The County Mental Health Millage: Second Thoughts

Posted April 14, 2018 by varmentrout
Categories: civic finance, politics

Postcard sent to voters before Nov. 2017 election. (Click for full size)

In November 2017 Washtenaw County voters approved a new county property tax millage by nearly a two-to-one margin (see report in the Ann Arbor News).  Starting this December (2018) the County will collect a 1-mill tax ostensibly intended to support both County mental health and County public safety operations (i.e., the Sheriff).  But for some municipalities who have their own police forces, part of the tax is to be returned to them to use in any way they choose.(We discussed this in detail in Hair on Fire In Ann Arbor.)

The Ann Arbor City Council majority passed a resolution in July 2017 designating their preferences, which leaned strongly toward using the cash for climate change initiatives.  In August, the City Administrator Howard Lazarus issued a  memorandum to detail exactly how those funds would be allocated.  It indicated that proceeds from the millage would be divided so that 20% would go to pedestrian safety, 40% to affordable housing, and 40% for climate change.  In the March 12, 2018 budget presentation, these expenditures were further mapped out.

Budget presentation of March 12, 2018 showing division of millage proceeds

But some citizens are saying “Not so fast”.  At the March meeting, as reported by the Ann Arbor News, several citizens complained that they supported the millage in order to support mental health efforts.  Their feelings could not have been assuaged much by the indication that part of the money will go to support two staff positions (saving the General Fund some money).  Money is fungible, folks.  And there is every indication that the use of this money is going to be a campaign issue.  Already both the 5th Ward Council challenger, Ali Ramlawi, and Jack Eaton, who is running against Mayor Christopher Taylor, have said that they disagreed with the proposed use of the funds, which they each said should go to mental health.  (Eaton is also emphasizing crime prevention.)

Taylor and his caucus argue that Council has been perfectly clear all along about the use of the “rebate” from the millage and that citizens who voted for it understood that the purposes encompassed more than mental health and public safety.  But a new citizens’ group begs to differ.  Citizens for Mental Health & Public Safety (CMHPS) has issued a press release in which they request some rethinking of this special windfall.  They support the millage issue itself and don’t quarrel with the election results.  But they want a refocus, to mental health.  Specifically, to drop the climate change allocation and use that money for mental health purposes. From the press release:

CMHPS members urge the City Council to include the following new actions in its planning and budgeting decisions to remedy this omission.. First, Council members should appropriate 40 percent of current and future revenues from the millage to mental health services. Second, Council members should appoint an advisory group of experts to identify best practices for improved mental health services and related public safety services in time to inform the biennial budget process for fiscal years 2020 and 2021.

And to that argument that the public already knew what they were voting for, CMHPS proceeded ahead of time to gather data.  They had a professional polling organization conduct a telephone poll.  (I received the poll and can report from my own experience that it was not a push poll but seemed to be entirely objectively conducted.)  The poll results support their contention that many of the public voting did not understand that part of the millage proceeds would be diverted into other Ann Arbor-specific objectives. When asked what the priority for spending the money would be, 56% answered “mental health services”.  When asked whether the information that a different use of the cash would have influenced their vote, 45% said it would have made them less likely to support it.

From the findings of the survey conducted by Public Policy Polling April 2-3, 2018

So how did this disconnect occur?  The answer doubtless lies with the way local news is not very well transmitted in Ann Arbor now.  We have a very intermittent local newspaper, which most people read online, if at all.  City Council deliberations and results are followed by a tiny fraction of the electorate.  In this case, probably most people got their information from the campaign material sent out by postcard.  You’ll note that the website itself only mentions mental health in its title.  It is obvious why many voters had the impression that this was a mental health millage and why they didn’t understand that millions of dollars would be diverted to climate change and other inside-Ann Arbor-purposes.

From the postcard.

In an interview, Glenn Nelson, a leader in this effort to redirect Ann Arbor’s “rebate”, stressed that his group still supports the County millage. (And a majority of the taxes collected will go to the purposes stated.) They simply want the money redirected to Ann Arbor used to address mental health and safety issues.  Thus they are fine with pedestrian safety and affordable housing (which often is addressed to serving supportive housing in Ann Arbor; this serves mentally needy clients).  But they want the focus to return to mental health for the remainder of the proceeds.

The Council is in the midst of budget discussions.  These generally conclude mid-May. We might suppose that some mention of this issue will come up with this year (FY2019) budget, though Lazarus said not in his memo of last summer.  Meanwhile, we have electoral campaigns to conduct.  The discussion will continue.

 

 

Governance and Transit and Taxes, Oh, My.

Posted January 18, 2018 by varmentrout
Categories: politics, Regional, Transportation

Breakthrough nears on transit in southeast Michigan.  

That was the headline in a recent article in Bridge Magazine.  It is referring to the Regional Transit Authority of Southeast Michigan.  The concept of the RTA is to combine the transit systems of four counties (Oakland, Macomb, Wayne, Washtenaw) into a single authority. It has been just the latest effort to form a truly regional transit system for the metropolitan Detroit region. As this account from Curbed Detroit relates, the effort to achieve regional transit in Motor City has been frustrated over and over again. With the creation of the RTA, it was hoped that it might finally be achieved.  A carefully constructed plan (RMTP plan) was put forward in 2016, after many “listening tours” and much negotiation.  A millage proposal was placed on the November 2016 ballot.  It was not successful.

Now there is a last-ditch effort to save the RTA and the possibility of a true regional transit system for Detroit (the only major city without one).  But the factors that led to this latest failure, as well as many of the earlier ones, are still here.

Note: for all the illustrations of maps, a larger version may be viewed by clicking on the image.

Precinct-by-precinct vote for the RTA millage in November 2016. Credit to Steve Wilse (map creator) and the Motor City Freedom Riders.

Leadership

The RTA had gone through many birth pangs (for a blow-by-blow legislative account and other history, see our post, The SE Michigan Regional Transit Authority in Progress) before the package of bills was signed into law by Governor Snyder on December 19, 2012. SEMCOG, the SE Michigan regional planning agency, hosted the fledgling organization, supplying office space, support and a web presence.  The RTA Board consists of members appointed by the chief executive of each participating unit of government (in the case of Washtenaw County, which has no county executive, the Chair of the Board of Commissioners).  The Governor appoints the Chair, who is ex officio (non-voting).  Governor Snyder tapped Paul Hillegonds, a distinguished former state representative who has served in many public capacities as well as in industry.  He has led the Board through many travails.

The Board had some initial difficulties in settling on a Chief Executive Officer.  Then  they tapped Michael Ford, the CEO of the newly regional Ann Arbor Area Transportation Authority, who had had a notable success in the May 2014 vote to form the AAATA (as reported by the Ann Arbor Chronicle, over 70% of voters in Ann Arbor and the two Ypsilanti communities voted themselves a 0.7 mill tax to form the expanded authority).  With that background, he seemed the ideal person to lead the RTA through a successful regional millage vote.  The November 2016 request to taxpayers of Oakland, Wayne, Macomb, and Washtenaw Counties was to commit to a payment of 1.2 mills for 20 years to support the RTA plan. The millage failed, just barely.

The system map as proposed by the RTA in 2016

Since November 2016 the RTA board has been struggling to find a way to achieve success. The obvious approach is to try again with another millage, presumably after a few tweaks here and there. And the obvious moment is November 2018 (the legislation requires a November election date).

But it has been a rough ride, with several changes in leadership.  Michael Ford, with no electoral success to protect him, was terminated in March 2017 because of issues with his expenses.  His deputy, Tiffany Gunter, seemed to have things well in hand.   Under her leadership, a Board Retreat in May 2017 reviewed the possible issues and approaches (RTA Board Retreat) for the RTA to go forward in a forthright but optimistic manner. But in November 2017 Gunter quit.  According to this account in Crain’s Detroit Business, she had not been given a permanent slot and her salary had remained at the same level ($150,000) as when she was Ford’s deputy.  (Ford had been paid $200,000.)  The supervising planner had departed in May 2017 and now the transportation planner Lucas Reigstad also walked out.  Longtime transit supporter Megan Owens, on her Facebook page Support Detroit Transit (November 16, 2017), commented:

Today the RTA pretty much gave up and closed up shop. At today’s board meeting, the interim CEO resigned as did their staff planner, leaving 1 administrative staff person and some consultants. The board has no plans at this time to seek a new CEO. SMART has taken over their one project: RefleX. The RTA appears to have abdicated any leadership role, giving everything into the hands of the Big 4 (County Execs and Mayor Duggan) to decide if and when we get transit. The public, riders and other stakeholders appear to have no say.

Now a “leadership group” consisting of the elected county executives of three counties plus the Mayor of Detroit has been designated to figure out how to put this deal together.  Oh, yes, and also the Chair of the Board of Commissioners for Washtenaw County (Andy LaBarre) was invited to sit in.  (He is not mentioned by name and not pictured in this report by the Detroit News.)  But really, it is the Big 4 (Detroit Mayor Mike Duggan, Wayne County Executive Warren Evans, Oakland County Executive L. Brooks Patterson and Macomb County Executive Mark Hackel) who hold the fate of the RTA in their hands.  Unfortunately, the issues that nearly derailed the RTA before the last millage vote remain.

