2011 Ward 2 Race: Looking Ahead to the ’90s

On a rainy Wednesday evening late last month, around 55 Ann Arbor residents gathered inside the Thurston Elementary School media center to hear Ward 2 Ann Arbor city council candidates respond to questions. This year, the general election in Ward 2 is contested between three-term Democratic incumbent Stephen Rapundalo and independent challenger Jane Lumm, who served on the council as a Republican from 1994-1998.

Rapundalo has made the city’s past and future a central theme of his campaign, and the Oct. 26 event amply reflected that. Rapundalo spent much of the evening trying to characterize the city councils of the 1990s, on which Lumm served, as unable to work cooperatively as a group. That contrasts with his own approach and that of the current council, said Rapundalo, which is based on consensus and cooperation, even if councilmembers don’t agree on everything.

Even as Rapundalo appealed to the past in criticizing Lumm – for supporting what he called luxurious labor contracts during her tenure of service – he also criticized what he perceives her attitude to be towards the future. He calls it a “hunker down” mentality, which he says doesn’t take into account the steps the city needs to take to ensure future generations have what they need.

For her part, Lumm tells a narrative in which city government has become, since the time she served on the council, disconnected from the priorities of residents. She wants to restore community input and open conversation back to city government, which she contends is now lacking. At the Thurston forum, she responded to Rapundalo’s criticism about her prior service as a councilmember by saying she welcomed the comparison between “the bad old days” and now. She characterized herself as a fiscal watchdog, who pressed financial issues, even if there was not the same appetite for that on the rest of the council.

Certain aspects of Lumm’s record are portrayed on Rapudalo’s campaign website in a way that could fairly be described as out of context. [A closer examination of Rapundalo's portrayals based on city council minute archival material is included in The Chronicle's write-up of the League of Women Voters forum, earlier in the campaign: "2011 Election: Ward 2 City Council"] At the Thurston forum, however, Rapundalo was right about a point of contention that emerged over whether Lumm had enjoyed a Republican majority on a city council committee. The city council archives show a 3-2 Republican majority on the labor negotiating committee in 1996.

The forum was hosted by the Orchard Hills/Maplewood Homeowners Association, moderated by Peter Mooney, who’s president of that group. Rapundalo is a member of the association, and Thurston Elementary is in Rapundalo’s neighborhood. But if there was a general leaning among the assembly, it seemed to be in favor of Lumm – based on response to a few laugh lines sprinkled throughout the forum.

The format of the event contrasted with many other similar events, in that it featured no rigid time constraints on candidate responses – just a general guideline from Mooney to try to limit responses to around three to four minutes.

Mooney took questions written by audience members on cards and synthesized them into prompts for the candidates. Paraphrased questions and responses below are summarized in the order they were given. [Campaign websites: Jane Lumm , Stephen Rapundalo]

Opening Statements

Each candidate gave an opening statement.

Opening: Lumm

Lumm began by saying it was an honor to serve on the council for three terms in the 1990s. She said she didn’t expect to run again, but felt that city government has become disconnected from the community. In financially challenging times, she said, the city can’t afford everything – it’s about choices and priorities.

Many people believe the city should be targeting tax dollars on getting basic services right, but we don’t see that happening, she said. Instead, she said, the city government had built a new municipal center and diverted precious capital dollars to public art. The council had focused on ordinances addressing issues like pedestrians in crosswalks and vehicles idling too long, instead of more pressing problems. “We deserve better,” she said.

She then described Rapundalo’s campaign strategy as tossing “a bunch of false claims and nasty accusations on the wall in the hope that something might stick.” As an example, she gave Rapundalo’s contention that she’d consistently opposed recycling, the environment and human services. She said she doubted that the local Sierra Club would have endorsed her if she were anti-recycling and anti-environment. She said she also doubted that former city human services director Eileen Ryan would be saying the positive things she was saying about Lumm if Lumm were anti-human-services.

Today, Lumm said, our elected officials don’t seem to be listening to residents, which was shown by a misalignment of priorities. She continued by saying that elected officials appear to think they “know better.” Decisions are made privately, she contended, and then publicly it becomes about “selling” the decision to the public. She said that people who remembered her previous service know that she would work hard to engage all stakeholders to ensure that all options and points of view are heard – that’s just a good government principle that she would restore to city government, she said.

Opening: Rapundalo

Rapundalo thanked everyone for their confidence and support over the last six years of his service on the council. He called it an honor to serve as representative to the council. Rapundalo said that for him, the election is about who can best lead Ann Arbor forward. Ann Arbor is facing some real economic challenges, he said, but compared with other communities in the state, the outlook is not as bad. He attributed that to the fact that the city council, during his period of service, had focused diligently on priorities for the budget, services and infrastructure improvements. It has not been easy, he said, but the council has managed it pretty well. As a result, he said, the city of Ann Arbor enjoys a good fund balance, top bond ratings, clean audits, and earns praise for its quality of life.

He said he has not adopted a “hunker down mentality.” Instead, he said, he’d tried to be strategic in his due diligence in addressing issues, so that Ann Arbor can move forward. It should not just be a question of whether things are okay for today. The question is what needs do we have for tomorrow, he said, and we need to challenge ourselves with meeting those needs.

Rapundalo said he was proud of the council’s accomplishments – replacing outdated and expensive labor contracts, with savings that can be allocated to hiring back police. More and better recycling has been established, he said, parkland has been protected, aging infrastructure has been replaced, and neighborhoods have been protected from inappropriate development. Budgets had been developed that did not raise taxes.

