Stories indexed with the term ‘budget planning’

Property Values Up, Budget Decisions Loom

Washtenaw County board of commissioners meeting (April 17, 2013): Major budget issues were the focus of the April 17 county board meeting, including news that tax revenues in 2013 will be higher than anticipated.

Raman Patel, Leila Bauer, Washtenaw County board of commissioners, The Ann Arbor Chronicle

From left: Raman Patel, Washtenaw County’s equalization director, greets Leila Bauer, chief deputy treasurer who is retiring after 41 years with the county. (Photos by the writer.)

After several years of reporting declining tax revenues, Raman Patel – the county’s equalization director – gave commissioners a report showing stronger signs of economic recovery, reflected in a 1.68% increase in taxable value. That translates into an estimated $2.327 million more in property tax revenues for county government than had been budgeted for 2013. [.pdf of Patel's presentation]

Also related to the budget, commissioners gave initial approval to a four-year budget planning cycle, a change from the current two-year cycle that’s been in place since 1994. Voting against the item was Ronnie Peterson (D-District 6). He and other commissioners expressed a range of concerns, including the fact that commissioners are elected every two years and therefore might not be able to contribute adequately to setting budget priorities. Although Peterson remained unconvinced, several commissioners observed that the annual budget affirmation process acted as a fail-safe, allowing the board to make adjustments based on changing priorities.

Another item that could have a dramatic impact on the county’s budget was only briefly mentioned: A proposal to issue up to $350 million in bonds to fully fund the county’s pension and retiree healthcare plans. It would be by far the largest bond issuance in the county’s history. County administrator Verna McDaniel plans to make a formal presentation about the proposal at the board’s May 2 working session. She distributed materials on April 17 to help commissioners prep for that meeting. [.pdf of bond proposal handout]

Commissioners also took a final vote officially to dissolve a countywide public transit authority known as the Washtenaw Ride. There was no discussion, but Conan Smith (D-District 9) – a vocal advocate for public transit – cast the sole vote against the resolution.

Other action handled by the board included a federal weatherization grant, a public hearing for the Urban County strategic plan, and resolutions honoring county employees and residents. Among them was Leila Bauer, the county’s chief deputy treasurer who is retiring after 41 years with the county. She received a standing ovation from the board. [Full Story]

AAPS Schedules FY 2014 Budget Forums

Led by trustee Glenn Nelson, the AAPS board has discussed and approved a process for engaging citizens in their budget development. The proposed process and timeline is:

  • Late March & Early April: Community dialogue meetings sponsored by BOE
  • April 10, 2013: Administration presents projected revenues for FY 2014
  • April 24, 2013: Administration presents recommended expenditure budget for FY 2014
  • Early May: Community forums led by the administration on the proposed budget
  • May 8, 2013: First briefing of the Budget Resolution for FY 2014
  • May 22, 2013: Second briefing and action on the Budget Resolution for FY 2014

The schedule for public engagement on the budget was put forward at the board’s March 13, 2013 meeting.

This brief was filed from the board room of the Ann Arbor District … [Full Story]

City Council Puts Off Townhouse Zoning

Ann Arbor city council meeting (Feb. 4, 2013): Two significant land use items were included in the council’s agenda, but councilmembers moved ahead on just one of them. A request to zone a recently annexed piece of property as R3 (townhouse district) prompted long deliberations by the council, and ultimately a referral of the item back to the planning commission for further review.

Current zoning of properties surrounding the parcel requested to be zoned at R3 (townhouse dwelling district).

Current zoning of properties surrounding the parcel at 2081 E. Ellsworth Road – denoted with a “?” Owners are requesting the parcel to be zoned as R3 (townhouse dwelling district). (Map labeled by The Chronicle.)

Dependent on the R3 zoning is Summit Townhomes – a proposed project for the 2081 E. Ellsworth Road site, located in the southern part of the city just east of Stone School Road. The townhouse project’s site plan is expected to come before the council for approval later this month. The planning commission has already recommended that the Summit Townhomes project be approved, and previously recommended the R3 zoning. The council itself had already given the zoning its initial approval at a previous meeting.

