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Posted on Wed, May 5, 2010 : 6:08 p.m.

Tempers flare as DDA votes to hand over $2 million to Ann Arbor with no strings attached

By Ryan J. Stanton

Mayor_John_Hieftje_May_2010_4.jpg

Mayor John Hieftje was accused of having a conflict of interest today, along with City Council Member Sandi Smith, because they both earn paychecks from the city and were voting on a $2 million transfer of DDA funds to the city. The DDA's attorney decided both Hieftje and Smith, who are DDA board members, could vote on the issue.

Ryan J. Stanton | AnnArbor.com

Tempers flared and accusations flew during a two-hour debate today at a meeting of the Ann Arbor Downtown Development Authority.

By a 7-4 vote, the DDA's governing board agreed to transfer $2 million in parking revenue to the city of Ann Arbor. The money, which the DDA is under no obligation to provide, will help the city plug a hole in its 2010-11 budget and retain the jobs of several police officers and firefighters.

The DDA is making the transfer in good faith that a mutually beneficial parking agreement between the city and DDA will be worked out later this year.

The DDA has been providing the city $2 million a year for the last five years under a $10 million, 10-year parking agreement that expires in 2015. The city tapped out the full monetary worth of that agreement five years early and is seeking new terms to continue payments.

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DDA board member Jennifer Hall decried the $2 million transfer of parking revenue to the city's general fund today.

Ryan J. Stanton | AnnArbor.com

Members of the public and even some DDA board members came forward today to decry the fact that the money comes with no strings attached.

"Responsible boards are careful about setting precedent," said Arbor Brewing Co. owner Rene Greff, a former DDA board member. "And yet you stand poised to hand over $2 million of DDA funds to the city with no expectation or guarantee of getting any value in return. The mission of the DDA is to spend public dollars to spark private reinvestment. This resolution clearly will not serve that mission and supporting it violates your fiduciary duty."

The Main Street Area Association and the Ann Arbor Area Chamber of Commerce also took stances against the $2 million transfer.

DDA board member Jennifer Hall was the most outspoken, offering up a six-minute prepared speech in which she chastised DDA board members and Ann Arbor City Council members who worked out the framework for the $2 million transfer behind closed doors during the last year. Hall said the meetings of the working group should have been open to the public, but even some DDA board members were kept away from sitting in on the discussions.

"I don't support this type of conduct," Hall said. "I find it sneaky, and underhanded, and corrupt, and possibly illegal, and in violation of the public trust in our government. Obviously not everyone is in agreement with me on this or things would have happened in a different way. But at the very least you should be able to understand why I'm so angry today."

Three board members joined Hall in voting against the $2 million payment: Newcombe Clark, Gary Boren and Keith Orr. John Mouat was absent.

DDA members who supported the transfer included Russ Collins, Leah Gunn, Roger Hewitt, Mayor John Hieftje, Joan Lowenstein, John Splitt, and City Council Member Sandi Smith.

Orr proposed an alternative in which the DDA would provide the city $1 million on July 1, and then another $1 million on Jan. 1 if an agreement was reached by then.

"I've been heartened to hear that discussions are frank and fruitful and that certain general areas of agreement have been reached," Orr said. "However, what we have before us is not an agreement. In my business, if I were to present this to my attorney for review, he would advise me not to sign. Not because it is a bad agreement, but simply because it is not an agreement at all."

A majority of board members voted down Orr's proposal. After much debate, they ultimately supported the full $2 million transfer to the city.

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Rene Greff, owner of Arbor Brewing Co. and a former DDA board member, criticized the DDA today for its actions.

Ryan J. Stanton | AnnArbor.com

At multiple points during today's meeting, Hall accused Mayor Hieftje and Council Member Smith of having conflicts of interest. She said because they both earn paychecks from the city, they stand to gain directly from the $2 million transfer and should not be allowed to vote on the issue.

Jerry Lax, the DDA's attorney, decided both Hieftje and Smith could vote on the issue. Lax said state law provides exemptions from normal conflict-of-interest rules when dealing with contracts between two public entities such as the city and the DDA.

Had Smith and Hieftje not been allowed to vote on the $2 million transfer, it would have fallen short of the six votes required for approval.

Smith said she and others who have been working on the mutually beneficial agreement between the city and DDA feel enough progress has been made to make the $2 million transfer now on good faith until a full agreement is in place later this year. She said there are several agreed-upon talking points for those negotiations, such as a shift in parking enforcement oversight from the city to the DDA.