All this had been done, Rapundalo said, because he’d worked collaboratively with his council colleagues to reach consensus on solutions, even though they did not always share the same view on everything. In short, he said, there’s important work to be done to ensure that Ann Arbor remains the economic beacon for Michigan. His strength, he said, is as someone who runs a business that is a high-tech industry leader [the industry association MichBio], has strong analytical and management skills, and demonstrates principled leadership. Rapundalo said he is exactly what the city council needs going into the future.

Huron Hills Golf Course

Question: What are your thoughts on the future of Huron Hills golf course? Should it be kept as it is, sold, or something else?

Huron Hills Golf Course: Rapundalo

Rapundalo began by saying, “That’s an easy one!” From the get-go, he said he’d supported keeping Huron Hills as a golf course. He had never supported or contemplated that it would be sold.

As chair of the golf advisory task force, he said he had worked very hard with others to try to improve golf operations. Over the last three years, revenues have increased, he noted, not just at Huron Hills but at Leslie Park golf course as well. The hope is that the trend will continue. Various adjustments and improvements have been implemented to make that happen, but it takes a concerted effort, he said. He concluded by saying his support is completely behind Huron Hills as a golf course.

Huron Hills Golf Course: Lumm

Lumm said she’s been very involved in trying to save Huron Hills over the last six years. The course has gone through countless reviews by consultants, she said. This last summer, a request for proposals (RFP) went out and Miles of Golf was the only respondent. If the proposal from Miles of Golf had been approved, it would have commercially developed half the property.

Lumm noted that she’d spoken against the RFP – because the plan recommended by the golf advisory task force was, and is, working. [Lumm addressed the city council on the topic at its June 7, 2010 meeting.] Lumm said the situation is being grossly misrepresented. She said Rapundalo is on record as saying the operating shortfall is greater than $500,000. But later, she said, Rapundalo had acknowledged that on a cash-operating basis, Huron Hills is essentially break-even. The public perception is that Huron Hills bleeds money – but it doesn’t, she said. She said she believes in public recreation – Huron Hills turned 90 years old this year.

If Huron Hills were not already owned by the city and were under consideration by the city’s greenbelt advisory commission for acquisition, she said, she felt there’d be no doubt that the city would purchase it. Greenbelt parcels are evaluated based on eight criteria. One of those criteria is its proximity to the Huron River, she said. Another one is the number of passers-by. Huron Hills would score very high on that metric, she said. Of the city’s 12 recreation facilities (swimming pools, canoe liveries, ice rinks), Huron Hills is the No. 3 revenue generator, she said.

Huron Hills serves a municipal function, Lumm continued, pointing out that young people, as well as seniors, play there. Leslie and Huron Hills, on a fully-allocated basis, Lumm said, lose $160,000 and $100,000 respectively. The Miles of Golf proposal was eventually turned down – it was a “lose, lose, lose” for Huron Hills and the city. It would have only benefited Miles of Golf, she said.

The RFP also violated the 2008 city charter referendum on selling parkland. The charter amendment requires that if the city ever decided to sell parkland, then residents get to vote on it. What was happening with the Miles of Golf proposal was an attempt to “skirt that voter referendum,” she said. All sorts of words were used instead of “sale,” she said – “long-term leases” and “development agreements.” That happened under Rapundalo’s watch, she said.

The city got a land appraisal on Huron Hills a number of years ago – that’s not something we should do with our parks, Lumm said. If you believe in protecting city parks, you don’t turn a blind eye to activity like that, she contended. Lumm noted that the city is spending millions of dollars outside the city – through the greenbelt program – to prevent development. So why would we allow development of our own city parks? she asked.

Public Art

Question: What’s your philosophy on public art spending? What changes should be made?

Public Art: Lumm

Lumm noted that $2.2 million has been set aside so far through the city’s Percent for Art program – it’s been carved out of the parks millage, the solid waste millage, the parks capital improvements millage, utility fees and the municipal center building fund. She thinks money like that should be used in a way that any reasonable person would consider related to the source. So she would not support carving out one percent of funds from those various millages for public art. She particularly would not do that when streets and bridges are deteriorating.

Lumm said supporters of the public art program talk about the economic benefits. She said she didn’t doubt the economic benefit – her objection is based on the funding source. She noted that the city of Ann Arbor has a lot of public art – it’s been donated. The city should look at those opportunities.

Another option would be to give voters discretion – they could make a contribution to public art when they paid taxes, she said. She characterized herself as an “art lover,” having served on the Ann Arbor Art Center board for six years. It’s not about being for or against public art, she said, it’s about how it’s funded. It amounts to diverting resources to things that are “nice to have” in financially challenging times.

Public Art: Rapundalo

Rapundalo said he took a very different point of view from Lumm. He said he was in support of the Percent for Art program concept for a number of reasons. He contended there are a lot of myths and misrepresentation of what the Percent for Art program is all about.

Rapundalo contended that the program is “budget neutral.” He said you could think of the public art being “a design element in whatever [capital] project” is already funded by a source – whether the funding source is the streets millage or the parks millage or whatever. That art has to be accommodated in the project, like painting or landscaping within those projects. So the art doesn’t detract from the projects that need to get done.

He called public art an economic development tool. He said he works in the high-tech industry, and people want to be in a community that is vibrant and that offers a lot in terms of cultural arts. So to retain talent in this day and age, in this kind of community, he said, it’s important that we make that kind of investment.

