Looking Ahead to 2018 & Beyond: Ann Arbor City Council Gets Budget Overview
Major Projects: New Fire Station, Train Station, Treeline Urban Trail, Police-Community Relations, Water & Sewer Rates
Land use, economic development and staffing issues — these were some of the topics discussed at a Dec. 11 financial planning session for the Ann Arbor City Council.
It marked the public start of the next budget cycle and is a good indicator of projects and priorities for the coming fiscal year, as well as longer-term issues that the city faces. The city’s fiscal year runs from July 1 through June 30.
Fiscal 2019 is the second year of a two-year budget cycle, so there won’t likely be major adjustments. Officials characterized it as more of a planning year. Council will hold a Feb. 26 working session on the draft FY2019 budget, then city administrator Howard Lazarus will present his recommended budget in mid-April. The council will vote to approve the budget, and any amendments they make, in May.
Tom Crawford, the city’s chief financial officer, began the Dec. 11 presentation with an overview of city finances, mentioning several factors that could impact the budget. Those include the cost of implementing recommendations from a police-community relations report, a possible new train station, and work on the Treeline Urban Trail.
Crawford reported that projected budget deficits in FY2019 and the following two years might decrease the fund balance to $10.5 million by FY2021.
Lazarus described the upcoming budget challenges as “inherently solvable.”
It’s worth noting that the day after this council session, Lazarus flew to Austin, Texas for a final round of interviews for the city manager’s job there. He’s one of two finalists, so it’s possible he won’t be in Ann Arbor when the budget process wraps up in May.
This report pulls out some highlights from the Dec. 11 session, focused on these areas: Ann Arbor police and fire departments, a possible new train station, parks & recreation, affordable housing, parking, planning & development, regionalization of services, water & sewer rates, and internal reorganization.
Held off-site at the downtown library, the 2.5-hour meeting was attended by all 10 councilmembers and the mayor, as well as several city department heads and other staff. Unlike regular council meetings and working sessions, this meeting was not broadcast or videotaped, though it was open to the public.
You can download the full presentation to council from the city’s Legistar system. Interested in more context? Click here for the city’s Citizen Guide to Finance & Budget.
Ann Arbor Police Department
Hillard Heintze Recommendations. In November, consultants hired by the city to analyze relations between the Ann Arbor police and residents submitted their 105-page report. (Click here to read it.) The City Council and Ann Arbor Human Rights Commission held a joint working session on Nov. 16 to discuss the recommendations.
Now, the police department and city administration are looking at how to implement the report’s recommendations, including a proposal to create a “Co-Produced Policing Board (CPPB).”
Police chief Larry Baird and city administrator Howard Lazarus both mentioned this during their presentations to council on Dec. 11, but they didn’t have details about a timeline or cost for implementation. Baird said that if the city creates a CPPB, it would require additional resources from the police budget as well as from the city attorney’s office.
Retirements & Staffing. Over 50% of the city’s sworn police officers will be eligible to retire within the next five years. If they did, it would create a staffing crisis that police chief Jim Baird is hoping to avert. He plans to use an “overhire” program to bring in 12 police officers each year over the next few years, even if there aren’t yet vacancies due to retirements.
The department only has the capacity to train 12 officers annually, Baird explained. So they need to start onboarding staff now to be prepared for this significant wave of retirements.
Ann Arbor Fire Department
New Fire Station. Fire chief Larry Collins said he’s working on a Fire Station Master Plan that he hopes to complete soon. It will include recommendations about where to locate a new fire station — but Collins isn’t disclosing any details yet. He joked that if he talked publicly about possible locations for new fire station, the cost of real estate would go “zing!”
The master plan will likely be public in early 2018. The city currently operates five fire stations throughout Ann Arbor.
University of Michigan Funding. Collins reported that about 30% of all AAFD calls are tied to situations in campus neighborhoods. So the city is preparing to ask UM to provide funding that would offset some of those costs. City administrator Howard Lazarus indicated that in preliminary discussions, UM administrators seem amenable to that.
Ballistic Gear. Another upcoming expense for the fire department is “ballistic gear for active shooter situations.” Collins said UM bought the AAFD four suits “because they know they have some risks.” The city plans to purchase more — a trend that is playing out across fire departments nationwide, he said.
