City Council Caucus Yields More Budget Talk

Huron River plan, Percent for Art program also discussed

Ann Arbor City Council Sunday caucus (Dec. 6, 2009): At the Sunday night caucus of the Ann Arbor city council, looming budget decisions were front and center as topics, just as they’d been the previous day at the council’s day-long retreat. [Chronicle coverage: "Ann Arbor City Budget: Cuts Begin Now"]

Residents who attended the caucus expressed concerns about probable firefighter layoffs, possible threats to city parks, and a Monday meeting agenda item approving $895,000 for an accounting system overhaul. In responding to residents, councilmembers mentioned an idea that Mayor John Hieftje had briefly floated at the council’s budget retreat: an across-the-board wage cut of 3% for all city employees.

Besides the accounting system overhaul, the other Monday meeting agenda item residents spoke about was the council’s “acceptance” of the Huron River and Impoundment Management Plan. Representatives of the Huron River Watershed Council encouraged the council to accept the plan. That discussion led to the topic of the city’s Percent for Art program and its legal status. The council has an item on its Monday agenda to reduce the percentage reserved from 1% to a 0.5%.

On the council side, the caucus was attended by Hieftje, Sabra Briere (Ward 1), Mike Anglin (Ward 5), Stephen Rapundalo (Ward 2) and Stephen Kunselman (Ward 3).

Firefighter Layoffs: Negotiations, Safety

Karen Sidney addressed the caucus on a range of topics, including the pending layoff of 14 of the city’s 94 budgeted firefighter positions. At the budget retreat the previous day, city administrator Roger Fraser and Mayor John Hieftje had maintained that the firefighters union had been unreceptive to a proposal to accept a wage cut in exchange for preserving jobs.

At the caucus, Sidney said she’d heard that the wage cut proposed to the union had been 25%, which she said was not a reasonable proposal.

Sidney also suggested that the city’s plan to provide fire protection services in the face of firefighter layoffs would have a negative impact on the fire department’s ability to rescue people from burning buildings. Based on the safety protocol for firefighters described by safety services area administrator Barnett Jones at Saturday’s budget retreat, firefighters cannot enter a burning building without a partner, and without having two coordinating staff remaining outside – a total of four people are required on scene.

Based on the standard staffing of a three-person crew for a truck, and Jones’ description of planned delays in sending a second truck, Sidney reasoned that this would have to mean delays in the fire department’s ability to send firefighters into burning buildings to rescue people trapped there.

Across-the-Board Wage Cut for City Staff?

Nancy Kaplan asked councilmembers if – in the spirit of everything budget-wise being on the table for consideration – the city administrator’s salary was also on the table. Sabra Briere (Ward 1) replied that she didn’t mean to seem defensive about it, but that the city administrator, Roger Fraser, had not had a raise in at least three years.

That led Stephen Rapundalo (Ward 2) to mention that the mayor had proposed at the budget retreat a 3% across-the-board pay cut for all city employees – something he said had not been reported in the newspaper account of the retreat. Asked for clarification at caucus about whether this was a serious proposal, or just an idea, Hieftje said that it was a proposal and that there was support on the council for it – but that council didn’t have control to make it happen. That was something the unions would have to agree to do, he said.

The 3% corresponds to concessions made this year by unions representing most of Washtenaw County government employees, but in that case it reflected forgoing a contracted 3% wage increase. [Chronicle coverage: "AFSCME union concessions help, but other issues remain"] Hieftje said he didn’t have the exact dollar figure the move would save, but would have the number by Monday’s meeting.

Asked if the council might implement the 3% cut for at least the non-union employees, Hieftje said that implementing the wage cut for just that group would not have as strong an effect. Resident Karen Sidney pointed out that the city had 190 non-union employees.

In an earlier comment, Sidney had noted that historically, union jobs at the city had been cut more than non-union jobs. In 2002, she said, there were 205 non-union jobs compared to 190 now, for a reduction of 7.5%. In contrast, she said, 696 union jobs in 2002 have decreased to 571 union jobs today, for an 18% decrease.