He went on to contend that it’s inexpensive to make that investment with the Percent for Art program. He reiterated that the public art program is “budget neutral.” He maintained that it takes nothing from the city’s general fund, so it can’t be used for fire or police protection. He wound up by saying the public art program builds the vibrancy of the community, and it’s something that people can point to and say, “This is what Ann Arbor is all about,” and take pride in it. It’s a selling point for Ann Arbor for being a magnet for the future economy.

Unfunded Pension/Health Care for City Workers

Question: Rapundalo notes the city has a strong fund balance. But the city has an unfunded combined health care and pension obligation for city employees of $225 million. Thoughts?

Pension/Health Care: Rapundalo

Rapundalo began by saying that the questioner had not looked at the numbers very carefully. The city has assets against that liability, he noted. Percentage-wise, the pension fund is about 90% funded, he said. It was 98% funded as recently as five years ago. The retiree health care fund is about 30% funded – which Rapundalo said was one of the best in the state. It’s inaccurate and misleading to say we don’t have assets against the liability, he said.

The city is actually in relatively good shape with respect to pension and health care, but Rapundalo allowed: “That’s not to say we don’t have our work cut out for us.” That’s why he had gone after the labor contracts, which he said under Lumm’s watch were luxurious. Union members had free health care and very little pension contribution. He said he’d spent the last two years trying to roll back those benefits, whether employees are union or non-union, so people pay their fair share “just like you and I have to.” In that way, future pension fund obligations would not be as great, he said.

Pension/Health Care: Lumm

Lumm said her take on the numbers is 180-degrees opposite to Rapundalo’s. When she served on the council previously, the council had adopted the first long-term financial plan for the city. Any long-term outlook takes into consideration debt and unfunded liabilities. Today, she said, both of those have grown considerably. The most recent actuarial report, she said shows the pension obligation is unfunded to the tune of $45 million. The health care obligation is unfunded by another $170 million.

While Rapundalo talks about cleaning up the mess of 15 years ago (when Lumm served on the council), Lumm said, at that time the pension fund was $60 million over-funded, while retiree health care was underfunded by $50 million. That was a net surplus of $10 million, she said. She felt the truth is in those numbers.

Lumm pointed to a 2005 blue ribbon finance report that recommended addressing the fundamental issue of the pension benefit – but the city is still offering a defined benefit plan, not a defined contribution plan. That’s not sustainable, she said.

The changes that have been made recently by the council have been good, she said, like extending the final average compensation (FAC) period and increasing employee contributions to healthcare. But for Rapundalo to say she was the person who supported fat labor contracts, she said, “That’s laughable.” She said Rapundalo could ask his Democratic colleagues, or anyone who has any institutional memory – she was “a pain in the neck” about labor issues. However, she said, there wasn’t the appetite for it.

Lumm contended she “pushed mightily” on controlling employee pension and health care costs. She said she brought forward resolutions when the council discussed the budget, and she aired those issues not weeks but months in advance to try to get buy-in. She’d started in 1994 and was a pain in the neck about this topic until her last meeting on the city council, she said.

Fuller Road Station, Transportation

Question: What are your thoughts on the proposed Fuller Road Station and high speed transit?

Transportation: Rapundalo

Rapundalo said he’s supportive of the whole concept. He called it a “generational game changer.” Whether people appreciate it or not, it’s here today because the federal government has identified high speed rail in this corridor as a priority and a need, he said. When you combine that with local needs driven by University of Michigan employment, Fuller Road Station becomes an important component of that. In years past, the city has looked at how to move people in and out, he noted, and after looking at many different locations, the conclusion was that the spot on Fuller Road at the base of the university hospital would be the ideal location.

The concept that’s been developed involves two or three phases, Rapundalo said. The first phase would be a parking facility with commuter rail platform. The second phase would include a fully built-out high speed train station. A third phase would be an interconnector hub from North Campus and Plymouth Road southward. It would integrate rail, bus, bike, pedestrians and cars.

The first two phases won’t require any city general funds, he said. Entities like the University of Michigan, Michigan Dept. of Transportation, Federal Transit Administration, Federal Rail Administration and Amtrak have committed to being full partners. Hundreds of millions of dollars have been allocated – the state of Michigan has purchased the trains and the tracks. The pieces are in place and in motion, he said. Other stops along that route – Battle Creek and Dearborn – are getting renovated. Ann Arbor is the busiest Amtrak stop on the Detroit-Chicago route, so it would behoove Ann Arbor be a part of the high speed and commuter rail link, he concluded.

Transportation: Lumm

Lumm allowed that she would sound like the naysayer, but what Rapundalo was describing sounds “utopic.” It’s an “intermodal transit station” – that sounds great. At some point it would be a wonderful amenity for the city, she said, but we need a reality check.

What we’re talking about today is the first phase, which is essentially a parking structure for the University of Michigan, she said. The city has made a commitment of $10 million in order to use 22% of the facility. The university is a wonderful employer, and the city should be partners, she said, but Ann Arbor taxpayers shouldn’t necessarily bear the expense of that project on their parkland.

The project comes with too many unanswered questions, Lumm said. She has yet to see a business plan. What will the ongoing operating costs be? If someone would share that information, she said, that would be great. As far as the claim that it will require no city general fund money, she said, “I’ll believe that when I see it.” She came back to the point that the site is located on city parkland. The project violates the spirit of the 2008 charter amendment. Voters said in 2008 that if the city is going to unload parkland, voters get to weigh in on that. Thinking the project will become a train station anytime soon, Lumm said, is not realistic.

