2011 Election: Ward 2 City Council

Independent Jane Lumm is challenging Democratic incumbent Stephen Rapundalo in the Ward 2 Ann Arbor city council race, and they both participated in the recent candidate forums hosted by the local League of Women Voters (LWV).

The forums on Oct. 5, 2011 were held for all four of the city’s five wards that have contested races. Replays are available via Community Television Network’s video on demand service. [Ward 2 CTN coverage]

The Ann Arbor council is an 11-member body, with two representatives from each ward, plus the mayor. All members of the council, including the mayor, serve two-year terms. In a given year, one of the two council seats for each ward is up for election. In even-numbered years, the position of mayor is also up for election.

This year, the general election falls on Nov. 8. Readers who are unsure where to vote can type their address into the My Property page of the city of Ann Arbor’s website to get that information. A map of city ward boundaries is also online.

Of the four contested races this year, the Ward 2 contest likely poses the greatest chance for a challenger to take an incumbent’s seat. Lumm previously served on the city council in the 1990s, has been active in the community, enjoys good name recognition and has achieved a broad coalition of support across party lines. She served previously on the council as a Republican. Lumm’s supporters include some who previously supported Rapundalo as recently as in the August Democratic primary.

One measure of Rapundalo’s own perception that Lumm poses a significant threat is the tenor of his campaign – as reflected in his website as well as his closing comments at the LWV debate. In those comments, he attempted to paint Lumm – and the city councils of the 1990s – as having created a mess that he’s had to clean up. Specific votes cast by Lumm are described and criticized by Rapundalo on his website without their full context. The context for some votes by Lumm – votes that are cited and criticized on Rapundalo’s website – reveal a kind of garden-variety fiscal conservatism that Rapundalo is also known for.

Topics addressed by the two candidates, presented in chronological order below (annotated to include historical context), include the proposed Fuller Road Station, the retirement board charter amendment, street repair millage, finance, human services, public art, and the Ann Arbor Downtown Development Authority.

Opening Statements

Each candidate had a minute to give an opening statement.

Opening: Rapundalo

Rapundalo began by thanking Ward 2 residents for their confidence in him and their support over the last six years. He said he’s seeking re-election because now more than ever the city needs strong fiscal leadership to address the challenges of the future and to move Ann Arbor forward. He said he’d been responsive to Ward 2 residents on a wide range of issues.

Rapundalo said he is proud of his accomplishments, which he said include leading the effort to replace outdated and expensive labor contracts, to provide more and better recycling, establish and protect neighborhood parkland, rebuild aging infrastructure, defend neighborhoods from inappropriate development, and ensure quality city services. Most important, he said, was to develop city budgets that do not put those services at risk. He said he had worked collaboratively with his council colleagues, despite occasional policy differences.

Opening: Lumm

Lumm began by thanking Rapundalo, the LWV and CTN. She said that in today’s nationally challenging environment, the city needs to make responsible, but difficult choices – the city simply can’t afford everything.

Lumm said the guiding principle should be to align city spending with what people value and are willing to pay for. Unfortunately, she said, this alignment is not there. She said the city needs to refocus its priorities on basics like police, fire, streets and infrastructure. The more discretionary and visionary items like public art and transit stations will just have to wait, she said. To her, she said, public safety is job one.

Lumm was honored, she said, that people across many different political persuasions had united in their support of her campaign. Their common concern is that elected officials have lost touch with the community and its needs and priorities. That needs to change, she said, and it’s time to get back to basics to reconnect Ann Arbor’s city government with its residents.

Transportation

Question: The Fuller Road Station will require parkland for the purpose of providing a parking structure, which will be used primarily by the University of Michigan. For this the city will pay 22% of the initial cost. Down the road, how will the parking revenue be split? Who will pay the maintenance? Who will provide safety measures and protection? How do you personally feel about the project? What is the long-term vision for this station and the probable timeline?

Transportation: Fuller Road Background

The introduction of the Fuller Road Station concept to the public can be traced at least as far back as January 2009, when the city’s transportation program manager, Eli Cooper, presented a concept drawing at a meeting of neighbors at Northside Grill. At the time, the city was trying to encourage the University of Michigan to reconsider its plans to build parking structures on Wall Street.

The city’s strategy was to get the university to consider building its planned parking structures on the city-owned parking lot, just south of Fuller Road, near the intersection with East Medical Center Drive. It would allow the university to participate in the city’s hoped-for transit station at that location. The university has leased that parking lot from the city since 1993.

The transit station is envisioned as directly serving east-west commuter rail passengers. A day-trip demonstration service that was to launch in October 2010 never materialized. But an announcement earlier this year, that some federal support for high-speed rail track improvements would be forthcoming, has shored up hopes by many people in the community that the east-west rail connection could become a reality. That hope has been further strengthened by the recent acquisition of the track between Dearborn and Kalamazoo from Norfolk Southern by the Michigan Dept. of Transportation.

The council has already approved some expenditures directly related to the Fuller Road Station project. It voted unanimously on Aug. 17, 2009 to approve $213,984 of city funds for an environmental study and site assessment. Of that amount, $104,742 was appropriated from the economic development fund.

On Nov. 5, 2009, on separate votes, the council approved additional money for the environmental study and site assessment and to authorize a memorandum of understanding with the University of Michigan.

Controversy on the project includes the status of the land where the proposed Fuller Road Station would be located. It’s designated as parkland, but formally zoned as public land (PL). In the summer of 2010, the possible uses for land zoned as PL were altered by the council, on recommendation from the city planning commission, explicitly to include transportation facilities. Any long-term use agreement with the university is seen by many as tantamount to a sale of parkland. A sale should, per the city charter, be put to a voter referendum.

