Carsten Hohnke « A2Politico: Ann Arbor Politics Grilled To Perfection

August 25, 2010

The Politics of Punks: The “Keep Ann Arbor Clean Campaign”

Filed under: Uncategorized — Tags: Alex de Perry, Ann Arbor Police Department, Avalon Housing, Bandemer Park, Carsten Hohnke, Chief Barnett Jones, Dan Pampreen, David C. Munson, Downtown Development Authority, Dr. James O. Woolliscroft, Gen Y, Google, Ira Levin, Jr., Main Street Ventures, MichBio, Michigan League, Modern Language Association, Orville Hubbard, Punk Week, Roger Fraser, Roger Hewitt, Sergey Brin, Stephen Rapundalo, Valiant Partners — A2 Politico @ 8:00 am

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I paddle my kayak regularly from Bandemer Park, the site of a Punk Week gathering that made big news in this town of ours. I wasn’t there the afternoon the Ann Arbor Police Department car responded and the officer found himself out-numbered. Of course, given the fact that there are only 5-7 officers patrolling the entire town on a given day, with a single patrol car cruising Charlie Sector (the part of town in which Bandemer is located), the officer inside the patrol car would have expected to be out-numbered. That’s why the officer called for back-up. There was chicken on the grill and swimming going on at Bandemer. Someone was, perhaps, even swimming without the benefit of a bathing machine. The delicate Victorian sensibilities of some passerby at Bandemer that afternoon were offended. Evidently, the police showed up because some local prude had dimed out the Punk Week rabble gathered at the park.

Here’s the Ann Arbor definition of Punk Week:

That’s when a 25-year-old woman puts in her earbuds, turns up her iPod, and pays AATA to haul her from Ypsilanti to Ann Arbor to some low-paying job for some high-earning bugie business owner who lives in Pittsfield Township.

Oh, sorry. Our punk should not be living in Ypsilanti. She should be living in some ramshackle Ann Arbor rental house owned by Dan Pampreen with 15 other Gen Y punks. The house will have been last inspected by City inspectors when Old Hickory was president. (Being super-tight with Fifth Ward Council member Carsten Hohnke has to have some perks, doesn’t it?) Our punk will be hopping on one leg, dying to rent “work force” housing brought to her by local developocrat Alex de Perry or the develop-beard Avalon Housing that will be, they promise, swear to Dog, the shit (not to be confused with shitty). After all, if they’re not working for Google billionaire Sergey Brin for $40K per year, or waiting tables for $30,000 per year at some downtown restaurant owned by Downtown Development Authority authority Roger Hewitt, or the fine folks at Main Street Ventures, what the hell good is a Gen Y punk? Heck, what good is anyone who’s not white (or who talks white really well), upper-middle class, and who feels virtuous that they’re over-filling their single-stream recycling container every single week?

Wake up and smell the idea that Ann Arbor is an urban center distinct from Detroit (or so goes the fantasy). That, after all, is the goal of the present batch of politicos in office. That’s why we desperately need a convention center. Second Ward Council member Stephen Rapundalo is the MichBio CEO about town, and he does natter on about the fact that there’s no place is this God forsaken berg to host a conference with 500 attendees. Really? I think what he means is that there is no Ann Arbor taxpayer-direct subsidized place to put on a conference with 500 attendees. No matter that the Michigan League has ample space to host a meeting with 500 attendees and then some.

In a post from December 2009, I wrote:

As expected, the conference center proposal from Valiant Partners closely follows the proposal that was secretly circulated and pitched by City Administrator Roger Fraser to City Council members in January 2009 at the City Council’s retreat.

The proposal includes two letters of recommendation from University of Michigan deans. The first is Dr. James O. Woolliscroft, MD, Dean. Is it me, or does his letter of “endorsement” sound like it was written while sitting under a naked bulb with water boarding apparatus nearby? The two sentence (seriously, two sentence) letter says, “A conference center that will allow Ann Arbor to host large events is desirable, and I support efforts to make this reality.” Replace “conference center” with bawdy house, and we have a space to meet Dr. Woolliscroft’s needs, n’est pas? The other “endorser” was the Dean David C. Munson, Jr., Dean of Engineering. “We have a strong need for a space for plenary sessions with 500 participants and break-out sessions of 75 participants,” writes the Dean of Engineering. Oh, it should be “centrally” located, as well. Yo, Dr. Munson, the Second Floor Ballroom at the Michigan League holds 500 nicely. In fact this handy room capacity document shows that the Michigan League has all the space for which Dr. Munson says Ann Arbor has a “strong need.” Thus, why he “strongly endorses the need for a conference center” remains a mystery….or not.

We need more conference attendees in Ann Arbor, not Gen Y punks. Wait, what about brainy Gen Y punks who attend conferences? Well, all the brainy Gen Y punk grad students are at the Modern Language Association conference in ______________ (fill in the name of a fun, large, metropolitan area that Ann Arbor will never be able to compete with). They’re wearing impossibly small glasses, fretting about post-deconstructionism, and attending guerilla workshops on what to do when your thesis advisor repeatedly hits on you (Hint: sexual harassment charges are tiresome and bad for one’s academic career, that is the academic career of the individual who levies the charges).

The not-so-brainy comments at AnnArbor.com from the site’s devoted readers who live in Howell, Brighton, Dexter, Chelsea, Saline and out-of-state were full of reasons why punks are unwelcome in Ann Arbor. Punks smell. Punks do drugs. Punks listen to music in public. Punks swim naked. Punks grill chicken without a permit. Punks look unkept. Punks are dirty. Punks are not gainfully employed. Punks are, well, punks. I’m really not sorry to have to burst the bubble of so many small-minded individuals at once, but the above complaints apply to just as many tenured faculty at the University of Michigan as they do to the Gen Y attendees of the impromtu Punk Week festivities. There’s a physics prof at U of M with a wicked reputation amongst the librarian folk as an individual not to be trifled with unless one has a completely stuffed up nose.