But during the public hearing about the zoning on Feb. 4, the council heard from several people who spoke against the zoning and the project, reprising many of the same objections that had been raised more than seven months ago at the June 19, 2012 meeting of the planning commission. Concerns included overcrowding and congestion in the area, and a lack of adequate city services. Also weighing in with general support for zoning that fits with the desires of residents was Washtenaw County commissioner Andy LaBarre, who represents the county district where the site is located.

Another item related to future land use was council action to authorize the distribution of the draft South State Street corridor plan to neighboring jurisdictions and other stakeholders, such as the University of Michigan, the Ann Arbor Public Schools, and the Ann Arbor Transportation Authority. After a mandated comment period, the city planning commission will have the opportunity to make revisions to the plan, before the commission and the city council make a decision to adopt it.

A major infrastructure study, with a roughly $1 million budget, was also authorized by the council – to give the city a clearer understanding of how flows behave in the sanitary sewer system, especially during rainy periods. The study is prompted by a desire to measure the impact of a footing drain disconnection program that the city has implemented for over a decade. In the last year, the program has generated strong protest from the Glen Leven neighborhood. The footing drain disconnection program was created in part to remedy the backup of raw sewage in basements during heavy rains.

The city council also authorized revisions to two existing technology agreements. One was an agreement between the city of Ann Arbor, Washtenaw County and the Ann Arbor Transportation Authority to act as a purchasing consortium. The modification to the agreement will allow other participants to be added to the consortium in a streamlined way. The second agreement was the extension of a contract with the city of Chelsea to provide various IT services.

The council put off a decision on issuing bonds to support energy improvements for its property assessed clean energy (PACE) program. The item had been added late to the agenda, and several councilmembers had questions they wanted answered before voting on it.

Although the agenda itself was light, several significant communications were included, either as written attachments or conveyed verbally. The written reports attached to the agenda included a revised auditor’s letter and a report on how the street resurfacing millage money was spent during the 2012 season.

Conveyed verbally was a report from the council’s budget committee chair, Marcia Higgins (Ward 4), who alerted councilmembers that on Feb. 11 and Feb. 25 the council would hold budget work sessions starting at 6 p.m., with each meeting consisting of two 2-hour sessions with a break.

Stephen Kunselman (Ward 3), chair of the city’s taxicab board, called for enforcement of the city ordinance that is meant to prevent the operation of “rogue limousines” – in the context of a reported sexual assault of a University of Michigan student by the driver of either a taxicab or limousine.

Kunselman also called for a number of revisions to the city ordinance that establishes the Ann Arbor Downtown Development Authority, including stricter regulations on membership of the board, but more significantly a limitation on the way the DDA’s tax increment finance (TIF) capture is calculated. [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]

AAPS Opens 170 Schools of Choice Seats

Ann Arbor Public Schools Board of Education regular meeting (March 7, 2012): Trustees of the Ann Arbor Public Schools (AAPS) school board fast-tracked the approval of another 170 schools-of-choice slots in the district, allowing students from within Washtenaw County to transfer to AAPS for the remainder of their K-12 education.

Simone Lightfoot

AAPS trustee Simone Lightfoot at the March 7 meeting. She was not alone in expressing her dissatisfaction with the transportation services being provided by Washtenaw Intermediate School District. (Photo by the writer.)

Under Michigan’s schools-of-choice legislation, local school districts can enroll these nonresident students without having to obtain approval from the district in which students reside.

So schools-of-choice students bring their state per-pupil allocation with them to AAPS. If all 170 seats are filled, the district will gain approximately $1.19 million in additional revenue.

The March 7 board meeting included discussions of the district’s transportation options, staffing process, and fund balance as trustees brace for budget recommendations to be brought to them by AAPS administration by the end of March.

Trustees expressed dissatisfaction with its transportation services, which it receives from the Washtenaw Intermediate School District as part of a consortium of other districts. [Full Story]

Ann Arbor Budget Outlook OK, CFO Cautious

Ann Arbor city council working session (Feb. 13, 2012): At a working session last Monday, the council took its first look at the budget for fiscal year 2013, which starts July 1, 2012. Continued from a budget committee meeting on Dec. 12, 2011 was the theme that this year is the second year of a two-year planning cycle – and the city financial staff are approaching it that way.

Chief Financial Officer Tom Crawford

City of Ann Arbor chief financial officer Tom Crawford before the Feb. 13, 2012 working session. (Photos by the writer.)

