Today’s episode is a rerun of Deeper Dive Episode 9: “Budgets and Budget Season.”
Transcript
JL: Hi, Ann Arbor AFers. This is cohost Jess Letaw. The pod team is taking June off for a much-needed break. Council is still going strong, and it’s looking like June is going to be a doozy, so make sure you pay attention to the a2council hashtag on Twitter, Council meeting threads on Facebook in the Ann Arbor Humans Who Wonk group, and check Legistar to read the agendas for yourself. Even though we’re off, we hope you still keep getting informed and getting involved!
In the meantime, we’re rerunning some old episodes you’ve told us you liked, with a little context about where the topic came from.
Molly, Michelle and I believe that budgets are moral documents, and that you can be most effective about making change if you understand where dollars come from and the rules around they get spent. Each Council meeting taught us, however, that while we all have a superficial understanding of the city budget, we had more questions than answers.
We pulled together those questions, did a little research on the City website, and the result is the following conversation. Here for your re-listening pleasure is episode 9, “Budgets and Budget Season.”
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MH: hi welcome to this episode of Ann arbor as a podcast for folks trying to figure out what’s going on in Ann arbor we’re here to discuss current events in local politics and policy governance and other civic good times.
JL: And Jessica Letaw and my pronouns are she her.
MK: I’m molly kleinman and my pronouns are she her.
MH: And i’m Michelle here’s my pronouns are she her where your co hosts to help get you informed and get involved it’s your city.
MK: We wanted to start out by thanking all of you so much, those of you who donated after we put out our last request for donations just in this one week we’ve got almost two thirds of the hosting fees for our whole first year covered so you are all the best and if you would like to give or give again or get for the first time, you can find us
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MH: And now Jess.
JL: Today we’re taking a deeper dive into Ann arbor city budgeting process we here in Ann arbor area, believe that the city is better when we’re all involved with how it runs. A lot of times decisions come down to funding, so understanding how municipal money flows is an important part of driving the change you hope to see. All three of us wanting wanted to do an episode on budget as quickly as possible for a couple of reasons, one will be referencing it a lot in the future. As we do deeper dives into specific areas of the city like policing and housing to its budget season, right now, so there’s no better time for all of us follow along and get more involved. I’m going to start by giving an introduction to municipal budgeting i’ll talk about the public process, including opportunities for as for an advocate. I’ll get a little bit into revenues expenditures and the challenges of budgeting in a pandemic and i’ll end with next steps you can take if you’d like to learn more or even get involved.let’s jump in. So I really relied on two primary resources to get ready for today’s conversation the Michigan municipal League and then arbours citizens guide to the budget process the Michigan mean this league document on municipal finance opens by saying that oversight and governance of financial affairs is among the most important of the responsibilities of municipal elected officials inadequate oversight can lead to abuses such as embezzlement misuse and misuse of and or misappropriation of funds and general loss of esteem for the municipality and it’s officials excessive control or oversight can render your city in effective and incapable of delivering important services from the Ann arbor citizens guide to the city budget serves as an outline for how the city of Ann arbor revenues should be spent to maintain and improve the city. The Mayor city council and the city administrator and interested citizens and businesses and they don’t say this but residents I don’t think we should always define people who live in a city as citizens, we should just find us as residents. All service participants in the creation and execution of the annual budget it’s not just an accounting document it’s a Management and Planning tool, because the city is limited by the amount of resources available, the budget aid city officials in determining which objectives have the highest priority and will produce the greatest positive impact in our Community.
MH: i’ve often heard it said that, like a budget is a moral document, this is where you’ve decided what you care about and.
JL: I have to say I firmly agree with that not everything that you care about necessarily has $1 amount attached to it, but if you care about something it should in some way be reflected in the budget, if only staff time.
MH: To and it’s always it’s always like Oh, we can’t do this because we don’t have it in the budget will put it in the budget, you know. Okay, all right.
JL: It in the budget yeah.
MH: Another thing I wanted to talk about with you at the beginning, you talked for the Michigan municipal league you talked about. You know that oversight budget oversight it’s important to prevent like embezzlement and misuse misappropriation and my understanding is that that is not not been a problem that has been a serious one here in Ann arbor it’s really not and in fact recent Ann arbor budgets have won state awards for their transparency legibility consistency, the way that they hold up to audit know we tend to not have those issues, because we have pretty well defined consistent processes by which the budget is developed it takes almost a full year to develop. Given years fiscal year’s budget. All the departments in a city contributed to it, many years participate in multi year planning, which means that it kind of smoothes out the bumps in any individual year’s budget. So, no, we tend not to have those problems, because we have pretty good checks and balances on our process right now.