"The one thing that I really wanted to have is the dialogue that the enforcement belongs here with the DDA, and it has taken a year and a half to have city staff recognize and be willing to have that dialogue," Smith said. "And it's something that I've never given up on — to have that particular piece be a part of this and be in writing and be at the table. And because I feel that we have gotten to this point and now are in a position to have meaningful dialogue ... I am willing to support this."

Hall still disagreed.

"Giving $2 million for nothing in return violates the DDAʼs mission and our responsibility to the downtown," she said. "Our mission is to undertake public improvements that have the greatest impact in strengthening the downtown area and attracting new private investments. There is nothing at all in this proposal today that even remotely relates to this mission. What we have in front of us today ... is essentially a transfer of $2 million from the DDA to the city for no reason."

Terms of the $2 Million

According to the resolution approved today, "Representatives of City Council and DDA have held informal discussions in an unprecedented spirit of cooperation and have outlined some preliminary terms as a basis for future agreement." The resolution authorizes providing the city with $2 million in fiscal year 2010-11 with the following expectations:

  • The DDA and city representatives who have developed the preliminary terms will continue to meet at least once a month to complete work on an agreement that will go to the DDA and City Council for approval, and those meetings will be open to the public.
  • The DDA and city representatives will aim to conclude their work by Oct. 31, but no later than the end of the fiscal year 2010-11.
  • The DDA will provide the city with $2 million by providing half on July 1 and the second half no later than Jan. 1, 2011.

Hewitt said the working group has made an earnest and honest effort to come up with a structure that could serve both the city and the DDA going into the future. He said he's confident there will be a fair and equitable agreement reached.

Hewitt denied Hall's accusations that any meetings have violated the state's Open Meetings Act. He said they weren't technically public meetings.

"I'm not going to get into a name-calling situation," he said. "If that's what she feels, I'm sorry she feels that way and, I'm sorry, those accusations are not justified."

AnnArbor.com was denied entry to a meeting of the working group held last month in City Administrator Roger Fraser's office inside city hall.

The group included Boren, Collins and Hewitt from the DDA, and Council Members Carsten Hohnke, Christopher Taylor, and Margie Teall. Smith doubled as a council member and DDA member.

Hewitt said that was the only meeting he's aware of where anyone was turned away. He said officials felt that meeting needed to be conducted in private because they were discussing sensitive personnel issues involving the transfer of parking enforcement duties.

Hewitt said any other DDA members outside of the working group could have attended that meeting if they wanted. He also said meetings of the mutually beneficial committee that has met several times in the last six months are open to anyone who wishes to attend — though some complain they haven't been publicly posted.

Framework for Discussions

The working group of select City Council members and DDA board members has agreed to the following plan for future negotiations of a mutually beneficial agreement.

  • The DDA would continue to pay the city $2 million a year.
  • The DDA would be responsible for all the public parking management and policies within the city, though certain policy decisions still would go through City Council.
  • The DDA would take over parking enforcement that is now currently a city function. The DDA also would take over community standards enforcement within the DDA area, which is now a city function.
  • The DDA would be responsible for certain city services that are now done by the city within the DDA area.
  • The DDA would become the engine for the implementation of development of city-owned surface parking lots within the DDA area.

Hall, whose term on the DDA ends in July, said she would not be surprised if Hieftje refused to reappoint her after today. But she said it was important enough to publicly address what she considers a lack of open discourse leading up to the $2 million agreement.

She ran through a timeline of events, starting with a January 2009 resolution brought forward at City Council to begin discussions. A DDA resolution two months later established a committee. At every meeting since, Hall said, the DDA has had a standing committee report on its monthly agenda, but few details have been forthcoming.

"Since council has seated their committee, we have heard reports from Sandi Smith to the effect of 'the committee has not met' and 'there is nothing to report,'" Hall said. "Once she stated the committee had asked staff some questions and was awaiting answers. And then, boom, last Wednesday there's all of a sudden a very detailed discussion about what it is that we're giving $2 million for."

Hall said she has a hard time trusting that some future agreement can be worked out when the city already has the DDA's money in hand. "We've reduced our own programs, and here we are today, ready to sacrifice our future again to give the city $2 million to plug a hole in its budget," she said.

Hieftje, who was not part of the working group, said the framework for continued discussions between the city and DDA "has a lot of promise." For that reason, he said it made sense to go forward with the $2 million transfer now so the city can include it in its budget forecast.

In the worst economic downturn in 80 years, Hieftje said the DDA — which he considers an arm of the city — should be expected to step up to help the city with its budget shortfalls.

Kyle Mazurek, the chamber's vice president of government affairs, said the DDA is only enabling the city to delay tough budgetary decisions. He argued consequences of the $2 million transfer will be increased parking rates and proposals akin to increasing parking meter enforcement.