A Question of Governance

The comprehensive difficulty is the issue of governance.  As we explained some years ago,

(Governance) alludes to the manner in which government conducts its business and especially the way it interacts with its citizens.  Some of the important elements in this interaction are representation, taxation, and power.   People generally want to believe that they are fairly represented at the decision-making level.  If the body collects taxes, are they proportionate to the function of the governing body?  And does this body exert a level of power over daily lives that is appropriate to its function, not dictatorial or burdensome?

Governance is at the heart of any effort to create regional entities, especially in Michigan.  When you combine a number of essentially sovereign civic bodies (four counties and a major city), questions of representation and power immediately emerge.  These are very unlike entities.  Oakland County is the most populous and richest. In any relationship that involves taxation, they are likely to contribute the most.  Detroit is The City but also has a history of economic problems. Wayne County is the county that contains Detroit.  Macomb County is the workingman’s county with a history of being extremely independent on electoral issues (remember the Reagan Democrats?). And Washtenaw is the afterthought, a relatively rural county with a small urban area and some assets like the University of Michigan and the associated technology culture. (The original RTA proposal did not include Washtenaw.)  All have different things to gain or lose from a regional association.

The Citizens’ Research Council, a nonpartisan and well-respected organization that often analyzes governmental issues in Michigan, published a critical examination of regional authorities,  with the RTA as its example. It highlighted how uneven the representation is across the authority.

From the Citizen’s Research Council. Note the population and representation disparities. Larger percent of population indicates less representation.

There was some dispute about representation early on. As finally constituted, the RTA board consisted of two representatives appointed by each county (and one by the City of Detroit), plus a chair (non-voting) appointed by the Governor.   I say “each county” but in fact the power of appointment resides with the actual county executives and the Chair of the Board of Commissioners.

The question of how many representatives was solved by simply making everyone the same.  Except Detroit.  Notice that though this is after all a Detroit Metropolitan organization, the City of Detroit receives only one representative, the least well represented of all.

Taxation

The representation is very uneven with regard to taxation as well.  Tax paid is determined by the ad-valorem of each county. (We explained some of this in the post, Taxes and the Local Government Quandary.)  Because Oakland County has a lot of valuable property, the tax yield both for the entire county and probably for individual taxpayers is quite high.  Note also that they have the highest total millage rate of all entities, meaning that their taxpayers are already paying a lot of taxes.

From the Citizens’ Research Council. Note the disparity in tax contributions. (The last column is total millage the citizens of each county are assessed, not the RTA millage.)

The answer to this inequitable (according to relative investment) arrangement was to make expenditures directly related to the funds contributed by each entity.  (For reference, Senate Bill 909 as adopted.)

An authority shall ensure that not less than 85% of the money raised in each member jurisdiction…is expended on the public transportation service routes located in that member jurisdiction.

Of course, this makes it almost impossible to have a truly regional effort.  The two Oakland County Board members, Chuck Moss and Timothy Soave, both of whom have solid financial and policy backgrounds, addressed a remarkable memo (Oakland RTA memo) to Ford and Gunter before the November vote.   Presumably some of their concerns were addressed, since they later acceded to the ballot issue.   But they note, “this 85% rule will require annual monitoring and different expenditure levels yearly as TV’s will always change, thereby causing the sum of the total proceeds to change.” Later in the 19-page memo, they complain that the mechanism to assure that RTA will stay with the 85% rule is vague and they also question the fairness of allocating the remaining 15% outside of the required set-aside.  Overall, the concern voiced here is that Oakland County will invest more in the RTA than the services provided will justify.  But the authors also question the ability of the RTA to administer the sums coming to them under the requirements placed on them, without harming the present local transit providers and systems.

Finally, the plan must establish a binding mechanism to guarantee that the benefits promised to each jurisdiction will be delivered, a mechanism that cannot be overturned by a simple majority vote of the RTA Board.

In other words, having two representatives on the board is not enough when one’s interests may be overwhelmed by the majority.  That is a power imbalance.

The CRC’s analysis concludes that representation by appointment in this fashion violates the “one man, one vote” norm for a body with the power to tax and cause many life rearrangements.  It posits that such a board should be elected by the population at large.  An example of this form would be the Ann Arbor Public Schools.  All voters of the district vote for the entire membership of the school board.  But it is not a coincidence that City of Ann Arbor concerns tend to dominate.  Most voters of the district live in the City.  In the case of Oakland County, their higher population numbers would likely give them at least slightly more weight on the RTA than they are being awarded.

Location, location, location

One obvious take-home from examining the results of the 2016 election is that the parts of the 4-county area that voted against the RTA millage were the areas not currently served by transit.   The parts where there were a high percentage of yes votes were the densely settled areas where people are using transit to get to work.

Job centers in the RTA area. From the RMTP.

Since fixed-route transit (bus routes) are usually installed only where the population density merits it, the transit web itself serves as a population indicator.

Existing transit services, from the RTMP. The single line between Washtenaw and Wayne Counties is the Air Ride.

In reviewing this, RTA staff suggested to the Board at their spring retreat that perhaps a circumscribed territory for the RTA, addressing only the urbanized areas where there were more yes votes, would be advisable in order to make a new millage more palatable.

Proposed limited territory, from RTA Board Retreat (only dark blue areas would be included in RTA).

This would, however, have two consequences.  One is that an increased millage rate (probably 1.5 mills) would be required.  It is assumed that the RMTP, which basically covered those areas, would remain intact. It also means that residents of those areas, many of whom are already paying millages for local services, would be asked to take on a considerable tax load for transit alone.  For example, Ann Arbor residents would add 1.5 mills to the current 2.7 mills, and thus a homeowner with a house valued at $200,000 would be paying $420 annually.  But considering that most Ann Arbor properties are now valued more highly, the more likely number is $630 (based on a market value of $300,000).

The Moss-Soave memo mentioned above makes a particular point about the possible impact on local transit millages, especially if the RTA does not deliver services seen to match its promises.  It asks what the RTA will do if local renewable millages fail because of taxpayer fatigue or disillusionment.

Maintenance of local services

One reason for urgency is that the RTA has no current source of funds. When the authorizing legislation was passed, it included a $250,000 appropriation, matched by $250,000 from MDOT.  In FY 2014-2015, the Legislature added a special appropriation of $1.1M.  Since then, they have obtained some planning grants and received some administrative charges for Federal funds.  They ended the fiscal year 2017 (September 30, 2017) with less than $1M.

They could dip into the government monies distributed to the current providers.  Detroit Department of Transportation (DDOT), Suburban Mobility Authority for Regional Transportation (SMART), and Ann Arbor Area Transportation Authority (AAATA) are now subordinate to the RTA for state and Federal funds.  Michigan state transportation tax (gas tax) is distributed to public transit providers via the Comprehensive Transportation Fund.  There are both operating subsidies and capital funds.  Federal funds from the Highway Trust Fund are also distributed to transit providers by a formula.  Because the RTA legislation allows 15% of these funds to be used by the RTA, the amounts distributed to local providers could be reduced by that amount.  Of course, doing so would likely harm the ability of those agencies to provide actual transit.  To my understanding, locally raised millages are exempt from this.  But clearly, unless the RTA can raise additional revenue on its own, it would not be helping the cause of public transit to hang on using those funds.

Disconcertingly, one of the options presented to the RTA board in its spring retreat was the idea of consolidation into one agency.

From the RTA Board retreat – an idea for consideration

On one hand, this is understandable.  A long-term complaint and a reason for establishing the RTA was that the suburban SMART system and DDOT have not coordinated well.  DDOT is a department of the City of Detroit and is supported by the Detroit General Fund.  SMART is supported by millages in various counties and communities (in something of a patchwork).  They really were two separate systems and their overlap has been a problem for the greater Detroit community.  But on the other hand, different communities have made decisions and commitments in support of these systems, and that is emphatically true of AAATA.  Talk about governance issues. Some communities have voted extra taxes for better service.  A consolidation does not recognize this.

Some obstacles to a changed RTA

Because this idea was the result of a closely argued process through the Michigan Legislature, any changes would have to pass through transportation committees of both houses and be passed and signed by the Governor in time to write up a new Plan and get the item on the November ballot.  It is still possible, but only if everything moves very, very fast.  Also, once you open up a piece of legislation, you don’t know what ideas people may have for changing other sections.  For example, what if the representation is altered, or the ways funds are distributed?

The impetus for the first pass was to provide a venue for the M-1 (now known as the QLine).  The Federal funding for that depended on the creation of a regional transit agency.  Now the QLine is built and operating.  Might the RTA structure be altered to give it better support?  (It is not currently part of the plan.)  So many possibilities.

The Big 2

If the news reports are correct, we’ll be hearing soon what the Big 4 have come up with.  The ever-hopeful Megan Owens asks supporters to put in a word.  Quotes sometimes appear.  But they are not always encouraging.  The problem is that the county executives of both Oakland and Macomb Counties are still reluctant though they are evidently willing to sit down at the table.  They were both unenthusiastic before the November 2016 vote but wound up taking no position.  These two (L. Brooks Patterson of Oakland County and Mark Hackel of Macomb County) are used to being the big power in their own turf, and are very territorial.  They might even like to have more power over the way the RTA is run.  So while Detroit and Wayne County are anxious to complete a plan, the Big 2 will not be rushed, even by the recent drive to entice Amazon to the area.  Hackel in particular has made remarks that indicate he is not supportive of the concept.  At one time, he mentioned roads and bridges, and recently he has been bringing up autonomous vehicles and the infrastructure to support them. (Macomb County has a strong involvement in that technology.)  He was heard on Michigan Radio as saying he wouldn’t support any plan that didn’t recognize that need.  The word on the wind was that we’d hear in January.  Here we are.