MH: Right so yeah there’s a lot of you know people that have opinions and aren’t quite happy with how the budget works, but embezzlement and misappropriation or not. But I hear people talk about.
JL: it’s really not we’re very lucky in in this part of Michigan in this part of the world that those are not issues that we have typically but I will say that oversight and the more people that are involved in the process, the better the more those odds go down definitely. So I wanted to talk a little bit about why the city budgets, where that power comes from it’s not a given necessarily that a city would manage its own finances.The authority and responsibility for municipal financial policies are established by the Michigan Constitution our state statutes federal statutes state and federal administrative codes and our own city charter. All of those instruments, along with case law grant us authority on one hand and limit that authority on the other, and i’ll talk a little bit more about limits, a bit later. Here state statutes in Michigan state statutes control almost every aspect of municipal finance, so we set our priorities at the local level. But how we are allowed to raise our monies and then spend our monies is largely dictated by the state. Budgets most convenient most basic components our revenues are money collected and expenditures or money spent. In this episode we’re going to focus more on the budgeting process and to a limited extent on expenditures, we will talk about revenues a whole lot more in a future deeper dive episode.
MH: When you were saying that. it’s not necessarily a given that.
MH: A city would manage its own budget, I was thinking what might be an example of that or what is a time when a city doesn’t manage its own budget, and the first thing that came to mind with the state’s emergency financial managers. And yeah I don’t know if I want to really have a lot about that, but I have a lot of opinions about it and not a lot of information about it.
JL: The thing that I was really interested to learn, when I was learning about the empowering acts of a city’s budget is that it very specifically comes from the state, because the United States Constitution grants to states explicitly grants to States all those powers not explicitly named in the Constitution finance is one of those, and so our power to budget for ourselves comes explicitly from the state right. All right, so an overview of Ann arbor is budget. The total budget and i’m for the most part, unless otherwise stated i’m using the budget for fiscal year 20 and 21. that’s, the most recent one that’s, the most recent one creating now.
JL: Exactly exactly and i’ll get into that in just a moment, so the total budget for fiscal year 2020 and 22 through 2021 our revenues were budgeted at 510 million dollars and our expenditures at 460 $5 million, the general fund activities and i’ll talk a bit more about the general fund in a moment.Essentially, these are unrestricted funds were planned at around 115 million dollars. All of these numbers are most likely going to change fairly significantly because of the pandemic we won’t really know until after the end of this fiscal year how actual activity differs from planned activity. In general, in October and most municipalities of our size or larger even smaller their actual activity tends to be pretty close to their plans. But the pandemic is just such a norm breaker and that we really won’t know until like I said after the fiscal year is done, where it’s going to settle out.
MH: This might be more open so.
JL: it’s like I just once, I get the key staff managing the budget are the city administrator who’s currently Tom Crawford the city chief financial officer CFO who’s currently matt horning and the finance and administrative services department city council members vote to adopt or not adopt but typically to adopt the budget and they do so one fiscal year at a time, even though the city plans for multi year budgets, which I think you had a question.
MH: yeah I guess like.
JL: I hear a lot about how the pandemic is destroying our budget.
MH: And i’m i’m I don’t know how that happens, so I guess, this is more of a question for the you know the revenue section, but like my understanding was a lot of our stuff came from property taxes and it’s not like you know if if the businesses aren’t doing well, or you know if people aren’t willing aren’t able to pay their rent well we’re still collecting those property taxes right so like why aren’t we, why do we have these huge budget shortfalls people keep complaining about.
JL: that’s a really good question and we’ll get into that both a little bit more in the revenue section and a little bit more in the covert section so excellent question you’re predicting the future which is.
MH: Not with my scrolling down in the document.
JL: Alright, so the way that the city’s process works i’m going to step us through it backwards. The city’s fiscal year runs July one through June 30 this is unlike both the state of Michigan and Washington, our county which is October one through September 30 this is appropriate, because essentially we are sub budgets. Under those bodies, so we need to report our budget plans to them in order for them to finalize their own budgets so we’re a little off kilter with the county and the state, but for us our city and all city units run July one to June 30 our Charter requires that the budget be adopted by Councils second meeting in May, so typically between the 15th and the 25th of May. The city administrator submits a recommended budget to city council honor before April 15 which gives Council at least five weeks to review and make comments and amendments city units, which means departments and other bodies such as the DDA and the housing Commission have working sessions with Council in February and March to present their draft budget requests take questions and have time to make amendments before the final recommended budget. Before that city departments and units to submit their initial budget requests in January. The fall before that the fall of the previous here the city administrator formulates a series of goals in cooperation with city council that are to be accomplished in the next budget year. Those goals are used to guide individual service areas in preparing budget requests, this is consistent with Councils role in providing strategic direction to the city’s whole and parts. Some of the factors departments have to take into consideration when developing their budgets, besides just revenue expenditures are inflation Labor Union negotiations multi year plans, like the rolling six year capital improvements plan often often known as a tip fund balances which is kind of like a departmental savings account, and the fact that by Michigan statute expenditures cannot exceed revenues budget adoption requires seven of Councils 11 boats budget amendments, so any changes to the budget after it’s been formally adopted required eight.