The Bandemer Park Punk Week dust up was proof positive that Ann Arbor is becoming a community the likes of which we last saw in that Ira Levin book. Ann Arbor is no more a Midwestern bastion of progressive liberality, where creative thought and actions are embraced, than is Pyongyang. The AAPD has launched an internal investigation thanks to a complaint filed shortly after eight people were arrested for “resisting officers” on Sunday August 15th. The police charged the people with refusing to leave the park. Maybe Ann Arbor’s mayor should just adopt the tactics of Dearborn’s segregationist hero Orville Hubbard. For decades under Hubbard’s “Keep Dearborn Clean” campaign, non-residents were barred from the city’s parks, pools and recreational facilities. Non-residents could be tossed out of parks by police in Dearborn, just as the AAPD officers tried to toss out non-residents from Bandemer Park. How would the Dearborn police identify non-residents? The same way the AAPD identified the Punk Week participants. They were the people who looked “different.”

As usual, on AnnArbor.com, just as we saw in the old Ann Arbor News, we hear absolutely not a single peep from the Mayor and City Council members save a comment that, maybe, “permits” need to be issued the next time punks want to grill chicken and swim in the Huron. Then again, when the political shitzu hits the fan, we don’t have elected politicos in Ann Arbor. We have a head-less horseman whose job it is to scare the locals into staying inside unless they pay for a permit. The local news outlets sweetly perpetuate this myth by failing to point out that the Chief of Police answers to the Mayor and City Council. Chief Barnett Jones, after all, went before Council and assured everyone that the AAPD could handle policing with a force that has been severely reduced.

Now, drive your Volvo/Subaru/Prius to Bandemer Park, throw some $20 per pound, free-range, organic chicken on the grill, strip to your 100 percent organic cotton skivvies, hop in the river, and imagine the AAPD responding to a disturbance the size of the one at Bandemer Park times 10 or 100. Stop screaming. No one can hear you. No one wants to hear you. Repeat after John Hieftje: “Crime is down. Crime is down. Crime is down. Crime is down.”

I was told by AAPD police officials that our police department simply won’t ever be able to respond to any kind of a large disturbance. Of course, voters re-elected a mayor who assured them that if crime ever goes up (as if crime is a generic noun) he’ll look into beefing up the police force. Will that be before or after you or someone you know gets assaulted, I wonder? Well, if the Bandemer Park fiasco demonstrates one thing quite clearly it should be that it won’t be a little old crime spree that obviates the need for more than 5-7 patrol officers on duty during any given day.

As for the Gen Y punks, professionals, plebes and poseurs, they need to get a clue and realize that the new urbanista Boomers in Ann Arbor—this Mayor and Council—don’t welcome change or Gen Y with open arms. Our little slice of Ira Levinville craves and obsesses about well-behaved, well-mannered, well-heeled “young professionals,” who will bend over, smile and support the well-connected, well-mannered (at least to your face, mostly), much better-heeled business owners, local developers, and local politicos.

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July 16, 2010

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

Filed under: Mayor Hieftje, city services, elections — Tags: Ann Arbor City Council, Ann Arbor Housing and Human Services Board, Carsten Hohnke, Christopher Easthope, Dave Gershman, Delonis Shelter, Georgetown Mall Citizens Task Force, John Hieftje, Lower Town, Margaret Wong, Margie Teall, National Organization of Women, Ned Staebler, Ryan Stanton, Washtenaw County Board of Commissioners, Wendy Cooper — A2 Politico @ 7:57 am

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

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

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

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

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

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

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

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

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

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

Compost

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

The taxpayer funds saved as claimed by the incumbent?

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

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

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

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

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

Compost

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

The incumbent claims he:

Championed the Greenbelt initiative.

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

This next claim is classic Hiefje:

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

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

Fee hikes have been substantial:

2002 Water charges to residents: $13.262 million

2006 Water charges to residents: $16.881 million

2009 Water charges to residents: $18.971 million

2002 Solid Waste charges to residents: $7.3 million

2006 Solid Waste charges to residents: $9.6 million

2009 Solid Waste charges to residents: $12.1 million

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

Water — $9.3 million

Sewer — $44.7 million

Street Repair Millage Fund Balance — $19.4 million

Stormsewer — $5.2 million

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

Fleet Surplus — $7.5 million

IT — $4 million

Project Management — $1.5 million

Central Stores — $1.6 million

Total unrestricted fund surpluses: $93,100,000

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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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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April 25, 2010

The Politics of Propositions: When Every Scheme Sounds Like a Winner

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When Google rode into town promising to create 1,000 jobs by 2011, Mayor and Council responded to the racy proposition by taking over $2 million dollars from the city’s already stretched General Fund and creating a new fund called the Economic Development Fund. It should have been called the Rob Peter to Give Away Money to Paul Fund. With the magical appearance of money in the Economic Development Fund, Council took taxpayer money and paid to give Google 400 parking spaces. That crazy arrangement is due to expire in December 2010. I call it crazy for any number of reasons not the least among which is that Google created about 20 percent of the total jobs the company promised, yet still took (and was given) 100 percent of the free parking spaces promised. For every one job created by Google, Ann Arbor taxpayers funded two (yes, two) parking spaces.

Now, money from the Economic Development Fund aka the General Fund is being used on the Fuller Parking Garage project. Our tax dollars are being used to pay a consultant to design a parking garage for the University of Michigan.

In Ann Arbor, our current Mayor and Council simply don’t evaluate business propositions with any modicum of business sense. They will entertain just about any proposition, and give away more money than is practicable in order to smooth the way for the smooth-talking types who come before Council and want their way with the group. The current rumor that it’s tough for those Willy Loman types, developers who ride into town, architectural plans in their travel bags, is pure nonsense and bunkum—developers Newcombe Clark and Jeff Helminski included. Clark recently launched a bid to unseat Fifth Ward Council member Carsten Hohnke because Hohnke sent a note to be read by Fifth Ward Council colleague Mike Anglin that made it clear that Hohnke did not favor Clark’s Moravian project.

One has to wonder why Newcombe didn’t run for Mayor. It was Mayor Hieftje, after all, who sank any chance Clark and partner Jeff Helminski had for their Planned Unit Development (PUD) petition to be approved. Hieftje voted against the PUD petition, while Carsten merely sent a note to the meeting and missed the vote. For that matter, why doesn’t Clark move to Ward Three and take on Council member Chris Taylor? Taylor voted for the PUD, but in taking out Taylor, Clark could live la vida loca and spend his days making the life of the other Third Ward Council member, Steve Kunselman, a towering inferno.

