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Posted on Sun, May 16, 2010 : 6:41 a.m.

Transfer of DDA parking money to city fails the transparency test

By Guest Column

I didn’t disagree with the DDA’s decision to hand over $2 million to the city because I don’t think the DDA has an obligation to be a good financial partner with the city. I do, especially during difficult economic times. The DDA captures about $1.9 million annually from the city. In addition to the $2 million it just voted to give to the city, it already pays the city $1.6 million a year toward street maintenance and bond payments for the court/police facility.

051610_rene-greff2.jpg

Rene Greff: DDA is increasing rates and extending enforcement in order to generate revenue for the city of Ann Arbor’s general fund.

And in addition, anytime the city has asked, the DDA has agreed to fund initiatives like converting to LED downtown, installing solar panels at the Farmers' Market, purchasing the old Y so that the city could ensure that the low-income housing stay in the downtown (even though once it was purchased the City decided that was no longer a priority).

The only thing we ever said no to was free parking for Google - because we thought it was unfair to all of the small and local businesses and employees in the downtown who have to pay for their parking and would have to pay even more to subsidize Google. The DDA created and funded the getDowntown program to try and increase the use of alternative transportation. It fought hard for street improvements on 5th and Division that would provide for the installation of bike lanes. It pays for the holiday lights, provides funds for the annual spring clean-up downtown, pushed for and paid for pedestrian recycling receptacles, and wayfinding, provided grants to assist Avalon Housing in purchasing homes and apartments to increase the stock of affordable housing in and near downtown, and provided further grants to help retrofit them to improve energy efficiency. The DDA has worked hard to reflect and uphold the values of our community. It pays a living wage to parking employees, adopted its own 1% for the arts to generate funds to assist struggling arts organizations downtown, has a green energy grant program that provides energy audits and assists businesses and non-profits with green energy improvements. The DDA is not stealing from the taxpayers, it is serving them.

And if we decide we don't need a DDA then it should be dissolved. But as long as the DDA is collecting from the taxing authorities based on the plan they all approved, then the DDA board should be spending their money the way they said they would. And if the DDA is going to offer rebates to the taxing authorities, it should do so proportionately to all of them, not selectively to the one who has the most votes at the DDA board table. But since the $2 million is coming from the parking fund, we're really talking about parking dollars and not tax dollars.

Core municipal parking management principles adopted by the DDA and supported by nationally recognized best practices are:

1) That parking should pay for itself and not be subsidized by tax dollars.

2) That parking revenues should be reinvested in the system.

3) That rates should be set strategically to achieve certain goals (like getting long-term parkers off the street and into the structures, increasing the use of alternative transportation, making parking convenient for people running errands or using city services, etc. Our parking system was once on the verge of collapse because the city violated these core principles and did not make the necessary re-investments into the system. That was why the DDA took over management of the system - to take politics out of parking management decisions and ensure the system's sustainability.

My fear about taking money from parking and moving it to the general fund is that we will no longer be running a financially sustainable parking system - which I think is bad for downtown and everyone in the community that uses the downtown. I have said all along that the community might very well decide that we are willing to spend more on parking to generate money for the general fund if asked the question. But I want that debate to happen out in the open. I would like the City and DDA to say, "If you will accept a 50 cent an hour increase in parking rates, there will be no layoffs this year." That way we know what we're paying for.

I think it is important for people to know that the DDA is increasing rates and extending enforcement in order to generate revenue for the city of Ann Arbor’s general fund. And if we had not stood up and objected to this process, no one would have known because the council members and DDA members involved in the closed-door negotiations didn't want people to know. I think everyone who pays taxes in the county or pays to park in the downtown should have the right to know why decisions are being made and what the potential pros and cons are so that they can come to their own conclusions and have the opportunity to voice their opinions before a vote is taken - rather than waste their breath after the fact as is too often the case. My problem is not in giving money to the city, it is the lack of an open, honest, and transparent process and debate.

Rene Greff is the owner of Arbor Brewing Company in downtown Ann Arbor and the Corner Brewery in Ypsilanti. She is a former member of the Ann Arbor Downtown Development Authority.

