Park advisory commissioners Tim Berla (left) and Doug Chapman (right). Berla is talking about differences in funding levels for parks as compared with the rest of the city's general fund.

PAC chair Julie Grand lamented the short notice they had received about the proposed changes to the way parks programs will be supported in the fiscal year 2012 budget – which meant that the public had little opportunity to weigh in with PAC.

On May 2, the city council is holding its public hearing on the FY 2012 budget, which the council needs to approve at its May 16 meeting. The 2012 fiscal year begins July 1, 2011.

The city’s administrative policy on parks support dates back to a measure passed by the city council in October 2006, which reads in relevant part: “If future reductions are necessary in the City’s general fund budget, during any of the six years of this millage, beginning with Fiscal Year 2007-2008, the general fund budget supporting the parks and recreation system for that year will be reduced by a percentage no greater than the average percentage reduction of the total City general fund budget.”

The policy was seen as important to assure voters that once the 2006 millage was passed, millage money would not replace general fund support for parks.

But based on city staff calculations, the portion of the city’s general fund in the proposed FY 2012 budget that supports parks would fall short of the 2006 administrative policy standard by $90,000. And some park commissioners objected to the fact that some of the money previously drawn from the general fund to support parks will now be drawn from the METRO and stormwater funds.

The stormwater fund receives revenues paid through fees based on the amount of impervious surface on a property. The METRO fund receives revenues that the state requires telecommunications companies to pay municipalities for use of the right-of-way. For purposes of the administrative policy, the city is counting the METRO funds that are supporting parks as part of the general fund.

The resolution passed by PAC called on the city council to adhere to the prevailing administrative policy. A different resolution passed by PAC expressed the body’s support for the cost-savings measures in the parks and recreation programs included in the FY 2012 budget. Besides parks and recreation programs, park operations are supported by the general fund – in the public services area of the budget. The administrative policy discrepancy lies in the park operations budget.

In other budget-related business, the commission recommended fee increases and new program fees that had been suggested by city staff. Those increases will need final authorization by the city council.

The commission also received a presentation from the Ann Arbor public art commission on a program to create murals. One of the initial sites selected for mural installation is the restroom building at Allmendinger Park.

Parks Budget Background

Understanding the discussion at the park advisory commission meeting last Tuesday depends on an understanding of some history of parks funding, dating back to the park maintenance and capital improvements millage. It was approved in 2006, and allows the city to levy an annual tax of 1.10 mill from 2007 through 2012.

The discussion also depends on understanding how the city of Ann Arbor’s parks system is supported in the general fund budget – it is split between two different areas of the budget.

Budget Background: History

The park maintenance and capital improvements millage approved by voters in 2006 replaced two separate millages, which were previously levied at around 0.5 mill apiece for a total of 0.914 mills. The single millage that replaced the two separate taxes – one for maintenance and one for capital improvements – was approved by voters at a rate of 1.10 mill. That compares with the just over 6 mills that are levied by the city to support the general fund.

Left to right: Mike Anglin (ex-officio member of PAC representing the city council), PAC chair Julie Grand, and Colin Smith, parks and recreation manager.

A mill is equal to $1 for each $1,000 of taxable value for a property. For a hypothetical house worth $200,000, with an state equalized value and a taxable value of $100,000, each mill of tax on that property would generate $100 of revenue. In ballpark numbers, 1.0 mill of property tax in Ann Arbor generates around $4.5 million of revenue annually.

Now, within the combined millage, money is allocated to maintenance or capital improvements on a more flexible basis than the previous legally enforced 50-50 split that was expressed by the specialized purpose of each millage.

However, there’s not complete flexibility to allocate money to maintenance or capital improvements within the unified millage. Percentage allocation is guided by a city council resolution passed in October 2006. The resolution specifies a range of 60% to 80% for maintenance, with the remainder going to capital improvements.

