Chart 1: City of Ann Arbor two-year outlook for the general fund. The black bar represents recurring revenue. The stacked bars represent expenses. From the bottom up, those expenses are: existing recurring expenses (light red), requests for new recurring expenses (dark red), one-time requests (light blue), and capital improvement plan needs (dark blue). There also could be additional expenses needed to meet the city council’s priority goals.

The most recent of those work sessions took place on March 11, 2013. The agenda focused on the city council’s top priorities, as identified at its planning retreat late last year: (1) city budget and fiscal discipline; (2) public safety; and (3) infrastructure. Two additional areas were drawn from a raft of other possible issues as those to which the council wanted to devote time and energy over the next two years: (4) economic development; and (5) affordable housing. The retreat had resulted in a consensus on “problem” and “success” statements in these areas – answering the questions: (1) What is the problem we are solving? and (2) What does success look like?

The priority-focused March 11 work session followed one held on Feb. 25, which mapped out the financial picture for the next two years fund-by-fund – not just the general fund, but also the various utility funds (water, sanitary sewer, stormwater, and streets) and internal service funds (fleet, and IT). But on March 11, the council’s focus was primarily on the general fund – as deliberations centered on the first two priority items: fiscal discipline and public safety.

The Feb. 25 session had provided the council with a sketch of the basic general fund picture for the next two years, which is better than it has been for the last several years. Based on current levels for all services, recurring revenues for the two years are projected to exceed recurring expenses by a total of $1.44 million in a general fund budget of about $82 million each year.

That doesn’t factor in requests from various departments that would result in additional recurring expenses, totaling $1.17 million for the two years – which would leave a surplus of just $265,000. When further requests from departments are considered that would result in one-time expenses, that two-year surplus would flip to a deficit of about $252,00. And if all as-yet-unfunded capital improvement expenses are added in for the two years, the city would be looking at a two-year general fund deficit of $4.41 million.

The general fund’s uncommitted balance could cover that deficit – but it would leave the uncommitted balance at $9.69 million at the end of FY 2015, or 11.5% of operating expenses. Under city policy, the uncommitted general fund balance should be between 8% and 12%. However, Tom Crawford, the city’s chief financial officer, has recommended that the city strive for 15-20%.

None of those numbers factor in any additional resources that could be required to achieve success measured in terms of the city council’s priority goals.

At the March 11 session, discussion by councilmembers of the first two priority items – fiscal discipline and public safety – revealed some unsurprising philosophical differences in approach. The majority of councilmembers seemed to accept city administrator Steve Powers’ inclination to take FY 2014 as a “breather” year, not asking departments to meet reduction targets this year, after several years of cuts. But Jane Lumm (Ward 2) – who previously served as a Republican on the council in the mid 1990s, and was elected as an independent in 2011 – expressed disappointed with this approach. She wants reduction targets every year.

And Sumi Kailasapathy (Ward 1), who was elected in November 2012, challenged the idea that it’s only new councilmembers who need to learn during the budget process. She pointed out that city staff members also have a learning curve – as they shift the organization’s priorities to the new council’s priorities.

For public safety, a consensus seemed to emerge that the council’s planning retreat success statements about policing might need further refinement – in light of the current department’s configuration. Police chief John Seto characterized that configuration as set up to be reactive, not proactive. Current staffing levels don’t allow for a proactive configuration, he indicated.

But the council did not appear to have a complete consensus about the importance of that proactive capability – unless that capability could be linked to success in making the community be safe and feel safe. Measuring perceptions of safety through the National Citizens Survey – for the first time since 2008 – was an idea that seemed to have some traction on the council. Some sentiment was expressed that the number of police officers should be increased – whether or not that increase could be tied to better safety as defined in adopted city council goals.

For the fire protection side of public safety, councilmembers effectively made a decision – without voting – to give clear direction to fire chief Chuck Hubbard that they didn’t want to see his three-station plan implemented. He had first presented the plan about a year ago. The proposal would close three stations but re-open one, for a net reduction from five to three stations.

Some dissent was offered, but mayor John Hieftje indicated that in his view the three-station plan was dead. Still, councilmembers seemed unenthusiastic about an alternative – which would entail hiring an additional 23 firefighters to staff existing stations. They seemed more inclined toward incremental improvements in fire safety. Those improvements might be gained through community education. Another possibility is deployment of some light rescue vehicles, which would require a crew of just two, instead of water-carrying trucks that need a crew of three.

This report focuses exclusively on the top council priorities of budget discipline and public safety. Also discussed at the working session, but not included in this report, were draft work plans for the other three priority areas: infrastructure, economic development and affordable housing.

The council may schedule an additional work session on March 25 to give city administrator Steve Powers more direction as he shapes the final budget that he’ll submit to the council in April.

Work Session Overview

The agenda for the council’s working session included draft work plans built around the council’s priorities and success statements – which they had adopted from their late 2012 planning retreat. [.pdf of 2014 draft priority area work plans]

Work Session Overview: General Fund

But before being briefed on the draft work plans for the five priority areas, city administrator Steve Powers invited chief financial officer Tom Crawford to review the basic financial picture for the city’s general fund. The council had been briefed on this at their previous work session held on Feb. 25.

Crawford highlighted the contrast between recurring requests and nonrecurring requests. He also pointed out that there was a line for capital improvement plan (CIP) projects that have no other funding identified except for the general fund. Listed as “TBD” in the chart presented to the council were additional resources for the council’s priorities identified at their planning retreat, as well as other possible subsidies from the general fund that might be required for other funds.

Crawford told the council he would be listening that evening to hear their feedback. Specifically, he’d be listening for how the council wanted to measure success for each of their priority areas. Based on the council’s reaction to the draft work plans, Crawford said, he’d be listening to see if the staff had heard accurately what the council had expressed about how it wanted to measure success.

