Arbor Update

Ann Arbor Area Community News

Latest Greden Letter

2. May 2005 • Scott Trudeau
Email this article

April 2005

Dear 3rd Ward Resident-

As the City Council prepares the City budget for fiscal year 2005-2006 (which begins July 1, 2006), I have published a series of messages regarding the budget process. In prior budget messages, I outlined the background regarding the City budget, the steps the Council has taken in recent years to cut costs, and the reasons why we continue to face a structural budget deficit. In this e-mail, I will outline some specific proposals for the 2005-2006 budget.

Revenues

Property taxes: As I outlined in a prior budget message, only about one-third of our property taxes are paid to the City. The majority of our property taxes are paid to other governments, including the State of Michigan, Washtenaw County, Ann Arbor Public Schools, Washtenaw Intermediate School District, and Ann Arbor District Library. Each year, the taxable value of property in Ann Arbor increases due to inflation and new development. The increase in taxable value, however, must be partially offset by a reduction in the City’s property tax millage rate. This process is required by the Headlee amendment to the State Constitution, and is known as a “Headlee rollback.” Because of the Headlee rollback, the City’s total property tax millage rate for 2005-2006 will likely be less than the current millage rate. In other words, Ann Arbor property taxpayers will receive a cut in their property tax rate.

Special millage to pay for removal of ash trees:

Unfortunately, just as the City’s property tax rate falls, the City faces a variety of major capital expenses, including the emerald ash borer problem. As you may know, the emerald ash borer is an insect that has infested ash trees throughout southern Michigan. Infested ash trees become a major safety hazard as their branches decay and fall on people and property. The City must pay to remove thousands of dead ash trees on City-owned land. It will likely cost the City several million dollars to remove these trees. To pay for this removal, City administrators propose asking voters to approve a short-term (3-7 years) special property tax millage. The amount of the millage has not been determined, but will likely be between 0.2 and 0.4 mills. For example, a 0.25 special millage, if approved by voters, would cost $37.50/year for the owner of a home worth $300,000. This special property tax millage – like all property taxes – would be deductible on your federal income tax return.

DDA parking agreement:

The Downtown Development Authority (DDA) currently pays the City $109,000 in annual rent for City-owned parking spaces in parking garages, surface parking lots, and street meters. The DDA recently reviewed its parking system finances and determined that the $109,000 rent was too low. In February, I worked with Councilman Chris Easthope (D-5th Ward) to negotiate a new rental agreement with the DDA. Under the new agreement, the rent paid by the DDA to the City will increase from $109,000/year to $1,000,000/year. Furthermore, the DDA recognized that the City faces a structural budget deficit, and thus they voted unanimously to allow the City to take advances on these rent payments over the next five years. This infusion of cash will allow the City to weather the current financial storm while we continue the re-organization of City government and work with the labor unions that represent 85% of the City’s employees to achieve long-term cost savings.

Administrative reductions

City managers continued implementing the reorganization of City government. This process will result in significant financial savings that will not affect programs enjoyed by City residents. For example:

  • The City will move the budget for our Project Management Unit and Information Technology Unit into special service funds. The Project Management Unit employs highly specialized civil engineers and technicians who design new roads and water projects, and perform other technical functions for the City. The IT Unit provides important computer support for all City services. The General Fund currently subsidizes both units with over $800,000. By establishing special service funds for Project Management and IT, they will become financially self-sufficient and the General Fund will save over $800,000/year.
  • The City employs a full-time Environmental Coordinator and Energy Coordinator. They provide important services regarding the Pall Gellman clean-up, the City’s parks millages, and other local environmental projects. Much of their work is associated with special City funds, including dedicated parks millages and the water and sewer funds. Their positions will be transferred from the City Administrator’s office to the City’s Public Services Area, and much of their work will be funded by dedicated funds. This change will save the General Fund over $80,000/year.
  • A variety of vacant positions will not be filled and other positions were transferred to other units, for a net savings of over $300,000/year. For example, a clerical position was transferred from the City Administrator’s office to the DDA because the DDA was short-staffed. A vacant supervisor position in the Public Services Area will remain vacant. The positions of Administrative Services Director and Finance Director were eliminated, and their duties were transferred to other employees. Program reductions City staff identified over $1,000,000 in budget cuts that will not directly impact residents. Unfortunately, that is not enough to cover the City’s projected budget deficit. Accordingly, the Administrator’s Recommended Budget includes several cuts that will directly affect Ann Arbor residents.