Comments

Vivienne Armentrout

Wed, May 19, 2010 : 8:13 a.m.

Steve, thanks for pointing to the Chronicle article. I'm glad to see the Bolt decision getting some discussion. Quoting from that article (which summarized from the Michigan Municipal League), the criteria are: 1. a user fee must serve a regulatory purpose rather than a revenue-raising purpose; 2. a user fee must be proportionate to the necessary costs of the service; and 3. a user fee must be voluntary property owners must be able to refuse or limit their use of the commodity or service. I think that the only reason "property owners" are mentioned here is that the Bolt decision referred to stormwater fees that were imposed on property owners. I doubt that this decision would refer to property ownership if used in argument against fees that are not levied only against property owners. For example, though I'm not sure that the Bolt decision was cited, Ann Arbor lost a lawsuit brought by contractors that said its permit fees were in excess of the necessary costs of the the service. Note numbers 1 & 2, with regard to parking fees: 1. A regulatory rather than a revenue-raising purpose: Originally cities, presumably including Ann Arbor, put in parking meters to keep downtown parking more available, so that people didn't hog those parking spaces. The DDA has also used parking fees to encourage parking in structures rather than on-street. But if we are frankly raising rates *only* to increase revenue, it might be challenged. 2. Proportionate to costs of providing service: increases could be justified if the cost of maintaining and administering the entire system were factored in to the parking rate. But by simply skimming a large sum from the parking system and passing it to the city's general fund, one could argue that this requirement has been bypassed. (My original point.) Finally, 3. Voluntary nature - it is true that we may all avoid parking fees by simply not parking downtown. This could be by using nonmotorized or mass transit - or by simply staying away. I think that is what Ms. Greff may be concerned about, in her role as an owner of a downtown business.

Steve Bean

Tue, May 18, 2010 : 11:32 a.m.

Vivienne, Dave Askins posted a piece yesterday on annarborchronicle.com that included the criteria that the court in the Bolt case established to distinguish a user fee from a tax. The third one refers to property owners, which is what I had in mind when I asked about whether parking is a public service in the sense that the Bolt decision would apply. The language of the criteria isn't very clear, which could be seen as leeway for these sorts of decisions.

Mick52

Mon, May 17, 2010 : 2:59 p.m.

Parking should be free. Parking is a right like "health care is a right" (Debbie Stabenow). Ann Arbor life deluded me. I went to Vegas and parked in this huge parking structure. Biggest structure I ever saw. When I drove out, I could not for the life of me find the booth to pay. It was horrible. Free parking, a miracle. DDA money is for downtown development, not bailing the city out.

Dalouie

Mon, May 17, 2010 : 1:36 p.m.

Jon: I thought I explained that. The city lost a parking structure, it had to be torn down, it was very old. They lost 200 street spaces over the last 6-7 years, they could lose a big surface lot they don't own soon and with it another 200 spaces. Seems like a good idea to be ahead of the curve if you want businesses to move downtown. I also noted that Townies can usually find a space but also that the numbers show most of the structures just about fill up every day. The one on Maynard does fill up. Why not build a new parking structure if no property tax money is involved? Why not let the people paying to park pay for it? Why not support a vibrant and lively downtown? Something else to consider, do you think Briarwood has a huge parking lot because it fills up every day? It doesn't. Or maybe they want to be able to capture the peaks?

Jon Saalberg

Mon, May 17, 2010 : 11:36 a.m.

@Dalouie: Maybe you've had trouble parking, but I've lived in Ann Arbor most of my life, and have never (really) had a problem finding a place to park. It might be in the garage by First and Miller, but there are spaces to be found all the time - it's just people are too lazy to walk a few blocks to get downtown from the First street structure. Also, with the digital counters on the garages, it's easy to note that all the garages are NEVER filled at one time, and I've only seen the "FULL" measure on the Fourth Street structure.Why do we need another 600+ spaces downtown? Was there clamoring from the Ann Arbor population or visitors to our fair city? I don't think so.

