Stories indexed with the term ‘Ann Arbor Budget 2014’

May 20, 2013 Ann Arbor Council: In Progress

The main event of the May 20, 2013 Ann Arbor city council meeting will be the council’s approval of the FY 2014 budget. The city’s fiscal year starts July 1. Under terms of the city charter, the council is required to amend and approve the city administrator’s proposed budget by its second meeting in May – which this year falls on May 20. The Chronicle will be filing live updates from city council chambers during the meeting, published “below the fold.”

Door to Ann Arbor city council chambers

Door to the Ann Arbor city council chamber.

If the council fails to act, then the city administrator’s budget, which Steve Powers presented formally to the council on April 15, 2013, would automatically be adopted. It’s been described as essentially a “status quo” budget, with no major changes to personnel levels or basic approaches to service delivery. The council has held work sessions on various aspects of the budget starting in February.

For the general fund, the status quo budget translates to $82,893,312 in total expenditures, which will require tapping the general fund balance for $260,514. That would leave the general fund with $13.8 million in reserves or 17% of operating expenses.

But it’s possible that the council will undertake amendments to that budget. Among the amendments that might be proposed are some that would change the budget of the Ann Arbor Downtown Development Authority. Other amendments that might be put forward provide funding for an increase in the number of police officers. One strategy for increasing funding for police officers is to take money out of the 15th District Court budget. Another strategy that could be brought forward for funding police officers is to re-allocate the salary for retiring assistant city attorney Bob West.

Affordable housing and human services funding will likely be the topic of some amendments. It’s possible to change the budget later in the year, after the May 20 meeting, but that would require an eight-vote majority. Amendments to the main budget resolution of the year – this year on the May 20 agenda – require only a six-vote majority. [Full Story]

Parks Group Recommends FY 2014 Budget

One component of the city’s fiscal year 2014 budget – for the parks and recreation unit – has received a recommendation of approval from the Ann Arbor park advisory commission. PAC was briefed on the budget at its April 16, 2013 meeting and unanimously passed a resolution recommending that the city council adopt it. [link to city's Legistar system, where 12 parks-related budget documents can be downloaded] FY 2014 begins on July 1, 2013.

Budgeted expenditures for the parks and recreation unit in FY 2014 – from the city’s general fund as well as from the parks maintenance and capital improvements millage – are $12,546,068. Of that, about $5.2 million will be paid from the millage, with $7.3 million from … [Full Story]

FY 2014 Ann Arbor Budget Preview

On Monday, April 15 – the Ann Arbor city council’s second meeting this month – city administrator Steve Powers will be submitting to the council a proposed budget for fiscal year 2014. The fiscal year starts July 1.

The slide presentation for that budget proposal is now available for preview on Legistar, the city’s online agenda platform. The council will have until its second meeting in May to make any amendments.

The budget for the general fund in FY 2014 shows $82,632,807 in general fund revenues against $81,287,363 in expenditures, for a recurring surplus of $1,345,444. However, one-time expenditures for FY 2014 total $1,605,949 – with a net result that the general fund budget for FY 2014 will require tapping … [Full Story]

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?

FY 2014 Ann Arbor budget box

FY 2014 Ann Arbor budget box. (Chronicle illustration using city of Ann Arbor budget summaries.)

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.” [Full Story]

Rounds 4, 5 FY 2014: Priorities, Reality

Over the last month, the Ann Arbor city council has been using a series of working sessions to deliberate toward a final budget decision in late May. That’s when the council will need to adopt the city administrator’s proposed fiscal year 2014 budget, or make adjustments and adopt an amended budget. The city administrator’s proposed budget is due by April 15 – the council’s second meeting in April.

City of Ann Arbor Two Year Outlook

Chart 1: City of Ann Arbor two-year outlook for the general fund. The black bar represents recurring revenue. The stacked bars represent expenses. From the bottom up, those expenses are: existing recurring expenses (light red), requests for new recurring expenses (dark red), one-time requests (light blue), and capital improvement plan needs (dark blue). There also could be additional expenses needed to meet the city council’s priority goals.

The most recent of those work sessions took place on March 11, 2013. The agenda focused on the city council’s top priorities, as identified at its planning retreat late last year: (1) city budget and fiscal discipline; (2) public safety; and (3) infrastructure. Two additional areas were drawn from a raft of other possible issues as those to which the council wanted to devote time and energy over the next two years: (4) economic development; and (5) affordable housing. The retreat had resulted in a consensus on “problem” and “success” statements in these areas – answering the questions: (1) What is the problem we are solving? and (2) What does success look like?

