FY 2014 Budget: Getting It in a Box

What if the city of Ann Arbor had a daily newspaper with a section dedicated to public safety? And what if city administrator Steve Powers were editor of the public safety section of the local paper? What would he want to read about in that section, if he were just a resident of the city, not its top official?

That hypothetical was part of an April 2 conversation between Powers, chief financial officer Tom Crawford, and Chronicle editor Dave Askins. The focus of the conversation was to confirm and clarify some of the ideas that have been expressed at the city council’s budget retreat and work sessions over the past few months.

Announced by Powers and Crawford at the most recent council work session, on March 25, is the fact that the budget proposal is now essentially “inside the box” – meaning that it falls within the parameters imposed on Crawford by the city council’s adopted fiscal discipline priority. [.pdf of general fund budget summary as of March 25]

The tentative summary of the general fund budget calls for recurring general fund expenditures in FY 2014 of roughly $80.8 million, with $83.6 million in expenditures the following year.

Until March 25, the draft two-year plan had called for expenditures that would have left the city’s general fund unrestricted balance at $13.1 million (16.1% of operating expenses) and $9.7 million (11.5%) for FY 2014 and FY 2015, respectively. In the second year of that plan, the 11.5% left the city well short of the 15-20% currently recommended by Crawford, even though it’s within the 8-12% mandated by city policy.

But on March 25, the revised budget proposal called for unrestricted fund balances of $13.8 million (17%) and $12.1 million (14.4%) for the respective years.

Also up to March 25, the budget proposal had called for a two-year deficit of $252,000 for a specific subset of line items – which included recurring revenues, recurring expenses, recurring new requests and one-time requests. That’s a number that Crawford wants to balance for the two-year plan, even if it doesn’t balance in any one year. On March 25, the new figure was positive at $699,000 – or almost $1 million better than the original proposal.

The conversation between Powers, Crawford and Askins is reported below in more detail.

Pulling out some highlights, the discussion confirmed that this year’s budget won’t include a significant re-thinking of service delivery. Greater efficiencies and improved service could result from taking advantage of opportunities as they arise, but the recent departure of IT director Dan Rainey is not seen as an immediate opportunity for that kind of efficiency  – say, through a further merging of the Washtenaw County and city IT operations. Rainey’s position will be filled. With respect to IT in general, the telecommunications component of the staff’s draft economic development work plan – referred to as “fiber optic to the premises” – is still so conceptual in nature that the question of funding hasn’t been explored in detail.

Communication to the public from the city – in the form of reliable, consistent information about police and fire incidents – is a key part of the council priority that Ann Arbor feel (and be) safe. Related to that priority, the city administrator appears receptive to the idea of a data feed produced by the city containing all the police and fire calls. He indicated that a survey of citizens on attitudes and experience with public safety, as well as a range of other topics, is likely to be included in the FY 2014 budget.

With regard to a tentative proposal to remove funding for re-use of the city-owned 415 W. Washington site, it appears that the change was purely a function of a desire to get the budget “into the box.”

Priority One: Budget Discipline

Askins: I just wanted to start with the very first council priority [budget discipline] and the work plan associated with that – that’s the one that I would characterize as sort of “magnificently boring.” [.pdf of 2014 draft priority area work plans] So it’s basically keep doing what we’ve always done with respect to identifying efficiencies as they come up: We’re not looking to radically rethink the way we’re delivering services this time around. That might be for an off year in the future. But essentially we’re going to continue to exercise our usual good sense with respect to being good stewards of the taxpayer dollars?

Powers: Yes. And continue to review and work on opportunities where services can be delivered differently with the outcomes being: better service, less cost, or both. Opportunities for cooperation with other local governments, for example. The point that was made at the work session is that we don’t have any [additional efficiencies] currently on the shelf, that the staff is actively pursuing. And that was the reason for us calling that out – to make sure that the council understood that. If there were a different direction provided to staff [by the council], we could certainly be more aggressive in pursuing those opportunities.

