Ann Arbor Dems Primary: Mayoral Race

Dems will decide Aug. 3: Hieftje or Lesko

Candidates for mayor in the Aug. 3 Democratic primary: (top) incumbent John Hieftje and (bottom) Patricia Lesko. (Photos by the writer.)

On Thursday evening, the North Central Property Owners Association (NCPOA) hosted a forum for candidates in two Democratic primary races:  Ward 1 city council representative and mayor.

Coverage of Ward 1 candidate responses to audience questions is provided in a separate article: “Ann Arbor Dems Primary: Ward 1 Council.”

Before the forum began, as candidates worked the room – which would eventually be packed with around 60 people – they greeted their known supporters and detractors alike. Patricia Lesko was cheerily blunt with Ward 1 councilmember Sabra Briere, telling Briere:  “Hated what you had to say in The Observer about Lesko!” She was alluding to an article in The Ann Arbor Observer’s July edition, with the headline “Satan for Mayor?!

Briere was seated in the back row next to John Hilton, editor of The Ann Arbor Observer and a member of the NCPOA. The location of the forum at the Ann Arbor Community Center on North Main Street and its sponsorship by the NCPOA was significant – the site is across the street from Near North, a controversial affordable housing development approved by council in September 2009. The NCPOA had opposed the project most of the way through, but in the end wound up supporting a compromise version of the design.

Development and the definition of downtown was one of several topics raised by questions put to the candidates.

Incumbent mayor John Hieftje’s basic theme was that Ann Arbor was doing fine financially during tough economic times – especially when compared to other Michigan cities. For her part, Patricia Lesko questioned the ability of the city’s current leaders to make tough choices and described her own toughness with flourishes like: “You want a flower girl? Don’t vote for me!”

There is no Republican running for mayor – the winner of the Aug. 3 Democratic primary will not face a GOP challenger in November. Steve Bean and William Bostic Jr. plan to run as independents.

The moderator for the event was David Santacroce – a University of Michigan law professor who specializes in civil rights and health care issues. He laid out the ground rules: (i) five minutes per candidate for opening statements; (ii) roughly 30 minutes total for responses to audience questions – one minute per response per candidate; and (iii) two minutes per candidate closing statement. His only job, he said, was to pronounce names correctly and to read the questions, which audience members submitted on cards.

Margaret Schankler organized the event for the North Central Property Owners Association (NCPOA). Candidates all opened by thanking the organizers and those in attendance.

Opening Statements

Each candidate had five minutes for an opening statement.

Lesko’s Opening Statement

Lesko read from a prepared statement. She began by thanking the NCPOA for organizing the event. She also said she wanted to thank Hieftje for his years of service. She said it was important for those who are running for office to realize that serving on the city council is a “heckuva lot of work.” She contended that she was not running because she disliked Hieftje, saying that she’d voted for him three times. She said she wanted to be the next mayor of Ann Arbor because she wants to see the city government refocus on the basics: responsible spending, services, and infrastructure.


Patricia Lesko, candidate for mayor of Ann Arbor.

Lesko then moved into a biographical description of herself. She’s lived in Ann Arbor for 26 years, she said, and earned her degrees from the University of Michigan. She spent a decade teaching college, and for the last few decades has served as CEO and publisher of a national higher-education publishing group, headquartered in Ann Arbor.

A question she’s heard going door-to-door, she said, was: “Why on earth are you running for mayor?”

Who would want to lead a city where the roads are a mess, where the police and fire departments had been decimated, where the Stadium Boulevard bridges have been allowed to deteriorate for years? she asked. Who would want to lead a city where residents pay some of the highest property taxes in the state, but which still “nickels and dimes” to death residents and visitors alike? She compared the idea that extending the parking meter enforcement hours was good for downtown to a great-grandmother’s recommendation for castor oil, as good for whatever ails you.

The reduced frequency in parks mowing, she contended, suggested to some people that here in Ann Arbor we are trying to recreate the Great Plains.

Summarizing the set of examples she’d given, Lesko described them as resulting from policies and decisions made by Hieftje.

She noted that the city had floated bonds to fund the police-courts facility now under construction at the corner of Fifth and Huron, which she described as “luxury office space.” But the city had not floated bonds to fix the Stadium bridges, she said.

She questioned whether a good leader tolerates unethical behavior on the part of their colleagues. And she called the underground parking garage currently under construction on the city-owned Library Lot “non-essential.” Instead, she suggested that the city should mend the roads that have been allowed to crumble.

She criticized the new $3 entry fee charged at the recycling drop-off station. She characterized the city’s current approach to police and fire staffing as “gambling” with public safety. Lesko said she had the support of the police and firefighter unions because they know that as mayor she would focus the city government on the basics.

She said she wanted to promote environmentalism not just through the implementation of programs, but through the regular evaluation of how well we’re meeting our environmental goals. She cited Susan Collins, who’s executive director of the Container Recycling Institute, as calling single-stream recycling a “poor choice.” [This month, starting July 5, the city of Ann Arbor is switching to a single-stream recycling program.]

She called green energy challenges “great” but evaluating results and meeting goals is the kind of management that is necessary, she said. [Hieftje's green energy challenge calls for the use of 20% green energy by 2010 for municipal operations and by 2015 for the whole city]. Launching initiatives, Lesko said, is something that politicians are good at doing, but evaluating their success is something she’d do as the next mayor of Ann Arbor, she said.