With the exception of one significant change – adding one police officer instead of cutting nine – the blueprint for this year’s budget will, with some slight revisions, follow the plan put in place last year. That includes a plan to eliminate five firefighter positions, pending labor negotiations with the firefighters union.

At the December budget committee meeting, city administrator Steve Powers described this year as taking a “breather” – while stressing that the review of the organization is an ongoing process.

The relative luxury of essentially following the second year of a two-year plan is made possible this year by positive news and outcomes on several fronts.

But at Monday’s working session, the city’s chief financial officer, Tom Crawford, urged a cautious approach, given pending uncertainties about the basic structure of funding local governments in Michigan. Among those uncertainties is the future of the personal property tax, which could drop the city’s general fund revenue by $1.76 million, if that tax were to disappear completely. He advised the council not to use one-time positive outcomes to increase expenditures. Instead, he recommended that the city should strive to increase its fund balance reserve to 15-20% of expenditures – it currently stands around 13%, or $10.5 million. The general fund budget for the city this year calls for $78,321,015 in expenditures.

One of those positive outcomes is the retiree health care funding level for FY 2013, recommended by the city’s actuary – $12.4 million. The city’s planned cost for FY 2013 was $15.3 million. But Crawford is recommending that all but $400,000 of that $2.9 million savings should continue to be paid into the city’s voluntary employees beneficiary association (VEBA), to reduce unfunded liabilities and to guard against future liabilities. The potential $2.9 million savings is a citywide figure.

But as a result of another VEBA-related policy choice that Crawford is recommending, the city’s general fund – out of which basic services like police, fire, planning, and the like are paid – would see a roughly $1 million boost. That policy change would start treating retiree health care as a true pre-funded system, instead of the current pay-as-you-go hybrid. The current hybrid pay-as-you-go approach places a higher burden on those funds that have a relatively large number of associated retirees – workers who were paid out of that fund while they worked for the city. [As of December 2011, the city's general fund had 366 active employees and 532 retirees.] Crawford’s recommended approach focuses on the gaps in pre-funding, which puts the financial burden where most of the liability is currently accruing – active employees. And that would translate to a $1 million general fund savings, compared to the current approach.

Crawford put specific pieces of positive budget news in the context of general positive news, suggesting that the city has now seen the worst of the 2008 economic downturn. Unemployment numbers are dropping – in the Ann Arbor area, unemployment stood at 5.5% in December. And state sales tax receipts are coming off depressed levels – that’s important, because the “revenue” in state shared revenue (the amount the state distributes to local units of government) comes from state sales tax receipts.

Among the specific pieces of positive news Crawford presented to the council was the expectation that the city would break even on the current budget year (FY 2012), which ends June 30, 2012. The city had expected to tap the general fund reserve for $1.1 million this year. In the previous year (FY 2011), the city also essentially broke even, when it had anticipated needing to spend $1.5 million from its fund balance reserve.

Compared to what was anticipated in the two-year plan for FY 2013, on the revenue side several categories are expected to increase. Additional expenses, compared to the two-year plan, include adding a police officer instead of eliminating nine positions.

The net effect of all the changes from the two-year plan is a $1.6 million surplus of recurring revenues against recurring expenses for FY 2013. Of that surplus, Crawford is recommending that the council allocate $150,000 for a pilot program for recruiting police officers. But the rest he’s advising the council to add to the fund balance reserve to guard against leaner years projected in FY 2015-16.

The police recruitment program would allow potential hires to work under the direction of an Ann Arbor police officer before being hired on as a sworn officer. The program’s rationale was described by police chief Barnett Jones at the Feb. 13 working session as stemming from the hiring process to fill nine officer positions that came open at the end of 2011, due to retirements.

Jones gave a presentation of year-end crime reports showing that crime in major categories is trending down for Ann Arbor. Despite the net gain of 10 officers now anticipated for FY 2013, compared to the AAPD staffing levels in the two-year plan, the department’s 118 sworn officers leave Jones 32 short of the 150 that he described at the working session as the “perfect” number of officers for Ann Arbor.

After the jump, this article includes charts and graphs of crime reports, more detail on the impact of retiree health care on the budget, the budget outlook for FY 2013, and the city council’s work schedule for ratifying the FY 2013 in late May. [Full Story]