by P.D. Lesko

The Downtown Area Citizens Advisory Council (CAC). Sounds official, right? It is supposed to be a group of no more than 15 mayoral appointees who, by Council resolution, live within the downtown area and “advise the DDA and City Council with regard to implementation of the Downtown Development Plan and Tax Increment Financing Plan.” Terms are three years. Members serve when appointed by the mayor and confirmed by City Council.

The reality is that the CAC situation has made a mockery of previous Councils’ oversight of boards and commissions. The CAC has been used as a bully pulpit to enthusiastically support and protect the DDA Board and its agenda from public criticisms and from criticisms leveled by Council members. In 2012, there were just three members of the CAC, Herbert and Jane Kaufer, and the “Chair” of the group, Ray Detter, a retired University of Michigan lecturer. After October 2012, all of the mayor’s appointments to the CAC had expired. Despite this fact, Detter continued to speak regularly at meetings of the Downtown Development Authority and City Council on behalf of the CAC “board” and “membership.” The many DDA and City Council meetings at which Detter spoke and claimed to be the chair of the CAC were reported on by AnnArbor.com and chronicled by the AnnArborChronicle.com.

In November 2012, a month after his appointment to the CAC had expired, Detter was quoted in AnnArbor.com as speaking before City Council as the “chairman of the Downtown Citizens Advisory Council.”

In December 2012, the AnnArborChronicle.com, in the course of chronicling a DDA meeting, posted this: “Ray Detter, speaking for the downtown citizens advisory council, updated the board on another major development – 413 East Huron.” When this was written, in reality, there were no members on the CAC, and Detter, no longer a member, had no authority to speak for the CAC.

In April, when the city’s Historic District Commission came out against the proposed development at 413 E. Huron (near Detter’s home), AnnArbor.com described Ray Detter as “chairman of the Downtown Area Citizens Advisory Council.” Detter told Ryan Stanton, “On behalf of the Downtown Area CAC, I would simply say that we are very pleased to see the Historic District Commission give support to the stated positions of the DDA’s Connecting William Street initiative as well as the Downtown Design Guidelines Review Board.”

While the two news blogs appear to have been hoodwinked, the fact is that both Ryan Stanton, AnnArbor.com’s government reporter and David Askins, Editor of the AnnArborChronicle.com, repeatedly told their respective readers that Ray Detter was speaking at public meetings as the representative of an important downtown citizens group. Had Detter been referred to as a resident of Ann Arbor who spoke regularly at those meetings, his “advice” and input would certainly have been construed very differently. Instead, readers were led to believe Ray Detter was speaking on behalf of other downtown citizens. He was not. He had no authority to do so as he was no longer a member of the CAC.

When A2Politico brought the question of the CAC membership to the attention of the Ann Arbor City Clerk, Jacqueline Beaudry, one of her several subsequent emails reported that Detter was applying for reappointment to the CAC. Detter has served on the CAC for 28 years running. It’s no wonder talk of term limits might make him a bit cranky.

The establishment of Ann Arbor’s CAC was a state legal requirement associated with establishing a Downtown Development Authority. The Downtown CAC webpage offers this description:

How Established: Council resolution approved August 16, 1982. Revised by R-44-2-05 changing the title, revising the length of terms, and number of members. Purpose: This group of citizens living in the DDA area is established to advise the DDA and City Council with regard to implementation of the Downtown Development Plan and Tax Increment Financing Plan. Special Qualifications for Appointment: Resident of the DDA area. Individuals who were residents of the DDA District upon appointment may remain on the CAC or be reappointed to the CAC if they move to a new residence on a block bisected by the DDA boundary line or a block abutting the DDA boundary line. Length of Terms: 3 years. Meeting Times and Frequency: This is a permanent committee that meets the 1st Tuesday of the month at 7:30 p.m. in the 4th Floor Conference Room of City Hall, 301 E. Huron. Membership/Committee Composition: No more than 15 members. Contact Info: Raymond Detter, 120 N. Division St., Ann Arbor, MI 48104, 734-668-7027.

In February 2005, the City Council passed a resolution that amended the 1982 DACAC resolution to provide the following:

RESOLVED, City Council approves the following changes to Citizens Advisory Council as follows:
· The official name of committee shall be the “Downtown Area Citizens Advisory Council”
· Applicants for appointment to the CAC must live within the DDA District. Individuals who were residents of the DDA District upon appointment may remain on the CAC or be reappointed to the CAC if they move to a new residence on a block bisected by the DDA boundary line or a block abutting the DDA boundary line.
· Terms will be three years.
The number of CAC members will be limited to 15.