Recent developments have included an indication from mayor John Hieftje that a work session would be scheduled to update the council. When the city council subsequently added a July 11, 2011 work session to its calendar, it left the expectation that the topic of that session would be Fuller Road Station. However, that session did not include the proposed transit station on its agenda.

A letter from Hieftje sent to constituents in late July 2011 reviewed much of the information that was previously known, but appeared to introduce the possibility that the University of Michigan would provide construction costs for the city’s share of the parking structure up front, with the city’s portion of 22% to be repaid later.

Transportation: Lumm

Lumm said the long-term vision is that it’ll be a multi-modal station. And that could be in Ann Arbor’s best interest, she said. But now the only thing on the table is a parking structure with a significant city funding commitment, she said, estimated at around $10 million. She felt she could not support the proposal right now, because there are way too many unanswered questions.

The main question that remains unanswered, Lumm said, are estimates of ongoing operating costs. Also the city hasn’t shared details of the operating or capital plan. If these plans exist, they should be shared in a completely transparent discussion with the community, she said. Before embarking on any such proposal, we need to understand what the financial commitments are, she said. In addition, she said, the location is a park. If the Fuller Road Station is as solid a proposal as the city says it is, it should pass muster with voters, Lumm concluded.

Transportation: Rapundalo

Raundalo said he was quite supportive of the project. For him, Fuller Road Station would be a “game changer” for the city and its future. The station is part of an effort to move people in and out of the city right next to the largest employer the city has [the University of Michigan]. We need to think about the future and what our kids and grandkids need and how they are going to move around in an increasingly dense community, he said.

Rapundalo said the idea of multi-modal transportation is exactly the kind of forward thinking the city needs to do now, not later, when it’s going to be too late and more costly. The city has the funding for the first phase, and funding for the next phases is evolving, he said.

Retirement Board Charter Amendment

Question: On the Nov. 8 ballot, voters will be asked to approve a city charter amendment that removes the city administrator, currently Steve Powers, from the city retirement board of trustees. Explain the purpose of approving this amendment.

Retirement Board Charter Amendment: Background

The composition of the nine-member body as currently set forth in the charter is as follows: “(1) The City Administrator and the Controller to serve by virtue of their respective offices; (2) Three Trustees appointed by the Council and to serve at the pleasure of the Council; (3) Two Trustees elected by the general city members from their own number (general city members being members other than Policemen and Firemen members); and (4) Two Trustees elected by the Policemen and Firemen members from their own number.”

The proposed change would retain nine members but would distribute them differently: (1) the city controller; (2) five citizens; (3) one from the general city employees; and (4) one each from police and fire.

If the measure passes on Nov. 8, it will still need to be ratified by the city’s collective bargaining units in order to take effect.

In 2005, a “blue ribbon” commission – tasked to make recommendations about the city’s retirement board and the city’s pension plan – had called for a change in the board’s composition to be a majority of trustees who are not beneficiaries of the retirement plan and, in particular, to remove the city administrator’s position from the board.

In 2008, a member of the retirement system’s board of trustees, Robert N. Pollack, Jr., resigned from the board in part due to the city’s failure to enact recommendations of the blue ribbon panel. [.pdf of blue ribbon panel report] [.pdf of Pollack's resignation letter]

Under the terms of new city administrator Steve Powers’ contract, he will not be a beneficiary of the city’s retirement plan, but will instead have a 401(a) plan.

The city’s retirement program is supported in part by the levy of a retirement benefits millage [labeled CITY BENEFITS on tax bills], currently at a rate of 2.056 mills, which is the same rate as the city’s transit millage. A mill is equal to $1 for every $1,000 of a property’s taxable value.

Retirement Board Charter Amendment: Rapundalo

Rapundalo described that particular charter proposal as “years in the making.” It goes back, he thought, six years to a blue ribbon task force that was put together to study elements of the pension board and how it conducts its business. The task force had identified a number of issues related to the perceived conflict of interest and the lack of true independence on the board.

The idea is to remove the city administrator and a number of the other city beneficiaries from the board, Rapundalo said. Instead of those positions, he said, at-large citizens would be installed, who have the right skill sets to deal with the issues of pension allocations and dispersements.

Retirement Board Charter Amendment: Lumm

Lumm thought it was a good move. The recommendation had come over six years ago, and she said the community should vote for it.

But Lumm said it was unfortunate the way it was presented. Another one of the recommendations made by the task force was to improve communication between the pension board and the city. But the trustees on the pension board found out about the ballot proposal only after the city council voted to put it on the ballot, Lumm said. The executive director of the pension board didn’t find out about it until the day the council voted on it, she said.

When she previously served on the council, the council met with the pension board regularly, Lumm said. Now the city council does not meet even annually with the pension board, she said.

Street Repair Millage

Question: Proposal 1 on the Nov. 8 ballot requests up to 2.0 mills for street and bridge reconstruction. Proposal 2 allows an additional 0.125 mills for sidewalk repair outside the Ann Arbor Downtown Development Authority TIF district. Please explain the mechanics of the two proposals’ interdependent passage. Tell voters in your ward how you plan to vote.