The priority-focused March 11 work session followed one held on Feb. 25, which mapped out the financial picture for the next two years fund-by-fund – not just the general fund, but also the various utility funds (water, sanitary sewer, stormwater, and streets) and internal service funds (fleet, and IT). But on March 11, the council’s focus was primarily on the general fund – as deliberations centered on the first two priority items: fiscal discipline and public safety.

The Feb. 25 session had provided the council with a sketch of the basic general fund picture for the next two years, which is better than it has been for the last several years. Based on current levels for all services, recurring revenues for the two years are projected to exceed recurring expenses by a total of $1.44 million in a general fund budget of about $82 million each year.

That doesn’t factor in requests from various departments that would result in additional recurring expenses, totaling $1.17 million for the two years – which would leave a surplus of just $265,000. When further requests from departments are considered that would result in one-time expenses, that two-year surplus would flip to a deficit of about $252,00. And if all as-yet-unfunded capital improvement expenses are added in for the two years, the city would be looking at a two-year general fund deficit of $4.41 million.

The general fund’s uncommitted balance could cover that deficit – but it would leave the uncommitted balance at $9.69 million at the end of FY 2015, or 11.5% of operating expenses. Under city policy, the uncommitted general fund balance should be between 8% and 12%. However, Tom Crawford, the city’s chief financial officer, has recommended that the city strive for 15-20%.

None of those numbers factor in any additional resources that could be required to achieve success measured in terms of the city council’s priority goals.

At the March 11 session, discussion by councilmembers of the first two priority items – fiscal discipline and public safety – revealed some unsurprising philosophical differences in approach. The majority of councilmembers seemed to accept city administrator Steve Powers’ inclination to take FY 2014 as a “breather” year, not asking departments to meet reduction targets this year, after several years of cuts. But Jane Lumm (Ward 2) – who previously served as a Republican on the council in the mid 1990s, and was elected as an independent in 2011 – expressed disappointed with this approach. She wants reduction targets every year.

And Sumi Kailasapathy (Ward 1), who was elected in November 2012, challenged the idea that it’s only new councilmembers who need to learn during the budget process. She pointed out that city staff members also have a learning curve – as they shift the organization’s priorities to the new council’s priorities.

For public safety, a consensus seemed to emerge that the council’s planning retreat success statements about policing might need further refinement – in light of the current department’s configuration. Police chief John Seto characterized that configuration as set up to be reactive, not proactive. Current staffing levels don’t allow for a proactive configuration, he indicated.

But the council did not appear to have a complete consensus about the importance of that proactive capability – unless that capability could be linked to success in making the community be safe and feel safe. Measuring perceptions of safety through the National Citizens Survey – for the first time since 2008 – was an idea that seemed to have some traction on the council. Some sentiment was expressed that the number of police officers should be increased – whether or not that increase could be tied to better safety as defined in adopted city council goals.

For the fire protection side of public safety, councilmembers effectively made a decision – without voting – to give clear direction to fire chief Chuck Hubbard that they didn’t want to see his three-station plan implemented. He had first presented the plan about a year ago. The proposal would close three stations but re-open one, for a net reduction from five to three stations.

Some dissent was offered, but mayor John Hieftje indicated that in his view the three-station plan was dead. Still, councilmembers seemed unenthusiastic about an alternative – which would entail hiring an additional 23 firefighters to staff existing stations. They seemed more inclined toward incremental improvements in fire safety. Those improvements might be gained through community education. Another possibility is deployment of some light rescue vehicles, which would require a crew of just two, instead of water-carrying trucks that need a crew of three.

This report focuses exclusively on the top council priorities of budget discipline and public safety. Also discussed at the working session, but not included in this report, were draft work plans for the other three priority areas: infrastructure, economic development and affordable housing.

The council may schedule an additional work session on March 25 to give city administrator Steve Powers more direction as he shapes the final budget that he’ll submit to the council in April. [Full Story]

Round 3 FY 2014: Housing Commission

After a Feb. 11, 2013 budget work session that included separate presentations on the city’s capital improvements plan (CIP) and the Ann Arbor Housing Commission (AAHC), both of these topics came up again briefly at the city council’s most recent regular meeting.

During communications time for the council’s meeting on Feb. 19, 2013, Stephen Kunselman (Ward 3) expressed his view that the CIP should start including the 360 units of public housing managed by the AAHC.