So, who is Ray Detter and why was he reappointed to the CAC for over two decades instead of any one of the other thousands of residents who live downtown? Either you know the name Ray Detter, or you don’t. Either you merit an invitation to his annual Old Fourth Ward party where you can rub elbows with a host of other politicos, their pals, donors and their appointees, or you don’t. Detter is politically-connected, but he is also enamored of being politically connected—a political pilot fish, if you will, a mutualist. Look at the campaign finance forms of Council members, and you will find that every year Ray Detter coughs up multiple donations, primarily to Hive Mind-backed candidates. In 2012, he supported Ward 1 candidate Eric Sturgis, Ward 2 incumbent Tony Derezinski, Ward 4 incumbent Margie Teall and Ward 5 candidate Chuck Warpehoski.

It is because he is a deft political pilot fish that certain Council members are playing Twister over the proposed student high rise a developer wants to plop on a small parcel on the corner of Huron and Division (413 East Huron). Detter’s historic home sits about half a block behind what would be a huge apartment complex tall enough to blot out the little sun that reaches his yard in between the stately trees that shade his property.  Detter, speaking as the chair of the Downtown Citizens Advisory Council (CAC), has been generally in support of downtown density, and vocal in support of outsized developments built along the edges of downtown neighborhoods. Until now. Now, the proposed downtown density will shade his garden and block his views. He wants the city to down zone the parcel and stop the development.

However, Detter has not confined his comments at DDA and City Council meetings to “advice with regard to implementation of the Downtown Development Plan and Tax Increment Financing Plan.” In April 2013, six months after his appointment to CAC had expired, Detter spoke as the “Chair” of the CAC and on behalf of the CAC’s board “members” at a Downtown Development Authority meeting. He complained that a proposed City Council resolution to impose term limits on DDA Board members and slow the group’s capture of tax dollars was an “irrational attack” on the DDA by the Council members sponsoring the resolution (Ward 1 Council member Sumi Kailasapathy and Ward 3 Council member Stephen Kunselman).

When asked if he’d been aware that his appointment to the CAC had expired when he’d attacked the Council members’ resolution as “irrational,” Detter responded with a genial email that included a friendly invitation to anyone living within the DDA boundary to join the CAC. The problem, of course, is that the city’s Charter doesn’t give Ray Detter the power to make appointments to the CAC. It’s not a private club, but  has been run like one since 2008. Membership in the group, by resolution of Council, is granted by mayoral appointment, and confirmation of City Council.

Some of the appointments of the people listed by the City Clerk’s office as serving on the CAC Board expired as long ago as 2008. Ann Arbor City Clerk Jacqueline Beaudry responded to A2Politico’s inquiries promptly and contacted the DDA’s Executive Director Susan Pollay, via email, to ask about the membership of the CAC. Pollay responded with a roster of CAC “members” and an offhand comment that the DDA has little to do with the group. Pollay, it would appear, was unaware that all of the CAC members’ appointments had expired. She is, perhaps, also unaware of the state law and Council ordinance that requires the existence of a CAC from which the DDA will solicit citizen input on downtown development and tax increment financing plans.

Pollay’s list of CAC “members”—from whom the Ann Arbor Charter requires the DDA and City Council to hear regularly— included several people who were not, in fact, members of CAC.

The City Clerk contacted John Hiefje’s office for information on the CAC, then updated the city’s webpage with the correct information, including the names, appointment dates, and appointment expiration dates for each former member:

Raymond Detter    start date 10/15/1984     end date 10/19/2012

Herbert Kaufer      start date 5/21/2001       end date 10/19/2012

Jane Kaufer           start date 5/21/2001       end date 10/19/2012

Jim Kern                start date 2/22/2000       end date 7/21/2011

Sue Kern                 start date 2/22/2000       end date 7/21/2011

Marsha Chamberlin     start date 5/5/2008       end date 5/5/2011

John Chamberlin          start date 5/5/2008       end date 5/5/2011

Joan French          start date 7/3/2006         end date 7/3/2009

Kathleen Nolan    start date 5/21/2001       end date 7/21/2011

Susan Nenadic     start date 10/17/2005       end date 10/17/2010

The members of the DDA Board have been content to hear from Ray Detter regularly because he routinely tells them what they want to hear and. It’s infinitely better if the criticism of a resolution to impose term limits on the DDA Board comes from the “Downtown Area Citizens Advisory Council,” rather than any of the hugely unpopular DDA Board members. However, regularly misleading the general public and the media into believing the CAC is an entity that represents downtown residents, is more evidence that City Council not only needs to rein in the DDA Board, but needs to exercise much more stringent oversight over all the city’s boards and commissions.