P.S. For those who missed the allusion in the title, Dorothy, the Tin Woodman, and the Scarecrow were tiptoeing through the Wood sharing their fear of Lions and Tigers and Bears (Oh, My).  But all they found was the Cowardly Lion.

ADDENDUM: Mary Morgan publishes columns irregularly via Medium.  The latest one is a transit update.  Sadly, she repeats the Bridge article without much more examination.

UPDATE: An interview with Paul Hillegonds by the Detroit News includes the suggestion that in the absence of a 2018 millage request, the RTA might look for income to survive until 2020.

“In the past, the state has supported us, but local bus services already are stretched,” he said. “The law requires us to stay in business, but if they don’t support the master plan in 2018, we will be running out of resources in 2019.”

Hillegonds mentions that one “Plan B” might be to look for the local bus services to support the RTA.  That would presumably mean, as we mentioned earlier, that they might tap into the regular operating budget for the local providers.

SECOND UPDATE: The Big 4 met on a stage with the Economic Club of Detroit (January 23, 2018) and left the RTA hanging once again.  As reported by Crain’s, the execs of Oakland and Macomb Counties are still not committing to any solution.  It now sounds as though they might be fishing to put some different features into the plan. Wayne County Executive Warren Evans said a decision was needed in the next 45 days if state legislative action is needed.

THIRD UPDATE:  Regarding automated vehicles, the University of Michigan is a leader in this field, including an automated shuttle already in use on campus.   The Federal Transit Administration is issuing an RFC for comments.

UM automated shuttle as shown on the FTA site.

FOURTH UPDATE: An interview with Paul Hillegonds and Robert Cramer (who runs SMART bus) at the January 29, 2018 TRU Transit Awards event is recorded in this podcast.   Hillegonds is cautiously negative about the notion of only Wayne and Washtenaw Counties joining to form an RTA (as was floated in this Bridge article).  He seemed to say that if Washtenaw got its commuter rail, there wouldn’t be money for anything else in the truncated RTA.  Also, he does not support any option that requires a change in the statute, which would mean action at the State level.  Instead, he stated that deputies of the County executives were working on a slightly amended plan that would maintain most of the current version.  One possibility is more cross-county routes.  The decision needs to be made by April or sooner to allow for work needed to put the item on the ballot.  He said that he hopes for a consensus on the Board.

FIFTH UPDATE: Oakland County executive Brooks Patterson sounds pretty definite in this February 7 article from the Free Press.

Only those communities that currently “opt in” with local property taxes to support SMART bus service should be included in a millage proposal to support regional mass transit, Patterson said.

Doesn’t sound like much of a consensus for a new millage proposal.

SIXTH UPDATE: Patterson really unwound in this February 7 interview with the Detroit News. Speaking of the current opt-out Oakland County communities, he said

“I will not betray them and slip some, or all of them, against their will, into a tax machine from which they can expect little or no return on their investment.”

SIXTH UPDATE:  Frustration with the Oakland County blockage has led some advocates to push the idea of a Wayne-Washtenaw RTA, presuming that the votes will be there since they were before. However, as we have noted, this would require state legislative action, and soon.  There are many difficulties with this scenario, but here is one enthusiastic scenario from a previous member of the RTA board. (Richard Murphy now works at the Michigan Municipal League.)

SEVENTH UPDATE: February 14, 2018 – looks as though the Board of Commissioners of Washtenaw County is ready to follow the dream. A BOC special meeting (on February 15) will have a discussion of a resolution in support for a Washtenaw-Wayne RTA.  According to a report by the Free Press, the hope of a commuter rail is probably driving this action.

EIGHTH UPDATE: The BOC did pass the resolution  (with three commissioners absent) on February 15. It instructs the County Administrator to “appropriately engage in discussions about a possible transit agreement between Washtenaw County, Wayne County, the City of Detroit, and other related public entities“.  The Administrator is requested to provide a report of options by June.

NINTH UPDATE: The Wayne County Executive, Warren Evans, has been pitching a revised four-county plan  (March 15, 2018) As noted by Curbed Detroit, it would call for a 1.5 mill tax.   But Macomb and Oakland County representatives are still showing notable resistance, according to Crain’s Detroit.

TENTH UPDATE: The outgoing Governor of Michigan, Rick Snyder, urged Detroit Chamber of Commerce members to get behind a four-county transit plan.  According to Crain’s Detroit Business, Snyder didn’t support the two-county concept. (March 27, 2018)

ELEVENTH UPDATE: A group of Detroit-area CEOs have come out with a plea to pass a plan, any plan. As discussed in Crain’s Detroit Business, (April 15, 2018) the execs are concerned with the image of Detroit with a poor regional transit system.

“The poor quality of our public transit is not lost on potential investors in our region. When Amazon passed on naming Detroit as a finalist for its second headquarters site, the lack of a workable regional transit system was one of a few key factors cited.”

Evidently the RTA Board is scheduled to meet on April 19 and is being entreated to put something on the ballot.  But no particular plan is being endorsed.  That doesn’t leave the board with much direction. The rules require that at least one of the appointees from all parties vote in favor of the item.  Considering the objections coming from both Macomb and Oakland Counties, that will be a challenge.

TWELVETH UPDATE:  At the RTA April 19 meeting, it was decided to move ahead with public comment on the Evans plan, now being called Connect Southeast Michigan.  The advocacy is currently located on the Detroit Regional Chamber of Commerce site, which may give you a clue to the motivation.  According to Crain’s Detroit, the RTA board may vote on whether to move this onto the ballot at their May meeting.

THIRTEENTH UPDATE: Not quite relevant to the RTA millage vote, but not very good news, was the failure of the QLine (M-1 streetcar line in Detroit) to achieve its ridership goals for the first year. As reported by Crain’s (May 2, 2018), the line was 500,000 riders below projections for the first year, despite a period of free ridership. The M-1 line was one of the major drivers for the formation of the RTA and received an upfront grant from USDOT upon the RTA legislation’s passage.  It is a public-private partnership, with substantial private investment, but it was hoped that the RTA could take over its operation in the future.

FOURTEENTH UPDATE: A distracting theme has emerged with action at the State Legislature. According to a Gongwer report published in Crain’s Detroit Business (May 9, 2018), a bill (HB 5870) has been introduced to allow communities to opt out of any new transit millage.  It appears to be mostly supported by Oakland County municipalities. This concept has caused the failure of past transit efforts in metro Detroit. Most likely at this point it is more an expression of resistance than a likely change in the state legislation.

FIFTEENTH UPDATE: The comments from Macomb and Oakland Counties continue to be negative to the RTA.  In a press conference reported by MLive (May 28, 2018), the two County Executives emphasized their support for a renewal of the SMART millage and not for the RTA millage.

Ann Arbor Emergent

Posted January 1, 2018 by varmentrout
Categories: Basis, Sustainability

Ann Arbor is rushing toward the future.  Each day, each moment, events small and large are shaping the new reality.  There is no possibility of remaining anchored in the past because we are leaving that behind us.  The only question is what shape the future will take and who will frame it.  What will emergent Ann Arbor be like and whose vision will best describe it?

Much of Ann Arbor’s political polarization in recent years has been from our various efforts to seize the future.  One problem with visualizing the future is that none of us has a perfect understanding of the outcome from a specific action.  We can surmise, we can expect, we can predict.  Often, whether we understand this or not, we are following a model (a set of hypothetical outcomes based on a perceived mechanism).  But while a model can be used to forecast, it is likely to fail at some level because other factors have not been considered.

My best example of this is the Washtenaw County budget director’s model for revenue in the 2002-2004 timeframe.  “The best predictor of the future is the past.”  Since development (sprawl) was very rapid, the tax revenue for the County was increasing by 6% a year or more.  He drew a straight-line curve showing a huge growth in funds over ten years.  So the County forged ahead with several high-ticket projects in confidence that the funds would be available to pay the costs.  He failed to anticipate either the many policy brakes (Greenbelt, etc.) governments put on sprawl or the massive economic collapse that began in Michigan as early as 2006.

Currently, much policy in Ann Arbor is being driven by models, voiced or implied. For example, the model that if we continue to increase the housing supply, even with extremely high-priced luxury housing, the supply-demand ratio will mean that other housing in the area will become more affordable.  This is stated as an immovable law of nature.

But that can only be tested by putting a particular policy into place.  The outcome will be fixed, whether it fulfills that prediction or not. So, often discussion of the emergent Ann Arbor is composed of warring models and thought experiments.  A piece is missing, though.

Have we as a populace and as a civic body really examined the critical questions of what that emergent Ann Arbor should be?

We have not really elucidated our game board.  How can we test proposed actions and initiatives against a desired outcome if we don’t even have a picture of the outcome?  Do we really know what we want or what the future we are trying to achieve looks like? This leaves so many questions unanswered.  We’ll try to consider them one at a time.

