politics | Local in Ann Arbor

Archive for the ‘politics’ category

The Master Plan and Ann Arbor Emergent

July 6, 2019

Cities are born, live, and die. Like any living thing, they are changing constantly. For most of us who live in one, we don’t see the beginning and the end, only the change. Ann Arbor, of course, is constantly changing. Here is what we said in the post, Ann Arbor Emergent.

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?

So much of the civic debate about policy in Ann Arbor has been about the direction of change. It has precisely been about the question of whose vision will guide the city as its new shape emerges. The two opposing sides in this debate have been given many names, none of them adequately descriptive. Most recently, we defined them as the Powers That Be and the Neighborhoods. In that post (The Primary Struggle for the Future of Ann Arbor), we described the Powers That Be as the “majority”, which is no longer quite appropriate, since seats on Council other than the Mayor shifted from one side to the other in the 2018 election. That post defined a number of the issues under contention. The Neighborhoods are generally understood to be long-term residents of Ann Arbor, though not all long-term residents agree on many points.

The accusation by the Powers and their supporters, like the self-named YIMBYs, has been that the Neighborhoods are opposed to change. This is wrong on its face (not all change is the same, and long-term residents don’t oppose everything that is change) and in practical reality, since change is constant. While each decision by Council guides change to some extent, we are now about to experience a potential major shift in focus and purpose to emergence of a future Ann Arbor. Our city is embarking on a new Master Plan, and the consequences are likely to be substantial. This is a moment when all sides and all citizens can engage at a meaningful level.

Master Plan

The Master Plan is both literally and figuratively the foundation for city planning. For most cities, it is the projection of the city’s vision of the future, and a map for how to get there. In Michigan, this process is determined by the Planning Enabling Act (P.A. 33 of 2008). As the Act says,

A master plan shall address land use and infrastructure issues and may project 20 years or more into the future. A master plan shall include maps, plats, charts, and descriptive, explanatory, and other related matter and shall show the planning commission’s recommendations for the physical development of the planning jurisdiction.

Historically, the Master Plan has had no statutory authority (it is not a law, merely a suggestion) but has been used to direct policy. The legal direction for land use is the zoning ordinance and map, which is wrapped around with many restrictions and directions as to how a particular parcel may be used. The zoning map is a to some degree a reflection of the Master Plan that is sometimes subject to change. We have often seen Council award zoning or approve site plans for developers of projects that do not harmonize with the Master Plan. And yet the argument that “this is not consistent with the Master Plan” or “this reflects the Master Plan” is often heard in rezoning and planning debates. My reading of the Planning and Enabling Act is that there is some intent to coordinate these two planning functions in this relatively recent rework of Michigan law. Specifically,

For a local unit of government that has adopted a zoning ordinance, a zoning plan for various zoning districts controlling the height, area, bulk, location, and use of buildings and premises. The zoning plan shall include an explanation of how the land use categories on the future land use map relate to the districts on the zoning map.

The Zoning Ordinance (now properly called the Unified Development Code) itself becomes very granular. Each zoning classification has attributes clearly defined, down to physical limits (height, setback, parking requirements, and other), and each parcel has its place. The truly marvelous Ann Arbor Zoning Map shown on GIS (Geographical Information Service) refers by number to a PDF file showing the zoning classifications for each area. (Because it is GIS, it has many layers showing many characteristics of this terrain, but we are talking zoning.) Want to know your own zoning and that of your neighbors? This is the place.

The Ann Arbor zoning reference map as shown on GIS (mapAnnArbor). The individual marked squares are references to zoning maps for specific sections.

Once you have identified the section of the map that interests you, you may enlarge the magnification to study detail. Or you may simply note the numbered square and go directly to the pdf file that shows a parcel-by-parcel zoning classification.

Zoning map for a portion of the Burns Park neighborhood. The PL is Burns Park school and park. Note the different residential zoning classifications.

Current status

The City of Ann Arbor’s Master Plan is currently a collection of plans, not a single document. The Land Use Plan (2009) is what we usually think of when citing the Master Plan. This incorporates several area plans: Lower Town, Central Area (1992), University of Michigan Property, West Stadium Boulevard Commercial Corridor, and also the Northeast Area (2006), South Area (1990), and West Area (1995) plans. This version of the Land Use Plan was actually a compilation by Planning staff of existing plans. Some of us who observed this process felt there may have been some changes and omissions in the cut-and-paste. The original area plans were the product of citizen committees and long public sessions and hearings. The residents of the designated areas were the major decision-makers and citizens from elsewhere in the city were not much involved in the specific areas. The Downtown Plan (2009) was a complete rewrite of the previous plan; “A2D2” was a product of the first wave of serious development push in which height limits and parking requirements were changed drastically. Likewise, an ambitious Transportation Plan Update (2009) called for serious investment in rail transit via several projects that have not been realized. (A new Transportation Plan Update is now underway, with a consultant and a committee at work. No news yet.) The PROS Plan is revised by the Parks Commission every five years (the current one is through 2020). And notably, the Treeline Allen Creek Urban Trail was incorporated into the Master Plan in 2017.

All these different plans have been adopted by the Planning Commission as part of the Master Plan, which means that they are policy documents and in theory are all directives for future action. A “plan”, if adopted by the appropriate body (which is most often the City Council) has some force, though many parts may never be implemented.

There are many other documents listed as “resource documents” that are not part of the Master Plan, although some of them are called “plans”. Note, for example, the Connecting William Street Plan, which was produced by the DDA as the result of a long public process after the City Council requested that the DDA formulate a plan for use of the block containing the Library Lot. The final plan got a cold shoulder from the Council, indeed, it was never taken up. (It basically envisioned how each part of the area in question could be developed to the maximum height and density.) In a somewhat questionable move, the Planning Commission placed this rejected plan on its resource list. If it had been more successful, it too would doubtless be part of the Master Plan. This story is instructive because it illustrates how the Planning Commission can act autonomously, not merely as an advisory committee to the Council.

Process

After a public hearing on May 21, 2019, the Planning Commission adopted a resolution approving “the allocation of resources to solicit both consultant assistance and internal support of a comprehensive master plan update process, rooted in extensive public engagement”. The staff report cites quite a few concerns. They are, briefly (but in same order as named in the report)

The long periods, some as long as 30 years, since adoption of some sections
Possible local effects of global warming
The combined volume and number of plans and resource documents, making policy difficult to parse
Affordability “a … challenge for the City in supporting a diverse population, a robust workforce, and sustainability goals”
Aging of the population
Increasing population
The number of commuters and transportation challenges this entails.

Somewhat confusingly, the Planning administration had already posted an RFP (request for proposals) seeking a consultant to perform the update. The due date for proposals in answer to RFP 19-06 was set as March 7, 2019, two months before the resolution passed by the Planning Commission. There is now a committee evaluating the eleven proposals. Once they have made a recommendation, the contract with the winner will go to Council for approval.

Themes

The RFP provides quite a few clues as to the weight and potential impact of the Master Plan revision. It contains a number of directives to the prospective consultant.

Values

The consultant is asked to begin by developing a set of City values that may be used to evaluate potential consequences of implementation. They are characterized as “high-level evaluation tools (e.g. equity, affordability, sustainability)”. They are evidently intended to carry real weight. “The City aspires to use such values to help support the shift from aspirations to realizations of community goals.”