Crawford presented the council with a slide they’d seen at their previous work session [figures are in thousands]:

                      FY 2014     FY 2015
Recurring
Recurring Revenue   $(82,274)   $(83,527)
Recurring Expenses    80,797      83,565
Net Recurring         (1,477)         38
Recurring Requests       698         476
Net Recur Oprtns        (779)        514

Non-Recurring
One-time Rqsts           431          86
Gen Fund CIP Rqsts     1,298	   2,856
Council Priorities       tbd         tbd
Gen Fund Subs Other      tbd         tbd
Total Non-Recur Rqsts  1,729       2,942

(Surplus)/Deficit        950       3,455

Uncommitted Fnd Blnc  13,144       9,689
Fnd Blnc as Percent    16.1%       11.5%

-

Crawford reminded the council that if all current departmental requests were granted, and all of the capital needs were funded, that would result in the use of general fund balance of around $950,000 in fiscal year 2014 and roughly $3.5 million in fiscal year 2015. The result would be to reduce the uncommitted general fund balance to about 11.5% of total expenses. The current fund balance, Crawford indicated, reflects about 18% of operations. He reminded the council that the range that he recommended for the uncommitted fund balance for the general fund was between 15% and 20%.

Work Session Overview: Draft Work Plans

To give councilmembers an idea of what they’d be presented that evening, city administrator Steve Powers described the draft work plans as centering around the council’s priority areas – which the council had identified at the December 2012 planning retreat. Powers indicated that the service area administrators would be presenting the draft plans and highlighting those places where the staff feel like they need additional feedback from the council.

Powers also stressed that some of the action items might be accomplished without additional funding and that the service area administrators would highlight those items. Some of the action items might also be undertaken in partnership with other entities, he said, not necessarily under the leadership of the city. Powers reiterated Crawford’s point that staff would be looking for feedback from the council on how to measure success as set forth by the council.

The desired outcome for the staff that evening, Powers said, was a consensus about the success statements and guidance for the 2104 and 2015 budgets, and about how the council would like to proceed in developing its priorities. The staff wanted guidance on topics that the council would like to see brought before the body within the next two years. The idea was to transform the draft work plans into something that was really actionable during the two-year timeframe, Powers said. He stressed the fact that the work plans are currently drafts on which the staff is looking for feedback at the work session or later.

Later in the presentation, Powers also reminded councilmembers that the problem statements and the success statements in the draft work plans were developed and adopted by the city council. The other parts of the work plan were initiated by the city staff.

Budget Discipline

Crawford reviewed the success statements on budget and fiscal discipline from the council’s planning retreat.

Problem: Provide efficient, quality service delivery in the face of the projected gap between revenue and
expenses.
Success: Prioritizing expenditures while matching them with revenues over the long-term.

Budget Discipline: Draft Work Plan Summary

The city staff were hearing that the council was basically satisfied with the kind of discipline that the city currently has, Crawford indicated. In thinking about how to measure success, he told the council, the staff felt that they could continue to look at the question: Do we have a balanced budget?

Whether a budget is balanced is measured in two ways. First, is the budget balanced on a recurring basis over the two-year plan? And second, on a non-recurring basis – unless you’ve been saving for a particular investment – does the two-year plan balance out by not showing a net use of fund balance? The city staff’s interpretation so far, Crawford said, is that this kind of metric would resonate with the city council. He wanted to hear some feedback if that kind of metric doesn’t meet the council’s expectations.

Staff is trying to listen to the council’s direction about how to achieve budget discipline, Crawford indicated, so staff had come up with four basic strategies, with four corresponding action items.

The four strategies that were in the draft work plan, with comments from Crawford made at the work session, are:

1. Pursue efficiencies where/when possible. This reflects the fact that there are always opportunities for improvement and the staff always need to be looking at ways to become more efficient, Crawford said.
2. Periodically consider how services are delivered (in-house, privatized, franchised, etc.). Crawford said the staff needs to step back periodically and consider whether the city should be providing a service using in-house resources, whether it should be a franchise arrangement, or privatized. Historically, Crawford explained, the city had applied that kind of scrutiny during the “off year” of the budget cycle – when there is a chance to “chew on” some of the bigger questions. [The city has a two-year budget planning process, but adopts budgets one year at a time. This is the first year in the two-year budget cycle. The second year is considered to be the "off year."]
3. Develop a citywide strategic plan to help inform the prioritization of services. The idea here, Crawford said, is that the city provides a wide range of services to the community, and they are not necessarily independent. In fact, many of the services are interrelated, he noted. So the strategic framework would have a longer lasting priority direction.
4. Reconfirm budget policies/practices. Crawford explained this strategy in terms of action items related to it. Those included a laundry list of general policies and practices that are currently in place. Those policies have implications for how the staff develops the budget each year.

In addition to the strategies and action items, Crawford continued, the staff has listed out some challenges associated with the council’s goals. With respect to budget discipline, he said, the staff recognizes that the city council has elections every year, with half of the council elected every year. Given the size of the organization and complexity of operations, it takes time to get up to speed on all the issues. Another challenge is that a complete re-prioritization takes a lot of resources – and it might not be something you do every year or every two years, but only periodically.

To illustrate the inter-relatedness of the various services and the complexity of the organization, Crawford gave the example of crime reduction. A lot of people might think that’s a police function, Crawford said, but the attorney’s office also has a role in that. And for crime related to nuisance properties, for example, the planning and development services area has a role to play. So there’s a lot of relatedness between the city’s various operations, he said.

Another challenge is the staffing resources to support a number of simultaneous efforts.

Crawford returned to the initial sentiment he’d expressed – a sense that the council felt that the city’s fiscal discipline was in pretty good shape, but that it could perhaps be tweaked. That’s the context in which the work plan for budget discipline was offered, he said. If that’s not the case, then the staff needed to hear about that.

Budget Discipline: Why No Reductions?

City council reaction was led off by Jane Lumm (Ward 2). She told Crawford she appreciated the fact that some “meat had been put to the bones” of the strategic framework. She told Crawford that she felt he and his staff did pursue efficiencies wherever possible. But picking up on the statement that there is always room and opportunity for improvement, she said, the city has identified no cost reductions targets for the next two years. She understood that there had been budget reductions over the last few years, but she didn’t feel that meant there were no further efficiencies that could be achieved.

Lumm felt that continuous improvement is a reasonable expectation. Even in a world of flat budgets, she continued, we should be striving to optimize resource allocation, to meet priorities. Savings generated in one area could be reinvested in another, she said. She encouraged staff to strive to identify cost-saving targets. “That was a surprise to me that we didn’t do that.” The city has been through some tough times, Lumm said, but she still felt that cost reductions are something that the staff should always strive for.

