The Top of the Parking Decision

Winter scene from the Dahlmann Ann Arbor Town Square proposal

There has already been plenty of outrage expressed about the decision by the Library Lot advisory committee (formally the RFP advisory committee) to drop the open space options for what I am now calling the Top of the Parking (the top of the underground parking structure to be built at the site of the former Library Lot).    Commenters to the piece by the Ann Arbor Chronicle (oddly, there has been no coverage of the recent events by AnnArbor.com) and members of email listservs are criticizing the decision.  As we also reported, the committee eliminated the two proposals, namely the Dahlmann Ann Arbor Town Square and the Ann Arbor Community Commons, on the basis that they did not benefit the city financially.  Dahlmann offered to hand over $2.5 million in cash to the city, while the Commons proposal listed a number of public sources for funding and also suggested that community support (from private donors) would be forthcoming.  But the committee noted that neither one had provisions for ongoing maintenance and that the Dahlmann millions would not be enough to develop the plans provided. (Recall that the city has now posted both conceptual and cost proposals on its RFP website.)

But as we noted in a previous post on this subject,  the requirements of the RFP are both very broad and very simple.  They are: beneficial use of the site (public space), environmental benefits (LEED, stormwater, etc.), and financial return.  I asked at the time whether a project that filled the first two extremely well but not the third would be considered, especially since it reads: “In the absence of other considerations, the City has a fiduciary responsibility to obtain fair market value upon the sale of City assets (my emphasis).”

The selection criteria as outlined by the RFP don’t seem to take the first two criteria into account.  Here they are:

Note that these criteria presuppose a development project.  Also,  it is curious that the Cost Proposal specifies a lease, as though this is the only anticipated result.  Nevertheless, it says that the “cost proposal” is only weighted as 10% of the evaluation criteria.  By summarily dismissing the open space proposals because they did not apparently fill this one criterion, the committee made the “cost proposal” equal to 100% weighting.

It is time for us all to take a deep breath and to examine what the real issues are here.  Here is a preliminary list.

1. What is the best use of this site for the benefit of Ann Arbor?

Clearly, members of the committee (especially Councilmember Rapundalo, who was never shy about his bias) have concluded that the answer is “Something to fill the budget gap”.  Other people are saying, “A conference center, because it will bring business and it is needed”.  Many members of the public are saying, “An important public area that can function like New York’s Central Park and make the whole of downtown a better place to be”.  But we have never had that discussion. Not just about what different people want.  About what will really benefit the city, its residents, and its businesses best over the long run.

2. What should be the process in making the decision?

Council rushed into this RFP after the existence of the “Secret Plan” (see earlier post describing it) became more widely known.  This proposal for a conference center had been floating around city hall for what is now over a year without any public disclosure.  With the RFP, there has been at least some grudging effort at better transparency, with the RFP website, open committee meetings, a plan for public input at the interviews, and even posting the proposals in full on the website (after both AnnArbor.com and private citizens visited the city with FOIAs).

But we have never had a public discussion about what the best use of the “Library Lot” (now the Top of the Parking) is for Ann Arbor.

How would we do that?  Obviously, some other way than rushing through a decision on a tight timeline designed to facilitate a massive development.  The classic way would be to have a series of facilitated meetings and allow the public or even a structured group of “stakeholders” to review all possibilities, try to look ahead to what kind of future we wanted and what future events we think will impact us most (not an easy job, predicting the future).  As flawed as the Calthorpe process was, I am rather nostalgic about it now since there was some effort to bring in various viewpoints; but I think the public did not behave well enough for those who would direct Ann Arbor’s future according to their own wishes.  (I reviewed this briefly in this article.)

3. Will any of the present development proposals really benefit the city financially?

This will, of course, be subject to a lot of analysis and study.  I haven’t had time to study the cost proposals in depth yet, and I’m glad the committee is considering hiring a consultant for that purpose.  But we need to be careful how the terms are defined.  We’ve heard a lot of “smoke and mirrors” finance plans lately at both the national and local level.   It is possible for financial projections to look very positive until one examines the assumptions.  We’ve already been subjected to several very dubious financial decisions for the city regarding development (the city hall and the underground parking structure).  Remember the famous Disraeli quotation, “There are three kinds of lies: lies, damned lies, and statistics.”?  (Apparently he is not actually recorded to have said it.)  Accounting devices with fallacious underlying assumptions have them all beat out.  I think I am correct in saying that the city has never succeeded in a public-private partnership that actually paid off. (If you know of one, please inform me – I’d really like to know.)