MH: There was a lot of information that I wish was I wish I had a graphic to look at yeah I guess um but I guess, my question is like there was a lot of like stuff like departments are going to do this by the States, you know this this thing is going to do this by this date, what about what about me. When do I talk when do I talk to people who do I talk to you.
JL: So fall, is a good time to be talking to your City Council member fall is also a time when the city typically puts out its city wide Community budgeting priority serving and other thing that i’ll talk about in a couple of minutes. So you have multiple opportunities to submit your ideas to the city, although typically just one invited one when they put out that invitation for the Community budgeting priorities request. You can talk to your City Council member typically fall for the coming fiscal year is the best time.
MH: We missed that time like.
JL: we’ve we’ve missed i’d say setting priorities for the coming year, but that doesn’t mean that there isn’t still opportunities to make changes so right now, this it’s really in staff hands to make budget changes or to make budget proposals recommendations changes so right now is a really good time to be asking questions of staff. So if, for example, you have questions about municipal snow removal now is a really good time to talk to your Council member, but more importantly to stuff and find out what are they budgeting for and how is that different or the same as the previous year okay.
MK: So one thing that I wanted to highlight was one of the very last details you mentioned was this idea about expenditures can’t exceed revenues so it’s this idea of a balanced budget and cities. And i’m understanding is states to in this country like throughout the country have to operate on a balanced budget so where the federal budget can operate at a deficit and can borrow in order to do important things. Am I right that we we can’t do that as a city, so if we say yes we’ve taken a hit from coven but there’s because of that we should be spending more to help our residents and therefore we’re going to borrow money we can’t the city can’t do that right right correct.
JL: yep and that’s.
MH: that’s what I borrow money, but we have to like have the money to pay it back like right like we can’t. We don’t have to have it all at once, but we have to take into account, we can’t just say like oh pay it back in the future.
JL: that’s true and there’s pretty limited ways in which a municipality can borrow money and once they do what it’s possible to use it for. So it’s much cleaner on the city budgeting side to say actually what we’re going to do is go into austerity mode about our expenditures and really cut to the bone. Rather than trying to figure out what to borrow an example of where this has caused some issues is going back where we to 2021 going back 13 years, so the recession that really started in 22,008. The city up until that point had 100% of its liability funded for city employee pensions. Starting in the recession, one of the ways that they cut back, was in funding future pension payouts and it dropped pretty significantly at one point I think that fund was down to something like 64% funded so now.
MH: If people retired without us three funding, then we wouldn’t be able to cover that. Right exactly right now it’s up to I think 80% of our obligation but it’s not backed up to 100 and that’s a lot in it that represents over 100 million dollar shortfall in our obligation.
JL: So we have to be really careful in what we cut, not only for the idea of not being able to take out money but understanding that some obligations, while they may be deferred cannot be eliminated and we’re essentially in getting our future selves to be able to pay for them. I will come back i’m going to do a little bit more uncovered at the very end of the episode, but I will talk a little bit about how the city is planning to respond to some of those changes. So I wanted to talk a little bit about funds. For funds are typically restricted in use by Michigan law, the city Charter and local ordinances to assure that funds collected are used for their intended purposes, so in a city budget, you can essentially think of a bind excuse me a fund as a specific account. The source of funding generally determines the restriction applicable to those funds and thus what fun type, it is. So, for example, a bond, which is essentially dead can’t be taken out to cover operating costs like payroll. Another example is that housing funds can’t be used to pay for the water treatment Center. So this means that if you’re looking for a way to fund something new, or at a higher level at the city. Most likely that will have to come from unrestricted funds, at least, to begin with, so a good first question in any conversation around. In any conversation around the current state of things, or something you’d like to change is, where does the money come from and what restrictions are there on its expenditures. The default for almost all city activity unlisted to use or department suggests otherwise is to manage revenues expenditures through what’s called the general fund, which is the most unrestricted fund. At the top of the episode, I talked about the total budget so Ann arbor is fiscal year 2021 budget was 510 million in revenues for 65 in expenditures. If you’ll remember the general fund was around 110 million, so it represents, although it represents the bulk of the city’s activity, it represents 20% of the city’s overall unrestricted funds.