I don’t know if we would be successful, because as I think Tom [Crawford] articulated very well, those opportunities and those initiatives take time, and for them to be lasting, for them to be sustainable, they really need to make sense for all parties – and not be a forced arrangement that may bring some temporary savings, some temporary benefits, but then fall apart because it really wasn’t built on a solid foundation. Dispatch, for example, I think will last – because it made sense, or if it’s sharing a service, then that lends itself to merge a multi-jurisdictional type of delivery. [Police dispatching for the Ann Arbor police department is now outsourced to the Washtenaw County sheriff's office.]

Askins: But my understanding of the conversation at work sessions is that this year the path to identifying those greater efficiencies is not going to come from the arbitrary imposition of some reduction targets, just to see what the various departments can come up with.

Powers: Correct.

Askins: I think [Ward 2 councilmember] Jane Lumm expressed some frustration about why aren’t we doing that. Why aren’t we identifying some reduction target to hit – because we should always be reducing by some amount to see what the departments come up with in response to that? So it’s my understanding that the push for greater efficiencies and improvements in services will not come from an across-the-board “let’s reduce” but rather from being judicious, and in taking advantage of opportunities when they come up. So, we didn’t anticipate that the set of events would necessarily unfold, but now that they have, we have an opportunity to do something.

Powers: Correct.

IT Operations

Askins: My actual specific question in connection with this issue relates to IT director Dan Rainey’s departure: Does that represent an opportunity to capitalize on the already existing collaboration that the city has with Washtenaw County, with respect to IT?

The city and county share data servers, and there’s some sharing of staff already. There are specific initiatives, like GIS mapping, that happens in collaboration with the county and the city – with fantastic results, from my vantage point. … I don’t think anybody was sitting around saying, “If Dan would only leave, then we could implement some further thing.” But given that he has left the city, does that represent an opportunity to say, Okay, we didn’t necessarily plan for that to happen or even hope for that to happen, but now that it has happened, let’s look at maybe further consolidating IT operations with the city and Washtenaw County? [Crawford has assumed the role of interim director of IT. When former city administrator Roger Fraser left the city, Crawford served as interim of that position, too, until Powers was hired.]

Powers: I am looking at the interim director!

Crawford: At this time … our organization is sizable enough, with unique enough needs, that we are presently planning to seek to fill the position – with the expectation that we continue these productive and mutually beneficial efforts that have been started [with the county].

Askins: Do you have any idea at this point whether that would be an internal hire, or an external hire, or what the timeline would be?

Crawford: I hope to have the position [posted] by the end of the month. It would be posted internally and externally.

Askins: It’s my sense that you already have plenty to do.

Crawford: Yeah, I am not looking to hold onto this long! Fortunately, we have a talented group that can sustain it for the interim period.

Fiber to the Premises

Askins: In connection with IT, and it might be that this is only thematically linked and has no actual practical connection here to real life, but IT shows up in the work plans – in my mind at least – in the form of the economic development piece. Residential fiber is on the list. [It's actually characterized on the list as "fiber to the premises."] In my recollection of the fiber initiative, when Google was offering their program and the city of Ann Arbor applied … former congressman Wes Vivian came and addressed the city council and he said, Listen, if Google doesn’t do this for us, we have got to figure out a way to do this for ourselves. It’s that important.

So what’s your sense of that work item? Are you getting any clear direction from the city council on that? Left to your own devices without any direction from the council, is that something were you would say, Yes, that’s something that really is important that we should pursue, and it’s just that we have to get a way to pay for it?

Powers: That is very important, and I think it’s part of place-making, part of having an environment that’s conducive to businesses and residents choosing to locate in Ann Arbor and stay in Ann Arbor. It’s also an example of the strategic cooperation that I think your earlier question was referring to in the first work area that you described as “boring.” But certainly that partnership with others is a key to having it feasible for us – because I don’t see it as something we could do on our own. It has to be in partnership with others. Our next step at a staff level will be to develop that action item into a more specific recommendation or proposal for the council to consider – and we are not at that point yet. Is there anything you want to add to that, Tom?

