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Posted on Wed, Apr 20, 2011 : 5:59 a.m.

Ann Arbor officials to DDA: Give up the money, or more police and firefighters will face layoffs

By Ryan J. Stanton

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.


DDA Chairwoman Joan Lowenstein, center, talks with Council Members Margie Teall, left, and Sandi Smith, right, Tuesday night.

Ryan J. Stanton |

For the last several months, the three council members negotiating on the city's behalf — Christopher Taylor, Margie Teall and Carsten Hohnkehave 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 Reach him at or 734-623-2529. You also can follow him on Twitter or subscribe to's e-mail newsletters.



Thu, Apr 21, 2011 : 4:53 p.m.

Ann Arbor has created a monster in the DDA. That our elected leaders are "negotiating" for our citizen tax dollars is imbelievable. That Sandi Smith is making flippant comments while sitting on city council and being a member of the DDA is further proof that the DDA should not exist anymore. Let's get rid of it and keep our money in the control of ELECTED officials who need to answer to the electorate for their actions.


Thu, Apr 21, 2011 : 9:58 a.m.

Wow!!! I know this may seem like an attack but this is my honest to God opinion of what Ive been watching happen to our goverment here in A2. I am so absolutely disgusted with the city council, the mayor, and the CFO Tom Crawford. This is what we get for re-electing this JOKE of a city goverment. Got money for 2 NEW PRETTY buildings that cost 50+ million a piece? Sure :) ..............How about another 1.4 million for a stupid water fountain we dont need? SURE!!! Why not! What about police officers and fire fighters who lay down theyre lives to protect you and I? Nahhhhhhhh who needs to be safe (laugh my butt off!) We get what we deserve people. This is so sad I think Im going to move out of A2 and go where my tax dollars are respected and not wasted.


Wed, Apr 20, 2011 : 10:13 p.m.

there's probably more to this...if the contentiousness can't be resolved, get rid of the DDA. Downtown is overdeveloped anyway. The parking, navigating and general atmosphere is less desirable for Ann Arbor residents as time goes on.


Wed, Apr 20, 2011 : 10:10 p.m.

I would.

Somewhat Concerned

Wed, Apr 20, 2011 : 9:28 p.m.

What babies. Who would miss the fired police officers? Not the drunk, under-age students who wander into traffic right in front of cops who do nothing; not the aggressive panhandlers who follow you down the street or the crooks who break into cars with no fear of the police. Maybe Verizon Wireless when there are fewer officers riding around talking on their cell phones.


Wed, Apr 20, 2011 : 9:26 p.m.

This is ridiculous. As one of the commentators above said, ABOLISH the DDA! It has proved unworthy with its parking pit that nobody is going to want to park in and that is causing long-term, untold distress to local merchants and citizens, and now it seems that the DDA's power has corrupted it completely.


Wed, Apr 20, 2011 : 8:24 p.m.

This a bureacratic joke at its best. Create an organization to manage the financial and operations portion of the city that the city cannot properly run. Probably hired more people than necessary and is costing us more. Then complain when the organization doesn't give back as much revenue as the city wants. In the mean time when there is adequate space available to house the organization within space for which our taxes are already being used against, they choose to lease other space. Enough. I think there are plenty of private firms that could run the city at a much lower cost. I'm just about ready to say scrap the city council and mayor and hire a professional management company. All city employees can be employees of the company.


Wed, Apr 20, 2011 : 8:21 p.m.

How about cutting the City Council expenses? Or, maybe some of their other pet projects. Police, fire and infrastructure are primary at this time. The res of your spending is optional. Also, how about freezing raises for everyone, including teachers.

DaLast word

Wed, Apr 20, 2011 : 7:40 p.m.



Wed, Apr 20, 2011 : 7:26 p.m.

Whether or not you believe the DDA is vital, important or a white elephant --- that's immaterial. Once the City Council is successful getting the DDA to respond to their ultimatum of forking over the last bag of cash....they'll be coming for yours in the form a city income tax. This isn't about whether the DDA is necessary, it is about the City tapping the last source of money before they come after us. Why do they have to tap the DDA anyway? That's the real issue.


Wed, Apr 20, 2011 : 9:08 p.m.

Exactly my point Mr. Craig.