It’s my supposition that sometime during the years when Helminski and Clark accumulated their multiple small parcels in the Germantown neighborhood, someone, somewhere, led the two to believe that the P.U.D. was in the B.A.G. All they would have to do was jump through a few hoops at the Planning Commission (which eventually recommended that the Moravian PUD be approved) then, on the Commission’s recommendation, Council would approve the PUD, just as they did for the Near North project. It’s no secret that there are those on Council who believe that the neighborhoods adjoining downtown are fair game for denser development, despite what the residents, zoning laws and various city master plans might say. However, there arose a Third Ward Council member in August of 2009 who knew not Joseph, Jeff or Newcombe. Steve Kunselman voted against the PUD. I can only venture a guess and that former Third Ward Council member Leigh Greden would have heeded the advice of former Second Ward Council member Joan Lowenstein, when she stood before Council and told members not to give in to the “sulkers,” and approve the Moravian PUD.

Since 2000, some 41 development projects have been approved by City Council, developments totaling close to 4,000,000 square feet of new development in our city. Those projects include the 2003 City Council approval of a 633,000 square foot fantasy-land at the corner of Broadway and Wall Street, called the Broadway Village PUD Site Plan. The Broadway Village was supposed to include 7 buildings, 196 units of residential space, and over 760 parking spaces. It’s currently a 7.3 acre eyesore that has enjoyed seven years worth of site plan extensions thanks, one imagines, to the political donations and connections of developer Peter Allen. There are other communities that pull site plan permissions after six months if the developer hasn’t secured funding and broken ground. I have to imagine that Allen, the Broadway Village developer, will petition Council in October of 2010 for another extension. I also have to imagine that funding for the project will not be any more forthcoming in October of 2010 than it was in 2003, when the project was first approved.

It makes no sense to allow Peter Allen to squat at the corner of Broadway and Maiden Lane as he waits for the banks to see the light and finance his development, or at least make sure he gets his developer’s fees before the project goes belly-up, and Ann Arbor is left holding the bag.

So, why can’t developers get their projects built in Ann Arbor? Well, for starters, since 2000 our Mayor and City Council have fallen over and again for the same story: nice project, grandiose financing scheme. Over and again, planning staff have advised the Planning Commission that the individual projects were viable, and Planning Commission has advised Council to say yes to the proposition. Over and again, the developers were unable to begin construction. Not once, not twice, but 40 times since 2000. In fact, the number of development projects that have been approved since 2000 exponentially outnumbers the number of projects turned down by City Council, including as the Moravian.

In going door-to-door, I’ve heard over and again from voters that they want to see the zoning laws applied fairly and uniformly. They want to see PUD projects in near downtown neighborhoods discouraged, and density concentrated within the boundaries of the Downtown Development Authority. After all, one voter pointed out, that’s how the Greenbelt millage was sold.

Well, no. That’s not how the Greenbelt millage was sold.

In 2003, not a single piece of Greenbelt millage campaign literature linked the Greenbelt campaign to increasing density within the city of Ann Arbor. Chapter 42 of the City Charter that deals with the implementation of the Greenbelt millage says nothing about downtown density as a reason to repurpose the then land acquisition millage money. Elected officials, Greenbelt Advisory Committee members and city staff have “repurposed” the intention behind the Greenbelt millage passage to suit their political belief that we must increase density in downtown Ann Arbor. However, the Greenbelt millage was sold and presented to voters this way:

From Chapter 42 of the Charter: Uncoordinated development in the areas around Ann Arbor has affected and may continue to adversely affect the quality of life in Ann Arbor leading to fragmented open space and wildlife habitat; loss of productive farmland and forestland; destruction of rural beauty which is part of the natural historic character of the Ann Arbor community; decline in water quality and the loss of wetlands; increased auto dependency, fuel consumption, traffic congestion and air pollution; relocation of jobs to peripheral area; excessive public costs for roads and utility infrastructure, new and extensions, to dispersed development.

Now, almost 10 years and $22 million dollars later, a map of the Greenbelt millage purchases shows 1,782 acres “saved” from development.

Greenbelt

What should be obvious from the map is that the total amount of land acquired within the boundary is miniscule. The 30 year 0.5 mill tax for and acquisition is anticipated to raise between $80 million and $100 million dollars from Ann Arbor taxpayers. Even doubling or tripling the number of acres will not substantially increase the total land mass, or create anything close to a “green belt” around Ann Arbor. What we will have done is to have preserved multiple small parcels of open space and farmland in outlying townships. Meanwhile, the opportunity for a Greenway languishes, brought back from the dead every two years, like Lazarus, by politicos who pledge to support a Greenway for the city.

While the Mayor claimed in a January 2010 AnnArbor.com post this is a “golden” time to swoop in and pay less than the $12,000 per acre on average that has been paid for the rights purchased, Ginny Trocchio one of two people who manage the Greenbelt millage program, was quoted in an April 14, 2010 AnnArborChronicle.com post as refuting the notion. Trocchio is quoted thusly, “The market has changed dramatically since the millage passed. Land values have dropped sharply, but landowner expectations remain higher than the actual market price— that’s an issue in trying to negotiate deals.” The dilemma makes sense, in fact. Chances are good that land rich, cash poor landowners need money now more than ever.

The most recent example of this propensity to accept propositions sits at 2502-2568 Packard. The 91,700 fantasy-land was to be called Georgetown Commons. Even with the TIF (tax increment financing) sweetheart deal from Council that would have given tax dollars to the developer, the Titanic development scheme sank after hitting the icebergs of financing, debt and unpaid taxes. The property is valued at $4.6 million, based on its 2010 state equalized value. Developer Craig Schubiner paid $6.1 million for it in 2001, according to city documents.

After creating a 6.4 acre disaster by letting Craig Schubiner talk them into a TIF financing package, City Council created the Georgetown Mall Citizen’s Committee which held a meeting at 6 p.m. April 22nd in a 6th floor conference room at City Hall. Citizens will come together and figure out how to clean up the mess created by Council’s short-lived love affair with the Georgetown Commons developer.

So what’s the answer to this decade-long string of failed development? It’s simple: no more tax increment financing (TIF) giveaways to private developers, no more public-private partnerships where our tax money is used to subsidize private development projects, or mitigate the risks, as First Ward Council member Sandi Smith once said, of private development in Ann Arbor. Those public-private partnerships are breeding grounds for what President Obama’s chief economic advisor Dr. Lawrence Summers, referred to as “crony capitalism.” The public good is subverted for the sake of private gain. Public policy is replaced with back room dealing. An excellent example of crony capitalism is the convention center RFP process, a sham procedure designed to give us a predetermined outcome. A few politicos, including the Mayor, City Administrator and former Chamber of Commerce leader decided quietly among themselves as early as 2008 that Ann Arbor’s downtown needed a convention center.