Crawford responded by indicating that earlier in the day, in response to a question that Lumm had raised at the previous working session, staff had developed some responses that had been emailed to the council. Summarizing the sense of the email, he said staff’s view is that the organization “needs a breather” right now. The staff does believe that there is always opportunity for improvement – but the larger opportunities for that improvement will require some planning, and may require that a lot of different elements be brought together, he said. Significant efficiencies are likely to be more surgical in the future, Crawford felt. That contrasted with the way things were done in the past – where the city collectively had been “ratcheting down.”

Lumm characterized the issue as perhaps a philosophical difference, and reiterated her view that there were always opportunities for improvement and finding savings so that the city can allocate resources in a way that’s consistent with its priorities.

Budget Discipline: Against Wal-Mart-ization

Christopher Taylor (Ward 3) said he heard the staff saying that efficiencies and improvements are always part of the analysis – and in the past it’s been driven by a need for cost savings. But now, Taylor said, he didn’t necessarily want to have a desire for cost savings drive the efficiencies. If we can achieve cost savings and maintain or improve service, then absolutely we should do that, he said. But in the environment he envisioned in the future, he felt the goal is not merely to provide service, but provide excellent service. He compared cutting merely to achieve cost savings to “Wal-Mart-ization” – cutting and cutting and cutting and making the products thinner. Ann Arbor’s goal, he felt, should be to do the best we can to provide services to the residents with the taxes and the few dollars that we have. We should make sure that we’re doing it right, he said, and in that he concurred with Lumm. But he wanted the organization to equally emphasize excellence in service.

Lumm reiterated her point that the goal should be to find savings in some areas so that the money can be spent in other areas that are a higher priority. For example, she felt very strongly that the city needs to look at the pension plan – and to transition from a defined benefit plan to a defined contribution plan, or some hybrid form. That would not be for existing employees, she said, but rather for future employees. That’s just one example, she said, where the organization could find savings to invest in other areas.

Budget Discipline: For a Breather

Marcia Higgins (Ward 4) summarized the last 10 years as a period during which the city had been downsizing. As some of the areas have been totally reorganized, she characterized the result as “a lot of chaos.” However, in the last couple of years, she continued, things had settled down a little bit. With the new city administrator and service unit managers, she felt those people are now looking at how the organization is structured and asking where additional efficiencies can be realized. But she felt that the organization did need “a moment to take a breath” – otherwise there could be continual chaos in the organization, and that just leads to a lot of anxiety.

Ann Arbor: Total number of city employees by year.

Higgins felt that the staff came to the council every year with proposals for savings and how the savings could be used in other areas. She felt the staff are already doing a pretty good job at that. Higgins felt it was a great dialogue to have about how the identified savings can be used on the council’s identified priorities. So Higgins asked Lumm how Lumm envisioned that dialogue taking place. “Where in the process do you see that taking place?” Higgins asked.

Budget Discipline: Council Input Process (Dog Food)

Lumm ventured that everyone could put forward their budget amendments. Last year, the budget amendments that she had brought forward had identified savings in certain areas to be spent in other areas, she said. “A lot of people didn’t like the dog food, so it didn’t really go anywhere,” she laughed. Identifying savings in one area and spending it in another – that was how she envisioned the next step unfolding. But she ventured it was difficult to say, because the council did not yet know what budget the city administrator would propose.

Steve Powers weighed in by suggesting that some of that feedback and discussion could be conducted before the point of preparing budget amendments. He ventured that the draft work plans being presented that evening could provide a framework for discussion.

Margie Teall (Ward 4) said that for her part, the city had gone through 10 or 11 years of cutting. She felt the city is now a very lean organization. If the staff feels that the council needs to give them a break to see how things are going, and let things settle down a bit, then now is the time to do that, she felt. A lot of the stress, she ventured, comes not just from the chaos, but from doing more with less over and over again. So she wanted to let up a little bit if the organization feels it can do that. Her question for Lumm was: When is there a point when you’re not looking to cut anything?

Lumm responded to Teall by saying that she felt it was always possible to look for continuous improvement and savings. There are lots of ways to do that, Lumm said, and there are lots of things that the savings can be spent on – like the priorities identified by the council. A lot of it is simply shifting money from one bucket to another, she said. Infrastructure is a council priority, she observed, but she felt that she didn’t want to see any more money spent on the city hall building. She wanted more potholes to be filled instead. It’s those kinds of shifts, she suggested, where the city is reducing allocation in one area and increasing it elsewhere.

Sumi Kailasapathy (Ward 1).

Sumi Kailasapathy (Ward 1) told Crawford that she did not want to quibble with what he had said. But she picked up on his remark that when there are changes in the city council membership, there can be a steep learning curve to digest the budget complexity. She flipped that perspective by suggesting to Crawford that the city staff need to digest the fact that new priorities sometimes come with new councilmembers.

She felt that the priorities identified in the council’s planning retreat did not reflect a “Wal-Mart-ization,” but rather shifted priorities. She did not feel that the council had stressed cutting and achieving more efficiency, but rather the retreat had focused on what the council wanted to spend money on. She knew a lot of people, for example, who wanted to see the roads fixed.

Teall interjected that road repair was, in fact, one of the council’s priorities. Mayor John Hieftje wanted to move the discussion along, but before doing that, he responded to Lumm’s remark about shifting funds from one bucket to another. He stressed that this is possible just as long as the “buckets” are located inside the general fund. But outside the general fund, the various buckets, in many cases, have legal restrictions on them. He wanted to make sure that no one in the public misunderstood the city’s intentions.

Police Services

Ann Arbor chief of police John Seto reviewed the problem and success statements from the council’s planning retreat.

Problem: Inadequate police staffing resources to do proactive and consistent enforcement and community outreach.
Success #1: Part I crime rates (major crimes) are among the safest 20% of communities in the country.
Success #2: Community perception of safety is high.
Success #3: Police officers have 25%-30% of time available for proactive policing.

Police: Crime Rates

Seto told the council that he would like to hear some input about measurement of that 20% standard. The way the city of Ann Arbor analyzes its crime statistics, he explained, is through the Federal Bureau of Investigation crime statistics reports. Those reports group cities into different population sizes, he explained. Ann Arbor falls into the population size of 100,000-250,000. For 2011 – the last year for which the city has complete data – 206 communities fell into that group. Ann Arbor is ranked 26th out of those 206, which translates to the top 12% – so Ann Arbor is in the top 20%. By that standard, the city is meeting success as defined in the statement right now. So the strategies and action items related to that success statement, Seto explained, relate to the idea of maintaining and continuing what the city is doing to achieve that success that has already been achieved.