It is expected that a “vision statement” will be part of a plan. The current Land Use Plan has one which is descriptive of the different systems of the City. But it also indicates the expected product. “The quality of life in Ann Arbor will be characterized by its diversity, beauty, vibrancy and livability…” (from the current Plan)

If values such as those named earlier are used to evaluate every scenario in the Plan, it implies a standard that all provisions must match in some form. As an extreme example, does our park system justify itself in terms of equity and affordability? We have withdrawn a great deal of land from our total city area in search of natural beauty, recreation, and quality of life. If you think this is far-fetched, you may not know that the City Council of the mid-1980s refused to put the first park millage on the ballot because parks were viewed as “elitist”.

Participation

The RFP laudably puts “civic engagement” near the top. This is an important step for a master plan affecting the entire community. It calls for “an innovative, multi-format public engagement process that gathers input from a diverse section of the City, including students, residents, workers/commuters, owners and employers“. However, it also calls for participation of “those who experience the City in varied ways, as … commuters, and potentially aspiring community members“. This indicates that people who are not currently residing here or who do not own businesses here will have some say over the future development of the City. This raises a lot of questions, including one about how those participants will be chosen or recruited.

Plan Consolidation

As noted, there are currently 8 plans and 18 resource documents. The desired result will consolidate all this into a single document less than 100 pages in length. What is wanted is a “unified master plan, that … consolidates the goals of these numerous documents, identifies (and to a large extent reconciles) contradictions within the numerous documents”.

This is something of an earthquake within our current planning structure. It implies considerable editing and condensation of specific plans, most of which were done with public input and often much thought and compromise in order to accommodate a variety of views. As we learned with last year’s condensation of our zoning code into the current Unified Development Code, there can be many omissions, deletions, and even errors in such a process. It is almost impossible for interested citizens and elected representatives to track the extent of such changes. Just as one illustration of a potential effect, the inclusion of the Connecting William Street project (never accepted by Council) in the resource documents suggests how shading and insertion of material could alter the overall plan.

Refocus Land Use

It is clear that an important goal here is to wipe the slate clean and start over again as far as land use goes. Currently our land use map is a accretion of decisions made over decades, often hard-fought and hard-won. The zoning map pins down uses in each area and preservation of neighborhood character has been one of the important criteria. Here is what the RFP says about this:

Identify a future land use plan that addresses the fundamental goals of the City. For example, the plan should identify land use strategies for affordability, sustainability, and a realistic vision for accommodating projected and/or desired population and job growth in the City through 2050 and beyond. This effort will result in a consolidated land use map that uses a single set of land use categories throughout the City, that no longer reflect the subtle distinctions that the current City-by-area land use maps reflect.

And:

…evaluate the current site-specific recommendations from the existing master plan, and eliminate as appropriate. The City seeks to shift from such site-specific recommendations toward character areas, corridors or districts whenever possible, that articulate a character or expectation of how a larger neighborhood might develop, and interact with surrounding areas of the City.

Action Plan

The revised Master Plan is intended to go beyond the usual general vision and set of recommendations. As indicated in the Planning Enabling Act, a zoning plan will be prepared simultaneously to enact the policies indicated. (The answers to questions about the RFP specifies that the consultant is to develop the zoning plan.) Thus, this will be a muscular set of directives ready to go into action.

The document will include a fully prioritized implementation schedule that identifies the highest to lowest priority actions (i.e. ordinance amendment recommendations, further planning recommendations, development review process evaluations/recommendations) for the City to undertake to realize the vision identified in this new Master Plan. (from the RFP)

Where we are at this moment

While the RFP specifies a beginning in July 2019, we are some distance away yet. The evaluations committee is presumably continuing to evaluate the proposers and their offerings. Eleven different sets of professionals take a while to sort out. (I don’t know of any public access to the deliberations of the committee.) Once they make a determination, a contract will have to be negotiated and will have to be approved by Council.

What Does It All Mean?

It is clear to me and to anyone who is paying attention that this is a major leap toward the objective of upzoning Ann Arbor. There has been open talk of eliminating single-family zoning. There has been discussion for years of the need for “missing middle” housing (2-3-4 or more units per parcel). But if the Master Plan is massively redrawn, it could be a push toward even more intensive development. This is likely to be density, density, and more density. We’ve been hearing about it long enough.

The objective that is always cited is affordable housing. We’ll have to discuss the likelihood of that outcome at some other time. To date, most new, denser development has been at the high end of the market (i.e. expensive, not affordable). This is accord with what is happening nationwide. Developers are in business. They build to maximize profit from investment. Unless subsidized, they are not going to build “affordable” housing, no matter how you define that.

Ann Arbor will change, no matter what happens. Only in the last year, many new, denser projects have been approved. The whole block on E. Hoover will be a huge apartment complex. At almost every Council meeting, a new development is approved without controversy. The Lockwood proposal for an intrusive senior citizen complex in a single-family zone was defeated partly because of its conflict with the Master Plan. Density advocates took that hard. But this was an exception.

Our current planning mechanism doesn’t award any obvious winners and losers. There are wins and losses on all sides, and often politics does play a role. (Doesn’t it in all things?) What appears to be proposed here is to change the rules so that the outcome is predetermined.

If we who live here want to have a role in determining the face of emergent Ann Arbor, we’ll need to pay attention and participate to the extent possible. The future of the city is in the balance.

Categories: civic finance, Neighborhoods, politics, Regional, Sustainability

Comments: 3 Comments

This Land is – Our Land?

August 31, 2018

This land is your land, this land is my land…This land is made for you and me. — Woody Guthrie

The concept of public land goes back so far that it is practically racial memory. The history of many peoples has been the war over open common land vs. privately held lands. Even today there are wars in some locations (e.g., Africa) between herders and farmers. Perhaps the best documented case of a transition from publicly held to privately held land, enclosure, is in England. Enclosure led to wealth for those who held the land, and forced many laborers into cities where they formed the basis of the Industrial Revolution. In this country, the great expanses of land “liberated” from the indigenous peoples who treated them as a common birthright made land ownership available to many common people via the Homestead Act. Property ownership is still one of the best predictors of wealth accumulation and a great majority of people still hope to own their “little bit of heaven”. But despite this drive, we tend to see public land as ours, held in common. In other words, it is our land, to be used for our benefit.

Public Land in Ann Arbor, Defined

Probably the greatest cause of civic strife in Ann Arbor over the years has been the dispute over public land. What is it? First, it is owned by a public entity, whether that is the public schools (but not a charter school), the University of Michigan, or an authority such as the Ann Arbor Transportation Authority. But when owned by the City of Ann Arbor, – that is when many of us feel ownership.

Public Land is a zoning category and is shown on maps as PL. As defined, “This district is designed to classify publicly owned uses and land and permit the normal principal and incidental uses required to carry out governmental functions and services.”

It has 10 “permitted uses”.It seems clear that the authors of this classification were thinking about parks right off the top. Note that sentence in the first use about structures that are not incidental to the use of the land? The first three items are about parks and open space. Most of the others are about obvious governmental functions, though item (f) might raise some questions. The PL designation is restrictive and creates a barrier to development.

Zoning for two important blocks along William St. Dark red is D1, burnt umber is D2.

Public ownership does not mean PL zoning. For example, none of the public parking lots in the downtown are PL. They are all zoned D1 (core downtown) or D2 (edge). (The Ann Arbor GIS system contains a very detailed zoning map.)

Two of the most hotly disputed public land holdings in Ann Arbor, the old Y lot and the Library Lot, have never been zoned PL. Note that the Ann Arbor District Library and the Blake Transit Center (and Post Office) are all PL, as is Liberty Plaza. This means that those parcels could not be developed unless they are rezoned, but no such obstacle exists for the two former parking lots.