As elected officials, and as a community, we’re going to have to apply significantly more business acumen, vision and skepticism when developers come forward with plans such as the Broadway Village and Georgetown Commons. Yes, it’s a great bullet point for a political résumé to bring in and break ground at such a project, but when the projects fail, as those two have, our community as a whole suffers tremendously. The closed Georgetown Mall has spurred an increase in crime in the neighborhood around the area.

If Ann Arbor is to become a community in which development investments are approved, financed and built (a critical three-step process), we’re going to have to reshape the way in which projects are taken through the planning process, and by whom. We’ll have to carefully analyze and study the successes and the failures of the past decade to identify patterns, people and issues where Ann Arbor’s staff, appointed and elected officials can do a better job helping those who want to invest in our community do so equitably and, ultimately, in the best interests of the taxpayers.

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March 18, 2010

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

Filed under: Mayor Hieftje, city council, environment, recycling — Tags: Ann Arbor City Council, Carsten Hohnke, Container Recycling Institute, Ecology Center, Environmental Commission, Margie Teall, Mayor Hieftje, Recycle Ann Arbor, recycling, Ryan Stanton, Sue McCormick — A2 Politico @ 6:41 pm

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

Reduce. Reuse. Recycle.

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

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

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

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

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

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

Compost

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

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

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

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

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

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

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

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

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

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

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

·       $30,000.00 annual savings in recycling dumpster collection

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

·      $450,000.00 annual revenues from merchant MRF users

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

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

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

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

The solution to this financial and managerial mess is obvious.

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

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

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March 15, 2010

The Politics of Garbage: Single-Stream Recycling Stinks For More Reasons Than You Think

Filed under: environment, money, recycling — Tags: Ann Arbor Ecology Center, Ann Arbor Materials Recovery Facility, Calvert's Roll-off Container Services, Carsten Hohnke, conflicts of interest, Container Recycling Institute, Margie Teall, Mayor Hieftje, Meslissa Uerling, Michael Garfield, Planning Commission, recycling, Reuse Center — A2 Politico @ 12:19 pm

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A2P Notes: Looking for the back story? I wrote about single stream recycling first on January 28, 2010. To read that entry titled “The Politics of Unscrambling Eggs: Hieftje, Hohnke and Teall Push $6.4 Million For Environmentally Regressive Single Stream Recycling,” click here.

It has often been disturbing to follow the money, connections and political threads that run through our city, and from city government out into the larger community. We live in a small town, and it’s sometimes too easy to justify ethically questionable contracts, relationships, and reciprocities. I wrote here on February 18th that businesses owned by a current member of the Planning Commission and a current member of the Downtown Development Authority were awarded contracts for city work, and then the initial contract was amended by Council on February 16th to increase the original allocation by $100,000.

In the Council resolution, the names of the businesses never appeared anywhere, neither was it made public that the city was awarding contracts to members of the boards. If this information had been made clear to Council and the public, it might have raised questions (at least for me it would have). Furthermore, nowhere in the Council Board packet did information about the bidding process, or whether or not the work had been bid out competitively appear, either. The several hundred thousand dollar prize was quietly awarded to the companies of two politically-connected individuals (or so it appears).

With the details not disclosed when staff requested the funds from Council, the transparency of the bidding, awarding and allocation processes skirt dangerously close to cronyism—much too close for my tastes.

Then we have single-stream recycling. It’s an absolutely ecologically regressive move as documented by numerous studies, including a 35 page 2009 survey (tip o’ the keyboard to Steve Bean) by the Container Recycling Institute. The survey concludes: “In summary, with increased processing costs and lost revenues in total far exceeding collection savings in most instances (and zero under alternating-week collection), overall single-stream recycling does not show the cost advantage that was originally anticipated. As well, the expected increases in capture rate are also not apparent. Overall, dual-stream recycling still appears to be more advantageous.”

The presentation to Council in support of the resolution put forth by Mayor Hieftje, Fifth Ward Council member Carsten Hohnke and Fourth Ward Council member Margie Teall to allocate funds for the $6.5 million dollar move to single-stream recycling was prepared for city staff by a consultant who will receive a $100,000 sole source contract to help in the transition to the single stream program. Here’s another fact you may not know: At present only about 35 percent of the material processed at the Ann Arbor Materials Recovery Facility (MRF) is actually collected in Ann Arbor. The remaining 65 percent of materials come from the rest of Washtenaw County, Windsor, Toledo, Livingston, Oakland, and Wayne Counties. However, Ann Arbor taxpayers bear the sole tax burden for the entire proposed expansion of the facility to allow single-stream recycling.

The push to move to single-stream recycling isn’t just coming from outside consultants who stand to gain six-figure sole source contracts. It’s being pushed by politicians up for re-election who stand to gain politically. It’s also being pushed by city staff members under the misconception that recycling success is measured simply by increasing the percentage of materials diverted from our own landfill. This is from the Container Recycling Institute 2009 survey: “It is important to understand that diversion from disposal is not recycling. Collection is not recycling. A product is not recycled until it is made into another product.”

Pressure to make the switch to single-stream recycling is also coming from the Ann Arbor Ecology Center and the center’s Executive Director, Michael Garfield.

I last wrote about Garfield here.

Is there a problem with Garfield and the Ecology Center lobbying for the switch to single-stream recycling, and for Council to award the contract for the work to Recycle Ann Arbor? Other than the fact that he is lobbying for an ecologically regressive multi-million dollar expenditure? There are several reasons, not the least among which is that Garfield has a conflict of interest and stands to gain financially from the arrangement.

The connection between the Ecology Center and Recycle Ann Arbor is revealed in tax documents, in specific Schedule O of the Recycle Ann Arbor’s 2008 990 tax return. In that schedule, we read the following disclosures:

Classes of members of stockholders: “The Ecology Center, a nonprofit corporation is the sole member of Recycle Ann Arbor and, as outlined in RAA bylaws, has the right to appoint a majority of the members of RAA’s Board of Directors.”

Election of Officers and their Rights: “Ecology Center has the right to appoint a majority of the members of the RAA’s Board of Directors.”

Decisions Subject to Board Approval: “Decisions made by the RAA Board are subject to approval by the Board of the Ecology Center.”