She concluded her remarks by saying that she wanted to form a city government that treats its workers fairly and equitably. She gave an example of a city worker she’d met, a single mother who earns $10 an hour as a full-time temporary employee without benefits, who for the past several years had supervised other staff without the possibility of regular raises. [For background on city temporary employees, see Chronicle coverage: "Living Wage: In-Sourcing City Temps"]

While the city hires people like that single mother by the dozens, Lesko said, Hieftje had more than doubled his own pay.

[In 2003, the Local Officers Compensation Commission recommended that city council pay be raised from $9,800 to $15,000 over two years, and recommended raising the mayor's salary from $18,800 to $40,000. Recommendations of the LOCC take effect by default unless the city council acts to reject the recommendation. A Chronicle search of council minutes did not produce a resolution considered by the council in 2003 to reject the LOCC recommendation. In 2005, the council voted to reject the LOCC recommendation for slight increases in pay, and in 2007 voted against rejecting a recommended increase – thus confirming the LOCC recommendation for a raise. In 2009, the LOCC recommended no change in council and mayor compensation. The LOCC makes its recommendations every two years.]

Lesko concluded that she was running for mayor because she believed that the Democratic Party could talk the Democratic talk and walk the progressive walk.

City services would take center stage with her as mayor, Lesko said.

Hieftje’s Opening Statement

Hieftje also began with thanks all around. He then said that he would tell the audience a little bit about “what he’d been up to.” He’d begun the week on Monday with the Urban Core Mayors. [The Urban Core Mayors is a forum developed in 1992 and includes the mayors of the following cities: Ann Arbor, Battle Creek, Bay City, Dearborn, Detroit, Flint, Grand Rapids, Jackson, Kalamazoo, Lansing, Muskegon, Pontiac, and Saginaw.]


John Hieftje, Ann Arbor's incumbent mayor who's seeking another term.

He said that the mayors of the cities sat around and talked about what’s going on in their cities, and he left that meeting thinking the same way he’d thought for some time – he would not trade places with any other city, he said.

The group had discussed what’s going on around the state in cities like Troy, Royal Oak, and Grand Rapids. He’d spoken with the mayor of Grand Rapids, where they’d cut 140 jobs back in January and then had passed a tax increase this spring, which meant that they were able to rehire many of the police and firefighters they’d laid off back in January. But they were only able to open two of 16 swimming pools this year and had cut parks programs dramatically.

The economic situation, Hieftje said, was the worst since the 1930s. Hieftje said that Ann Arbor was doing well to survive the loss of 4.86% of tax revenues, caused by the former Pfizer property being sold to the University of Michigan. Ann Arbor is continuing to move forward, he said, in one of the toughest fiscal environments it would ever find itself. Ann Arbor has not increased taxes, he pointed out. Ann Arbor continues to win awards for quality of life, he said, citing one given by Forbes magazine designating Ann Arbor as the 4th most livable city in the nation.

He asked rhetorically, “Can we make money in the downstairs basement of city hall with a big machine? No, we don’t do that.” Instead, the city used prudent management he said. The word “prudent” could be found in the bond rating reports when the city’s bond rating is made, he said.

On the topic of the Stadium Boulevard bridges, he said it would have been foolish to repair those bridges this fall as they could have done, without waiting for one more opportunity to get federal money that they think is coming the city’s way. He said they’d just heard that $450,000 – it’s only a little bit, he allowed – was coming Ann Arbor’s way and that more was on its way.

He questioned the wisdom of selling bonds to fund the bridge repair. There needs to be an income stream to sell bonds, he said, adding that the income stream for the underground parking garage would be paid for by parking revenues, not property tax dollars.

One of the largest projects in the history of Ann Arbor was still going forward, Hieftje said – the replacement of an entire wing of the sewage treatment plant, which had been built back in the 1930s. That’s a $140 million project, for which about half had already been saved, by implementing modest increases in fees, he said. The increases in fees, he contended, were well below the increases in peer communities.

Hieftje said he felt that people could put up with less frequent mowing, while the city gets through the worst financial crisis in modern history.

Looking at the numbers for police and fire protection, he said, he noted that there’d been a long-term decline in crime rates. If there were an increase, then that would need to be looked at. He then said he wanted to ask a central question: If Ann Arbor is mismanaged and it’s sheer incompetence that has put us where we are, is it sheer incompetence that has driven the state of Michigan’s budget down? Is it sheer incompetence that is driving Troy, Grand Rapids, and Royal Oak to do what they’ve had to do?

Hieftje said he believed that compared to any other city in Michigan, Ann Arbor is doing far better.

City Income Tax

Question: Should Ann Arbor have an income tax? Why or why not?

Hieftje on City Income Tax

Hieftje confirmed the report of Ward 1 councilmember Sandi Smith, who’d spoken just prior to him, that they’d heard more and more people speaking in favor of an income tax. He said he’d never been in favor of an income tax – he has his problems with it, he said. He said he doesn’t think an income tax spread the burden fairly, as it was particularly hard on people who rent.

An income tax would also introduce a new variable into budgeting – in Grand Rapids, their income tax revenues were down about 14%. So a property tax decrease was exacerbated by the additional lost of income tax revenues as jobs were lost during the recession.

