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.

by P.D. Lesko

At the moment, Ann Arbor City Council members are trying to assert their Charter-mandated authority over the Board of the Downtown Development Authority like a parent trying to discipline a hopelessly out-of-control toddler in the midst of an epic temper tantrum. John Hieftje stars in this drama as the ineffectual parent, the one who stands by and undermines all efforts to impose discipline—the parent at whom people in grocery stores stare, shake their heads and roll their eyes. Members of City Council want term limits for DDA Board members—one particularly troublesome member was appointed when Barbara Bush was First Lady—and want to slow down the DDA’s capture of tax dollars.

This effort to clean up the DDA Board  comes on the heels of the “retirement” of two members of the Ann Arbor Transportation Authority Board of Directors. Local politicos argue that David Nacht, who does not live in Ann Arbor, had no business serving on the Board of AATA and making decisions about the disposition of millage dollars. Likewise, Jesse Bernstein, so say disgruntled members of the now defunct Ann Arbor Chamber of Commerce, had no business cross-dressing as the AATA’s “finance” guru during the group’s failed efforts to sell a $500 million dollar county-wide transit boondoggle to residents. Under Bernstein, the Ann Arbor Chamber of Commerce lost revenues, members, and ultimately after Bernstein left his job there, was forced to merge with the Ypsilanti Chamber of Commerce.

At his last meeting, David Nacht was quoted by AnnArborChronicle.com as saying “I encourage all my fellow citizens to serve on a board.” The comment is somewhat pretentious coming from the township resident who soaked up a decade on the AATA Board. In addition, while Nacht’s encouragement of his “fellow citizens” in general may appear laudatory, it’s absurd in the face of John Hieftje’s determination to choose candidates for the city’s most powerful boards and commissions from among a gene pool the size of a thimble, primarily from among his political donors and cronies (Nacht included). Nacht’s “fellow citizens” have a snow ball’s chance in hell of being appointed to the AATA Board based on Hieftje’s track record of making such appointments.

However, the DDA Board battle, along with the “retirements” of Nacht and Bernstein, suggest John Hieftje’s ability to stack the city’s boards and commissions could be at an end thanks to a group of citizens and City Council members concerned with transparency and fiscal accountability in local government. These Council members include Ward 1 Council member Sumi Kailasapathy, Ward 2 Council members Jane Lumm and Sally Hart Petersen, Ward 3 Council member Stephen Kunselman and Ward 5 Council member Mike Anglin. All are inclined to question board appointments, and all have spoken in favor of making board and commission appointments more prudently. Several favor term limits on board and commission appointments, and several have concerns about city contracts that have been awarded to Hieftje’s board and commission appointees and their employers, including Environmental Commission member David Stead, whose company is up to its neck in city contracts awarded during the move to single-stream recycling.

Hieftje’s efforts to put long-time Planning Commission member Eric Mahler on the AATA Board to replace Nacht may prove to the a turning point in the battle against rampant and unchecked cronyism in local government.

In addition to appointing political donors to boards and commissions, Hieftje has repeatedly appointed to important boards and commissions as “citizen” members City Council members whose constituents have booted them from office. Leigh Greden was tossed from office in 2009 after the Ann Arbor News revealed Greden was playing on Facebook and sending rude and unprofessional emails during open City Council meetings. Hieftje subsequently appointed Greden to the city’s Housing Commission. In 2012, Ward 2 voters chose to vote Tony Derezinski out of office. Shortly thereafter, Hieftje appointed Derezinski to the the city’s Planning Commission. Likewise, Ward 2 voters tossed Stephen Rapundalo from office, and Hieftje appointed Rapundalo as a “citizen” member of the LDFA—a board on which Rapundalo sat as a Council member. The LDFA was used to funnel tax dollars to Ann Arbor SPARK.

