Budgets and Politics

I have not had a chance to write about our last Council meeting (May 18, 2020) and there is quite a lot to cover. We are facing significant budget shortfalls. I need to start there, because this fact has not been acknowledged as openly and publicly as it needs to be. One thing I said at the last Council meeting has now been quoted in more than one MLive article: Investing in a bike lane is a lot less important to me right now than feeding somebody who’s hungry or making sure that somebody gets to stay in their house because they’re about to be evicted. This should rank among the least controversial things anyone could possibly say during a time like this, when many in our community are struggling and none of us knows what will happen when the stay on evictions is lifted. We are told to expect nearly $5 million in budget shortfalls for the current fiscal year (ending 6/30/20) and projected budget shortfalls of nearly $11 million in FY2021. In just the last month, City Council approved two budget amendments (totaling $450,000) for emergency funding to shelter the homeless and we expect additional, similar budget requests in the future. These problems will surely get worse. Our local nonprofits will be working to assist people in crisis and the City will be partnering with them to meet community needs. The City will not be able to fund every single budget item at the same level that we did last year or in the past. Period. That is a fact. We may actually have to choose between funding agenda items like bike lanes and funding support for affordable housing and related services. We anticipate a budget crisis that drastically changes the context for ALL of our funding discussions. We are well and truly going to have to make decisions to fund some things more and some things less. At our last Council meeting, I felt most frustrated when I realized that some of my colleagues were comfortable posturing that this year’s budget is like any other. That is a huge obstacle to meaningful debate and compromise. Regarding our budget, all of your elected leaders should be honest in admitting that cuts are likely. It is irresponsible for any of us to pretend that this is not the case, pretend that past promises for funding are sacred in this new reality. Ignoring facts doesn’t make them go away, it just makes frank conversation and constructive discussion more difficult. It is a way of avoiding responsibility. During this last budget discussion, we were looking at a budget that had been prepared before the pandemic, before anyone knew just how different our budget is likely to be next year (and how different it already is, this year). The numbers did not take into account a serious loss in revenue. There was no time to completely re-write that budget ahead of our meeting; the City charter requires that we settle the budget this month. We know that decisions will have to be made in the coming year as we go. Some of my colleagues tried to at least acknowledge these facts, admit that this year presents unique challenges. FACING THE FUTURE On May 11, Council met for a work session to discuss the projected budget shortfalls: the difference between the prepared budget and much lower anticipated revenue in light of the recent and ongoing pandemic: Direct Legistar link to the May 11th "COVID-19 Financial Recovery Plan" presentation: https://a2gov.legistar.com/View.ashx?M=F&ID=8335821&GUID=37263836-E17B-4B05-A0E3-8D0094DA670D That presentation has also been linked on the City's "Budget Public Process" page: https://www.a2gov.org/departments/finance-admin-services/financial-reporting/budget-guide/Pages/BudgetPublicProcess.aspx In response to that work session, CM Lumm and CM Griswold added a resolution to our May 18 agenda that included a list of pretty reasonable directions to our city administrator, guidance to help him adjust our budget moving forward: https://a2gov.legistar.com/LegislationDetail.aspx?ID=4523946&GUID=B3CB8645-48F4-449A-87C1-7ADCC2A3E456&Options=&Search=&FullText=1 Among the suggestions: hiring freezes, negotiated pay cuts, fewer consulting contracts, delays for major projects, and lifting a 40/40/20 commitment (from 2017) that designated the use of $2.2 million in unrestricted millage rebate funds. (see footnote below) Also included in the Lumm/Griswold resolution was the priority that: Funding is ensured for the actions necessary to support residents most impacted by the crisis. Of the three goals “promised” (40/40/20) from those rebate funds - affordable housing, climate action, and pedestrian safety - only one of them is likely to meet the basic needs of our most vulnerable residents, the members of our community most impacted by the pandemic and economic downturn. Somehow, advocacy groups for the goal least likely to see reductions - affordable housing - seized on this resolution as evidence that Council planned to “defund” and remove priorities for affordable housing and related support services. In the days preceding our last Council meeting, instead of reaching out to actually discuss specific priorities (i.e. clarify the facts of how the Lumm/Griswold resolution was likely to impact 40/40/20 commitments), several advocacy groups spread the message that Council was "plotting to defund” services to the most vulnerable in our community. This was wildly inaccurate. The emails I received from residents were panicked and frantic (or hostile and furious) and they didn’t make any sense in terms of what was actually on our agenda. Regarding these emails (and the folks who prompted them), some of my colleagues expressed a lot of frustration at our meeting. I understand their feelings. Funding for affordable housing and the support services connected to affordable housing were never going to be cut. Period. If - in the time it took to draft a “call to action” email to hundreds of people - anyone from one of the advocacy organizations had called me or any of my colleagues, we could have clarified this. At the Council table, the resolution was amended to explicitly protect the 40% of rebate funds promised to affordable housing. That amendment was expected, even without hundreds of emails accusing two of my colleagues of callous disregard for the poor. For me, this series of events (and exceptionally poor communication) highlighted a bigger problem: some members of our community have become so eager to find villains and project bad intent, they have stopped trying to understand and assess the facts of a given situation. In this case, the facts were best understood and assessed through members of Council who proposed them and would eventually vote on them. All of us are accessible by phone. During this pandemic, I would wager that many of us are home and available a whole lot more. One of the people who unleashed hundreds of angry emails at Council actually lives just around the corner from where I live. If I had bumped into this person on the sidewalk, would he have thought to ask me about the Lumm/Griswold resolution, express his concerns and ask me