Strategies for achieving the top 20% safest community standard included in the draft work plan are:

• Increase efficiencies in communicating with the public through Neighborhood Watch and social media.
• Increase communications with other law enforcement agencies within Washtenaw County.
• Seek opportunities for collaboration with other law enforcement agencies to reduce crime.
• Create a Crime Strategy Unit with the mission of reducing crime.

The strategies were heavily focused on communication, Seto observed.

Some of that increased communication could require additional staff support, he ventured. He noted that the reductions in overall police force staffing have not only affected sworn officers, but also civilian support staff. A lot of factors are also outside of the department’s control, he noted – like economic conditions, or the policies of other judicial systems. Seto summarized by saying that the department needed to continue to do what it is doing, and to increase some of the efficiencies through better communications. Invited to comment on the strategies and action items for the first success statement, councilmembers did not offer any feedback to Seto.

Police: Perceptions of Safety

Seto told the council that some additional direction on the second success statement might be required – noting that the perception of safety is highly subjective. One of the strategies listed is to participate in the National Citizens Survey to determine the current community perception of safety. He ventured that some councilmembers might remember that the last survey was conducted in 2008. So he was suggesting that another one could be done – to gather a more current measure of Ann Arbor residents’ perception of safety. Based on the results of the survey, additional action items could be generated, he suggested. The cost of the National Citizen Survey – a tool for measuring community perception of safety – is estimated to be around $15,000-$20,000, Seto told the council.

It’s all about visibility, he said, and allowing people to see the police. It’s also important to have accurate information available so that people have accurate statistical data about crime – instead of having to rely on what they hear from their neighbors. As challenges, Seto noted that there could be a trade-off between assigning additional resources to downtown foot patrols and the department’s ability to react effectively to other situations. That could have an impact on Part I crime rates.

Police: Council Reaction – Perception of Safety

Chuck Warpehoski (Ward 5) said he appreciated the way the success statements are defined because the goal is not to hire officers – but rather to have a safe community. He wanted to keep that goal in front of the council and to talk about approaches to reaching that goal. But he said that the community’s perception of safety has to be taken with a great deal of caution. In connection with some high-profile sexual assaults recently, Warpehoski said people had an understandable fear about “strangers in the bushes, and parking garages,” but he pointed out that most sexual assaults take place in homes where the victim knows the assailant: Somebody might feel safe with someone they know, but might not actually be safe. So improving a sense of safety is not always about making an actually safer community, he said. He noted that it’s a nuanced issue.

Chuck Warpehoski (Ward 5).

Warpehoski felt that it was important for people to actually be safe, and then also feel safe as a function of that real safety. He indicated support for the use of the National Citizens Survey as a tool to measure perception of safety – but felt it was important to decide in advance of administering that survey a clear goal for the metrics.

If a clear standard were not identified before administering the survey, he feared that once the survey was done, whether the numbers reflected in the survey were too high or too low would a political discussion as opposed to a data-driven discussion. So he wanted to identify a specific numerical goal for perception of safety in the same way the council had identified a numerical goal for Part I crime rates.

Sally Petersen (Ward 2) felt like there was probably some benchmark that would be reliable. Seto indicated that the 2008 survey data included benchmarks. If there were benchmarks associated with the 2008 survey, then Higgins wanted to know from Seto what was done with that information and what the results of the survey were. Seto told Higgins he would provide a link to a summary of the public safety portion of the survey. [.pdf of 2008 Ann Arbor National Citizens Survey]

Public safety results from 2008 Ann Arbor National Citizens Survey.

Police: Budgeting – Hiring, Staffing Level

When he laid out the costs for some of the action items, Seto indicated that an additional officer for fiscal year 2014 would cost $78,000 and in fiscal year 2015 it would be $86,000 – due to step increases, Seto explained.

Sally Petersen (Ward 2) asked if there would be an explicit connection in the budget presented by Powers between the numbers and council’s priorities. Powers indicated there could be. One of the outcomes that would be helpful for the staff would be some council discussion on, for example, recurring revenues and recurring expenditures, he said. It would be useful for him to know where those revenues and expenditures coordinate, conflict, or collide with the priority area of policing and the need for additional resources.

Sally Petersen (Ward 2) before the March 11 work session started.

Christopher Taylor (Ward 3) indicated that his feedback on that question was: If we don’t have recurring revenues for something, we shouldn’t be making recurring expenditures associated with it. Petersen indicated that she wanted a notation in the proposed budget that specific expenses reflected the implementation of the council’s priorities.

Jane Lumm (Ward 2) stated her expectation that the council’s priorities – especially those related to public safety – would be reflected in the proposed budget. And that doesn’t just mean how to spend new money, she said. It also means a reallocation of existing resources to the council’s priority areas. That’s how she interpreted the direction that the council had given the city administrator. Added personnel would be at a cost.

Last year Lumm had asked the question about the “magic number” for sworn officers. Some back-and-forth between Lumm and Seto established that the current authorized number of sworn officers is 119 and there are currently 117 officers, after recent hires. She wanted to see the city on a “glide path” to get to higher numbers, so that the police agency can become not just reactive but also proactive. She felt it is desirable to have additional foot patrols in the downtown, but at the same time it is important to balance that against pulling them from some other place.

Later in the working session, Seto indicated a problem with not knowing if somebody is going to be eliminated from the training program, which is what happened to one of the two people who were supposed to bring back the staff number of sworn officers to 119. Seto indicated that the department did not have a policy of staffing more than the authorized number of FTEs.

Lumm objected somewhat to the characterization of all the “new” hiring, saying that all of the new hires had replaced retired positions. She felt it was important to clarify that the size of the police force had not grown. She noted that the department had strategically held that number lower than 119 because of the overtime bill that has to be paid – so not filling those positions is freeing up the cash to pay for overtime. [Lumm's characterization was based on remarks made by Seto at the Feb. 25 working session.]

Powers weighed in to correct Seto’s statement about authorized staff levels. He noted that when there are talented, competent candidates, he’s given Seto authorization to hire above the 119 level. He’s given the chief direction to “over-hire” in the event that there are very highly qualified candidates who apply. Seto has also not been restricted in his hiring in order to achieve overtime pay, Powers said. Powers also noted that the department has proceeded with hiring replacements despite losing $350,000 in funding from the Ann Arbor Public Schools. So the staff’s direction – following the council’s priorities – has been to continue to strive to maintain the staffing level at 119 FTEs. He wanted to make sure that the staff understands the direction it’s been given by the city council is to maintain staffing – not to reduce it to offset overtime or to compensate for lost revenue from the Ann Arbor Public Schools.