For example:

  • The City’s Historic Preservation Coordinator recently resigned, and the Administrator’s Proposed Budget would eliminate that position. An Assistant City Planner will now perform all work related to historic preservation. Some people in the community would prefer that the City employ a dedicated preservation coordinator. If the City can find funding for this position in the near future, I agree that the City should fund a dedicated preservation coordinator.
  • The City will likely eliminate funding for several projects, including Project Grow.
  • The Administrator’s recommended budget includes a $52,000 reduction in funding for local human service agencies that provide services to low income residents. I will seek to amend the budget to restore this funding.
  • Annual leaf pick-up will continue, but will likely be reduced to one pick-up per year instead of two.

Cuts that were avoided

Many of the budget cuts that were proposed earlier in the year will not be implemented, including:

  • Staff had proposed closing one or more swimming pools. I am confident that all City-owned pools will remain open. The City’s swimming pools play an important role in the community by providing recreational, social, and healthy activities for seniors, families, and children.
  • Staff had proposed closing a variety of park centers for two months each year, including the Senior Center, the Leslie Science Center, and Cobblestone Farm. These facilities will likely remain open year-round.
  • Public services managers had proposed shutting off hundreds of street lights and/or charging residents a special assessment in neighborhoods with an excessive number of street lights. This proposal will not be implemented.
  • The Police & Fire Service Units faced layoffs of several police officers and firefighters. Fortunately, these cuts will be avoided.

Summary

The City Council is scheduled to vote on the 2005-2006 budget on May 16, 2005. I am pleased that we avoided more draconian cuts to the Budget. Nonetheless, the City faces a structural budget deficit that will require further cuts in future years.

Please e-mail me at Lgreden AT ci.ann-arbor.mi.us if you have comments or questions about the proposed budget. – Leigh Greden, Ann Arbor City Council (3rd Ward)



  1. From the Town Hall Meeting on the budget that I (and Juliew) attended, it seems like the historic preservation coordinator issue is the most outcry-generating issue here. There were more people commenting on / questioning that part of the proposed budget than everything else combined. The sentiment was, “Historic preservation is what creates Ann Arbor’s atmosphere,” and that, without it, people wouldn’t want to live here. I, personally, question the degree to which that is true, though it’s obviously true for at least a small and vocal group of residents. It seems to be placed, in this letter, in a “hopefully this can be restored sometime soon” category, which I think is fair.

    But what is “an excessive number of streetlights”?
       —Murph    May. 3 '05 - 12:04PM    #
  2. “But what is ‘an excessive number of streetlights’?”

    That would be an example of poorly chosen words. ;-)

    Either that, or poorly evaluated facts. If there are truly an excessive number of lights in any area, some should be removed. Charging residents for waste would be about as bad a policy as I can imagine. Leaving the extra lights on and maintaining them would be the next worst.

    I’m not concerned that historic preservation will cease (or historic structures cease to exist), so a “restored sometime soon” attitude about the coordinator position seems reasonable.

    I’m more concerned that Project Grow may suffer a worse fate if the program doesn’t have supporters speaking on its behalf. City-dwellers need to know about soil and food production issues. It’s unfortunate that PG hasn’t made itself a more prominent player in the community beyond its current community gardens program. The success that Food Gatherers has seen (earned, really) could also be PG’s if it worked for it (possibly in cooperation with FG.)
       —Steve Bean    May. 3 '05 - 12:56PM    #
  3. The two most “outcry-generating” issues at City Council last night were indeed the historic preservation coordinator (which will certainly be cut and is unlikely to be reinstated under Hieftje) and the surprising dark horse of eliminating funding for the Mack pool (which will not be cut). The Dawn Ducks, a group of senior citizens who swim in the morning at Mack, turned out in full force with touching stories, humor, and cool t-shirts. They made the preservationists look like slackers in the political arena.