Labor Negotiations

Question: What’s your philosophy on labor contracts? What’s the role of the council versus the role of the administration in labor negotiations?

Labor Negotiations: Lumm

Lumm said the question strikes a nerve, because she knows what she did, and she knows what has been said about what she did. She said she’d welcome anyone who can remember the history, to confirm she had pushed on pension and health care issues, for current and retired employees.

Lumm said she had served on the labor committee, and recently she’d reviewed some of the contracts from that time. She referred to a study that had been done looking at benchmarking health care costs with other communities. The committee relied on human resources staff, the city administrator and the city attorneys – they’d come to the labor committee as those staff members had negotiated the contracts. She said she’d looked at a contract from 1997 – before that contract was settled there were 14 negotiations. She allowed that some things that were being asked for were actually fairly luxurious, but she maintained that the city had held the line on things.

Lumm said  that back when she served, the council relied on professionals to guide it. Today, she said, the council is doing the work that professionals once did. The impression is, she said, that it’s the councilmembers who are doing the negotiating. She said she didn’t think that’s what is actually happening.

Labor Negotiations: Rapundalo

Rapundalo said that before he addressed the question that had been posed, he wanted to respond to some of Lumm’s comments. He noted that when Lumm served on the labor committee, she was on it when there were more Republicans than Democrats. So she had the opportunity to carry a recommendation out from the labor committee to the full council as to what they wanted to see come out of the negotiations. But he didn’t think there’s a record of that having happened.

Rapundalo stated that councilmembers don’t participate in labor negotiations – they provide parameters and the strategies by which the professionals do the negotiations. What has changed over the last five to six years, he said, is that the labor committee has put its foot down and said: The city is not going to conduct business like this any longer.

Rapundalo said that for many years, the police and firefighter unions, which are governed by the Act 312 arbitration law, would “call our bluff.” They’d say: “You’re not going to lay us off; we’ll string this out as long as we can.” But the council had gotten to the point where it said, “Enough is enough.” The city could not continue to cut other areas, he said, without looking at the largest expense, which is personnel. And the majority of personnel costs are in the public safety sector, he said. And with public safety union contracts that had no contributions to health care and minimal contributions in terms of pension, it was not fair.

So the council had said it’s time to connect the labor strategy with the budget strategy, Rapundalo explained. That meant that for units with employees who’d agreed to contracts that had higher contributions to health care and pension plans, budget reductions in those units would be correspondingly less. Most of the unions, “saw the writing on the wall,” Rapundalo said, and accommodated that strategy. Police and firefighters, however, had not, he said.

Rapundalo called it ironic that the settlement that the city had recently reached with the police officers rank and file – with greater contributions by employees to health care and pension – was the same set of conditions offered to them in May and June of this year, before the budget was approved. It was also the same set of conditions that had been offered a year ago. In their minds, he said, their contracts had already expired, so it was to their benefit to continue to work under those contracts that were more generous to them. But the police officers had finally come around, and he hoped now that those savings could be used to re-hire some of the officers.

Rapundalo called it a situation where the labor committee and the council at large had said that it was going to put its foot down, because it’s not sustainable. We’ve been living off those luxurious contracts for many years, Rapundalo said, and the rich buyouts that many people remember, back when firefighters were ending their careers with pensions in six figures, came under Lumm’s watch. At that, Lumm objected that she was not around at that time. Rapundalo insisted, “You supported it, you voted for it at the budget time, period, Jane. … You were there …”

Rapundalo’s contention was that Lumm had served on the council when the terms and conditions had been put in place that allowed for subsequent buyouts. Rapundalo continued by saying he’d spent his time on the council trying to roll back the labor contracts, and it had not been easy, because they were very entrenched. “Folks, you’re paying for these guys’ … food every day! They have written into their contract that you will pay for their coffee. I mean this is ludicrous in this day and age, let alone that they’re not paying for health care.”

The council said that “enough was enough” and had been adamant with the city administrator that it was not going to budge. And this time, if the unions called the city’s bluff, it would not work, Rapundalo said.

Council Minority

Question: (For Rapundalo) How is Lumm held responsible for what took place on the council when she served as a minority? (For Lumm) For residents who are happy with the current majority on the council, why shouldn’t they be?

By way of historical background on city council membership, ArborWiki’s entry on Ann Arbor city council membership from different periods is useful.

Annotated from the Nov. 18, 1996 Ann Arbor city council meeting minutes is the following membership for the labor negotiating committee:

Labor Negotiating Committee
Meets: As needed
Location: Guy C. Larcom Jr. Municipal Building (various rooms)
Contact: Neal Berlin, City Administrator, 994-2650
Sheldon [Ingrid Sheldon, Republican, mayor]
Lumm [Jane Lumm, Republican, Ward 2]
Kwan [David Kwan, Republican, Ward 2]
Hartwell [Stephen C. Hartwell, Democrat Ward 4]
Daley [Elizabeth Daley, Democrat, Ward 5]

Council Minority: Rapundalo

Rapundalo reiterated a point he’d made previously that evening, that there were instances where Lumm was in the majority “whether it be on the committee level, or otherwise.”