Street Repair Millage: Background

At its Aug. 4, 2011 meeting, the Ann Arbor city council approved language for the Nov. 8 ballot that would renew the street and bridge reconstruction millage, at a rate of 2.0 mills. It was last approved by voters in November 2006 for five years beginning in 2007 and ending in 2011. A tax rate of 1 mill is equivalent to $1 for every $1,000 of a property’s taxable value.

As a separate proposal on the ballot, voters will be asked if they support an additional 0.125 mill to pay for sidewalk repair. Up to now, sidewalk repair has been the responsibility of property owners.

The ballot language for the street repair millage will read:

Shall the Charter be amended to authorize a tax up to 2 mills for street and bridge reconstruction for 2012 through 2016 to replace the previously authorized tax up to 2 mills for street reconstruction for 2007 through 2011, which will raise in the first year of levy the estimated revenue of $9,091,000?

The ballot language for the sidewalk portion of the millage will read:

Shall the Charter be amended to authorize a tax increase of up to 0.125 mills for 2012 through 2016 in addition to the street and bridge resurfacing and reconstruction millage of 2 mills for 2012 through 2016, which 0.125 mills will raise in the first year of levy the estimated additional revenue of $563,000, to provide a total of up to 2.125 mills for sidewalk trip hazard repair in addition to street and bridge reconstruction and resurfacing? This Charter amendment shall not take effect unless the proposed Charter amendment to authorize the levy of a tax in 2012 through 2016 of up to 2 mills for the purpose of providing funds for the reconstruction and resurfacing of streets and bridges (Proposal 1) is approved.

The sidewalk repair portion of the millage would be levied only if the street repair millage were also approved by voters. But the levy of the street repair millage is not dependent on the authorization of the sidewalk repair millage.

If both millage proposals were to be approved by voters, the money would be collected under a single, combined millage – but accounting for reconstruction activity would be done separately for streets and sidewalks.

The separation of the question into two proposals can be explained in part by a summary of responses to the city’s online survey on the topic of slightly increasing the street repair millage to include sidewalk repairs. Sidewalk repairs have up to now been the responsibility of property owners. The survey reflects overwhelming sentiment from the 576 survey respondents (filtered for self-reported city residents) that it should be the city’s responsibility to repair the sidewalks.

The survey reflects some resistance to the idea that an increase in taxes is warranted, however. From the free-responses: “Stop wasting taxpayer money on parking structures, new city buildings, and public art. You are spending money like drunken sailors while we’re in the worst recession since the Great Depression.” Balanced against that are responses like this: “I strongly endorse the idea of the city taking responsibility for maintaining the sidewalks and am certainly willing to pay for it in the form of a millage in the amount cited in this survey.” [.pdf of survey response summary]

An amendment to the resolution approved by the council on Aug. 4 directs the city attorney to prepare a change to the city’s sidewalk ordinance relative to the obligation of property owners to maintain sidewalks adjacent to their property.

Street Repair Millage: Past Perspective on Voter Choice and Millages

This year, the basic strategy with the street and sidewalk repair millage is to separate out a basic millage renewal from consideration of an increase in the millage rate. The city is asking for a renewal of an existing millage at 2 mills and an increase of 0.125 mills as separate questions.

This is the same kind of strategy that Lumm supported in 1997, when she sponsored a resolution to present voters with the same kind of choice for parks maintenance – a renewal and an increase as separate ballot propositions. From city council minutes:

DEFEATED
RESOLUTION TO APPROVE MILLAGE PROPOSALS FOR .3654 Mill and for .1071 MILL FOR PARKS MAINTENANCE AND REPAIR RESOLVED, That the Ann Arbor City Council propose that the City Charter be amended by amending Section 8.22 which shall read as follows: Funds for MAINTENANCE AND REPAIR OF PARK FACILITIES SECTION 8.22.
…
RESOLVED, That if one or both of the amendments are adopted, they shall take effect on January 1, 1998; provided, however, that the amendment to authorize a tax and levy of .1071 mill shall not take effect unless the amendment to authorize a tax and levy of .3654 mill also is approved by the voters.
Councilmember Lumm moved that the resolution be adopted. On roll call the vote was as follows:
Yeas, Councilmembers Hartwell, Putman, Lumm, Kwan, 4;
Nays, Councilmembers Kolb, Vereen-Dixon, Carlberg, Herrell, Mayor Sheldon, 5. Mayor Sheldon declared the motion defeated. [.pdf of Aug. 18, 1997 Ann Arbor city council minutes]

Having lost the bid to split the proposal, Lumm then joined the rest of her colleagues in voting unanimously for a single ballot proposal that asked voters to approve the millage with the increase, for a total of .4725 mills.

Rapundalo’s campaign website points to a vote of Lumm’s at the council’s previous meeting, on Aug. 4, 1997, against putting the single millage proposal before voters. On that basis, Rapundalo claims Lumm “voted against allowing Ann Arbor residents to vote on the parks and maintenance millage, which fund the City’s park maintenance.” In fact, the vote on Aug. 4, 1997 had come after an unsuccessful attempt by Lumm to get the measure postponed, so that an alternative, split proposal could be developed. [.pdf of Aug. 4, 1997 Ann Arbor city council minutes]

And when there were not enough votes to postpone, or for the other side to push through the single proposal, the ballot proposal was defeated at the Aug. 4, 1997 meeting. That gave Lumm the opportunity to put together the split proposal for the following meeting on Aug. 18, which ultimately did not succeed. The historical record of council minutes does not support a contention that Lumm was against allowing residents to vote on a parks maintenance millage.