Proper Uses of Public Land

So regardless of zoning, what is the proper use of land owned by a public entity? One hopes that it is for a civic purpose, that is, a purpose that will enhance the condition of the civic body, its residents, its businesses, and its private property owners (taxpayers).

And how do we define that civic purpose? That is the job of the policymakers (City Council and certain boards and authorities). We have many policy priorities in the City of Ann Arbor, well recognized and discussed over years. They include environmental objectives such as energy conservation, management of storm water, and conservation of open space; enhancement of business activities (especially in regard to downtown properties), and attention to zoning and planning dictates. Another objective that has become more and more urgent is the provision of affordable housing, both in the sense of subsidized housing for the most vulnerable populations and in so-called “workforce” housing for moderate-income (60%- 100% or sometimes even 120% of median annual wage) people. And for downtown parcels, parking for automobiles is still desired, though often criticized.

But wait – there is another objective. Land in Ann Arbor has become so valuable that it is a resource ripe for extraction. One can actually mine money from it, especially if it is in or near downtown. Given the perennial structural deficit that the City often runs, and the ambitions of the Council majority (and now, our very forward-looking City Administrator), it is irresistible to look for a cash return as well. The downtown parcels are actually pots of money just sitting there unrealized.

Given the value of downtown parcels, it is a temptation for Council to try to attain all their policy goals and at the same time realize a cash return. This inevitably sets them up for some awkward gymnastics. Developers may wish to develop downtown, but they also insist on making a profit. It is called “Return On Investment”. After all, developing parcels and negotiating with politicians is a lot of work.

Another complication is that there has been a fluctuating policy in which sale of city property was designated to be deposited in the City Affordable Housing Trust Fund. The history was well reviewed in the Ann Arbor Chronicle. This policy puts a moral and political pressure on the Council to obtain a cash return on the property. But obtaining cash and also the type of development that they want is truly challenging.

Let’s Do an RFP

The most direct and effective way for Council to obtain policy goals and also a reasonable financial objective is to execute a Request for Proposals. Typically these invite proposals from developers to fit some predetermined criteria and also invite them to offer their best price. Also typically, there need to be some guidelines for how the proposals will be reviewed and the City is always free to refuse all offers. (This actually happened in the case of 415 W. Washington, where an RFP issued in 2008 attracted relatively few bidders, and none of the proposals met the standards of the Council.)

The history of RFPs, as used by the Ann Arbor City Council to dispose of public land, is rather sad. The first RFP issued for this purpose in recent history was for affordable housing on the lot recently vacated by the old YMCA (we now know this as the old Y lot). The logic and history behind that RFP were described in an article for the Ann Arbor Observer (the actual published version was edited for length and content but this is the most complete version). We told some of the story here of the William Street Station, the project that won the bid but was killed within a week of being finalized.

Another RFP was issued ostensibly to find an appropriate developer for the Library Lot, the former parking lot next to the Ann Arbor District Library. That story is told here and in many posts about the long struggle over the Valiant proposal to develop a hotel and conference center. (See the page Library Lot Conference Center for a list of posts.) Ultimately, the Council terminated the RFP and made no awards. Instead, it directed the DDA to take another look, with the evident intention that there should be a comprehensive downtown planning process. The beginning of this “look” is told here, and the end was the Connecting William Street project, in which the DDA sought to convince us that every surface lot should be built to its highest possible density. That report was never taken up by Council, though the Planning Commission, under the leadership of Kirk Westphal, placed the report on a list of “resources”.

With these successes behind it, the Council sought to make things simpler. Both the Y lot and the Library Lot were simply placed with a broker and put up for sale. But neither Council nor the Ann Arbor public could quite shake the notion that public land should be sold only with some public benefits attached to the deal. (We reviewed both the history of the Library Lot and its importance in Ann Arbor’s culture and concept of ourself in our post, Core Space and the Soul of Ann Arbor.) Thus, both of these sales became mired in court cases.

But that is a story for later.

NOTE: The “Council majority” referred to here is the Taylor caucus (the “Powers That Be“) that has existed for some years, in succession to the Hieftje caucus. A minority of Council members (the “Neighborhoods“) have opposed many of the policy directions and substantive decisions. However, the recent primary has apparently changed those ratios. See The Primary Struggle for the Future of Ann Arbor for details.

UPDATE: The fate of our downtown public lands is being hotly debated (October 2018). The immediate cause is Proposal A on the November ballot, which would reserve the Library Lot for use as a public park. This is in direct contradiction with the intent of Mayor Christopher Taylor and allies to have Core Spaces develop the lot. There is a pending court case regarding some hasty contract signing without the approval of Council, in apparent violation of our Charter. (Here is an account published by the Ann Arbor News.)

Meanwhile, the fur is flying as both sides present their case for the ballot issue. As this account by the News explains, a group has formed to fight the ballot issue and persuade Ann Arbor citizens not to vote for the proposal. Unfortunately, some of the assertions by this group border (in my view) on untruths and certainly push the boundaries of polite discourse. Recently Mayor Taylor himself has made an open plea to voters which contains hefty doses of hyperbole.

Mary Hathaway, one of the leading lights for the Library Lot park struggle, has responded with a lengthy letter refuting many of Taylor’s points. She admonishes him for the negative tone of his message and asks where the cheery positive person that she remembers has gone. And she addresses directly the financial bind the City Council has made for itself, with both the Y lot and the Library Lot in play, and the evident intent to use proceeds from one sale to pay the expenses of re-acquiring the other.

The stakes are indeed high, both monetarily and in terms of credibility of the Mayor, who recently won re-election over a strong opponent (Jack Eaton) but who also lost many of his Council allies. The fate of the ballot issue will tell us much about the future direction of Ann Arbor, since it likely breaks down so neatly along the fault lines that divide us.

SECOND UPDATE: (December 2019) Proposal A did indeed pass in August 2018, by 53.11% to 46.89%. The howls from the losers are still being heard. Meanwhile, the agreement to sell the space to the Core Spaces developers was cancelled, and the lawsuit brought by Council members over the hasty contract signing was settled.

Mary Hathaway passed away in October 2019 and is much mourned.

A “Center of the City” task force was appointed and has been deliberating about the future of the Library Lot, in accordance with the voters’ wishes. An item on the December 16 Council agenda would advance some temporary usage plans for the space.

Categories: Basis, civic finance, politics, Sustainability

Comments: 6 Comments

The Primary Struggle for the Future of Ann Arbor

August 5, 2018

Unless you have just arrived from Mars, or possibly Denver or Atlanta, you are aware that the City of Ann Arbor has been locked in a mighty political struggle for years. The majority (The Powers That Be, formerly the Council Party) has been pushing an agenda to make Ann Arbor into a high-tech generator of wealth. They have been fighting off insurgent challengers to their authority since approximately 2006. (Some history is in this post.) The rebels are sometimes called “Townies” (see What Does It Mean to Be an Ann Arbor Townie? ) but most often simply the Neighborhoods. This August primary may very well be the telling blow that decides the future direction of our city. This is a war about the very nature and future of Ann Arbor. Will we suffer the same fate as many high-tech communities? Or will we be able to sustain our community, our culture, and our home, all which have made Ann Arbor the very special place it is? And will it continue to be a city where the citizens have real influence over its direction?