    In an unexpected and surprisingly contentious agenda item, Council approved using the 4th Ward Mary Street Polling Place as an injured bird sanctuary on a trial basis (provided it is cleaned up before the next election). Higgins and Carlberg were glaring at each other across the room while the Mayor pleaded for the poor defenseless birdies. It was slightly surreal.

    Hmmm, the DDA suddenly realized they were paying $891,000 too little in rent/year? Sounds a bit fishy to me …
       —Juliew    May. 3 '05 - 01:03PM    #
  4. Has the DDA paid the city for the rent shortage for past years? Greden didn’t mention that.
       —Steve Bean    May. 3 '05 - 01:10PM    #
  5. Steve, I think Project Grow is mostly funded in other ways so this would not mean the loss of the project (although any loss of revenue would be hard). Speaking of that though, my brother and his wife have a community garden at the airport (they applied late) and all water has to be carried in because the Department of Homeland Security has turned off the water to the gardens. Why? Because for some reason (probably because one of the main wells for city water is out there), they deem the taps a danger to the water supply. Sigh.
       —Juliew    May. 3 '05 - 01:11PM    #
  6. Maybe I’ll have to catch a replay to see the bird shelter bit. That sounds like quality entertainment. (We’re not going to have cable in our new place, and I’m feeling a surprising pang of regret for the loss of my CTN fix. I’m a tragic nerd.)

    As far as the rent shortage goes, I think that’s politicalese for “What mechanisms are legally available through which the DDA can bail out the city?” Since it’s a renegotiation of the contract, rather than a mistake made with regards to the previous terms, I don’t think there’s any “back rent” to worry about. I’ll state the obvious criticism now, just to pre-empt anybody else’s stating it: “The DDA is trying to buy the City’s favor so that they can get the 3-site plan passed.” Yeah, sure, fine.

    Now would be a good time to note for the AU record that, starting yesterday, I am officially employed by the City of Ann Arbor as the DDA’s intern. You can go nuts creating conspiracy theories out of that, if you like.
       —Murph    May. 3 '05 - 04:02PM    #
  7. Oh, and I forgot (how could I!) that the Council set a date of June 13 for a public hearing on the DDA 3-site plan and the Greenway plans.

    Yes, the DDA money is a “bailout” for the City. As one of the public speakers pointed out last night, in 2002 the city “gave” the DDA the $1.9 million in parking meter revenue to stabilize the DDA funds and the DDA is now “giving $2 million back to the city.” Why they don’t just make the DDA an official department of the city is beyond me. The wink, wink, nod, nod stuff gets old and suspicious after a while (I’m sure there are advantages to this arrangement, but I don’t know what they are). Murph, maybe you can give us a good explanation once you have been there for a while.
       —Juliew    May. 3 '05 - 04:23PM    #
  8. The DDA is supposed to be a quasi-governmental, quasi-independent body under state law. This allows it to do things that the City wouldn’t or couldn’t otherwise do. These kinds of sharing of funds is done by DDAs all over the state. It never looks good from the outside but I’m sure it’s all legit by the law.
       —John Q    May. 3 '05 - 05:37PM    #
  9. When the DDA renewal came up a while ago, they had 10 years left on the contract. If they would of waited till the end to renew they would of lost all the TIF funding. Part of the early renewal was a percentage of DDA money was to go to affordable housing in the downtown. That came from Kim Grooms. She was very smart to push for that because in the long run it will help get affordable housing built in the downtown. The DDA did the right thing by helping the city out with the budget shortage. It’s not much, but it will help.

    I know when my income goes down, I have to cut back on spending. We turn the lights out when not in use, don’t drive as much, but take the bikes to run around on etc. All of us have to do this from time to time. The city is no different then any of us. If they don’t have the money they can’t operate in a deficit. It is against the law.

    It’s really a good thing that this blog is going strong, as it’s been good food for thought. So, my question to you all is, What can we all do to help our community while the city has these cuts in services, etc? I know what the DDA has done, how about all of you?