Lesko on City Income Tax

Lesko said she agreed with the mayor and with Smith when they said that Ann Arbor is doing well economically. She said, however, that she didn’t know who they were talking to when they said they’d been hearing a lot of pro-income tax voices. The people she’d been talking to, she said, were vehemently opposed to a city income tax. In fact, she said, as she’d gone door-to-door, one woman had grabbed her literature, looked it over and said, “Thank god, no city income tax!”

But what she had told the woman was that as an individual she is opposed to a city income tax. But as an elected official, Lesko said, she will never oppose putting something on the ballot and bringing it to the voters.

A voter referendum should have happened with the bonds that had been sold to build the police-courts facility, she said, as well as the new underground parking garage. [Lesko helped head up an ultimately unsuccessful petition drive to enact a city charter amendment that would have made such a referendum required for all general obligation bonds. Chronicle coverage: "Bid Launched to Amend City Charter"]

She challenged what she said was a contention by Hieftje made during his opening statement that the new underground parking garage is being funded with parking dollars, saying that the parking garage is being funded with municipal bonds backed by the full faith and credit of the city of Ann Arbor. She called the sign that read “Your Parking Dollars at Work” at the construction site “misleading.”

[In his comments, Hieftje had seemed to indicate a contrast between floating bonds without a revenue stream to make bond payments, versus floating bonds where there is a revenue stream – as with the parking revenues that will help make the underground parking garage bond payments.]

Lesko concluded that she did not think a city income tax was necessary, but that she would put it on the ballot.

Downtown Boundaries

Question: The Chamber of Commerce has been talking about expanding the boundaries of downtown. How far out does the “buffer zone” go?

Hieftje on Downtown Boundaries

He noted that there’d been a long process [A2D2] – about six years – of finding a community consensus on rezoning downtown. And recently there had been work to preserve a neighborhood near downtown along the Fourth/Fifth Avenue corridor south of William Street. [At its July 6 meeting, city council is expected to vote on a recommendation to create a historic district in that area.] He said he was a big believer that density should be in the downtown area, the D1 and D2 areas.

Hieftje described a “bargain” that had been made with residents where they’d accepted density in the downtown in exchange for leaving the near-downtown neighborhoods alone. He cited the current support for Zaragon Place 2, a high-rise residential project proposed inside the downtown, as evidence of that bargain. [See Chronicle coverage: "Moving Ahead on Zaragon Place 2"]

Lesko on Downtown Boundaries

Lesko said it was a great question because the city was currently allowing “development by exception” through the use of planned unit developments (PUDs). Buffer zones are called that, she said, because they are supposed to protect neighborhoods where people live. She indicated that the city must grow, but that growth must be sustainable. The city must grow in a way that includes open, honest, forthright dialogue, she said.

She noted that the mayor had said he favored density in the downtown, yet had voted for PUDs. She contended that she was not criticizing Hieftje for that, but simply pointing out that it’s difficult to be consistent, given the way that zoning is currently handled in the city. As far as expanding boundaries, she said, she thought the discussion should happen. It was past time, she said, that the community came together to discuss exactly that topic.

The 35% Question

Question: On your [Lesko's] website, you make the statement that the cost of city government has gone up by 35% since 2006. Where do the numbers come from and what would you do to change that?

Lesko on the 35% Increase

The city of Ann Arbor, Lesko said, had provided the numbers through audited financial statements.

She then briskly moved to the rhetorical question: “What do you do to rein in spending?” The city can’t clip coupons, she said, but what the city could do, for example, was tell the IT department no, when they came and asked for unnecessary purchases. When the police department wants new vehicles, she said, the city council has to say no. Just say no to non-essential staff requests for funding, she suggested. Single-stream recycling was a non-essential request for funding, she said. It doesn’t take a rocket scientist to rein in spending, she said, but rather political will.

Hieftje on the 35% Increase

Hieftje began by noting that his understanding was that a press release issued by the whole slate of candidates [Jack Eaton in Ward 4, Sumi Kailasapathy in Ward 1, and Lesko] had indicated that city overhead had been going up by 35% per year. He said that the city’s CFO, Tom Crawford, had said he doesn’t know where those numbers come from. Hieftje said he would have to side with Crawford and was curious as to how anyone could come to that conclusion.

Hieftje said he didn’t think that there was any city in the state of Michigan that had overhead going up by 35% a year. It was not possible, he said, for any city to have $10, $20, $30 or $40 million hidden away in some account somewhere – that’s just not possible. He said he’d refer folks back to the statements of the city’s CFO, and was very curious as to how someone could come up with that number.

Chronicle Analysis: A Theory on the Claimed 35% Increase

What is claimed on Lesko’s website is not a 35% increase each year, but rather a 35% increase since 2006:

REIN IN OVERHEAD: According to the city’s own audited financial statements, since 2006 the cost of running city government has risen 35 percent ($34 million dollars). I have the financial skills and real-world business experience to devise equitable and sustainable solutions to rein in overhead and increase government efficiency.