Craig Lounsbury

Wed, Apr 20, 2011 : 8:08 p.m.

the DDA's money comes from us too. Its all our money as citizens.


Wed, Apr 20, 2011 : 7:20 p.m.

I'm glad I do not live in Ann Arbor. I love Saline.


Wed, Apr 20, 2011 : 7:15 p.m.

If anyone is up to it, I would love to read a concise, non-partisan description of the benefit to Ann Arbor that the DDA provides. Their website doesn't really answer the question for me -- certainly, I'd have expected to see a mission statement or charter or something along those lines.


Wed, Apr 20, 2011 : 6:54 p.m.

Another example of our city services suffering in order to cover the unsustainable sweetheart deals negotiated by council and their minions. This is arrogant and deflects the real responsibility from the incompetent operatives that negotiated these deals - starting with former City Administrator Neil Berlin - lounging in Colorado on an "all expenses paid" retirement. To the latest example: Roger Fraser....who after a mere 9 years of service will receive 60% of his pay, healthcare for life and head on over to a new job paying $134,000 with MORE perks! Meanwhile, people are being laid off and the potholes and streets - the reason we pay our taxes - are not being fixed. How does this differ from the demise of Borders and the CEO's that rant that into the ground? Now this DDA ultimatum. The DDA funds were always intended for maintaining the vibrancy of downtown. That dies...and you can close shop! Watch out...they're coming for more money from citizens, too -- through the resurrection of the city income tax. How about re-evaluateing everything starting with that brand new shiny City Hall! Let's face it, the mismanagement, incompetence and greed of city officials ripping off taxpayers is no different than the mismanagement, incompetence and greed of CEO's ripping off shareholders. They look a lot alike!


Wed, Apr 20, 2011 : 8:22 p.m.


Edward R Murrow's Ghost

Wed, Apr 20, 2011 : 6:42 p.m.

I have a better idea: Dissolve the DDA. Good Night and Good Luck


Wed, Apr 20, 2011 : 11:19 p.m.

I'm not a fan of needless administration either. The big question is whether the DDA is needless or not. A nice journalism article by on the history of the DDA, its purpose, its accomplishments, its failures, its revenue and its spending would be very helpful to answer the question. How much money is actually needed to maintain the downtown infrastructure? On the other hand, I am growing very weary of the mantra of the council/city that the firefighters and police will need to be cut if .

Edward R Murrow's Ghost

Wed, Apr 20, 2011 : 9:11 p.m.

"And raise our property taxes, right?" Actually, disband the DDA and the taxes if "captures" from the ADL, WISD, AAPS, and WCC will go where the ought to have been going in the first place. Disband the DDA and the pile of TAXPAYER money it is sitting on will go to the city. Take a look at the DDA's books. Last time I checked, $20 million of taxpayer money in the bank. Welfare for businessmen. Good Night and Good Luck


Wed, Apr 20, 2011 : 8:23 p.m.

And raise our property taxes, right?

Alan Goldsmith

Wed, Apr 20, 2011 : 5:12 p.m.

"Hieftje stressed, though, that crime is on a downward trend in Ann Arbor and the number of serious fires is relatively low."


Thu, Apr 21, 2011 : 10:03 a.m.

yeah tell that to that kid that got stabbed at S state and monroe a week or so


Wed, Apr 20, 2011 : 5:06 p.m.

Miss Cleo just called, she is predicting a future "news" headline... "City Officials Blame DDA for next round of public safety layoffs". They no longer have Roger to take the heat for them, now they are gonna throw the DDA under the perverbial Fire Truck. Years of financial games and they simply change the shells/buckets that they use to make themselves and the University feel better.


Wed, Apr 20, 2011 : 4:20 p.m.

Abolish the DDA. They have taken the "Authority" part of their name too far. The DDA, City Council, Mayor, and the like all need to remember they represent the taxpaying citizens of Ann Arbor, not each other. Seems to me the aforementioned entities have forgotten this simple fact.

Vivienne Armentrout

Wed, Apr 20, 2011 : 4:15 p.m.