Parks & Recreation
Millage Renewal. Voters approved a six-year Park Maintenance and Capital Improvements Millage in November 2012, and the city will likely put a renewal proposal on the ballot next year. The 1.1-mill tax funds improvements to Ann Arbor’s park system, which has more than 2,104 acres in its 159 parks. In 2012, the proposal passed with about 70% approval.
Treeline Urban Trail (Allen Creek Greenway). At its Dec. 18 meeting, the council will hold a public hearing and vote on adding the Treeline master plan to the city’s master plan.
After that, a work group will be formed to implement the plan, including funding and preliminary design. This work would be coordinated with the nonprofit Treeline Conservancy. (Click here to view the draft Treeline master plan.)
The city is working with the Conservancy to prepare the city-owned 415 W. Washington property for redevelopment as part of the Treeline, pending a notice to proceed from the Ann Arbor Historic District Commission. The city would also need to perform site environmental assessments and remediation on the property.
Ann Arbor Station
The city is moving ahead with plans for a new train station at the site of an existing Fuller Park parking lot. Staff is awaiting feedback from the Federal Railroad Administration (FRA) on a draft Environmental Assessment that was completed earlier this year. Next (admittedly wonky) steps include:
- Complete Preliminary Engineering (PE) process for the “preferred site” (May 2018)
- Obtain an FRA formal “Finding of No Significant Impact” (June 2018)
- Gain FRA agreement that preliminary engineering meets grant requirements (June 2018)
- Coordinate with the FRA and Michigan Dept. of Transportation for final design and construction resources (Fall 2018)
Before construction begins, the City Council is expected to put a proposal on the ballot asking Ann Arbor voters whether to move ahead with the project. This stems from an Oct. 15, 2012 council resolution that reads, in part: “RESOLVED, That at or before the completion of a final design for the Ann Arbor Station project, City Council will set a date by which the City will submit the question of moving forward with construction to a vote of the citizens of Ann Arbor.”
Check out the city’s Ann Arbor Station website for more info on this project.
City staff are developing a “housing affordability action plan.” Lazarus reminded council that they’ve designated 40% of funds from the new Washtenaw County public safety and mental health tax to be used for affordable housing. (That 40% equals about $1 million annually, but the tax won’t be levied until December 2018.)
Tom Crawford, the city’s chief financial officer, told council that the city is looking to amend its parking agreement with the Downtown Development Authority.
The current agreement, which runs through FY2019, allocates 20% of parking revenue back to the city each year. The remaining 80% goes to the DDA, which manages the city’s parking system. The city wants to continue receiving 20% of parking revenues, beyond the current agreement.
Crawford also said that parking fines need to be re-evaluated for consistency with parking deck permit fees and on-street hourly rate changes.
Later in the session, Howard Lazarus also mentioned parking as a risk to the city’s budget. There are challenges to the traditional downtown parking business model, he said, and the city faces a short-term loss of parking spaces and resulting revenues.
For more background on parking issues, see “Downtown Parking: More Spaces, Higher Rates?”
Redevelopment Ready Certification. Derek Delacourt, who leads the city’s community services unit, reported that the Michigan Economic Development Corp. (MEDC) has asked the city to wrap up its Redevelopment Ready certification process, one way or another.
The process began in 2014 but stalled over controversy regarding a recommendation to eliminate the City Council’s review and approval of site plans. The Michigan Municipal League has offered to help the city work on the certification, Delacourt said, but “we don’t anticipate it being the smoothest process.”
Redevelopment Ready Communities is a statewide program run by the MEDC. It’s designed to encourage best practices for fostering development, including a streamlined approval process.
Annexation. Delacourt told council that between 400–450 parcels — mostly Ann Arbor Township “islands” within the city — are in line to be annexed into the city in the next few years. This is part of an annexation plan negotiated with adjacent townships years ago.
Transit-Oriented Development. Delacourt reported that the Ann Arbor Planning Commission is working on a proposal for transit-oriented development “overlay” districts. The term refers to zoning that would integrate land use and transit, with the goal of decreasing traffic congestion and encouraging the use of alternative (non-car) transportation.