Stephen Kunselman (Ward 3).

Stephen Kunselman (Ward 3) looked at the police department staffing levels as a whole in 2001, when the staff total – sworn officers and civilians – was 244. In 2009 the level was down to 209. And in 2013 the level was down to 146, which he characterized as a precipitous drop over the last five years. He didn’t figure that the city could make up 60 FTEs anytime soon, and he knew that Seto did not want to say what the magic number was for the right staffing level. But he felt like the city had a long way to go to return to being a proactive department.

So what he was hearing from the administration, Kunselman said, was that the council needs to find some revenue. He asked Powers if additional direction would need to come from the council in order to direct any additional revenue toward police and fire staffing. “Or will that be something that we can just assume that you are going to want to do?” Powers told Kunselman that one of the desired outcomes from that night was for the council to have some discussion in a work session setting regarding priorities. Given that feedback, Powers could – with Seto and Crawford – develop a proposed budget. If it’s not to the satisfaction of the city council, the council would have the opportunity to amend the proposed budget.

Police: Budgeting – Overtime

Sumi Kailasapathy (Ward 1) noted she had raised the question of overtime at a previous work session. Adding more police officers does not necessarily mean that the city would be spending more money, she contended, pointing out that this could result in a reduction in overtime. There is a “sweet spot,” she said, for the hiring of additional police officers, that would somewhat reduce overtime, even if it wasn’t dollar-for-dollar. In the ensuing back-and-forth, Seto indicated that he did not believe there was a great deal of efficiency to be gained by eliminating overtime.

But Kailasapathy wanted to find that “sweet spot.” Marcia Higgins (Ward 4) questioned why there are currently only 117 officers on the job, when the city had budgeted for 119. Seto indicated that the department would have been at full strength (119) but one of the officers to whom AAPD had made an offer declined at the last minute and took a job with a different department. Another one had not made it through the training program. Higgins wanted to know if 119 was the proper number of sworn officers that would optimize overtime costs.

Tom Crawford then gave a more detailed analysis of the department’s overtime expenditures, which total around $1.2 million. Only about $250,000 of that total amount is attributable to scheduling, he noted. Reimbursable overtime – like University of Michigan football games – cause a spike for a couple of months, but you would not hire FTEs to cover those spikes, he said, when the cost is covered by the university.

The next category of overtime is holiday pay and court appearances. For that category, as you add staff and proactive enforcement, that will cause an increase in overtime costs, Crawford explained. And that category of overtime costs has gone down as staffing levels overall have declined, he said. So if staffing levels were to increase again, he would expect overtime in that category also to increase. The smaller category of around $250,000 equates to about 8,000 hours of work per year, which would be 3-4 FTEs. He did not feel that hiring additional FTEs would help reduce that overtime. “You’re at a very low level of overtime already.” He allowed the council might have other reasons to want to increase police staffing levels, but he did not feel that the desire to reduce overtime expenses should be one of those reasons.

Christopher Taylor (Ward 3) questioned the equation of $250,000 to 3-4 FTEs. He pointed to the various costs per officer that had been provided – $78,000, $86,000 and $110,000 – so Taylor indicated that he had a tough time reconciling $250,000 with four FTEs. Crawford explained that he’d used the rate of overtime pay, and divided that into $250,000. So $250,000 divided by $30/hour yields roughly 8,000 hours of work. Given 2,000 work hours a year per employee, roughly, that works out to four employees, Crawford explained. Taylor did not seem illuminated by Crawford’s explanation, but allowed, “This may not be important enough to keep talking about.” Still, Taylor continued by suggesting that it seemed to him the calculation should be dividing $250,000 by the $78,000 or the $86,000 figure. Taylor eventually seemed convinced that hour-by-hour it’s cheaper to pay the overtime than to hire the FTEs.

Police: Staffing Levels – Core Functions

Kunselman raised the point that in addition to less crime and fewer police officers, the city also had less revenue coming from officers performing core responsibilities, like traffic enforcement.

Ann Arbor traffic citations: 2006-2012 [No data was available for 2010]

Ann Arbor parking violations: 2006-2012

Kunselman concluded that if the city wants to perform core responsibilities really well, they need to add to the number of FTEs in the police department. As an example, he noted that for a while the city had focused on pedestrian traffic safety. Then “all of a sudden” the hotspot was taxicab ordinance enforcement. [The taxicab ordinance enforcement was actually pushed by Kunselman, who chairs the city's taxicab board.] What’s going to be next? he wondered. He compared the approach to Whac-A-Mole where things are addressed in one area, but would pop up again in another place. It seemed to him that more FTEs were needed to perform core responsibilities, saying that the 60-FTE drop in the last five years was pretty significant in his mind. With all the talk about successes, he felt there are a lot of things that are still not getting done.

Total Ann Arbor police department staff strength: 1997-2012. CFO Tom Crawford cautioned against using simple staff levels as an indicator of the amount of police services being delivered to the community.

Seto reminded Kunselman that the 60 FTEs includes civilians. And Crawford pointed out that it’s difficult to draw conclusions from a chart. As an example, Crawford noted that by contracting with the Washtenaw County sheriff’s office for dispatching services, the city was continuing to provide dispatch service – but not by using full-time city employees. That meant the FTE count went down, but the service was still being provided. In other cases, the FTE count might go down because the same service was transferred to a different department.

As examples, Crawford gave an information technology position that was transferred from the police department to IT, and accounting positions in the police department that were just absorbed by the accounting services department. Crawford also pointed out that through technology and capital investments, service levels can be increased, even though the FTE count might not stay the same. So he did not view the FTE count as the only way to evaluate how much service was being delivered.

Police: Proactive Policing

Seto recalled some remarks he’d made to the council at their previous work session, when he’d told them he felt the department was very effective at reacting. Statistics show the department is effective at making arrests, he said.

Ann Arbor physical arrests: 2006-2012

But there’s not a lot of flexibility in the staffing levels to allow for proactive engagement, Seto said. The proactive engagement that is currently done in the department is not at the same level as the department used to do, he said. Seto indicated that additional personnel would be needed, depending on the desired level of additional proactive and community engagement.