MH: I think yeah I want a couple of types of funds that I wanted to talk about were like the millage funds that we get like we have the parks, the park acquisition millage and we just spent some money out of that the most recent Council meeting and that is you know, we had a millage vote voters approved that they were going to pay a little extra in property taxes in order to pay in order to purchase parkland and so, then that money can only be spent to purchase parkland.
JL: And then the other it’s an important point to bring up because and i’m sorry to interrupt yes help a lot of folks when when they look at something like that they say oh we’re spending to me $2 million on X why can’t we spend it here. Why can I on buses why can’t we spend it on snow removal why can’t we spend it on X typically, the answer is because it’s a restricted fund. Right not always but often.
MH: it’s because the voters decided that that way they voted we’re gonna we’re going to collect this money for park landing acquisition. The other kind of fun, I wanted to talk about was enterprise funds. That would be things like the utilities, the.
JL: Water and sewer and stuff like that.
MH: Because they run as if they’re out there they’re a separate business enterprise that’s why they call it enterprise fund that like they have money coming in through usage fees and then they spend it on delivering that service. And so, like they can’t you know they can’t like take your water bills money and use it to spend on you know hiring staff for the I don’t know police depart the police oversight Commission or something like that, because the money was taken with the idea that it would be spent on your water.
JL: For sure, and I, although funds are important to understand. I’m just going to go ahead and muddy it immediately. Another one of the it’s important to understand that, while those funds are restricted, and there are good reasons for that. Those restrictions aren’t always super clean so, for example. The housing Commission or not, the housing Commission, but there was a local group of activists who got a ballot on or got a proposal on last year’s ballot proposal see around affordable housing. One of the conversations that was had at the counsel table was how much should we allow for supportive services, so when it comes to public housing, a lot of times we need supportive services like safety really like public health and and different kinds of. Public social and mental health those kind of services are key to making sure that folks who are struggling to stay House are successful in staying housed and safe. Those supportive services are a really critical component to a housing budget, but the question is how much of a housing millage quote Unquote. Do we put towards physically building housing and how much do we spend towards making sure that people who are housed are successful staying that way so it’s just one of those things where it it’s both clear cut and sometimes hard to draw lines.
MH: Well, the way I remember that conversation was that it was there was a decision about how they were going to write the language to put on the ballot so like we were like once the voters decided like. You know this percentage of it has to be spent on this, and this percentage, but you know that’s that’s set in stone, and I think the original proposal before the Council started talking about it was to just say that supportive services were one of the things that it could be spent on without saying it had to be less than such and such percent but like once once the Council got to at this they restricted at the some number of percent like 20 or 25 something like that and. You know, they said. And so that was put in the ballot, and that was put on the ballot the voters approved it and so now we have that money and only whatever percent the voters voted on can be spent on supportive services yep for sure.
JL: So those kind of descriptions like I said it’s just helpful when you’re coming into a discussion about something that you care about. When you’re asking about the money understanding that what restrictions exist on either what month that how the money is raised or how the money is spent is really critical to being effective in advocating for change really critical. So I want to talk a little bit about revenue. Our primary sources of revenue in Ann arbor and most Michigan municipalities, we have what’s called state shared revenue, the Michigan sales tax of 6% of which over 80% goes to the State and less than 20% is returned to municipalities less than some places, but less than 20% here in Ann arbor. We collect utility fees and other fees and fines, we levy bonds and marriages, we love the property taxes and special assessments. In Michigan the state restricts the ways in which we can generate revenue from a reticence. On the one hand it’s a good thing, because this keeps tax increases extensively from outstripping inflation, but on the other hand, it makes new services really difficult to pay for so, for example in Washington our county there was a proposal about proposal at the county level for public safety and mental health, because the since we don’t get those funds returned from the state, we did not have a way to pay for expanded mental health services Another example is the one that I brought up a moment ago, the affordable housing millage from last year. I think one of my frustrations around budgeting in particular and mostly we’re not getting into the dollars of the budget, but Ann arbor has a high enough tax burden, did I think it’s worth being careful about when we’re asking residents to pay for something new. Why are we saying that we’re not prioritizing enough dollars out of our general fund, for example, to be able to cover the housing needs of our most vulnerable residents, why do we have to ask for more money. I think it’s clear that we absolutely do need that money, but because we don’t get that state shared revenue back at a reasonable rate. We have to keep going back to taxpayers and asking for more money again and again we have it for the transportation authority both regional and our local like greater in our area we’ve got it for the PDA we’ve got it for the library like it just I wish that we were a little bit more consistent in the monies that we were asking for from residence, I will say that one of the things that we’d like to talk about is how michigan’s proposal and headley amendments affect the property taxes. That the city of Ann arbor collects and how that affects city wide affordability it’s a big conversation and it’s enough toward its own episode so we’re going to be coming back to revenues in greater detail in a future episode one time one.