1.Where and what is Ann Arbor?

City of Ann Arbor (red) and areas with Ann Arbor zip codes. (Click to enlarge.)

Ann Arbor Zip Codes and Addresses

To some extent, Ann Arbor is what you make of it, geographically, at least.  There is, of course, the City of Ann Arbor, a landlocked city that is now annexing its final few township islands.  Some of those islands are still part of Ann Arbor Township, a completely different municipality.  But there are many people who have Ann Arbor addresses who don’t live within the city limits. Note that Ann Arbor zip codes include addresses in Superior, Webster, Scio, Lodi and Pittsfield Townships. (Only Ypsilanti does not share an Ann Arbor zip code.)

This is significant because though all those addresses pay property tax to their local governments, many people and businesses in them identify themselves as “Ann Arbor” and have an interest in the future of that label.

The Ann Arbor Public Schools

AAPS School District. The eastern border in Ypsilanti is Golfside Avenue.

Another “Ann Arbor” is the Ann Arbor Public School District.  The AAPS is thought to provide high-quality schools and it is an important feature of the Ann Arbor image and reality.  It is a major real estate selling point. (Often, houses and condominiums for sale in the townships are labeled, “Ann Arbor schools”.)

Of course, children who attend these schools have a common background because of that and it creates a sense of community. (Parents are engaged too.) Further, everyone in the district votes for the AAPS School Board and pays AAPS school taxes.

These boundaries are identical for the Ann Arbor District Library.  The library was historically part of the school district.  The AADL split from the AAPS in 1996 and succeeded in persuading residents to vote in a perpetual millage (does not have to be renewed) of 2.0 mills.  The AADL has won many awards and has multiple activities and several branches, including one in Pittsfield Township. It is an important community center.

Ann Arbor Metropolitan Statistical Area

Portion of SE Michigan as shown in U.S. Census map of MSAs for the U.S.A. Note that Washtenaw County is “Ann Arbor”. The adjacent MSA, Detroit-Warren-Dearborn, defines the combined Detroit Metro.

As we noted in an earlier post about regions including Ann Arbor,  it was determined some years ago that the magic of the name, “Ann Arbor” could be used as a business and economic development asset for the entire county.   Thus, Ann Arbor SPARK became “Ann Arbor, USA” and a marketing effort defined the entire county region as Ann Arbor.  This designation has been solidified by the U.S. Census descriptor of our primary Census area (the Metropolitan Statistical Area, or MSA) as “Ann Arbor” – but its boundaries are those of Washtenaw County.

Census information showing median income by MSA. Arrow is to Washtenaw County (Ann Arbor MSA). Note we are one of the 5 wealthiest counties in the Lower Peninsula.

The actual Census was in 2010. It is supposed to be a comprehensive picture of the American population and includes much demographic and economic information.  The basic Census uses a combination of paper forms and door-to-door interviews.  The American Community Survey (ACS) continues to  do spot surveys and produces updated information on many fronts, especially demographic and economic data.  (Because it is not comprehensive, one needs to be cautious about drawing conclusions, since sampling error is always a possibility.)  Graphic displays of this information can show a map of the U.S. in which various factors are called out by MSA.  With just a little practice, one can quickly pick out Washtenaw County, right next to Wayne County in the far southeastern corner.

Richard Florida’s map of metro inequality. Darker blue means more segregation by income. (Click for larger image.)

This has led to much confusion because so many articles, especially those covering some national topic, use the Census MSA data for analysis.  Data miners and analysts pick up all that nice easily accessible data and draw conclusions which show up in headlines that say “Ann Arbor is…”   A good example was Richard Florida’s 2015 article on  America’s Most Economically Segregated Cities. Headlines indicated that Ann Arbor was the 8th most economically segregated.  Florida’s article was based on a longer study he did earlier, which in turn was based on a Pew Research Center study.  The source of data for all?  You guessed it – the Census.  But while Florida referred often to “metros”, the title of his study was Segregated City.  You’d have to forgive the casual reader for supposing that it meant Ann Arbor City. But if you examine the map closely, you’ll see that little Washtenaw County rectangle.  Since this article was picked up by a number of mainstream media, the conflation and confusion was magnified.

Ann Arbor resident Jean Henry reminded The Ann that despite A2’s recent accolades, we were ranked eighth in income segregation by The New York Times.  (Quoted in The Ann, Ranking the Rankers)

Washtenaw County median income by census tract. Dark green is highest income.

This is more than confusing, it conveys the wrong information.  Washtenaw County is indeed an example of income segregation.  But Ann Arbor City actually contains a large number of the lower-income census tracts.  The county includes some very well-heeled communities outside of Ann Arbor and Ypsilanti, such as Barton Village and several of the townships.  It is necessary to go down to the level of individual census tracts to see that, and few studies do that.

How do we rate?

By now it has gotten so commonplace to see “Ann Arbor number one” stories that we could almost assume that we have somehow done everything perfectly.  How can you argue with success?  But that doesn’t necessarily jibe with the daily experience of many, or keep us from arguing about details.  Ann Arbor author Patti S. Smith, writing in The Ann, analyzed a variety of the surveys and rating stories and made some good observations in her article, Ranking the Rankers: Just What do Those Top Ten Lists Mean? She offered a number of cautions, including that one should examine the methodology used by the ratings’ source.

One of the recent ratings came from Niche.com – this one was pretty good.  Ann Arbor is the best city in the U.S. to live in!  Looking a little closer, it seems really good since we only scored Bs on housing, crime, jobs, and cost of living, and C on weather.  They partly base their ranking on surveys and reviews.  But also on many publicly available data bases.  Yup, the Census Bureau was the first on the list.

Where are we talking about?

The take-home message?  It is clear that Ann Arbor is both a city and a region.  In another state it would probably be a larger city, perhaps with about the same geographic area as those zip codes, or even larger.  We function much like a metropolitan area.  But we don’t really have a command of that entire area, yet we are expected to serve it in many ways.

It is important as we form an idea of where our future should lead us that we have a clear understanding of the Where that we mean.  Sometimes real “granularity” is needed (getting down to the details, perhaps as small as specific neighborhoods or even just a few blocks). Sometimes it is about the greater metropolitan region or sometimes as broad as the County. Often when we are talking about the urban area, the City of Ypsilanti becomes important to our discussion because we have so many dependencies on one another.  But policy discussions about future initiatives should be informed by an acute awareness of which Ann Arbor we are assigning characteristics or responsibility to. Too often, our leaders make sweeping statements about what Ann Arbor is or should be.  For those of us especially who live in the City of Ann Arbor, we need to know where they are.

NOTE: For information from the U.S. Census about Washtenaw County, consult this page.

 

 

When Can A Win be a Losing Proposition?

Posted November 9, 2017 by varmentrout
Categories: civic finance, politics, Regional

The Washtenaw County Board of Commissioners had a big win on November 7.  The somewhat controversial ballot issue for a combined mental health and public safety millage passed rather spectacularly.  As related by the Ann Arbor News, it won by nearly a 2-1 margin.

We had complained a great deal about this ballot measure.  As explained at length in Hair on Fire in Ann Arbor, the inclusion of a “rebate” to certain county communities seemed questionable, made the measure unnecessarily complicated, and added a layer of strangeness in that the Ann Arbor City Council promptly passed a measure announcing how they would spend the windfall.

We also noted in Taxes and the Local Government Quandary that a change in language at the last minute made this into a vehicle to distribute taxes on some municipalities to others.  The purported reasoning behind the rebate was to acknowledge that municipalities who tax themselves for their own police forces were being taxed twice.  The idea, then, would be to repay them according to their tax base (ad valorem).  But this was altered to make the payment on the basis of population.  According to the report in the Ann Arbor News, the device was invented by CM Chuck Warpehoski and Commissioner Conan Smith.  The intent and effect was to transfer additional funds to the City of Ypsilanti, presumably in an effort to provide “equity”.  (Ypsilanti is perennially revenue-short.)

My concern was that all this complication might cause the millage to fail at the ballot box.  But that fear was not realized.  The voters, at least those in the eastern more urbanized section of the County, endorsed it heartily.  In spite of two groups opposing the millage, the win was more than its supporters had imagined.  As quoted by the Ann Arbor News,

“Tonight, the people of Washtenaw County recognized the need to adequately fund mental health and public safety,” County Board Chairman Andy LaBarre, D-Ann Arbor, said in a statement after the results were reported.

Regional Issues

Distribution of votes for and against the millage proposal, as shown by Washtenaw County. Note that most townships in the western part of the County voted No.

But there are some regional implications in any County-wide vote.  With their heavy voter numbers, the cities of Ann Arbor and Ypsilanti, and Ypsilanti Township, can often carry a measure. This can create a classic urban-rural split, where the townships that don’t use services intensively may resist being taxed to provide them to others.  As we noted earlier, many of these rural townships keep their own operating millages to a bare minimum.  The fact that much of the land being taxed is agricultural probably adds an edge to this.  If you are operating a business that requires tens or hundreds of acres, each tax increment is a direct hit on your livelihood.