"A $2 million transfer tied to nothing is irresponsible," said Maura Thomson, executive director of the Main Street Area Association. "If the DDA is in the business of bailouts, then that should be openly stated in the DDA's mission."

Ryan J. Stanton covers government for AnnArbor.com. Reach him at ryanstanton@annarbor.com or 734-623-2529.

Comments

John Q

Wed, May 12, 2010 : 7 p.m.

"what you are seeing here is the collision between bad law and crass opportunism, writ large." The state legislators are well aware of these kinds of situations in DDAs across the state and have taken no action to change the law to stop them.

Jeff

Mon, May 10, 2010 : 12:20 a.m.

This is another artifact of unbridled abuses of DDA's in relation to their original, statutory purpose. "Old" DDA's do not require the authorization of the County, Community College, Library, or any of the other taxing jursdictions for their continued spending, or tax capture. Originally meant to help restore the vitality of aging downtowns, they allowed the drawing of a boundary for proposed development; the the INCREASE in property values' taxes would be recirculated as into the DDA as an 'investment' in a faltering area, to add to its success. What has happened now, is that they have been so SUCESSFUL that the DDA and the City are now arguing over the embarrassment of reiches they have created, both as a consequence of normal inflationary growth over the period since it was established, and also the legitimate successes they have created and we now enjoy, in a thriving business climate downtown. What they should actually do is disband, or to reset actual development goals which will produce even more development/restoration. Instead, they have realized the "cash cow" they have going over at their sister governments, is too good to be true. They now have income coming in from an unelected, quasi-governmental body, the purpose of which goes back over twenty years. They keep reinventing new spending options, eg. cops on bicycles, etc., so that they can keep spending the "easy money" taken off of county and other taxpayers. Clever? Maybe. Wrong? DEFINITIELY!! The dilemma which is created is that the revenue "captured" in the DDA is also THEIR OWN. Solution?? Find a way to give the money back, in kind or in this instance, boldly, IN CASH. This way, they still get to collect their own taxes from the district, but leave the County and WCC, and others on the hook for what are, in effect, city taxes. This contravenes the DDA's statutes, which state that DDA fund's are meant for "economic development purposes" and is probably a violation of the law; certainly its spirit. But, since, like most legislation, its authors never dreamed about how cleverly it could be abused, they are not explicit on this score. Essentially, the too-clever people in Ann Arbor, have figured out how to be Conscientious Objecters in their own DDA. If the City has money left in its DDA fund, if it is NOT directed to Downtown Development investments and projects, it should rebate the monies IN THE PROPORTION IT WAS COLLECTED, and not cleverly single itself out through this action. The County, WCC and any other conscripts in this far-flung enterprise should be deeply offended by these actions. The County attorney can---and should---request their share of these funds be returned in the requisite proportionate share; and if they decline, the County attorney should sue---that's right---sue, requesting a declaratory judgement from the Circuit Court judge as to whether a "cash rebate" soley to a city---but collected from all---is a legitimate "expenditure" encompassed by the statute. It is NOT!! This has been done once in Michigan, but it was not settled in legal action as precedent precedent, since the city involved saw the writing on the wall and capitulated, giving the money back and agreeing to no longer make these exactions against County and other fellow taxpayers, through differential refunds of DDA dollars to themselves alone. In essensce, what you are seeing here is the collision between bad law and crass opportunism, writ large. If you have a kid who can't get into an occupational or trade class at WCC, or if your Sheriff or County Parks are short of funds, these crass and manipulative allocations of DDA dollars are part of the reason why. It's an outrage!!"

bruno_uno

Sun, May 9, 2010 : 2:12 p.m.

so the unions are bailed out again using funds from the DDA. keep patching up the broken system with band aids. this one is actually pretty funny, such a blatant slap in the face to hard working tax payers. im sure the DDA has it in their enabling legislation that money will sometimes be diverted to related costs of keeping our city unions afloat. thanks to all the no voters against this would be criminal act without a loop hole found in the law. wonder how much time was spent wasted on this for city paid lawyer fees.

John Q

Sat, May 8, 2010 : 10:07 p.m.

"Check out the Chelsea DDA. It just laid out $500,000 to buy prime real estate, gave it to the city to build a Police Station." You think that's unusual? You must not be very familiar with how DDAs operate around the state. Contrary to what was previously posted, they are independent of the elected body of the community, per state law. DDAs were originally intended to help cities maintain their downtowns and prevent sprawl. Over time, they've been used to facilitate sprawl as greenfield communities created DDAs where there was no downtown of any note. Vivienne made a good point. Few communities ever look at the lost value of tax dollars diverted to DDAs.