Ann Arbor Housing Commission Properties

Ann Arbor Housing Commission properties. The size of the dot is proportional to the number of units in the location. (Map by The Chronicle. Image links to interactive map.)

Kunselman’s argument for future inclusion of AAHC properties in the city’s CIP is based in part on the fact that the city of Ann Arbor currently holds the deeds to those properties. But his broader point is that he’s opposed to the city relinquishing title to the properties – as part of a proposal made to the council by AAHC executive director Jennifer L. Hall. Hall has served in that capacity for about a year, and began her Feb. 11 presentation at the council work session with an overview of improvements that AAHC has achieved since she took the post.

Hall’s proposal stems from a need to cover an estimated $500,000 per year funding gap for needed capital investments, coupled with a perceived shift in priorities by the U.S. Dept. of Housing and Urban Development (HUD) in its funding strategy. That shift is somewhat away from subsidized public housing, where rent is subsidized in units owned by a housing commission. [Ann Arbor's situation is apparently unique – because the city, not the AAHC, holds the deeds.] While HUD still allocates several billion dollars nationally for public housing, it subsidizes even more in programs that are based on vouchers. And based on the last three years, the trend is toward more funding on the federal level for vouchers than for public housing.

Some HUD vouchers are tied to a tenant – a person. A potential tenant can take that voucher to a private landlord – and it’s the tenant who receives the rent subsidy, wherever that tenant is able to rent a place to live. Other HUD vouchers are tied instead to privately-owned property, and whoever lives in that private project receives the rent subsidy.

The strategy that Hall will be asking the council to authorize is one that converts AAHC properties to part private ownership, in order to take advantage of project-based HUD vouchers. The private ownership of the AAHC properties will also allow the possible use of tax credit financing to pay for needed capital investments – roofs, boilers, plumbing and the like.

The conversion to project-based vouchers would take place under HUD’s Rental Assistance Demonstration (RAD) program. To set the stage for that, the board of the AAHC selected a co-developer at its Jan. 10, 2013 meeting: Norstar Development USA.

The council would need to take two specific steps in order to proceed with the RAD: (1) approve the contingent transfer of the city-owned AAHC properties to the AAHC; and (2) approve a payment in lieu of taxes (PILOT) for the properties so that they’d owe just $1/unit in property tax per year. As city-owned properties, no property tax is currently owed. Without the PILOT provision, taxes would be owed. Requests to take those steps are expected to come to the council in March. March will also be a period during which public hearings will take place on this issue.

Although Kunselman expressed clear opposition to the idea of transferring the deeds, and Mike Anglin (Ward 5) joined him in expressing significant skepticism, other councilmembers were more positive. They still had several questions about the complexities and the risks associated with the RAD program. [For more background on the AAHC’s efforts to prepare for the RAD program, see Chronicle coverage: “Housing Commission Eyes Major Transition.”]

The Feb. 11 budget work session included the 15th District Court and the capital improvements plan (CIP). A session held on Feb. 25 covered the fund-by-fund budget picture for the next two years. Presentations on those topics are covered in separate Chronicle reports. The council’s discussion of its budget priorities – identified at a planning retreat late last year – is expected to begin at a March 11 work session. [Full Story]

Round 2 FY 2014: Capital Improvements

At the first of three work sessions scheduled on next year’s budget, the Ann Arbor city council was briefed on about $95 million worth of capital improvements to be undertaken over the next two years. That amount is roughly evenly split over fiscal years 2014 and 2015.

Capital Improvements Plan: City of Ann Arbor

An excerpt from the city of Ann Arbor’s capital improvements plan. TR-AT-12-04 is a pedestrian crossing of Ellsworth at Research Park Drive, near the Center for Independent Living. TR-AP-10-04 is a runway extension at the municipal airport – the brown shaded area.

Generally, about 58% of funding for these projects comes from utility fees and dedicated millages, and 39% from state or federal funds, leaving about 3% to be covered by the city’s general fund. In dollar figures, the amount of improvements that will tap the city’s general fund – or for which funding is otherwise not yet identified – is greater for the second year of this two-year budget cycle. For FY 2015, about $3.4 million of the needed capital improvements will either need to come from the general fund or have some other yet-to-be-determined funding source.

For FY 2014, the amount needed from the general fund or as-yet-undetermined sources is closer to $1.3 million. The city of Ann Arbor’s total general fund budget is around $80 million.

The projects range across the broad categories of: (1) municipal facilities (buildings, parks); (2) transportation (streets, sidewalks, paths, parking decks, train station); and (3) utilities (sanitary, storm, and drinking water).