There was another indication at the BOC meeting that there might be some regional strains. According to the Ann Arbor News, the vote was only 5-4 in favor to put this on the ballot.  Evidently only the Ann Arbor commissioners, together with the representatives from Northfield and Pittsfield Townships (both are relatively urban and will receive a rebate), voted for it.  Even the Ypsilanti commissioners did not support it, nor did the commissioners from the western townships.

This raises a common question in governance: is winning the question by majority rule the only consideration? When is it more important to accomplish a goal regardless of opposition by a substantial minority and when is it instead important to reach a consensus?  Should we be concerned when such a geographical divide exists on a particular issue? Is it worthwhile to try to find an approach which will at least not lead to a revolt as this one has?  These questions are at the heart of the question of what regional governance should mean.  In my opinion, it is better to avoid cultivating a deep well of resentment between localities.  It should never be a “I win, you lose”.

Legal Questions

From the beginning, there have been those who questioned the legality of this ballot measure.

Former County Commissioner Dan Smith circulated a message prior to the election with a number of reasons that the measure could fail a legal test (Smith is not an attorney).  These are his points, verbatim.

  • Michigan law states that a millage proposal must state a “purpose,” which is something like constructing a new building or paying for police/fire protection. I don’t think that allocating funds to jurisdictions which maintain their own police force is a “purpose.”
  • Local government can only spend taxpayer funds on things which are authorized (or fairly implied) by state law. There is no provision for the county to simply give money to another municipality (or anyone else, for that matter).
  •  The “refund provision” results in non-uniform taxation as those municipalities w/o a police department are paying a higher tax rate than those which get the refund; this also violates current interpretations of “equal protection” in both the U.S. and Michigan constitutions.
  •  The refund provision also violates Article IX Section 6 of the Michigan constitution as those municipalities WITH a police department are experiencing a tax increase (the amount of the refund) without the qualified voters of JUST that municipality voting on it.
  •  Similarly, this could be an end-run around Charter tax limits, Ypsilanti (and maybe others) is already levying the maximum under its charter.

To all who questioned these points, BOC Chair Andy LaBarre assured the public that the Corporation Counsel, Curtis Hedger, had not only reviewed the measure, but had consulted an expert in ballot language.  (The Corporation Counsel advises the BOC and the County Administrator, but does not communicate directly with the public.)

We’ll See You in Court

The champagne bottles had barely made it to the recycling bin before the next step was announced. The news report from the WEMU radio station revealed that the question of legality has not been dropped.

WEMU interviewed Harley Rider, the Supervisor of Dexter Township, who announced that he would be part of a coalition who will challenge the ballot measure in court.  When we reached Rider today, he stressed that he is joining what he expects to be a “bi-partisan” coalition as a private individual, not in his role as a township official.  He says that there is not yet a formal, named group but it is obvious that the process is full of energy.

This is not the first time the County has been sued over a tax issue.  While the matter was never completely resolved, a previous suit did not prevail.   The County had levied a tax without a vote of the people in 2015 and 2016.  As the Washtenaw County Road Commission notes, that tax made it possible to improve many county roads, but its legality was questionable.  The BOC dropped that idea after they were sued and put an issue on the ballot in November 2016, when it passed handily.   They were also moved to drop the “Act 88 millage” which was similarly imposed using a somewhat novel theory.   (Ann Arbor News report)  It seems that some commissioners just can’t quite leave alone venturing into deep waters as far as taxation is concerned.

NOTE: Of course, we do not know how any court case will be resolved, nor has an argument been set forth by the parties.  This account is not intended to prejudge the result and it will likely be months before we know more.  But it would have been desirable to avoid this conflict.  The County needed a “win-win”.

UPDATE:  Harley Rider responded (December 17, 2017) to an inquiry about progress on the lawsuit with a statement that was explicitly for quotation.  “We are trying to schedule a meeting with an attorney shortly after the first of the year.”

SECOND UPDATE:  (March 14, 2018): Some people are beginning to realize that Ann Arbor is not using the millage for mental health, as was supposed by many voters. As was reported by the Ann Arbor News,  City Council got an earful from several commenters.  The intention to bring a lawsuit by Harley Rider is also referenced.

Fuller Road Station – A Review

Posted October 23, 2017 by varmentrout
Categories: civic finance, politics, Transportation

The Fuller Road Station has been one of the dominant stories in Ann Arbor politics for most of the last decade.  It blends two major influences:  former Mayor John Hieftje’s preoccupation with rail travel, and the University of Michigan’s growth plans and need for parking.  And, as a theme not invited by the powerful, Ann Arbor’s love of its parks.

A deadline is approaching.  The City of Ann Arbor requests public comments by November 2, 2017 about the Environmental Assessment for the Ann Arbor Station.  This is a tough homework assignment for the general public. The EA itself is 221 pages and then the Appendices are 735.  But these pages represent over 10 years of wishes, plans, politics, and especially money (from Ann Arbor’s civic pockets, and others).   Many studies, much data, probably hundreds of consultant hours, all to solidify the conclusion we knew all along:  the City of Ann Arbor wants to build a new Amtrak station on Fuller Park, next to the University of Michigan health sciences campus and hospital. 

Fuller Road Station site as located by Google

Rail

As we recounted in our post Ann Arbor’s Fading Dream of Trains and Rail Systems, it all began with John Hieftje’s Mayor’s Model for Mobility (2006).  Most elements of that model were included in the expansive transportation plan (the AATPU) passed by Council on May 4, 2009.  The plan (which still informs Ann Arbor transportation decisions) calls for signature routes, now the location of a proposed light rail line (the Connector).  They run through a nexus at Fuller Road.  Note the little blue train station icon. Under “mid-term recommendations” (5-10 years) it lists Construct permanent station at Fuller/Maiden intersection for Ann Arbor to Detroit Commuter Rail/AMTRAK service ($10,000,000) as one of its objectives.

Signature routes from the 2009 AATPU. (Click for larger image.)

 

Parking

From the beginning, the UM has been engaged with the City of Ann Arbor over the University’s growing population and its need both for increased transit and for parking.   As noted in this useful timeline from the Ann Arbor Chronicle, the UM first proposed to build a parking structure on Wall Street.  At a meeting held in January 2009, the idea of a multimodal transit center combined with parking for the UM (initially called FIT, or Fuller Intermodal Transit) was first floated by Eli Cooper, the City’s transportation specialist.  The Chronicle’s account of this meeting is worth reading for insights on how the City and UM interact.  The UM was persuaded to abandon the parking structure on Wall Street and invest its planning and its cash in the Fuller Road location instead.

The background information in the May resolution stresses the interest of the UM.  (Emphasis added.)

Work began on developing the plan update in April 2007.  The planning effort was guided by a technical steering committee comprised of city and stakeholder agency transportation and planning staff.  The University of Michigan contributed $20,000 to the planning effort and also contributed information about current and future travel patterns related to University growth plans.

To emphasize the point, a  Letter  (August 17, 2009) to City Administrator Roger Fraser from Hank Baier, UM VP for Facilities and Operations contained this information (emphasis added):

“As the conceptual plan for FIT is advancing, city and university staff will continue their efforts to more fully define next steps in anticipation that each of us will approve the conceptual plan in October. That schedule is necessary if we are to reach agreement on a first phase of construction that would accommodate university parking by 2012.”

Also on August 17, 2009, City Council passed a resolution awarding a contract to JJR LLC for Phase I engineering services for FIT, at a cost of $541,717.  (Emphasis added.)

The City owns the land containing the existing southern surface parking lot along Fuller Road and has determined that this area is: uniquely suited as adjacent to the existing Amtrak passenger rail service corridor, which is proposed to accommodate commuter rail service linking Ann Arbor to Metro airport and Detroit and has been designated as a national high-speed corridor between Detroit and Chicago; immediately adjacent to the University Medical center campus with thousands of employees and visitors daily; able to provide direct pedestrian access to jobs and medical services; accessible to bus transport via Fuller and East Medical Center Drive and is along a proposed signature transit corridor identified in the City’s recent Transportation Plan Update.”

To finalize the concept, on November 5, 2009, Council adopted the Memorandum of Understanding with the UM to construct the Fuller Road Station.   It also increases the project budget to $111,228.  The MOU states that UM will pay 78% of the cost. Phase I will consist in part of a structure with 900 parking spots.

So, in a deft slight of hand, the City has put the Mayor’s vision close to a first realization, while reaching an agreement which will obligate the UM to pay for most of the first phase.  But there was a weak spot.  The City may have “owned the land”, but that land was a park.

Parks

With the accession of Roger Fraser as City Administrator, the City was casting its eyes on Ann Arbor’s extensive parks system as a possible source of needed funds.  There were actually lists of parks that might be sold.  But the parks loyalty of the Ann Arbor public should not be dismissed lightly.  In November 2008 the voters had approved (by 81.21%) a ballot issue that requires the City to ask for voter approval prior to selling any park land.
Shall Section 14.3(b) of the Ann Arbor City Charter be amended to require voter approval for the sale of any land within the City purchased, acquired or used for park land, while retaining the Sections current requirement for voter approval of the sale of any park land that is designated as park land in the City of Ann Arbor Master Plan at the time of the proposed sale?