Another part of that resolution was intended to address a fear expressed by some in the community at the time: Even though more money for parks might be generated through the new millage, the amount of money actually spent on parks could be reduced – if the city reduced funding for parks from its general fund. So the intent of the council’s resolution was to allay that fear. In relevant part, the October 2006 resolution reads:

4. If future reductions are necessary in the City’s general fund budget, during any of the six years of this millage, beginning with Fiscal Year 2007-2008, the general fund budget supporting the parks and recreation system for that year will be reduced by a percentage no greater than the average percentage reduction of the total City general fund budget;

5. If future increases occur in the City’s general fund budget during any of the six years of this millage, beginning with Fiscal Year 2007-2008, the general fund budget supporting the parks and recreation system for that year will be increased at the same rate as the average percentage increase of the total City general fund budget;

The administrative policy expressed by that resolution has since been altered by the city council. The policy as reflected in the 2006 resolution had also stipulated that the city’s natural area preservation (NAP) program would receive a 3% increase in funds from the millage each year – the policy had been based on an assumption that millage revenues would increase.

But during its approval of the FY 2011 budget at its May 17, 2010 meeting, the council eliminated NAP’s automatic 3% increase, and reset NAP funding to levels proportionate with other programs.

Budget Background: Parks Budget Split – Operations, Parks and Recreation

Support for Ann Arbor’s parks system is split between two basic areas of the city’s organization: (1) community services; and (2) public services. The community services area is headed by Sumedh Bahl. The public services area is led by Sue McCormick.

Parks and recreation services falls under community services – think canoe liveries, swimming pools, ice rinks and the like. Park operations falls under public services – for example, the care of trees in parks, mowing of grass and the like.

FY 2012 Parks Budget

Discussion of the FY 2012 parks budget took up most of PAC’s time on Tuesday.

FY 2012 Parks Budget: Stacking Up Against 2006 Administrative Policy

In his presentation to PAC on Tuesday, Colin Smith presented the parks portion of the city administrator’s proposed FY 2012 budget in a way that allowed commissioners to see the effect of the proposed budget on the two different areas, and to evaluate how the proposed budget did or did not adhere to the 2006 administrative policy on proportionate park spending.

The numbers from the summary slide in Smith’s presentation to PAC show that one part of the parks budget did better than the rest of the general fund, but the other part did worse. Specifically, the parks and recreation part of the budget was reduced by 1.51% compared to last year, which is less of a decrease than the rest of the city’s general fund experienced – it dropped by 3.10%.

In this year’s park operations budget, however, general fund support dropped by 17.71% compared to last year. But the city is accounting for part of that drop by pointing to a shift in funding for park operations activity out of the general fund to other funding sources – the METRO fund and the stormwater fund.

Money in the METRO fund comes from telecommunications providers who use the city’s right-of-way; money in the stormwater fund comes from a fee paid by residents. So for purposes of the administrative policy, the city is counting the METRO and stormwater fund support for parks the same as general fund dollars – because the idea behind the 2006 administrative policy was to prevent a shift from the general fund to millage dollars.

Even counting the funding support from METRO and stormwater leaves the city’s proposed FY 2012 budget about $90,000 short of adhering to the administrative policy – a 4.23% reduction in parks support compared to a general fund drop of 3.10%:

               Adptd        Prop
Area            FY11        FY12             Chng
===================================================
Park Ops   $2,732,375  $2,248,537 (GF)      -17.71%
                          212,387 (METRO)
                           36,809 (Storm)
                           19,700 (Rec&Ed)*
                        2,517,433 (TOTAL)    -7.86%
===================================================
Park&Rec    3,641,584   3,586,528            -1.51%
===================================================
Parks Tot   6,373,959   5,835,065 (GF)       -8.45%
                          268,896 (OTHER)
                        6,103,961 (TOTAL)    -4.23%
===================================================
Total GF   81,449,966  78,922,541            -3.10%

-

To get the roughly $90,000 shortfall, take the difference between the relative parks and general fund percentage drops and multiply by the total parks budget support last year, then add in the $19,700 Rec & Ed figure from the table – it should not have been included, according to Smith. Those dollars had already been factored in. [(.0423 – .031) * 6,373,959 + 19,700 = 91,725].