Outofthebox

Sat, May 8, 2010 : 8:32 p.m.

only in Ann Arbor? At least the Ann Arbor DDA has by-laws. Check out the Chelsea DDA. It just laid out $500,000 to buy prime real estate, gave it to the city to build a Police Station.

Dalouie

Sat, May 8, 2010 : 3:53 p.m.

There is a good explanation on the Mich. Municipal League site. Tax Increment Financing is used by DDA's across Michigan and the USA, just about every city has one. Many small towns use them too. Even Whitmore Lake. They capture the top of the tax stream from the new development but the base taxes all go to wherever they would go, the county, city, library, etc. A2's takes less than most in that they don't capture school taxes. I think that in some cities the city council is also the DDA board. The purpose of DDA's is to maintain the center of cities and slow sprawl, otherwise all the business goes out to the malls in endless one story strips. That still happens but at least there is still a downtown in many cities. The DDA also gets all the money from parking fees at the structures and meters and that is where the money being discussed here comes from. The meters and parking lots belong to the city.

Historic District

Sat, May 8, 2010 : 11:45 a.m.

Quoting Dalouie: "A couple of DDA members meet for lunch with a couple of council members and they talk about a frame work for an agreement on the parking revenues." Actually, it was a 3:00 p.m. meeting held in Roger Fraser's office on Friday, April 16. I think both AnnArbor.com and The Chronicle are on record as to having the office door shut in their face. The meeting consisted of more than "a couple of DDA members" and more than "a couple of council members." I can't say for certain whether or not they broke bread though, as you suggest in your hypothetical lunch scenario.

bruno_uno

Sat, May 8, 2010 : 10:05 a.m.

dalouie- so if the dda doesnt get tiff money from parking fees, where do they get all their funds from? please enlighten me.

Dalouie

Sat, May 8, 2010 : 8:41 a.m.

This was parking money, not TIFF money. The DDA did the right thing. A couple of DDA members meet for lunch with a couple of council members and they talk about a frame work for an agreement on the parking revenues. They have one meeting where the sensitive topic of labor relations is held, union rules are involved. They then take the discussion to the regular meeting of a standing DDA committee and the whole committee discusses it. The committee puts it on the agenda and the whole DDA discusses it on television. A few don't like the outcome so they cry about "open meetings," etc. This is common practice among those who don't get their way. But they are wrong, no laws were violated, the debate occurred in open meetings where the decisions were made. The citizens win here, police jobs will be preserved and the city and downtown will benefit.

Vivienne Armentrout

Sat, May 8, 2010 : 8:39 a.m.

A correction to my previous comment: when I said that programs were not receiving taxes, I was over-simplifying. Taxes are still collected on older buildings that have not recently been improved to qualify for TIF status, and the increment of assessed value due to inflation (which I think may be a negative number now) is also taxed on behalf of the original jurisdiction or program.

Vivienne Armentrout

Sat, May 8, 2010 : 7:47 a.m.

Regarding the TIF capture, I think any discussion of the DDA's civic and social value should include a consideration of how the diverted funds would have been used if not captured by the DDA. Washtenaw County has had severe budget problems and has also been laying off employees. The county could have made good use of the over half a million in tax dollars that instead went to the DDA. Washtenaw Community College is experiencing a huge student demand and doubtless could have used its tax dollars to good purpose. Also, the city taxes collected by the DDA include all the dedicated millages, including the road millage, the solid waste millage, the parks millages, the Greenbelt millage, and so on. Some of these programs actually serve the downtown area but do not receive the taxes to support that service. Others were intended by the voters to deliver a specific result (parks maintenance, for example) but the money is instead being allocated by the DDA board to various other programs, such as the $500,000 grant to the Near North residential project outside the downtown. This board is not elected and is not responsive to voters. If the DDA is no longer needed for true "downtown vitalization", it should not be capturing tax dollars meant for other programs and jurisdictions.

ACertainMan

Fri, May 7, 2010 : 11:55 a.m.

This = Corruption

Rene

Fri, May 7, 2010 : 11:47 a.m.

I also want to say for the record that the DDA has always recognized its obligation to partner with the city - especially during difficult economic times. The DDA captures about $1.9 million annually from the city and without the $2 million, already pays the city $1.6 million a year toward street maintenance and bond payments for the court/police facility. And in addition, anytime the city has asked the DDA to help fund or entirely 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 DDA also 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 so be it. But if the DDA is collecting from the taxing authorities based on the plan they all approved, then the DDA 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 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 and 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 also 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, 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 we are increasing rates and extending enforcement in order to generate $$ for the city. 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, what the pros and cons are, and to voice their opinions before a vote is taken rather than after the fact as is so often the case. My problem is not in giving money to the city, it is the lack of a transparent and open process and debate.