Street Repair Millage: Lumm

Lumm said she supports the street millage. Updating the city’s basic infrastructure is a financial challenge, she said, and maintaining streets is a basic service that taxpayers value and are willing to pay for. However, she does not support earmarking those “precious capital dollars” for public art. To date, she said roughly $2.2 million had been diverted to public art.

In the budget deliberations for fiscal year 2012, Rapundalo had a chance to change that percentage earmarked for public art, chose not to do so, Lumm said. The sidewalk millage would generate another roughly $560,000, she said, and she was not supportive of that. She cited the administrative costs associated with the sidewalk repair program as the reason for her opposition to the millage.

Street Repair Millage: Rapundalo

Rapundalo said he also supports the street repair millage. Since 1984, it has been renewed on a five-year renewal cycle, he said. Clearly that is a basic service that many residents want to see provided.

Regarding the sidewalk millage, he said, it’s something the council had voted to put on the ballot because of the feedback the council received from residents all over the city. The current model is to have residents pay for repair of sidewalk slabs in front of their property. But many residents have said that the city should take care of it directly. So this millage addresses that feedback, he said. [Rapundalo did not indicate whether he supported the sidewalk repair millage as a voter.]

Finance

Question: Is there a deficit in the city budget and how large is it? If cuts were to be made, how would they be made? Is citizen safety being jeopardized? Is a city income tax being considered?

Finance: Background on Budget, Income Tax

The Ann Arbor city budget for fiscal year 2012 was approved by the city council with $77,987,857 in revenues and $79,105,945 in expenditures, and drew down the fund reserves by $1,118,088 to balance the budget.

In Michigan, local municipalities have four sources of possible revenue: (1) property taxes; (2) fees for services; (3) state shared revenue – apportioned from the state sales tax; and (4) a city income tax.

The city of Ann Arbor does not levy just one kind of property tax. Ann Arbor tax bills include separate taxes to support: general operations, employee benefits, the solid waste system, debt, street repair, city parks, open space acquisition, and mass transit.

An example of fees for service is the drinking water utility – residents pay for the amount of water they use.

It’s not an option for a city to levy any kind of sales tax in addition to the state sales tax. For example, the city of Ann Arbor is not legally empowered to apply an entertainment tax that could be added to University of Michigan football tickets. Part of the rationale behind the state shared revenue system is for local municipalities to have their inability to levy extra taxes balanced out by revenue that is shared with them by the state. However, the future of state shared revenues is unclear, and local municipalities aren’t sure if they’ll continue to receive those revenues in coming years.

A feature of the Ann Arbor city charter that distinguishes Ann Arbor from other Michigan cities is the relationship between the general operations property tax and a city income tax. Per the city charter, Ann Arbor can enact one, but not both kinds of tax:

City Tax Limit SECTION 8.7. (a) … In any calendar year in which the Uniform City Income Tax Ordinance is in effect on the day when the budget is adopted, the City may not levy any part of the three-fourths of one percent property tax previously mentioned …

But if the city of Ann Arbor were to enact a city income tax, it’s only the general operations property tax that would disappear – the other city property taxes would remain.

Cities can enact a city income tax under the state statute Uniform City Income Tax, which allows an income tax of up to 1% to be levied on residents of a city, and on non-residents up to 1/2 of the percentage levied on residents. For example, if a city enacted a .5% income tax on residents, then non-residents would pay no more than .25%.

Supporters of a city income tax for Ann Arbor typically defend against tax burden arguments by pointing to the fact that the city charter stipulates that a city income tax replaces, rather than supplements, the roughly 6 mill general operations property tax for residents. [For readers who wonder how much property tax they would save, the line item, on summer tax bills, is labeled CITY OPER].

Supporters also typically point out that 40% of the real estate in Ann Arbor is not subject to property tax – due to the large city park system and the presence of the University of Michigan, whose land is not subject to property tax. So funding operations from property taxes is more challenging than in cities where a greater percentage of the property is subject to a tax.

Supporters also typically point to the large number of workers who have jobs in the city of Ann Arbor – many of them at UM – who live outside the city. That translates into larger potential revenue from an income tax than in cities that have a smaller number of commuters.

Detractors of a city income tax typically point to the potential barrier such a tax might represent to businesses choosing to locate in Ann Arbor, or to the inequity of the income tax with respect to resident renters – who may not see the reduction in their landlord’s property tax passed along to them in lower rents. Some oppose the idea on philosophical grounds, arguing that applying the tax to non-resident workers amounts to taxation without representation. Income taxes as a source of revenue are also somewhat less stable than property taxes.

Finance: Income Tax – Previous Discussions

Two years ago, at the Ann Arbor city council’s January 2009 budget retreat, then-councilmember Leigh Greden advocated for an exploration of replacing the general operating millage with an 1% city income tax. The budget retreat discussion resulted in the dissemination of a previous, 2004 city income tax study. The 2004 study had been preceded by a 1997 city income tax study.

In July 2009, the city released a more current study. But in August of that year, it became clear at a city council work session that there was no enthusiasm on the part of councilmembers to place the issue on the ballot in the fall.

Yet at that year’s budget retreat on Dec. 5, 2009, Christopher Taylor (Ward 3) again raised the issue of exploring a city income tax. And at a Feb. 16, 2010 meeting of the city council’s budget committee, which included [and still includes] Taylor, members gave then-city administrator Roger Fraser the green light to conduct a survey of voter attitudes on the city income tax.

