Comments on: Budget Round 2: What’s the Big Idea?

By: Rod Johnson

Rod Johnson — Sun, 14 Feb 2010 21:27:30 +0000

I think everyone knows that’s true. Fiscal decisions made within that context may have exacerbated the problem, though. You still have to look t the details to understand how we got here and what we have to do next. Knowing Kalamazoo is hurting doesn’t help us with that.

By: David Lewis

David Lewis — Sun, 14 Feb 2010 17:02:04 +0000

When looking for causes for the need to cut the city budget I continue to be amazed why anyone would wonder. Across the country and especially in Michigan cities are suffering greater pain than Ann Arbor.

Do any of you ever leave town? Ever read the Free Press, Grand Rapids, Lansing or Kalamazoo papers on line? Grand Rapids just cut 140 jobs (60 from police and fire) and is asking for an income tax increase. Closer to home, look at Ypsilanti and Washtenaw County Govt.

Five percent of A2′s revenue went away when the Pfizer taxes were lost. A huge percentage of the land in the city is non-taxable and they haven’t raised the millage in years.

It is not difficult to understand why the city needs to make budget adjustments.

By: Alpha Alpha

Alpha Alpha — Sat, 13 Feb 2010 23:32:48 +0000

Agreed!

JohnQ provided input to help arrive at the numbers cited above…

By: Vivienne Armentrout

Vivienne Armentrout — Sat, 13 Feb 2010 15:37:37 +0000

An extensive rehashing and critique of similar remarks by the above (#8) commenter can be found on AnnArbor.com. (It runs into 20 or 30 comments.) I suggest that we do not repeat it here. The good thing about that thread is that it features comments by John Q!

By: AlphaAlpha

AlphaAlpha — Sat, 13 Feb 2010 05:47:40 +0000

According to a detailed comparison of BLS data and 2010 Budget Book data
detailed in comment 59 here.

The average total compensation for Ann Arbor city workers is 141% of the
national government employee average total compensation,
and an astounding 204% of the average total compensation for civilians.

A mere 5.8% reduction in the total compensation paid to city workers would
eliminate the deficit completely.

The 29.1% reduction needed to normalize city worker compensation with nation wide government averages would save city taxpayers over $26,000,000
per year.

The big idea: competitive wages.

By: Vivienne Armentrout

Vivienne Armentrout — Fri, 12 Feb 2010 20:56:43 +0000

The downturn in real estate values was well underway in late 2007 and early 2008, and Pfizer’s withdrawal was already announced, when the council voted to build the police courts building based on a highly leveraged scheme that included sale of bonds, withdrawal from the fund balance, and reassignment of revenue that was already being used for other purposes, as well as the unrealized sale of First and Washington for $3 million.

It was a major decision far above the “mistakes were made and lots of bad things happened” level.

By: Steve Bean

Steve Bean — Fri, 12 Feb 2010 20:16:41 +0000

“Does this imply that our current deficit is due to not having money to pay for the new Police and Court facility?”

Looking for a single cause would unnecessarily complicate this discussion. You’ve identified one contributing factor (and I think David has accurately analyzed it.) Other factors include the general Michigan economy — partly because it affects how we all feel about the prospect of tax increases, and also because it led to the state government cutting revenue sharing — the bursting of the housing bubble that resulted in the drop in property values, the health care insurance mess (that affects the cost of employing people), and a lack of attention to the broader context we operate within. I’m sure others could add to the list, pointing to other recent city government decisions as well as some that go back more than a few years.

By: David

David — Fri, 12 Feb 2010 13:36:21 +0000

“Does this imply that our current deficit is due to not having money to pay for the new Police and Court facility? If so, shouldn’t the burden fall on the Police and Courts to pay for it?”

If I recall correctly, the city council forecast they would receive $3MM for that property. They then proceeded with construction of the new building before completing sale of the property. I also believe that the Village Green project has run into funding issues so sale of the property is not assurred.

If a citizen had made this mistake in planning/judgement, they would probably be under some sort of financial stress that could result in bankruptcy, loss of the property, etc. if the down payment could not be made. The city govt will try to find a way to cover the shortfall with shifts from other services or through a tax increase.

By: David

David — Fri, 12 Feb 2010 13:28:55 +0000

It is interesting how a lot of the funds are protected through “hold harmless” rules. I am sure the original intention was good but it will now only make the job more difficult.

It is also nice to see Hizzoner is concerned about our future with his stance on the Greenbelt program, but I can’t see how he can justify spending money in the program when the $st are needed elsewhere. It is like trying to put money in your child’s 529 college fund when your unemployment check is unable to cover all of your monthly expenses.

By: Gill

Gill — Fri, 12 Feb 2010 13:02:05 +0000

“Sandi Smith (Ward 1) asked what the proceeds from the still-pending sale of the First & Washington parcel – to be developed by Village Green as the City Apartments project – would be used for. Fraser’s answer: As a down payment on the municipal center currently under construction next door to the Larcom Building”.

Does this imply that our current deficit is due to not having money to pay for the new Police and Court facility? If so, shouldn’t the burden fall on the Police and Courts to pay for it?

Can we let the new building go into foreclosure to avoid the debt?
With so few employees left why is this building necessary anyway?