Rene

Fri, May 7, 2010 : 10:51 a.m.

Hey Ryan, one correction. you said the money "will help the city plug a hole in its 2010-11 budget and retain the jobs of several police officers and firefighters." One of the problems the dissenters had was that we don't believe it will have any impact on layoffs. That is the threat the city holds up whenever they want concessions and after they get the concessions, they layoff anyway. The 10 million the DDA agreed to in 2005 was in response to the city's threat to layoff beat cops. But since the DDA didn't require that the money be spent for that purpose, the city took the money and got rid of the beat cops anyway. The city council and DDA board members who conspired in the $2 million giveaway plan expressly refused to tie the funds to maintaining staff levels. If they were really interested in avoiding layoffs, they would have required that the money be used for that purpose.

JSA

Fri, May 7, 2010 : 7:38 a.m.

Thaks for the answer Ryan. Now another question, are there any other DDA's that receive funding from the same sources in Washtenaw County?

DagnyJ

Fri, May 7, 2010 : 6:18 a.m.

If the DDA can hand over money to the city, how about handing over some money to the schools? How about fixing the Stadium bridge? Thank you Ms. Hall for standing up the status quo. If Heiftje does not reappoint you, that will surely seal his political fate. Vote him out!

Plubius

Thu, May 6, 2010 : 11 p.m.

Why do we even have a DDA? Why have extra agencies, extra bureaucrats, etc? Merge the DDA, the LDFA, and all other such nonsensical organizations into the city government and these conversations become moot. (Of course, we would still have the bozos in city hall to deal with...)

guyfroma2mi

Thu, May 6, 2010 : 9:13 p.m.

I think that what is getting lost in this discussion is the fact that the DDA is funded by "captured" tax revenues that would have otherwise gone into the general fund. Not just parking revenues; my take on the Ann Arbor DDA funding structure is that every time a property in the DDA district is improved, the added value goes to the DDA. Of course the DDA has a responsibility to the city to pay its fair share of the police, fire, bus, and infrastructure costs that it imposes on the City, and not be subsidized by the residents and businesses outside it. Not to mention the tremendous legal and financial liabilities it imposes on the City, such as if the new underground structure next to the Library turns out to be a money pit and the city is on the hook for millions in bond payments. It does seem to me, though, that if they have that much money lying around, it might be time to revisit the permanent funding structure and perhaps update it to divert less from the public coffers in the first place and avoid this "kickback"/ potential conflict of interest in the future.

glenn thompson

Thu, May 6, 2010 : 7:46 p.m.

There is substantial back ground information on the DDA presented in the CTN program: Other Perspectives - The DDA, An Inquiry with Jennifer Santi Hall. You can ask CTN to rerun it or there are clips from the show on www.OtherPerspectivesA2.com. The clips are near the bottom of the home page.

Edward R. Murrow's ghost

Thu, May 6, 2010 : 5:59 p.m.

Thanks, Ryan. Here is a link to that info on the DDA's website: http://www.a2dda.org/about_the_dda/how_we_are_funded/2007_tax_capture/ Gotta love that verb "capture". I think others are more appropriate.

Ryan J. Stanton

Thu, May 6, 2010 : 5:49 p.m.

2008 DDA Property Tax Captures By Taxing Authority City of Ann Arbor $1.9 million Washtenaw County $647,623 Washtenaw Community College $418,618 Ann Arbor District Library $218,237

Dalouie

Thu, May 6, 2010 : 5:31 p.m.

This is parking money, not TIFF money. It comes from the parking meters the city owns they contract with the DDA to collect the money for them. This an amendment to that contract, that's all. It saves cops jobs when most cities are laying them off or raising taxes. Hall, and Greff don't come off so well in this story.

Mick52

Thu, May 6, 2010 : 2:24 p.m.

Typically DDA's are funded by TIF taxes, taxes applied to the increase of property values of property within the district based on the value of the property at the time a DDA was established. The money is to be used to enhance the area within the district, not to bailout the city's errant spending. I do not know how A2's DDA is funded, Tigger and Steve Bean have commented on other sources, though I do not see why other tax district $ goes to DDA. Thus if people, business owners like Ms. Greff, are paying DDA taxes, then I say she is being robbed. DDA $ is supposed to be spent within the district. At any rate, the city council has a hammer lock on the DDA due to the appointment ability of the council. I think DDA members should be elected, as with other special districts so the apparent strong arming of council is more "negotiable." This money should be a LOAN. Hmm was that considered? The key paragraph of this story is the 4th paragraph. The city has been tapping into DDA funds for quite a while and has over dipped per this paragraph. This practice began in 2005, well before the economic failure. It appears the city needed twice as much as presumed in 2005. Also it appears the DDA board is stacked. The mayor and one council member and at least two former council members are on the DDA? Makes one wonder if the DDA is for downtown development or another hidden tax to keep city council afloat. Interesting that the city surely cannot tap the famous water fountain fund to plug holes, but it can tap this fund. There is another story on here about downtown AAPD beat patrols ended. DDA should insist those patrols resume with this generous donation. Excellent work by Ms Hall, Ms Greff and to Ryan Stanton for a great story.