A good place to begin would be for the City Council to direct that the 15 openings on the CAC be widely advertised. Then, Council members will need to press John Hieftje so that he offers up applicants from a much larger political gene pool, not his usual cast of cronies. It’s time for the DDA Board members to hear from a wider racial, socio-economic and political spectrum of downtown citizens, including students, young professionals, people with children, minorities and retirees. As for Ray Detter, he has had 28 years to curry favor and peddle his particular brand of “advice.” His behavior in purporting to represent the CAC months after his term had ended smacks of entitlement and comes dangerously close to deliberately deceiving the public. He deserves thanks for his long service, and should join the DDA Board members who are being given the opportunity to “retire” when their current terms end.

by P.D. Lesko

There are five solid votes on City Council to bring to heel the members of the Downtown Development Authority Board of Directors. Those are the votes of Sumi Kailsapathy, Jane Lumm, Sally Hart-Petersen, Stephen Kunselman and Mike Anglin. The resolution needs six votes to pass, however. The DDA Board, comprised of a bushel of appointed Hieftje cronies who control over $20 million dollars in parking fees and money captured through a tax increment financing scheme, is facing a resolution that would remove the mayor from the DDA Board (or require Council’s written permission for the mayor to serve) impose term limits on DDA Board members, and slow down the DDA’s capture of tax money. If passed, the resolution would return $931,000 per year in tax dollars to various jurisdictions including the city’s parks ($53,000), Street Repair Fund ($72,000), Solid Waste Fund ($83,000), as well as money to the Ann Arbor District Library ($52,000) and Washtenaw Community College ($124,000).

Needless to say, the DDA is in panic mode. DDA Board member Sandi Smith hinted at a March meeting that the DDA would be unable to give money in support of affordable housing should the proposed resolution pass.

DDA Board member John Hieftje decried term limits, saying that they were “ineffective” and lead to “inexperience.” At the April 15, 2013 City Council meeting, he proposed an amendment to the ordinance which would have stripped out term limits. Voting in support of the proposal was Ward 5′s new Council member Chuck Warpehoski (pictured right, with wife Nancy Shore). It’s no surprise that Warpehoski voted with Hieftje. On April 2, 2013, Wapehoski slammed term limits as “mandatory inexperience law.” Evidently, neither man has a clue that there are dozens of city boards and commissions with term limits, including the Park Advisory Commission.

What may come as news is that Warpehoski spoke out against term limits and the resolution to assert Council’s authority over the DDA the day after DDA Executive Director Susan Pollay sent an email to City Council members in which she announced that should the proposed resolution pass, the DDA would be forced to cut funding to the getDowntown program by some 85 percent. Chuck Warpehoski’s wife, Nancy Shore, has directed the getDowntown program since 2007, and the DDA Board provides the bulk of the funding for the getDowntown program. A2Politico filed a Freedom of Information Act request for emails sent between January and April 2013 between Council members, DDA Board members and Pollay that referred to the Kunselman/Kailasapathy DDA resolution. Pollay’s email with the threat to castrate the getDowntown program was included in the emails turned over by the DDA.

In fact, in multiple messages to Council members Pollay writes that should the DDA’s capture of tax money be slowed, the organization will “cut funding to the getDowntown program by 85 percent.” Funding to the Ann Arbor Transportation Authority for its go!pass program would go from $479,000 to $69,642. Such a cut would cripple the getDowntown program which exists, primarily, to provide subsidized go!passes (monthly bus passes) to employees of businesses in the DDA district. Since 2010, the DDA Board members have graciously granted the getDowntown program over $1.473 million dollars in taxpayer money captured by the DDA to subsidize $10 annual bus passes for 4,130 (Susan Pollay March 2013 email to City Council members), 6,500 (AnnArborChronicle.com, March 2013), 5,739 (city of Ann Arbor website: 2008 data) active go!pass users.