FY 2012 Parks Budget: Public Commentary

The only person to address PAC during public commentary was Karen Sidney, who introduced herself as a Ward 5 resident. She noted the parks maintenance and capital improvements millage would be coming up for renewal [in the fall of 2012]. Back in 2006 when the parks maintenance and capital improvements millage was passed, the public was promised that parks support would go up or down at the same rate as the rest of the general fund, she said. The base year for that was 2007, she said. The first year reflecting the parks millage was 2008.

Sidney told the commission that relative parks general fund spending has gone down since that time. The difference in spending is not being allocated to police and fire protection, so it’s going to other areas – to fund things like the city attorney, general administration and planning.

Secondly, Sidney said, a spreadsheet was sent out on park operations expenses in the general fund, but it doesn’t include forestry expenses. [For the city's overall FY 2012 budget, roughly $475,000 in savings are realized through allocation of some forestry operations to the stormwater fund. Of that $475,000, $36,809 is being claimed by the city for park operations.] Sidney pointed out that there are no forestry expenses in the spreadsheet for FY 2011. You can’t shift zero and somehow have it turn into $36,809, she said.

Sidney also criticized the characterization of a funding shift as savings. She noted that the funding reduction to park operations works out to a 17% cut, but the city is considering it only as a 7% cut because of the shift in funding source. Sidney told commissioners that she’d been following city finances since around 2004, and is sick of getting misinformation: Don’t tell us an orange is an apple, she said. “Just be honest with us.”

FY 2012 Parks Budget: Fee Increases, New Fees

Colin Smith, manager of parks and recreation for the city of Ann Arbor, reviewed for PAC members the set of recommended fee increases and fees proposed for programs that did not previously exist. [.pdf of recommended fee increases]

Examples from the set of fee increases include an increase in daily swimming pool admission fees for adults from $4 to $5, and for youth and seniors from $3.50 to $4. The increase in daily swimming pool admission fees is expected to generate an additional $40,000 in revenue for the city. Smith told commissioners that the last time staff could find history of an increase was 2001. Utility costs and personnel costs have increased a lot since then, he noted.

Alcohol permit fees for residents would be increased from $12 to $25, which is expected to increase revenue by $4,925. Smith said he did not think the increase would scare anyone away. Commissioner Sam Offen asked about the competitiveness of the pricing with Washentaw County parks and metro parks – there’s no fee for an alcohol permit for those two organizations’ parks. Do they change for facility rental? asked Offen.

Smith explained that Washtenaw County and metro parks charge a fee for facility rental and there’s a cost for an alcohol permit calculated into the basic rental. The city of Ann Arbor charges a facility rental fee, then extra for an alcohol permit – so rather than have a fee that subsumes the cost for alcohol, you have an option, Smith explained. Offen confirmed with Smith that the cost of facility rental was competitive. [.pdf of comparative fee data for proposed fees]

Tim Doyle asked if the alcohol permit fee varied based on the size of the party. Jeff Straw, deputy manager of parks and recreation, explained that the price for the alcohol permit is the same, regardless of the group’s size.

Fees are also proposed for FY 2012 for new activities that previously did not exist. Among the new fees would be one for renting inner tubes. The city does not currently rent them out, but expects to be able to do some business with the tubes in connection with construction of the Argo Dam bypass channel – which is projected to be completed at the end of this season. It would cost $10 to rent a tube. The city is projecting 1,000 such rentals for April-June 2012, for an additional $10,000 in revenue for the FY 2012 budget.

There are various options for tube rental, with and without transport. Some tubes are expected to be rented to park users who wish to take the ride down the newly constructed Argo Dam bypass channel, when it’s completed, and then walk the tube back up for another ride.

Raft rental will be another new offering – at a cost of $75. Smith characterized them as comfortable and stable, good for groups and families. Smith also described whitewater boat rental, from a sit-on-top package to a premium boat rental, which would require four hours of instruction. You would need to pass a test, said Smith. You’d learn how to roll the boat, and the boat itself would be equipped with a spray skirt. That type of rental will likely be unique to this area, he said, so the comparables listed in the commission’s packet are all from other areas of the country like Maine, New Hampshire and Tennessee. Offen wanted to know if it was possible to bring your own boat – yes, and there is no charge for that, just like now.