Crawford: “Fiber to the premises” is probably a better description than “fiber to the home.” … I think that’s what you’re seeing occurring in different cities. That means it doesn’t pick up just residences, but also businesses. Google is going into the home with their stuff. What you’re seeing other people do is going to the curb – just so you are aware of the distinction. It means different things to the business case and it means different things to the end user and potentially to the community, depending on whether they care about houses versus businesses.

Askins: So in terms of a possible funding sources, at least for the downtown area I would think of the Ann Arbor Downtown Development Authority and the Local Development Finance Authority. And specifically the LDFA, because that’s actually in one of its foundational documents, where it references telecommunications investments as an eligible expenditure. I’ve haven’t checked in recently to see what the LDFA’s finances look like. But the last time I checked in, there was some interest expressed on the LDFA board to make sure that the LDFA was not holding on to excess funds but was actually spending them. The sentiment was: You know, we’re not a savings account. If it’s 15% minimum fund balance that we have to keep, then we keep 15% and not more. [Crawford sits on the LDFA board in a non-voting, ex officio capacity.]

Crawford: That is still fair [to characterize LDFA board sentiment that way].

Askins: And so people were sort of saying: Hey, what about a wet lab? If we have the money, we should be spending it on something – so maybe a wet lab. When I was sitting in that meeting … I was thinking: Wet lab? How about fiber?

Crawford: You asked about funding and that’s relevant when you have an idea that has matured to the point where funding becomes an issue. I don’t think we have a concept that is that mature yet.

Askins: So it’s not even to the point where we have to figure out how to pay for this, because there is no “this”?

Crawford: Well, the [budget] proposal that the LDFA has for this year has not got anything like that included. … If you want to talk concept, yes, then the DDA is a possibility and the LDFA is a possibility. But there are so many steps it’s got to go through. Should public funds be involved? If so, in what way? Those questions have to be addressed. I’ve looked at various alternatives of possible funding for a concept, and I think we will continue to do that.

Askins: The third funding possibility I was thinking of is the cable licensing fees. Currently, by ordinance that has to go to community access television or communications for the city. Communications is a fairly general concept – right now I think it funds 1.5 FTEs – so that’s Lisa Wondrash’s position and Joanna Satterlee’s. My understanding, though, is that you could – or rather, the city council could in its wisdom – change the ordinance to direct cable licensing fees to allow for some other use  … For example, for the sake of argument, the ordinance could be changed so that half of the revenues have to go to community access television and communications, and half could be available for telecommunications-related infrastructure. Just conceptually.

Crawford: I’m aware of that conceptually.

Public Safety Communications

Askins: Related to communications, communications are an integral part of the work plan for public safety – the idea that success looks like this: We perceive the community to be a safe place. One of the action items involves communications, making sure that people have a reliable and accurate information source on which to form their perceptions.

Crawford: And we also have the survey that we’ve talked about.

Askins: At the work session it seemed to me like the idea of doing the National Citizens Survey resonated with the council? [.pdf of 2008 Ann Arbor National Citizens Survey]

Powers: Me, too.

Askins: With the proviso from councilmember [Chuck] Warpehoski that he didn’t just want to do a survey, without saying in advance what we would consider to be good survey results. We don’t want to do the survey and then have people arguing about what it meant – which we will do anyway, of course. But I think that his thought was: We need to decide what success would look like in terms of the survey. Have you given any thought to what success would look like?

Powers: Not yet.

Askins: From my vantage point, I would say, the last time we did it was in 2008 with comparative data for 2007. So this time around I would expect that we would do at least as good or better than the last time around. Whether that’s reasonable or not, I think that’s the expectation that the community will have.

Crawford: Really? That’s an interesting assumption. That was the start of the great recession, with a lot of changes in the world. And a lot of reductions in police nationwide.

