programs such as the DDA’s Partnership Program (Near North development), and little overall development vision. As a result, we have political leadership that has forced residents and developers to become adversaries, and suffer through a decade-long inability to bring financially sound, and neighborhood friendly developments to fruition.

What else can we do to right the redevelopment wrongs at Georgetown Mall? We have to significantly improve the city’s vetting process whereby proposed developments are judged fiscally sound by planning staff and the Planning Commission. Developers with established paper trails of financial failures and bankruptcies have been granted site permissions without any additional required guarantees from their lenders.

In addition, site plan extensions are going to have to be granted more frugally. Squatting on prize parcels for years in Ann Arbor, such as the Lower Town parcel, needs to be halted. There are cities in which developers have six months to break ground, or risk losing their site plan permissions altogether. I’m ready for a more common sense approach to development, such as that of Ed Shaffran, and his desire to see over-development discouraged.

Finally, I want to point you to what I consider another important aspect of any solution to development messes such as the Georgetown Commons: imagination and vision. On January 27, 2010, food writer Constance Crump penned a blog entry for Concentrate Media in which she posited that we need to “dream big” when contemplating the next incarnation of the Georgetown Mall parcel. I agree. This doesn’t necessarily mean big in the sense of tall or dense, but rather to look at what the Fourth Ward Georgetown Mall neighborhood would not just welcome, but embrace. In my vision, Ann Arbor will encourage future development of which we can be extraordinarily pleased and proud—single and mixed use development that will complement the personality and character of our 186-year-old downtown and surrounding neighborhoods.

Right now, there’s a Georgetown Mall citizen’s committee formed to address some of the serious problems, such as rising neighborhood crime, that have resulted from the 2007 Georgetown Mall redevelopment fiasco. However, without studying, analyzing and understanding what went wrong, the establishment of this citizens committee is little more than busy work for dedicated neighborhood activists who deserve much, much better treatment than to be pandered to during an election year.

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April 30, 2010

The Politics of Surpluses: Fudging the Numbers

Filed under: city services, money, taxes — Tags: budget, Mayor Hieftje, money, Roger Fraser, Sue McCormick, taxes — A2 Politico @ 3:23 pm

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In the 2010-2011 proposed budget, the General Fund is projected to bring in $76.3 million in taxes and state profit sharing, and spend $77.9 million dollars, with a $1.5 million dollar deficit (provided all of the City Administrator’s proposed cuts are adopted). Over the past three years, the city’s General Fund has been pushed, pulled and manipulated inexorably toward structural deficit. The 2009 budget book has a message from the City Administrator that includes this: “For the foreseeable future we will continue to experience 1-3% revenue shortfalls with each annual budget.”

The result, of course, has been the decimation of our city’s human capital, and the ongoing deception that the loss of 239 city staff, including almost half of our firefighters and over 100 employees (civilian and sworn officers in our police department) has saved taxpayers money. In campaign literature we’ve read time and again that this “streamlining” has saved taxpayers $10 million dollars per year. It’s a cruel deception, not only to those who were dismissed from their jobs for no reason other than sheer managerial incompetence, but also to taxpayers who trusted that they were being told the truth.

In a February 9, 2010 presentation before Council, the City Administrator claimed that the “streamlining” of city government had saved taxpayers $25 million dollars since 2002. Below you’ll find the nifty chart he used to illustrate this fairytale.

Layoffs

Why is it a fairytale? Because the city’s income tax returns don’t corroborate Mr. Fraser’s claims of saving $25 million dollars on employee wages and benefits since 2002.

Here’s a graph with information from Ann Arbor’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? It cost exactly the same amount in 2009 to compensate our city employees as it did in 2003, when Mr. Fraser was hired. 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.

One of most frequent questions I get from voters is where our I’ll find the money to fund core services, such as police and fire. The short answer is that the money is already there. Finding it is not a difficult task. One simply needs the financial skills to know where to look. Ann Arbor also needs leaders who will no longer allow city staff to fudge numbers and data to support their requests for funding and their claims of competence. Something else has been happening, something even more disturbing than the false claims of savings and the patently absurd claim that our services have not been systematically reduced.

First, we must keep in mind that Mr. Fraser has inaccurately projected revenue shortfalls in our General Fund since 2003, when he began his job as City Administrator. There have actually been budget surpluses in the General Fund since 2003, with the exception of 2009. This is significant, because those projected deficits have resulted in convenient opportunities for certain City Council members to “rescue” items budgeted to be “cut” thanks to the projected pretend shorfalls. This happened for several years to the Human Services funding. It would be eliminated in private meetings by the Council’s Budget Committee, then “saved” by Council members in public. In this election season, look for Council members who claim to have “rescued” the Burns Park Senior Center from the chopping block, as well as Mack Pool. Look for a Council member to “rescue” Allmendinger Park residents from the outrage of football Saturday parking—a “revenue source” proposed in the current budget to raise under $40,000.

These phantom budget shortfalls have been used to pad political résumés of those on the very Committee (the Council Budget Committee) that oversees the city’s budget. This cycle of projecting General Fund deficits, targeting high profile programs for elimination, then Council members stepping in and “saving” the high profile programs is nothing short of remarkable in its political ingenuity. The result has been budgeting and governance by three ring circus. P.T. Barnum would have loved the showmanship.

Meanwhile, because our elected officials were not prepared to dig through the city’s audited financial statements, or well-versed enough in finance to understand the statements, over the past half a dozen years, the citizens of Ann Arbor have been bilked out of over $100 million dollars. How? The oldest game in the book: over-charging for services.

Let’s start with water. Water flows to the lowest point, but in Ann Arbor the money poured into the coffers of the Republic of Water, Sewer & Stormwater Management runs right into a consolidated savings account. In that Utility Fund there is a $59.2 million dollar surplus, according to the most recent audited financial statement posted to the city’s web site. In essence, the City of Ann Arbor has over-charged residents $9.9 million dollars per year over the past six years for water and sewer in order to accumulate the surplus of funds—unrestricted funds—funds that are not earmarked for any purpose whatsoever. Sue McCormick, the city’s public services area administrator, has been allowed to amass a $59.2 million stash of our tax dollars.