4. Even if the accounting looks good, can Ann Arbor really support a conference center and do future events look favorable for this path?

This is going to need a lot of study, comparisons with other cities, and discussion about future trends.  Not something for a quick decision, yet many people appear to have made it already.

5. Should the budget crisis be driving this decision?

I’m as concerned about city finances as perhaps anyone.  I’m such a worrier that I even ran for council last year after retiring from the county Board of Commissioners and now I’m writing this blog.  But there is something craven and low about the suggestion that in order to keep our city afloat, we should sell off our best real estate rather than use it for building a future city that gives us sustenance as a community.    After all, after your family has sold off your antique furniture and Grand-dad’s gold watch, you still need to find a way to keep your household going from day to day.  Selling our assets is a short-term solution at best.  At worst, we may enter into arrangements where we are played as the fools and take the risk so that others may make money.  That would be piling insult on injury.

I’d also like to note that there are a number of studies out there showing that a really prime public space can have truly beneficial economic effects.  We have not planned the south 5th-Division area as an area and looked at what its future could be.  There are many pieces in the air and who is to say that the open space is not the best solution economically? Further, proponents of the open space plans never had an opportunity to make a case as to how that space could be maintained or what its overall financial impact would be.

I hope that the council will take responsibility for stepping back from the brink and allowing a full discussion of what we are doing with one of our prime pieces of real estate.  Anyone who feels as I do should write and/or call their council representatives and the mayor and ask them to give us a break.

UPDATE: According to a story in the Ann Arbor Chronicle, the mayor says that council might consider the open space proposals too.

SECOND UPDATE: The Chronicle has a story about the Ann Arbor District Library Board meeting in which the Library Lot proposals are discussed.

THIRD UPDATE:  Peter Allen, ever the downtown development booster, says in a story on Concentrate that he sees the Library Lot as “downtown’s Diag”.  Many of us think of the Diag as open space but he means a hotel and conference center.

FOURTH UPDATE: A group of citizens has sent a letter to the mayor and council asking for a better public process to decide the fate of the Library Lot.  It also requests an opportunity for the open space proposals to be  reviewed.

FIFTH UPDATE: The DDA has now approved $50,000 to hire a financial consultant to advise the RFP committee.  Peter Allen is quoted as saying that we are about to make a “timeless, 100-year decision about what is it that makes a great, great city”.  We’re in agreement there, Peter.

SIXTH UPDATE: In a remarkable email exchange (pdf available here), Stephen Rapundalo defends the RFP committee’s process in response to a message from Eric Lipson.

SEVENTH UPDATE: Process issues have been part of the discussion and the question of whether the use of the Library Lot has been adequately discussed.  It is instructive to look at the 1991 Luckenbach Study (available here) – conducted by the same architect now part of the Library Lot parking structure team.

Library Lot: Open Space Option Dropped

The Library Lot advisory committee eliminated both open space options within the first few minutes of their meeting today (December 18).  The reason was that they would not make money for the city.

Details to follow in an update.

The Ann Arbor Chronicle has a very complete account of the meeting.

UPDATE: See the Chronicle story for a comprehensive account of the meeting.  But here are some important highlights:

1. The next meeting of the advisory committee is January 8.  At that time they will review the answers to questions sent the four developers (remember, the two open space proposals are off the table).  There was a hint that they might eliminate one or more development proposals.

2. The interviews will be during the day (starting at 9:00 a.m.) on January 20th.  The public is invited.  Location not yet certain.  With an apparent nod to public input, the proposers will be given 30 minutes for a presentation, 30 minutes for questions from the panel, and, remarkably, 30 minutes for public questions (to be taken League of Women Voters-style from index cards).