Among the documents available under the link are the Comprehensive Annual Financial Reports for each fiscal year. [2006 CAFR] [2009 CAFR]

Comparing 2006 figures for “governmental activities” expenses to 2009 figures in that category gives the following contrast:

2009  $130,177,876 (2009 CAFR page 14)
2006   $96,870,412 (2006 CAFR page 14)


The difference in those numbers is $33.3 million, and the increase is 34.38% – truncating at the millions place before doing the computation would give the $34 million difference and 35% increase Lesko has specified.

The Chronicle asked CFO Tom Crawford how to interpret expenses for governmental activities in the CAFR – is it reasonable to think of that category as “overhead”? The short answer he gave was no. In somewhat more detail, what are governmental activities? Crawford’s discussion paralleled the CAFR boilerplate definitional language:

Governmental activities – All of the City’s basic services such as police, fire, public works, and general administration are included in governmental activities. Property taxes, fees and charges, state shared revenues, and state and federal grants finance most of these activities.

Governmental activities contrast with business-type activities. From the CAFR:

Business-type activities - Business-type activity areas include water, sewer and stormwater systems, parking facilities, market, golf courses, solid waste and an airport. The City assesses fees, taxes and charges to cover the cost of services provided in these business-type activities.

So governmental activities, Crawford said, aren’t “overhead” in any reasonable sense for financial professionals. What does count as overhead, then, if not the governmental activities in the CAFR? Crawford pointed The Chronicle towards categories of expenses like human resources, the finance department and the city attorney’s office.

The municipal service charge, said Crawford is a reflection of “overhead.” Based on The Chronicle’s previous reporting on the municipal service charge, the total amount of cost allocation is in the range of $12 million [From "City of Ann Arbor's Municipal Service Charge Explained"]:

At Monday’s council meeting on the budget, Karen Lancaster stressed that the idea behind the MSC was about cost recovery to the general fund. In FY 2008, the total amount of administrative and overhead costs identified in the general fund budget for FY 2010 and FY 2011 – the current two-year cycle – was about $12 million.

Out of that $12 million, around 75% of it goes to support general fund activities. So it’s only a little over $3 million that is recovered to the general fund from outside the general fund.

So MSC amounts do not appear be on the same scale as the $34 million increase cited by Lesko.

Even if governmental activity expenses aren’t “overhead,” does Crawford monitor performance on that statistic – total governmental expenses – to check how well the city is doing? The key things to look at, he said, are each fund – the general fund, the water fund, the solid waste fund, for example.

So what accounts for the increase since 2006 in governmental activity expenses? Crawford pointed The Chronicle to the fact that the CAFR provides explanatory notes. A roughly $18.5 million chunk of the $34 million difference happened between 2008 and 2009. The explanation in the 2009 CAFR:

• Expenses for General Government increased by approximately $9.9 million primarily due to an increase in construction costs for the new Court & Police addition and for the Police early retirement payouts.

• Expenses for Public Safety increased by approximately $9.4 million due to increased wages and benefits, and increased fleet costs.

• Expenses for Public Works decreased by approximately $1.8 million due to decreased expenses on major and local streets due to the decline in revenue sharing funds.

Affordable Housing

Question: What do we do about affordable housing?

Hieftje on Affordable Housing

Hieftje said that affordable housing was something that Ann Arbor needs, and it is needed across several income levels. Responding the Lesko’s observation that he had voted for some PUDs, he noted that one of them had been for the Near North project, located across the street from the Ann Arbor Community Center, where the evening’s forum was taking place.

As far as replacing the 100 units of affordable housing offered by the old YMCA building at William and Fifth, he noted that they had been very substandard units. He said that their replacement had proven to be difficult. One thing that’s happened in recent years is that the tax credit program that had previously funded affordable housing had dried up in the state of Michigan. There had been a proposal [William Street Station] that would have supported affordable housing with other market-rate units in the same project, he said, but when the financial markets began to take a downturn, that project had not materialized.

One telling number, Hieftje said, is that Ann Arbor and Lansing are the only two cities left in the state that still contribute general fund money to human services.

Building affordable housing on a massive scale, he cautioned, would probably have to wait until the tax credit program came back. There had been proposals made to the county, he said, to do something with county-owned land, and those discussions were still happening. [Chronicle coverage: "The 100 Units of Affordable Housing"]

In the meantime, he said, the city would need to continue to “chip away” at the problem with 10 units here and 20 units there.

Lesko on Affordable Housing

She said that if Ann Arbor could build affordable housing the same way that it had been building “cash box apartments” we wouldn’t be having the discussion. She pointed to Ashley Terrace, at the corner of Ashley and Huron, as such a “cash box” that was in the middle of “going belly up.”

She called for an affordable housing trust fund. She said that an affordable housing trust fund that was funded through construction would provide a base of revenue that could be used to address this issue. [During her turn at the question, Sandi Smith pointed out that the city already has such a fund.]

Based on a study by the city, there were 500 additional units of affordable housing required, but the city had built something like 60 – that was not a commitment, Lesko said. There had to be political will, she said. We need development, she said, but we need the political will to make the commitment, instead of waiting for someone to come help us with funding.

She pointed to other instances where the city was waiting for funding – Stadium bridges and Fuller Road Station. She said she was not content to wait, concluding, “We need affordable housing now.”

Argo Dam

Question: What is your position on Argo Dam? If it stays, is there a need to shift the funding source out of the drinking water fund into the parks and recreation fund?