Running for City Council and losing also has its perks. After Hive Mind candidate Ingrid Ault challenged Ward 3 Council member Stephen Kunselman in 2011, Hieftje appointed Ault to the Park Advisory Commission. Needless to say, a decade of fostering group think and appointing political yes men (and women) to boards and commissions has resulted in some spectacularly expensive mistakes and poor stewardship of the city’s resources, such as a Park Advisory Commission member who voted in support of developing parkland and using it for parking.

In an effort to better understand why a wider variety of the city’s residents are not participating in boards and commissions, A2Politico filed a FOIA seeking all of the applications submitted for the openings on city boards and commissions over the past four months. It’s not clear whether Mahler filled out an application to sit on the AATA Board, or whether he needed to do so in order to be considered for the opening.

Ann Arbor Transportation Authority Board member David Nacht’s departure marks not only the end of a decade of public service, but also marks a turning point. John Hieftje appointed Nacht to the Board for a 10 year term. Over the course of those ten years there has been sharp criticism leveled that AATA’s Board members have neglected bettering service within the city of Ann Arbor. Many of those criticisms came from former AATA Treasurer Ted Annis. Annis, in fact, is still an outspoken critic of AATA’s finances (Annis contends AATA is run inefficiently) and the bus provider’s inability to get a rider from one side of the city to the other in less than one hour.

That AATA Board members David Nacht and Jesse Bernstein are “retiring,” in the light of the county-wide transit debacle that cost taxpayers millions, is great news. That Hieftje wants to replace Nacht with Eric Mahler should come as no surprise. Mahler, it could be argued, has done enough for Ann Arbor having played his part in crafting the seriously flawed A2D2 Design Guidelines/Zoning against which the public is now railing. At the end of March 2013, in response to public backlash aimed at a parcel which Mahler (among others) voted to zone D1 (for dense development), City Council decided to conduct a review of the D1 zoning guidelines. Mahler and the Planning Commission, in essence, were asked to review their own work—work which they believed had been done correctly in the first place.

There are about 400 Ann Arbor citizens who serve on boards and commissions, according to city records. About one-fifth of those citizens serve on more than one board or commission. Below, you’ll find a list of several of Ann Arbor’s busiest citizens, each of whom have been appointed to serve on multiple city boards and commissions:

Bonnie Bona: City Panning Commission, Downtown Zoning Steering Committee, Ad Hoc, North Huron Vision Task Force, Street Art Fairs, Mayor’s Committee on

Roger Hewitt: Community Security & Public Space Task Force, Downtown Development Authority, Downtown Zoning Steering Committee, Ad Hoc, Local Officers’ Compensation Commission, Local Officers’ Compensation Commission

Anthony Ramirez: Building Authority, Cable Communications Commission, Housing and Human Services Advisory Board

Kirk Westphal: City Panning Commission, Design Guidelines Taskforce, Environmental Commission (Planning Commission Rep.)

Westphal, of course, has recently stepped up to challenge Ward 2 Council member Jane Lumm, who recently called out Hieftje for launching personal attacks and bullying those who, as Lumm put it, “may occasionally” disgaree with him. The question, of course, is whether there are six votes on Council to break John Hieftje of his nasty habit of appointing his cronies to the city’s most powerful boards and commissions. If there were six votes to put Mahler out to pasture, it would force Hieftje to appoint one of David Nacht’s “fellow citizens” to the AATA Board. That would be a huge step in the right direction.

by P.D. Lesko

Dan Rainey, the City of Ann Arbor’s IT Director, raked in a six-figure salary as one of the highest paid employees in the city. Now, he’s off to work for former Ann Arbor Director of Public Services, Sue McCormick. Shortly after former City Administrator Roger Fraser took his pension and decamped for a six-figure job with the State of Michigan, McCormick decamped with her pension for a six-figure job with the City of Detroit. Former Ann Arbor Police Chief Barnett Jones “retired” with his pension to a six-figure job as the Police Chief of Flint and a six-figure job with Sue McCormick at the Detroit Water and Sewage Department leading the office of (seriously) Integrity and Security. That bit of double-dipping resulted in front page headlines in the Detroit newspapers. After the scandal broke, the Michigan Department of Treasury, where Roger Fraser works (Fraser recommended Jones for the Flint job to that city’s Emergency Financial Manager), inserted language in future EFM contracts that says “emergency financial manager appointees can not engage in other employment, unless approved by the EFM.”