Early signs of trouble for the Fuller Road Station (FRS) included a push-back at the Park Advisory Commission (PAC).  After a subsequent visit to PAC by Mayor Hieftje and several efforts at revision of a resolution, a resolution merely calling for “transparency” (to quote the Ann Arbor Chronicle) was passed, but not until hearing a great deal of intense public comment.   All this discussion was in consideration of the allowable uses for park land, which is where PAC had some voice.  This was addressed by Council simply by changing the rules: on July 6, 2010, City Council changed the zoning codes so that PL (public land) may be used for “transportation uses”; but again, as reported by the Chronicle, not without a great deal of passionate public comment.

Federal Funds

Note that at the time the Fuller Road Station was first proposed, no Federal funding was in hand. It was simply a joint project between the City of Ann Arbor and the University of Michigan, and the UM promised to pay the bulk of the initial cost.  (Which basically would have been the parking structure.) But things were looking up.  President Obama, as part of his stimulus package (American Recovery and Reinvestment Act), proposed the High Speed Intercity Passenger Rail program (HSIPR).  The Michigan Department of Transportation (MDOT) assisted communities, including Ann Arbor, in making application (due date was April 4, 2011).  Ann Arbor applied for a grant to design a rail station at Fuller.  In May 2011, Eli Cooper was rather giddily announcing that the City had a $2.8 million grant for that purpose.   It would be through the auspices of the Federal Railroad Administration (FRA).

Wait, That’s a Park.

An unexpected obstacle materialized just as the cheers rose.  The Huron Valley Chapter of the Sierra Club had been following the development of a parking structure and train station in Fuller Park with dismay.  They had a tool.  Because of the National Environmental Policy Act (NEPA), an Environmental Assessment (EA) is required.  And the result has to be a Finding of No Significant Impact (FONSI) (to the environment).  But wait – remember, this site is in a PARK.   That means that Section 4(f) comes into play.  Here it is, straight from the Federal Register.  (Emphasis added.) It unequivocally states that park land has certain protections.

(f) ‘‘4(f)-Protected Properties’’ are any publicly-owned land of a public park, recreation area, or wildlife and waterfowl refuge of national, State or local significance or any land of an historic site of national, State, or local significance (as determined by the Federal, State, or local officials having jurisdiction over the park, area, refuge, or site) within the meaning of section 4(f) of the DOT Act (49 U.S.C. 303(c)).
(g) ‘‘4(f)Determination’’ is a report which must be prepared prior to the Administrator’s approval of any FRA action which requires the use of any4(f)-protected properties. This report documents both the supporting analysis and the finding required by section 4(f) of the DOT Act (49 U.S.C. 303(c)), that (1) there is no prudent and feasible alternative to the use of such land, and (2) the proposed FRA action includes all possible planning to minimize harm to the park, recreational area, wildlife and waterfowl refuge, or historic site resulting from the use.”

In less than a month after MDOT submitted the City of Ann Arbor’s grant request,  the Chair of the HVC-Sierra Club, Nancy Shiffler, sent a letter to the director of the HSPIR project.  The letter points out, with some asperity, that the property is a park.

Time Passes

 Suddenly, things slowed down and there were few announcements. In July 2011 Mayor Hieftje sent constituents a letter assuring us that all was well, and the UM would “pay almost all upfront costs for Phase I”.   In October 2011, UM spokesman Jim Kosteva sent an anxious email to the City (Hieftje and City Administrator Steve Powers) with a reminder that time was of the essence.  “The U is hearing from and feeling the pressure of the 18,000 folks who work in and around the medical center as they are severely squeezed in their search for parking.”
Still, there were no more announcements.  In January 2012, the HVC-Sierra Club issued a press release.

What’s Ahead for Fuller Road Station? It’s Time for the City to Let the Rest of Us in on the Plans.

It is time for the city administration to stop playing shell games, for the city council to force a full
disclosure of what the plans are for the Fuller Park site, and for the city council to follow the mandate of
City Charter Section 14.3(b), which requires a vote of Ann Arbor electors for the sale of any part of City
property acquired for parkland uses, regardless of what any temporary current parkland use may be.

The Sierra Club and a newly formed group, People for Ann Arbor Parks (now Protect A2 Parks) reported the results of a FOIA in which they discovered speculation about also developing the Fuller Road area for commercial purposes.

On February 10, 2012, the UM announced that they were pulling out of the agreement. At the time, Christopher Taylor (then a CM for the Third Ward but already a frequent spokesman for Hiefjte) issued a defiant statement.  “The effort to bring a new station to Ann Arbor remains very much alive.”  He then revealed that prior money spent could not be credited toward the local match to the grant.  In two subsequent meetings during 2012, the Council appropriated money from the City budget for the match.  Since then, the months and now years have been spent in preparing the Environmental Assessment, then in submitting it to the FRA for review.  A strange period ensued in which these discussions were kept confidential, even after a FOIA by MLive’s reporter Ryan Stanton.  (The picture of the redacted emails is memorable.) (MLive archive of articles about the EA status)

For all those months, we didn’t know how the different sites proposed fared.  Under the FRA’s guidance, the City was obliged to examine all possible site.  The reason?  Because this site was in a park.  That is where the “prudent and feasible alternative” comes in.  They were obligated to show that this was the best, or perhaps the only, choice.  So months were spent in analyzing several different possibilities.   One of the more intriguing notes was that the FRA required the consultants to consider the possibility of using the old Michigan Central Railroad Depot building (now in use by the Gandy Dancer restaurant).  How did that come up? Notice the reference to a historic site in Section 4(f)?

Now we are truly in a rush.  The consultants are now being paid on our dime.  (The grant ran out: see our post, Ann Arbor and the Rail Station Gamble.)

Comments are due by November 2.  Send them to ecooper@a2gov.org.

A caution: there are a lot of things in this bulk of material to argue about.  Do we think Fuller or Depot is better for our downtown? Can we afford it?  When do we think a commuter rail will actually materialize?  But actually these are all immaterial to the Environmental Assessment.  Here are the questions:

  1. Does the plan cause damage to the park asset?  Not just to the current temporary parking lot but to the entirety of Fuller Park?  How well will a major Ann Arbor park co-exist with a busy parking garage and train station?  In other words, do we agree with a Finding of No Significant Impact?
  2. Even if we agree that some damage will occur, is Fuller still the only choice?  In other words, is there really No Prudent and Feasible Alternative?

Note: Ryan Stanton of MLive has done considerable valuable reporting on this subject. His work has contributed to our community’s understanding of this complex and important topic.

Note: Much information is to be found at the website of Protect A2 Parks, All Aboard on Depot Street.  Disclosure: I am a member of this group.

ADDENDUM:  Comments are due on November 2, 2017.  They should be sent to Eli Cooper, ecooper@a2gov.org.  Here is the official comment from the Sierra Club.

UPDATE: Yes, I finally got my letter in.  Here it is: EA comments.

 

 

 

Taxes and the Local Government Quandary

Posted August 15, 2017 by varmentrout
Categories: civic finance, politics, Regional

Got vision? Our City Councilmembers do.  But that takes money.  Can we talk taxes?

Why do people run for office in local government? Various reasons, including personal (political) ambition, an enjoyment of politics as a practice (it has its obsessive qualities and you meet people), sometimes useful connections that might help you in your day job.  But I believe that a common characteristic in budding politicians is that they want to DO SOMETHING.  The aspirational impulse may go many directions.  With me it was land use. (So, immediately, all the BOC of my day was able to deal with was homelessness.)  We have local politicians who have emphasized economic development, transit, and development for population density.  Lately, the attention has turned to economic equity and affordable (i.e., subsidized) housing, and now there is a strong interest rising in solar power as a method of attacking climate change.

The Michigan Difference

It is frustrating, from the viewpoint of a Michigan municipal official, to read about advances in other states.  Here a transit program, there a measure to provide affordable housing, often paid for by a special sales tax, hotel tax, or even ticket surcharge (think UM football games) levied by a city or a county.  Not here. There are only two ways a local government in Michigan can tax its residents and businesses.  One is a tax on real property (real estate) and “personal property” which despite the confusing name is really business property.  However, that tax is slowly being eliminated.

The other option (available only to cities) is a city income tax. According to the Ann Arbor News,  the City Council is considering that again.  If the Council decides to go ahead with this oft-considered option, they will have to put a charter amendment on the ballot.  If the tax is enacted, it will mean that City residents will pay a 1% tax on income (this is rents and retail proceeds as well as wages) and non-residents will pay 0.5%.  In return, property owners will not be obliged to pay the general operating millage (for FY2018, that is 6.0343 mills).  Whether one comes off ahead on this personally depends on personal circumstances. (My best understanding is that retirement income is now taxable, so seniors are not as advantaged as in the past.)  The advantage to the City, and perhaps to many taxpayers, is that we are able to tap the incomes of UM employees and others who live elsewhere and work or do business in Ann Arbor.

Because of limitations in the Michigan constitution, it is very difficult for local government to raise property taxes.  We reviewed that in this post from 2011, which also walks you through details of when and how assessments for property tax are done.  Because of the Headlee Amendment and some other constitutional restrictions, governments are limited as to the total millage they can impose and must go to a vote of the people (a ballot question) to raise a new millage. Tax expenditures become (by design) a zero-sum game.  So local governments are always starved for revenue, especially if they are ambitious.