for help? I’m not sure. The problem I see: folks are pointing fingers in a game of “find the villain” instead of reaching out to find the solution. THE “PROMISE” FOR FUNDS In our Council meeting, Mayor Taylor supported an amendment to the Lumm/Griswold resolution that explicitly preserved funds for two of the three goals (affordable housing and climate action) in the upcoming budget cycle. He then voted against the whole of the resolution that recommended hiring freezes, negotiated pay cuts, fewer consulting contracts, and lifting the 40/40/20 commitment. We attempted a similar compromise last year - lifting the 40/40/20 “promise” while preserving annual budget - which Mayor Taylor vetoed with much fanfare (boasting that his veto would not actually impact anything at all, “not by one penny”). In our most recent budget discussion, I was gratified to see Mayor Taylor vote in favor of the amendments guaranteeing 80% of the promised funds. I saw his support as an acknowledgment that we are facing a very different financial situation than last year, i.e. it’s time for compromise. Friday, I learned that Mayor Taylor had issued a veto. In a meeting that lasted eight hours (from 7 p.m. to 3 a.m.), Mayor Taylor gave no indication that he planned to do this. He voted with the majority in support of amendments that guaranteed funding for affordable housing (offered by CM Griswold) and for climate action (offered by CM Ackerman) but he voted in the minority, against the final amended resolution. His veto is stunning and nonsensical to me. By preserving a funding “promise” from 2017, he stands on a principle that isn’t based in our current reality. To pretend that our financial circumstances haven’t changed drastically is like an ostrich putting its head in the sand. It is not strong leadership. My voting chart from the May 18th Council meeting is here: https://www.a2elnel.com/post/city-council-voting-chart-for-may-18-2020 RE-VISITING A “PROMISE” In these times, we will be re-assessing priorities and we will be re-considering past commitments for funding. This is reality. In the last of our approved budget amendments, we did exactly that (without any controversy) in regards to Parks funding. In 2006, a Park Maintenance and Capital Improvements millage prompted Council to adopt a “promise” by resolution, guaranteeing general fund investment in Parks: as annual budgets increased, funding to support Parks would also increase by calculated amounts. This policy was meant to ensure that the Park Millage dollars would always exist as a supplement to (rather than substitute for) general fund dollars. This policy has been applied year after year in fulfillment of the 2006 “promise.” The policy was affirmed by resolution in 2011 and again in 2012. (Then Council Member Christopher Taylor co-sponsored the “promise” in 2011 and approved it again in 2012.) However, in making this “promise” by resolution, the City Council of 2006, 2011, and 2012 had the wisdom to anticipate economic downturns. The policy guidance resolutions reference potential fund reductions and dictate that those reductions be “no greater than the average percentage reduction” for the rest of the City general fund budget. At our meeting on May 18, Council unanimously voted to suspend this longstanding Parks funding policy for the current year. Our Parks department anticipates much lower revenue this summer season because of cancelled activities. Still, we unanimously agreed to cut what should have been an additional $114,144 to that department. The “promise” (made not once but three times), has been thoughtfully set aside for now, in light of “unprecedented financial stress to the City’s general fund.” That decision to re-visit and back out of a past “promise” was not politicized by anyone. It passed without significant comment. By the time we reached this part of the budget discussion, it was already 2 a.m., so perhaps that’s why it got so little attention. Or perhaps it got little attention because it directly contradicts the notion that a “promise” via resolution should never be revisited under any circumstances. POLITICS In the last two years, I have watched a political strategy play out when anyone questions or suggests adjustment to a plan: connect that plan to a worthy goal and then characterize any skepticism or suggested adjustment to that plan as total rejection and lack-of-support for the undeniably worthy goal. It goes like this: if you don’t support every single dollar requested for the sustainability department, you don’t believe in climate action. If you have questions about a proposed traffic reconfiguration or are willing to let neighbors weigh in, you don’t believe in science. This game is exasperating when budgets are less pressured, but at a time like this, it’s even more counter-productive. Now more than ever, we need space to have meaningful debate around tough choices. In these times, compromise cannot be a dirty word. Your elected leaders know that serious decisions are ahead of us. Last week’s budget conversation was an opportunity to make that clear to the whole of our community, clarify that budget priorities will be more difficult moving forward and compromise will be necessary. I believe that we missed that opportunity by a country mile. In the next 18 months, we anticipate about $15 million dollars (or potentially more) in lost revenue but in our budget discussion, we only cut expenditures by $1.2 million. I am disappointed that some of my colleagues seem unwilling to engage in honest conversation about our budget. Many in our community still misunderstand our budget situation, do not realize the challenges ahead of us. The mayor’s veto helps promote that misunderstanding. He is encouraging residents to cling to expectations that are no longer realistic. If you have not already, please look at the presentation given to Council at the work session on May 11, to better understand the looming budget crisis. I believe we can make better decisions as a community if we are all more aware and informed about the future ahead of us. Footnote: I have seen incorrect statements repeated about these millage rebate funds, so the facts need to be re-stated: a 2017 Council “promise” to fund climate action, affordable housing, and pedestrian safety for eight consecutive years did not appear on any ballot seen by voters. Some people knew about the “promise” and many others didn’t, because it was not written on the ballot for a Community Mental Health and Public Safety Millage. The language on that ballot described eight years of funding for Community Mental Health and Public Safety and unrestricted “allocation” of rebate. Seven communities received these unrestricted rebate funds, and only Ann Arbor took the peculiar step of approving a long-term “promise” for year-to-year spending of it, toward goals that were different from what voters saw on the ballot.

Elizabeth NELSON

DEMOCRAT for Ann Arbor City Council Ward 4

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PO Box 2243. Ann Arbor. MI 48106-2243