The remark drew some sarcastic laughs from the audience, likely because Rapundalo’s phrase “or otherwise” was understood to be a contention that Lumm had been a part of a Republican majority on the council as a whole, which she was not.

A brief exchange between Rapundalo and audience member Tom Wieder included, from Wieder, “Well, stop lying!” and protest from Rapundalo that the reference was to a committee [the five-member labor committee, on which Lumm had served as part of a 3-2 Republican majority].

Rapundalo continued by saying that good governance is about collaborating with colleagues to try to reach a consensus. He said that’s exactly what the councils he’s served on have tried to do – come together based on an understanding of what the issues are with a common goal. The councils of the 1990s, Rapundalo contended, were characterized by petty partisan politics and brinksmanship. It was the same sort of thing we see in Washington D.C., he said, and there’s too much of that in Congress. That’s a recipe for stagnation, he said. “The only way you’re going to get is if you give,” he said.

Council Minority: Lumm

Lumm began by saying she didn’t know where to start. She said when she served there were two Republicans on the council, three counting mayor Ingrid Sheldon. She said there’d never been any Republican majority on any committee or board. She insisted she was not a part of any majority.

Referring to the buyouts in 2000 and 2001, those buyouts had contributed to the increased pension liability, she said. There were subsequent buyouts as well, including the 2009 police buyout, which Rapundalo had voted for. She returned to her point that she had left the council by the time of the 2001 buyouts, even though Rapundalo said she was responsible.

At that time, Lumm said, the council had (without consultation with the actuary) made an early retirement proposal. Two hundred employees were eligible and 200 accepted, she said. Although she was not on the city council at the time, she said, she was curious about it. She was serving on a chamber of commerce public policy committee, so she called the actuary as an interested citizen, and the actuary reported that the city never contacted them.

Obviously, Lumm said, the buyout was far too lucrative – the FAC was based only on the last year’s compensation, she said. She noted that the current mayor, John Hiefjte, had voted for that. But she said she wasn’t around for it. That was a “golden parachute,” she said, and she wondered who wouldn’t take it. “Please don’t blame that on on me, I wasn’t around,” she said.

Commenting on her interactions with other councilmembers, Lumm returned to a point she’d made previously, saying she would float proposals not weeks but months in advance. When Rapundalo talks about brinksmanship, she doesn’t know what he means. “We had a little more diversity on council and we talked about things openly. What a concept! I think that’s a good thing.”

Today, what you see is everybody in agreement, Lumm said, with decisions having been made before the actual council meeting. Now, it seems like it’s more about selling and marketing the decisions. She said she wanted to open up the conversation to the wider community. In the 1990s, there were philosophical differences on the council, but it didn’t get personal. That’s good democracy, she concluded.

Underground Parking Structure

Question: The underground parking structure currently under construction on Fifth Avenue includes foundations that are capable of supporting a 12-story hotel, when the future use of the parcel has not yet been determined. Also, how do you justify building the underground garage when popular opinion is against it?

Underground Parking Structure: Lumm

Lumm said it was not possible to turn back the clock on the parking garage. It was built to support a much larger structure on top, she noted. So going forward, the conversation is more about what’s going to go on top. It’s a very valuable piece of property, she said. So the discussion about what goes on top needs public input, but not in a check-off-the-box kind of way. We’re talking about everybody’s tax dollars, she said, so we need to open things up to all conceivable stakeholders. It’s a vitally important parcel in the downtown area.

There’s one group of citizens that has come up with some guiding principles, which she supported. They want to see a public art component, green space and “it’s not all or nothing … it’s a really balanced set of guiding principles.” One of them is that it should be tax-producing, as well as an enhancement to the Ann Arbor District Library’s downtown location. Another factor is the nearby Blake Transit Center. She said she wanted to see a robust community discussion about it.

Underground Parking Structure: Rapundalo

As far as justifying construction of the underground garage itself, Rapundalo noted that the need for the capacity was identified by the DDA by sitting down and projecting forward 10 or 20 years. The city has lost a number of lots and structures, he said, so that underground garage is really trying to make up for some of the loss.

For last five or six years, the Ann Arbor Downtown Development Authority and the city council have been adamant in supporting the notion that there’d not only be an underground parking garage, but also a mixed-use development above that. As a result, the foundations included reinforced steel to accommodate something bigger, he said, but not specifically for a hotel. The question of what would go on top was purposely left open, he said.

Reviewing the set of proposals the city had received for the Library Lot RFP, Rapundalo said it was interesting that three had a hotel component, and of those, two had a conference center component. The job of the committee he’d chaired was to shepherd the proposals through a review process and bring a recommendation to the city council. His frustration, Rapundalo said, was that the council was not able to complete that process. [The council voted to terminate the process.]

For what it’s worth, Rapundalo said, the project that the committee had selected as its preferred option was, in its final version, not going to cost the city any money – it was going to be completely private. Rapundalo said he found it ironic that Alan Haber, who’d championed one of the responses to the city’s RFP that had called for parkland, has now come forward supporting something more akin to what the council has always said about the parcel – it should be mixed use with a large public component. “We’ve come back full circle,” Rapundalo said. He noted that the future of the lot is now in the hands of the DDA, which is looking at not just that site, but at other city-owned surface parking lots as well.

Heritage Row, City Place

Question: Explain what happened that resulted in the City Place development going forward – which will knock down seven historic houses – when the Heritage Row plan was turned down.