Yet, on April 13, 2010, Sue McCormick went to Council and announced that Ann Arbor taxpayers need to pay more for water and sewer. Why? Because Ann Arbor has, according to McCormick, the “second lowest rates” in the state.

In an April 13, 2010 AnnArbor.com post reporter Ryan Stanton writes:

“Fraser’s proposed budget for 2010-11 includes rate increases of 3.88 percent for water, 3 percent for wastewater and 2 percent for stormwater. Sue McCormick, the city’s public services area administrator, said the rate increases are needed to maintain adequate revenues and pay for capital improvements within the system. McCormick said some capital improvements already are in progress, and new projects are coming on line that also are driving the increased rates….McCormick handed out a report Monday night showing Ann Arbor’s water and sewer rates were the second lowest when compared to dozens of other communities around the state.”

It was the same kind of ridiculous rationale the City Administrator gave when “revisiting” the parking fines charged to residents. It had been a long five years since the schedule has been examined and Ann Arbor folks were paying lower fines than, say, residents of Portland and Seattle. We darn well should be paying fines lower than those paid by those residents, and it’s about time that we adopted the governmental mantra that if ain’t broke, don’t fix it, and if it is broke, spend the money and fix it as quickly as possible.

Unfortunately, the surplus in the Utility Fund is just the beginning of a long-time unchecked scheme to create phantom deficits, over-charge residents for services, build up surpluses, then spend the surpluses to feed the bureaucracy—as opposed to supporting and expanding existing services.

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

Fleet Surplus — $7.5 million

IT — $4 million

Project Management — $1.5 million

Central Stores — $1.6 million

Total unrestricted fund surpluses: $102,100,000

That surplus $102,000,000 belongs to the taxpayers. So what can be done?

Our city’s budget needs to be examined closely, and Council must implement policies that keep departments from building up surpluses greater than, say, 10 percent of the department’s annual allocation. The surpluses above are the result of inflated charges the city levies on residents, as well as on its own units. The fleet department charges other departments $160 per hour for labor, and $300 per day to use a city-owned sedan. As a result, the fleet fund has a $7.5 million dollar surplus. Meanwhile, the Fire Department is sitting on fire fighting equipment and trucks that are outdated and need to be replaced now. The Street Repair Millage Fund balance is $19.4 million dollars, and the millage raises almost $9 million additional dollars each year. Meanwhile, Ann Arbor has the third worst roads in all of Michigan, and thanks to delays in repairing our roads will have to pay seven times more money to fix them than if the repairs had been made in a timely manner.

Here’s a news flash that shouldn’t come as a surpise: No city with $102,000,000 million in fund surpluses needs to cut police, fire, privatize its golf courses, stop tending its parks, or start charging residents $3 to drop off recycling. Between 2006-2009, Ann Arbor taxpayers paid $1 billion dollars in taxes, fees and debt to our government. Since 2000, Ann Arbor taxpayers have, collectively, funded our city government to the tune of $2.5 billion dollars in taxes, fees and debt.

The current administration has collaborated with city staff to spend every single dime of that $2.5 billion dollars—and then some. The current proposed budget is a sham and a shame. It represents neither the priorities of the taxpayers, nor an honest representation of our city’s true financial position. Council should direct the City Administrator to return to the General Fund all of the money from the total $102,000,000 million in fund surpluses, where such charge-backs are permissible under the auspices of the Charter, then re-fashion a budget that not only funds existing core services, but deflates the municipal service charge on which the budget is based by at least 20 percent in every department that currently has an accumulated fund surplus.

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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: A2Politico, AnnArbor.com, AnnArborChronicle.com, Bureau of Labor Statistics, David Jesse, Downtown Development Authority, John Mouat, John Splitt, Main Street Area Association, Matt Horning, Newcombe Clark, Northside Community Center, parking, parking enforcement, parking fines, Rich Rodriguez, Roger Fraser, Sandi Smith, Tina Reed, Tony Lupo, Wines School — A2 Politico @ 5:56 am

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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.

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April 8, 2010

The Politics of Compulsive Gambling: Shooting Snake Eyes With Public Safety

Filed under: Uncategorized, city services, fire, money, police, taxes, unions — Tags: Ann Arbor Airport, Ann Arbor City Council, Budget Committee, Chief Barnett Jones, FBI Uniform Crime Statistics, Fleet Department, Mayor Hieftje, Officer Sam James, Roger Fraser, Sabra Briere — A2 Politico @ 11:58 pm

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I got up, had breakfast and was at the Police Station on Fifth Avenue by 7 a.m. on the dot on Wednesday April 7th. Officer Sam James arrived from the Wheeler Center by 7:15. He showed me around the Fifth Avenue station, or at least what’s left of it as the construction and reconstruction continue apace. Chief Barnett Jones has moved on up to an office on the 6th floor of the Larcom Building. Equipment is stashed in corners, interrogation rooms are still cramped and shabby, crime scene evidence is scattered in secure rooms in city buildings throughout town. The basement is closed off, and the detectives whose offices were down there have long since vacated the Larcom Building. Patrol staff remain at the Fifth Avenue station, and that is why Officer James and I met there for my morning ride around.

In the main office area, where the front desk reception area is, we stopped in front of a large map of the city divided into four quandrants: A (Adam), B (Baker), C (Charlie), D (David). In each of those areas, Ann Arbor police divide up the work of patrolling the 27.7 miles of our city and protecting the 112,000 people who live here. On the morning shift on April 7, 2010, there were exactly seven sworn police officers patrolling our city: 1 double patrol (2 officers in a patrol unit) in the Adam section, and 5 single cars (1 officer in a patrol unit) divided among the other three sections of town. And me. Seven sworn police officers on patrol to answer calls from dispatch, write traffic citations, parking tickets, sort out domestic disturbances, and keep some 17,700 acres of area policed. Our patrol was quiet. The rain spattered the windshield as Officer James pointed out individual homes that had been broken into, or where he had responded to calls from residents. On one street in the Burns Park student section, Officer James said every single house had been broken into. Pairs of old tennis shoes dangled from the telephone wires overhead as we cruised slowly past houses with open windows and, Officer James assured me, open doors.