Lesko on Argo Dam

Lesko began by saying that she lives near Argo Dam, and kayaks regularly between Bandemer Park and Argo Dam. She stated that Argo Dam should stay, but not for the reason that people might think. She observed that the proposed Fuller Road Station was to be located on city parkland. The intention, she continued, is to lease the land, which took advantage of a loophole in the city charter that requires a voter referendum on the sale of parkland. [The city draws a distinction between lease agreements and the use agreements that are planned for Fuller Road Station.]

Fuller Road Station, Lesko cautioned, created a precedent for leasing of parkland. That is relevant to the Argo Dam question, she said, because removing the dam would reveal 10s of acres of new parkland, which could then be leased. So she would not vote to remove the dam, she stated, until that loophole is closed.

We’d been told the dam was failing, when it wasn’t, she said. She called for an open and honest discussion. “You want to take out the dam? Let’s talk.”

Hieftje on Argo Dam

Hieftje said the reason for the study was that the Michigan Department of Natural Resources and Environment had pushed the city to repair the toe drains, then the city did not think the situation was as serious as the MDNRE had said. The city had conducted studies to show its position was correct, he said, and the MDNRE had backed off considerably.

He said the city should keep Argo Dam. If we’re going to talk about dams, he said, they should talk about the other dams on the Huron River, including Geddes Dam, which creates Gallup Pond. Argo is much healthier than Gallup as a body of water, he said.

As far as the funding issue, Hieftje said they were going to have to look at that. Argo and Geddes required maintenance, he said, and did not currently generate power. He mentioned that he serves on the city’s energy commission and said that another reason for keeping Argo Dam was for the energy it could generate if it were retrofitted to generate hydropower.

He called for a comprehensive look at all the dams along the river, before looking at removing one.

Just for Hieftje

Hieftje on Hieftje

Question: Why do you feel you’ve earned another two years as mayor? What, if anything, will you do different?

He said that what he thought the campaign of the slate of candidates who were headed up by Lesko was really about was “screaming that there’s something wrong.” He said he was happy to sit down and show people what was going on in other cities and what is going right in Ann Arbor. Ann Arbor is going through the same ups and downs as other cities, having just lost its largest employer and taxpayer [Pfizer, which pulled out of Ann Arbor in 2008]. In that context, he contended, Ann Arbor is actually thriving.

With respect to bridges, he said, it was worth considering that there were currently three bridges closed in Washtenaw County – 50 in the state of Michigan. We’re going to fix the Stadium bridges, he said. The city could have done that this fall, and in the spring they’d go ahead whether they had federal money or not. Hieftje noted that the safety rating had improved recently, when the beams were removed.

As far as the contention that the city would spend $11 million for its contribution to Fuller Road Station, he said that the city would not be spending anything like that amount of money. The University of Michigan investment is providing the entire local match that’s required, he said. He called it a “bargain” for the city of Ann Arbor, which would be an asset that the city owns. The city will not be leasing the facility, but rather having entities like Amtrak, Greyhound and others use the facility through use agreements.

Just for Lesko

Question: Could you elaborate on the unethical behavior and the mayor’s acceptance of it, which you alluded to in your opening remarks?

Lesko on Unethical Behavior

Lesko indicated that it stemmed from a scandal that everyone read about who opened their Sunday papers on “a fine June day [in 2009],” to find out that while people were addressing the city council, city councilmembers were talking to each other by email. They’d been making fun of each other, giving some councilmembers Golden Vomit Awards, calling a councilmember “the moron.”

“That’s unethical,” she declared.

If you’re a leader and you know those things are going on, she said, you have to face the situation. She quoted J.K. Rowling in one of the Harry Potter books: “It takes a great deal of courage to stand up to your enemies; but a great deal more to stand up to your friends.” [Albus Dumbledore in "Harry Potter and the Philosopher's Stone"]

You have to make hard decisions as a leader, she said, and one of the most difficult decisions to make is when you’re faced with unethical behavior by those around you. As far as she is concerned, she said, the episode is in the past, and people would have to learn to work together. It would take someone who is willing, she said, to lead the way.

She noted that Hieftje had called her and Eaton and Kailasapathy “the slate,” but she contended that Kailasapathy had said several things with which Lesko disagreed. She also pointed out that the “council majority” is called that because they vote together usually. There was a slate of candidates who ran in 2008 who were all endorsed by Hieftje, she noted.

Closing statements

Each candidate had two minutes for a closing statement.

Hieftje’s Closing

He began his closing statement by responding to a critique by Kailasapathy, of his frequently repeated assertion that Ann Arbor was doing better than other Michigan cities. She had contended that it was expected that Ann Arbor would do better than Flint and Detroit. Hieftje stated that her critique was interesting because he’d not once mentioned Flint or Detroit, but had instead cited Grand Rapids and Royal Oak, award-winning cities. He agreed that Flint and Detroit were in a different category.

Hieftje reviewed the budget situation. The property taxes from Pfizer had disappeared, he said, yet for the budget that the city council had passed, the police chief had told them it was a workable budget. The budget that the council had passed would allow the police force to be proactive, Hieftje said. The fire chief had told the city council that he could, under the budget passed by council, meet the three criteria that the council had set: (i) keep all the stations open, (ii) maintain response times, and (iii) maintain the ability to get 18 firefighters to the scene to protect the city’s insurance ratings.