JSA

Thu, May 6, 2010 : 10:55 a.m.

Can Ann Arbor.com confirm if any sources of funding are from county sources for AADA? If so, how is this legal without a vote of all the residents of the county?

Steve Bean

Thu, May 6, 2010 : 8:35 a.m.

My understanding is that the DDA no longer captures taxes from the AAPS. In addition to those other entities that Tigger listed, it captures them from the county. The TIF capture is largely irrelevant to this matter, though, since the funds in question are from parking revenues. The process continues to be dysfunctional from my perspective as a citizen. Maybe from the perspective of some of those involved, expediency is justifiable. I believe that we can do better. To not consistently make the effort to seek consensus allows bad feelings to fester on top of the erosion of trust that comes with the sacrifice of agreed-upon process to expediency.

citizenx

Thu, May 6, 2010 : 8:22 a.m.

I just hope the DDA/City leaders equally divides this money up between all the city Depts and unions,dont give it all to Police and fire. The other city employees have families to care for and are just as important as the public safety people.

josber

Thu, May 6, 2010 : 8:19 a.m.

The complaining about handing the money over is out of line. Ann Arbor needs it's front line people, cops and firefighters, and the DDA is not a private entity,it isn't just their money, not when they are taking money from parking meters. I am glad that the vote broke the way it did.

logo

Thu, May 6, 2010 : 8:13 a.m.

No slander Alan. Rene Greff has endorsed a Republican candidate for governor who is pro-life, opposes gay marriage, opposes most stem cell research, and holds a host of other right wing positions.

Freedom2010

Thu, May 6, 2010 : 7:52 a.m.

In response to those who are criticizing Ms. Hall and Ms. Greff for attempting to defend what DDA's money is used for: Of course all of the money DDA collects are "public funds" to be used for public purposes. But why has DDA been set up apart from the rest of City govt? I seem to recall that many years ago the City was collecting the parking revenue directly and placing it into the general fund. It would then spend that money on its various priorities. Unfortunately, regular maintenance of City parking garages and streetscape improvements were not high on the list. These needs did not have many vocal supporters. Remember when the structures were in horrible shape and a mess? Recoginizing their own limitations, the City allocated to the DDA the parking revenue with the charge to direct those revenues toward certain purposes. Those earlier concil members were, I believe, trying to protect a critical part of the City infrastructure from (excessive) spending from later councils. Now the City, rather than make the hard decisions needed (staff size, pension and benefit reforms), raids the fund and begins to treat the monies as just another account item in the overall City budget. Why doesn't the City raid the Utilities or Greenbelt funds? Those are public monies too. Why? Because those funds are also dedicated to other, specific purposes. Furthermore, I do not read Ms. Hall's protests to be against the transfer per se. What she is criticizing is the process used to bring the transfer about, the treating of the DDA as a sub-subcommittee of the Council with the "insider" members meeting in private, keeping their discussions confidential and then springing the decision on the entire DDA Board once the decision has been made. I have met Ms. Hall only once (we shared a dais together), shortly after she came to AA. While we were arguing opposite sides, I found her to be geniune and honest. Since then I have always read her comments about various issues with interest. She has been a hard-working, engaged person who has always had the best interest of AA in mind. Despite what I can imagine to be significant blowback, she is trying to do what is best for AA downtown merchants and their customers. She is to be applauded for having principals and courage to step up when others shrink. She is the type of person we need in govt. My recommendation to her is to point out publically that the DDA, as a separate, independant body, no longer exists but is instead a convenient fiction. Then she should resign.

tdw

Thu, May 6, 2010 : 7:51 a.m.

No strings attached? ART! Greenbelt!

a2grateful

Thu, May 6, 2010 : 7:46 a.m.

The facade of valued participative citizen volunteers seems to be crumbling rapidly. 2 other things seem apparent: 1) average citizens have little idea about how the DDA is supposed to work; 2) those working in the sausage factory no longer agree with the recipe or cook Another mess, another day... Does the DDA need fixing? Who's going to fix it? How will they do it? Do we have the right leadership? Tough questions in tough times, no doubt...

Edward R. Murrow's ghost

Thu, May 6, 2010 : 6:58 a.m.