[Fun fact: The term “transit-oriented development” was coined by Doug Kelbaugh and Peter Calthorpe in their “The Pedestrian Pocket Book.” Kelbaugh is an professor and former dean of UM’s College of Architecture and Urban Planning. He lives in downtown Ann Arbor and regularly weighs in on local development issues.]
Craig Hupy, who leads the city’s public services unit, told council that there are “stability issues” with the earthen embankment at Barton Dam. (A sinkhole was discovered at the top of the embankment earlier this year.)
A study is underway to find the root cause of those issues, he said, and at some point the city will need funding for repair — likely from both the general fund and the water fund.
Barton is one of four city dams along the Huron River. It generates hydroelectricity and impounds Barton Pond, which serves as the source of 85% of the city’s water.
Regionalization of Services
The possibility of regionalizing services was mentioned several times throughout the presentation. Three areas are eyed for potential: solid waste management (potentially with Washtenaw County and other entities), the Ann Arbor Housing Commission, and the Ann Arbor Fire Department. None of these possibilities were discussed in detail on Dec. 11.
Water & Sewer
Rate Changes. City staff and an advisory group have been meeting regularly for several months to look at restructuring rates for drinking water and wastewater services. (Get more info on the city’s website.)
The goal is to implement changes — whatever those might be — on July 1, 2018. That coincides with the start of the city’s next fiscal year. A proposal is expected to be brought to council in February.
Odor of unknown origin? Craig Hupy told council that a study will be done at the relatively new wastewater treatment plant to determine the cause of an odor at that site. It’s not clear if it’s coming from the plant itself, he said, or from either the city’s wastewater collection system or the adjacent collection system for Ann Arbor Township. The plant operates 24/7. More info about projects related to the plant are outlined in this October 2017 staff memo.
Events & Festivals
The cost of security is increasing for groups that hold outdoor festivals and events in the city. City administrator Howard Lazarus told council that they might consider funding those costs, rather than requiring that the organizers pay.
City administrator Howard Lazarus highlighted several internal staff changes, and a reorganization of the staff that reports to him. Part of that includes creating a new position for an assistant city administrator — the hiring process is already underway for that.
Under the reorganization, the sustainability staff — including Matt Naud, the city’s environmental coordinator —will become part of city administration, as a “sustainability & innovation office.” Those employees are currently part of the systems planning unit. In addition, two current temporary positions will be made permanent, full-time staff.
Lazarus has also created three unpaid “executive advisor” positions:
- Economic Development (Sally Petersen)
- Sustainability & Organizational Development (John Mirsky)
- Neighborhood Connectivity (unfilled)
One of the city administrator’s advisors — former Ward 2 councilmember Sally Petersen — organized an Economic Development Summit in September, and is working with Lazarus to create a new Economic Development Advisory Team. According to Lazarus, that group will help the city:
- Recommend an approach to sustainable economic development
- Identify and evaluate current and potential funding streams
- Identify areas of opportunity involving government-owned/influenced lands and potential public-private ventures
- Identify development obstacles, burdens, and barriers to sustainable development
- Provide recommendations that will position city government to be a better business and community partner
- Recommend approaches for continual involvement of the Ann Arbor community in the development and implementation of economic development initiatives
For background on this topic, see “Economic Development in Ann Arbor: Does the City Need a New Advisory Commission?”
Separately, Lazarus originally indicated that he’d be bringing forward a proposal to council on Dec. 18 to reconvene an economic development task force, which would make recommendations on the use of city-owned properties. That task force was last active in 2014 — here’s a link to its final report.
However, on Dec. 11 Lazarus told council that instead of reconvening the task force, he’d be meeting privately with individuals who might not feel comfortable talking about this topic in a public forum.
Next Budget Steps
The council typically approves the city’s budget in May. Here’s a timeline for the process:
Feb. 26, 2018: City Council work session
April 16, 2018: Recommended budget presented by the city administrator
May 7, 2018: Public hearing at the council’s first meeting in May
May 21, 2018: Council consideration and vote
If you’d like to weigh in, you can contact the city administrator directly at email@example.com or 734-794-6110 ext. 41102. Click here for contact information for the mayor and City Council.
There are opportunities to speak to the council in person at public commentary during their meetings, on the first and third Mondays of each month. Click here for details. The meetings begin at 7 p.m. at city hall, 301 E. Huron.