3. Meanwhile, the DDA Partnership committee (composed of DDA board members and council members) has proposed that the DDA should pay for a financial consultant to help the committee with the fine points of the financial aspects of the proposals.  (To my mind, a very good idea, since none of us wants to see the city sucked into a deal whereby we take all the risks and the developer gets all the cash.)  Susan Pollay, the DDA executive director,  listed four points (my paraphrases):

a. “Post-financial meltdown”: is the project feasible and does it make financial sense?  Would a bank give them money?

b. Are the project teams financially solvent?  Or are they overdrawn on other projects? Again, would a bank find them creditworthy?

c. What is a realistic timeline?  These are complex projects with other partners possibly involved.  So that the council can evaluate it, they need a realistic idea of a timeline.

d. Have similar projects been done in other cities similar to Ann Arbor?  What works in a medium-sized city?  Ann Arbor has not had a conference center so it is helpful to pull out some information.  (Ed. note: not all these proposals are for conference centers.)

Reaction to this proposal was first cautious, then enthusiastic, as it became apparent that DDA would provide the money and arrangements and leave the conclusions to the committee.  But Rapundalo muddled the charge to the consultant by insisting that they should also handle the public input problems (a very different task).  The actual responsibilities were left rather indefinite.

Also indefinite was the timeline for this consultant (possibly a firm with multiple talents) to do its task.  Problem: in order to hire a consultant, the  DDA board must act to authorize a Request for Quotations, or RFQ, but the committee wants to interview on the 20th of January – and the DDA board doesn’t meet until the first week of each month.    Pollay also stressed that the consultant should come from outside the community so that there was no whisper of conflict of interest (even through secondary connections).  Further, the firm chosen needs to be aware of the needs of municipalities.  The objective is to get the maximal benefit for the city.  But the question was left unresolved of how to reconcile the need for a careful selection process for the consultant and the ongoing rush by the committee to have recomnendations for council by February.

4. It was evident throughout the meeting that Rapundalo (who is chairing the committee) is very anxious to eliminate contenders.  He brought up this point over and over, including the idea of eliminating them on the basis of their questions and having the consultant eliminate some.  Also, he mentioned that perhaps the interview process will not be so lengthy because some will be eliminated by then.  At the first meeting on December 4 and at this one, he was the person who stated unequivocally that the project must be a moneymaker for the city, because of budget problems.  He moved rapidly to exclude any possibility of the open space proposals being considered.  It is hard to escape the conclusion that he has a particular outcome in mind.

The Fog of Plans (II)

We complained earlier about “the fog of plans”, resulting from too many high-level planning initiatives in Ann Arbor.  Some of these have moved along. As reported by the Ann Arbor Chronicle, the A2D2 zoning ordinance came up for a final vote and passed on November 16 (see also the Chronicle’s story on the council caucus for a very useful chronology; link to Ann Arbor City website with ordinance revisions.)  As also detailed by the Chronicle, speakers at the caucus and public comment on November 16 entreated the council to revise and pass the accompanying design guidelines, but to no avail.  (It is estimated that revised design guidelines will require 8-12 months more work.) But Council voted on December 7 to send the Area, Height and Placement study back to the Planning Commission for consideration of possible changes to reflect public comment during the summer.

The consolidated master plan (aka “City of Ann Arbor Master Plan Land Use Element”) about which we objected strenuously in the previous post was passed without dissent on November 5. But now the effort to remake completely the entire planning and zoning context of the city continues.  According to Jayne Miller, the director of Community Services,  the Phase 2 Master Plan revision is currently scheduled to begin January 2010.  Remember, the point of a consolidated master plan was to make it easier to revise?  And to help that along, the Zoning Ordinance Reorganization project launched with several presentations in December. The ZORO outline makes the agenda chillingly clear.

The City is undertaking a multi-phase initiative to consolidate and then update its land use plans
and codes.

1. First, the four area master plans have been consolidated into a single master plan, making future revisions easier.
2. Second, the zoning ordinance and other development-related ordinances will be reviewed for technical changes to improve clarity, organization, and user-friendliness, setting the stage for future amendments.
3. Third, the master plan land use element will be reviewed for relevancy and appropriateness of future land use recommendations and planning principles.
4. Fourth, and finally, the zoning and development-related ordinances will be reviewed for substantive changes to standards and regulations to reflect and implement the revised master plan land use element.

This initiative brings up several questions.  Who “ordered” all this re-examination of our planning context?  There is a clear vision here.  Whose? And what is it?  There are some indications, as we will be speculating.  But here is my diagnosis as to the intent and motivations.  (I’ll have to justify my conclusions over many posts.)