Steve Bean wrote: "And can you confirm Rene Greff's contention (if I understand it correctly) that the $2 million exceeds the total amount of the city taxes captured annually (or this past year?) by the DDA?" Let's make this clear: The DDA "captures" (I'd prefer a different verb) not only Ann Arbor city taxes, but those from AAPS, WISD, AADL, and WCC, as well. This, as I said above, is ridiculous. That there is any serious debate within the DDA about whether or not to help A2 in its fiscal crisis suggest that those members 1) seem not to understand that a vibrant downtown requires a vibrant and well-functioning surrounding community; 2) the taxpayer largess upon which they sit can be taken away.

KJMClark

Thu, May 6, 2010 : 6:53 a.m.

Here's an idea: the DDA and city can agree to have the city keep the revenue from the parking structures, like the city used to before they made the mistake of giving it to the DDA. Then the city won't need to ask the DDA for money. Giving the DDA control of the parking structures and revenue from them was a bad idea to begin with. Now the city has to go back hat-in-hand to beg the DDA for money that should have been the city's the whole time.

Edward R. Murrow's ghost

Thu, May 6, 2010 : 6:27 a.m.

Thanks for the info Ryan, but you've made my point. Though several of the DDA members are elected officials, none of them are elected to the DDA and are, at best, indirectly accountable to the taxpayers for the money they manage. Even better, this is taxpayer welfare for businessmen administered 9at least partially) by businessmen. The very same folks who complain about their taxes being too high and about firemen being overpaid seem not to care one whit that businessmen are sitting on a pile of taxpayer cash. SHOCKING!!!!

Ryan J. Stanton

Thu, May 6, 2010 : 5:55 a.m.

@Steve Bean Thanks for the input. I'm not sure I follow the math on that argument. Estimated DDA tax captures actually total $3.8 million in the upcoming year, which is an increase from $3.54 million.

15crown00

Thu, May 6, 2010 : 1:28 a.m.

it's a give away.so who is kissing up to who.

Steve Bean

Thu, May 6, 2010 : 12:15 a.m.

Ryan, I think you're doing your readers a disservice by adopting the term "framework for discussion" and other language from the memo presenting the resolution to board members. Also, a link to that document would be helpful context. And can you confirm Rene Greff's contention (if I understand it correctly) that the $2 million exceeds the total amount of the city taxes captured annually (or this past year?) by the DDA?

logo

Wed, May 5, 2010 : 11:48 p.m.

The money being discussed at the DDA comes from the parking meters and parking structures. All of them are owned by the city, the people of Ann Arbor. Exactly who do Greff, Hall and Newcombe Clark think they are? Hurry for the rational, thinking members of the DDA who supported the city and the police on this. Greff by the way, is now endorsing far right Republicans. Nothing really wrong with this but she has changed her stripes.

racerx

Wed, May 5, 2010 : 11:48 p.m.

Ms. Hall, thanks for having the balls to state your position and for having the courage to stand up to both the DDA and the city. You're right, King John probably won't appoint you to the board when your term ends, being self appointed and all. If giving the city these funds based on a good faith effort to continual forging towards a future agreement, then why not wait until that agreement is in hand. Now isn't this putting the cart before the horse? Or a bit "premature"?

logo

Wed, May 5, 2010 : 11:03 p.m.

The DDA collects this money from the parking meters and parking structures, both are owned solely by the city, the people of Ann Arbor. Nobody elected them. Who do Hall, Greff and Newcombe Clark think they are? Hurray for the rational members of the DDA. Greff by the way, is now endorsing far right Republicans, developer Clark might be one. It's worth knowing.

Useless

Wed, May 5, 2010 : 10:55 p.m.

Any find it funny that famed Moravian developer Newcombe Clark was absent?

eJohn

Wed, May 5, 2010 : 10:34 p.m.

SO typical. NO ONE thinks this is a good idea, no one wants it, many people, including current and former board members speak out about how irresponsible and unethical it is, yet the board rolls ahead and approves it anyway. Unbelievable. But then, that appears to be what the DDA does best--cost the taxpayers money with no foreseeable benefit to anyone. Only in Ann Arbor....

Ryan J. Stanton

Wed, May 5, 2010 : 10:05 p.m.

Just so everyone is clear about how the DDA is governed: It has a 12-member volunteer board appointed by the mayor. It answers to the mayor and City Council members who are elected. The DDA's annual budget (though prepared and approved by its own board) is approved by the City Council each year in May and is included in that big 348-page city budget book. State statute dictates that seats on the DDA board are filled as follows: 1 seat for the mayor or city administrator, 1 seat for a resident of the DDA district, 7 seats for downtown property owners, downtown employees or individuals with an interest in downtown real estate, and 3 seats for citizens-at-large.