Heritage Row, City Place: Rapundalo

Rapundalo called the situation very frustrating. He said he was on the side supporting the Heritage Row PUD (planned unit development), which in its initial version would have torn down the seven older houses – which he contended were not “historic,” even though they were old. The first version of the project was to be a “very quaint” brownstone row house-type development, which he described as a very nice project. [At that time, the PUD was called "City Place," but subsequently the name "City Place" would be attached to a matter-of-right project, not a PUD.] After the brownstone version, the PUD then evolved into the Heritage Row project most people are familiar with, Rapundalo said. That one would have preserved the seven houses and also built something more contemporary behind the row of houses.

The majority of council supported Heritage Row, but neighbors took various steps to try to prevent its approval, Rapundalo explained. One tool was to file a petition with the city to force the council to achieve a supermajority of eight votes. The council was not able to muster that supermajority, and as a result Heritage Row failed on a 7-4 vote. So the developers came in and offered City Place, which was a project that was proposed to meet all the zoning codes, but would definitively remove the old houses. Rapundalo called it an “inferior project,” but the council was not in a position to say no, because the project met the zoning regulations. Saying no would have meant putting the city at risk of litigation and almost a certain loss in that litigation, he said.

There were several attempts to reconsider that vote on Heritage Row, Rapundalo said. However, the four councilmembers who’d voted against the project refused to budge on that. In the context of the most recent attempt in the last few weeks, the project had been sold to a new developer. And when the numbers were crunched by the new developer, long story short, he said, the numbers didn’t add up for the new developer. So the Heritage Row proposal was withdrawn.

Rapundalo said that in the next few weeks, he expected that demolition permits would be issued and the houses would come down, to make way for a project that will likely become student housing. Rapundalo called it unfortunate and it saddened him. There were many opportunities to make it right, he said. He said he can’t speak to why some councilmembers chose to prolong their opposition to a project that was at least reasonable. [For the latest City Place news, see "City Place: ZBA Appeal Filed"]

Heritage Row, City Place: Lumm

Lumm said nobody is happy with the outcome. She suggested that the situation could have been averted, if elected officials had moved forward with the review of the R4C zoning districts. A committee was formed, she said, to address questions about this zoning classification. If that had proceeded along a path where recommendations could have been made, it’s possible that the recommendations could have been in place in time to steer things in a direction that everyone was hoping for – Heritage Row.

Now, there’s speculation about whether the original developer had calculated the true cost accurately. Lumm ventured that he would know better than anyone. The new developer contends the Heritage Row development was not feasible. She said she just didn’t understand why those questions weren’t worked out and discussed. She said she hoped there’d now be an effort to get the R4C zoning review completed. The City Place project is student housing in a near-downtown neighborhood and she wondered how viable it would be, but she hoped it would be fully occupied. She said the council “played chicken” too long. She said people should have locked themselves in a room and figured it out. But she allowed it was easy for her to say – she didn’t live through it.

Sidewalk Millage

Question: If the sidewalk millage is not approved, will there need to be cuts?

[This item was presented in conjunction with a question about a possible city income tax, but are separated here, because the two are really two separate issues.]

Sidewalk Millage:  Lumm

Lumm said she was personally not supporting the sidewalk millage. Those feelings have been strengthened by knocking on doors during the campaign, she said. She’d been walking on some nice, newly-repaired sidewalks that residents had paid to have fixed under the recent five-year sidewalk replacement program. By way of full disclosure, she said, there are no sidewalks adjacent to her property.

People Lumm has talked to say they just spent a lot of money getting their sidewalk slabs replaced, and wonder about the coincidental timing of the millage proposal. She said a lot of people are not embracing that idea. Addressing the question of whether something would need to be cut, she called it an “unnecessary add,” because $540,000 had been carved out of the street millage for the public art program, when the sidewalk millage is projected to raise around that same amount – $560,000.

Lumm also called the 25% that is needed for administrative overhead excessive – “That’s insane,” she said. She’d attended a meeting of the Main Street Area Association, where members had discussed the use of the sidewalk millage inside the Ann Arbor Downtown Development Authority district. Commercial property owners would all be paying the the millage, she said, but based on the original city council resolution of intent for the use of the sidewalk millage, it would not be used inside the DDA district except for single-family and duplex residences.

The expectation was that the DDA would handle the sidewalk repair inside the district, using only the tax increment from the millage already captured by the DDA TIF district. [The council's resolution of intent was subsequently modified to provide the DDA with all proceeds from the millage inside the DDA district, provided that the DDA agreed to take responsibility for sidewalk repair.] The original resolution was discussed by the council, but nobody bothered to discuss it with the DDA, she said.

Sidewalk Millage: Rapundalo

Rapundalo described the sidewalk millage ballot proposal as coming about due to feedback from voters over the five years that the replacement program has been in place. Many people had to replace slabs, go through the rigamarole of hiring contractors, or teaming up with neighbors to find economies of scale, Rapundalo said. And what councilmembers had heard from people was that they really didn’t want to deal with all that.

The 1/8 mill tax roughly translates to $15 a year, Rapundalo explained. From the monetary side of things, it’s less than having to pay $120-130 per slab. One of the reasons the city has the current model of the five-year inspection program is due to the reduced administrative costs. If you chose to ignore the citation from the city and opted to have the city do the work, the per slab cost was more expensive. If the sidewalk milage doesn’t get approved, he said, the city will continue with the current model on another five-year program cycle.

City Income Tax

Question: What are your thoughts on a city income tax?