Finance: City Income Tax – More Recent Discussions

Through the city council and mayoral election season in 2010, the idea of a city income tax received some discussion as an issue. During his campaign, Tony Derezinski (Ward 2) in particular expressed support for the idea. He’s now part of a working group on the council, which also includes Taylor and Marcia Higgins (Ward 4), that is taking a closer look at revenue questions.

At the Dec. 4, 2010 budget retreat, former city administrator Roger Fraser had expressed the same sentiment he’d conveyed to members of the budget committee back in February 2010: He thought he had an obligation to ask the citizens to consider the income tax question before cutting services. Fraser’s sentiment is one that Rapundalo has supported during his service on the council and during the current campaign.

Finance: Council’s Approach to Budgeting – Public Safety Unions

Part of Rapundalo’s current campaign is an attempt to characterize the city councils of the 1990s, which included Lumm, as having been irresponsible with respect to spending, in particular with respect to labor contracts, which Rapundalo has repeatedly characterized as “rich.”

However, up until this last year, the councils of the 2000s have essentially pursued the same kind of labor strategy as the councils of the 1990s. They have essentially bargained under the constraints of the state’s Act 312 legislation, while at the same time maintaining a defacto no-layoff policy. In 2009, the council elected to offer an early retirement buyout to police officers instead of imposing layoffs. At that time, 34 officers qualified for the retirement incentive – at least 26 of them accepted it, which cost the city over $5 million. The cost of the buyout was covered with the general fund reserve.

In early 2010, the council injected some drama into the budget discussion that year, by treating a $2 million payment from the Ann Arbor Downtown Development Authority as if were uncertain. As a result, the council raised the specter of police and firefighter layoffs. When the DDA authorized the $2 million payment, it was spent partly to prevent the layoff of public safety officers.

Finance: Council’s Approach to Budgeting – Amendments

On his campaign website, Rapundalo cites minutes of council meetings from the 1990s in his criticism of Lumm’s performance on the city council. Those minutes show that the council’s basic approach to the city budget was similar in the 1990s to what it is now. Specifically, the budget proposed by the city administrator underwent any number of amendments put forward by councilmembers, some of which succeeded and some of which failed.

For example, an amendment proposed by then-councilmember Peter Fink for the fiscal year 1996 budget stipulated that a business plan be put forward for the recycling drop-off station. Rapundalo’s 2011 campaign website characterizes Lumm’s vote in support of a business plan and a prohibition against a staff increase as being against recycling. From the council minutes:

Councilmember Fink moved that the resolution be amended by adding the following two “Resolves” regarding the recycling drop-off station with each clause to be voted on separately:
RESOLVED, THAT THE STAFF BE INSTRUCTED TO RETURN TO COUNCIL WITH A TOTAL BUSINESS PLAN FOR THE RECYCLING DROP-OFF STATION SHOWING PROPOSED NET SAVINGS FROM SUCH A PLAN AT THE SAME TIME AS CONSTRUCTION CONTRACTS ARE BROUGHT FORWARD;
On roll call on the first part of the motion, the vote was as follows:
Yeas, Councilmembers Fink, Lumm, Nicolas, Kolb, Mayor Sheldon, 5 Nays, Councilmembers Hanna-Davies, Carlberg, Smith, Daley, 4
Absent for the vote, Councilmember Hartwell, 1
The Mayor declared the motion defeated.

The question under consideration was the following language:
FURTHER RESOLVED, THAT IN NO CASE SHALL THE PLAN FOR THE DROP-OFF STATION REQUIRE ANY NET INCREASE IN CITY STAFF;
On roll call, the vote was as follows:
Yeas, Councilmembers Fink, Lumm, Nicolas, Mayor Sheldon, 4
Nays, Councilmembers Carlberg, Smith, Kolb, Daley, 4
Absent for the vote, Councilmembers Hanna-Davies, Hartwell, 2
The Mayor declared the motion defeated. [.pdf May 25, 1995 Ann Arbor city council minutes]

Another vote of Lumm’s characterized by Rapundalo as against recycling was an omnibus amendment to the 1998 fiscal year budget. Among many other things, it included a cap on expenditures on commercial recycling. From the council minutes:

Councilmember Lumm moved that the following spending reductions be incorporated into the proposed budget: SAVINGS IMPACT ON 1997/1998 DEPT. PROPOSED BUDGET Reductions Required to Avoid Tax Increase $1,200,000 POSSIBLE REDUCTIONS

• Reduce temporary pay in Admin. Svcs., Admin. Svcs. $275,000 Parks & Rec., and Solid Waste to project- Parks & Rec. ed 1996/1997 levels plus 3%; reduce Solid Waste temporary pay in Parks an additional $75,000 to reflect permanent hiring of temporaries
• Reduce Police Dept. total budget Police $100,000 (Dept. discretion — possibly by deferring capital spending or reducing overhiring)
• Limit growth in vehicle fleet, maintenance Public Svcs. $100,000 costs, and/or acceleration of equipment re-purchase schedule
…
• Offset increase in Fire Dept. overtime Fire $50,00 (Dept. discretion)
…
• Limit spending on new commercial Solid Waste $30,000
recycling program to $30,000
…
The question being the proposed spending reductions, with the exception of the increase in Building Department fees, on roll call the vote was as follows:
Yeas, Councilmembers Lumm, Kwan, Putman, 3;
Nays, Councilmembers Hanna-Davies, Vereen-Dixon, Carlberg, Herrell, Hartwell, Kolb, Daley, Mayor Sheldon, 8.
The Mayor declared the motion defeated. [.pdf of May 28, 1997 Ann Arbor city council minutes]

Finance: Rapundalo

Rapundalo began by saying the general fund has to be balanced and the city has done that consistently. For the last number of years, since he had served on the council, councilmembers have worked diligently at retreats at the end of the calendar year to begin setting priorities for the upcoming budget discussions. He said it’s important to do that and it’s become even more important given the tough economic times that we’re going through.