There is a computer in each patrol car for which the city’s IT department charges the Police Department almost $5,000 per year (the police officers’ union had a devil of a time getting that information from the city that employs them). Officer James was adept at typing in information, and tapping at the touch screen as calls were relayed from dispatch, and he drove through the Charlie section of Ann Arbor, an area that includes the north side of the city where our family lives, as well as Arborland and everything in between. In a typical shift, Sam James will drive 60-70 miles in what amounts to a large loop. He’ll be dispatched to check out tripped home alarms, and look for speeders by flicking the radar on as cars he thinks are going well over the speed limit approach from the opposite direction.

Had something serious been called in, a situation that demands two officers to respond, and had Officer James responded first, he would have had to wait for one of the other single patrols from across town to arrive on the scene before proceeding. It used to be the norm for every patrol car on the road to have two officers assigned to it. Just a few years ago, there were double the number of patrol cars out on the road each day, as well as staffed police sub-stations around town, before the City Administrator, Mayor and Council launched their grand plan to “streamline” city government by gutting our public safety services.

The Mayor and City Administrator recently had one of their clever semantic moments when John Hieftje turned to Roger Fraser at a City Council meeting and asked whether Ann Arbor had ever lost police officers to layoffs. Fraser, ever the straight man, indicated that Ann Arbor had never lost police officers to layoff.

Evidently, the lost officers had simply evaporated.

Actually, many civilian employees of the Department have been lost through lay-offs. The police officer positions have been eliminated through attrition and, most recently, a $6 million dollar early retirement buy-out the City could ill afford. Ann Arbor taxpayers now pay $80,000-$100,000 per year for sworn police officers to catch dogs and write parking tickets. According to the city’s own audited financial statements, in 2002, Ann Arbor taxpayers paid $37.2 million dollars for public safety. In 2009, the budget called for taxpayers to fork over $56.7 million dollars for public safety services provided by dozens fewer police and firefighters.

The City Administrator explained in an April 8, 2010 post to AnnArbor.com, “As we talked with council about this, it was their belief and it’s my belief that we didn’t want a community that was strictly police and fire — that we cherish our parks and we cherish a lot of things that we do. We need still to do code enforcement, we still need to do good planning — we need to do a lot of those things — and so this is an effort in some ways to catch up, because safety services now represents about 52 percent of our total budget. It used to be closer to 40 percent.”

How can the amount necessary to pay for police and fire have gone from 40 percent of the General Fund to 50 percent of the General Fund. Well, first of all, the General Fund is shrinking. If the exact same amount allocated for police and fire in 2009 were allocated in 2010, it would, of course, be a larger percentage of the smaller General Fund. When Mayor and Roger Fraser simply point to percentages as the reason to target police and fire for cuts they assume City Council members will not recognize the the fallacy being presented to them. However, there is a very different reason that the cost of public safety has increased 47 percent from $37.2 million per year in 2002 to $56.7 million dollars per year in 2009.

Here’s a clue. The $50 dollar windshield wiper.

Officer James told me that the windshield wiper on his car had been broken in the course of responding to a call. The City’s Fleet Department then charged the City’s Police Department $50 to put a single wiper on Officer James’s cruiser. When I accused him of exaggerating, he pulled up the official report (thanks to that handy $5,000 per year city IT Department-provided computer in the front seat) listing the damage to his cruiser, and the name of the Fleet Department Supervisor who’d sent along the notice of the $50 price tag for the repair.

I found wiper blade sets for James’s cruiser priced online from $5.95 on Amazon.com, to $17.95 at the Auto Parts Warehouse.

The City Administrator’s newest budget unveiled calls for the elimination of 20 jobs in the police department, 12 more sworn officers and 8 staff. It also calls for the elimination of 20 jobs in the fire department again, also a combination of firefighters and staff. There’s a budget “deficit.” Again. Why? According to a piece posted to AnnArbor.com, the City Administrator blames the budget woes on anything and everything except bloated overhead, such as the $5,000 per year IT Department provided computers, the $4,000 per acre per year cost to mow our parks, and the $50 wiper blade. Ryan Stanton quotes Roger Fraser as explaining:

The city’s reliance on property taxes continues to increase as other forms of revenue — such as state-shared revenue — decrease or remain flat. At the beginning of this decade, the city received more than $14 million annually from the state. By last year, that had dropped to about $10.7 million, then down to $9.1 million this year. Fraser’s budget has that going down to $8.2 million next year.

Compounding the city’s problem, Fraser said, property tax revenue is on a decline driven by a negative inflation rate, a weak real estate market resulting in lower taxable values, and the removal of the former Pfizer property from the city’s tax rolls due to its acquisition by the University of Michigan.

In addition, the city will see increased costs for retiree pensions and health care next year, Fraser said.

It’s crucial to remember that since 2003, Roger Fraser has miscalculated (inflated) General Fund deficits in every budget cycle and the City Council’s Budget Committee, which has included the Mayor and Margie Teall until just this year, didn’t challenge Fraser to present more accurate data. 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. Yesterday evening Mayor Hieftje and the City Administrator presented the 2010-2011 budget and the fait accompli is that Ann Arbor taxpayers will not be spared from service reductions this time around.

Since when have they spared us from service reductions and fee hikes in other budget cycles?

City Council member Sabra Briere, at the request of a First Ward constituent, forwarded that constituent’s email to Roger Fraser enquiring about the number of police officers on patrol. Here is the constituent’s email that Briere forwarded to Fraser:

Today I ran into an old friend who’s on our police force. We had an in-depth discussion of the current situation. The bottom line is that we’re in danger now.

Yesterday, afternoon shift had only six officers on patrol. That is six to cover the whole city. Afternoon shift (2-10) is the busiest one. All the officers just went from call to call to call, often being told to ignore one call because a more important one had come in. If a major crime happened, such as a bank robbery, all six of them would have gone to that scene and would not have been able to respond to anything else that happened. On the warmer days, there is noticeably more activity for the police. It is expected that there will be a crime wave when the good weather is here to stay.