MH: Oh sorry you go first i’ve been asking questions, every time.
MK: So one thing about the the revenues that I think is was surprising to me, the first time I understood it so we’re talking about the revenues that the city. The City of a number gets to do things, but if you flip that and you look at your tax bill, if you are a homeowner property owner in Ann arbor you’re paying a lot of property taxes that are not going to the city. A huge chunk is going to the school district a chunk of that is going to the county and so um. I think it it gets it gets so Monday, when we talk about revenues and especially taxes and in arbor our tax rates are actually not.
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MK: That high relative to other cities in our in the county even I think ypsilanti is paying higher tax rates than we are, but our property values are so much, and I just this is not the topic of this episode, but I just think it’s really helpful to be really clear about what we are talking about, which is just that slice of revenues that are going to the city and getting budgeted by the city.
MH: um The thing that I wanted to talk about was something Oh, I wanted to talk about um that you, you mentioned the that the State isn’t giving us isn’t doing as much revenue sharing as we’d like and I saw a chart one time that Tom Crawford showed me he’s now the city manager anything he showed it to me a couple years ago and he was the chief financial officer, but for the city, but um yeah it’s it show it talks about. How we used to be that we got so much revenue sharing from the state that folders had authorized us to you know levy a certain amount of taxes for for our general fund for our general operating millage. And we didn’t always have to collect all that because we had so much revenue sharing coming in from the state that we didn’t need all the money that voters had approved but. That since then, the amount of revenue sharing that we’ve been getting from the state has been decreasing decreasing decreasing decreasing and so now yeah we need all the money that the voters approved and more. In order to do what we need.
JL: One of the things that I saw in preparing for today was that Michigan Venus believe had prepared a report showing that between 2001 and 2014. All munition Michigan municipalities had lost out in over a billion dollars of revenue sharing from those taxes collected now seven years later we’re probably. Not knocking on 2 billion, but pretty close and that’s huge like if we’re thinking. The things that we’ve talked about about municipal snow removal about housing about Community safety outside of policing about these wishlist items. If we had those dollars, it would be easier to prioritize them, whereas right now, it feels like not only a zero sum game, but it’s the hunger games right like we have to take away from something else that we care about in order to fund something at a greater level of fun something new and I, this is definitely an opportunity where we could be doing better.
MK: And this that piece, for me, was real it really helped me understand because I have not understood for so long, why Ann arbor. Like as a city feels kind of broke when you look around up just our infrastructure, the state of our roads, the state of you know, things that it feels like things should be nicer here given. We think of it as such a wealthy community, we have the university people really love and arbor and we think of like people talk about what an incredible place it is, but I look at other cities and towns around the state and. Some of the other wealthy towns that are smaller are able to do a lot more, because in our verse pretty big and we’re not and it’s that money from the state that’s missing like that’s what I couldn’t figure out like why don’t we seem to ever have enough. To plow the roads and it’s that it’s that missing state money.
MH: I wish, and I wish I understood more about the missing state money like, why are they not sharing it with us because they don’t have it, or because.
JL: I mean, honestly, this is i’m not going to say that this is a totally uninformed comment but I typically like to talk to people, before answering questions like this. I was able to talk to State representative so and so and ask this question, but I will say in my conversations with the Chamber of Commerce State representatives from a while ago that the city, excuse me, the state tends to use those revenues as a slush fund and often for education, so if they can’t find a way to fund something. They pulled from the should they pull from the shared revenues and so when municipalities start agitating and saying we really need those money. Those monies the state says, maybe not super nice things back like Okay, which schools, do you want to take it from and I don’t know that that’s the conversation that we need to be having but I agree with you i’d like to learn more maybe we’ll do a future deeper dive sharing that’d be interesting.
MH: But yeah.
JL: I think it’s definitely the lowest hanging fruit on how we can get more resources for our Community, without asking residents to be the ones to share it right.
MH: And I think one difference, too, is that the money that would come from state revenue sharing comes from income tax instead of property tax.
JL: mm hmm correct.
MH: And that would be yeah yeah so that’s a little different. alright.
JL: So, moving on to expenditures when the budget is adopted, it goes into effect for the fiscal year, which again is July one to June 30. But in Ann arbor expenditures over $25,000 are still required to come back to City Council for approval, meaning many costs have to be approved twice. You often see these show up on a city council meetings consent agenda because it’s typically assumed that an expenditure that conforms with the adopted budget means and. It gets a rubber stamp of approval that isn’t always the case even since we’ve been doing this podcast a lot of times we see budget items and the consent agenda pulled out of that as agenda items by Council members, because they’d like to ask more questions about electric vehicles for the city’s fleet, for example, or how data storing is working and whether it’s being used for facial recognition things like that. But it does mean that there is a little bit more overhead on financial decisions, then perhaps necessarily needs to be there. I also wanted to call out because we talk a lot about police budget and our next deeper dive is going to be on the police. That over a third of our general fund expenditures go to police and fire, I believe the police budget in Ann arbor is around $30 million give or take a couple million.