Invitation to a fundraiser that was posted to Facebook in July 2017

In the face of this frustration, some of our County Commissioners and City Councilmembers have gotten creative.  As we described in Hair on Fire in Ann Arbor, the BOC has established a millage ballot proposal that offers to give certain local governments a “rebate”, to be spent as wished.  This has entered into Ann Arbor City Council politics, with the incumbents who sponsored the resolution that assigned these tax goodies to favored uses (pedestrian safety, affordable housing, and climate change) running for office as the “Sustainable Ann Arbor”, “Progressive” slate on the strength of that resolution.  This device is obviously a response to frustration over the inability to use local tax dollars as they would like.  But in my opinion, both the BOC and these Councilmembers are not just misusing the ballot initiative system, but are being insensitive to the way ordinary taxpayers view local taxes and how they are used.  To be successful, they will have to persuade a majority of Washtenaw County voters that paying an additional 1.0 mill tax is to their benefit.

Taxes are Taxing

Ann Arbor homeowners are very conscious of our local tax system in July. This is the month the big property tax bill is due. To many of us, this is the make-or-break moment. Writing that check by the end of the month (and Ann Arbor has a very big stick to make sure that you do) is a big stress point.  Of course, no one loves taxes, but this is your HOUSE.  And every year, the total goes up.

Most of the property taxes we pay are for local government.  Across the County, the actual rate and amount paid varies widely, especially because of overlapping school districts, library districts, transit authority district, and other authorities. The greatest difference is in the millage that each municipality imposes on its own behalf.  That is the operating millage together with any special millages that voters have approved.  These can be seen by referring to the Apportionment Report from the County Equalization Department. (All figures cited in this post are from County Equalization.) Washtenaw County is really the essential level of government in Michigan, because many programs based on Michigan and even Federal law are delegated to the County to enact (these are called mandated services).  Taxpayers in all of our local units pay the same County millage (currently 6.2432).

Property taxes collected in Washtenaw County as shown in the Apportionment Report (2016). The smaller pie chart is County taxes and is detail of the pink wedge. Note that schools are the largest tax target. AAATA and DDAs are in the “local government” wedge.

Questions About Equity

There are several questions that occur to the taxpayer. One is, “what am I getting for this tax payment“?  That depends. The general expectation for local taxes is that the tax is collected by government so that it can carry out the services we need. Washtenaw County has 27 cities, villages, and townships.  Taxpayers in each of these may live in different school districts, library districts, etc.  In some, voters have chosen a high-service, high-tax government. Many townships are run on a bare-bones model.   So service levels differ, and so do local tax rates.  City residents usually go with the high-cost option. When we want special services (parks, local buses, better roads, etc.) we vote in special millages. In some townships, it is very difficult to pass a library millage or an increase in the township general operating millage.  Cities have a solid waste millage and provide trash pickup; most townships leave it up to the occupant to contract for trash removal.  Cities typically have water utilities (sewer, drinking water). Townships mostly leave it up to occupants to have a well and a septic tank. There are exceptions; the more urban townships like Ypsilanti and Pittsfield contract with the Detroit water authority, and portions of Scio Township and Ann Arbor Township have contracts with the City of Ann Arbor.  In general “you get what you pay for” is the rule. But to feel that you are taxed fairly, you want to see that you get the services you have opted for.

Is It Fair?

The wish to be treated fairly is baked into our bones.  (Experiments with monkeys show they resent being treated less well than the next monkey; they’ll refuse to do the trick if the other monkey gets a grape and they only get a cucumber.)  But part of that is your expectation of the “service” that you are buying.  I want my trash picked up and my drinking water to be clean and readily available.  I’m not fond of potholes either. But I also want to know that my community is being administered rationally and compassionately by officials who have the correct expertise.  In the example of the County, I want to know that public health, environmental health, and mental health are all being tended to by people who know what they are doing, and public safety (policing and judicial system) is important to me even if I never get robbed or a ticket.  So those are “services” I will happily purchase.   I’ll vote for school taxes even though I never had children.  But what really irritates me is if I do my part and others don’t. That is where we come down to the question of an even treatment of taxation.

Local Differences in Taxation

Because voters in local municipalities (that includes cities, villages, and townships) all choose different “packages” and also because the economic picture in each locality differs, there are major differences across the county in how much tax revenue is collected and what individual taxpayers have to pay. The fortunes of each government (and the burden on taxpayers) are determined by two different factors: the millage rate and the taxable value (properly called the ad-valorem) available.  In order to keep local assessors from under-assessing the value of property, the County Equalization Department conducts a detailed study each year and publishes a complete snapshot of local government assessment and taxation.  (All figures we cite here are from the Equalization Report or the Apportionment Report.)  The fortunes of each government depend heavily on the ad-valorem (hence the constant attention to “tax base”).

Let’s stop right here and acknowledge that there are different kinds of taxpayers, including owners of agricultural, industrial, and commercial property.  These are very important to a locality’s tax base but our discussion here focuses mostly on residential taxpayers.  For the taxpayer, the assessed value (SEV) of their house is determined each year by the assessor (assumed to be half the market value), and the taxable value (TV) is determined by a complex formula (see Proposal A) that works to hold down TV for long-term property owners.  For most, it is much lower than the SEV.  The tax due is calculated in this way:

Some localities have such high-value property that they can afford to keep millage rates relatively low and still provide quality services.  Others, with low real estate values, strain to cover all the bases with high millage rates.  This creates a good deal of inequity on a social level across the county.

Tax profiles for three different municipalities. Local millages (including operating and special millages) are shown. Tax calculated on total homestead millage is for house of market value $200,000, assuming TV is exactly half that.

In this example, the owner of a new house of $200,000 market value (TV of $100,000) would pay a drastically different tax bill.  Because it has such a low tax base, the City of Ypsilanti is taxing its residents at the very maximum that its charter allows.  Because most real estate in Ypsilanti is often at a lower valuation, many may not pay that.  However, this tax rate will obviously depress real estate value.

Back to the fairness question: presumably since each of us has chosen to live in a particular community (a free will theory of taxation), the tax assessed there is “fair”. But what about when the tax is being collected for services used by a different locality?  As we explained in our post Regionalism Reconsidered, Michigan has a strong home-rule tradition and culture.  When we pay County taxes, we are paying for a regional benefit.  We must accept that services delivered to our entire region (county) are on our own behalf.  But what few of us expect is that the County will collect taxes specifically to donate to a different municipality.

In the case of the proposed “mental health and public safety” millage, that was a decision made on the floor during debate on the ballot language. In the final language, a change was made so that the “rebate” to municipalities with their own police forces would be made proportionately on the basis of population, not on taxable value.

shall the limitations on the total amount of taxes which may be levied against taxable property within Washtenaw County, Michigan, as provided for by Section 6 of Article IX of the Michigan Constitution of 1963, be increased up to the amount of $1.00 per thousand dollars of taxable valuation (1.0 mills) for a period of eight years, beginning with the December 1, 2018 levy and extending through the 2025 levy, which shall raise in the first year an estimated $15,433,608.00 to be used as follows: 38% shall be allocated to Washtenaw County’s Community Mental Health Department for mental health crisis, stabilization and prevention, and to meet mental health needs in an appropriate setting, thus reducing the burden on the jail and improving care; 38% shall be allocated to the Washtenaw County Sheriff’s Office to ensure continued operations and increased collaboration with the mental health community; and 24% shall be allocated to jurisdictions in the County which maintain their own police force (currently Ann Arbor, Chelsea, Milan, Saline, Ypsilanti, Pittsfield Township and Northfield Township) in proportion to their respective 2016 population values?

(The change was made in order to benefit the City of Ypsilanti.) This has the effect of redistributing County taxes from one municipality to another.  As is seen in the table, most other cities and townships are essentially donating their own tax base (accepting the logic that this is a repayment for local taxes already collected) to others.  For the complete calculations, refer to this spreadsheet.

“Rebate” in first year based on taxable value vs. population.

But the tax is also a redistribution from all the other municipalities in the County to these units receiving a rebate.  Recall that the more rural townships have chosen to tax themselves at very low rates and then offer very minimal services.  For example, Bridgewater Township has a local millage rate of 0.8233. Freedom Township is 0.9501.  The proposed new County millage of 1.0 mills is higher than they choose to tax themselves for all services.  And part of that tax is going to be redistributed to the urban communities.  This may be why (as reported by the Ann Arbor News) the vote to approve the millage was 5-4, with the “out-county” commissioners voting against it.

There was some discussion that this redistribution in favor of the City of Ypsilanti was for “equity” and that small city does indeed have its problems, as shown with the tax situation. Perhaps we need to consider what “equity” means in distributing taxes among County communities, especially if the purpose is not truly regional in nature.  Should the farmers of Bridgewater Township be paying for pedestrian safety in Ann Arbor?  Should Saline and Chelsea be donating tax receipts to Ypsilanti and Northfield Township?  The rebates are not going to individual taxpayers in those different jurisdictions, but rather to their elected bodies, to spend on whatever priorities they determine. Is that fair?