As it turns out, Dan Rainey will fit right in with McCormick and Jones at the Detroit Water and Sewage Department. Ann Arbor’s most recent audit  revealed that while Rainey’s Department had $150,000 dollars allocated to projects such creating and implementing a disaster recovery plan, in the event that the city’s computer data were lost, no such plan had ever been created or implemented. The IT Director sat on the allocated $150,000 for over two years, according to the city’s March 2013 Revenue Budget Performance report. In fact, a list of special projects were funded, including money for contracted services, but never completed under Rainey’s tenure:

Jury Management System ($5,000 allocated)

Disk Array/Disaster Recovery ($150,000 allocated)

Project Management Business Improvements ($17,000 allocated)

Barton Canoe Livery Asset Management System ($25,000 allocated)

Kiosks ($55,000 allocated)

Tax Assessing Software Upgrade ($20,000 allocated)

Then, there are the contingency funds. Under Rainey, the IT Department sat on hundreds of thousands of dollars in “just in case we want to spend it money.” This money includes a $65,000 contingency fund for software purchases, a $60,000 contingency fund for “business intelligence,” and a $50,000 contingency fund for “intrusion prevention.” This bit of mad money is particularly amusing given the fact that the 2012 audit dinged Rainey and his department for not requiring computer passwords to be changed regularly, and for neglecting to set up computers so that screens lock when employees leave their work stations. The IT Department’s budget includes $75,000 in contingency funds for a Water Data Mart project that wasn’t done.

In 2009, Rainey, ever the generous ITsar came to the attention of A2Politico when he “volunteered” taxpayer-funded IT services to his professional association which needed it website redesigned, a project that can cost a company anywhere from $20,000-$100,000. In 2009, A2Politico posted this piece:

Looking though the City’s web site where recruitment listings are posted, evidently, has the draw of a great garage sale to some people. You never know when you’re going to find something fascinating. According to someone who regularly enjoys a good rummage through the City’s online resources, on August 28th, the City of Ann Arbor posted a job for an unpaid intern to work on the redevelopment and launch of a new web site. The unpaid intern would report directly to the City of Ann Arbor’s Chief Information Officer and IT Director Dan Rainey.

No news scoop there. Unpaid internships are de riguer in this economic climate. Heck, AnnArbor.com relies on loads of unpaid “contributors” to produce their editorial content. Unpaid workers are in, Sweetie.

Back to the City’s unpaid internship. The job advertisement begins innocently enough:

“The City of Ann Arbor is committed to providing excellent municipal services that enhance the quality of life for all through the intelligent use of resources while valuing an open environment that fosters fair, sensitive, and respectful treatment of all employees and the community served.”

So far so good. Then the intelligent use of resources hits the fan, as it were.

The August 28th job description continues: ”We currently have a great opportunity for an Information Technology Intern for fall semester 2009. This is an unpaid internship.The primary project will involve redevelopment and launch of a new website for the Metropolitan Information Exchange (MIX) organization (www.mixnet.org), a national group of public sector Chief Information Officers. Reporting directly to the City of Ann Arbor’s CIO, You will be given lots of support and direction with this highly visible project. This is a great way for you to showcase your talents and get some great exposure to various public and private sector organizations.”

Ann Arbor’s CIO Dan Rainey, who oversees an IT department that is budgeted to cost taxpayers $7.4  million dollars in 2009, is seeking to hire an intern to redevelop a web site for the Metropolitan Information Exchange. There are several obvious problems with Rainey’s scheme, not the least among which is that employing an IT intern under the auspices of the City of Ann Arbor to do work wholly unrelated to the city’s IT needs amounts to cheating the taxpayers. The intern will use city resources (office, computer, software, phone, office supplies, etc….) to do the work and CIO Rainey, who earns $160,000 in salary and benefits, will supervise the intern’s work on behalf of MIX.