    Ps. Thanks Scott for posting this letter.
       —Bob Dascola    May. 3 '05 - 10:28PM    #
  10. If the city is anything like Arrowwood, they do have too many streetlights. Or rather, they have too many of the wrong type of streetlights. We just started a program to replace all of our outdoor lights because they were ones that had been purchased in the ‘70s and ‘80s, and they were innefficient, too bright and sent too much light upward.
    I see a lot of street lights downtown, especially the ones with the globe tops, and have to imagine that they could be more efficiently used by reflecting that upwards light back down. That, combined with outdated lamp technology, could be why the city would think about taking some out (which would cost money in the short term, but save money in the long term).
       —js    May. 4 '05 - 09:20AM    #
  11. I have a question that may/not be relevant. Why is the city picking up trash? In most places I have lived prior to Ann Arbor, there was enough demand so that private refuse companies could handle it (throughout the metro area). Given that the city is trying to make cuts with the new machine-friendly bins, why haven’t they considered privatizing the whole operation? I’m normally anti-privatization, but private garbage collection has been the standard in my experience. This is irrespective of recycling, which I think IS the city’s responsibility, because—despite the clear environmental benefits—there doesn’t seem to be enough demand to sustain private recycling pickup and processing.

    Any informed thoughts on this are welcome.
       —Dale    May. 4 '05 - 09:51AM    #
  12. I’m sure they have considered it, Dale. I think the more accurate question might be along the lines of, “Why didn’t they choose that route?” Bob? Leah?
       —Murph    May. 4 '05 - 11:20AM    #
  13. Communities that have stuck with City pick-up have done so to avoid have trash trucks on the same street every day of the week. Most communities don’t privatize with one firm – they leave it up to homeowners and businesses to negotiate their own deals and that’s why you end up with multiple companies doing pick-up in the same area.
       —John Q.    May. 4 '05 - 11:38AM    #
  14. In Ann Arbor TWP, one company (currently Republic Waste Management) services the township. But, residents pay $42/quarter directly to Republic. If you don’t pay them, you are on your own, I guess.
       —tom    May. 4 '05 - 11:42AM    #
  15. Kalamazoo (and Portage), where I’m from, of a similar size to this area, have 2 major refuse companies. It’s not like there are a billion different trucks on the street every week. 2 trucks on a street for a combined 10 minutes a week doesn’t seem too big a deal to me.

    To smooth the transition, it seems like the city could offer a 3-year franchise to 1 or 2 companies to make sure that everyone was serviced in the transition, then after that open it up to competition or have a process for introducing new companies.
       —Dale    May. 4 '05 - 11:50AM    #
  16. “Kalamazoo (and Portage), where I’m from, of a similar size to this area, have 2 major refuse companies.”

    Based on what’s posted on those cities web sites, that’s enforced by the City, probably through a franchise agreement. So that’s not real competition as you see it in most SE Michigan communities. And yes, the trucks do go down the same street multiple times a week. I can’t imagine that would go over well in eco-minded A2.
       —John Q    May. 4 '05 - 12:18PM    #
  17. Endorsed by the Mackinac Center too!

    http://www.mackinac.org/article.asp?ID=3155
       —John Q    May. 4 '05 - 12:22PM    #
  18. You’re right. No one could ever think up a franchise agreement like the one I just suggested and other cities have implemented.

    I also agree we wouldn’t want 2 trucks on a street in a week in eco-friendly Ann Arbor; the 800 cars that run by my house on Madison each day would have have a hell of a time dodging them for those 10 minutes a week.
       —Dale    May. 4 '05 - 12:22PM    #
  19. Lansing, Michigan used to be the largest city in the nation with no municipal garbage collection.

    The result? Trash was strewn everywhere, especially in poor neighborhoods, and ubiquitous backyard burning barrels created a stench and worsened air quality.

    I’m not opposed to having private trucks pick up trash on behalf of the city, but crowded urban communities ought not make garbage collection optional.
       —Larry Kestenbaum    May. 4 '05 - 01:51PM    #
  20. Who was suggesting that, Larry?
       —Dale    May. 4 '05 - 02:05PM    #
  21. Dale, I think Larry’s talking in the realm of “unintended consequences”, and not official policy. This is also what I’m worried about – cutting people’s taxes by the amount that garbage collection costs does not in any way indicate that they’ll all use the money to buy private garbage pickup. Some of them will prefer to load it into their car, take it out into the countryside somewhere, and dump it in a field. (Assuming they’re conscientious enough to not just dump it halfway down the street.)