1. The intent is to bring the master plans and zoning ordinances of the city into concurrence with the land use recommendations of the Ann Arbor Transportation Plan Update.
2. The AATPU fulfills the vision of Mayor John Hieftje’s Model for Mobility and promotes the concept of Transit-Oriented Development.
3. This forecasts a much higher city population in a much denser city.
4. It also supports the business of development.

But the purpose of planning and zoning is supposed to be that it enhances the quality of life for the city in accordance with community wishes. As we said earlier, the classic model is that planners spend months working with a citizen-based committee to update a master plan, with plenty of public input, so that it captures as best as possible the wishes of the community for how it will look in the future.  This is called the “vision”.  The planners then put their skills to work fleshing out that vision in workable form.

But we have turned this model on its head.  Instead, we have a driving vision that is being fleshed out by all the technical assistance that it needs – and the public is being instructed in it after the fact. And this constant pressure is wearing on the citizens who care about the city’s future. The vision many of us share is that of the city as a neighborhood-friendly place that offers a good quality of life to its residents and a real sense of local community.   Here is the way I stated it in a campaign flyer last year.

We live in a lovely town, with green spaces and parks, historic buildiings and attractive neighborhoods.  This is home because of the community we have created here.  That sense of community is rooted in our neighborhoods as well as in the networks of interest and affiliation we create around issues like social equity, environmental stewardship, affordable housing, and the arts.  Locally owned businesses add to our sense of place and community by offering services with a human face.

The complexity and scope of the many kinds of changes now being considered require real study, and responding to them requires a great deal of time.  It means noting possible consequences of individual items or the plan as a whole, preparing careful responses, and communicating with Planning Commission, staff, and council, as well as appearing at public meetings, public hearings, and public comment (which requires signing up).  If that last sentence sounds whiny, it is not on my behalf that I say it, but in awe and admiration for the many Ann Arbor citizens who have stepped up to this task.  For example, a large committee (with the able facilitation of Ray Detter),  recently spent many evenings going over the draft design guidelines word by word, finally presenting council with a fully marked-up draft.

I was also particularly impressed with the statements that Hugh Sonk, the president of the Sloan Plaza Condominium Association, presented to council.  He was asking that the north side of Huron be zoned D2 instead of D1. His statements combined careful technical detail (such as discussion of building heights, other buildings along the corridor, traffic considerations, etc.) with heartfelt expressions of love for the city.  I’ve attached one in its entirety but here are a couple of quotes from it that I found particularly moving. First, he noted the strong attachment that both long-term residents and many UM alumni have for the city, and says, “There is a broad community concern that the character of this town is in jeopardy, and steps must be taken soon to prevent irreversible damage to the town we love.”  Then,

At Sloan Plaza we were the pioneers of downtown living, having lived here for 24 years. We respectfully request that Council take serious consideration of the long-term negative impact of excessive building heights on the quality of life downtown, and pay close attention to the recommended density limits of the Calthorpe Report, and temper those in reaction to recent construction by the University. Calthorpe was the one participant that had no vested interest in the outcome of the study. Somewhere during the implementation of the study, some of the key points and goals were lost, and the wishes of developers have overridden the recommendations of consultants, and the will of the people.

Unfortunately, after many hours of discussion, the council passed the A2D2 zoning ordinance with the D1 designation for north Huron intact.

In the next post we’ll discuss the ZORO project.

Ann Arbor’s Media Online at PBS

A story on AnnArbor.com today features, among other bits, an online-only clip from PBS Newshour about Ann Arbor’s media.  Amusingly, the only reader interviewed is a UM sophomore, who says she doesn’t miss the Ann Arbor News much.  But Ed Vielmetti is also interviewed, as are Mary Morgan and Dave Askins of the Ann Arbor Chronicle.  (Dave is shown working at the Workantile Exchange.)  Not mentioned is Ann Arbor’s vibrant blogging culture.

AATA’S Uncertain Future

As we indicated in the previous post, there were intimations at the recent council budget retreat of major changes in the very structure of how the city delivers services and touches lives.  One of the most startling proposals was the notion of “repurposing” some millages that were previously approved by the voters for very specific services, including the Ann Arbor Transportation Authority millage, which has traditionally paid mostly for bus service within Ann Arbor.  Suddenly a lot of different people have plans for that millage, and they are not compatible.  If city officials succeed in achieving the goal of “repurposing” the millage, the future of our city bus system is in question.