"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." The DDA has traditionally kept a firewall between its two funds. The TIF fund is property taxes from new development. The Parking fund is revenue from parking. Till recently, the parking revenue was plowed back into the parking utility, including the building of new structures. Now the firewall has been breached and TIF money is being used to pay for the Library Lot parking structure. The problem with mingling the two is that TIF taxes include those that would have been paid to WCC, AADL, and Washtenaw County. Those taxes are only supposed to be used to revitalize the downtown. They are not supposed to be transferred to the city for operating expenses. By pressing the DDA to spend TIF on parking expenses and then skimming off the revenue, the city is close to an improper use of these tax monies.


Wed, Apr 20, 2011 : 3:59 p.m.

sounds like AA will need to next on the EFM list, lol

Ethics Advocate

Wed, Apr 20, 2011 : 2:35 p.m.

If the dollar amount of parking revenues given to the City goes down even if the percentage goes up, then the forecast must be for total parking revenues to go down. If DDA's revenues are going to decrease, then why should their payments to the city have to increase?


Wed, Apr 20, 2011 : 2:30 p.m.

It's really sad to see the ignorance of city council in play. The "give us more money or we'll layoff" tactic was attempted when the Mayor asked for 3% and the FD gave a little more than that. What happened? They laid off anyway. Great negotiation strategy moving forward! Then the health care issue: "We're going to lay you off anyway. But unless you give us what we want, we'll lay more of you off." Now DDA: "Give us more money, or we're laying them off." Why do you think the groups in the city are at the point of thinking "no matter what we do, you're going to do whatever it is you want anyway" ? This is how they operate. They've proven not to hold up their end of deals And as for Rapundalo.... well, I don't want this getting deleted...


Wed, Apr 20, 2011 : 2:29 p.m.

Looking at the statute that controls the DDA, the city could (read should) dismantle the DDA. Then the city would capture all the tax revenue from downtown and the money from the parking structures. It appears that we could dissolve the dda and then after a public hearing (notice and comment) reinstate a dda with the terms the city wants. I would say after the dda put up the terrible signs downtown it had completed its purposes of wasting money Here is the governing statute. 125.1680 Dissolution of authority; disposition of property and assets; reinstatement of authority; contesting validity of proceedings, findings, and determinations. Sec. 30. (1) An authority that has completed the purposes for which it was organized shall be dissolved by ordinance of the governing body. The property and assets of the authority remaining after the satisfaction of the obligations of the authority belong to the municipality. <a href="" rel='nofollow'>;objectname=mcl-act-197-of-1975</a> I did not read the entire law

Peter Eckstein

Wed, Apr 20, 2011 : 2:18 p.m.

The answer is simple. Either abolish the DDA and let city government take over its responsibilities, or abolish City Council and let the DDA run the rest of the city. The latter would seem to be closer to present reality, but the former makes more sense. DDA has accomplished some good things, as well as some foolish ones, like the deep money pit that used to be the Library lot. But it is still living in the 20th century--onward and upward with unlimited sources of revenue--and Michigan in the 21st is a much more austere place. Consolidate and let elected officials allocate funds to their most important uses rather than having to squabble with an entity that their predecessors created but which they cannot control.


Wed, Apr 20, 2011 : 1:34 p.m.

I seem to remember the the DDA's also receiving funding from the taxes gathered to support the Intermediate School District as well as Washtenaw Community College. Is this incorrect?


Wed, Apr 20, 2011 : 1:16 p.m.

It sounds as if the city is being held hostage by the DDA which is not a healthy state of affairs for the city. Who is in charge here - the DDA or the City? It has never seemed the wisest course to have turned over so much of the city's business to a private entity - perhaps it is time to re-think this relationship which seems to have evolved into one of bullying and threatening. The city councel needs to take charge - that is what they are elected to do; the DDA is not the boss is it?

Top Cat

Wed, Apr 20, 2011 : 1 p.m.

Political theatre at its finest. They should stage this at the Purple Rose for all to see live.


Wed, Apr 20, 2011 : 12:57 p.m.

@bob: that is exactly right. the city spent the parking revenue freely on anything but maintainng the parking system. this is why the structure on washington and first was condemned and had to be torn down. the structure behind borders downton barely escaped condemnation. city council has already exhausted fees for several years in advance. part of the deal of receiving advanced funding was for beat cops back on duty downtown. the city promised this and then has since refused to follow through. instead there are more and more attempts at blackmail like this. essentially, city council is saying: give us more or you will have no police or firefighters. but, we will continue to spend wildly. city council has wasted more than enough taxpayers dollars already, it is time to say no. i support the dda to refuse the city demands. i would encourage the dda to seek legal action for enforcement if promises against the city.