The Nature and Future of Ann Arbor

So what is the war about? The very nature and future of Ann Arbor. Here are the two outcomes:

(1) Ann Arbor will go the way of so many other centers of technological enterprise. We will dedicate our governmental priorities and our infrastructure into making the city attractive (as we believe) to the high-tech workers needed for successful startups. Real estate will become prohibitively expensive as money rushes in to take advantage of the wealth being created. Residents of modest income will be displaced as the cost of living increases. Developers will also take over many of the public spaces and familiar institutions. Much of the casual charm of the city and its sense of community and shared culture will be lost.

There are many accounts of the effect on the community of a high-tech community with too much money flowing in for the citizenry to compete. San Francisco and Silicon Valley are the prototypes. This lengthy documentary shows in full detail what happens when money rushes in after scarce real estate. San Francisco 2.0

(2) Ann Arbor will plan to keep housing and local businesses in place by countering some of the actions and decisions that are leading to displacement. This will be done with careful planning and citizen involvement. Ann Arbor will still continue to evolve and will still support enterprise, but will make it possible for a wide spectrum of residents to live and participate in the community. It will be a resilient community where changes in the built environment will be adaptive, not abrupt, where the future is anticipated but the past is respected. We will have a city that is to human scale, that includes restorative green spaces and accessible public areas.

There is a process for this. See, for example, Boulder. “The city’s infrastructure, design, and neighborhoods are driven by public investments and land use decisions. Choices made today will last for generations. These choices also must be considered on multiple scales and across issues and systems. Facing a future with so much uncertainty will ultimately require flexible and adaptive systems that do not lock the Boulder community into a single pathway.” (From Boulder Resilient Cities post)

The Placemaking Agenda

There has long been an effort to transform the city from a sleepy college town to a high-tech success story. The aim was economic development. A guy named Rick Snyder helped to start an incubator called the “IT Zone” in downtown Ann Arbor (1999) and also launched SPARK (2005) which then (2007) merged with the IT Zone Meanwhile, Washtenaw County passed a resolution naming Ann Arbor and Ypsilanti downtowns as Smart Zones. These were part of a push by Governor Jennifer Granholm to bring economic revival to Michigan via high technology centers. They allowed school taxes to be captured for economic development in the named centers. (Technically, the taxes are repaid to the local schools by the state, but it is complicated.) Our Local Development Finance Authority administers those funds. Since then, SPARK has infamously received substantial allocations from both Washtenaw County and Ann Arbor City. In the same general time period, Gov. Granholm also launched her Cool Cities initiative, which was presumably modeled after the Richard Florida “Rise of the Creative Class” book and theory. The basic precept is this: to be successful in economic development, cities must install quality of life enhancements that will attract the young “creatives” (who turn out to be mostly tech workers). There was quite a push for this in Ann Arbor around 2010, as I reported. All this met with the agenda of the Powers, who set to the job of transforming Ann Arbor into a different place, one that would support a technology-driven enterprise culture.

The word for this type of activity is placemaking and it is now a major field of study and implementation. Much of this is discussed in this post: The Placemaking Agenda and Ann Arbor Politics. The post was written to explain the election of 2014, and most of it remains entirely pertinent today, including the promotion of friendly candidates by the Michigan Talent Agenda. (The MTA is widely known to be run by Ned Staebler, though his name does not appear on the website.) Note the word “talent”. That is the key to entrepreneurial success, as explained in many different pages. The basic concept is to make Ann Arbor a place that appeals to a different class and type of people, especially those who will lend themselves to a technology-driven enterprise culture.

It worked! Ann Arbor has attracted a number of technology startups, some of which have even stayed in town. A recent highlight: the sale of homegrown Duo Security for $2.53 Billion to Cisco (reported by MLive). Every day seems to bring a new announcement of a start-up or the growth of one, or other similar successes. We have succeeded in importing “talent” and others. The overall effect of the placemaking efforts has indeed been to bring in more people, which means more need for housing. It must be acknowledged that the University of Michigan plays a part in this, since the student population continues to increase. A local blogger, TreeDownTown, has written a useful overview of the student housing picture, in which he concluded that the massive downtown buildings recently built as student-directed luxury units are barely keeping up with demand. But the overall drive to bring in new “talent” has also meant an influx of affluent new residents who are willing to pay well for housing that satisfies their wish for close-in (to downtown) quality living. For the first time in several decades, Ann Arbor’s population has grown noticeably. According to the United States Census Bureau, Ann Arbor City’s population is estimated to have grown from 113,934 to 121,477 between 2010 and 2017, an increase of 6.6%. That is over 7,500 people looking for housing. Meanwhile, the price of houses is going up and Ann Arbor, according to this 2017 article, is said to be the least affordable housing market in Michigan.

Development, Gentrification, and the Loss of Local Character

One outcome of this drive to transform Ann Arbor has been a strong development push. This has sometimes been led by revisions of downtown zoning (the DDA has been heavily involved in promoting development) but neighborhoods adjacent to downtown have been heavily affected even without changes in zoning. The young population who were the target of all this promotion want to live near downtown, in a nice place, within biking or walking distance. This has put great pressure on the neighborhoods near downtown. It has also driven up the value of downtown property to unimaginable heights.

Each time a major development is proposed, it brings out the neighborhood who are fighting to maintain the distinct character of their home territory. For example, Germantown (a neighborhood at the southern edge of downtown, roughly between William, Packard, Madison, and Main) was devastated by the loss of seven historic houses that were the heart of the neighborhood. The Powers opposed a historic district and approved an ugly student-oriented development (City Place) instead. (See Heritage City Place Row.) Other more recent battles have been over 413 E. Huron, unaccountably zoned D1 right next to a residential neighborhood that is also a miracle of historic preservation, now the Foundry Lofts; and the Broadway Lowertown site, which TreeDownTown accurately described as a better deal that could have been had by the City. Battles have also been over the fate of the Library Lot, an Ann Arbor treasure and one of the very few open spaces remaining in the downtown. See Core Spaces and the Soul of Ann Arbor. With the Taylor caucus (the Powers) holding tight, most often with 8 votes but always with a majority, development after development has been approved over the cries of the residents. The face of Ann Arbor is indelibly changed already.

These individual battles often obscure the true nature of the war itself. The Neighborhoods, who are not really a party or a coherent group, emerge over and over again as residents fighting for the survival of their community. What is at stake in many cases is displacement, as well as loss of local connections and culture. Displacement has already happened in some areas as gentrification has meant replacement of older structures, often affordable rentals or modest owner-occupied houses, with extremely high-end expensive condominium developments. These are in the desirable near-downtown zone in areas such as Kerrytown, Water Hill, or the Summit Road neighborhood. In classic gentrification style, these were once areas where Black families were grouped because of segregation. Often they had already attracted new owners because they were affordable and had a certain raffish charm. But now the next phase is occurring. For example, Tom Fitzsimmons has built numerous attractive condominiums on former one-house lots or combined lots to create larger developments. New policies appear directed at ensuring such dense development in formerly single-family neighborhoods. As high-priced denser housing sells in each location, the surrounding land becomes more valuable, and simple market pressure causes displacement of renters.

Affordable Housing, the Confusion

One thing everyone agrees with is that housing in Ann Arbor has become unaffordable. But while “affordable housing” is a desirable goal, few agree on what that is and how it should be achieved. To some, affordable housing is targeted to very low income individuals, is subsidized by a variety of governmental programs, and is administered by the Ann Arbor Housing Commission, Avalon Housing, or perhaps other nonprofit or governmental providers. This was the concept presented at a recent Council working session by Jennifer Hall, the Director of the Housing Commission. The AAHC was created to oversee the Federal public housing in Ann Arbor but is becoming the housing and community development department in its reach. (Ann Arbor’s Community Development Department was subsumed by the Urban County in 2008.) Hall and Washtenaw County’s Teresa Gillotti made a very thorough case of the needs for subsidized housing and called for a millage to pay for new housing.