Michael Garfield is the Vice Chair of Recycle Ann Arbor’s Board of Directors, and the 2008 income tax return filed by Recycle Ann Arbor indicates that he was paid $67,986 by the Ecology Center for his work there, as well as for an average of 5 hours of work per week on behalf of Recycle Ann Arbor.

In 2007, Recycle Ann Arbor, under the de facto control of the Ecology Center, lost $54,016 dollars. In 2008, Recycle Ann Arbor lost $468,911 dollars, almost entirely on loses associated with the operation of the Reuse Center. Despite the financial loses, the CEO of Recycle Ann Arbor, Melinda (tip o’ the keyboard to Steve Bean) Uerling, received a 20 percent raise in her compensation in 2007 and again in 2008 to bring her total yearly compensation up to $98,377 per year. In 2008, Garfield received a 21 percent increase in his pay from the Ecology Center, despite the fact that Recycle Ann Arbor lost close to half a million dollars.

It is quite clear that Recycle Ann Arbor needs to land the contract from the city, and quite clear that the Ecology Center stands to gain from an expansion of the city’s recycling program.

On March 13th, Garfield blasted out an email titled: “Take Action: Support Single Stream Recycling!” In his email Garfield writes:

Some of you have been recycling in Ann Arbor for almost 40 years, and after sorting one recyclable from another all this time, it might seem wrong to put it all in one cart. After all, we’ve been telling you how important it is to sort your papers separately from your containers. (Some of you may even remember when we sorted green glass from brown glass from tin cans, and so on!) Less than ten years ago, the Ecology Center opposed single-stream collection programs.

But times have changed, and new sorting technology at the materials recovery facility —what we call Single Stream 2.0—makes the extra sorting at the household unnecessary, without compromising the quality of the recyclables.

He is, in essence, lobbying for a contract to be awarded to a company under his control (Recycle Ann Arbor), but making it appear in his email that the Ecology Center simply favors single stream recycling. Garfield does not support his heralding of what he refers to as “Single Stream 2.0″ with any objective studies or data. Furthermore, Garfield does not make clear that the Ecology Center stands to gain financially from the city’s move to single-stream recycling. His claim that the quality of the recyclables is not compromised by the move from dual to single-stream recycling is in direct conflict with the findings of the Container Recycling Institute’s 2009 study, among many others.

The Council resolution in favor of amending the existing contract with Recycle Ann Arbor to be voted on tonight doesn’t include the actual contract. It includes a summary. This is a glaring omission, because the city’s check register shows that payments to Recycle Ann Arbor have risen steadily. According to the city check registers, the city wrote $1,483,381.14 in checks to Recycle Ann Arbor in fiscal year 2008. The total for fiscal year 2009 was $1,866,777.79. For the first seven months of this fiscal year the city has paid Recycle Ann Arbor $1,028,660.80.

In his email to Ecology Center members, Michael Garfield is trying to sell single-stream recycling as a benefit to Ann Arbor, its environment and its people. This is misleading, 65 percent of the materials processed in our city’s Materials Recovery Facility come from outside our own city. How does it benefit Ann Arbor taxpayers to expand our recycling facility to suit the needs of, say, Saline?

Unfortunately, the change over to single-stream recycling looks more like a move to continue to over-pay for services, such as those provided by Calvert’s Roll-off Container Services, a company purchased by Recycle Ann Arbor is 2007. It is a move that will suit the political aspirations of those involved, rather than an objectively studied and well-researched policy decision. It’s the work of a Green Machine interested in financial and political gain, rather than sound environmental stewardship.

The switch-over should be halted.

Popularity: 68% [?]

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March 7, 2010

The Politics of Negotiating: You Never Get What You Deserve

Filed under: city council, city services, fire, police, unions — Tags: Administration and Labor Committee, Budget and Labor Committee, Carsten Hohnke, Christopher Taylor, Ed Pierce, firefighters, Jerry Jernigan, Lou Belcher, Marcia Higgins, Margie Teall, Mayor Al Wheeler, Mayor John Hieftje, Nicholas Nightwine, police, Sandi Smith, Stephen Rapundalo, Tony Derezinski — A2 Politico @ 6:50 am

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The following was posted to AnnArbor.com on February 28, 2010:

City officials say it’s been a challenge getting the needed concessions from labor unions, specifically with the police and firefighters unions, whose members enjoy premium-free health insurance.

“We are still struggling with labor contracts that were heavily one-sided that were decided back in the ’70s and ’80s,” said Mayor John Hieftje. “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.”

So, the current serious problems between the current City Council, Mayor and City Administrator and our unions are really the responsibility of Mayor Al Wheeler—D (1975-1978), Lou Belcher—R (1978-1985), Ed Pierce—D (1985-1987) and last but certainly not least, Jerry Jernigan—R (1987-1991)?

Bollocks.

Fantasies come in all shapes and sizes, and some are more elaborate than others. Mayor Hieftje’s latest fantasy is that our city “is still struggling with labor contracts that were heavily one-sided that were decided back in the ’70s and ’80s” and that he’s been “working very hard to try to do more.”

Let’s make something very clear: The longest serving members of Council, Mayor Hieftje, Fourth Ward’s Marcia Higgins and Margie Teall, along with Ward Two’s Stephen Rapundalo, have among them a collective 30+ years sitting on the former City Council Budget and Labor Committee. In case you’re wondering, that’s the committee that, until this year, oversaw negotiations with the city’s unions. Oh, those elected officials didn’t position themselves across from the union representatives and hammer out agreements. That’s the responsibility of the City Administrator. So, naturally, he relies on a lawyer to do the actual negotiating. A lawyer from the City Attorney’s office? Nope. Ann Arbor’s Mayor and City Council have approved hundreds of thousands of dollars over the past decade to hire consultants to negotiate with the unionized employees.

We’ve certainly gotten what we paid for, if the Mayor is to be believed: one-sided labor agreements. You know why? For starters, until recently the city’s labor union PACs could be counted on for political donations. In summer of 2008, First Ward’s Sandi Smith, Second Ward’s Tony Derezinski, Third Ward’s Christopher Taylor and Fifth Ward’s Carsten Hohnke, all put their hands out and took, collectively, thousands from the firefighter’s PAC. Taking money from a local union group with which you’re expected to negotiate and vote on contracts is a conflict of interest. The donations were perfectly legal, mind you. However, the Council members should have exercised better judgement, propriety and common sense.