Hieftje stated that there are on average only about 12 fires per year where firefighters hook up to a fire hydrant, and the number of fires in Ann Arbor is down about 70% since 1970. He said it was really a shame and his heart went out to the firefighters who are losing their jobs. That could have been prevented if the firefighters had come to the table and sat down with the city as firefighters had done in other cities, he said.

We can’t be standing up for one particular union, he cautioned. He concluded by saying that Ann Arbor would continue to build on the quality of life that we have in Ann Arbor and that he’d compare it with anywhere. We’d continue to win awards, he said.

Lesko’s Closing

Lesko began by alluding to a remark that Sandi Smith had made in her closing statement about stones being thrown: “Boy, Sandi is feeling like somebody from the Old Testament!” She said she found Hieftje and Smith to be very competent and likable people, but it’s not about personality, she said, but rather policy.

In the June Ann Arbor Observer, she said, Hieftje is quoted as saying that she is against everything he is for [The Observer quote came in the context of an article on single-stream recycling.] She said she’d thought about that and concluded he was actually right – she is against cronyism, she said.

She said she is uncompromising when it comes to unethical or illegal behavior. She’s against scripting votes by email, she said. She said she takes very seriously the legal and fiduciary responsibilities that come with elected office.

She said that as the next mayor of Ann Arbor, she’d lead a city where city services take center stage. She stated that she would lead – “I’m not a go-along kind of gal.”

“You want a flower girl? Don’t vote for me. I’m tough,” she told the audience.

These are tough times, she said, and anti-union rhetoric “doesn’t fly with me.” And it is also not acceptable, she said, to allow unions to negotiate the “pants, shirts, and socks” off the mayor, the council and the city administrator.

She’d told the unions that if elected, she’d reopen their contracts, and that they’d said they’d cooperate.


  1. By Chris
    July 3, 2010 at 1:24 pm | permalink

    How does she feel about writing about the government she hopes to run under an assumed name not identified as such? Is that “ethical” behavior?

  2. By Brian
    July 3, 2010 at 3:47 pm | permalink

    Thank you, Chronicle. This is just one of the many reasons I pay what I can to keep ya’ll doing great work.

  3. July 3, 2010 at 3:54 pm | permalink

    Thank you for doing the analysis of the “overhead” claim. I agree that calling the changes in this metric an increase in overhead is mistaken. I would call it an increase in the cost of operation. It is notable that the cost of “non-business” governmental activities has increased to this extent during a period in which staff was being markedly reduced and services cut. I believe that it is traceable to the increase in indebtedness and bond payments.

    A measure of Ann Arbor’s relative fiscal health that has not been discussed is its “GDP”, which was reviewed by the Center for Michigan. [link] It shows a decline in Ann Arbor’s GDP, and it compares unfavorably to Lansing and Grand Rapids in this regard.

  4. July 3, 2010 at 4:19 pm | permalink

    Thanks for making sense of the 35% increase in the cost of governmental activities over the past three years. This is an astounding increase. It shows the “business as usual” philosophy in City Hall.

  5. By Patricia Lesko
    July 3, 2010 at 5:55 pm | permalink


    I don’t believe you use a tape recorder, and I want to congratulate you for your refreshingly accurate account of what I said, and your dissection of the rise in the cost of city government.

    CFO Crawford, I would point out, is not a neutral party in this election, and though it’s certainly appropriate to consult him, he has every reason to fear the election of all of those challenging the incumbents. In, I’ve questioned the quality of the financial data he produces, and questioned his statements before Council promising a total cost for the police-court facility. The challengers have repeatedly pointed out that this year’s budget includes “additional” costs for the building Mr. Crawford guaranteed would cost not a penny more than $47.4 million dollars at a City Council meeting.

    As opposed to quietly approving the cost over-runs, Mr. Crawford and Mr. Fraser should have been called before Council to explain their serious errors in projecting costs for the building.

    It would have been better journalism for Stanton to have confirmed his information with an expert third party, and I’m encouraging you to do so, as well.

    Finally, our city keeps two sets of books, as I’m sure many of you know. The flawed fund-based accounting method used by Messers Crawford and Fraser is not accepted by the state, and a second financial statement is produced using a different accounting method, as well. The incumbents and staff frequently switch back and forth between the two sets of financials depending on their political needs.

    Thus, I agree completely with First Ward candidate Sumi Kailasapathy that Ann Arbor must move to zero-based budgeting.

  6. By Dave Askins
    July 3, 2010 at 8:31 pm | permalink

    Re: [4] I did not observe eye-rolling on Smith’s or any other candidate’s part. The Chronicle’s intern, Hayley Brynes, was tasked specifically with taking notes on Smith’s remarks. But we did not have anyone on eye-roll patrol. If it’s down to whether someone rolls their eyes, I think we are sunk as an electorate.

    Re: [5] “your dissection of the rise in the cost of city government.” The “dissection” was simply a theory as to where the figures of 35% and $34 million might come from, which could at any point have come directly from the candidate who’s thrown those figures into the discussion. When asked where a percentage figure “comes from” a reasonable answer is not “the city provided the information.” A reasonable answer for someone who relates to numbers reflexively is to name a specific numerator and denominator that gives that percentage.