The Muddle

County voters have shown that they are willing to pay taxes for a truly regional service.  For example, in November 2016, the County roads millage passed by 70.94% and the millage to support indigent veterans passed by 73.18%.  But because of this muddle, it will be hard to make the case that this is truly a regional service for parts of the County. Perhaps the votes in the urbanized parts of the County will be enough to pull it off.  But I wish that the BOC had offered us a clean choice with two pared-down millages, one for mental health services and one for the Sheriff.  It should have been possible to make a good regional case for each of those.  This was a bad time to introduce political aims into the process.

Just to confuse things further, should the Ann Arbor City Council decide to place a ballot issue for a city income tax on the November ballot, Ann Arbor voters will be making two different decisions about their tax futures at the same time.  Wonder how that will work out?

ADDENDUM:  The City Administrator has prepared a memo recommending use of the county millage rebate as to how that extra tax revenue from the County millage might be used.  Here is the report by the Ann Arbor News.

UPDATE: The Ann Arbor News has an article about the city income tax that compares the UM position (not our business) with that of MSU re an East Lansing income tax (oppose it, offering a buyout).  According to the article, there will be a special work session of the City Council on September 11 to discuss the tax.

General note: I believe that it is probably too late to place a ballot item onto the November ballot.  (I am having difficulty in finding the due dates for a charter amendment to be placed on the ballot by the Council.)  That would indicate that the next opportunity for an election would be May 2018.  After that, August or November 2018.  There are potential political consequences for all these choices.

SECOND UPDATE: The City Council has now had a working session to discuss the possibility of a city income tax.  Here is the account by the Ann Arbor News.  Note that any appearance of this issue on the ballot will not be until after another study has been done, possibly November 2018.  The slide show for council had some eye-opening figures, in the slide showing future capital needs. (The Treeline project is said to begin at a floor of $55 million.)

 

Vote As Though the Future of Your City Depends On It

Posted August 6, 2017 by varmentrout
Categories: politics

All elections are consequential.  The Ann Arbor City Council (Democratic) Primary on this Tuesday, August 8, 2017 will likely, all hyperbole aside, set the course for the next several years, perhaps decades.  Please vote.  (And I hope you choose the candidates I want you to, but for goodness sakes, vote.)

Obligatory public service announcement: see CivCity’s Ann Arbor Votes page for information.  Here is the City of Ann Arbor’s page on voting absentee.  If you are qualified, you may apply until 4:00 p.m. on Monday and vote in person at City Hall.

If you’ve been living in Ann Arbor for a while and have been awake, you know that the control of the Council agenda has been the subject of a mighty tug of war. (See, for example, our post The Placemaking Agenda and Ann Arbor Politics.)  Now, with the passage of a charter amendment that means all Council members will serve for four years, this is the last odd-year election and perhaps the last chance for a group of scrappy Ann Arbor residents to elect representatives who will actually represent their interests. (Note: this is a “catch-up” election. Those elected will serve for three years and then all terms will be for four years.) It is also a make-or-break election for Ann Arbor’s Mayor Christopher Taylor.  Taylor has lately enjoyed a supermajority of CM who represent his vision (and that of his mentor John Hieftje).  With this 8-vote majority, he is able to pass through almost any measure, leaving the minority (CM Jack Eaton, CM Sumi Kailasapathy, CM Jane Lumm) to present measured opposition in the face of overwhelming odds.

Lately the vibrations (and who knows? we don’t have polls) seem less favorable to Mayor Taylor.  There are some good, substantial candidates opposing his favored incumbents.  He was moved to send out an email to certain voters (not all, and we didn’t get one) with his endorsements.  Here is a rundown:

Council candidates for August 8, 2017. (I) is incumbent. Red = endorsed by C. Taylor. Blue = endorsed by Local in Ann Arbor

Yes, the Mayor did not formally endorse Jaime Magiera, who has been running as a quasi-independent, and we did not make an endorsement in the 3rd Ward race.  (There is no Democratic primary in the Second Ward.)

The Mayor also included an anodyne list of promises, should his slate succeed.  He is for fiscal integrity. He likes quality services, and a quality way of life.  He likes parks.   But these points are perhaps more descriptive.

We also know that Ann Arbor has not yet done enough to prepare for our future — we do not have anywhere near enough affordable housing; particularly in light of the failure in national leadership, our climate change responses need to accelerate, not stagnate; and the City’s costs rise faster than its natural revenue increases, threatening the sustainability of services upon which residents depend.

We share the belief that all successful cities evolve. No one can stop change, but we can and must do everything we can to ensure that Ann Arbor maintains its essential character, the character that drew us all here in the first place. Finding that mix, finding that balance, is what it’s all about.

The Outcomes

So what can we look forward to if Mayor Taylor’s picks are all re-elected?  (If he loses only one vote, he will have to work more collaboratively, and much of this is less certain.)

1. More approval of high-rises everywhere. Are all high-rises bad?  Of course not. They make sense in certain locations and for certain purposes.  We’ve all gotten used to the student housing towers.  But a major issue this year was the Core Spaces sale of the Library Lot. See our post Core Spaces and the Soul of Ann Arbor.  This has been criticized on the basis of aesthetics and use of public land, but also on fiscal integrity and the loss of publicly funded parking spaces.  The behavior of the Council majority in the push to approve this questionable project (there are still legal questions to be resolved and it is taller than any new building in Ann Arbor) has activated many citizens.

2. A serious push to build an Ann Arbor Train Station, on the Fuller Park site if at all possible. This project is in a terminal state right now (it is proceeding without the possibility of further Federal funding, and still no word from the FRA), but don’t give up on it. One way it could be funded would be by selling bonds or seeking private investment. This has been a top priority of Mayor Taylor from the beginning.  See our post Ann Arbor and the Rail Station Gamble.

3. An increase in water and sewer rates. This is underway and goes beyond the yearly increases in water, sewer, and stormwater rates already experienced. There appear to be moves to restructure the rates. (Note that our system probably needs major upgrades if a heavy development surge is to be supported.)  A survey was sent out this summer that sent some strong signals.  Here is just one page from the survey.

From the survey sent out by the City of Ann Arbor in June 2017. Click for better visibility.


4. An effort to find additional tax revenue.  Mayor Taylor has some ambitious goals and we are constantly finding that Council is limited by the Michigan tax structure and our structural deficit (the UM occupies a great deal of what should be our tax base).  The only current possible mechanism is the County millage vote (which has been arranged for a “rebate” to Ann Arbor without strings attached; see our post, Hair on Fire in Ann Arbor).   Another possibility, which has been considered by Council this year, is a city income tax. (Our post, Same Song, Different Verse, laid out some of this.) Taylor’s endorsement message had this curious statement “the City’s costs rise faster than its natural revenue increases, threatening the sustainability of services upon which residents depend”. “Natural” revenue increases?


5. A move to down-zone up-zone residential areas so that more dense development is allowed in traditionally single-family neighborhoods. “Down-zoningUp-zoning would be, for example, changing R1 properties to R3 or R4, making multifamily building more available. (Karen Hart, former Planning Director for the City of Ann Arbor, pointed out that I had this definition backwards.  What I have described is “up-zoning”.  I regret publishing in haste because of the pressure of the calendar without checking this terminology more carefully.) Neighborhoods near the central core are at most hazard for this. Many of those are R2A or R4C, which has permitted modest infill with 4-unit condominiums in place of a single-family house, for example. See this zoning map for Water Hill.  But denser development will depend on a down-zoning up-zoning.

Such a move would be consistent with Mayor Taylor’s emphasis on affordable housing.  (It is a matter of faith with many urban planners that denser development would bring affordability, though to date the result has simply been more expensive condominiums.) This change has especially been telegraphed by Chip Smith, who is running on his “expertise” as an urban planner, and there has been commentary on the social media. With an 8-vote majority and with a Taylor-appointed Planning Commission, it would be possible to push through a massive rework of Ann Arbor’s zoning map.  At present those residential zones are a tremendous frustration to those who would like to see dense development.  We are about to run out of downtown.

There is actually a move afoot at the County level to examine the role of single-family zoning in economic segregation, which in turn is based on a Federal program, Affirmatively Furthering Fair Housing.   Here is the County flyer about it.  The premise, on a national level, is that residential zoning has been devised to keep out the economically disadvantaged and racial minorities.  So for “fair housing” we have to get rid of single-family housing.  I don’t see that here.  I live near two public housing facilities, some rental housing, and some historically black (single-family) streets that are holding on.  In my view, single-family housing is simply how many of us would like to live.  But it is a great impediment to development, which in Ann Arbor’s overheated real estate market, is where the money is.

The Future Ahead

In principle, I don’t like to see any faction have the overwhelming power to do as they will.  Some of Mayor Taylor’s agenda may have merit, but it should be argued out at Council and with reasonable citizen participation.  I hope that Tuesday will see some rebalancing of City Council so that we can all deliberate on that future.

UPDATE: In the August primary, one of Mayor Taylor’s majority (Jason Frenzel) was defeated.  Chip Smith and Zach Ackerman were both renominated.  Ackerman will be unopposed on the November ballot, so he will be on Council for the next three years.  Jack Eaton defeated his primary challenger.  The November ballot will have contests in the 2nd, 4th and possibly 5th wards.  Here is the Ann Arbor News report and analysis of the results of the primary: Mayor’s Camp Could Lose “Supermajority” on Ann Arbor City Council.