In comparison, monthly AATA bus passes for K-12 students are $29 per month, or $348 per year. A monthly bus pass for an adult is $58 per month. A monthly bus pass in San Francisco costs $45 for adults and $10 for students. In Rome, Italy, a monthly bus pass for K-12 students costs 18 Euros ($23).

John Hieftje has never seen a conflict of interest that he couldn’t rationalize. In 2006, Mr. B.A. from Eastern Michigan University was hired to teach graduate school by Paul Courant, then a dean at the Gerald M. Ford School of Public Policy. Courant set Hieftje’s per course pay higher than any other lecturer in his class, topping out at $15,000 per course. If that wasn’t enough, Courant, whose expertise is in library science and Dewey decimals, gave Hieftje a glowing endorsement which Hizzoner plastered all over his web site and literature in which Dr. C. complimented Hieftje’s stellar finance skills.

Ward 5 Council member Chuck Wapehoski hasn’t been hired to teach by the University of Michigan. He is, however, a walking conflict of interest in a much more serious way, and has turned out to be someone over whom it is relatively easy to exert pressure—such as threatening his wife’s job. However, the Hive Mind Collective does not exert subtle pressure, as evidenced by John Hieftje’s bullying public attacks on Ward 3 Council member Stephen Kunselman as of late.

Warpehoski is the Executive Director of a tiny non-profit that advocates for peace, social justice and, as of late, county-wide and regional transportation. The Interfaith Council for Peace and Justice “inspires, educates, and mobilizes people to unite across differences and to act from their shared ethical and spiritual values in pursuit of peace with social and environmental justice,” according to its website.

According to tax returns, in 2010 the organization netted $119,117, or about $40,000 less than the City of Ann Arbor pays its city attorney each year, Stephen Postema. Warpehoski on the other hand, was paid $38,801 in 2010, again according to tax documents. His take home pay would be just north of $26,000 per year. Thus his $15,000 salary as a City Council member, then, bumps up his annual income significanty. Warpehoski’s wife’s employer, the getDowntown Program, is funded by the Boards of the Ann Arbor Transportation Authority and the Downtown Development Authority, appointments to which Warpehoski now votes on in his role as a City Council member. The getDowntown program is also funded by the City of Ann Arbor. Eli Cooper, the Transportation Program Manager for the City of Ann Arbor, sits of Shore’s Advisory Board. Chuck Warpehoski, as a City Council member, votes on recommendations and schemes Cooper brings before City Council. Susan Pollay, the Executive Director of the DDA is one of the getDowntown program’s four Advisory Board members. It was, in fact, Susan Pollay who provided Council members with the information, in March and April 2013 that, should the proposed resolution pass to impose term limits on DDA Board members, and slow the DDA’s capture of tax dollars, that the DDA would be “forced” to cut funding to Shore’s program by 85 percent.

Thus, Pollay’s threat that the DDA will defund the getDowntown program is not subtle pressure; it is a gun aimed directly at Chuck Warpehoski and his wife. The threat is also more evidence that the DDA and its Board members need to be brought sharply to heel. The pervasive lack of discipline and accountability expected from the DDA by City Council over the entire Hieftje era has resulted in a group of appointed officials arrogant enough to threaten a sitting Council member. Then again, Warpehoski laid with the same dogs when he ran for City Council in 2012. He accepted endorsements and large campaign donations from several of the same DDA Board members who, through Susan Pollay, have told Council members that the getDowntown program will be gutted should term limits be imposed and the TIF capture slowed. Did Warpehoski’s wife know he was playing with fire in accepting money and endorsements from the people who fund her job and feed their family? Nancy Shore was her husband’s campaign treasurer and signed the campaign finance forms.

The Hive Mind Collective’s choice, funding, and endorsement of Chuck Warpehoski was no accident. They choose candidates whom they expect to control. The question of whether Warpehoski is the independent-minded representative he promised to be when he ran was answered when he voted in favor of stripping term-limits from the Kunselman/Kailasapathy DDA resolution on April 15th. His conflict of interest is voting on anything to do with the AATA or DDA is immense in light of how his wife’s job is funded, and that he voted on the DDA resolution after Pollay’s direct threat speaks volumes.