Cresson Slotten – a city engineer and manager for the city’s systems planning unit – gave the capital improvements briefing to the city council on Feb. 11. The presentation was based on the city’s capital improvements plan (CIP), which was approved by the city planning commission on Dec. 18, 2012.

Slotten also briefed the council on three significant study initiatives related to water systems – a city-wide stormwater study, a more focused study on the Malletts Creek watershed, and a sanitary sewer flow study. Those studies are part of the current year’s work.

In the course of Slotten’s presentation, councilmembers had questions about specific projects, including the footing-drain disconnection (FDD) program. Stephen Kunselman (Ward 3) noticed the FDD program has no funding indicated beyond the $2.5 million that’s called for next year, in FY 2014. Craig Hupy, the city’s public services area administrator, explained that the contract recently authorized by the council to study sanitary sewer flows would inform possible funding in future years.

Another project that drew scrutiny from councilmembers was a $540,000 for interim parking to support a possible commuter rail demonstration project. The city of Ann Arbor has told the Michigan Dept. of Transportation that it expects MDOT to pay for that parking. And Mike Anglin (Ward 5) asked for clarification of the $2.6 million slated for FY 2015 for the design of the “Ann Arbor Station.” City staff clarified that the location of a possible new Amtrak station is currently still the subject of a council-approved $2.75 million study, 20% of which the city is funding, with the remaining 80% covered by a federal grant.

A new station has been controversial in part due to an initially proposed location on Fuller Road near the University of Michigan hospital – on land designated as city parkland. In the CIP, the construction of such a new station is $44.5 million, slated for FY 2016. That cost was not included in the figures presented by Slotten, which went only through FY 2015.

The city council chambers appear in the CIP in connection with two capital projects. A renovation to the chambers – pegged at $300,000 in FY 2015 – seemed to meet with scant enthusiasm from councilmembers. Likely to have a bit more traction with the council is the remaining asbestos abatement in the city hall building. Asbestos abatement was partly completed when renovations were done in connection with construction of the adjoining Justice Center. For the city council chambers portion of city hall’s second floor, abatement would cost about $200,000, and is included in the CIP for FY 2014.

A query from Christopher Taylor (Ward 3) about Barton Dam projects drew out the fact that two projects listed for the concrete and steel portions of the dam  – a two-year total of about $1.65 million – could be joined by additional work that might be required on the adjoining earthen berm. The berm is part of the dam that holds the water in Barton Pond, the main source of the city’s drinking water. The possible berm project depends on the outcome of investigatory work that’s being done at the behest of the Federal Energy Regulatory Commission (FERC).

A runway extension at the municipal airport – included in the CIP for FY 2014 at a cost of $2.14 million – was met with the observation from Sabra Briere (Ward 1) that an environmental assessment (EA) had not yet been acted on by the Federal Aviation Administration. The council had approved the last bit of funding for that study on Aug. 20, 2012. Without the finalized EA in place, Briere ventured, it would be difficult for her to vote for a capital budget that included the runway project.

The budget on which the council will vote this year will include a separate breakout of capital spending. The substantive conversation about the capital budget as it relates to the council’s established priorities is expected to begin to unfold at the council’s March 11 work session. Before then, a second work session is scheduled for Feb. 25, with an additional session slated for March 25, if necessary. Other topics discussed at the Feb. 11 work session included the 15th District Court and the Ann Arbor Housing Commission. Presentations on those topics are covered in separate Chronicle reports.

City administrator Steve Powers is required by the city charter to submit his proposed budget to the council by the second meeting in April, with any council amendments required by the second meeting in May. The city’s fiscal year begins July 1. [Full Story]

Round 1 FY 2014: 15th District Court

Ann Arbor city councilmembers were briefed on the 15th District Court as part of a Feb. 11 work session. Last Monday’s meeting kicked off a series of such sessions that will provide information to the council as it looks toward its second meeting in May, when councilmembers will set the budget for the next fiscal year.

From left: 15th District Court administrator Keith Zeisloft, city administrator Steve Powers, judge Joe Burke

From left: 15th District Court administrator Keith Zeisloft, Ann Arbor city administrator Steve Powers, 15th District Court judge Joe Burke. Before the meeting, the men were setting up a slide presentation. (Photos by the writer.)

All three judges of the court attended the session and addressed the council: Elizabeth “Libby” Hines, Chris Easthope and Joe Burke. Court administrator Keith Zeisloft also attended the session, but did not formally address the council.