Askins: I’m not saying that’s necessarily a reasonable assumption, but I’m saying that this is the expectation I would predict for this community. You know Ann Arbor is a place where it’s always “better, faster, stronger,” so if we did a survey in 2008, and if the percentage of people who feel safe after dark was – let’s say for the sake of argument – 79%, it had better be 79% or above this time around. Or else people will conclude: Well, that just goes to show you that the reduction in police officers had a negative effect. That would be my prediction. I’m not arguing that position. And then there are the benchmarks that are built into the survey itself for the communities. And I would think that for Ann Arbor it would be automatic and axiomatic that of course, we will be better than the benchmark for all categories across the board. That’s just the expectation in the community.

Powers: And if council agrees with the recommended budget, I’ll be very interested in the results of a survey that would allow us to accurately and comprehensively compare Ann Arbor to benchmarks. The interesting discussion could very well be around the benchmarks and our definition of success. I think the problem and success statements from the council developed are a very good start and a nice foundation. And I think the next discussion around those would be that the council considers what questions to ask. For me, a helpful outcome will be: How well do we do, compared with agreed-upon benchmarks.

Askins: But the survey already does supply benchmarks. The results, if you scan through them, scores the outcomes for Ann Arbor … it’ll say it’s above or below the benchmark of other communities. … If we agreed as a community in advance – that we’re willing to say that Ann Arbor is perceived as a safe place if we’re better than the benchmarks measured in this survey – then we’d have a consensus that if we meet that, then the city will have achieved success as council has defined it.

Powers: By one measure.

Askins: One of the action steps for perception of public safety was media articles talking about the successful conclusion of criminal investigations. So as residents of the city – just imagine that you are living in a city and not working for the city: What kind of crime/police coverage would you want to read? Let’s imagine that Ann Arbor had a daily newspaper and a section called “public safety.” If you were the editor of that publication, what kind of thing would you put in that public safety section? I mean, it would be great, right, if every day it was “No Crime, Again Today!”

Powers: I’m kind of leaning the other way – and say ideally it would just be like the daily activity log. The activity log that generated an actual dispatch call or some recordable event. Whether that is realistic for a community our size, I don’t know. For my own personal experience, family experience, that would be of interest to my family – that level of minutia.

Crawford: Kind of like an RSS feed of the calls?

Powers: Yes. I think what chief [of Ann Arbor police John] Seto was thinking in the action items would be: consistent reporting, helped by the city through providing the information. It would be a consistent reporting on the crimes and activities that do generate community and resident interest – as measured by not only our experience, but more importantly as measured by the phone calls and e-mails we receive. And the same types of input that councilmembers receive from constituents. Graffiti, for example. I think the higher profile cases do generate some media coverage – the breaking-and-enterings, the assaults. I think chief Seto recognizes that we need to be taking more responsibility as an organization for sharing the information.

Even with our communications staff, I think we tend to not really share the good work that is done by our employees, and that is being done by the police officers. We just say: That’s part of why we are here – an occasional thank you will suffice, thank you very much. We don’t do as good of a job as we should be doing in sharing the good work and the results of that good work with the community – either through the media, or through the city council, or through our own press releases.

Askins: Let’s go back to the part where you talk about the data feed of just the activity log and the reports.

Powers: It could be a version of [The Chronicle's] Stopped.Watched. Maybe Stopped.Called.?

Askins: Well, to some extent, though, the city already does push information like that out in the form of the … it’s the mapping thing.

Crawford: The website is crimemapping.com.

Askins: That’s already a huge step in that direction, I think. So what I’ve been doing since it launched … is routinely downloading everything. [The site provides data for just the most recent six months, on a forward-moving window.] So we’re getting to the point where there’s two years worth of data. So instead of putting my energy into rewriting city press releases … I can plot by month incidences of property damage against temperature. So that would be the kind of work that I could do as a journalist – analysis of trends as opposed to the daily business of telling people about all the “mayhem” that is happening, when in reality it’s not really mayhem, but just a lot of routine stuff. …

Askins: So back to this idea of just a data feed. How close would you be to implementing something like that?

Powers: I don’t know. You should ask the IT director!

Crawford: I don’t know either.