In November 2012, Wapehoski’s opponent, Vivienne Armentrout, wrote this to response to a piece posted to AnnArbor.com: “Mr. Warpehoski will face a number of challenges in reconciling his role as an advocate for causes with his role as a representative. He is a thoughtful person who places a high value on ethics, and I wish him well as he threads his way through this and other such issues.”

Chuck’s going to need more than luck on May 6th.

Under former city administrator Roger Fraser, the amounts paid out in tax dollars for cell phone allowances increased almost 95 percent between 2009 and 2012. By 2012, 196 of the city’s 693 full-time employees had been given cell phone allowances. Likewise, between 2009 and 2012, according to information from city officials released in response to a Freedom of Information Act request, taxpayers shelled out $323.512.74 in car allowance money.

In 2009, under Fraser, 27 city employees (including himself) were given car allowances totaling $70,357.56. By 2011 the number of employees with car allowances grew to include 36 staffers and the allowances paid out that year totaled $85,06.06, a 15 percent increase. One of those staffers with a car allowance was City Attorney Stephen Postema, an Ann Arbor resident who can frequently be seen walking to City Hall from his home on the West Side.

At the moment, the Ann Arbor City Attorney  is on vacation. No doubt he’s taking a needed break after narrowly avoiding getting tossed out on his keister for being caught charging taxpayers $1,038 for mileage at the same time he’d collected $15,840 in car allowance funds since 2009. The city’s new auditor dinged Postema in June 2012  as a double-dipper, scamming taxpayers for mileage while collecting a car allowance. Then, Postema was quietly allowed to accept a new contract by means of a November 8, 2012 resolution offered up to Council members by the City Council’s Administrative Committee (John Hieftje, Ward 4 Council members Margie Teall and Marcia Higgins, outgoing Ward 2 Council member Tony Derezinski, and Ward 3 Council member Chris Taylor). This was done without mention of the auditor’s findings, and the resolution brought to Council stated the City Attorney was “willingly giving up” his monthly car allowance, as opposed to losing it because he’d been caught gaming the system.

New City Council members Sumi Kailasaphy, a Ward 1 Democrat and a Certified Public Accountant, and Sally Hart Petersen, a Ward 2 Democrat with an MBA and ample business experience, both of whom now sit on the City Council Audit Committee, pushed for more details about Postema’s violation of city policy as identified by the auditor from Rehmann Robson.

While City Council members on the Audit Committee decided how to best revisit the June 2013 audit and investigate the double-dipping violations, Postema, according to information released by the city, had multiple discussions with the auditor about his own double-dipping identified in the 2012 audit report. As Audit Committee members decided how to ferret out the details surrounding the City Attorney’s “double-dipping,” Postema offered legal guidance to Council members on the matter until he was rebuked, told that doing so was a conflict of interest, and instructed to stop.

Nonetheless, documents released by the city show that together with CFO Tom Crawford, Postema pressed the city’s new auditor by phone and by email to reclassify the City Attorney’s double-dipping transgression as something other than a “violation” based on the fact that Postema’s “executive” contract allowed for travel and thus his mileage was claimed as an allowed expense. The auditor, in issuing his revised opinion make a point to reaffirm that “… from a business practices standpoint, our conclusion (with or without the existence of a policy) was it would be illogical and, therefore inappropriate, to make mileage reimbursements to persons having a car allowance.”

CFO Tom Crawford, dressed as Mr. Magoo, came bravely forward and told the Audit Committee members Postema couldn’t possibly have violated city policy concerning simultaneous collection of a car allowance and mileage reimbursement for the simple reason that the city’s internal controls and mileage reimbursement policies are so vague that it would have been impossible for the immediate past president of the Michigan Association of Municipal Attorneys to understand that receiving a monthly car allowance and then collecting over $1,000 in mileage reimbursement might be, well, “inappropriate,” to quote the auditor.

In response to an A2Politico request for comment about the amount of money the City of Ann Arbor is spending on cell phone allowances, new City Administrator Steve Powers included this in his comment justifying cell phone allowances for a third of the city’s full-time regular employees: “….I have eliminated vehicle allowances for service area administrators.”