Police: Proactive Policing – Council Reaction

Higgins returned to the success statement the council had adopted related to proactive policing. Proactive policing can mean a lot of different things to different people, she said. She asked Seto to define what he was talking about. Seto indicated that the success statements were given to him by the city council. Higgins ask Seto again to define what proactive policing meant to him. Seto referenced the success statement: Officers will have 25-30% of their time available for proactive policing. He noted that the police department had developed an electronic data sheet that maintains accurately all of the activities the officers perform. That was rolled out in January, and it still has a few bugs in the system, Seto allowed. But he noted that each category of activity can be accurately captured.

In this extract from the city of Ann Arbor’s digital activity report system, 22 minutes were logged on downtown foot patrol.

He felt it would be possible to pull out specific categories – such as downtown foot patrol, or neighborhood patrol – and evaluate whether officer activities in those categories add up to 25-30%. And that could be the gauge that the department could use. But clear definitions of categories of activities that constitute proactive policing would need to be defined, he said. He allowed that his idea of proactive policing might differ a little bit from councilmembers.

Higgins told Seto that she still hadn’t heard what his definition of proactive policing is. He told Higgins it has to be dedicated time that is not obligated to respond to calls coming over the radio. Higgins ventured that it meant engaging one-on-one with the community. She imagined it meant when officers were on foot patrol in the downtown, talking with citizens and “just being personable.”

Seto agreed with that description, adding that it could mean taking an hour of time to go to a neighborhood association meeting, or visiting the schools. There are a lot of activities that he felt could be characterized as proactive. The parameter he would use, he said, would be that it’s time when you’re not answering the radio – you’re free to make contact with citizens and businesses.

Higgins ventured that an officer on a patrol could pull up to a city park and then take 15 minutes to take a stroll through the park and see what’s actually happening on the park grounds. Seto agreed, saying that is what officers do now as free time permits. The difference between the way the department approaches that now, and the way the department did previously, is that previously they would have an officer dedicated eight hours a day to do just that. Now it’s only as free time permits that officers would walk around in Briarwood Mall or around downtown, for example. Some of that can be accomplished now, Seto said, but not with as much flexibility.

Warpehoski indicated that his recollection from the planning retreat in late 2012 is that the definition of proactive policing had come from the consultant who facilitated that retreat. The consultant had referenced an outside standard. The 25-30% figure makes sense to him if it’s related to a third-party standard. If the city itself is coming up with a number and assigning some other definition to it, he was less certain. If the definition was something more akin to what Higgins and Seto had just described, and if that definition was unique to Ann Arbor, then the question of 25-30% as appropriate needed to be revisited, Warpehoski felt. His own definition of proactive policing would include the behaviors that Higgins had just described, but he wanted to get some clarity. He ventured that defining proactive policing was not something that Ann Arbor had to do completely on its own.

From left: mayor John Hieftje, Christopher Taylor (Ward 3) and city administrator Steve Powers.

Taylor echoed what Warpehoski had said – and he wanted to push that sentiment even further. The success statement by the council, he said, struck him more as an action item rather than a separate goal.

Taylor felt that the goal is to be actually safe and to feel safe. If the way to achieve that goal is to have zero proactive policing – every officer in a patrol car just driving around town – that would be fine with him. If it means 50% proactive policing, “you tell me.” For his part, Taylor would “downshift” on the third success statement and focus in on the first two. “If you come back and tell me in order to get to one and two you need 25-30% of time available for proactive policing, I’d say, ‘Thank you, chief, we’ll see what we can do.’”

Seto told Taylor that the staff was simply trying to create some options for the success statement that the council had identified. Seto pointed out that one of the recommended action items was to develop standards for measuring the impact of proactive policing. He felt that proactive policing may have an impact on success statement number one, for example. Crime might go up, because there are more reported crimes – because people feel more comfortable reporting crimes. It also might have an impact on the perception of crime – positively or negatively.

Teall said that to her, the core function of policing was to respond to calls, and that core function needs to be completed in any case. To her, the percentage of proactive policing loses meaning. In her experience, when she contacts the police about issues in the neighborhood, they have been addressed reactively, but then intense proactive policing begins in an area that really needs that extra attention. If more proactive policing were done everywhere that would be great, she said, but she felt that it should in some sense be driven by a need and fed by reactive policing.

Seto indicated agreement with Teall. He agreed that the department is reactive to concerns identified by residents or by the city council – and that resulted in proactive efforts in a particular area. Seto also pointed out that the department gets requests for enforcement of traffic safety or traffic enforcement. So more proactive policing could be taking time away from traffic enforcement or other code enforcement in other areas, he explained. “It’s all a balancing act,” he said.

With respect to the balancing act, Warpehoski felt that Taylor’s idea – to look at the first two goals and then tell the council what it would take to achieve those goals – made a lot of sense. He encouraged a data-driven approach, alluding to a report from San Jose, California – academic research on the relationship between police staffing and crime. Citing that research, Warpehoski contended there is a general consensus that simply adding or subtracting police personnel will not impact crime. The report indicates that the “hotspot model” – identifying where there’s a problem and focusing resources there – does work. Seto noted that even with reduced police staffing, the long-term trends are that crime is down, not just here in Ann Arbor but in other communities as well.

Fire Protection

In Ann Arbor, the chief of police is also head of all public safety – so fire protection also falls under John Seto’s general administration. Seto gave the overview for the fire department draft work plan before inviting fire chief Chuck Hubbard to comment and respond to questions from councilmembers.

Problem: Current fire staffing and deployment is not optimized to meet the National Fire Protection Association (NFPA) Standards for Fire Suppression.
Success: Fire station locations, number and infrastructure are optimized to meet community needs and industry standards, within City resources.

Options from the draft work plan for fire safety:

• The Station Restructure Plan.
• Reduce minimum staffing by deploying light rescue vehicles, which can be operated with two fire personnel. This could reduce minimum staffing without closing any stations.
• Hire 23 new employees so that each of the existing 5 stations can be staffed with a minimum of 4 fire personnel each day given the current contract language for daily staffing.
• Work with employees to develop ways of maintaining minimum staffing.

Seto indicated that more clarification was needed – to determine what the community’s needs and desires are with respect to fire suppression and medical response. Should the department emphasize fire suppression, medical response, or both? [Later during the work session, Stephen Kunselman (Ward 3) told Seto that he was adamant that both fire suppression and medical response were priorities.]