After A2Politico revealed the CIO’s scheme to “donate” IT services to MIX, the announcement for the internship was quietly removed from the city’s website.

Then, there’s the IT Fund. Certain city departments and even millage funds are being assessed proportionally higher IT Fund charges, specifically the city’s Park Maintenance & Capital Improvement Millage Fund, the Parks & Rec Department, the AAPD and the AAFD.

In 2012 Argo Canoe Livery paid $10,320 to temp. workers, employees who rent canoes, sell concessions, teach summer camp classes, and tend to the equipment. That same year, Argo livery was charged $12,041 by the IT Fund. Gallup Canoe Livery was charged the same amount by the IT Fund. The Ann Arbor Senior Center, threatened with closure for the want of operating funds, was assessed $18,825 for the IT Fund, or 10 percent of the Senior Center’s $188,000 annual expenses. The Field Operations Department oversees Parks Operations, which spent $180,360 in 2012. Of that amount, $57,713 was turned over to the IT Fund, 33 percent of the total. According to comprehensive  budget documents posted to the city’s website, in 2012 taxpayers spent $12,129 for chemicals and $14,716 for water for Fuller Pool. Fuller Pool pool was also assessed $11,700 for Rainey’s IT Fund. Mack Pool paid $18,814 for electricity and was soaked $17,391 for the IT Fund. The Leslie Golf Course spent $12,639 on water, $26,502 on retiree medical insurance and was chipped for $36,824 for the IT Fund. Huron Hills Golf Course was assessed a whopping $60,000 for the IT Fund in 2012.

The Park Maintenance & Capital Improvement Millage Fund, which raises about $5 million dollars per year from taxpayers, is paying high IT Fund assessments, as well. In 2012, the Maintenance & Capital Improvement Millage Fund was assessed over $167,000 for the IT Fund. The Open Space & Parks Acquisition Millage was assessed $10,412 for the IT Fund, but the Natural Area Preservation program was charged $67,959 for the IT Fund, 25 percent of NAP’s $268,069 expenditures. Neither the Street Repair Millage Fund nor the Art in Public Places Millage Fund paid anything into the IT Fund in 2012.

Like the parks millage, the Parks Department is expected to pay a relatively high IT Fund assessment in 2013, $179,000. Conversely, the City Attorney’s Office is budgeted to pay $152,800 to the IT Fund and the Solid Waste Department is budgeted to pay $143,000 to the IT Fund, respectively, in 2013.

The Downtown Development Authority, on the other hand, is budgeted to pay no IT Fund assessment in 2013 and paid none in 2012.

Like the city’s parks, preservation and open space programs, safety services are assessed significantly higher IT Fund charges than other departments. Ann Arbor employs 124 police officers. The Police Department paid $1.32 million dollars to the IT Fund in 2012, $100,000 more than the AAPD is projected to pay to fund retiree medical insurance in 2013 and $300,000 more than the AAPD is projected to spend in 2013 on medical insurance for its active patrol officers. The Ann Arbor Fire Department, with 90 officers, was assessed $338,000 for the IT Fund, or triple what is budgeted for maintaining and repairing the city’s firetrucks in 2013.

What can be done? A Council member suggested that it’s time to “go after fund balances” such as the “contingent” money that sits in the IT Department’s budget and other city funds. Stephen Lange Ranzini is the president of a local bank and, for the past 12 months has been vocal in his support of emptying what he calls the city’s “buckets.” In December 2012 Ranzini wrote this in response to a piece about budgeting by city officials: “Some (city) funds are overstuffed with cash (for example the 1% for art fund), overall the city has over $100 million of cash trapped in various buckets not restricted by millage or the source of the funds but “restricted” *only* by vote of city council, while the mayor and city manager assert that the general fund *only* has $15 million in cash and therefore doesn’t have enough funds to properly staff the fire fighters and to keep all five fire stations open. Overall the city’s many funding buckets earned over $30 million last year, but we have “no money” to find basic priorities like fire, police and roads! Drain the buckets!”