In 2013, according to records from the city, the following 16 staffers receive a car allowance:

• Colin Smith, parks and recreation manager — $200
• Jeff Straw, parks and recreation deputy manager — $200
• Ralph Welton, chief development officer — $150
• Susan Pollay, DDA executive director — $315.63
• Annette Weber, city assessor’s office — $200
• Michael Courtney, city assessor’s office — $200
• David Petrak, city assessor’s office — $200
• Amy Balogh, city assessor’s office — $200
• Ryan Doletzky, city assessor’s office — $200
• Patricia Forner, city assessor’s office — $200
• Matt Warba, acting field operations manager — $300
• Dennis Crum, fleet and facilities supervisor — $300
• Matt Kulhanek, fleet and facilities manager — $300
• Earl Kenzie, wastewater treatment manager — $300
• Ellen Taylor, assistant fire chief — $375
• Greg Bazick, deputy police chief — $375

In April 2012, when Powers assumed his position, the following 33 staffers were receiving car allowances (the names of those staffers still receiving allowances in 2013 are bolded):

• Sumedh Bahl (2009-2012 total paid: $13,200)
• Amy Balogh
• Gregory Bazik
• Matthew Bedner (2009-2012 total paid: $540)
• Martin Brosnan (2009-2012 total paid: $1,150)
• Robert Cariano (2009-2012 total paid: ($14,400)
• Tom Crawford (2009-2012 total paid: $16,800)
• Dennis Crum
• Ryan Doletzky
• Patricia Forner
• Seth Garner (2009-2012 total paid: $1,320)
• Ammar Hamamy (2009-2012 total paid: $1,980)
• Kenneth Harris (2009-2012 total paid: $1,620)
• Craig Hupy (2009-2012 total paid: $12,300)
• Earl Kenzie
• Matthew Kulhanek
• Thomas Lentner (2009-2012 total paid: $1,010)
• Steven Lowe (2009-2012 total paid: $2,250)
• Roger Meyer (2009-2012 total paid: $610)
• David Petrak
• Susan Pollay
• Jared Post (2009-2012 total paid: $870)
• Stephen Postema (2009-2012 total paid: $15,840)
• John Seto (2009-2012 total paid: $16,125)
• Gary Shivley (2009-2012 total paid: $1,500)
• Colin Smith
• James Sobetski (2009-2012 total paid: $910)
• Jaime Solis (2009-2012 total paid: $1,310)
• Jeffrey Straw
• Ellen Taylor
• Matthew Warba
• Annette Weber
• Ralph Welton (2009-2012 total paid: $5,100)

While the remaining $48,000 per year paid to city managers each year for car allowances is a significant savings over the $79,786 paid out in 2012, it should be pointed out that Christmas tree collection was discontinued to save some $36,000. While Ward 3 Council member Stephen Kunselman was quick to come to the conclusion that he didn’t think anyone had been trying to “game the system,” according to coverage of the Audit Committee meeting by AnnArborChronicle.com, Kunselman, unlike Ward 1 Council member Kailasapathy, “indicated little enthusiasm for delving into the wording of Postema’s contract or existing city policies.” Setting policies, however, is a Council member’s job, and Kunselman’s “lack of enthusiasm” for doing it is disappointing, particularly given the fact that his Ward 1 colleague has the necessary education and professional experience to understand gaming of a system when she sees it.

Than again, Kunselman recently announced he is planning to challenge John Hiefje in 2014, should Hieftje run again, and the Ward 3 Council member might be afraid to delve into existing city policies or to criticize city staff who are obviously gaming the system, according to the city’s previous and current auditors. In the 2008 Council election, Kunselman’s criticisms of city staff were effectively used against him in a scathing Ann Arbor News editorial:

Two years ago, we endorsed Stephen Kunselman for his first term on Ann Arbor City Council, and he went on to win that seat. We liked his pragmatic approach, viewing the council’s role as giving voice to people who might not otherwise be represented. He describes himself as a blue-collar Democrat who advocates for working-class residents, and has supported projects like the proposed skatepark and the ordinance allowing residents to raise backyard chickens.

However, Kunselman sometimes approaches his job in a way that we feel is inappropriate for a council member, tending toward micromanagement rather than policy-setting….As one example, earlier this year Kunselman met with some of the city’s unionized public services employees, where he used an expletive to criticize their performance in the winter’s snow removal. When asked by an employee about the automated compost pickup, Kunselman said, “You guys are getting lazy,” according to a letter of complaint from the union president to City Administrator Roger Fraser. That letter ultimately led to a formal apology from Kunselman.