Washtenaw County’s 2015 study of Housing Affordability and Economic Equity reviewed the demographic differences (income, educational attainment, etc.) between Ann Arbor and the City of Ypsilanti and concluded that Ann Arbor should add (subsidized) affordable housing while Ypsilanti should add market-rate housing intended to attract Ann Arbor’s highly educated population. The evident intent was to homogenize the population of the two cities. (Pittsfield Township was included in the study but has not been much involved in the conversation.) Jack Eaton was the sole CM to vote against adopting this concept, which he called “social engineering”. He has been beat up about that ever since. But in point of fact, the study made no useful suggestions for creating affordable housing and merely imposed targets on both communities that they are unlikely to meet. The subsidized housing discussed would most often not be accessible to working families making 60-80% of median income (e.g. roughly $44,000 to $57,000). Those would need what is often called “workforce housing”, which must also be subsidized because it is still below market. This means that many service personnel and even public employees like schoolteachers and city staff have difficulty in affording housing here.

What must be acknowledged is that everyone who can afford to do so wants to live in Ann Arbor. Thus, the limited land mass in the city has virtually become an extractable resource. Parcels that were previously considered to be virtual wasteland are now being expensively developed. This creates several classes of people who find living here unaffordable. Among them are, yes! two-income professional couples. It is just that expensive. According to Zillow, the median sales price of a house in Ann Arbor is now about $400,000. Unless one is either very high-income or bought in many years ago, buying a house in Ann Arbor is becoming nearly unreachable.

A new group supportive of the Powers has been insisting loudly that our current neighborhood residential structure must be altered. These self-named YIMBYs (Yes In My BackYard) seem resentful of current residential homeowners, whom they often term “wealth hoarders” because of unearned appreciation in real estate value. ~~Downzoning~~ Upzoning (which allows denser development in single-family neighborhoods) has been called for. The YIMBYs believe that by building more housing units, regardless of the price, somehow housing will become more affordable and available to them in the desirable areas. Ironically, some appear to be hoping that single-family houses will become available after everyone else moves into the high-priced condos. Much discussion of these options occurs on a Facebook group called Ann Arbor YIMBY.

Generally, it appears that some major restructuring of the landscape might be proposed in order to allow for more housing of any type, but especially denser market-rate housing. The two Mayoral candidates have weighed in. Jack Eaton has proposed a number of possible approaches to housing lower-income Ann Arborites. It includes using City land to start cooperatives. Chris Taylor appears to stay with the tried-and-true approach via the Housing Commission but also (somewhat ominously) notes:

If we are to be inclusive, we must also be open to development that will create homes people can afford. This will be disruptive and will involve trade-offs. If we do not begin to explore and experiment now, we will not meet even our modest affordability goals.

The Neighborhoods are not united on all subjects and are not really a coherent group. But generally they wish to retain both their homes and their quality of life. (Yes, lots of complaint about the roads.) Gentrification is a threat. So are increased taxes and increased fees. Recently a water rate restructure has reduced the cost of water service to multifamily developments such as are built by developers, while increasing the cost to certain single-family homes. While the City’s basic tax rate has not increased, allocation of City funds to such multi-million dollar projects as the Treeline ($55 Million) (a greenway conservancy that is already attracting more high-value development along the railroad tracks in what were once the old industrial properties and the lowest value) and the Fuller Road Train Station (ca. $80 million) creates potential tax demands for the future. These are high-risk projects that will encumber current or future City budgets, without bringing direct benefits to current residents. Thus, the Neighborhoods can anticipate either higher taxes, or loss of services, or both, in the drive to bring “talent” for technology to town.

The Citizenry as Decision Makers

Some have accused the Neighborhoods of being elitists and implied that they are worse. But actually, the shoe is on the other foot. The whole thrust and focus is to wealth creation at the expense of long-time residents, many of whom are not particularly well off. Who owns the city? Current residents and businesses, or a future populace who are not here yet? Should a small group of elected and appointed officials make all the decisions and determine the course of the city? Or should the citizenry be empowered to help set the course?

Ann Arbor has a strong tradition of citizen involvement, and I believe this is one reason for the strength and vitality of the town. We have a City Charter that requires a number of decisions to be based on a vote of the people, or a supermajority (8 votes) of our elected representatives. We have public comment at meetings and open meetings act/freedom of information act requirements for governmental transparency. With leadership from the former CM Sabra Briere, we have many steps in our development process that make citizen access to planning documents practically global. (I remember when I had to go to the department physically and beg to see them.) There are a number of citizen task forces and committees that produce advisory reports. But some CM have found contributions from the public to be a tedious intervention, sometimes remonstrating from the bench.

Recent actions on the part of the Powers seem to indicate that they consider themselves uniquely qualified to make all the decisions. They have supported massive redactions in FOIAed documents and most recently supported the signing of a contract by the Mayor and staff, in contravention of the Charter requirement that a vote of 8 CM is required for such action. (They knew they didn’t have the votes.)

This Is It. Vote.

This election may be a decisive battle, since credible challengers against the Powers are running in every race. (Full information on the election and candidates can be found on the Ann Arbor Votes page. Additional insights from these interviews on All About Ann Arbor.)

All four Ann Arbor wards which have incumbents running also have a challenger. The First Ward has two candidates running for an open seat; one of them has declared his allegiance to the Powers so is treated here as one of them. The other has affiliated himself with the bloc I am calling the Neighborhoods. Note that each of these candidates has a personal history and individual positions on many issues. None of them are running in a slate. Nevertheless, their places on the chessboard are clear.

Candidates running for City Council in Ann Arbor, August 2018

The race for Mayor is key and the battle is being vigorously fought. The current Mayor, Christopher Taylor, is challenged by current 4th Ward Councilmember Jack Eaton. They are very distinct, not only in their views but in their voting records. Here is a very comprehensive account of their voting records on key issues, as reported by the Ann Arbor News.

This is it, folks. Ann Arbor is at a turning point. Please vote.

Disclosure: I am Jack Eaton’s campaign treasurer and I have supported the objectives of the Neighborhoods for years.

UPDATE: I have been reminded that Council and Mayor terms have now been extended to four years. This election is more meaningful than ever.

SECOND UPDATE: This was quite a turnover election. The only “Powers” candidate who survived was Ward 3 Julie Grand, but in addition Mayor Christopher Taylor held an authoritative lead. (Jack Eaton remains as a 4th Ward CM for three years until a new contest.) So Mayor Taylor will now be presiding over a Council where the numbers have turned against him. He’ll have only 4 votes (including his own) against a potential bloc of 7 votes. I predict that the Neighborhoods representatives will not operate in the strict discipline of the old Powers bloc, since they are all individuals with independent viewpoints. But it should not be business as usual.

Important note: the new Council will not be seated until the General Election in November. So we have a dangerous period ahead of us where a lame-duck Council may yet take actions.

THIRD UPDATE: Obviously, the course of business on Council is likely to shift noticeably beginning in November. Mayor Taylor will not be able to command a supermajority as he has been accustomed to, now that the majority (7) has shifted to the Neighborhoods. (Note that neither “party” has a supermajority.) But we should not expect that drastic changes will occur. For one thing, the Mayor has great influence over the agenda. Also, at least a couple of the newcomers are showing signs of independence. They will assume their place at the table, not just count as a number.