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

“Hieftje gives out seats on city boards and commissions at parties, like they were candy,” says a political insider. John Hieftje’s propensity to populate the city’s boards and commissions with yes men (and women) and unqualified political cronies has long irked political insiders and haunted city residents, whose input and feedback Hieftje’s cronies often blatantly ignore. Hieftje’s short-sightedness is now coming back to bite him in the political posterior. Most recently, the Board of the Ann Arbor Transportation Authority (AATA) Board, comprised of political cronies, several of whom don’t live in Ann Arbor, and most of whom never regularly take the bus, wasted millions on a spectacularly embarrassing failed bid to hijack AATA millage money to pay for buses to run to out-county communities, and commuter rail between Howell and Ann Arbor. Hieftje was forced to humiliate himself and sponsor a resolution for the city of Ann Arbor to withdraw from his own transportation scheme after virtually all of the county’s elected leaders failed to sign on.

The comments on AnnArbor.com that call for the Ann Arbor Downtown Development Authority (DDA) to be “dissolved,” “disbanded,” “fired” and “junked,” are strident and virtually non-stop. The DDA’s unelected Board members are treated to equally pointed criticisms by readers of the news site. Joan Lowenstein, a libel lawyer and  former City Council member, was appointed by Hizzoner to the DDA Board after she lost a bid to sit on the 15th District Court. Lowenstein is often mocked by AnnArbor.com readers as politically arrogant. Then again, Lowenstein has mocked and insulted Ann Arbor residents and voters in videos, at open meetings, as well as in print.

The DDA, as well as several of the organization’s Board members (including John Hieftje and Lowenstein) backed the failed Ann Arbor District Library millage proposal.  Ellie Serras, who headed the “Our New Downtown Library” committee told a local news blog after the millage went down in flames, “I think there were implications that the library was involved with the city and the DDA (Downtown Development Authority) in some way…and the community responded.” The support of the DDA and endorsement of DDA Board members of the library millage proposal was a serious negative in the eyes of “the community.”  Ouch. With a couple of exceptions, the DDA Board members are routinely criticized as arrogant, out-of-touch cronies who thumb their noses at the public through profligate spending of tax dollars. The following comments come from recent stories about the DDA on AnnArbor.com:

• I can’t recall electing any of the members of the DDA. How in the world can the council even consider giving them this kind of power? It’s bad enough that they control the money from PUBLIC parking.
• These are the same groups of people that want a conference center with no actual business proposal on how to pay without city funding/backing.
• Abolish the DDA. We don’t need an unelected shadow government.
• ….I thought the DDAs were city development arms for re-energizing downtowns and were never to be revenue collectors nor service providers. Seems Ann Arbor’s DDA has gotten off its leash and now runs its own little self-financed business club – often at “human value” expense and minority position against voters. The Library lot convention center, the Library, new vamprise funding/discounts, AATA programs including one ugly and unnecessary station, Too much!

As a result of the almost constant public pounding, perhaps, the DDA Board members look for ways to make it appear as though they are competently managing the city’s 7,145 parking spaces and the public’s $17 million in parking revenues. It’s a losing battle. At the most recent DDA Board meeting, Board member Roger Hewitt (a restauranteur) told the public “…not to evaluate whether an individual structure is making money but rather whether the parking system as a whole is working. And the net annual income is nearly $800 per space ($784).” He said it as if bringing in $784 in annual revenue per parking space should be something to write home to mother about.

As it turns out, bringing in $784 in annual revenue per parking space is something to write about, because it’s 98 percent below the national per parking space average, according to the most recent data compiled by the National Parking Association. The National Parking Association represents 2,300 members, 715 Companies and organizations serving the corporate and small business owners/operators of parking operations, as well as institutional, government and educational entities.