The other reason that we’ve ended up with one-sided labor agreements is that the Mayor, City Council, the City Administrator and the contractors hired to “negotiate” our union labor agreements have negotiated one-sided contracts, and voted to approve one-sided contracts. This comes from a piece about the city’s union woe’s posted to AnnArbor.com on February 28, 2010:

AFSCME President Nicholas Nightwine, who heads up the city’s largest labor union, acknowledged his bargaining unit historically has shared little of the cost of health benefits. For instance, AFSCME employees never paid deductibles for their health insurance until their last contract—and they still don’t pay premiums.

“But when we negotiate a contract, both sides sign off on the agreement,” Nightwine said. “So the city has not given us anything that they have not signed off on giving us. We don’t make our own wages or benefits.”

Nightwine is absolutely right: it’s a well-established rule in business that you never get what you deserve, you get what you negotiate, and our city’s unions have negotiated our City Administrator, Mayor, City Council, and their highly-paid hired negotiating guns right under the bargaining table. In turn, the results of those “negotiations” have been approved by the City Council’s Budget and Labor Committee members above, then by the other City Council members.

At any time in the process, any of our elected officials could have spoken up and asked why the contracts on which they were voting to approve allowed AFSCME employees to skip making contributions to their health care premiums. Of course, that would’ve required studying the contracts to understand them. It might take a law degree to write a labor contract, but it doesn’t take a law degree to read and understand a labor contract. It takes a command of English, patience, and the ability to use a table of contents to get to the juicy parts, such as wages and benefits.

Yes, it would have caused a ruckus to have pointed out problems in the proposed final versions of the contracts brought to Council for approval, and it certainly would have left the City Administrator red-faced, but what’s more important than negotiating an equitable contract on behalf of the taxpayers? For some, it’s more important to try to sell the public a bill of goods that the problem with union contracts reaches back to the days of platform shoes, Casey and the Sunshine Band, and President Ford.

Is the cause of the city’s financial mess the result of the pay and benefit packages of some current unionized employees? No, of course not. Overhead unrelated to those salaries and benefits has risen 35 percent ($34 million dollars) since 2006. Annual debt payments have ballooned from $950,000 per year in 2005 to $3.9 million dollars per year in 2010.

Are the city’s unionized employees a bunch of spoiled brats with outsized pay and benefit packages? As someone with extensive experience analyzing labor agreements for both employers and employees, I can tell you the responsibility for the final version of any contract between our city and its unions rests with Mayor, Council and the City Administrator. Nick Nightwine is absolutely right that AFSCME doesn’t make its own wages and benefits. The union negotiated them. AFSCME officials negotiated the pants off of Marcia Higgins, Margie Teall, Mayor Hieftje, Stephen Rapundalo and Roger Fraser. Not a single other Council member over the past decade has been willing to say that the members of the City Council’s Budget and Labor Committee had no clothes.

The Budget and Labor Committee was recently split into two entities. Mayor Hieftje took himself off the Budget Committee, but remains a member of the newly created Administration and Labor Committee, along with Tony Derezinski, Marcia Higgins, Margie Teall and Stephen Rapundalo. And now we have the absurd assertion from the five of them that they have “been trying to do more” to bring down costs of unionized labor. Four of them couldn’t do it as long-time members on the Budget and Labor Committee, and Council member Derezinski has the worst attendance record of any member of City Council; he can’t be counted on to show up to meetings, or important votes.

The firefighters recently gave voluntary salary concessions, and then woke up to read in the newspapers that the deal was for six months, and that there are still layoffs planned to close the ever-present “budget gap.” Negotiating in bad faith, and with more hubris than verifiable factual data, will do little than destroy any hope of working with our city’s organized labor. I expect the City Administrator and current lot of Council members to have little luck winning voluntary concessions from any of the city’s other unions.

Why should we care if our unionized employees are utterly disgruntled? The Dickensian model of employee management went out with the Triangle Factory Fire, and management science studies from the 1920s that first definitely linked employee morale with productivity. Put simply, low employee morale costs our city millions every year in decreased productivity. The damaged relationships with our unionized employees cost additional millions, because those employees are disinclined to give salary and benefit concessions voluntarily, or to open their contracts in times of serious and real fiscal emergency.

Since 2003, (with the exception of 2009) city staff has sent budgets to Mayor and Council, and our elected officials have approved budgets year after year which have had projected inflated deficits in the General Fund. When the actual numbers came in, there were General Fund surpluses. The inconceivable consistency in miscalculating General Fund revenues aside, unionized employees are asked to rely on this data during negotiations. It should come as no surprise that they are increasingly disinclined to do, and suspect they are being deliberately fed inaccurate financial information.

There is binding arbitration in the case of police and fire union negotiation impasses, but in reality Act 312 is a dangerous spin of the Roulette Wheel for any Michigan city. Act 312 does not allow the units to strike. Instead, there is a legally-mandated arbitration procedure. In 2009, Ann Arbor’s patrol officers union went to binding arbitration and won $673,000 in pay raises.

So what’s the solution? It’s going to take some significant changes in how our city approaches labor negotiations. It’s going to take hard work to repair the severe damage done to the relationships between Ann Arbor and its labor unions. On the up side, there’s a pretty simple formula to ending up with equitable union contracts: first, City Council members must make sure that the City Administrator negotiates equitable labor agreements, then Council members will have to read the agreements carefully before voting in favor of them.

Instead of doing the Hustle, it’s time for elected officials and city staff to take responsibility for the labor agreements they negotiated then voted in favor of supporting.

Popularity: 35% [?]

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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?

Popularity: 32% [?]

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February 21, 2010

The Politics of Money: Capriccio Economico

Filed under: economic development, money, taxes — Tags: A2Politico, Ann Arbor News, Ann Arbor Public Schools' Orchestra Night, Ann Arbor SPARK, AnnArbor.com, Carsten Hohnke, LDFA SmartZone, Michael Finney’s, Michigan Economic Development Corporation, Ned Staebler, Pioneer High School, Rick Snyder, Skip Simms, Stefanie Murray, Stephen Rapundalo — A2 Politico @ 1:36 pm

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*Capriccio

February 18th was Ann Arbor Public Schools’ Orchestra Night. All of the middle and high school orchestras came together for a music student-a-palooza that began at 7 p.m. and finished with the last note from the Pioneer High School orchestra at 9:30. My middle schooler’s orchestra played the first notes of the evening. The entire week before, he’d been coming home with tales from the practice room that the orchestra teacher was driving the kids like musical mules in a field of flats and sharps. Evidently, she was making them rehearse and practice—making them play the first measures of their opening piece, Capriccio Espagnol, something like 5,000,000 times. Pre-teens somehow suddenly lose the ability to count: they start at 1 and jump from there to 5,000,000.