Askins: … I would love to be able to just offer readers a display of the standard data feed for the city of Ann Arbor for crime calls and the same for fire calls. So that you get reporting on 100% of fire calls and 100% of police calls.

Crawford: There’s a lot of calls we would have to assess: Are they real or not? … I mean as far as trying to conclude that there is actually an injury or an incident. A lot of calls, to be honest, might just be a cop calling in to get information. … It’s more complex than what’s on the surface.

Powers: What I said was meant to be more the external calls. Someone calls in about kids skateboarding in the parking garage, or suspicious youth near a dumpster and they think it might be graffiti. That’s what we’d share.

Askins: The follow-up piece would be when that incident is resolved, you can imagine a separate sharing of information by the city that this is how it was resolved. And you can go back and link to the original item in the feed. And you start to get a sense of what is normal and what is routine. There’s a certain amount of just background noise that’s happening – whether it’s kids acting up, or vehicles getting broken into, or people getting assaulted, I guess.

But typically what you see is only sort of the dramatic thing, the thing that is meant to scare you or make you concerned, and you get the impression there is bad stuff happening all the time. And it’s just that there is tons of stuff happening all the time, but a range of it.

Powers: Whether there is an objective survey with benchmarks or whether it’s providing the data, my point is that we’re going to be consistent. We’re not the ones alarming or minimizing threats and risks and dangers. If the council chooses, or if individual councilmembers choose to do that, that’s their decision. But from a perspective of the work plan, from the perspective of trying to help council move forward with their success statements, we see providing good comparison data as well as providing good data on activity and outcomes as very important to accomplishing that work plan.

415 W. Washington

Askins: So you mentioned that your perception at the work session was that the citizens survey had resonated with councilmembers. And I think that anybody who was watching the work session would agree that councilmembers seem like they’re interested in pursuing that.

On a different topic, at the work sessions at least, I didn’t really see any explicit discussion by the council – or body language or anything – on the capital budget allocation for reuse of 415 W. Washington [a city-owned property with with one large building and a few smaller structures, as well as an area currently used as a surface parking lot in the city's public parking system.] But that item got revised [between March 11 and March 25, so that the $650,000 originally included in the city's capital improvements plan for reuse of the property has been removed from that year's capital budget.]

So how would that – I would not call it a decision, yet – but how did that tentative proposal evolve? Was that councilmembers conveying their thoughts to you privately? Or was it the result of the physical testing that was done on the property?

Powers: It’s not done yet. So, no on the physical testing. … That project is a good example of Tom primarily – and … Craig Hupy [public services area administrator] – really working hard with discipline to accomplish the success statement that he was given as a part of his budget and financial responsibilities. And specifically, that was to get the fiscal year 2014 and 15 “into the box.” He been sharing with me some earlier drafts of the budget summary and we weren’t “in the box.” … As we came up to the day on March 25, he said, Hey, Powers, we’re really close – what do you want to do? We met with Craig Hupy, and this project was one where there’s some room to help us get into the box. And that’s what we shared with the council that evening. …

In hindsight, I didn’t take the opportunity to communicate it to council – that this is still a fluid project. Perhaps literally – if we get the report back saying that there is water six inches beneath the floor! But it was based on what we know today to help accomplish the fiscal discipline goal. … We also had a discussion with Hupy, about how we have these two properties … 721 N. Main and 415 W. Washington. And as we need to prioritize and focus our resources, as we need to start moving forward … on these parcels and properties that are surplus to the city’s needs, let’s start that through the budget – prioritizing where would I put our resources. That’s where we ended up with 415 W. Washington [not budgeted for reuse in the capital budget].

What’s Next

On April 15, the city council’s second meeting this month, Ann Arbor city administrator Steve Powers will be submitting to the council a proposed budget for fiscal year 2014. The council will have until its second meeting in May to make any amendments. This year that meeting falls on May 20. Those deadlines are set by the city charter. The 2014 fiscal year starts on July 1, 2013.

Through the spring the council has held a series of work sessions on the topic of the FY 2014 budget. It’s been decided that a possible additional city council budget work session for April 8 will not be scheduled.

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