The AnnArborChronicle.com ”chronicled” the December meeting of the Ann Arbor Downtown Development Authority where Hewitt shared that information. Once again DDA officials took the opportunity to pass off poor performance as an achievement worth noting, and did so unchallenged. It is also worth noting that the DDA is a regular advertiser on AnnArborChronicle.com. Without comparing Hewitt’s (and the DDA’s) annual income per space to the annual income per space generated by other similarly-sized parking systems, Hewitt’s statement is little more than a useless factoid. When DDA’s revenues and expenses are compared to national averages, it becomes clear that the DDA Board overseeing an organization is delivering results well below national averages where revenues are concerned, and well above national averages where overhead, debt load and project costs are concerned.

Perhaps calls to dissolve the DDA aren’t so off base, after all.

After reading Hewitt’s boast, A2Politico contacted the National Parking Association. The group puts out an annual report titled Parking in America. It includes data from 47 states, 91 cities in the U.S. and Canada. Participants own or operate more than 28,000 parking facilities with more than 10.7 million parking spaces.

Here are some key findings:

• Mean maximum 12-hour daily rates charged in the operator’s facilities cost $13.19 in 2012.

A2P Notes: In Ann Arbor’s attended lots, it costs $17 to park from 8 a.m. to 6 p.m.

• Monthly permits in Ann Arbor garages cost $140-$195  per month.

A2P Notes: According to the 2012 Collier’s Parking Survey, Ann Arbor monthly parking permits cost more than those in much larger cities such as Portland, San Diego, Denver and Minneapolis. Monthly parking permits in Atlanta, Georgia and Columbus, Ohio cost between $75 and $125 in 2012.

• The average on-street metered parking for one hour in the city/metro area is an average of $1.35 cents per hour.

A2P Notes: Over the past 24 months, the DDA and City Council have doubled the rate of hourly metered parking from $.75 cents to $1.50 per hour.

• The average net revenue per parking space is $1,510.

The DDA’s abysmally low revenue per space is primarily due to the organization’s long-term build up of structural debt. The DDA’s fund balance is down to $4 million, and if the organization’s finances dip into the red, state law would require the DDA to be disbanded, or for the city’s taxpayers to raise revenues sufficient to bail out the organization. The DDA’s per parking spot operating expenses are also significantly higher than the national average, according to the NPA officials.

Ann Arbor’s current Hieftje-appointed DDA Board cronies (including a woman appointed when Barbara Bush was First Lady, an architect, two bar owners, a libel lawyer, a theater director and the owner of a dry cleaning shop) oversee a parking system that takes in 98 percent less net revenue per parking spot managed than other similarly-sized parking systems in the United States surveyed by the NPA.

Ward 3 Council member Stephen Kunselman has been taking political swipes at the Ann Arbor Downtown Development Authority Board and its members (including John Hieftje) for almost two years. Kunselman has been quoted in the media as saying he has “lost confidence” in the DDA’s Board, and that the DDA is a “shadow government.” When Kunselman last ran for re-election in 2011, at a candidate debate sponsored by the local chapter of the League of Women Voters, Kunselman suggested that John Hieftje’s administration has a serious problem with cronyism.

Prior to 2001, the city’s parking system employed a unionized workforce. Shortly after John Hieftje took office, he pushed to have the DDA control parking. In turn the unelected DDA Board members broke the union, and tossed out the unionized workers. Republic Parking was hired, and under the terms of its current contract is paid a $150,000 management fee, plus the $50,000 “performance-based” fee which DDA Board members have repeatedly referred to as a “tip”—a 30 percent tip, paid for with taxpayer funds. The Ann Arbor DDA Board’s “tips” paid to Republic Parking by the DDA Board members are split among Republic Parking executives. Republic executives take in “tips” from other city’s parking systems they manage, as well.