MH: sounds.
JL: So on the city’s debt I won’t spend a whole lot of time on this, but i’ll just note that the city does have the ability, and the responsibility to take on debt like bonds. To finance large projects to examples from the last decade, include the library lane parking structure that all that below ground parking and the Court and police building attached to City Hall. And we also talked about the little bit about the city’s unfunded pension plans, so this isn’t exactly debt it’s an unfunded obligation, but we do need to find a way to cover those obligations. So, Michelle you’ve had some questions about what it means to budget and covert times. One response that we’re seeing is that the city administrator which is functionally the city’s manager has asked all departments to make at least 5% reduction. In their planned expenditures for the coming fiscal years or excuse me, the coming fiscal year servicing our debt obligations is an extremely high priority and those won’t be affected so anything that essentially has to do with maintaining our good professional and governmental standing with other agencies, none of that will be affected, you talk a little bit about why are funds going to be affected in a pandemic like what about our revenue is sensitive to the economy. That state shared revenue is a huge one. Because it’s predicated on a sales tax and consumer activity has gone down so far, but also we don’t yet know how far it’s going to fall and how long after this vaccine rollout it’s going to persist that’s a very unreliable source.
MH: I guess, I had a hard time figuring out like where what is the like how big a thing that would be because I heard that the revenue sharing was decreasing so i’m just kind of like how much has it decreased like how much of our budget is that versus.
JL: The revenue shared I believe I saw it, for the last fiscal year so not this current one, but 2019 2020 was in the neighborhood of 11 or $12 million so that’s approximately 10% of our general fund. It obviously won’t go all the way away it’ll be impacted but if that goes down to $5 million then that’s approximately 5% just the general fund, not of the overall. Budget right, I think, I think, and I know we want to be careful with guesses, especially in a technical area like this. But I think one of the concerns is we actually don’t know what’s going to happen with our property values residential in Ann arbor is probably going to stay pretty stable but office and commercial not necessarily and there is a concern that that hasn’t yet bottomed out. So i’m imagining that the 5% over the top decrease is a way of getting ahead getting out in front of any potential disasters in the next couple of years. And we make the disclosure every now and then that the bodies that we sit on or not we’re not speaking for any of those i’m a dd a board member i’m not speaking for the board. But I do know that in looking at our revenue projections for the next four years, we still don’t see us returning back to baseline like even not within four years so it’s good to be careful.
MK: There are other revenue streams to aside from taxes so there’s property values which we think are probably going to go down, but also things like parking things like fines various kinds of fines, the city like a lot of places has basically gotten rid of late fees during the pandemic. I don’t know how much of a thing late fees are in our budget, but they all like add up all the different kinds of fines and fees. We stopped parking enforcement like there were no parking fines, so not just the regular parking revenue, but the parking ticket revenue all of that stuff for several months. I think we’re now paying like charging for parking again, but I don’t know just do you.
JL: Were back charging for parking and we’re back at 100% the the challenges, because so many people are working from home, we still have a compact to 50 even 50% of parking activities, so, while the rates are back the activity isn’t. Right.
MH: But the parking money well, I guess, some of that does go to the city doesn’t it, I was thinking it mostly goes to funding the parking system but.
JL: Right 20% of gross revenues go to the city and we also help service, the debt on the Court building to the tune of about I think $500,000 a year and that comes from parking as well.
MK: So, just as you were doing the research for this episode was there anything that really surprised you.
JL: And that’s a good question. The one thing that surprised me it’s like a mirror image of each other, I loved that there were some resources that made it really easy to get into the budget. The citizens guide to the budget process for Ann arbor we’re going to drop the link in the show notes so helpful like really, really helpful but it’s best if you come at it having absolutely no questions whatsoever. If you come at it with enough information to be dangerous and you’re like okay so, for example, i’d like to understand how parking enforcement fees factor into our city budget that’s actually more difficult to find and it’s, not because they make it hard it’s because the way that they summarize the information is really the way that you’re looking for it really answers the question that you have. So, at that point, you have to actually get into the budget document itself, which is 458 pages of total Turner no it’s not it’s so dry, but it is really fun like especially once you get into the amendments it’s just it is an interesting conversation Michelle said at the top of the episode of budget is a moral document. If you read it with that I it actually is a really paid a real page Turner because you get a super good sense of what Ann arbor cares about from. The way that we talk about money and the way that we spend it, so I was surprised by how easy it was to access some insider information and how hard it was to parse it. So that’s in our budgeting really we covered the basics of the public process revenues and expenditures and some challenges related to the pandemic. If you’d like to take it a little further on your own First up in just a couple of days, the city is very next work session on February 2021 is on the coming year fiscal year 2122 budget, including the general fund community services fire police and the 15th district court. The last Community budget survey results were just published last month, so you could take a look at that and find out what folks are finding important right now. For myself, I love, seeing that have the top 15 priorities I think either six or nine had to do with housing affordability so that’s feels awesome to me. You can also take a look at the citizen guide to finance and budget still think we should call it a resident time don’t think we should be constraining to citizens. And you can also talk to your neighbors and there in your local community organizers about what they’re hopeful for in this budget season, what are they hoping changes, what do they want to see funded morals and what do they see funded less of so i’m going to pass the MIC to molly Michelle and ask you that question, what do you hope for.