    Once the specific source for the figures is identified, the merit of the claim attached to the figures can be evaluated. In this case, it’s clear that the claim that it’s “overhead” that has increased by 35% is not accurate — governmental activity expenses in the CAFR aren’t “overhead” for people with financial expertise. The same point that can be understood by reading through the CAFR’s definition of governmental activity can also be conveyed by swapping in “overhead” for “write off” in this Seinfeld episode [link]. And it’s way more entertaining that the CAFR.

  7. July 3, 2010 at 10:50 pm | permalink

    Re (6), I agree with your comments about eye-rolling but I think that was a response to a comment by the same commenter to a different story.

    Those of us who care about these things know that this campaign and the issues involved are the source of a great deal of passion and personal involvement. My own thinking is that we should ignore twitches, eyerolls and even sighs and gasps. We are all human, after all. I always thought that Al Gore was mistreated in his debates against W because they pictured his somatic responses. It was not relevant to the points being made. I’m not going to excuse his orange makeup since I think that was the fault of support personnel.

  8. July 4, 2010 at 8:26 am | permalink

    For the past half century, ever since the Kennedy-Nixon debates, the demeanor and actions of the candidates have played important roles in the voters’ evaluations. Compare Smith’s alleged eye-rolling and Hieftje’s looking down at the table most of the time with Nixon’s sweating and nervousness, Bush I’s looking at his watch, and Gore’s woodenness.

    With regard to the 35% increase, it is a quibble to make a big deal out of whether it is in “overhead” or “governmental activities” expenses. A helpful CEO, who should have instantly recognized what Lesko’s figures were (since they were posted on her blog), would have said “oh, she’s talking about governmental activities expenses.” And of course these expenses are much larger, and hence more significant from a policy point of view, than overhead.

    Also, the increase in governmental activities expenses is not just due to some one-shots, but is a steady trend. Here are the figures for each fiscal year, 2006 through 2009, from the CAFRs:

    2006 96,870,412
    2007 97,548,949
    2008 111,655,402
    2009 130,177,876

  9. By Jenkins
    July 4, 2010 at 9:13 am | permalink

    @ David Cahill I completely disagree regarding the overhead issue. This is not a term that can be misconstrued (it is a common term that is recognized in all fields not just accounting) and if lesko does not understand the difference between governmental activates expenses and overhead she should not be in any executive position.

    Ms. Lesko owns a business it is hard to believe that she does not know the definition of these terms. Also, Ms Kailasapathy who repeatedly states that she is a CPA should definitely know the defintion of the terms, yet she has defended Ms. Lesko on some other blogs trying to explain away the mistake. It is hard to believe that this is some sort of mistake

    Nonetheless, a 35% increase in overhead is not the same as a 35% in governmental activates spending and do not have the same inference when speaking about waste. Although the increase in governmental activates spending bothers you, it does not circumvent the issue that Lesko claims that overhead” has increased by 35%.

    Also, as Tom Crawford pointed out, if you would like to see the reasons for the increase in governmental activities spending you are supposed to read the explanatory notes. Most sure sound like one-shots to me, not a steady trend.

    Lesko claims:

    “I have the financial skills and real-world business experience to devise equitable and sustainable solutions to rein in overhead and increase government efficiency.”

    Oh really? Her claim that overhead increased by 35% is not accurate and shows the public what type of “business” experience she really has.

  10. July 4, 2010 at 9:48 am | permalink


    Thanks for the detailed reporting and your commitment to objectivity. I have one small correction regarding the use of the word “support” in regards to the NCPOA position on Near North (under the Affordable Housing question in your report). We prefer to characterize our position as a decision to “accept” or “not oppose” the negotiated final design. I do not believe anyone from NCPOA used the word “support”.

    Although it may be seen as a small difference, I think it is important to make this clear, especially when some candidates for re-election are claiming this “significant addition” of 39 units of affordable housing stock as a personal accomplishment.

    As a member of the NCPOA area planning committee, I voted to accept the final site plan – with substantial reservations. Below are my personal views mostly copied from an e-mail I sent to the NCPOA Planning Committee in Sept. 2009:

    Based on my review of the new plans, I cannot offer my support for this project. What I can offer is my acceptance of this version and a statement that I will not to oppose its approval at council. I am willing to sign on to a letter from NCPOA that uses the word accept. But I will not use the word support.

    My reasons for acceptance:

    1) The project will provide an additional 14 units offering supportive housing services in our neighborhood. North Central has a history of welcoming cultural and economic diversity, and additional supportive housing will continue that legacy.

    2) Setbacks have improved enough to allow the building to be somewhat absorbed into the landscape over time.

    3) The retail space is now a phase II item that will only be constructed if/when the Summit Party store is demolished and an access driveway off of Summit Street to the new store is provided.

    4) Building height has been reduced from the proposed 5 stories/55 feet – a height which was an egregious violation of existing zoning. The four story portions along Main Street are barely acceptable and perhaps can be softened by additional work on the roof lines.

    5) 3 Oaks is willing to put into writing some commitment to keep NCPOA involved in the design and construction process as it moves forward, as well as in planning for the open space areas and their maintenance.