There has been priority placed on public safety, he said, but public safety services have not been immune to cuts. He pointed out that cuts made this year could have been totally mitigated if unions had come on board – their health care plans have been too rich for too many years, he said. In Rapundalo’s closing remarks, he said he felt that the council owed it to the community to talk about revenue restructuring [i.e., a city income tax] and not just cost cutting.

Finance: Lumm

Responding to the question about the amount of the deficit, Lumm pointed out the city had used around $1 million in its fund balance this year in order to achieve a balanced budget. This is a situation, Lumm said, where elected leaders have not aligned spending priorities with the community’s priorities. Protecting public safety should be the priority of any local government.

Lumm said she felt those public safety cuts have been too severe. She described the budget as having been approved year after year with non-strategic, mindless, across-the-board reductions. The council can direct the administrator and staff to reduce costs in administrative areas more and with less reduction in police and fire.

Human Services

Question: The proposed Washtenaw County budget includes major cuts in human services. The Delonis Center homeless shelter will suffer from this. Is the city prepared and able to make up the shortfall? If not, it would seem to exacerbate the problem of homelessness in the city, particularly downtown.

Human Services: Recent Background

For background on the recently-proposed budget for Washtenaw County, see “Proposed County Budget Brings Cuts.”

The city’s support for human services is allocated in coordination with other entities: the United Way of Washtenaw County, Washtenaw County and the Washtenaw Urban County. For background on the coordinated funding approach, back when it was still in the planning stages: “Coordinated Funding for Nonprofits Planned.”

Human Services: Past Background

Part of Rapundalo’s campaign has included the assertion that Lumm consistently opposed funding human services during her service on the city council in the late 1990s, when she served on the council as a Republican. (Rapundalo ran unsuccessfully as a Republican for mayor in 2000.) In May 1997, Lumm joined her Republican Party colleagues on the council on a party-line vote opposing the use of general fund dollars to create a new fund for human services contingencies [caps in original]:

RESOLVED, That a Housing and Human Services Contingency Fund of $100,000 be created in the Non-departmental Budget for 1997-98. Council unanimously agreed that the last paragraph of Councilmember Carlberg’s proposed language be amended as follows:
RESOLVED, That a Housing and Human Contingency Fund of $100,000 be created in the Non-departmental Budget for 1997-98 FROM GENERAL FUND FUND BALANCE.

The question being Councilmember Carlberg’s proposed language as amended, on roll call vote the vote was as follows:
Yeas, Councilmembers Hanna-Davies, Vereen-Dixon, Carlberg, Herrell, Hartwell, Kolb, Daley, 7;
Nays, Councilmembers Lumm, Kwan, Putman, Mayor Sheldon, 4.
The Mayor declared the motion carried. [.pdf of May 28, 1997 Ann Arbor city council minutes]

Regarding an expectation that the human services area provide objective data on positive outcomes, in order to justify their funding, Lumm’s position on human services while on council in the 1990s appears consistent with the position championed by Rapundalo during his service dating from the mid 2000s. Rapundalo is fairly credited with much of the work that went into the current scoring matrix used to allocate and prioritize city funding to nonprofits. It’s an approach that has won widespread praise as a more equitable manner of making human services funding allocations.

An attempted amendment to the fiscal year 1996 budget – which was supported by Lumm, but which failed – called for an increasingly objective standard for evaluating community services. However, the resolution gives direction that is not nearly as fine-grained as the development of a scoring matrix to determine funding allocation. Instead, it simply directed city staff to reduce the number of different human services agencies funded by the city. From the council minutes:

Councilmember Fink moved that the resolution be amended by adding the following language:
RESOLVED, TO INCREASE THE EFFICIENCY OF STAFF TIME AND THE WORK OF NON-PROFITS THEMSELVES AND TO QUANTIFY AN EXISTING COMMUNITY DEVELOPMENT “‘CRITICAL SUCCESS FACTOR”, AN ADDITIONAL “MEASURE OF SUCCESS” FOR COMMUNITY DEVELOPMENT WILL BE TO REDUCE THE NUMBER OF NON-PROFIT CONTRACTS BY 2% PER YEAR FOR THE NEXT 5 YEARS. (THIS DOES NOT SPEAK TO THE TOTAL AMOUNT OF FUNDING, ONLY TO THE NUMBER OF NON-PROFITS.);
On roll call the vote was as follows:
Yeas, Councilmembers Fink, Lumm, Nicolas, Mayor Sheldon, 4
Nays, Councilmembers Hanna-Davies, Carlberg, Smith, Kolb, Daley, 5 Absent for the Vote: Councilmember Hartwell, 1
The Mayor declared the motion defeated. [.pdf May 25, 1995 Ann Arbor city council minutes]

Human Services: Lumm

Lumm felt there are things that can be done budget-wise and priority-wise. There’s no question it’s important to address human services needs, she said. When she looks at how the city spends money – a beautiful city hall and the new maintenance facility – those are “nice to have,” she said. Those projects are in the past, she said, but accountability matters. There are ways to allocate finite resources, she said.

If the community feels that human services funding is a priority, then so be it, Lumm said. We need to engage citizens in assessing what their priorities are and how they want their money to be spent. She said she did that when she served on the council previously and she would do that again.