Another fee for a new activity would be for the pilot night market program on Wednesday evenings – the stall charge would be $20, which is expected to generate $10,000 for the city. [Previous Chronicle coverage: "Idea for Night Farmers Market Floated"] Smith told commissioners that the public market commission is fine with the recommended fee level.

Another new fee will be a class to be offered at Huron Hills golf course where a parent and a child will take instruction at the same time – the cost will be $125. Since the golf courses opened up this spring, Smith said, they’ve had a lot of interest in this class.

Outcome: PAC members voted unanimously to recommend the set of fee increases and new program fees for park facilities as part of the city’s fiscal year 2012 budget. The fees require final approval by the Ann Arbor city council. The FY 2012 budget, which begins July 1, 2011, will be considered and approved by the council on May 16. Fee increases would be effective July 1, 2011. [.pdf of recommended fee increases]

FY 2012 Parks Budget: Other Highlights

Colin Smith began his overview of the budget by reviewing the budget process to date, which began with two retreats by the city council and a series of work sessions.

On Monday, May 2, a public hearing will take place. On May 16 the city council will take action on the budget.

The general assumptions for the city and parks system includes a rise in the majority of fixed costs, Smith said, and a decrease in revenue. The city is looking at roughly a 3% reduction each year in a two-year planning process.

As part of the parks funding controversy that arose out of the 2006 millage vote, $287,500 in supplemental parks funding was allocated by the city council for FY 2008. That allocation was initially treated as a non-recurring expense, and the city tapped the general fund for that amount on the assumption that it would be non-recurring. But the expense recurred four times, Smith said. This year it has become part of the ongoing budget for the parks.

Smith also walked PAC members through the anticipated savings from items like lower energy usage resulting from infrastructure energy improvements ($65,083) and eliminating underused computer software ($7,000).

The other part of PAC’s purview in the city budget is a portion of the field operations budget involving park operations. For park operations that are part of field operations, the city is expecting to achieve savings in the use of temporary labor to staff vacant positions ($158,248).

Smith also reviewed with PAC the policy changes with respect to funding of dam maintenance. Based on a city council directive, starting with FY 2012, the city is moving maintenance on recreational dams out of the drinking water utility fund to the general fund. [That direction had come at the council's Nov. 15, 2011 meeting]

Smith also reviewed the breakdown between park operations compared to parks and recreation services, and the use of alternate funding for some park operations to make up some of the gap between the funding levels required by the administrative policy.

FY 2012 Parks Budget: Commission Deliberations

Commission members had a number of questions about some of the basics – what is the METRO fund?

Left to right: Christopher Taylor (ex-officio member of PAC representing the city council), and PAC members Sam Offen, Tim Doyle and Karen Levin.

The METRO fund gets its revenue from payments made by the state, based on telecommunications companies that pay to use the city’s right-of-way under Act 48 of 2002, which established the Metropolitan Extension Telecommunication Rights-of-Way Oversight (METRO) Authority. Budget impact sheets from the council’s budget working session on the public services area showed $340,000 in revenues for FY 2011 as well as for FY 2012-13.

Over the last few years, the city has chosen to spend most of its METRO funds on maintenance in the right-of-way – a restriction on the use of the METRO funds is that they must be used in the right-of-way. The city has chosen to pay for general fund obligations out of the METRO fund, so that it effectively supplements the general fund. [The METRO money is not part of the general fund.] For example, the city has used METRO funds for streetlight pole replacements. Early in the program, the city used METRO funds for tree planting.

The talk of using METRO funds for park operations this year comes in concert with a shifting of some expenses out of the METRO fund – to the street repair millage. Currently, METRO funds also pay for administrative expenses associated with the city’s sidewalk replacement program – the marking of slabs, notification of property owners and the like. If the street repair millage (on the ballot this fall) is revised to include the city’s sidewalk repair program, that will give the city more flexibility to use METRO funds for other programs – but they must still be used in the right-of-way.

Moving to another topic, Mike Anglin, who serves as one of two ex-officio city council members on PAC, drew out the fact that the parks budget supports 30 retirees, with just a handful of current employees.