Ann Arbor EMS responses: 2006-2012

Ann Arbor fires extinguished: 2006-2012

Seto told the council that more clarity was needed from them on that point. Depending on the answer to that question, Seto said, different action statements might be appropriate. The new station reconfiguration plan is a possibility. Also a possibility is reducing required staffing by deploying light rescue vehicles. Hiring 23 new employees was another possible action for the council to take – which would allow the operation of the current five stations with both fire suppression and medical response as priorities.

Fire Protection: Light Rescue Trucks

Margie Teal (Ward 4) indicated that light rescue vehicles had been talked about for a long time. She was not sure why the city had not already moved ahead in that direction. She felt it was pretty clear a while back that this would be a great cost saver. She wondered what the holdup was.

Ann Arbor fire chief Chuck Hubbard.

Fire chief Chuck Hubbard responded to Teall by explaining that the department had put in a bid for a light rescue vehicle a few months ago. In the final stages, he explained, the vendor “came up with some things that were not discussed initially” – so that vehicle had to be re-bid. The department is in the process of doing that right now.

Assistant city attorney Mary Fales, he said, is currently reviewing the request for proposals. As soon as she gives a green light, that light rescue vehicle will go out to bid again. He indicated that one light rescue vehicle was currently in service. Once the new RFP is issued and another vehicle is purchased, that would bring the total to two.

Fire Protection: What the Truck?

Mayor John Hieftje asked for an update on the tower truck the city is purchasing. Hubbard said he expected delivery of the new tower truck next month. The day after the work session, a final inspection was to be done in Dublin, Ohio, he said, where the truck is being built. He expected delivery of the truck by April.

Fire Protection: Inspections

Jane Lumm (Ward 2) asked about redeployment of staff to raise revenue as it relates to increased fire inspections. She told Hubbard that she had received some feedback from “customers” and she felt that there are a lot of people in the community questioning why there is suddenly an increase in annual fire inspections. Depending on the property class, inspections may not be required at all, or might be required only every two years, not annually, she observed. She said the justification and rationale for the inspections is not clearly understood. If it’s a safety enhancement policy that’s one thing, she said. It’s a revenue enhancement policy then “not so good,” she said.

Ann Arbor fire inspections: 2006-2012

Hubbard told Lumm that fire inspections are a proactive approach to safety. In the department’s past history, it had not been particularly diligent in that area. He could not speak to why that was – because he was not the chief at the time. “But under my tenure that has become a priority – to be proactive as opposed to react.” These inspections are critical, he said, for businesses and for tenants. He told Lumm that he’d received her email and there were some statements in it that were not accurate, and he would be responding to it. The annual compared to biannual inspection is one of the items, he said. Re-inspections can be required, he explained, if an issue is identified and the fire department inspector needed to return, to ensure that the problem had been rectified. Hubbard stressed that the inspection program is not designed to increase revenue but rather to increase safety for Ann Arbor’s citizens. “We want to prevent fires as opposed to going to put them out.”

Fire Protection: Station Restructuring Plan

Lumm asked about the fire station restructuring plan. She felt that the restructuring plan was based on the wrong premise and answering the wrong question. Rather than responding to the question of what the necessary staffing levels and equipment were, the restructuring plan was an attempt to optimize service, given staffing levels. Lumm wanted confirmation about the question of whether the plan is still “hanging out there.” Is this still being considered as a valid option? she asked.

Hubbard gave a straightforward answer: “As far as I’m concerned, yes. It is still a valid option.” He acknowledged that Lumm’s characterization was accurate – that the station reconfiguration plan had been designed around current staffing levels. He reminded Lumm that when he had put the plan together it was designed to meet the NFPA and the OSHA standards – to provide the best service the department possibly could with the staffing levels that it had. So he considered it to be a viable option.

Lumm wanted to know what the parameters were for framing the issue. She felt that the city was not looking at the issue in the right way.

Fire Protection: Station Reconfiguration

Kunselman passed along some praise from a constituent he’d met over the weekend who’d experienced a dryer fire in his house. Ann Arbor firefighters had gone “above and beyond” and had done everything in their power to save the constituent’s possessions. The constituent was also adamant that if the truck had to come from someplace else besides the Huron Parkway station [Station #6], the house would not have been saved. It’s that kind of concern that led Kunselman to conclude that closing any fire stations was not an option – whether there’s three people on the truck or four. What’s paramount, he said, is to get a truck on the scene, so that some kind of action could be taken.

Kunselman reported that he had attended one of the public meetings on the station reconfiguration proposal – at Cobblestone Farm. He’d heard from a heart attack victim, who told him that firefighter first responders had saved his life. Kunselman weighed in adamantly that the priority of the fire department should be both fire suppression and emergency medical response. He felt there should be a way to find a hybrid solution where the downtown fire station had the staffing to put four people on a truck, to cover the denser downtown area. He didn’t know how it would be possible to hire an additional 23 firefighters. But if the city could get a few more, he wondered if that might relieve the pressure to close stations. He felt it was very important to the community that a station in their neighborhood be open – so that they would feel safe and that they would be safer.

Fire Protection: Station Reconfiguration – Light Rescue Trucks

Sally Petersen (Ward 2) asked Hubbard if he was implying that the acquisition of additional light rescue vehicles could possibly mean that the existing five stations could be kept open as they are now. Hubbard explained that light rescue vehicles require only two personnel. The current labor contract with the firefighters union requires three personnel for any vehicle that carries water. Light rescue vehicles don’t carry water, but they are equipped with all the medical equipment and firefighter tools and gear. The only thing missing is water. So in a situation that might trigger overtime to staff a three-person truck, when there’s a two-person truck that can be put in service, that prevents the need to pay overtime to the third person, Hubbard explained. And that keeps the station open. If the community’s priority is for medical response, then a two-person rescue truck could staff the station. Petersen ventured that the answer to her question was yes, which Hubbard confirmed.

Teall questioned the idea that with one additional light rescue vehicle, all the stations could be kept open. She felt that depends on the community needs. For Kunselman’s example, she wondered what would happen if a three-person truck from the Huron Parkway station arrived at a fire: How many people could be sent in to fight the fire? Hubbard told Teall she was referring to the OSHA law – which requires a two-in-two-out deployment for a total of four firefighters on the scene before a firefighter could enter a burning building. That’s the principle that the restructuring plan was designed around.