Stephen Landes

Wed, May 5, 2010 : 9:57 p.m.

As I read this article's sidebar on the key points to be discussed one point is that the DDA will assume responsibility for parking enforcement. We are going to vest the DDA, and unelected body, with police powers? When will we be told it is in our best interests to simply turn over management of the whole City to this unelected board?

Radar

Wed, May 5, 2010 : 8:12 p.m.

The DDA is doing the right thing by supporting the police and firefighters. The DDA is in partnership with the City and has benefited from revenue streams provided to them by the City. For those who voted for this resolution, great job! We need more responsible well meaning public servants like this. The criticism is from the usual negative thinkers and those with a political agenda and is not supported by the community. The community would and will definately support this decision. Hurray for common sense!

amlive

Wed, May 5, 2010 : 8:09 p.m.

Does the DDA have any accountability to, or acknowledge any responsibility to the citizens of the city that fill their piggy bank? There is simply no way that any group or committee funded by the public should feel entitled to any of these funds as "theirs". Sailor: "Captain, the ship is sinking, and there's no fuel in the lifeboats. Why aren't we siphoning gas from the backup tanks?" Captain: "Sorry sailor, that fuel is strictly alloted for the emergency generators. Have to follow protocol, you know." When we're laying off emergency personnel, can't keep our roads and bridges intact, I don't feel that any unaccountable entity like the DDA should be able to sit back and say, "no - Mine!". Actually, I think the city government should have full power over all funds that come from taxpayers or use of city property like parking fees, and the DDA should be nothing more than an advisory board, if they really need to exist at all. Shame on you Jennifer Hall. That's not "your" money - it's "mine" (and every other taxpayer's in this city). We need police and fire fighters much more than we need yet another godawful cheesy mural, cheesy "art" bike racks, signs telling you where downtown is, or another parking garage.

blahblahblah

Wed, May 5, 2010 : 7:46 p.m.

Yes, any agency that has a funds surplus (or unraided bucket of money laying around) versus a deficit must be doing something terribly wrong. Who do they think they are? That's well saved money that should have been spent already. Yes, bring your hammers down upon the last remaining piggy banks. Spend, spend, spend....

heresmine

Wed, May 5, 2010 : 7:30 p.m.

Boy, do I agree with Tigger. The city should take back its rightful responsibilty to manage all its financial resources instead of passing the buck(s) literally and figuratively to others. If the DDA is sitting on that much unspoken for money, then something is really wrong.

Hot Sam

Wed, May 5, 2010 : 6:51 p.m.

Wow...must agree with Rene and Jennifer here...this is nuts. What a way to welcome new business downtown...and punish the existing...

Edward R. Murrow's ghost

Wed, May 5, 2010 : 6:49 p.m.

Let me see if I have the right: --The DDA has a board that is not elected and that is not responsible to taxpayers in any way whatsoever. --The DDA collects money from every agency in Washtenaw County whose budget depends on a millage. In other words, a portion of every tax you THINK you are paying to the public schools, to the WISD, to Washtenaw Community College, etc... goes to the DDA instead. --All of these entities are strapped for cash now while the DDA is sitting on a pile of money --And now there are those on this unelected and unaccountable board who question whether or not the DDA ought to turn over some of that mountain of cash to help the city of Ann Arbor (the city where the "D" is) to help it through a budget crisis? Seriously?????? I have a better idea. Let's disband the DDA immediately and return its cash surplus to those governmental agencies we thought were receiving it in the first place.

David Cahill

Wed, May 5, 2010 : 5:51 p.m.

Ryan, the DDA's attorney said he based his ruling that Smith and Hieftje could vote on a state statute that provided an exception to the rule against conflict of interest for contracts between public entities (such as the DDA and the City). He said that statute "occupied the field" and took priority over a DDA bylaw provision. When you do your update, could you please include a reference to that statute?

Jennifer Santi Hall

Wed, May 5, 2010 : 5:39 p.m.

If Mayor Heiftje and Councilmember Smith had recused themselves from the discussion, the DDA bylaws would have required 6 votes to pass the resolution. So with only 5 affirmative votes, the resolution would have failed.

aareader

Wed, May 5, 2010 : 5:35 p.m.

Puzzling. Was this the same DDA board that oversees the manager that awarded a contract to his own company for construction of a new underground parking garage after a questionable bid process? Does this board likes to be in the news with controversy. If these 2 did not vote the outcome would have been 5 to 4 still in favor of the transfer? Some have stated it is always good to be in the news.... for any reason.... As noted..... puzzling.