Several commissioners expressed concern about the clarity of the parks budget. Tim Berla in particular said that if he wanted to ask how much money is spent on parks, the numbers presented to PAC don’t really answer that question. You have to look in different places to come up with the number.

Commissioners were also critical of the reduction in parks spending as compared to the benchmark established by the 2006 administrative policy. Several of them questioned whether it was, in fact, appropriate to count METRO and stormwater funds as “general fund” support in assessing conformance with the policy. Even when those alternative forms of funding are counted, the parks are left $90,000 short of the administrative policy.

The other city council ex-officio representative to PAC, Christopher Taylor, said about the 2006 administrative policy: “A commitment is a commitment and it ought to be abided.” But he went on to say that when services can be provided with lower cost due to greater efficiencies, that is “not a problem.” He was referring in part to the description at the meeting by Matt Warba, field operations supervisor, of the greater efficiencies he’d managed to achieve in mowing operations by revising mowing routes and the use of staging. Taylor compared the current policy of using hard dollars as a guiding principle with an alternative of using service levels as the guiding principle. But in observing that the path the city had chosen was for hard dollars, he concluded: “So be it.”

Matt Warba, field operations supervisor with the city of Ann Arbor, demonstrates the art of balancing budgets ... and a phone on his thigh.

Berla said he did not necessarily want to say that the parks should receive more money just because the city “owes” it to the parks, based on the hard dollar figure. But he pointed out that when savings are realized within the parks budget, it can easily be used on other items within the parks system. He cited the conditioning of ball diamonds specifically as an area where the parks system could spend additional money.

Tim Doyle drew out the fact from Smith that although the parks system has grown over the last decade, that expansion has taken place almost exclusively in the natural areas preservation program (NAP), not in park facilities. The city has not built additional swimming pools, for example. Smith noted that the construction of the Argo Dam bypass scheduled for this summer is an exception to that.

The commission entertained discussion about whether to pass a single resolution on the proposed FY 2012 budget or just one resolution making the two basic points: (1) PAC supported the cost saving measures;and  (2) PAC was unhappy with the failure to meet the 2006 administrative policy standard and with the short notice it had received.

Commissioners eventually settled on two separate resolutions. They briefly entertained the idea of calling on the council to restore the $90,000 or else change the 2006 administrative policy (as the council had done previously for the part of that policy affecting NAP funding). In the end, the one resolved clause in the second resolution read as follows:

RESOLVED, that PAC recommends that City Council honor its commitment to voters by observing sections 4. and 5. of the Policies for Administrative of the 2006 Parks millage and not reducing the Parks Operations Budget at a greater rate than the reduction in the overall General Fund.

[.pdf of PAC's complete memo and support for FY2012 budget measures]

[.pdf of PAC's complete memo and reminder resolution]

Presentation on Murals as Public Art

At its April 26 meeting, PAC received a special presentation from Jeff Meyers, who is one of the newer appointees to the Ann Arbor public art commission (AAPAC). Meyers introduced himself as a Ward 3 resident.

Meyers reviewed for PAC members how the Percent for Art program had been established through a city ordinance in 2007. It’s a program that designates 1% of all capital improvement projects as support for public art, with a $250,000 cap per project. AAPAC is an advisory commission with volunteer commissioners, all appointed by the mayor, Meyers noted.

Last year, AAPAC decided to pilot a mural program, with the goal to generate locally-produced public art by Michigan artists, Meyers said, and to make it an annual way to generate art in all areas of the city. AAPAC had established a task force to lead the mural program.

In addition to Meyers, task force members include Hannah Smotrich, associate professor of the University of Michigan School of Art & Design; Mariah Cherem, a UM graduate student and former community manager for Yelp.com’s metro Detroit region; and Connie Pulcipher of the city’s systems planning staff.

The task force had reviewed two dozen possible sites, and in March, task force members had agreed that the most promising two were: (1) a retaining wall along Huron Parkway – the northernmost wall on the western side; and (2) the Allmendinger Park restroom building. The retaining wall is not inside a park, but runs along the Huron Hills golf course.