MH: First, I wanted to note, I think we got a little garbled with the date of that cities work session is Monday February 8 2021 that’s fun the City Council is going to be talking about budget that staff is going to be talking to the Council about the budget and you can tune in.
JL: You can tune in we’ll put a link to that meeting.
MH: Okay, what, what are we hopeful for in the budget.
JL: that’s right, what do you what’s your wish list.
MH: hahaha you want to go molly I saw you I.
MK: can go I can go first so you know we talked about municipal snow removal sidewalk snow removal, at our last our last episode it’s something that’s top of mind for a lot of people right now that happens every winter we sort of forget about it and spring and summer and then.
MH: just anyone in it.
MK: As a community we sort of cycle through it, and so this is the moment when people are thinking about it again and talking about it again and I would love to see us take steps towards municipal sidewalk snow removal I don’t hold any illusions that this is going to be the year we can really get all the way there, given the cuts that we’re facing at the same time, I would argue that the some of the work that we would need to do to build a sidewalk snow removal service would make a lot of sensory stimulus money it’s going to require buying equipment it’s going to require hiring people Those are the kinds of those are things that the Federal Government is interested in supporting at the local level, so I think it’s not impossible and it just it feels it feels like there’s some energy and interest in it right now and i’d love to see us really move towards that. I want us to have less money in the budget for police and more money for police oversight, as well as for housing and for Community mental health. Those are probably the three big ones for me when i’m thinking about you know we were talking about this as a moral document what are what are our values, I want to see a budget that recognizes walking on foot as a kind of transportation and using buses, as a kind of transportation and I want to see a budget that values real Community safety over policing fame.
MH: And I guess some other things i’d like to see since you took someone might, since you took some of my favorite ones i’ll talk about.
MK: Sorry, Michelle.
MH: I also would like to see us do.
MK: municipal Internet yes.
MH: We have everyone’s using the Internet, nowadays, especially you know, during the pandemic and some people have better service than others, and I think the digital divide is all more defensive than than it has been and we have started to build a fiber backbone downtown between certain municipal buildings and I think it would be great if we could start extending that into residential areas and hook people up to municipal internets um I think another thing oh wait there’s another good one, I had just a second ago um it’s really good idea. I’ll probably just blurted out some other time and some other.
MK: Just what are you what are you looking to see in the budget.
JL: You know the two that i’m really hoping to see our pedestrian and bike improvements I want to see bike lanes continue to proliferate across the city. I want to see us continue to take those two things bike lanes and sidewalks seriously as transportation infrastructure we just don’t and I wish we did I the Ann arbor that I think that I live in is a city that takes those seriously as transportation infrastructure and so i’d love to see. A greater budget priority on those two things and then housing, but i’m actually not asking for anything new i’m just super excited about the millage funds that are kind of come in, I think they estimated something like $6.4 million per year over the next 20 years that’s enough to get a fair amount of work done and so i’m excited to see new plans coming out of the housing Commission new work plan strategic plans. I would really love to see i’ve talked about this on the podcast before and i’m sure i’ll do it again. I really want to see a 10 or 20 year housing plan from city council, not just at the lowest absolute Louis levels of income and highest levels of affordability, but for all of us like we know that affording Ann arbor is a challenge for almost all of us, and I think that there are things that we could do first and policy level, and then the budget level to help ease that pain, so I want to see the housing Commission take a lead, based on the millage that they just got approved but following that in the next couple of years i’m really excited to see what we can do from our people in Ann arbor. So those are a bunch of priority I.