AATA board member Ted Annis, who has hoped to reduce the tax bill for AATA for some time, would like to see a county-wide authority replace the current city authority and run the city bus service on a single county-wide millage while eliminating the city millage.  But others don’t share his vision.  He forgot one of the pillars of tax theory: never let a secure line of revenue get away from you.  Ann Arbor’s millage was voted in as a charter amendment on April 2, 1973.  The actual language approved by the voters was as follows:

“Shall the Charter be amended to require the levy of a tax of two and one-half mills annually for the purpose of providing funds for operating and equipping a public transportation system for the city?”

Since then, the millage has been eroded by the requirements of the Headlee Amendment to a little over 2 mills.  But because it is in the city charter, it never has to be renewed and can only be removed by a vote of the people. In contrast, most modern millage issues have a fixed time limit.  Local transportation issues (under Public Acts 55 or 196) usually have to be renewed every five years.  So the AATA millage is a little gem that few in government would surrender easily.

But though AATA was originally voted in and  incorporated as a body to provide bus service to Ann Arbor, it has been expanding its reach for some time, running buses out to other communities under Purchase of Service Agreements (POSAs).  The costs of these are partly paid for by Federal and state funds, but there is a charge to the various municipalities thus served, who are not paying the tax that Ann Arbor citizens do. As I described in a previous article written a year ago, there have been numerous discussions about AATA becoming a county-wide authority.  The AATA board, which is appointed by the mayor, took a straw vote at a May 2008 workshop to work toward becoming a regional authority.  In late 2008, the board heard from an attorney, Jeff Ammon, who has specialized in the conversion of local to regional transportation authorities.   Things went slowly until the new CEO Michael Ford was installed.  On November 18, 2009, the board voted to move toward becoming a countywide system.  On December 8, they really rolled out the carpet and the canopy and invited the community to a meeting at Washtenaw Community College with croissant sandwiches and experts.  Their attorney, Jerry Lax, and Jeff Ammon prepared some very helpful and clear materials to explain the ins and outs of becoming an “Act 196″ authority.  This is the Public Act 196 under which regional transportation authorities are organized (AATA is organized under Public Act 55).

As the illustration shows, there are three basic models: the “service contract” (which is essentially what AATA has been doing), the “donut”, in which the city authority would remain separate from the county millage and maintain its current local service using the city millage, and the “layer cake”, in which the city retains its existing millage but also joins the county entity, with various service contracts between the city and the rest of the county, but with the county millage providing a stable funding for all other transit needs for the region.  Note that all three models require the use of the Ann Arbor perpetual millage to maintain Ann Arbor bus service.

But city officials have some other ideas about the use of that millage.  Indeed, it is clear that they have been casting an envious eye at that little pot of cash for some time.  In 2008, with little fanfare, the designation on the property tax bill changed from “AATA” to “Mass transit”.  Meanwhile, the millage is now shown as part of the General Fund, though, as city administrator Roger Fraser said at the budget retreat, “it is an amount over which you (council) have no control or discretion”.  One of his “suggestions” (he declined to call it a recommendation yet) was to “reduce or repurpose the general fund support for AATA”.  He noted that the council would have to use those funds for a public transportation system, and that it could not be used for streets.   Tom Crawford, the city’s chief financial officer, said that the city was not legally required to send the funds to the AATA.

So what would the city use the funds for if not for the services offered by the AATA? Multimodal transportation was named. In later discussion, it was pointed out that after an AATA conversion to an Act 196 authority, the funds from the Ann Arbor millage could be used for the local connector study, the east-west rail, or WALLY. This would be the next step to fulfill Mayor John Hieftje’s vision, as first expressed in the 2006 “Mayor’s Model for Mobility”.  He advocated a muscular approach to many forms of transportation other than the automobile, i.e., multimodal transportation.  With the firm hand of transportation coordinator Eli Cooper guiding it, the policy was fleshed out in the Ann Arbor Transportation Plan Update, passed by council on May 5, 2009. (A copy of the large file for the plan is found here. ) The resolution for the “connector study”, for which the council appropriated $80,000 from the General Fund on June 15, 2009, states that “The Ann Arbor Connector is intended to provide a rapid-transit linkage between the proposed east-west, Ann Arbor to Detroit, and north-south, Ann Arbor to Howell, regional commuter rail systems, the Ann Arbor Transportation Authority (AATA) and University of Michigan (UM) local transit service.”  The Ann Arbor Chronicle has provided a good chronology of its history, that also explains the AATA’s payment of $320,000 to support this study.  Clearly the study is meant as the first implementation of the AATPU’s signature route plan.