Here is what Mr. Fraser wrote back to Council member Briere:

Thanks, Sabra, for sharing this. As with so many of these reports, there is a fraction of truth that attempts to justify the suppositions. Today, we have the essentially the same number of people on patrol as we previously had. Even several years ago, our officers have had days when they run from call to call, and yet there are also many shifts in which boredom is possible. That is the very nature of the safety business. The good news is that crime rates in our city continue to drop and public safety has not diminished.

You, personally, know the arguments well. We have very few choices as we work to balance services with declining revenues.

Roger Fraser, of course, never mentions numbers and implies the constituent is making “suppositions” that aren’t accurate. A source within the police department gave me the following information directly from the duty rosters:

On any given morning, there are between 6-10 police officers responding to calls from the people who live in Ann Arbor. On the afternoon shift, there are between 6-10 police officers on patrol. On the midnight shift, when most serious crime happens, in Ann Arbor there are 10-12 police officers on patrol.

The Mayor was quoted in the AnnArbor.com piece as saying since 2003 crime is down 15 percent. According to the FBI Uniform Crime Statistics, crime in other towns the same size as Ann Arbor is down more than it is in our town. On March 5th, I wrote about that fact here with links to the statistics:

While comparing Ann Arbor to itself is a somewhat useful exercise, an even more complete picture emerges when we compare Ann Arbor to other communities. First, when you look at the drop reported in the unofficial crime statistics released by our Police Department as compared to FBI data gathered from towns with similar populations, there’s a different and more complete story that emerges. For example, in cities with populations between 100,000 and 249,999, in 2009 arson was down 10.2 percent, whereas in Ann Arbor arson is up by 7.5 percent. Nationwide, in cities the size of Ann Arbor, robbery was down 9.3 percent, but down by 6.5 percent in our city. Rape was down 3.1 percent nation wide, but in Ann Arbor it’s down 1 percent. On the other hand, assaults and motor vehicle theft in Ann Arbor were down significantly more than in other similarly sized cities around the U.S. Wait before you breathe a sigh of relief. When we look by region, Ann Arbor’s drops in crime play out even less impressively. In the Midwest, rape dropped 7.5 percent and motor vehicle theft dropped 21.4 percent. Had Ann Arbor crime rate decreases kept pace with regional drops, we would have had fewer motor vehicle thefts than reported in 2009, and fewer burglaries.

The University of Michigan has 55 sworn officers to patrol its 3,000 acres and 350 buildings. If Roger Fraser’s budget is approved by our City Council members as is, Ann Arbor will go down from 99 sworn officers to 87 sworn officers to patrol 17,700 acres and respond to calls from the city’s 45,000 residences. On any given day in Ann Arbor, 6-12 sworn officers patrol a city that is 27.7 miles in size, and respond to the emergency calls of some 90,000 adults, including the 29,000 of U of M’s 41,000 students who do not live in campus housing. For Roger Fraser to write to Briere that “Today, we have the essentially the same number of people on patrol as we previously had” hides an ugly reality.

Crime is down by 15 percent says the Mayor. So we can afford to lose 12 more police officers. The Michigan Theatre hasn’t burned to the ground yet, so we can afford to lose more firefighters. Hardly.

Our City Council, City Administrator and the Mayor have decimated the ranks of our police and firefighters, and in doing so put the lives and property of 112,000 city residents on the line every day. I actually believe not a single member of City Council knows that, at times, there are only six police officers patrolling our city. I also believe not a single one of them knows that by cutting safety services, they are going to force every single resident, business owner and home owner in our town to pay higher auto, renter, home and business insurance rates which is what happens when public safety service response times go outside of federally mandated guidelines.

To lead the way out of this year’s alleged budget “deficit” the City Administrator, once again, recommends to City Council that they cut police and fire positions. Roger Fraser wrote to Sabra Briere, “we have very few choices as we work to balance services with declining revenues.”

By feeding such tripe to Council members, and by being allowed to decimate the human capital of our city, Roger Fraser has found millions to feed to his burgeoning bureaucracy and coven of consultants. In exchange, the politicos get bullet points for their résumés and web sites such as this old chestnut you may recognize: “The reorganization of City government increased efficiency and saves more than $10 million per year…With more efficient delivery, city services have been preserved.”

Few choices? Hardly. Council members can choose to direct Roger Fraser to justify why the Fleet Department charges $50 to replace a single wiper blade on one of our police cars. At $50 per wiper blade, that would put a $30 oil change performed by the city’s Fleet Department at $400. A brake job done by the Fleet Department would cost as much as a vacation to Europe. Council could direct the Administrator to justify why it costs $5,000 per year for each police cruiser to have a computer tended to by the city’s IT Department. City Council members can choose to direct the City Administrator to reduce by half the $4,000 per acre per year the city charges itself to mow the grass in our parks. They can direct him to return to the General Fund a portion of the the Solid Waste Fund’s $10 million dollar surplus. They can ask the City Administrator why he loaned the money-losing Ann Arbor Airport over $1,000,000 dollars to build hangers for airplanes that can’t land there unless the runway is lengthened.

There are lots of choices that involve sending the City Administrator and CFO back to the drawing board to trim overhead, track down and account for what must surely be $20-$30 million dollars in fund surpluses throughout the various departments of our city, and stop using accounting methods that make it appear as though money-making entities within the city are losing money (such as our golf courses), so as to justify selling off our assets to private companies, and making money-losing entities look as though they are holding their own (such as the Airport) so as to justify additional investments of tax dollars.

That’s just for starters. Odds are there are many more choices than Roger Fraser would like to be directed to make.

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April 5, 2010

The Politics of Perks: Residency Must Have Its Privileges

Filed under: best of A2Politico, boards and commissions, city services, taxes — Tags: Ann Arbor, Dearborn, Downtown Development Authority, Leslie Golf Course, Planning Commission, services, University of Michigan, Wendy Rampson — A2 Politico @ 12:28 pm

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When I was a kid, at the beginning of every summer vacation kids in Dearborn, Michigan got a free pool pass, a tag that was sewn on to the proud owner’s swimsuit. Today, Dearborn (population 97,700) has eight outdoor pools and a summer family pool pass costs $90 for residents. Ann Arbor has four public pools (one of which was targeted for closure), and a family pass for residents this year will cost $250. Dearborn has a single public golf course, and on a weekend 18 holes with a cart will cost a resident $28.00. At the Leslie Golf Course in Ann Arbor, 18 holes and a cart cost $38.00, with no break for residents. Dearborn is the 10th largest city in Michigan, and Ann Arbor is the 5th largest. Dearborn has 37,000 residences, and that’s pretty darn close to Ann Arbor’s 45,000 residences. Finally, both Ann Arbor and Dearborn host the University of Michigan and other non-profits (in Dearborn it’s the gigantic Henry Ford Museum and Greenfield Village).