The idea would be to put four firefighters on the scene together, so that they could safely attack the fire. He noted that a dryer fire, as in Kunselman’s example, is a lot different from a structure fire. When you pull up to an actual structure fire, you need the people, he explained. Teall asked if Kunselman’s example had been a structure fire, how would that have been different? Hubbard told her that there would have been a lot more to do, for one thing. Firefighters from other stations would have eventually arrived on the scene.

Map 1. Ann Arbor fire chief Chuck Hubbard’s plan is to protect the city from fires with three stations (red helmets): Station 1, Station 2, and Station 5. Closed would be Station 3, Station 6 and Station 4 (gray helmets). Station 2 is currently not used and would need to be re-opened. The light blue area is the part of the city that is reachable by at least four fighters within four minutes. Red dots indicate fire locations over the last decade.

What the restructuring was designed to do was to get four firefighters on the scene at the same time together – as opposed to arriving separately. When you arrive with three people instead of four, it’s rolling the dice, Hubbard said. If two people go in, they essentially don’t have an escape plan. Still, Hubbard said, “a firefighter is going to do their job.” The problem comes, he said, if someone gets killed or hurt. Then we have to answer the hard questions, he said: Why didn’t you have the two-in-two-out? Why didn’t you wait?

That’s why you try to design a plan that is safer for firefighters and for residents, Hubbard explained. The extra two minutes or three minutes to get everyone there is, in some cases, the time you need to take. In the station reconfiguration plan, for some areas of the city, the result was to actually get trucks on the scene much quicker, he said. It’s hard to have a fire station on every corner, Hubbard said.

Teall made clear that she was not opposed to the station reconfiguration plan. She felt it’s part of the efficiencies that Lumm had alluded to. She wondered if the council is going to have a discussion on the question of fire suppression versus medical response. She recalled having community conversations about the issue back in 2002. When Huron Valley Ambulance pulls up at the same time a “giant fire truck” rolls up, she said, the city is paying for the expense of that truck every time it leaves the station. She felt that the medical response issue needed to be discussed, and community needs should be determined.

Fire Protection: Station Reconfiguration – Two-in/Two-out

Sumi Kailasapathy (Ward 1) didn’t follow the logic that all four firefighters had to arrive at the same time. If three firefighters arrived on scene, she felt they could still start on the prep work. Why is there a fixation on the idea that all four firefighters need to arrive at the same time? she wondered.

Hubbard allowed that there are, in fact, outside operations that have to take place before the fire can be attacked. Even one person can at least pull the hose off the truck and get it laid out on the ground, he noted. But minutes count, he said. And if there’s a rescue situation, then that’s very labor intensive. It requires a lot of bodies, and you need them immediately. If four firefighters arrive together, they can start to put that plan together en route, and when they arrive they can go right to work, instead of waiting. And by waiting, he didn’t mean just standing there doing nothing – because there’s a lot of things you can do even without the four personnel. But if there’s a rescue situation, then there is a lot of very intensive work – ladders that need to be raised and the like – that needs to get done very quickly. If there is a possible rescue, he noted, the firefighters will go in. The problem comes when they’re trying to attempt a rescue and something goes wrong and there’s no one to come get them out.

Kailasapathy indicated she was not interested in exposing firefighters to an unsafe situation. She was not asking that firefighters enter a burning structure without having the required two-in-two-out configuration. At the same time, she felt that having four people arrive at the same time seemed to be a goal in and of itself. If time was a so important, then even if there were fewer people at a closer station, it would be better to get them there immediately, she felt.

Mayor John Hieftje indicated that it had come up many times in conversation – if there were three firefighters on scene, and a rescue needed to be performed, then they would attempt a rescue. Marcia Higgins (Ward 4) told Hubbard that she was confused – because she had heard him say that every minute counted, but also that sometimes there was no choice but to just wait. Higgins indicated that Ward 4 under the current configuration has large sections that are within the acceptable time frame. Under the station reconfiguration plan, there were large sections of the ward that had unacceptable time limits.

Higgins told Hubbard that when he said the station reconfiguration plan is “still on the table,” she did not feel it was still on the council table. She did not know that the council had said yes or no to it. She only knew that the plan had been introduced to the community at public meetings. She did not feel like the council had continued that dialogue at the council table – about whether to go forward with it. She felt the council had not yet given the fire chief enough input to give clear direction about whether the station reconfiguration plan was the right path or not. The council had not done its job in giving the fire chief clear direction, she said. Hubbard agreed with Higgins’ assessment.

Fire Protection:  Station Reconfiguration – Decision

Hieftje then indicated it was very apparent to him that the fire station restructuring plan “isn’t going anywhere.” He felt it would be beneficial to take it off the table and if a vote of the council was needed to do that, than the council could vote. But he felt it was already very apparent that it was not going anywhere. He didn’t feel that it had anywhere close to a majority of the council’s support. “So this might be a good time to just say: Let’s work with the stations we have.”

Jane Lumm (Ward 2) hews to the old adage that it doesn’t work if you don’t plug it in.

Lumm quipped that she wanted to make a motion. Hieftje cautioned that the council did not make decisions at working sessions. Higgins picked up on Hieftje’s wording that the city would continue to work with the stations it has – but she pointed out that the city still has a station that is closed [Station #2]. She’s heard repeatedly that Station #2 is an integral piece of the station reconfiguration plan because of its location. She wondered what the final cost would be a staffing all six stations. She was interested in seeing that analysis.

Taylor understood the station reconfiguration proposal not as something that the city was definitely planning to do. Hubbard had been queried about it, and had said it remained a possibility in the world of possibilities. It was a useful topic of conversation, Taylor felt. It was useful to have the clarity of Hieftje’s understanding of sentiment around the table. Taylor felt it was useful for the public to understand that the station reconfiguration proposal was not something that was before the council for its consideration.

Kunselman thanked Hieftje for making sure that the station reconfiguration plan doesn’t go anywhere. Lumm thanked the mayor for saying loudly and clearly that the proposal is no longer “hanging out there” as a possibility.

Fire Protection: Education

Warpehoski said he’d had frequent chats with a retired firefighter who lives in his ward and who talked about the need for fire prevention and education. Warpehoski ventured that if he had a dryer fire in his house, there would be several minutes spent smelling the smoke, wondering what it was, and figuring out what to do before calling 911. Community training in recognizing signs of dryer fire, for example, could be useful in reducing the time between a fire actually making a 911 call.

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