Accounting System Overhaul

Given the budget crunch, Karen Sidney asked the council to delay spending $895,000 to overhaul the city’s accounting system – an item that’s on Monday’s agenda.

The overhaul includes new software, management of its installation, and programmers to move the legacy system, which is based in part on COBOL, an older programming language. The business case for the expenditure provided with the council’s meeting packet projects a return on the investment to be realized in two years and eight months. The new system is seen as easing use of the accounting system for people who don’t have a deep understanding of accounting, for increased transparency of the system.

Sidney pointed out that the business case also contains a description of risks associated with the project, which include budget overruns and the possibility of project failure. She concluded that the expenditure should be delayed.

In a later discussion, Sidney asked that the monthly financial reports that Stephen Rapundalo (Ward 2) said the budget and labor committee received also be posted on the city’s website. Mike Anglin (Ward 5) reported that such reports had been very helpful for members of the park advisory commission – a body on which he represents the city council.

Parks and the Huron River and Impoundment Management Plan

Gwen Nystuen, who is a member of the city’s park advisory commission, appeared before the caucus saying that she’d come because she’d been alarmed about what she’d read in Sunday’s paper about possible cuts to the park program. Stephen Rapundalo (Ward 2) said that what had been printed was a verbatim presentation of the PowerPoint slides shown at the budget retreat, but stressed that the context of the slides was to provoke the council to rethink everything. There was, Rapundalo said, little appetite on the council for selling parks.

Glenn Thompson appeared at caucus to express his support for keeping the Argo Dam in place. He allowed that there’d likely be a reduction in the water temperature by a half degree or so, but that this benefit to the river needed to be balanced against the potential for hydropower to be generated by the dam. The electricity that could be generated by the dam, he said, would save 1,000 tons of CO2 released into the atmosphere, when compared to the same electricity when generated by a coal-fired plant.

Laura Rubin, the executive director of the Huron River Watershed Council, came to caucus to make the case that the Huron River and Impoundment Management Plan committee had not been “stacked,” as some in the community have contended. She said that over the course of three years, the city’s environmental commission had engaged in a painstaking process of identification of stakeholders. It was important to have a river plan, she told the council, just as it was important for the city to have a transportation plan, a parks plan, and a city master plan.

Rubin said she hoped the council would “approve” the plan and that it would not languish. This prompted Stephen Rapundalo (Ward 2) to stress that the council would not be “approving” the plan, but rather “accepting” it. That is, there was no implication attached that the recommendations would be implemented. Stephen Kunselman (Ward 3) suggested that he wasn’t sure that “accept” was the right word either, saying that “receive” might be better. In any case, Rapundalo said there was simply not money to commit to anything in the HRIMP at this time, and the same sentiment was echoed by Sabra Briere (Ward 1).

Scott Munzel introduced himself as a Ward 5 resident of Ann Arbor, who also serves on the board of the watershed council. He noted that the purpose of the HRWC was to advocate for the river and that it was thus fitting and proper for its executive director, Laura Rubin, to weigh in on the Argo Dam question. She did so, he said, with the support of the board.

If the council decided to leave the dam in place, he said, he hoped that they would take seriously the question of how much it costs to maintain, which he said was around $50-60,000 per year. Currently, he said, that is paid out of the drinking water fund, which was not just inappropriate, but possibly even illegal, based on the Bolt v. City of Lansing case. That case involved a stormwater fee, which in the view of the court amounted to a tax. The court established criteria distinguishing a fee from a tax as follows [from the Michigan Municipal League summary]:

  1. a user fee must serve a regulatory purpose rather than a revenue-raising purpose;
  2. a user fee must be proportionate to the necessary costs of the service; and
  3. a user fee must be voluntary – property owners must be able to refuse or limit their use of the commodity or service.