Why does it cost 2.5 times more for Ann Arbor residents to buy a summer pool pass than it does for Dearborn residents? Why, for that matter, does the 10th largest city in Michigan have twice as many public pools as the fifth largest city, with its substantially higher per capita property taxes? The answer, of course, is that in Dearborn services and recreational facilities for residents are a major spending priority, and have been for the last 50 years. While Ann Arbor taxpayers are forced to fund a new $47 million dollar Police-Court building, in 1996 Dearborn taxpayers were asked at the polls and agreed overwhelmingly to float a bond to finance a $46 million dollar Cultural Center for the residents of that city. The Cultural Center includes a 1,200 seat theater, two indoor pools, a climbing wall, a senior center, fitness center and an art gallery among other amenities. It costs a resident family $564 per year to use the Cultural Center.

Being a resident of Dearborn has its privileges. Being a resident of Ann Arbor should have similar privileges, as well. To get there, it will mean changing the direction city staff want to take when spending our tax dollars. Should we follow the staff suggestions in the Capital Improvement Plan and drop $800,000 to update the terminal at ARB (Ann Arbor City Airport) so rich folks can jet in for the football games at U of M, or should we build a new public swimming pool on the south side of Ann Arbor, where there isn’t one? To me, that choice is clear: a new public pool for the residents on the south side of town. Should we pave our roads and rebuild our bridges, or follow the pie-in-the-sky, big buck-little benefit “vision” of city staff planning manager Wendy Rampson, and the misguided members of the city’s Planning Commission, who were quoted in the Press as wringing their hands because “all the entrances to town are ugly?”

The choice is clear to me: we pave our roads and rebuild our bridges. In Rome, there are triumphal arches that mark the entrances to the Eternal City. When our City Administrator conquers the budget and stops over-funding the various intra-governmental city-states, such as Solid Waste, Legal, Water & Sewer and IT, and budgets resident services first and fully, we’ll broach the subject of putting up triumphal arches at the entrances to Ann Arbor.

Outside of City Hall last week, I ran into a city employee whom I’ve known for several years. This woman is a dynamo and incredibly bright. Standing on that corner, she threw out half a dozen fantastic ideas about how to get more use out of the city facilities we have. The encouragement of healthy living is her passion. Working for the City is her job. The whole time she was talking, I couldn’t help but think of her boss, whom I’d run into just a few moments earlier. Why on earth did this woman answer to someone as unenthusiastic and just plain off-putting as that person? I tried to imagine what it must be like for someone with as much drive and passion as she has working for someone who, it is quite clear, simply collects a paycheck.

It should come as no surprise to anyone that morale at our City Hall is at the bottom of the fish tank. Employee morale was surveyed not once but twice several years ago (by the local Dension company), and both times the results were abysmal: people who work for the City of Ann Arbor (with the exception of those who work in the City Attorney’s Office and the Downtown Development Authority) indicated on their surveys that they were just plain demoralized. While it’s easy to shrug off the results of two city-wide employee surveys which revealed mass discontent, people who are unhappy in their jobs cost their employers money. In this case, those several hundred city employees who’d rather walk over hot coals than go to work every morning, cost taxpayers millions of dollars each year. How? Employee turnover is the first expense that results from low morale. It can cost up to 30 percent of the employee’s total base salary and benefits to conduct a hiring. Employees with low morale are prone to higher absenteeism, and have little desire to go the extra mile. Studies show that low employee morale comes out in all manner of ways, including outright theft and destruction of property; employees who are demoralized can develop drug and alcohol problems. I’m not writing these things to question the character or work ethic of Ann Arbor’s over 700 city employees. I’m writing this to acknowledge the obvious: the employee morale of those who work for the City has no where to go but up.

And up it must go.

Just to be clear, employee morale is not the purview of either the Mayor or City Council. The City Administrator sees to the day-to-day management of the City, and the day-to-day supervision of city staff. However, the ramifications of low morale appear on the agenda of Council meetings with alarming regularity. Let’s start with early retirement. I’m expecting to retire sometime after the age of 70. You probably have the same plan. The Social Security Administration would, I’m sure, like us to work until well past the age of 75. The enticement to do so is a higher monthly benefit offered albeit for the statistically shorter number of years we’ll live past the age of 75. In the City of Ann Arbor, employees with the requisite number of years worked can retire well before the age of 55.

In talking to a union representative who bargains on the behalf of city employees, the individual told me quite frankly that members of that union are looking to get out as quickly as possible. I asked why. The answer was what I expected. Thanks to the virtually constant and unchecked threats of layoff made by the City Administrator (unchecked and uncommented upon by our elected officials), Ann Arbor’s city employees look to retire from city service as quickly as possible.

In 2007 and 2008, Ann Arbor did citizen surveys. The results should give us hope as to what the future could hold for all of us with a focus on good management, accountability and resident services. Despite the fact that our city staff are demoralized and could use prescriptions for anti-depressants, they received high marks from citizens for their professionalism in the course of their duties. This is remarkable when you stop to think about it. They don’t like working for our city government, in general, perhaps even detest the management strategies that have been used over the past half a dozen years, but they push themselves to serve the public. They’re working for us through the pain of demoralization.

In those same citizen surveys, only 13 percent of residents responded that the level of services they received in exchange for the taxes they paid qualified as an excellent value. That means, in essence, a huge percentage of residents feel that they’re being cheated (tip o’ the keyboard to Angel Morn) every year out of the services they deserve in exchange for the amount in taxes they pay.