Vivienne Armentrout

Mon, May 17, 2010 : 7:07 a.m.

@Steve Bean, if parking isn't a public service, what is it? I would expect that it doesn't matter that some nonresidents use it. But I'm no lawyer.

Steve Hendel

Mon, May 17, 2010 : 5:34 a.m.

A big AMEN! Well-reasoned and to the point!!

Dalouie

Sun, May 16, 2010 : 9:25 p.m.

Do some of you live somewhere else or you just don't get it? The worst collapse in government funding since 1930 is destroying the budgets of Michigan cities. Cities are looking anywhere and everywhere for more revenue. Big cuts in revenue sharing combined with falling property tax receipts are crippling cities. Cities across Michigan are raising taxes or if the voters say no, laying off large percentages of staff. Ann Arbor has been doing way better than most and seems to have solved the worst of it for yet another year. So what if they used parking money? In some cities they take it all. Greff lives in Ypsilanti:

Steve Bean

Sun, May 16, 2010 : 4:22 p.m.

Vivienne, do you think that Bolt still applies in a case where some users of the parking system are not residents of the city (that is, they're not taxpayers within the local jurisdiction), or is that irrelevant? Another way of asking it might be, is parking a public service?

Vivienne Armentrout

Sun, May 16, 2010 : 12:14 p.m.

Well stated. The one point hinted at but not stated is that originally parking was provided to support the use of downtown - to bring customers, help business, etc. At some point in the last few years we have shifted to parking as a revenue source. This might be defensible in principle but undercuts the original purpose of providing parking downtown. The use of ever-increasing parking fees as a revenue source is also a masked tax. If the cost of parking to the consumer is greater than the cost of providing the service, and the difference is directed to the city's general fund, this practice may be unconstitutional. The Bolt decision by the Supreme Court indicated that when fees are not commensurate to the cost of providing a public service, it is a tax, not a fee, thus should be subject to a vote of the people in order to obey the Headlee amendment to the Michigan Constitution.

Dalouie

Sun, May 16, 2010 : 8:56 a.m.

I disagree, the city absolutely needed the new parking garage. Besides, most of the revenue to pay for it comes from the garage itself. No garage, no revenue. The remaining revenue comes from the overall parking system. Not a penny of property tax money goes into it. The city had to tear down an 80 year old structure. They lost a couple of hundred street spaces, the big surface lot on Huron is set to be developed soon, the city does not own it. In the future the city surface lots can be developed. Try to park (during the UM school year) near the central business district during the day, good luck unless you are a townie who knows the spots. Try to park on a busy Friday or Saturday night. Unless you want all the companies to move out to the townships, we need more parking downtown!

Anon E Muss

Sun, May 16, 2010 : 8:52 a.m.

Didn't the DDA vote to effect the transfer at an open meeting? Didn't some DDA committee consider the issue the week before at an open meeting? Should we embed chips in DDA Board members to track their every thought and utterance? Post all their correspondence in real time to some blog? It's an old story, when you're unhappy with the result, complain about the process.

Jon Saalberg

Sun, May 16, 2010 : 8:08 a.m.

I appreciate Ms. Greff's coherent defense of an open, logical process, with regards to Ann Arbor's parking situations. However, any hope of reason went out the window when the parties involved went ahead with an unnecessary parking monstrosity on Fifth Avenue, and brought forward the idea of extending parking fees into the evening. I nearly cringe at future parking developments in our fair city. What's next? $2/hour meters? Immediate removal of parking violators' vehicles? Don't laugh. Who would have foreseen a multi-story underground parking garage when one wasn't needed?

Tim Darton

Sun, May 16, 2010 : 8:03 a.m.

This is silly. The city owns the parking meters and lots. The DDA has a contract with the city to manage the parking system. The contract was modified to send more of the money from parking to the city. This has happened in each of the last five years. The changes were discussed in a regular committee meeting covered by A2.com and in a meeting on television. The DDA voted to again modify the contract to send another $2 million to the city, they voted on television. The majority did the right thing. It's the peoples money!