MH: Remember, I remember the one. So okay okay this one’s this one might be a little out there, but the It makes me sad that and also mad that during the pandemic. All the essential workers still need to get their jobs, but the bus system has like slow down and they’ve cut routes they’ve cut times and so now our essential workers are having a hard time getting around and. I am sad that that’s happened, I think we need to increase our bus service during the pandemic times because people need additional help and I think part of the problem is that about 20% of the Ann arbor trends in every area transit authorities revenues depend on people paying fares. And so you know when people are doing less traveling to work, that means that. Those fares go down, and so, then there’s less bus service to provide to the people who still have to travel to work and so I was thinking that if we had eliminated the dependence on fares. Then we wouldn’t have this problem and the bus system could continue operating like it normally does. An ad every area transit authority problem, not an adversity City Council problem but like we could contribute more money, we could contribute more money to it, you know, like we could voluntarily the city can voluntarily take from its budget to put into that like bail out the to bail out the bus service, because we think it’s something that’s important.
JL: And, and the city absolutely does participate financially and then triple A and and I agree with you that doing so at a higher level would be a huge benefit that’s a place where understanding the restrictions on the funds are really in pray because the AAA ta gets highly restricted funds from the Federal Government somewhat less, but still fairly restricted funds from the state government and they can’t spend it on really crucial things like payroll that’s what they were depend on the collection for their collection. So the people that are actually paying for passes are paying for the drivers driving buses are paying for the administrative staff so it’s fine to say eliminate fair collection and I think there’s a lot of reasons to do that, but we have to find another way.
MH: Right to.
JL: To fund their operations if that’s what we decided to do so, you know we were talking a little bit earlier about restricted funds that’s one place where understanding their revenue and expenditure restrictions is really important. If we want to change.
MK: Earlier in the pandemic, it was temporary, but they did in fact suspend fee collection, for several months mm hmm.
MH: But they didn’t eliminate their dependence on it.
MK: No one else was stepping up tore up i’m you know male pete, I guess, now we call him Secretary pete.
JL: Secretary.
MH: Secretary P talking about people to church that in US Transportation Secretary I am.
MK: yeah I I am cautiously optimistic about this one, this is we’re talking way beyond Ann arbor now it directly affects us because there’s in terms of especially regional transit and things like trains were just Michigan is a bit of a wasteland. Because of the you know the predominance of the car companies, I could go on and on and i’m very i’m hopeful that we’re going to get some help from the feds to keep our transmitter public transportation moving and maybe even make it better. So i’m going to take that and pivot that into my last question, which is we’re always telling our listeners to get informed and then get involved so we’ve gotten informed about the budget, what are the three of us going to do about getting involved.
MH: i’m gonna watch that work session on Monday and i’m gonna call into city council and yell at them about about doing the sidewalk snow removal and possibly about defunding the police that’s those are things that I like to do.
MK: And i’m also going to try and watch that work session i’ve never i’ve never tuned into a Council work session before so i’m i’m curious about it, this seems like it would be a good one. And then i’m also planning to go check in with liberate don’t incarcerate, which is a group it’s a washtenaw county group that was earlier on really focused on the county prosecutors race. They have a really clearly outlined set of abolitionist goals around policing and incarceration and i’m curious to see if they’ve got I don’t know. What they’ve got going if they’re thinking in terms of specific budget engagement, but that’s that’s where i’m probably going to go right after this recording is done and see what they’re see what they’re talking about it’s good. Yes, what about you jess.
JL: So, like you, i’m going to try to attend that work session i’ve done Council recessions before and I really love them. Because they’re mostly not political, you know we’re not wrestling over decisions it’s just an opportunity to learn. And so I get interested in the questions you get to see more of staff in those meetings and we tend to hire smart informed relevant people and I like hearing what they have to say on things so I plan to watch that work session i’d like to plug in a little bit more to the housing Commission budget I understand at a super high level how much they have and how it works i’d like to understand how they’re planning for changes, both in response to the pandemic and in response to the millage and I think my last to do for myself.
One of my very last discoveries in preparing for this episode is that Ann arbor engages in revenue sharing of asset forfeiture at both the state and federal levels and that gave me a lot of pause so i’d like to understand more about that and possibly advocate for removing that as one of our revenues, I was thinking.
MH: I said before, the before the show started I said we we should maybe we should, at some point do an entire episode on asset forfeiture that’s just an hour of swear words.
JL: And I think we both said we’re in so yeah.
MH: It might be more informative to do it, a different way, but.
JL: get involved is by swearing that’s right that’s right.
MK: So if we have nothing else to share them, I will wrap it up so thanks everyone for listening to Ann arbor af where your co hosts molly kleinman Michelle Hughes and Jess Letaw. Thanks for listening to Ann Arbor AF. We’re your cohosts Molly Kleinman, Michelle Hughes, and myself, Jess Letaw; and thanks to producer Jarod Malestein. For questions about this podcast or ideas about future episodes, you can email us at annarborafpod@gmail.com. Get informed, then get involved. It’s your city!