City Income Tax: Lumm

Lumm said she does not support a city income tax, noting that Rapundalo calls it “revenue restructuring.” She said she hears all the time from the mayor and other councilmembers, like a mantra, that we’re experiencing the worst recession since the Great Depression. But when times are tough, she said, this is not the time to raise taxes.

There’s a lot more that can be done in terms of government consolidations, Lumm said. So far, we’ve only nibbled at the edges of government consolidation, she said. She said the city didn’t collaborate with the Ann Arbor Transportation Authority, the Ann Arbor Public Schools, the University of Michigan, or Washtenaw County when the city built the $35 million maintenance facility [Wheeler Center]. She said when she served on the city council, she’d brought forward a resolution that called for cooperation with those other units of government, if a maintenance facility were to be built.

Until those kinds of collaborative options are explored, the city government should not be thinking about asking taxpayers for more money. An income tax, she said, is not revenue neutral and would be highly volatile. Up until two or three years ago, tax revenues had been increasing at roughly twice the rate of inflation. Suddenly things have slowed, she said, with respect to property tax growth. She called it “a panic reaction,” to appeal to a revenue restructuring plan. She felt there are many more ways the city can be more efficient in providing basic service delivery.

City Income Tax: Rapundalo

Rapundalo allowed that on the income tax, Lumm is right – he’s in favor of having a dialogue about revenue restructuring. He does not think the city can rely on cost-cutting alone. We’ve already cut and cut and cut, he said, and we’re at or near the bone.

Rapundalo said it’s foolish not to examine the revenue side of the equation. That’s particularly true in light of the reduced amount of state shared revenue that cities have received from the state, he said, and given the legislature’s contemplation of eliminating the personal property tax. By way of illustration, Rapundalo said Pfizer was previously a company that was very personal-property intensive, because of high-tech capital instruments it had. If the city lost that personal property tax revenue for all companies, it would have a huge impact and would not be easily replaced.

Before the personal property tax is eliminated, Rapundalo cautioned, it behooves us to think about whether the revenue model that’s in place is the best one: Is the burden fairly distributed among users of city services – property owners and people who just work here? A Headlee override is also an option, he pointed out. [A Headlee override would reset taxes up to their original rate before they were rolled back by the state's Headlee Amendment.] He wanted to stack the different revenue models against each other and ask what they would prefer.

He contended that Lumm misrepresents the income tax as an “additional tax.” Under the Ann Arbor city charter, Rapundalo said, it’s not possible to have both an income tax and property tax. [This is true for the general operating millage levied by the city of Ann Arbor for its general fund revenues, which is currently just over 6 mills. Other property taxes, levied for parks maintenance, solid waste, open space preservation and the like, could and would still persist, even if an income tax were enacted. Rapundalo's point is that the general operating millage property tax (6 mills) and an income tax are, in fact, either-or propositions. ]

Ann Arbor Downtown Development Authority

Question: Some say the DDA has so much power, it’s ruining Ann Arbor. What’s your vision for downtown? What are three things you’d do to improve downtown?

Ann Arbor DDA: Rapundalo

Rapundalo said that the DDA had generated a lot of discussion, and a lot of points of view have been brought to bear on the question. He said there are two extreme views. One is that the DDA is not independent enough and the city council is trying to impose its will on the DDA. The other extreme view is that the city council doesn’t have enough control over the DDA. He said that one of his council colleagues has proposed the city get rid of the DDA entirely, and that the city take over the management of the city’s public parking system, which the DDA now operates.

For his part, Rapudalo described the city-DDA relationship as a balancing act. He said it’s important to remember that the DDA is enabled by state legislation, but the city is responsible for the DDA’s assets. So if the DDA were to disappear, the city could get stuck with both the liability and the assets. It’s only prudent, therefore, that the council exercise some control, he said. That control is exercised primarily through the appointments to the board, he explained. At the same time the council can’t be so overbearing that the council prevents the DDA from doing what it’s supposed to do – make decisions that are in the best interest of the downtown. The city council has tried to walk that line, he said.

Rapundalo does not support eliminating the DDA, because he said that would have dire consequences. At the same time he didn’t think the city council should be so overbearing as to “cuff the hands” of the DDA. On the DDA board there are some dedicated people, he said, who have the best interests of the downtown at heart. As a show of good faith, he said, the city had turned over the entire management of its parking system to the DDA, as well as the planning for city-owned parcels. The council is trying to walk a fine line, he said.

With respect to his vision of downtown, he noted that he works in the high-tech industry in biosciences, and works with economic development agencies, including Ann Arbor SPARK. We have to maintain the vibrancy of downtown, he said. He would like to see more density in downtown, either through commercial or residential development. He said he could imagine some kind of mid-sized corporate headquarters downtown. There are opportunities with companies currently located on the fringes, he said.

It boils down to creating more density – to increase tax revenue and to allow for a flourishing retail sector, he said. Up to now the downtown has been able to forestall the introduction of big box stores and maintain a nice mix of local and mom-and-pop type of retail, Rapundalo said. By the same token, the city has never really developed a retail attraction and retention strategy. He’d like to see the city set out some economic development priorities so that they could be coordinated and integrated with the efforts of Ann Arbor SPARK.

Ann Arbor DDA: Lumm

Lumm contended that in many respects, the DDA has lost its independence. Rapundalo has talked about the extreme views – that it should be wholly independent versus the idea it shouldn’t exist. When she served on the council, the DDA was an independent body, but it’s not today. She felt like the city council had subsumed the DDA.