However, my bassist had not exaggerated a bit. He and his orchestra mates nailed the opening of the piece. In fact, they played the entire piece with a level of technical precision I never expected—there was no fuzzy fingering from the violinists, and nary a missed beat from the basses and cellos. Their orchestra teacher is a young woman who, in my opinion, is one of those teachers. You know the ones. They inspire, push and take a genuine interest in their students. Every school district needs more teachers like her, and to compensate them generously for their devotion to their students, teaching, and the results they get.

Unless you just got back to Ann Arbor from your isolated private island in the Pacific, you know that the AAPS is facing a multi-million dollar deficit. There is a passionate and wide-ranging debate as to why there is a deficit. There is a passionate and wide-ranging debate about how to close the budget gap. District officials floated the idea of privatizing several hundred union jobs. According to a piece posted to AnnArbor.com on February 17th, there are several companies “vying to replace the district’s custodians, maintenance workers and bus drivers, it could save nearly $2.4 million a year.”

I’m going to switch classrooms now. Walk with me.

I was going through the City’s checkbook register, which is now online, and saw a $75,000 withdrawl from the General Fund for Ann Arbor SPARK. I have written about Ann Arbor SPARK several times over the course of the past months. Click here to read my most recent entry about SPARK. Ann Arbor SPARK was created to “incubate” start-up businesses in the Ann Arbor area. It was headed by Republican Gubernatorial candidate Rick Snyder for several years. Our tax dollars don’t fund SPARK directly. That’s what the (Local Development Finance Authority) LDFA is for. Here’s a good description of the LDFA from a January 2009 piece in the now defunct Ann Arbor News, written by Stefanie Murray, “The LDFA is an Ann Arbor City Council-appointed committee that oversees the capture of part of the property taxes from Ann Arbor’s downtown development district. It gives some of that revenue to Spark and is responsible for overseeing how Spark spends it.”

Sounds pretty innocuous, huh? “The capture of part of the property taxes from Ann Arbor’s downtown development district.” No harm. No foul.

Nothing could be further from the truth.

The LDFA was formed to divert taxes from a single sector: public education. It contracts with Ann Arbor SPARK to “provide services.” In fact, the bulk of the money the LDFA diverts from our public schools goes to Ann Arbor SPARK. Second Ward Council member Stephen Rapundalo sits on the LDFA Board. Fifth Ward Council member Carsten Hohnke sits on the SPARK Board. In November 2009, I wrote about the resolution which Rapundalo brought to Council: “Resolution to Amend the Fiscal Year 2010 SmartZone LDFA Budget for Increased Business Accelerator Services.” In my November 2009 post I wrote:

“Ann Arbor SPARK is the public-private boondoggle supported by Mayor and Council with your tax dollars that has created no new jobs that would not otherwise have been created, according to an April 2009 statement before City Council by the Chair of the LDFA, Richard King. And SPARK has done it all for you since July 2006 for a mere $3+ million dollars. Who could want less for more? It’s a Bernie Madoff Special—no actual job creation in return for millions in public money. How long will it take the public to realize that they’re being robbed?”

Both Carsten Hohnke and Stephen Rapundalo voted in favor of giving the LDFA $205,000 additional dollars to pass on the Ann Arbor SPARK. Those were dollars taken from the Ann Arbor Public Schools. Here is a link to a video from the City Council meeting at which Council voted 11-0 to give the LDFA and Spark more tax money. You’ll see Skip Simms from SPARK tell Council that all of SPARK’s “incubator” money comes from the LDFA. All of the LDFA’s money is diverted directly from the Ann Arbor Public Schools. Do you understand the connection now?

According to the city’s budget, in fiscal year 2009, the LDFA SmartZone diverted $1.1 million dollars in property taxes from new development downtown. In fiscal year 2010, that amount increased to a projected $1.27 million dollars, and in 2011, the LDFA expects to divert $1.4 million in property tax dollars from our public schools to give to SPARK.

In this piece, I wrote about the $753,000 in salaries paid to just five employees of SPARK.

Now, we have the Ann Arbor Public Schools poised to cut over 200 union jobs to save $2.4 million dollars. If the Mayor and City Council dissolve the LDFA immediately, and Ann Arbor SPARK is spun off, in 2010-2011 the AAPS will collect an additional projected $2.67 million dollars in tax revenues. That money, along with some good faith bargaining for concessions from the unions involved could save the jobs of hundreds of long-time employees—custodians, maintenance workers and bus drivers in our community.

Public schools, or so said my son’s orchestra teacher, reflect the soul of a community. I agree with her. Right now, our soul is troubled. Business investment is important, but it can’t come at the expense of our own public schools. It’s time to stop diverting property tax dollars away from the public schools, and realize that owners of established small and medium-sized businesses choose to relocate to communities with exceptional schools, and residents choose to stay in communities with exceptional public schools.

Either our public schools can be given back the LDFA’s $2.67 million dollars and retain hundreds of jobs for custodians, bus drivers and maintenance workers, or Mayor and Council can continue to support a failed economic development system under the auspices of which no jobs have been created that wouldn’t have otherwise been created. Mayor and Council can continue to give public school tax dollars to the LDFA to dole out to Ann Arbor SPARK—an organization that paid five of its employees over $753,000 in salaries in 2008.

To me, the choice is clear. The time has come to shape new economic development programs that will give taxpayers objectively verifiable and carefully tracked returns on all tax dollar investments—something that has not been done over the past five years. It’s time to get back to the basics, and for our local politicos to face the music: they’ve diverted millions from our public schools to fund the LDFA and, in turn, Ann Arbor SPARK. Dissolving the LDFA and spinning off Ann Arbor SPARK could, actually, save hundreds of existing jobs in our community, and benefit our public schools.

Popularity: 43% [?]