Meyers said the task force had picked a retaining wall along Huron Parkway that was not growing a lot of ivy and that offered a sweeping view towards the Huron River. It was a highly visible site to motorized, bike, and walking traffic.

The restroom building features bare concrete pillars around its perimeter, which would provide the mural surface. The rationale for the choice of the concrete pillars as a mural site is the facility’s high use, the fact that it attracts all demographics, and includes a playground as well as sports facilities (tennis courts and ball fields). The neighborhood was invested in the park, Meyers said. The task force liked the fact that it’s not a downtown location, he said, but rather in a neighborhood. Use of pillars would expand the idea of what a mural is – it’s not just a flat space, and there can be many ways to present a mural.

The next step will be to hold two public meetings, one for stakeholders and one for neighbors. They’ll also expand the task force membership from four to six members, drawing an additional two members from the neighborhoods of the selected mural sites.

Commissioners had a range of questions for Meyers. Gwen Nystuen wanted to know what size the murals would be. Meyers replied that the idea was to try to leave it up to the artist. AAPAC doesn’t want to limit or dictate the size. The same principle will apply to the selection of mural materials. Meyers said he’d seen paints, mosaics, keys (in England), but would guess most applicants would be traditional.

David Barrett wanted to know what the budget for the murals would be. Meyers told him that the budget is $10,000 per site for the artist fees and materials. In response to a question about timing, Meyers said that assuming AAPAC gets community buy-in and involvement, he’d like to put out requests for proposals in June and have the murals completed by the end of September.

Sam Offen told Meyers he lives near the proposed site of the Huron Parkway mural. He said there’s a concrete abutment between the path and street and one between the path and the golf course grounds. Offen wanted to know if the lower abutment was also a possibility for a mural. Meyers replied the lower abutment hadn’t been considered, but if someone came back and wanted to include that, maybe it could be included. In response to a question about the possible need to close down a stretch of Huron Parkway for a time during creation of the mural, Meyers replied that if that were needed, he wouldn’t guess it’d be an extended period of time.

Christopher Taylor wanted to know how the $10,000 figure was determined. Meyers explained that the task force had looked at other cities with mural programs, and described $10,000 as a modest price. In Berkeley, Santa Barbara and Santa Fe, that’s about what they were paying for artist and materials, Meyer said.

Taylor then elicited from Meyers that the idea for the mural program is to use it as a pilot program for other similar, relatively lower budget projects that would yield an annual addition to the city’s public art.

Tim Berla wanted to know who would be responsible for maintenance. Would the artist have responsibility for maintaining it? What are the expectations for the life of a mural? Meyers told Berla that AAPAC expects a mural to last five years. He said there would not be specific guidelines – the concrete in different parts of the city might have different substrate, for example. Applicants would have to know what they’re doing, Meyers said. Once created, then as a city asset, a mural would fall under requirements of all city assets.

Berla suggested that AAPAC communicate its expectation of what happens after the five-year period. If the city is supposed to take responsibility, then a provision should be made so that the end is clear, so it’s not an unanticipated burden. Meyers explained that the chosen artists would fill out a maintenance form, so the city knows what the particular requirements for a mural’s maintenance is – and then a mural would be like any other city asset.

Meyers also said that perhaps only .001 percent of murals have been defaced – they’re a deterrent to graffiti, he said, so that makes them an asset. Colin Smith said he’d “received an education” about that fact from Meyers.

In response to a question from David Barrett, Meyers said the process would be driven by a request for proposals (RFP). Because the budget for each mural would be the same, a certain amount of aesthetic judgment would be exercised – by AAPAC. Barrett quipped that he just wanted to make sure Colin Smith wasn’t voting on the aesthetics.

Present: David Barrett, Doug Chapman, Tim Berla, Julie Grand, Karen Levin, Sam Offen, Gwen Nystuen, Tim Doyle, councilmember Christopher Taylor (ex-officio), councilmember Mike Anglin (ex-officio). Also Colin Smith, city parks & rec manager.

Absent: John Lawter.

Next meeting: Tuesday, May 17, 2011 at 4 p.m. in the  second-floor city council chambers of city hall, located at 301 E. Huron St. [confirm date]