It doesn’t take very much to imagine the performance and productivity our city staff would deliver if their morale were significantly improved. It doesn’t take a rocket scientist to figure out that improved employee morale will directly impact the percentage of citizens who feel that the level and quality of services they receive is commensurate with the amount of taxes they are expected to pay.

At the moment, city government is run and tax dollars are allocated as if it is a privilege to live in Ann Arbor.

This mindset has led to the deterioration of our infrastructure, and a multi-million dollar unhealthy reliance on additional taxation (millages) to pay for a bloated managerial bureaucracy addicted to cash surplus mad money, expensive no-bid sweetheart deals, contracts for city work given to political friends, subsidies for developers, and consultants. All the while our city budgets have been balanced on backs of hard-working city staff, by hiking fees for services exponentially, and by small but steady service reductions.

Popularity: 46% [?]

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March 29, 2010

The Politics of the Almighty Dollar: Would You Borrow From A2 To Pay For Home Energy Improvements?

Filed under: environment, money, taxes — Tags: AnnArbor.com, Cafe Zola, Dave Phillips, Downtown Development Authority, Earth Island Institute, Liz Brater's, Matt Grocoff, Matt Naud, Pam McCann, Rebekah Warren — A2 Politico @ 2:38 pm

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Matt Grocoff reminds of my friend in Berkeley, Pam McCann. Both are totally committed environmentalists. You may have a few friends like Matt and Pam, as well. Heck, you may even already know Matt and Pam. Both do widely subscribed to web-based media programs aimed at audiences who want to know more about how to live a life with a smaller carbon footprint. Pam’s husband, Dave Phillips, is the Executive Director of the Earth Island Institute. If you’ve ever seen the movie “Free Willy,” you’ve seen the fruits of Dave’s work. He was the guy behind the push to release the killer whale back into the wild. Pam, Dave and Matt are three very interesting and impassioned people who hope to inspire and interest the general public in their own particular flavors of environmentalism. As far as I’m concerned, it’s people like these who help the rest of us along the path toward mindful living.

Matt Grocoff and I bumped into each other on the street outside of Cafe Zola a couple of weeks ago. I’ve been talking to Matt about the PACE program currently under development by Ann Arbor city officials. On February 28, 2010, Representative Rebekah Warren, who’s running for State Senator Liz Brater’s seat, and County Commissioner Jeff Irwin, who’s running for the 53rd House seat vacated by Warren, posted a piece (a guest column) to AnnArbor.com titled, “Michigan must keep PACE on home energy efficiency.” Irwin and Warren write, “Property Assessed Clean Energy (PACE) enabling legislation. Sponsored by Rep. Rebekah Warren, House Bill 5640 will authorize local governments and citizens to engage in a voluntary program to finance energy efficiency improvements through future taxes and the use of special assessments.”

The gist of the program, according to city staff member Matt Naud, who is spearheading the effort, is that Ann Arbor will launch the program with around $4 million dollars and make loans at 5 percent interest to creditworthy homeowners. Sounds pretty straightforward. Here’s how Warren and Irwin explained it in their post:

Here’s how this program would work: (1) a property owner would contact the city or county; (2) an energy audit will identify the highest value energy efficiency improvements; (3) a financing plan will be agreed to between the government and the property owner stipulating the cost of the improvements and the appropriate rate of the special assessment needed to refund the community over time; and (4) the improvements will be made, saving money and reducing pollution immediately.

Matt Grocoff and I had the same reaction to the program as it is currently envisioned by the politicos and by city staff. It’s absolutely vital that as many Ann Arbor residences are included as possible. It’s also highly likely that people who are “creditworthy” enough to qualify for the financing from the City may well not be in need of such a program. Don’t get me wrong: everyone who owns or rents a home should get an energy audit. It’s the best routine examination of your physical surroundings that you’ll ever get. However, it’s the people who can least afford to borrow money against the value of their property who need to be drawn into the circle of environmental mindfulness. Furthermore, according to information from the U.S. Department of Commerce, “The U.S. residential construction market was $363 billion in 2008, down 41% from its high of $620 billion in 2006. The home renovations market was $188 billion in 2008, down 18% percent from 2007. Home energy efficiency renovations market in the U.S. was $21 billion in 2008; down 13% percent from 2007’s $24 billion.”

So, the market is still there for the PACE program, albeit with overall demand that is not as robust as 24 months ago. Should Ann Arbor go ahead with it, provided Representative Warren can get her bill through the Michigan House and then through the Senate?

In talking to Matt Naud, I was impressed by his enthusiasm. However, I was disconcerted that prior to committing staff time, money and resources to the possible implementation of a PACE program, no market research had been conducted to determine if there was actually a need in our community for such a program and, more importantly, if people would be inclined to participate. Not too long ago, the City Administrator was pressuring the City Council’s Budget Committee to agree to fund a market survey to gauge support for a city income tax. It’s clear that Ann Arbor needs to conduct a market survey to gauge whether city staff and city resources should continue to be dedicated to designing and implementing a PACE program. It’s really the only way to know whether the program as it in outlined by Warren in her legislation, and city staff in their planning, would actually be a program residents want, need and would use. Otherwise, it’s nothing but a bullet point on someone’s political résumé, and residents are left (once again) with a useless “environmental program.” We already have solar panels and windmills to nowhere—environmental bullet points—six-figure investments that aren’t connected to the power grid.

Let’s be clear. Residents should make improvements that save energy. We should all brush and floss daily, too. What we should do is sometimes not what we choose to do. That’s where education comes in. Matt Grocoff and I see PACE not just as a loan program, but a program that, if funded, must also have a significant educational component.

In talking to Naud, I asked the obvious questions. I began by asking what would happen if a resident took a loan from the city for the PACE program and then couldn’t repay the money. Naud replied that the city could foreclose on the homeowner’s residence. My heart stopped for a moment. Ann Arbor should never be in the business of foreclosing on residents’ homes simply because they owed $2,500 plus interest for insulating an attic and then, say, fell on hard times. I asked Naud whether Ann Arbor could make grants as opposed to loans, and he suggested I find him $4,000,000.

It would, in fact, be my pleasure to find Mr. Naud $4,000,000 so that grants could be made.