Responding to Munzel, Mayor John Hieftje noted that the intention was to rectify the funding source issue when the next budget is prepared.

Stephen Kunselman (Ward 3) was curious to know from Munzel, who’s an attorney, if he had any thoughts on the legality of the city’s Percent for Art program in the context of the Bolt v. City of Lansing case. Munzel did not offer a legal opinion on the matter.

The Percent for Art program is on the council’s agenda in the form of a resolution brought forward by Sandi Smith (Ward 1) to reduce the percentage reserved for public art from 1% to 0.5%.

Kunselman followed up on Munzel’s comments on the advocacy role of the HRWC by saying that the advocacy made him a little “squeamish” given that the city of Ann Arbor paid $10,000 a year to the HRWC as a member organization. Stephen Rapundalo (Ward 2) then asked if HRWC was a 501(c)(3) or a 501(c)(6) organization. Rubin replied that it was a 501(c)(3) – the nonprofit status that allows contributions to be deducted from income tax.

Rapundalo’s response to Rubin’s answer was: “Well, then you can’t lobby.” He cited his own experience setting up a parallel 501(c)(3) organization to a 501(c)(6), saying that he was well aware of what was allowed under each organization.  Rubin countered by saying that the HRWC had relied on their legal counsel as far as what their advocacy role could be and that the issue had been looked at in detail. [While there are contraints on 501(c)(3) organizations in how they lobby, they are allowed to do so: NP Action]


  1. By Rod Johnson
    December 7, 2009 at 11:12 am | permalink

    “The electricity that could be generated by the dam, he said, would save 1,000 tons of CO2 released into the atmosphere, when compared to the same electricity when generated by a coal-fired plant.”

    This doesn’t make sense by itself. 1,000 tons per what? Year? Hour? Kilowatt-hour?

  2. By Dave Askins
    December 7, 2009 at 11:22 am | permalink

    Re: [1] I think the relevant time frame is one year.

  3. By Boatman
    December 7, 2009 at 12:35 pm | permalink

    There is an interesting story about the political approach of the HRWC. Apparently, the private meetings (lobbying?) between HWRC and city hall did not bear fruit regarding the dam. Once the cat is out of the bag (or should we say the dam is out of the bag?), and the local community sees through the scams and rhetoric the true spots of the players become clear.

    HRWC has no issues using other people’s money (OPM). Since the HRWC cannot persuade any of the government bodies from Washtenaw to Washington into paying for their plan, they resort to sticking their hands in any pocket they can find.

    It is unfortunate that the nature of the director has become clear and why in the world does Ann Arbor provide $10,000 per year to this organization? How many years has this organization been paid this amount? How does one spell budget cut?

  4. By Patricia Lesko
    December 7, 2009 at 1:35 pm | permalink

    Sabra Briere is mistaken. Roger Fraser has had a raise in salary and benefits in each of the previous three years, at the behest of the City Council Budget and Labor Committee on which she now sits. Nancy Kaplan is absolutely on the right track in asking why it’s good management to lay-off city staff while accepting raises in pay, and why Council has granted those raises as the city’s budget had slid into structural deficit.

  5. By Dave Askins
    December 7, 2009 at 2:00 pm | permalink

    Re: [4] “Sabra Briere is mistaken. Roger Fraser has had a raise in salary and benefits in each of the previous three years, at the behest of the City Council Budget and Labor Committee on which she now sits.”

    Ms. Lesko is confusing the distinction between a raise and a one-time lump-sum payment, which both Fraser and the city attorney, Stephen Postema, have received the last few years. Further, they did not receive a lump sum payment at their most recent performance evaluation. From the Chronicle’s report of the Nov. 5, 2009 council meeting:

    According to Greden, both Postema and Fraser had volunteered to accept no increase in base salary and no one-time cash payment as they’ve been given in previous years when there’d been no increase in their base salary. The only revision to their contracts was a clause that allowed them to cash out an additional 120 hours of accumulated paid time off before June 30, 2010.