I thought Ali Ramlawi’s election night comments (video) were very heartening. They were evidently spontaneous and from the heart. Here is a transcript of the remarks. A couple of notable excerpts:

We’ve got a lot to do. I mean, other than the 4th Ward, all the races are close. You know, it’s just like national politics, it’s pretty divided. 50 to 50 almost, you know, give or take a couple percentage points, there’s a lot of work to do. The work has just started. We need to be bigger people and better people, reach across the aisle and work with folks who think differently than us.

I think we can actually have an honest discussion for the first time in a long time. I think the Mayor and Mayor’s party has had a majority, a supermajority where they didn’t really have to take into consideration what other people thought. For the first time in their career, they have been sobered by the fact that there is a great part of Ann Arbor who doesn’t feel comfortable with their decision-making. and who want a different voice and they elected that. So it feels empowering but at the same time there is a lot of responsibility that comes with that and I need to find ways to bridge the gap and be able to make a difference and move things forward in a way that takes all parts of our community together and don’t just shut out a part of them because they don’t have representation on Council.

FOURTH UPDATE: This article from the Wall Street Journal lists Ann Arbor as among the top cities for growth based on the tech culture. Some of the downside is mentioned.

GENERAL NOTE: Comments are moderated. I do not allow anonymous comments. I deleted an anonymous commenter who gave an address of “gmail@gmail.com”. Funny, yes? Discussion is welcomed, but you must own up to your comments and avoid abuse.

Categories: Basis, politics

Comments: 46 Comments

The County Mental Health Millage: Second Thoughts

April 14, 2018

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.

UPDATE: The Ann Arbor Citizens for Mental Health & Public Safety have come out with an election-time plea (June 2018). They ask citizens to take the usage of these funds for mental health into mind in supporting candidates in the August primary.

This is something of a bombshell because the dividing line on this issue is rather clearly the incumbents (Taylor caucus) vs. the challengers. (Detailed information on candidate positions.)

Categories: civic finance, politics

Comments: 1 Comment

Governance and Transit and Taxes, Oh, My.

January 18, 2018

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.

SIXTEENTH UPDATE: The purchase by Ford Motor Co. of the Michigan Central Station in Detroit’s Corktown has changed some of the tenor of transportation talk, with an emphasis on autonomous vehicles taking some of the energy. As reported in Crain’s Detroit Business, there is talk of making Michigan Avenue a test track for autonomous shuttles. (Ford’s intent is to make the station a headquarters for its autonomous vehicle development.) Meanwhile, the actual use of the station for trains is being dismissed with little more than a nod. But the Wayne-Washtenaw enthusiasts who want a commuter rail are still bringing up the idea. Unfortunately, Wayne County Executive Evans is still hoping for a 4-county RTA.

SEVENTEENTH UPDATE: The RTA board finally decided against placing the plan on the November ballot. According to Crains, it didn’t make it out of committee so we don’t know how the Board would have voted. Advocates are vowing to fight another day, maybe next year or the next. Meanwhile, both the SMART and AAATA system millages are up for renewal this year.

EIGHTEENTH UPDATE: (August 2018) SMART regional transit millage (parts of Macomb, Oakland and Wayne Counties) passed by a hair in Macomb County but handily in Oakland and Wayne. The AAATA millage passed by a hefty 83% in the urban core region which it serves.

NINETEENTH UPDATE: The Citizen’s Research Council has produced a broad-ranging essay about regional transit across Michigan. (March 2019: Rethinking Regional Transportation in Michigan’s Urban Areas. ) It points to difficulties in governance and taxation, and suggests what for Michigan are revolutionary ideas, such as new forms of taxation separate from property taxes, and tax-base sharing and/or “feathering”, so that different areas pay different tax rates.

TWENTIETH UPDATE: MetroTimes is quite critical of the QLine (aka M-1), especially considering its overall effect on Detroit transit and the RTA. Subtitle: “A Streetcar Named Disaster“. (May 2019)

TWENTY-FIRST UPDATE: With the death of long-time RTA opponent Brooks Patterson, advocates are figuring the odds on another RTA millage. Nothing simple yet. (September 2019)

TWENTY-SECOND UPDATE: This analysis by a current member of the RTA Board (Chuck Moss, Oakland County) seems very astute. He knows where all the bodies are buried:”the future of regional transit has some serious structural potholes as big as the worst ones on Telegraph Road”. (September 2019)

TWENTY-THIRD UPDATE:A new strategm for attaining a millage vote without Macomb County’s participation has been devised. It would require revision of the existing Municipal Partnership Act by the State Legislature.(February 2020)

TWENTY-FOURTH UPDATE:A letter from an impressive group of business leaders has been sent to the leaders of both legislative houses in an effort to jumpstart the MPA revision. (February 2020)

TWENTY-FIFTH UPDATE: A rapid sequence of proposed changes, including an abandonment of the MPA changes and a revision of the original RTA legislation, seems to have foundered and it is difficult to see how a new millage will make it to the ballot in 2020.

Categories: politics, Regional, Transportation

Comments: 10 Comments

When Can A Win be a Losing Proposition?

November 9, 2017

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.

Categories: civic finance, politics, Regional

Comments: 4 Comments

Fuller Road Station – A Review

October 23, 2017

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:

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?
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.

Categories: civic finance, politics, Transportation

Comments: 9 Comments

Taxes and the Local Government Quandary

August 15, 2017

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.)

Categories: civic finance, politics, Regional

Comments: 2 Comments

Vote As Though the Future of Your City Depends On It

August 6, 2017

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-zoning~~” Up-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.

Categories: politics

Comments: 16 Comments

Hair on Fire in Ann Arbor

July 5, 2017

How a resolution passed by the City Council could endanger needed funding for the mentally ill of Washtenaw County.

Those of us of the wonkish persuasion are always serious, often dogged, and probably viewed by others as rather dull in our insistence on correctness and data. We are not usually the ones to be seen at the front of the crowd, waving a sign around. But occasionally there comes a moment so potent in its wrongness that we can progress to that state known as “hair on fire”. This has been characterized as ”in a state of extreme agitation,” one stage above ”wild-eyed” and just below ”freaked out, totally out of control.” My hair on fire moment came on Friday night (June 30), when I learned (via a tweet from Council member and candidate Chip Smith) that the Council would consider a resolution to reallocate funds from a County millage that has not yet been approved by the Board of Commissioners, has not appeared on the ballot, has not been endorsed by the voters, and in which funds would be used for a different purpose than the millage proposal states.

The resolution (item DC-3) was sponsored by Mayor Christopher Taylor and three of his “faction”, CM Zach Ackerman, CM Chip Smith, and CM Jason Frenzel. All except for Taylor are up for re-election this fall. All have primary opponents. This is an especially consequential election because the winners will serve for a full three years (the City Charter was recently changed to designate four-year terms, but this is staggered to eliminate the odd-year elections). Monday (July 3) came and the Council approved the resolution by what is coming to be the expected balance of votes, 8-3. (In other words, the Taylor faction vs. the Eaton faction; or, if you prefer, the Council Party vs. the Neighborhoods.) In simplest terms, the resolution states that the City of Ann Arbor will take money collected by the County for mental health purposes and “repurpose” it to pet projects of Taylor and his followers, namely pedestrian safety, affordable housing, and climate change.