In 2009, when the DDA Board members were criticized in the Ann Arbor News for giving Republic Parking executives a $45,000 tip, then DDA Chair Roger Hewitt characterized the “tip” as giving the DDA some “clout.” Hardly. In a February 2001 study published by Cornell University researchers who studied tipping, the researchers discovered “… that people are poor at identifying the causes of their own actions. (O)ne should regard with skepticism, then, consumer reports that they tip as a reward for good service.” The Cornell researchers conclude that “the tipping- service relationship can only be described as weak.” Thus, people will give, say, a 20 percent tip regardless of service, and a large tip will have little impact on the overall quality of the service provided. Like Wall Street executives who received “tips” even when their “service” resulted a national economic collapse, there is typically little correlation between tips and better-than-average job performance. Republic Parking Systems, Inc. is one of the largest privately held parking management services companies in the country, with revenues of $360 million a year and about 2,600 employees.

The company’s parking attendants average $8-$12 per hour, plus benefits. By law, Republic Parking employees in Ann Arbor must earn an hourly rate at least equal to the living wage ordinance requirement, $12.17 per hour. Unionized parking lot attendants at the University of Michigan earn $31,824 per year, or $16.57 per hour before taxes, plus benefits. In 2008, the Charleston, South Carolina City Council members slammed Republic Parking for paying its employees “slave wages,” in some cases as low as $5.85 per hour. The Council members voted to allocate $300,000 to raise the wages of the Republic Parking workers, and when the city’s contract with Republic Parking was next approved those council members instructed Republic to raise the pay of its lowest paid workers by $1.15 per hour.

In Western Washington, where Republic Parking is contracted to handle parking for the cities of Seattle, Tacoma, Spokane and Bellevue, its rating with the Better Business Bureau is a D+, with complaints outstanding and unresolved. The BBB in that state has identified “a pattern of complaints from consumers alleging customer service and credit or billing issues. Consumers allege they pay, but later receive a ticket in the mail stating they have not paid for service, and late fees are incurred.” The new five-year contract between the DDA and Republic Parking calls for Republic to install new automated payment equipment in some of the city’s parking structures. The new equipment will allow motorists to check themselves out and will allow the use of credit cards for payment. The BBB in Western Washington has warned drivers away from Republic Parking and its automated payment equipment.

In July 2012, DDA officials borrowed $1.3 million from Republic Parking officials at 6 percent interest to fund the installation of new automated pay equipment in the city’s parking garages. This is the same kind of equipment that has led to consumer complaints against Republic Parking in Washington State and elsewhere. In 2009, Republic Parking  accidentally “reprocessed” the credit cards of Seattle customers who’d used the company’s automated pay equipment. Republic Parking blamed a computer glitch for the overcharging error, but the 12,000 reprocessed transactions topped $100,000, and the company sent out no warnings to consumers that their cards may have been “fraudulently charged,” complained one Seattle resident to a local news station. One question that surfaced during that investigation was why Republic Parking was storing the credit card information of short-term parking customers.

In Denver, Colorado, Republic Parking customers who’d had problems with the automated parking machines took to Yelp.com to voice their complaints. Republic Parking has a 1 star (out of 5) on Yelp.com Denver. One customer writes:

Stay away from these parking lots – their machines are always broken so you can’t pay for parking – then they never issue a ticket.  Their MO is to send you a letter two months later from some cheesy so called Lawyer (Byron somebody) totaling $55. If you try and dispute it they just don’t respond – even if you call or send written correspondence. I had to search on their website to find someone to talk to about the issue.  They asked me what time I called to report the problem.  Why is it my responsibility to report their issue when most of the time the machines are broken?  One time I even got my credit card stuck and had to stand there while my friend went and bought tweezers to get it out.  Seems to me like I’m doing a lot of work to pay them for a crappy service.

They don’t maintain their machines and then they are impossible to get anything resolved.

Terrible company.

It’s possible Republic Parking and the DDA will work together to avoid these pitfalls. Then again, hell could freeze over, pigs could fly, and The DDA’s $784 in revenue per parking space could be “chronicled” so that it appears as though John Hieftje and his DDA cronies are doing a fantastic job running the city’s parking system on behalf of taxpayers footing the bills.