    Last year, Fraser earned $145,354 and Postema made $142,000. They received lump-sum payments of $3,640 and $3,900, respectively.

    Without the lump-sum payment this year, they each will take home this year the same amount they did four years ago.

    For readers who don’t see a clear difference between a raise and a lump-sum payment, take a concrete example some someone making $100K per year. For each of ten years, if you give that person a $1,000 raise each year, in the tenth year, they’re making $110,000. On the other hand, if you you give them a $1,000 lump-sum payment each year, in the tenth year, they’ve taken home just what they did in the first year — $101,000. Over the course of 10 years, our lump-summer gets $10,000 extra, while the guy with the actual raise gets $55,000 extra.

    The Ann Arbor News began using the strategy of making lump-sum payment “bonuses” in lieu of actual raises sometime in the early to mid 2000s.

  6. By Judith Foy
    December 7, 2009 at 5:04 pm | permalink

    Re#5 Very good clarification, Dave. It’s a topic that I’ve wondered about but did not really ‘get’ until now.

  7. By Kathy Griswold
    December 7, 2009 at 9:59 pm | permalink

    I recommend that council member’s salaries be replaced with a $150/month expense reimbursement similar to the AAPS Board of Education. This would clearly identify the council as a policymaking body and differentiate them from staff.

    Ann Arbor has a council-manager form of government, which is defined by Wikipedia as: The council is responsible for establish policy, passing local ordinances, voting appropriations and developing an overall vision for the city. Council appoints a manager to oversee daily operations of the city and implement the policies of the council.

    For the last 15 years, based on my experience with the City, council has been so involved in the operations of the city that they have had little time left for decisive policymaking. The result is that the professional staff (management and white-collar, nonunionized staff) is forced to try to make decisions and recommendations based on ever shifting political positions.

    A very concrete example is the request to move the King School crosswalk to a safer location. A citizen made this request two years ago, and it has resulted in over 100 emails and over 30 hours of staff time, not including council time. However, no decision has been made. It has become a political issue even though the Transportation Safety Committee (TSC), with city engineering representation, recommended the move in early 2009.

    The lack of clear policy and the politicalizing of the simplest projects undermine the authority of professional staff and negatively impact their productivity. Thus the savings from reimbursing council members for policymaking is many times the approximate $150,000 savings in council salaries.

    A conservative estimate of the savings, based on management best practices, is that the nonunionized professionals could be reduced by the same 18% as the union staff have been reduced since 2002. This would result in a reduction of an additional 22 professionals, at a much greater savings than reducing 14 firefighters.

  8. December 7, 2009 at 10:18 pm | permalink

    I’m sorry, but I can’t agree. (I think school board should have a stipend too.) Council has a very modest stipend (about $16,000 annually, I think) compared to many municipalities. It is a responsibility that requires 20 hours a week for minimum participation and more for full. The idea that individuals should volunteer a major part of their waking hours makes no sense. Often they will be giving up other potential income for this work. Council receives no benefits apart from the stipend and must answer countless constituent inquiries. (How well they do that depends on the individual.)

    This is much of the same thinking that gave us term limits for state officials. The result is to give even more power to staff, who are not accountable to the public, and to make office less attractive to well-qualified people. Apparently that is the purpose of this commentor (Kathy Griswold). But operations are the extension of policy, and at the local level it is hard for citizens to distinguish between them.

    I also contest the assumption that council has been micromanaging. In my view, they have not been sufficiently involved and have let many poorly conceived initiatives go through, the most recent being the single-stream recycling initiative. Apparently council was completely hypnotized by staff recommendations.

    I’m not familiar with the King School crosswalk question. However, I would suggest that if it has become a political football, it is either because there are serious disagreements between different citizen factions, a serious expense, or a serious engineering/technical reason. This is precisely why council needs to play a role. They are the ultimate arbiters between different public interests. That is the purpose of politics.