ADDENDUM: Here is an excerpt from the resolution. The resolution refers throughout to a “General Fund Rebate”, which is not indicated by the County ballot language and for which there is no provision.

Resolved, THAT if the Board of Commissioners puts the Millage on the November 2017 ballot, City Council intends to consider a General Fund Rebate Use Policy Resolution, which resolution would in further detail state Council’s intent to use the General Fund Rebate for the duration of the Millage in the following amounts, for the following purposes:

• 20% to improve Pedestrian Safety (e.g., Enforcement Augmentation, Crosswalk Improvements, RRFBs, Streetlights) (operating & capital)

• 40% to effect the goals of the Affordable Housing Needs Assessment (a/k/a Washtenaw County Housing Affordability and Economic Equity Analysis) and to increase Workforce Housing (operating & capital) with guidance by the Housing and Human Services Advisory Board

• 40% to effect the goals of Ann Arbor’s Climate Action Plan (operating & capital)

It is so obviously political posturing that it hardly seems worth mentioning. Or, it is a sincere difference of opinion on priorities, which is even more concerning.

ADDENDUM: In terms of priorities, the following excerpt from the resolution is puzzling. Are they encouraging the County to look elsewhere if more money is needed for mental health?

Resolved, THAT mental health services and public safety are fundamental community needs and if the Board of Commissioners determines that there are insufficient resources to sustainably address these needs in a manner that meets community aspiration, City Council encourages them to seek additional funds.

The County Burden

The background to this event and the reasons I find it so outrageous lie in the role that County government plays in Michigan. As a former County Commissioner, I’m very aware that County government takes care of many housekeeping tasks that affect us all, often without much fanfare. Most of these are what are known as “mandates”, namely responsibilities decreed by state law. Ann Arbor residents who don’t get out much are often unaware of County activities, since they are just the machinery that runs in the background. One good example is community mental health services. Counties have historically been responsible for all aspects of public health, including environmental health, medical issues (for example, communicable diseases and other general public health hazards), and mental health. These are truly “global”, or in this case, county-wide services and are utilized at different levels by different localities, but they are all critical to a healthy county community.

Mental health services in Washtenaw County have gone through quite a number of different arrangements. At one time it was simply a County department. Then it got picked up by the UM health system as part of Medicaid-funded services. There was something called the WCHO (Washtenaw County Health Organization) that more or less foundered under some administrative challenges. (The actual patient contact was through County employees, in CSTS [Community Support and Treatment Services], under contract with the WCHO). Meanwhile, the State of Michigan has been cutting funding for community mental health services. In 2016, the Board of Commissioners reached an agreement with the unionized employees of the newly formed Community Mental Health (CMH) by providing some bridge funding from the general fund reserves. But the money problems continue. As a recent report in the Ann Arbor News notes, the opioid crisis has magnified the problem. But what doesn’t help is that the State of Michigan is proposing to turn mental health services over to private enterprise, and limit it to Medicaid recipients.

So here is where we are. We have a number of desperately mentally ill people in our county (many of them in urban areas and some of the same people who populate our homeless shelters). It is the County’s responsibility to take care of their needs, if anyone will. Who else is there?

‘Home is the place where, when you have to go there,

They have to take you in.’

(Robert Frost, “Death of a Hired Man”)

But as the need grows, the money available shrinks. Thus, the desperate move to try to persuade countywide voters to vote for a millage in these tax-averse times.

Enter the Sheriff

An additional item on the proposed millage would provide money to the Sheriff’s Department for deputy service. This might seem odd. We’re talking about mental health, and suddenly you want to pay for more police? But as the well-respected Sheriff Jerry Clayton made clear to the Commissioners, county deputies are an essential part of the mental health response system. Who do you call if someone is “acting out” or seems to have suffered some sort of catastrophic collapse? You call 911. The dispatchers are likely to send a deputy (or Ann Arbor or other police) if any kind of violence is indicated. But, as Clayton persuasively made the case, the current system of paying for those deputies is not working very well now. It relies partly on County general funds (also limited) and on local government funds (for deputies under contract). Everyone is short. Thus, the County Administrator, Gregory Dill, said in a recent memo (as quoted by the Ann Arbor News)

Moving forward, it is apparent to all stakeholders (Sheriff’s Office, county administration, and contracting partners) that the current financial architecture is not sustainable beyond the proposed contractual agreement through 2021.

The matter of paying for the Sheriff’s deputies has a troubled recent history. I reviewed it in this post from 2013, which is now out of date. There has been some softening around the edges since Clayton took charge. But basically, the outsize need for deputies in Ypsilanti Township (who use these deputies as their police force) has unbalanced that budget. Deputies in general are supposed to respond to calls where needed, but we can’t expect Ypsilanti Township to pay for mental health issues throughout the urban area of the county. Yet, cities such as Ann Arbor (who have their own police forces) pay for the Sheriff’s services through the County general tax millage, and thus are subsidizing Ypsilanti Township. This has caused a conflict in the past. Doubtless, this was what Commissioner Conan Smith was thinking with his comment at an April 21 BOC meeting, as reported by the Ann Arbor News.

Commissioner Conan Smith, D-Ann Arbor, suggested Thursday night there could be fairness issues raised with a countywide tax for public safety, as some urban communities with their own police departments might feel it would disproportionately benefit other communities in the county.

Smith did, however, follow this with another reflection.

Though, Smith said, if it is a countywide tax to support both public safety and mental health, then maybe it would balance out, as the mental health services might be largely going to people in urban communities.

A Calculated Millage Proposal

It seems likely that it was those regional equity calculations that led the BOC (at their Ways & Means meeting of June 7, 2017) to approve (tentatively) a draft ballot language that granted Ann Arbor a piece of the revenue from a mental health funding issue.

Sign displayed on roads in Ann Arbor reconstructed or repaired using the Washtenaw County road millage

They had a model to follow. The voters of Washtenaw County enthusiastically endorsed a millage intended to fix county roads on November 8, 2016. This in spite of the fact that roads also have a rural/urban split in taxation. Rural areas (including villages) of Washtenaw County are serviced by the Washtenaw County Road Commission (WCRC). That funding comes directly from the State of Michigan. Cities like Ann Arbor also receive state funding, but on a different line item, and are responsible for their own road work. So how to pass a millage to fix roads across the county without running into the problem of Ann Arbor paying for roads in Lima Township? Here is the ballot language adopted:

Shall the limitation on the amount of taxes which may be imposed each year for all purposes on real and tangible personal property in Washtenaw County, Michigan be increased as provided in Section 6, Article IX of the Michigan Constitution and the Board of Commissioners of the County be authorized to levy a tax not to exceed one half of one mill ($0.50 per $1,000 of state taxable valuation) for a period of four (4) years, beginning with the December 1, 2016 tax levy (which will generate estimated revenues of $7,302,408 in the first year), to provide funding to the Washtenaw County Road Commission, Washtenaw County Parks and Recreation Commission, and the various cities, villages, and townships of Washtenaw County to maintain, construct, resurface, reconstruct, or preserve roads, bike lanes, streets, and paths in Washtenaw County?

So, as explained on the WCRC web page, those taxes collected from cities were passed along to the city in question for repair of roads in their own jurisdiction. But the County kept a leash on those funds. Notice the wording in the ballot language? “provide funding…various cities…to maintain, construct, resurface (etc.). In other words, the taxes collected were clearly going to go to roads. Further, every road in Ann Arbor that is reconstructed using these County taxes has a sign letting us know that our “taxes are at work”.

Here is the actual text of the language in the tentative mental health item.