She contended that former councilmembers serve on the DDA board, and she noted that the mayor of course [by statute] also serves on the board. When she served on the council, the DDA board was composed mostly of downtown property owners – their mission was solely focused on the downtown. They were not susceptible to pressure to assist the city financially. But today, the DDA is paying $500,000 per year on a 30-year loan for the new municipal center, Lumm noted. That money could be used on other downtown investments.

She described the DDA as being in a “compromised position” now. She pointed to the contract under which the DDA manages the city’s public parking system – the city receives 17% of the gross parking revenues. She took issue with the idea that the city had “given” the DDA the management of its public parking system. What came with that “gift,” she said, was the obligation of roughly $2.7 million a year provided by the 17% of gross revenues in the contract. That money is needed to fill the holes in the city’s operating budget, she said.

Lumm said that despite Rapundalo’s desire not to “cuff the hands” of the DDA, in many ways the city did that. Now a discussion is unfolding about the possibility that hours of parking enforcement will be extended and rates might be raised. [Extension of hours of enforcement has recently been taken off the table, at least for now.] This was predictable, she said. As the city kept going back to the “DDA trough” saying, “Give us more money,” Lumm noted, some members of the DDA board had indicated that parking rates would need to be raised, if the trend continued.

The DDA board is accountable to all of us, she said, and they need to be allowed to have a laser focus on the downtown. Her vision for the downtown, she said, is a vibrant downtown – who doesn’t want that? The DDA has been stretched beyond what their traditional mission was, she said. The downtown is the core of the city and we need to work collaboratively with the DDA so that it remains a strong economic driver.

Closing

Each candidate gave a closing statement.

Closing: Rapundalo

Rapundalo offered that what attendees at the forum had heard is a fundamental difference in how he and Lumm approach the role of a councilmember. What they’d heard from Lumm was a “hunker down” mentality, where we batten down the hatches and say no to everything. He did not accept that, he said. There are times to say no, no doubt. But time doesn’t stand still. It’s important to ask: What are the needs of tomorrow? What do our kids need? We need to think about those questions now, he said. It’s what defines being strategic and it’s what defines leadership.

In his tenure on the budget committee and the labor committee, he said he has challenged other councilmembers about priorities. The council sets priorities at budget retreats, which sets the tone for everything. The council has done a good job of establishing the things that are important, he said, and figuring out what accommodations have to be made in the budget to make those things happen. He said that Ann Arbor is actually doing pretty well. It has good bond ratings, he noted, which allowed the city to embark on needed infrastructure improvements, when bond rates were lowest and when construction costs were lowest. That was exactly the right time to do some of those projects, he observed.

Rapundalo said he would not sit back and accept the status quo. We should always ask if the status quo is okay. If it’s okay, then great. But if it isn’t, then we had better be working on the next steps, he said. It’s about investing in our future, prioritizing safety, and accelerating road repair and economic development to shore up our tax base.

The conversation has to include revenue restructuring, Rapundalo said. It’s not enough to cut costs, because when you try to prioritize, everybody thinks that everything is important. That’s why we have to talk about revenues, he said.

There’s important work to be done, Rapundalo said. He brings a varied skill set to the table, he said, and will continue to bring his due diligence that he’s always brought. He said he would be fair, equitable and mindful of people’s input and bring that into the decision-making at the council table.

Closing: Lumm

Lumm thanked the organizers for hosting, and Rapundalo for his service, and the forum attendees for coming out on a night when the weather was bad. She said it had been great to hear all the questions and to hear what’s on people’s minds.

She ventured that people likely had a sense of what her campaign is about: refocusing spending priorities to reconnect neighborhoods to city hall. She said she wanted to make sure tax dollars are deployed consistent with residents’ priorities. She felt the city has taken its eye off the ball – that’s why she is running.

She allowed that public art is valuable, but the city shouldn’t sacrifice basic services to pay for it. Although Rapundalo said prioritizing public safety is a priority, she said that over the last six years, during Rapundalo’s service, public safety has been cut by 24%. She said she’s no expert, but she’s talked to experts – people who served at senior levels in the Ann Arbor police department – and they are very concerned. If they’re concerned, she said, so was she.

Lumm said that when she hears that we’ve cut to the bone and around 50% of the head count is in public safety, that tells her there are other opportunities for reductions, too. Maybe the city needs fewer attorneys or accountants, she ventured. The city needs to look at cuts strategically. She called for having the community assist in building the city’s budget. She didn’t think the city government’s priorities are the community’s priorities. She welcomed the comparison between the time she served on the council and now. She said she’d worked hard to contain costs and limit taxes. She was known as a “fiscal watchdog,” she said, and would do that again. She asked people to consider when they felt safer and when the roads and streets were in better condition – now or then.

Lumm said she is running as an independent, but is honored to have both Democrats and Republicans supporting her. She hopes that going forward there’ll be other independents who run for city council, and said that maybe the city council elections can become non-partisan.

Lumm said she feels a sense of unity as she goes door to door, and with the group that has come together to support her. They share the belief that city government must reconnect with the people, she said.

The Chronicle could not survive without regular voluntary subscriptions to support our coverage of public bodies like the Ann Arbor city council. Click this link for details: Subscribe to The Chronicle. And if you’re already supporting us, please encourage your friends, neighbors and colleagues to help support The Chronicle, too!