As the AATPU states, “This connector would look to provide a high-speed connection between the two rail stations (the Wally on the west edge of the downtown and the Ann Arbor to Detroit relocated station along Fuller Road). The question of connecting potentially transferring passengers will need to be resolved, possibly with a bus or fixed guideway transfer connection or with the development of connecting tracks, a common station and new rail facilities. It is recommended that coordination between these two commuter rail services and their existing or potential train stations will be needed in the long term time period in order to efficiently promote commuter rail within the city of Ann Arbor.”

The first step in realizing this vision has already been taken. As explained by the Ann Arbor Chronicle, the council has already approved contracts for preliminary design of the Fuller Road Station (previously the Fuller Intermodal Transit Station, or FITS).  Those contracts with the design firm JJR are for approximately $650,000.  But according to AnnArbor.com, the total cost of the project is estimated at $40-45 million, with the city to pay 22% of that.

Here is what the city has spent directly on FITS plans for 2009 (not included are UM contributions):

Item	Date	Amount
Street Repair Millage Capital Budget	5-Nov-09	$64,564
Sewage Disposal System Operating Budget	5-Nov-09	$46,664
FY 2010 Major Street Fund Operating Budget	17-Aug-09	$54,621
FY 2010 Alternative Transportation Capital Budget	17-Aug-09	$54,621
FY 2010 Economic Development Fund Reserves	17-Aug-09	$104,742
Total to date	10-Dec-09	$325,212

Clearly this expansive vision is going to be hungry for dollars.  Cooper has been vague when questioned about funding sources.  Cost of the total plan is estimated in the AATPU as $185 million without the signature routes included. That would be divided among the city, AATA, and the state department of transportation (MDOT).  The $45-50 million for FITS is also not included.  So when city officials say “multimodal”, the dollar signs start to spin.  Access to the AATA millage would be a g0od start.  Sue McCormick, who occupies a place on the AATA board despite also being a city employee (a case of incompatibility of office that really should be challenged on legal grounds), was very alert at the December 8 AATA Planning and Development committee meeting.  When the group was discussing use of an MDOT equipment grant (probably the last for a while, since MDOT is out of money) for new buses, she asked whether the grant was limited to that – or could it be used for multimodal?  McCormick could be excused for that, since as the Public Services department head she has already seen over $160,000 taken from the infrastructure funds (roads and sewers) that she is responsible for to feed FITS.

The timetable calls for AATA to have new articles of incorporation as an Act 196 approved by mid-January of next year, and for council to adopt a resolution dissolving the old AATA “because it has no more assets and no longer does business”.  Could that be the signal for transfer of the city’s millage to multimodal projects?  (Crawford is probably correct that this would be legal, since it would still be for a “public transportation system”.)  And how will our bus service be funded then?

What has not been discussed much lately is when a millage vote across the county will be held. A preliminary survey indicated a lukewarm response to the idea across the county.  Ironically, since AATA has been subsidizing the Ypsilanti area, the eastern part of the county had a more negative reaction than did the Ann Arbor area.

The potential consequences are enormous. AATA has traditionally been “the bus service”.  It is also a very important means of transportation to the disabled and elderly, via what are called in the trade “demand services”.  In Ann Arbor that is A-Ride, a “shared-ride, door-to-door transportation service for individuals who are prevented from using AATA fixed-route bus service due to a disability.”  AATA buses are also low-floor vehicles with accommodations for people in wheelchairs or who use walkers, etc.  As the only public transportation in town, AATA is also essential for mobility of  low-income people, people without drivers’ licenses, or anyone else for whom driving is not an option, even for a moment.  In the recent years all of us who live or work in Ann Arbor have been encouraged to “take the bus” instead of driving, especially to downtown (we have an agency devoted to this, getDowntown).  By doing so we hope to save energy, reduce congestion, and avoid taking up parking places.  But with the recent emphasis on commuters coming in to Ann Arbor, the intracity routes have been under pressure.  If we are dependent only on a county millage, this trend will accelerate.  And if the millage vote fails, will there still be a city bus system at all?