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February 14, 2010

The Politics of Assumptions: Maybe Money Does Grow On Trees

Filed under: city services, developers, money, police — Tags: 15th District Court, A2Politico, AnnArborChronicle.com, Carsten Hohnke, Patricia Lesko, Police-Court facilty, Ryan Stanton, Tom Crawford — A2 Politico @ 6:11 pm

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I was never a fan of the new Police/Court facility. I thought it unwise to spend $47 million dollars in the midst of an economic meltdown rather than to renovate the old facility, and find new leased facilities for the 15th District Court (who, it was claimed, had to move from their space leased from the County). I toured the police facilities in 2008, and was appalled at the condition of the space in which the police were expected to work. Why hadn’t their space been renovated years ago? Why couldn’t city officials just find another rented space for the judges? For that matter, why couldn’t they re-up the lease on the current space occupied by the 15th District Court?

There is ongoing debate about whether County officials were willing to allow the 15th District Court to remain in its rented digs. There are Council members who swear that there was an opportunity to extend the $750,000 per year lease. There are others who swear that the lease simply could not be extended and that to have done so would have been a waste of money.

All of that is moot now.

The bottom line is that we are building a new 103,000 square foot Police-Court facility.

Now we’ll take a commercial break for a short review:

June 2008: Council approves bonds to build 103,000 square foot Police-Court facility. Public is assured by Mayor, staff, and Council members that the construction project will not impact city budget or services. Project is presented as fully funded.

May 2009: City Administrator, City CFO and City Council Budget and Labor Committee (Greden, Teall, Higgins, Hieftje, Rapundalo) present 2009 budget to Council for its approval. Budget projects a structural deficit, and 1-3 percent declines in revenues “for the foreseeable future.”

July 2009: As a necessity to balance the budget, 25 police officers retire early at a cost of $6 million dollars to taxpayers.

February 2010: CFO Tom Crawford tells AnnArbor.com that, “The premise of this thing [the Police-Court building] was we needed to build this within the resources we had. Now we’ve got less resources coming to the city than we had then, but we didn’t know that.”

In a February 14, 2010 piece about the Police-Court building project by AnnArbor.com’s Ryan Stanton, the City Administrator is quoted thusly:

“Fraser acknowledged the project budget is dependent on $3 million from the sale of city property at First and Washington – a deal that has stalled because the developer, Village Green, has had trouble coming up with financing. Fraser said the city continues to operate under the assumption that the sale eventually will happen.”

Then, we have the City’s CFO who, in June of 2008, allegedly had no idea the economy was tanking. In his February 2010 piece, Stanton quotes CFO Tom Crawford as explaining that, “The premise of this thing was we needed to build this within the resources we had. Now we’ve got less resources coming to the city than we had then, but we didn’t know that.”

To the extent that his explanation can be understood, I find it incredible that he would fall back on “We didn’t know that.” The 2009 budget had a statement on page 2 of the Administrator’s Budget Message that says, “Despite efforts to contain and reduce expenses, the city is still facing a structural deficit. For the foreseeable future, we will continue to experience 1-3% revenue shortfalls.” That Budget Message is dated July 2, 2008. Of course our City’s CFO and Administrator knew the city would have less money coming in. The two of them projected decreased revenues in the budget they worked to prepare months before Council voted to issue the bonds to build the Police-Court facility.

In February of 2009, according to a piece posted to the AnnArborChronicle.com, during a City Council meeting, Fifth Ward Council member Carsten Hohnke asked CFO Crawford this question: “Will the funding of the building come from a reduction in services? Crawford’s Answer: Over the last five years, the city has become more efficient and the building’s funding comes from savings through efficiency, and through debt services with existing cash flow.”

Audited financial statements from the City’s web site show that between 2006 and 2009, the cost of running city government increased by 35 percent, or $34 million dollars. The city had not become “more efficient,” as Crawford claimed, and the Police-Court building’s funding was coming from savings accumulated from service cuts and hikes in fees rather than efficiency. Between 2004-2009, for example, funding for culture and recreation fell from $10 million per year to $5 million per year. The cost to provide solid waste services rose 40 percent.

The construction project remains, in essence, $3 million dollars short until that First and Washington parcel sells. That’s about 6.5 percent of the $47.4 million dollar total price tag. So what’s the plan to replace the $3 million should the sale not ”eventually happen?” ”Value engineering” is a slick term for cutting construction expenses on the fly. Is there a plan to replace the $3 million that really has no impact on the city budget or services? If there’s not, there should be.

In addition, there are some hard questions that need to be asked about how financial information about this project was presented to Council and taxpayers. Why? First of all, Mayor and Council are legally obligated by the City Charter to hold the City Administrator accountable in the performance of his job. In addition, the next time we undertake a large capital project, and city staff make assurances to Council and taxpayers that the project won’t impact services, those assurances need to be absolutely true and backed up by accurate financial data. Lastly, to have the city’s CFO claim in the Press in 2010 that, in essence, he didn’t know the City would be bringing in less revenue is simply shocking. He presented a budget in July of 2009 that projected reduced revenues. His 2010 comment brings up some disturbing questions about the quality of the financial data prepared and presented by the CFO to Council and the public.

What our city staff need to focus on is a $3.3 million dollar “value engineering” plan that has a drop dead date by which the plan will be implemented. To simply plow ahead and spend money that we don’t have under the “assumption” that a parcel of land appraised for $3 million dollars 18 months ago will sell, is yet another emergency “budget shortfall” waiting to happen. Furthermore, it’s folly to imagine that the parcel is still worth $3 million dollars.

While we can’t get back the $47 million dollars budgeted for this project. We can “value engineer” the project down by $3.3 million dollars, so that if the First and Washington parcel doesn’t sell, or doesn’t sell for $3 million dollars, our city services won’t be impacted by any shortfall. We can also take away from this experience the clear understanding that city staff must be held to much higher standards, and be expected to present financial data that are absolutely accurate. Otherwise, Council members and taxpayers can’t make informed decisions about how best to spend the money we have, or the money we borrow.

Popularity: 31% [?]

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May 28, 2010

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

April 25, 2010

The Politics of Propositions: When Every Scheme Sounds Like a Winner

March 18, 2010

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

March 15, 2010

The Politics of Garbage: Single-Stream Recycling Stinks For More Reasons Than You Think

March 7, 2010

The Politics of Negotiating: You Never Get What You Deserve

March 1, 2010

The Politics of the Pen: 1,082 New A2 Politicos Interested in the Issues

February 21, 2010

The Politics of Money: Capriccio Economico

February 14, 2010

The Politics of Assumptions: Maybe Money Does Grow On Trees

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