Comparing the 2012 and 2013 lists of city staffers receiving car allowances shows that City Administrator plucked off the low-hanging fruit, city staffers whose monthly allowances were relatively low. On the other hand, it’s difficult to justify perks for city staffers while cutting services to city residents. Furthermore, it has become even more difficult for any Council member to justify having “little enthusiasm” for doing her/his job. Jack Eaton ran for Council in 2012 and came 18 votes from unseating a 5-term incumbent Margie Teall. In response to a piece posted to AnnArborChronicle.com about Postema’s double-dipping, Eaton, a lawyer, writes:

It is my understanding that prior audits have identified similar problems with employee reimbursements and that staff previously promised to address the problems. More troubling, the fiscal year ended June 30, 2012. Likely, this issue came to light in July or August. The City Attorney was offered a contract without a vehicle allowance and Council was not informed of this issue when it was asked to approve that contract.

I understand the desire to focus on the application of policies in the future rather than dwelling on past actions. I fear that simply accepting this behavior will send a signal to City employees that there will be no accountability. I applaud Council Member Kailasapathy for insisting on higher standards than “business as usual.”

by P. D. Lesko

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

by P.D. Lesko

If the down-sizing and attrition continue apace at AnnArbor.com, Laurel Champion, former publisher of the Ann Arbor News, will be left to head the organization as Executive Vice President in Charge of, Well, Everything. Steve Pepple (pictured below, right), former Print Director for AnnArbor.com, has decamped to the Detroit Free Press. You didn’t hear? That’s because unlike the fanfare that accompanied Pepple’s AnnArbor.com hiring, and unlike the departures of AnnArbor.com President Matt Kraner and then Kontent King Tony Dearing to NJ.com, Pepple’s departure went unreported—despite the fact that he gave the Ann Arbor community over 15 years of his life as a news editor. Since July 2009, when New York-based media company Advance Publications shuttered the money-losing Ann Arbor News and launched its self-proclaimed “successful experiment” in digital journalism, the news blog has slowly wasted away. The AnnArbor.com masthead now lists two editors, 12 reporters, three “news directors,” along with 10 advertising sales staff, and half a dozen other support staff (VP Champion has not one but two assistants). This head count is down from the approximately 272 staffers who produced the Ann Arbor News prior to the paper’s demise. The count is also significantly down from the 35 reporters and dozens of “community contributors” who produced content for AnnArbor.com when the site launched in 2009.

The question asked by news outlets from Michigan Radio to the Columbia Journalism Review is this: Is AnnArbor.com profitable after 40 months in business, or are Advance and MLive executives propping up the news blog, desperately hoping that revenue from digital advertising will grow enough to make the “experiment” successful? Advance Publications, the parent company that owns MLive which, in turn, oversees AnnArbor.com, has refused to provide information about whether AnnArbor.com is making money. Instead, MLive and Advance executives point to AnnArbor.com’s “market penetration” as evidence that their digital model is a smash hit, a better gauge of a newspaper’s success than audited circulation numbers. Sleuthing by A2Politico recently revealed, however, that the “market penetration” aka name recognition of AnnArbor.com fell slightly last year. Circulation of the company’s AnnArbor.com newspaper has fallen 40 percent since 2009.

In addition, A2Politico discovered statements made to various publications by AnnArbor.com, MLive and Advance executives between March 2011 and June 2012 revealed that unique visits to AnnArbor.com have plummeted by 75 percent. In short, the site went from hosting 2 million unique visitors per month in January 2011 to hosting just 557,000 unique visitors per month in June 2012—a shocker confirmed by MLive’s Dan Gaydou. In March 2011 Matt Kraner emailed Crain’s Detroit that he was: “quite pleased with our (year over year) traffic growth. Kraner claimed that average daily unique users had improved from 42,613 in January 2010 to 68,045 in January 2011, or that AnnArbor.com hosted over 2 million unique users each month. If Kraner was telling the truth, between March 2011 to June 2012—in the space of 15 months—AnnArbor.com lost a whopping 72 percent of its daily unique readers, down from 68,045 in March 2011 (Kraner’s claim) to 18,566 in June 2012 (Gaydou’s confession).

The debate over the quality of the journalism produced by AnnArbor.com has been decided—the reporting was most recently referred to in the pages of the American Journalism Review as “anemic.”