UPDATE: The Ann Arbor Chronicle has now published a thorough account of the special meeting on December 8.

SECOND UPDATE: AnnArbor.com has now published the AATA staff response to the report by Ted Annis.  They don’t agree with his calculations, or presumably, his purpose.

NOTE: Continuing reporting and opinion on this story and all transportation issues may now be found by referring to the Transportation Page.

The Tipping Point

In the summer of 2008, I mailed a postcard as part of my primary campaign for city council.  It was titled “Ann Arbor at the Tipping Point”.  (It is now out of date, but if you are curious, it can be seen here.)  It exemplified my general campaign message that we were overspending on big buildings and “special” projects (often vanity items for the mayor) while making it less and less affordable to live in Ann Arbor and receive the services that we expect as residents and taxpayers.  These trends were clear to me but in that warm sunny summer I had trouble making the points resonate.  I found that as I went door-to-door, eyes would glaze over when I started to talk budgets and services.  It was much nicer to hear my opponent’s happy talk.

Some have said that “no one could have predicted what was coming”.  Pardon me, but that is simply not true.  This article from early 2007 states that Michigan was then in a “one-state recession” after “six consecutive years” of sliding employment.  And we knew in January 2007 that Pfizer was closing and we would be losing those tax revenues. Property values in the region have been declining for some time, though Ann Arbor has been somewhat favored. (The Assessor’s data show a decrease in the rate of increase since 2003.) At the Washtenaw County Board of Commissioners, I heard as early as 2003 that the state was cutting state shared revenues and we began laying people off because of it.  Cities are under a somewhat more favorable formula, but the loss of those revenues have been a problem for some time now. (The mayor now says that they may go away entirely. ) I got quite tired in that summer of 2008 of going around to interviews and campaign stops and having to talk about the impending economic doom.  But I saw the storm coming, as anyone should should have.

Yes, the city hall is history.  But we are continuing to make imprudent decisions, like taking on more debt for a huge underground parking structure and diverting money from basic operations through the Percent for Art program.

Well, folks, the storm has rolled in.  At the council’s annual budget retreat, (December 5, 2009) city administrator Roger Fraser laid out the grim news and the grimmer suggestions about the city’s financial state and possible fixes.  (A nice overview is on AnnArbor.com.)  Councilmember Stephen Rapundalo summarized it nicely at the beginning and near the end when he spoke of having to “amputate part of this institution”.  (The second mention was to say we had to figure out which fingers, toes, or bigger parts would go.)  There is a list of fairly stringent short-term cuts and then some really scary longer-term changes.  But left undiscussed was the role of taking down the city’s fund balance by millions of dollars to purchase a really big new addition to city hall.  (Irony: much of the justification was to give the police better quarters, and now police have been laid off and are facing more cuts.)

Of course, I had to say “I told you so” to city chief finance officer Tom Crawford during a break.  But he advanced the same argument that was brought up several times during the day: it doesn’t matter how much you have in reserve funds, that is, in the bank.  It is operational cash flow that matters.  As was often said, “you can plug the hole today but it will still be there tomorrow”.  So in Crawford’s and Fraser’s view, the loss of millions of dollars from the city fund balance, used for such things as the city hall and the down payment on the Fuller Road Station (its former name, abbreviated FITS, worked better for me), is irrelevant; you need to get the ordinary cost of doing business down to the same level as the revenue coming in.  So – if tax collection is down, let’s get that saw out and start amputating services.

Much of the problem, as I see it, is that we are operating the city like a business.  Many seem to think that this is the right model, but I think that it ignores the very reason that we have local government.  Business is all about the bottom line.  You build each department like a separate company subsidiary and make it pay its way.  If it is not profitable, axe it.  So some services that are loss leaders have to go (be shut down) and others get shifted into a branch of the company that has a better revenue stream.  Or – some are sold off at a loss to someone else that wants to operate it. (In government, we call this “privatizing”.) Above all, you want to be able to skim the cream for your own use.