Human Services: Rapundalo

Rapundalo said he’d spent a lot of time over the last number of years working on human services funding. What had been in place previously was based on a “tugging of sleeves.” He said he’d tried to reform that kind of approach so that it’s based on performance and impact.

Rapundalo said that whether the city could cover some of the losses that the Delonis Center homeless shelter might encounter due to the county is left to the “peer review process.” That process would determine if the city had the money and whether the shelter deserves it based on performance and the impact that they have on the community. He said there is a good system in place now to engage the public and social services agencies, and to use all that information in a disciplined review process.

Public Art

Question: The city council is reconsidering the previously approved Percent for Art program, which sets aside 1% of each capital improvement project to be used for public art in the city. The process appears to be slow in producing art. Should it be reconsidered? Do you have suggestions for improvement?

Public Art: Background

At the city council’s Aug. 4, 2011 meeting, councilmembers voted to place ballot language before voters for a street repair and sidewalk repair millage. Before the meeting, some councilmembers had indicated they were prepared to modify the ballot language to make explicit that millage funds would not be subject to the public art ordinance. The ordinance, which establishes the Percent for Art program, stipulates that 1% of all capital improvement projects must be set aside to be spent on public art.

Mayor John Hieftje effectively preempted that conversation by nominating Tony Derezinski (Ward 2) as a replacement for Jeff Meyers on the public art commission and assuring the council that the question of public art could be taken up at the council’s Sept. 19, 2011 meeting.

However, at the Sept. 19 meeting a proposed revision to the public art ordinance, brought forward by Sabra Briere (Ward 1), was postponed until after a working session to be held on Nov. 14, after the election on Nov. 8.

The proposed revision would change the Percent for Art program by explicitly excluding sidewalk and street repair from projects that could be tapped to fund public art.

Some councilmembers had previously understood the public art ordinance already to exclude replacement of sidewalk slabs from its definition of capital improvement projects. But based on additional information from the city attorney’s office, the proposed ordinance revision was meant to spell that out explicitly.

On two previous occasions in the last two years (Dec. 21, 2009 and May 31, 2011), the council has considered but rejected a change to the public art ordinance that would have lowered the public art earmark from 1% to 0.5%. The city’s Percent for Art program was authorized by the council on Nov. 5, 2007. It is overseen by the city’s public art commission, with members nominated by the mayor and confirmed by the council.

The most recent regular Chronicle coverage of the city’s public art commission is “Art Commission Preps for Dreiseitl Dedication.”

Public Art: Rapundalo

Rapundalo said he was a strong supporter of the public art program. He allowed that there’s been frustration at the pace of implementation. But any time there is a brand new program with such complexity, he said, it takes a while to get things off the ground. And things are now off the ground. The previous night, he said, there was a spectacular demonstration of that with the unveiling of the Dreitseitl fountain at the municipal center. There were well over 200 people in attendance, he said.

Rapundalo contended that the public art program doesn’t take any general fund dollars and thus does not impact things like police and fire protection. It’s been proven over and over again, he claimed, across 90 communities in 26 states that public art is an effective economic development tool. It contributes to the economic base and to the quality of life that is perceived in Ann Arbor. Public art draws talent and keeps people here, he said. That’s the kind of vibrancy that we want in our community, he concluded.

Public Art: Lumm

Lumm stated that her position is different from Rapundalo’s. She said she was certainly not opposed to public art. It boils down to this, she said: Is it an appropriate allocation of resources? Comparing it to Maslov’s hierarchy of needs, she said that if people are hungry and freezing, they don’t focus much on self-actualization. The city diverted $2.2 million to public art funding, she said.

Lumm said she begged to differ with Rapundalo about his contention that general fund money was not used for public art. She noted that the municipal center building fund was created out of the general fund reserves. Those are local tax dollars. It’s a good example of the unwillingness of the city to focus spending on basic services. And it’s a good example of the inconsistency of the use of the “bucket” analogy to talk about fund-based budgeting. When we want to spend money on something, magically the flexibility is there, she said.

Ann Arbor Downtown Development Authority

Question: The city has recently moved towards greater transparency with its A2OpenBook. What about the Ann Arbor Downtown Development Authority? Please explain the relationship between the city council and the DDA, and between the DDA and the Ann Arbor voters. Beyond increasing downtown parking rates, how does the DDA impact the lives of Ann Arbor citizens? What is their contribution to the community?

Ann Arbor DDA: Background

The Ann Arbor DDA has been the focus of heavy Chronicle coverage over the last year. One reason for that focus is the recently renewed contract between the city and the DDA, under which the DDA manages the city’s public parking system. It was ratified in May 2011.

However, the DDA’s raison d’être is not to administer the public parking system, but rather to make “public improvements that have the greatest impact in strengthening the downtown area and attracting new private investments.” The streetscape improvements that are currently nearing completion on South Fifth and Division in downtown Ann Arbor are one example of the kind of projects the DDA can undertake.

The funding mechanism for those improvements is tax increment finance (TIF) capture in the downtown district. In broad strokes, the taxes on an increment – between the initial value of a property and the value after new construction – are captured by the DDA, instead of being distributed to the authorities that levy the taxes. Those taxing authorities include the city of Ann Arbor, the Ann Arbor District Library, Washtenaw County and Washtenaw Community College.

