Ann Arbor officials to DDA: Give up the money, or more police and firefighters will face layoffs
The Ann Arbor City Council decided Tuesday night to send a clear message to the Downtown Development Authority: Give in to the city's demands for a higher share of downtown parking revenues, or else more police officers and firefighters will face layoffs.
Following a long series of deliberations, the council voted 9-2 on a resolution to send three council members back to the negotiations table with the DDA. They're directed to request that the DDA transfer 18 percent of downtown parking revenues to the city over 10 years.
"I hope you've got some good armor when you go in there," said Council Member Sandi Smith, D-1st Ward, expressing concern that the proposal might not be well received.
The DDA and city have been negotiating toward a new parking agreement since last May. The two sides seem to have reached consensus on nearly all the terms, except the annual amount of funds to be transferred from the DDA to the city.
Ryan J. Stanton | AnnArbor.com
For the last several months, the three council members negotiating on the city's behalf — Christopher Taylor, Margie Teall and Carsten Hohnke — have asked that the DDA transfer 16 percent of revenues for the next two years and then 17.5 percent the following eight years. But the most the DDA has been willing to offer is a flat 16 percent.
Tuesday's discussion was punctuated by tensions between Council Member Marcia Higgins, D-4th Ward, and the three council members in negotiations. Higgins at one point suggested they go back and ask for as much as 19 percent, but the three seemed to think it unwise to ask for so much more money considering the DDA's previously stated position.
Smith joined Taylor in opposing the decision to ask for more money. Teall also expressed concerns but went along with the majority in the end.
A 16 percent transfer of parking revenues next year would be about $2.5 million, a drop from the $3 million the city now gets. An 18 percent transfer would be about $2.8 million.
City Administrator Roger Fraser has told the City Council that going along with the DDA's proposal would force the city to permanently cut an additional four employees in public safety by July 1, and two more positions the next year.
As it stands now, the city proposes cutting 25 positions from the police department and 12 from the fire department over the next two years. Mayor John Hieftje said it's in the DDA's interest to do whatever it can to help the city avoid making those kinds of deep cuts.
DDA Chairwoman Joan Lowenstein said the authority's goal in negotiating a new parking agreement is to provide a fair return to the city while maintaining the structural integrity of the parking system and using revenues for downtown infrastructure.
"I do not really understand why any shortfall in the public safety budget is laid on the shoulders of the DDA," she said in an e-mail. "The city has many sources of income and blaming layoffs on just the DDA parking agreement does not seem logical to me."
Lowenstein said the 16-percent figure the DDA has proposed reflects “shared sacrifice” and leaves the DDA with very little money for downtown improvements for the next couple of years. Still, she said the DDA has been willing to make that sacrifice.
However, city officials believe the DDA is grossly underestimating the amount of tax revenues it will collect from new downtown developments in the coming years, so it can afford to give more.
Part of the parking agreement would grant several new powers to the DDA, including the ability to increase parking rates and extend meter enforcement hours without council approval.
Council Member Stephen Kunselman, D-3rd Ward, said he doesn't think there's anyone in town who wants to see the DDA granted that kind of power.
Kunselman added he thinks the city needs money more than the DDA right now, and he noted the city controls the purse strings and approves the DDA's budget. He said the city has been treating the DDA too much like an equal partner, when the reality is that the city is the "parent" and the DDA is essentially a "set of teenagers" that need "tough love."
"We have given them the opportunity to run the economic development of the downtown and I'm fine with the DDA doing that, but it's a responsibility we've given them or allowed them to have," he said. "It's one we could easily take away."
Tom Crawford, the city's chief financial officer and soon-to-be interim administrator, reported at Tuesday's meeting the city could save more than $850,000 next year in the general fund if four unions — the police officers, the command officers, firefighters and AFSCME — agreed to concessions bringing their health care benefits in line with the nonunion packages.
He said that would save the jobs of four police officers, two firefighters, one command officer and one AFSCME employee in the general fund.
City Council Member Stephen Rapundalo, D-2nd Ward and chairman of the council's labor committee, asked city staff to share the information publicly. Rapundalo has been on the forefront in calling for concessions from the city's unions.
Rapundalo said recently released reports showing police employees were exposed to high radon levels inside city hall don't change his belief that officers need to make concessions on health care. He doesn't agree with the union that there's a link between health problems experienced by officers and the presence of radon, asbestos and mold in their offices.
Ryan J. Stanton covers government and politics for AnnArbor.com. Reach him at firstname.lastname@example.org or 734-623-2529. You also can follow him on Twitter or subscribe to AnnArbor.com's e-mail newsletters.