But I think we should be running our local government like a household.  In a household, you save money during the good times so that you can tide yourself over during the bad times.  If one of the children is at an age when he costs a lot (maybe he is outgrowing his clothes too fast), you don’t jettison him, but cut the rest of the household expenses (hamburger instead of steak) to support him.  You certainly don’t buy a Mercedes, then complain about how much that kid costs.

Perhaps a better analogy is to consider our community as an ecosystem.  We are interdependent on each other in ways that may not be easily defined or predicted.  Why does a particular local business fail? What impact does that have on the lives of those who used the products and services it produced?  And on the businesses that its employees patronized?  And on the other businesses that were suppliers to it?  If residents find that the cost of services are higher than they can afford, did they cut purchases at that business?  Do they give less to a local charity on whom others are dependent?  And so on.  Our sense of community, the physical and mental health of individuals, and ultimately our prosperity are to some extent dependent on maintaining this ecosystem.

We should be deciding what kind of community we want, what services we think are important to our sense of who we are and what we expect from our government.  The priorities in the way we spend money define us.  Government should be seeking to fill the needs, both physical and, if you like, spiritual, of all who comprise the community, not just those who can pay.  This last is where the business model really breaks down since it wishes to make each activity pay for itself, and that often means fees.  Whereas taxes are usually based on some measure of ability to pay (whether income, property value, or whatever), fees are collected from all regardless of financial status.  In other words, they are regressive and make life less affordable for those of limited incomes who are living in our community. One of the aspects of community in Ann Arbor that appeals to me is the diversity of its people and the possibilities that this creates in our networks of affiliation and interest.  I don’t like to see policies that seem to imply that people with more limited income are unwelcome.

One of the good things that were said at the budget retreat was when Fraser openly challenged the council to decide how they want the city to look in terms of the services it offers.  He stated that he was expecting that council had little or no interest in a “revenue option”.  But some members said yes, that should be on the table.  (Two options discussed were an income tax and a Headlee override, both of which would require a vote of the people.)  I agree that some hard discussion is needed of the kind of community we want and what we expect from our city – and from ourselves to maintain it.

A disturbing theme of the retreat was that many suggestions offered by administration were not merely budget cuts but radical restructuring.  In other words, not just amputation but detaching large body parts and stitching up the body in a different way.  I’ll go into those (which include solid waste, transportation, and parks) in detail in a later post.  But we have to be sure that we do not produce a Frankenstein’s monster.  I hope that the council will not move precipitately.

UPDATE: The Ann Arbor Chronicle now has a very thorough report on the retreat.

SECOND UPDATE:   CM Sabra Briere sent out an email with her summary and analysis of the budget retreat.  I think it is quite good.

Library Lot Advisory Committee Update

The organizational meeting of the Library Lot advisory committee (more formally the Advisory Committee for RFP #743) met today.  (Details and links here.)  It was well observed and the several citizens and journalists present were allowed to sit in the back of the room.  In addition to the formal committee, Susan Pollay and CM Sandi Smith were present.

Most of what happened was to establish some guidelines for operation of the committee.  CM Stephen Rapundalo more or less volunteered and was elected chair of the committee by consensus.  The staff “project leader,” Matt Kulhanek, passed out summaries of technical review committee comments that noted whether each proposal had filled each requirement of the RFP.

The schedule for future meetings is as follows:

December 18th:  Next committee meeting (9 a.m.-12 noon, place not specified)

January 8: Another committee meeting (9 a.m. – 11 a.m.)

January 18 (week of): Interviews of proposers.  It will not be on Monday (Martin Luther King day).  It was suggested that the interviews should be held at the Library.  They will include a 30 minute presentation by the proposers.

The most interesting discussion of the morning was the delicate stepping around the question of how to separate out some proposals early on.  Jayne Miller suggested that “you might want to leave some on the table”.  Kulhanek mentioned that not all proposals, specifically the open space proposals, filled the “return to the city” requirement.  (Cost proposals are now available on the city RFP website.)  Rapundalo jumped in to say that that element will be critical, especially considering the subject matter of the Council retreat tomorrow.  He began to say that “I can’t imagine anyone on council…” but was interrupted by another member of the committee.

As we all know, the city is in a desperate financial condition.  The challenge for the next couple of months is to determine whether any of the development proposals would actually provide a immediate financial return or whether they would merely absorb city resources (staff, land, money) for a hypothetical future return.  And then – whether that should be the only criterion in determining how this precious piece of public land should be used.