This spring, city staff noticed that the ordinance establishing the Ann Arbor DDA appears to provide a kind of cap on the amount of taxes that the DDA is allowed to capture in its TIF district. Up to this year, that cap had not been observed. When that aspect of the ordinance was highlighted, it resulted in a repayment by the DDA of over $400,000 to other taxing authorities. In the future, a need to return TIF captured revenue to other taxing authorities could continue or be eliminated, depending on how the ordinance is interpreted. [See Chronicle coverage: "Column: Tax Capture is a Varsity Sport"]

After making repayments to other taxing authorities earlier this year, the DDA board subsequently took the position, at a special meeting held July 27, 2011, that the repayments it had made were not actually required.

The repayments, plus the conditions of the new parking agreement – which calls for transferring 17% of gross public parking revenues to the city of Ann Arbor – have put the DDA under considerable financial stress.

DDA board members are nominated to four-year terms by the mayor, and must be confirmed by the city council.

Ann Arbor DDA: Lumm

Lumm began by saying that she valued the DDA and what they do. She felt the DDA is a truly independent body. The DDA looks out for the best interests of the downtown, she said. Having a vital downtown is critical for a community, Lumm said. Unfortunately, she said, over the years the DDA has become a “piggy bank” for the city.

Under the new contract, the city will receive 17% of the revenue from the public parking system for the next 11 years, Lumm pointed out. That’s around $3 million a year, she said. The DDA also provides debt service of around $0.5 million per year for the city’s municipal center. Unfortunately, Lumm said, downtown merchants and residents are seeing the impact of these unwise allocations that Rapundalo has supported over the years. The council has not focused on the things they should be doing with that money, she said. She felt everyone could agree that the parking fund should be used to maintain the parking system. She described the DDA as “pretty much tapped out.”

Ann Arbor DDA: Rapundalo

Rapundalo described the downtown as the heart and soul of any community. The DDA is the independent authority that must oversee infrastructure and improvements to ensure vitality. He said he respected people who have served and continue to serve on the DDA board. They have brought great skill sets to the table to address many complex issues, not the least of which is parking, he said. The DDA has demonstrated its ability to do that, he said.

Rapundalo continued by saying the downtown has shortages in parking, so there’s a need to put additional facilities in place. The DDA has been forward-thinking in addressing the needs of the future and implementing solutions now instead of later, when the need is too great. The DDA is a body that has done a very good job of reaching out to community, he said, and being open and transparent about how they function and the decisions they make in the public interest.

Closing Statements

Each candidate had two minutes to give a closing statement.

Closing: Lumm

Lumm again thanked the LMW. She also thanked Rapundalo for his service to the city. She said she was honored to represent Ward 2 on the city council for three terms in the 1990s. She said she did not expect to ever run again. But she cares about Ann Arbor, she said, and thinks that the council has lost touch with the community and the community’s priorities.

So Lumm said she’s back trying to earn voters’ support to accomplish two goals. The first goal is to refocus city spending on basic services. Second, she wants to reconnect Ward 2 with city government.

As she walks Ward 2, Lumm said, she’s hearing over and over a genuine frustration from neighbors that elected officials are not listening to them, or think they know better. Residents recognize the many challenges faced by the city, she said, and they want to see focus on the basics, like public safety. Residents say they don’t see that happening, Lumm said, and they’re right.

During the six years Rapundalo had been in office, Lumm said, the percentage reduction in public safety is three times that of other areas of the budget. The city has hired a public art administrator, but is laying off police, she said. That doesn’t reflect the community’s priorities, she said, nor are they hers. Residents also expect elected officials to maximize efficiency, she said.

Rapundalos’s campaign literature states that the city should consider “revenue restructuring” alongside cost containment, Lumm noted. Before asking taxpayers for more, she said, the city must address structural cost issues, and pursue an acceleration of intergovernmental consolidation. While on the city council she worked hard to engage all the stakeholders, she said, and to ensure all options and points of view were heard in open dialogue. That’s essential to good government, she noted, but missing today. She said she knew that the city could do better and she would bring those principles back to the council table.

Closing: Rapundalo

Rapundalo again thanked voters for their past support. He said he’s seeking reelection because the city needs strong, principled leadership to address future challenges and to move the city forward. Cities across Michigan are facing the biggest crisis since the Great Depression, he said, and in the face of that, he’d helped lead a budget process that focuses on priorities. Those budgets did not raise taxes, and made city government more efficient, he said. The budgets had reformed outdated and expensive labor contracts that Lumm had supported in the 1990s, he said. Today, Rapundalo said, the city has 25% fewer employees, but has more and better recycling and waste pickup, lower crime, more parkland, and has rebuilt infrastructure like the new wastewater treatment plant.

Rapundalo said he was focused on maintaining the investment for the future, while prioritizing safety services, reconstruction of the East Stadium bridges, and economic development. He felt that the council owed it to the community to talk about revenue restructuring [i.e., a city income tax] and not just cost cutting. The community needs to have a conversation about what revenue model can work best and better spread the burden of all users of the city’s infrastructure and services. Rapundalo said that Lumm had a voting record that showed she consistently voted against recycling and human services, ignored needed infrastructure improvements and even pushed for cutting the police budget while supporting their unsustainable and expensive labor contracts.

Rapundalo said it had taken 15 years to “clean up that mess.” The city councils of the 1990s were characterized by brinksmanship and inaction, he contended. We see enough of that in Congress, Rapundalo said. The future of Ann Arbor can’t afford that approach to governance, he said, and residents don’t want that. They want public servants who lead through collaboration, even when they don’t agree on everything, which he’d done consistently. He wrapped up by thanking the LWV.

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