At around $3.7 million, the 15th District Court’s budget makes up roughly 4.5% of the city’s general fund – which is in the range of $80 million. The budget for the 15th District Court has decreased from a high of $4.2 million in 2009. Staffing levels of the court, according to the city’s comprehensive annual financial reports, have decreased from 41 in the early to mid-2000s to 36 FTEs for the FY 2012 budget year.

The district courts handle all civil claims up to $25,000, including small claims, landlord-tenant disputes, land contract disputes, and civil infractions. Washtenaw County has three district courts – 15th District Court for the city of Ann Arbor, 14B District Court for Ypsilanti Township, and the 14A District Court (with four physical venues) for the rest of Washtenaw County. Ann Arbor’s 15th District Court also handles preliminary exams for felony cases – which do not show up in official court statistics.

Part of the basis for the court’s presentation to the council was a recent report from the State Court Administrative Office. It includes metrics on the number and kinds of cases handled by the court, as well as collection rates. The judges focused their remarks, however, on the “problem-solving” programs of the courts – those that address sobriety, homelessness, veterans issues and domestic violence. This article includes vignettes from a session of the sobriety court attended by The Chronicle.

Other topics covered during the Feb. 11 work session included the city’s capital budget and the Ann Arbor Housing Commission. Presentations on those topics will be covered in separate Chronicle reports.

The substantive conversation about the budget and its relation to the council’s established priorities is expected to begin to unfold at the council’s March 11 work session. Before then, a second work session is scheduled for Feb. 25, with an additional session slated for March 25, if necessary.

City administrator Steve Powers is required by the city charter to submit his proposed budget to the council by the second council meeting in April, with any council amendments required by the second meeting in May. The city’s fiscal year begins July 1. [Full Story]

Ann Arbor Budget Process Starts Up

A short meeting of the Ann Arbor city council’s budget committee – just before the full council’s Jan. 22 session – resulted in a consensus on an approach to budget planning for the next two-year cycle.

The Ann Arbor city council is beginning a budget planning process that will likely result in a council vote to adopt a budget at its second meeting in May, which falls this year on May 20, 2013.

The Ann Arbor city council is beginning a budget planning process that should culminate in a council vote to adopt a fiscal year 2014 budget at its second meeting in May, which falls this year on May 20, 2013.

City administrator Steve Powers and chief financial officer Tom Crawford sketched out three kinds of topics they could explore with the full council at work sessions through the spring: (1) funding for items in the capital improvements plan (CIP); (2) budget impact analysis, broken down by service unit; and (3) additional resources required to support the city council’s five priority areas, which were  identified in a planning session late last year.

The top three priority areas are: (1) city budget and fiscal discipline; (2) public safety; and (3) infrastructure. Two additional areas were drawn from a raft of other possible issues as those to which the council wanted to devote time and energy over the next two years: (4) economic development; and (5) affordable housing.

Possible city council work session dates are the second and fourth Mondays of the month. Regular meetings fall on the first and third Mondays.

The city council will be adopting a final budget for fiscal year 2014 by its second meeting in May. FY 2014 starts on July 1, 2013. Although the council approves an annual budget for the next fiscal year, the city uses a two-year planning cycle. This year starts a new two-year cycle, the first complete one for city administrator Steve Powers, who started the job about a year and a half ago, in September of 2011.

During some back-and-forth with the budget committee about the staff’s ability to provide all the information to the council that the committee had been describing – within the timeframe of the budget season – Powers joked: “Tom and I aren’t rookies!” Powers was previously Marquette County administrator for 16 years. Crawford has served as Ann Arbor’s CFO for more than eight years.

The council’s five-member budget committee consists of: Sabra Briere (Ward 1), Jane Lumm (Ward 2), Christopher Taylor (Ward 3), Marcia Higgins (Ward 4) and Mike Anglin (Ward 5).

An interesting wrinkle that emerged during the budget committee’s discussion was the role to be played by the city council in shaping the capital improvements plan (CIP). In response to some interest expressed by committee members to amend the CIP, Powers encouraged them to think in terms of allocating funds (or not) for elements of the plan. That’s because the content of the CIP is the statutory responsibility of the planning commission, not of the city council. The city council’s role is to determine which projects should be funded, Powers explained. But it’s for the city planning commission to finalize the content of the CIP itself.

This report includes more on the Michigan Planning Enabling Act (Act 33 of 2008) and the city council’s recent history of amending the CIP. [Full Story]