Two rounds of staff cuts, the loss of many key, experienced reporters to the Detroit Free Press, and now the departure of Steve Pepple, have given rise to a different theory about why Advance is exporting the AnnArbor.com model to its other newspapers. It has been suggested that by implementing the AnnArbor.com low-budget journalism model across the company’s newspaper division, Advance can stave off financial disaster at the two dozen or so newspapers it owns. Under the AnnArbor.com “model,” staff has been cut by 90 percent, pay rates by 30-40 percent, and frequency of printed papers was cut by 71 percent. In short, the “experiment in digital journalism” is little more than a draconian scheme to cut overhead dressed up as a new business model. The cuts are coupled with selling online advertising using over-stated (perhaps) and misunderstood (definitely) “market penetration” gobbledygook to unsophisticated, small town business advertisers. In other words, now the debate rages as to whether the expected export of the digital journalism model as practiced at AnnArbor.com is a last-ditch attempt to keep the privately held Advance Media’s newspaper division from going under.

Selling advertising to pay for “anemic reporting” is, obviously, what’s best for the family that owns Advance Publications. Anemic reporting offered up by AnnArbor.com, however, is detrimental to the Ann Arbor community. However, the Ann Arbor marketplace is a lucrative one, and it has been suggested that Advance will not give up on it, nor will Advance Publications executives allow their “experiment” in digital journalism to fail. If AnnArbor.com were allowed to go under, where would that leave the company’s digital journalism sites in other marketplaces? Such a failure would leave Advance vulnerable in every marketplace in which the AnnArbor.com “digital journalism” model had been exported, including in much larger cities such as New Orleans and Cleveland (where Advance recently announced it was moving the Cleveland Plain Dealer to a digital model, much to the horror of Cleveland residents).

A 1987 profile of the Newhouse family in Forbes makes for some juicy reading. At one point, the IRS accused the family of tax fraud and imposed a $305 million dollar penalty on a $658 million dollar tax bill. The profile ends, almost too perfectly:

“By all accounts, Steve (Newhouse) is quiet and introverted. Single, he has an apartment in Hoboken, New Jersey, and another in Manhattan, where he spends most nights. A true son of his father, he takes the subway to work early in the morning. When he goes to Newark airport, he sometimes hits the subway again and then a bus. The dynastic drama in which these young men have prominent roles may not play out for a while. Their fathers are still relatively young and unlikely to step down soon. It may not even matter that much which members of the Newhouse family next rise to run the empire. When the business is itself the stronghold, the question of who heads it recedes somewhat in importance. Most other enterprises have a character that tends to thwart dynastic ambitions. In these, the founder can deed the enterprise to his heirs but cannot will them the companion essential: management ability. Retailing provides an apt illustration. As the world knows, you can derail a Montgomery Ward or a Sears or a Woolworth’s. Maybe you can even over time derail a Wal-Mart. But it is almost impossible to wreck big monopoly newspapers. About all they will let you do is get richer and richer.”

It’s Steve Newhouse who now oversees the company’s “transition” to digital. In an August 2012 piece posted by Poynter.org, Newhouse writes: “The reason for AnnArbor.com’s strong readership is the high quality of its journalism…..The changes we have made in Michigan have strengthened our confidence that we can secure a vital future for our local journalism elsewhere. While we believe that our print revenue will decline further, we are hopeful that our increased focus on digital will allow digital revenue to become an even greater revenue growth engine, and, eventually, turn our local companies into growth businesses once more.”

Newhouse makes these claims about AnnArbor.com just two months after MLive’s President Dan Gaydou told the American Journalism Review that the news blog’s unique visitor count had plummeted to 557,000 from the 2 million unique readers per month claimed by AnnArbor.com President Matt Kraner in 2011 in his interview with Crain’s. One comment in response to Newhouse’s Poynter.org essay provides a more realistic interpretation: “You speak at great length of the maintaining a high quality of journalism throughout Michigan at the new sites. Every reader, every reporter and every former staff member, as noted above, knows this has not happened. The Michigan outlets are shells of their former selves. The communities they purport to serve hate them. And they serve up sensationalized, mostly-aggregated (stolen) content from other news sources. You’ve traded journalism for garbage content, but pretend to move forward as if nothing has changed. Shame on you.”

Meanwhile, at AnnArbor.com Print Director Steve Pepple is out of the Newhouse’s digital journalism petri dish and on to a job as the Assistant Metro Editor at the Freep.