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 ten years, 2018 through 2027 inclusive, which shall raise in the first year an estimated $15,433,608.00 which shall be used as follows: 37% of the total millage shall be allocated to the Washtenaw County Community Mental Health Department (whether constituted as an agency or an authority) to be used for mental health crisis, stabilization and prevention efforts and to prevent unnecessary incarceration of individuals with mental health needs; 38% of the total millage shall be allocated to the Washtenaw County Sheriff to ensure continued operations and greater cooperation with the mental health community; and 25% of the total millage shall be allocated to those jurisdictions within the County which maintain their own police force (Ann Arbor, Chelsea, Milan, Saline, Ypsilanti, Pittsfield Township and Northfield Township) at a rate proportionate to their respective taxable values?

There is a major error here. Notice: the first two items say specifically that mental health is the point of the levy. But the last item simply allocates a portion of the millage to several local jurisdictions, including Ann Arbor, without a specified use. It appears on the face of it that this allocation is being made with no strings attached. It must have been this wording that caused City Councilmembers who have an election looming to race to pick up the goodies like kids at a parade. The effect is to ask County voters to approve a tax on their property that will partly be translated into a free gift – or, as the Taylor group are wont to call it, a “rebate”- to Ann Arbor and other cities. But this does not advance a solution to the need, which is mental health funding. Clearly, the BOC needs to repair this language before final approval.

So some will say (and have said): Why is this bad? Why can’t Ann Arbor use the money as they see fit? Several reasons.

By rushing this declaration, there has been no time or opportunity to review priorities for the City. We all like pedestrian safety and affordable housing and decry global warming. But most budgetary decisions are made with some definite plans specified for how the money will be used. That is the job of the City Administrator. Then the Council gets to debate those uses of the money vs. others. In this case, there is, for example, no actual plan to advance affordable housing, unless it is simply thrown into the huge deficit created by the Housing Commission’s ambitious plans. (This will not help everyone’s wish for affordable workforce housing, a.k.a. lower rents for young professionals.) Would it simply go into an account to be drawn on later for unknown projects?
There is a question whether the County can legally ask voters to approve taxes for unspecified purposes. There are laws and rules regulating ballot language, and they are pretty strict. You can’t say “give me money for roads” and then spend the cash on fixing up your IT system. Just specifying that money will go to various jurisdictions is not likely enough.
There are state law limitations on general fund appropriations, with caps on what local governments can assess in a “general ad valorem property tax” (yes, it’s complicated). This has been raised as a possible obstacle by a couple of local lawyers, including CM Jack Eaton, who asked this question of the City Administrator during the Council meeting of July 3. “Does the transfer of this county tax from tax levies on Ann Arbor residents with the subsequent pass through to the City have the effect of exceeding the City Charter limit on millage assessed for general government purposes?” ( The answer was that not enough was known about the County measure yet.)

Most of all, this action by the City Council and the unanswered questions it leaves is likely to be destructive to the success of the millage proposal itself. Will the voters of Ann Arbor approve it? It is so fuzzy that it would be difficult to explain. Measures that are too complicated and too poorly explained have a bad history at the ballot box.

But why should the voters in the rest of the County, especially outside the urban area (where neither the mental health services nor the expanded Sheriff’s deputy coverage are locally urgent) – when they are also told that Ann Arbor is going to cream off a substantial fraction of the proceeds for its own purposes, none of which are likely to sound very relevant to those “out-county” voters? After all, the residents of those small western townships and villages are already subsidizing Ypsilanti Township’s deputies and the County mental health services, though they likely use very little of them. The urban area (especially Ann Arbor and Ypsilanti City and Township) probably is home to most patients with the CMH. We’d hope that the voters outside the urban area would support needed mental health services county-wide. But why would they vote to send Ann Arbor a check?

A Possible Resolution

What I’d like to see the BOC do is to separate the public safety piece and the mental health piece into two separate millages. Each of them could be a smaller amount since the 25% designated as a giveaway could be left out. This will perhaps make the Sheriff’s needs somewhat more vulnerable, but with a persuasive, well-defined use spelled out for the extra money, I would hope that we would all vote for it.

It seems likely that this will be addressed on July 12. I hope that our County Commissioners will fix this. It is important.

UPDATE: Commissioner Conan Smith kindly sent along a memo (Smith memo 06072017) that he had written to the BOC for the discussion on June 7 about the millage ballot item. It has many recommendations for process, including this:

General Distribution
I believe the distribution should be articulated by policy so that agencies and partners have a reasonable expectation about funding and the Board of Commissioners maintains control of the funds. My preference is that this be described in broad strokes as follows:

37% to the Washtenaw County Community Health
40% to the Washtenaw County Sheriff’s Office
23% to Community Safety Net Grants

And the “Community Safety Net Grants” are defined in this way:

Community Safety Net Grants

Annually available by formula to communities that currently provide their own police subject to the objectives and criteria established by the Board of Commissioners (similar to JAG program funding)
Restricted to public safety and mental health activities
Requiring a “maintenance of effort” from local units to ensure our funds are enhancing, not replacing, locally generated revenue.

Now that makes sense. I’d like to know who persuaded a majority of the BOC to make the last portion of the millage into a free gift to the City of Ann Arbor. (Felicia Brabec was not present.) It is hard not to suspect some political dealing. I hope Cm Smith will give it another try.

SECOND UPDATE: Some of the mystery as to the urgent need for cash that evidently precipitated this move can be gleaned from Environmental Commission minutes. A request was forwarded from the Energy Commission to support their solar program.

Resolved, The Environmental Commission recommends that the City Administrator direct appropriate City staff to work with the Environmental Commission and Energy Commission on identifying potential alternative revenue sources that would generate $1-3 million dollars per year to support community energy and climate programs by August 1st, 2017 for presentation to City Council, and that the Solid Waste Fund support one half of one of these positions for work to improve waste diversion in multi-family rental housing and to expand organics collection;

This is from April minutes but the action date for Council is shown as 7/3/2017, which is when the resolution to take money from a county millage apparently looked like a good Hail Mary pass.

THIRD UPDATE: It appears that Conan Smith was simply playing me with all that additional conversation. He was apparently the person who suggested the dodge in the first place. Unfortunately, the BOC approved the language as stated, including the “rebates” to local units. According to Mary Morgan of CivCity , the vote was 5/4 in favor, with “out-county” commissioners voting against it.

FOURTH UPDATE: Here is the Ann Arbor News report on the BOC vote and the revised millage issue.

FIFTH UPDATE: Here is the Final language – County mental health and public safety millage.

SIXTH UPDATE: The Ann Arbor News has an article on how the tax rebate would be spent.

SEVENTH UPDATE: Several citizens spoke at the August 2, 2017 Ways & Means meeting regarding the millage. The minutes do not indicate the substance of their remarks. Minutes indicate that Cmr. Alicia Ping stated she would consult the Attorney General about the language of the ballot proposal.

EIGHTH UPDATE: The September 6 Ways & Means agenda includes an ordinance to designate the spending of the millage money coming to the County. Too bad they can’t designate the monies in the rebate.

CONCLUDING UPDATE: The measure was well received on the November 7, 2017 ballot. As reported by the Ann Arbor News, it won by nearly a 2-1 margin.

ADDENDUM: Here is a good review of the funding issue for statewide administration of community mental health, from Bridge Magazine.

NOTE: There is a follow-on post on this subject. See When Can A Win be a Losing Proposition?

Categories: politics

Comments: 9 Comments