    And I don’t think you can say (or, at least, I don’t want you to say), “Every household must provide proof of a trash hauling contract with some private company.” Pragmatically, what if I just want to haul my (very slowly accumulating) trash to the dump myself every 4-6 weeks, rather than paying somebody to pick it up every week?
       —Murph    May. 6 '05 - 10:05AM    #
  22. I guess I couldn’t say what the mechanism would be, though perhaps following other cities’ leads (whatever they do) would be a start.

    How about (not quite what you were hoping) you get the reduction at tax time if you show the private contract.

    How does the city compel persons to put their trash out now? If someone wants to hang on to all their too-big-for-the-bin trash for a while that’s fine; if it becomes a nuisance, there are mechanisms to deal with that, no?
       —Dale    May. 6 '05 - 10:42AM    #
  23. When I lived in Walled Lake (and everyone who bitches about Ann Arbor over at aaio ought to live in Walled Lake for a while), the city briefly experimented with requiring residents to buy tags that had to be put on your garbage bags or the city would not pick up the bags. The cost was $1.25/tag, I think. The intent was to solve some budget problems and force people to pay in proportion to what they discarded.

    The program did not work very well. A lot of people “outsourced” their garbage, taking it to relatives in other cities, dumping it in business’s dumpsters, or just dumping it in some field. The city abandoned the program after a year.
       —tom    May. 6 '05 - 10:53AM    #
  24. Inspecting everybody’s trash hauling contract to certify compliance would also have a very substantial cost.

    When garbage can be left on the curb once a week to be hauled away for free, it isn’t likely to accumulate in bushes and gutters and alleyways and back yards. To the extent that it does, it’s an isolated, manageable problem, rather than a citywide crisis of odors and rats and disease vectors.

    Good sanitation has done more for human health and longevity than medicine ever could. Collecting garbage may be seen as a consumer service, but at base it’s a public health measure.
       —Larry Kestenbaum    May. 6 '05 - 11:38AM    #
  25. Again, I don’t think anyone is arguing that regular trash disposal is not important.

    However, since it has been successfully taken over by private enterprise in several similarly-sized cities in the state and since the city of Ann Arbor is dealing with ways to cut their budget, I think it is a legitimate initiative to discuss.

    I like Kalamazoo, but I wouldn’t argue for Kalamazoo exceptionalism in this regard.

    Also (and I will defer to the civil servant on this question), why couldn’t the city require a standard contract for their one, two, or three trash franchisees so that it wouldn’t have a substantial cost to examine the contract?
       —Dale    May. 6 '05 - 11:59AM    #
  26. IIRC, the city put up the contract for bid and the city’s own solid waste department (as it was then called) won the bid (as it had in the past, I believe. I may be confusing this with the recycling collection contract, won by RAA.)

    We’ve considered the “pay-as-you-throw” approach here, but the results that Tom describes were one of the reasons to abandon the idea. I’ve argued in favor of it, and think it might be successful if we implemented a policy that doesn’t involve residents having to actively buy special bags or tags (which serve as a constant, irritating reminder even to those who reduce their waste.)

    Oddly, the effort many people are willing to expend to avoid spending an extra dollar (for something mandatory, at least) is greater than that which they seem willing to expend to save an extra dollar. (They won’t recycle or compost but they’ll haul their stinky trash to their brother’s house outside of town?!)
       —Steve Bean    May. 6 '05 - 02:35PM    #
  27. OK, I just read through the first couple pages of the city’s Solid Waste 5-year Plan (I don’t know if that makes me lame or awesome).

    http://www.ci.ann-arbor.mi.us/PublicServices/FieldOperations/SolidWaste/Plan%20Final%202-1-02.doc.pdf

    It says they opened up the wide range of services for bid in 96, but doesn’t really follow up (though of course AA won). It does look like they’re cognizant of staying competitive with private enterprise. And they do have a fairly broad strategy for reducing solid waste and increasing recycling. So trash pickup is off the chopping block in my mind. Back to the drawing board.

    The plan also recounts that “pay as you throw” wasn’t looked upon favorably, but the new size-optional bins seem like a good way to address it.
       —Dale    May. 6 '05 - 04:00PM    #