Wolf's Bane

Wed, Apr 20, 2011 : 12:40 p.m.

This is such an obvious power play by DDA Chairwoman Joan Lowenstein, that I can hardly take it serious. It appears that many forget that she used to be a city council person prior to joining the DDA which seems to have offered her greener pastures. Now she wants more. Why doesn't the city simple dissolve and integrate parts of the DDA under its own control and be done with it? Why does the DDA need to remain an entirely separate and costly entity?

Bob Martel

Wed, Apr 20, 2011 : 12:30 p.m.

I don't understand the reason for this protracted painful negotiation. Doesn't City Council have final authority over the DDA in that they can dissolve it? Given where we are tax revenue and budget-wise in this City, it makes no sense to continue business as usual. I don't see downtown dissolving into nothingness if 16 - 19% of the tax revenues currently captured for DDA purposes are re-purposed to the General Fund until things turn around a bit.


Wed, Apr 20, 2011 : 12:30 p.m.

One of the reasons the DDA was origingally created was because the city SPENT all the parking revenue on general fund projects and didn't put any money into maintaining the parking structures. Does anyone remember the temporary metal spoles that helped support the parking decks on the Fourth &amp; Washington structure before it was rebuilt? The city is good at spending tomorrow's dollars of the reasons things like the pension funds &amp; payroll liabilities are underfunded.

John of Saline

Wed, Apr 20, 2011 : 9:27 p.m.

I remember the wooden poles supporting the structure on S. Forest for years. Remember that? They'd slowly compress over time, splintering. THAT was reassuring.....

Bob Martel

Wed, Apr 20, 2011 : 12:35 p.m.

I agree that the City's record of maintaining parking structures in downtown is not all that stellar and that the DDA has done a MUCH better job at this. However, these are difficult times and we risk even greater downside to this City if Fire &amp; Police and other essential services are allowed to deteriorate too far. Surely a three to five year plan to re-purpose more DDA-diverted funds to the General Fund can be accomplished without destroying what has been built downtown?

Craig Lounsbury

Wed, Apr 20, 2011 : 12:26 p.m.

Nothing makes my day like reading about two layers of quasi-governmental bureaucracy arguing over money they &quot;captured&quot; from the citizens of Ann Arbor. Lets not forget even the money the DDA &quot;captures&quot; from parking fees they capture from our parking lots and parking structures.


Wed, Apr 20, 2011 : 11:39 a.m.

Hey thats the same threat they use to get more money out of us tax payers.


Wed, Apr 20, 2011 : 1:47 p.m.

It's the same threat they use to get more money out of us firefighters too!


Wed, Apr 20, 2011 : 10:57 a.m.

How about, &quot;Give us the funds or we'll negotiate a cheaper deal with next administrator&quot; ? Or &quot;Give us the funds or we'll cut back on all the committes&quot; ? Or &quot;Give us the funds or we'll eliminate the self-imposed 'buckets' (like art) and spend our money wisely&quot;? Or &quot;Give us the funds or we'll cut back on administrative staff&quot;? Or &quot;Give us the funds or we won't start any more unneccesary building projects during the crisis&quot;? Or &quot;Give us the funds or we'll cut the pay for mayor and Council&quot;? I guess they just don't have the same blackmailish effect, do they.?


Wed, Apr 20, 2011 : 4:22 p.m.

OR &quot;Give us the funds or we will disband the DDA!&quot;


Wed, Apr 20, 2011 : 10:46 a.m.

1- Am I missing something here. When did DDA become the keeper of all the parking funds that initially used to go to the city? 2-Extortion -- give us what we want or 4 more firefighters will be laid off? When there are no more firefighters to protect the city, yes indeed then DDA may need all of the funds to try to rebuild, should God forbid something like a fire happen to occur downtown. As for city hall, if you can afford the huge payout for the city administrator who is retiring after a short period with the city, I think you could find funds to support our men and women in blue both AAFD and AAPD.