Let’s start with the $10,000,000 surpluses that have been built up in the city’s Fleet Fund and the Solid Waste Fund, respectively. That’s a cool $20,000,000 right there. Let’s take back the millions that have been diverted from the General Fund and poured into the so-called Economic Development Fund. Let’s pull the plug on the Fuller Transportation Station aka the U of M parking garage project and repay to the General Fund whatever is left of the $500,000 in consultants’ fees allocated to that ill-conceived project. How am I doing so far?

Ann Arbor most certainly has $4,000,000 that could be allocated to such an important program in the form of grants. Grants, Grocoff and I both agree, could dramatically increase residential participation across the board demographically. At the moment, the Downtown Development Authority uses our tax dollars to pay for energy audits and improvement made to downtown business owners buildings. Since the program was launched, 90 businesses have participated. Every little bit helps, of course, when we’re talking about energy savings. However, won’t true environmentalism be realized when we do everything possible to encourage residents to participate on a mass scale? When it comes to designing a PACE program for Ann Arbor residents, money should not be a potential road block. What I want to avoid is socio-economic discrimination, and environmental elitism.

So here’s my question to A2 politicos out there. Would you be more willing to participate in the PACE program if it were a loan-based program, or a grant-based program? Conversely, are you disinclined to participate under any circumstances?

Popularity: 50% [?]

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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: Leigh Greden, Plum Market, Roger Fraser, Tom Crawford, Whole Foods — A2 Politico @ 8:12 am

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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% [?]

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March 24, 2010

The Politics of Singing and Dancing: Eli Cooper’s $14 Million Dollar Variety Show

Filed under: city council, taxes, transportation — Tags: A2Politico, AATA, Amtrak, AnnArborChronicle.com, Eli Cooper, Henry Ford Museum, Jayne Miller, Jim Kosteva, John Hieftje, Leigh Greden, Park Advisory Commission, Roger W. Fraser, SEMCOG, Stephen Rapundalo, Sue F. McCormick, trains, Wolverine Service — A2 Politico @ 11:56 am

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By now, if you haven’t already read it, SEMCOG announced that there is no money for commuter train service between Ann Arbor and Detroit. The transportation cognoscenti around town have been saying this for the past 16 months. So why no cash for the commuter line? According to a March 19, 2010 piece in Crain’s Business Weekly, “A $100 million federal transportation funding earmark for the project was made in 2005, but studies show the route’s cost-per-rider ratio of more than $70 remains too high for SEMCOG to qualify for the money.”

Read that last sentence again. The cost-per-rider ratio of a commuter train between Ann Arbor and Detroit is more than $70. Put another way, it would be cheaper to hop on a Southwest Air flight, to well, any one of a dozen destinations. There are just not enough people who would ride a commuter to make the cost-per-rider costs reasonable enough for the project to qualify for available federal funding.

According to Crain’s, “The hope has been that the demonstration line would encourage additional ridership, and linking the route to a proposed regional mass transit system of bus and train routes would boost usage and bring down the cost so that SEMCOG can get the federal funding.”

The result? No new target date for the daily service has been set.

The only trains that will run will be operated by the company that has been running an east-west train service between Ann Arbor and Detroit for 40 years: Amtrak. Heck, you can hop on the Ann Arbor-Detroit Amtrak train today, if you like. It will take about an hour to get to the Detroit train station, located at 11 West Baltimore Avenue, near the Cass Corridor, and about a mile from the Wayne State University campus and the DIA.

Since the demise of commuter rail, the new idea is “special” trains. For instance, there will be a special train between Ann Arbor and Detroit for the Thanksgiving Day Parade. If you’ve never been, go, but drive your car, because the train station is, literally, miles from the parade route. There’s always loads of free on-street parking within one block of the parade. Hit Lucy & Ethels diner, located at 400 Bagley Street, for lunch after the festivities.

We’ll see you there.

There will also be “special” trains for University of Michigan football games. In other words, Amtrak will schedule service to coincide with Michigan’s home football games. We need a new train station for that? I think not. We need to be exponentially more concerned with how AATA is going to haul the people who take the trains to the games to Michigan Stadium from the Amtrak station. At the moment, Michigan Stadium is not a choice on the AATA Trip Planner page, and “Stadiums” is not an option in the drop down menu. Those are easily remedied issues, of course.

However, there are other more complicated issues associated with “special” trains bringing people to U of M football games: AATA. Buses in our city currently run infrequently on the weekends, and Saturday service ends early. Unless every Michigan fan who takes the “special” train to Ann Arbor and then takes an AATA bus to the Stadium is charged enough to cover the actual operating expenses incurred by AATA for the service, Ann Arbor taxpayers who pay the AATA’s millage, will be subsidizing the University of Michigan as it earns tens of million of dollars in football revenues each Saturday.

One solution would be for U of M to assess a transportation fee on the tickets it sells to football games and give that money to AATA. It’s either that, or the University of Michigan should use its own buses to transport its football fans to and from its stadium and the train station on Depot Street. I would argue that it’s a stretch to ask taxpayers to provide train service to the football games of one university in the entire state of Michigan.

At the March 16th Park Advisory Commission (PAC) meeting, a commission member asked the city’s Transportation Program Director, Eli Cooper, a very important question: Is the Fuller Transportation Station a transportation center or a parking structure? “I believe it’s a little of both,” Cooper said. Cooper went on to explain that “the project began as a transportation center then turned into a parking structure to meet the short-term need—while at the same time proving to potential partners, such as the federal government, that Ann Arbor is serious about commuter rail.”

Seriously? Public servants serious about representing the best interests of their constituents don’t allow city staff to throw away tax money, give away parkland, or cut police and fire service to build the University of Michigan a parking garage for its “short-term need.” Because that’s the “short-term need” to which Cooper is referring—the University of Michigan’s growing need for more parking for its employees.

So, why are our elected officials still allowing city staff to steam down the tracks and spend money on the “multi-phase” Fuller Transportation Station? The “joint” venture with the University of Michigan looks suspiciously like the scrawny kid (Ann Arbor) being taken for $14 million dollars in lunch money by the neighborhood smooth talker (U of M). The latest plans for the transportation station shown at the PAC meeting include exactly one edifice: a parking garage to be used by the University of Michigan.