    My reasons for lack of support:

    1) A building of this size and massing, which requires the demolition of 8 homes, sets a precedent for allowing future downtown-style development in the North Central neighborhood, particularly along Main Street. Extreme vigilance must be taken to ensure that approval of this project in no way sends a “green light” message to other developers that projects of similar scale and density are appropriate here.

    2) Avalon/3 Oaks have not established that there is a need for, nor a public benefit to, the 25 “workforce” units in this project. The rent of $774 for a 1 bdr unit is close to the median for market rate units. The rent is equal to or well above the affordability ceiling for those in the 30-50% AMI range, and the income limits would make it difficult for those who can afford the rent to continue to qualify. To spend extremely scarce affordable housing grants & tax credits to subsidize un-needed housing is wasteful and comes at the expense of providing more housing for those in need. I fail to see the advantage to anyone of spending $12 million dollars in public money to build 39 bedrooms (307,000 per unit) while destroying 27 bedrooms that rent for an average of $330. In essence $12 million for 12 additional bedrooms.

    3) The industrial/modular design not only detracts from the architectural character that exists in the North Central neighborhood, but contributes to the extremely high cost of construction. To spend more public money than necessary in order to follow the particular design approach and aesthetic favored by the developers is unfortunate and wasteful.

    I thank Peter Pollack for all of this effort and for donating his impressive talents and time to this cause. Without his negotiation and acceptance by the 3 Oaks development team, I believe we would have ended up with a much worse project – one which council seemed set to approve.

  11. By Steve
    July 4, 2010 at 10:42 am | permalink

    The question seems to be what constitutes overhead? Overhead for governments are the indirect costs attributed to the functions (HR, finance, budget, administration, legal counsel)that support the direct services (governmental activities) that citizens receive.

    A 35% increase in the cost of governmental activities is not the same as a 35% increase in overhead.

    Many municipalities (I would imagine the City of Ann Arbor does this)charge some of these indirect costs back to the departments that benefit from the services, that is, the city is able to recoup some of costs of the payroll function from the police department (for example).

  12. By ChuckL
    July 4, 2010 at 11:26 am | permalink

    If “overhead” is continuing, ongoing expenses; from my point of view as a taxpayer, the $34 Million increase in three years is certainly “overhead”. The numbers that David Cahill presented show year-over-year increases every year from 2007 on. I can see the Mayor’s flacks are taking a page from the Bill Clinton crisis management book by asking what the definition of “is” is; shoot the messenger–avoid the facts! Without Pat we would not even have a chance to talk about this; instead of talking about why we have an increase in spending when the Mayor is taking credit for trimming the city’s headcount, we are talking about the definition of “overhead.” This is really offensive.

  13. By John Floyd
    July 5, 2010 at 4:46 pm | permalink

    Re: UM Fuller Park Car Commuter Parking Garage

    It may be a sign that I am a true 5th Warder – one of Mr. Hohnke’s Dim Bulb Natural Constituents – but I don’t get how a parking garage for UM car commuters, built in a city park near the river, is an “Asset” for city residents. And why would we WANT to own the train and bus stations? Can someone explain this to me, using small words?

    Is it just me, or does every time the UM Fuller Park Car Commuter Parking Garage comes up, Mayor Hieftje try to turn the discussion AWAY from the Car Commuter Parking Garage he proposes to build, and TOWARDS the things that are NOT being built, e.g. a new train station?

    Something else I may be behind on: the Feds WON”T fund bridge repair, but WILL build a brand new parking garage for car commuters in a city park? Is this true? Or did Amtrak change its publicly announced mind, and decide not to re-locate the Dearborn station, or re-build the Birmingham station, and but instead to devote its scarce resources to moving the otherwise fine Ann Arbor station?

    Is there some reason that the current “Inter-modal Transit Center”, served by Amtrak, AATA, pedestrians (the boys & I walk there whenever we take the train), two parking lots, cabs, and bike lockers, near both downtown and a freeway ramp, is unable to serve any real or imagined commuter trains until passenger volumes support a new station?

    Is it just my paranoia, or does this permanent transfer of city parkland to the University for non-park purposes keep changing its proposed legal form? Call me “Curmudgeonly”, but it strikes me that what ever legal form city hall solons invent for this transfer, citizens should get to vote on its substance. Besides, moving the existing train station, and the bus station, to the UM Fuller Park Car Commuter Parking Garage, would be the end of Fuller Park. Maybe this what people want, but shouldn’t we vote on it?

    Any help Chron readers can lend, to help me sort these questions out, would be appreciated.

    Again, this may just be me, but I have a hard time figuring out where Mr. Hohnke stands on any issue, including the UM Fuller Park Car Commuter Parking Garage. It would be handy if someone could tell me what he thinks about this.

    John Floyd
    Republican Candidate for City Council
    5th Ward

  14. July 8, 2010 at 10:31 am | permalink

    +1 to Lesko for Harry Potter reference.

    -1 to Hieftje for arguing that we need reduction in fire forces because there are only 12 hydrant fires in Ann Arbor each year. In case he has forgotten, 3 people died in the Dickens neighborhood in a fire within the last year and one young man died on campus. I can’t make an expert commentary on manning levels & station locations, but it is misleading (and offensive) to imply that Ann Arbor doesn’t have a significant fire problem. Hydrant fires is surely an inferior metric to fatalities.