At the March 16th PAC meeting, Eli Cooper explained exactly why he needs $14 million dollars the city doesn’t have to build a train station that we don’t need, and for which SEMCOG has made clear commuter trains will never stop. Cooper was quoted in the AnnArborChronicle.com as telling the city’s PAC members that:

…Amtrak anticipates doubling its ridership in the next 25 years. That’s not including potential commuter or high-speed rail. Right now, the Ann Arbor station, located on Depot Street, has 75 long-term parking spots. Their current location won’t accommodate future growth, Cooper said. He noted that the Ann Arbor station is the second busiest one on the Chicago-Detroit route – only downtown Chicago is busier. The Fuller Road Station is also intended to be an alternative for driving to the Detroit Metro airport, Cooper said. And though the Fuller Road Station didn’t get chosen in the latest round of federal funding, the project was approved, he noted – the feds just ran out of money.

First of all, Cooper’s explanation directly contradicts the March 19, 2010 Crain’s Business Weekly coverage that cited the cost-per-rider ratio as the reason the Ann Arbor to Detroit commuter project was turned down for federal funds. Next, in January 2010, the federal government awarded $40 million dollars to Amtrak to renovate two of their stations on the Detroit-Chicago route. Read about the allocations here. The Ann Arbor station was not selected; stations in Battle Creek, Dearborn and Troy will get money for the kind of expansions that Eli Cooper, Mayor and City Council are demanding that Ann Arbor taxpayers foot the bill for. The $40 million dollar federal allocation includes building a new train station, as well—just not in Ann Arbor, but rather near the Henry Ford Museum in Dearborn.

Evidently, the federal government is not prepared to spend money for a new train station in Ann Arbor despite Cooper’s assertion that Amtrak needs one “because Amtrak anticipates doubling ridership in the next 25 years.” Perhaps this is because there are people in the federal government who are perfectly aware that Cooper’s assertions are patently absurd. In Michigan, specifically, on the Detroit-Chicago route, Amtrak officials do not expect ridership will double. Amtrak has not experienced ridership growth over the past three years. In fact, between 2007 and 2009, ridership of the Wolverine Service route between Detroit and Chicago dropped by 7.1 percent, according to ridership and revenue data from Amtrak provided to Trains Magazine and which the magazine published on November 20, 2009. Revenues on the Wolverine route dropped 7.8 percent ($1.4 million dollars) during the same period. Between 2008-2009, Amtrak lost 1.6 million riders costing the company a total of $140,000,000 in revenue.

So I ask, once again, why are Ann Arbor taxpayers being asked to pay the University of Michigan to build a parking garage on public-owned land that overlooks the Huron River? According to Eli Cooper it’s a multi-million dollar gamble to prove we’re “serious” about a commuter line between Detroit and Ann Arbor.

Let me tell you what I’m serious about: holding city staff accountable for their work and the taxpayer money they want to spend. The city needs to withdraw from the “joint” partnership immediately, and refund all of the money taken from the General Fund for the Phase I concept plan. I’m serious about putting an immediate stop to the use of any more taxpayer money for the construction of a 1,020 car parking garage for the University of Michigan on valuable river-front property owned by the people of Ann Arbor.

On November 5, 2009, former Third Ward Council member Leigh Greden, Mayor John Hieftje and Second Ward Council member Stephen Rapundalo presented Council with the Resolution to Approve Memorandum of Understanding (MOU) between the City of Ann Arbor and the University of Michigan for the Development of the Fuller Road Station. See a video of the Council’s discussion of the MOU here. You will hear U of M’s spokesman Jim Kosteva tell Council that the parking garage for the University of Michigan is a “city-owned project.” The one-sided MOU was prepared by Eli Cooper, reviewed by Sue F. McCormick, Public Services Administrator and Jayne Miller, Community Services Administrator, and approved by Roger W. Fraser, City Administrator.

Our city officials landed none of the money they went before Council and said could be landed for commuter rail. Michigan received none of the $8 billion dollars in federal stimulus money for high speed rail between Detroit and Chicago. Does that mean we never will? Of course not. Does it mean we should give away parkland and spend millions to build U of M a parking garage to “prove” we’re “serious” about commuter rail? Wisconsin was awarded $810 million to upgrade and refurbish train stations and install safety equipment on the Madison-to-Milwaukee leg of a line that stretches from Minneapolis to Chicago. Elected officials in neither Madison nor Milwaukee spent a dime proving that their cities were “serious,” about rail prior to receiving the federal funds.

The Fuller Transportation is not a collaboration between Ann Arbor and the University of Michigan; it’s a giveaway of public land and public money to an entity that has already amassed over 1,700 acres of land in our city, and pays just a fraction of what it should for the city services it receives now. The MOU is a poorly negotiated, one-sided agreement supported by Greden, Hieftje and Rapundalo, and then unanimously approved by Council.

The MOU should have never been approved at all. Now that it’s clear that those citizen activists who said many months ago that there was no money to operate a commuter train were absolutely correct, it’s time for Council to step up and represent the best interests of the people of Ann Arbor. Those interests are in no way best represented by participating in a one-sided arrangement that seeks to give away our prime river front land and our money to our university neighbor.

If this is a “city-owned” project, as U of M’s Jim Kosteva said at the November 5, 2009 City Council meeting, City Council, by refusing to approve further funding and construction will, effectively, kill it.

Popularity: 49% [?]

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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: AnnArbor.com, Carsten Hohnke, City Administrator, city council, Joe Upton, Malloy Printing, Margie Teall, Ryan Stanton, Strong Kids Fundraising Campaign, YMCA — A2 Politico @ 9:35 am

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I was at the YMCA last night for the kick-off of the Strong Kids Fundraising Campaign. I raised money for the Campaign last year, as well, and was throughly impressed by the structure and organization of the Campaign. This year, like last year, Joe Upton tops the organizational chart of participants that you’ll see posted on the wall at the Y. Upton and his family own Malloy Printing, to which we moved a good portion of our book printing business several years ago in an effort to bring work home to Michigan, and pump dollars into the state’s economy.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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