Ann Arbor's new City Hall will cost a mere $57 MILLION

[meganmonkey]

Paying for the Rog Mahal
By Karen Sidney

The Ann Arbor City Council majority is rushing to approve a massive new city hall complex. City employees have named it the Rog Mahal, for city manager Roger Fraser. Ann Arbor residents have been excluded from the decision process but they will get stuck with the bill, which has risen to over $57 million dollars. This is more than double the amount the the Community Security and Public Space Task Force Report suggested spending.

There is no way to pay for such an expensive project without squeezing more money out of Ann Arbor residents. That's because the city has only $8-$9 million set aside for this project, not the $57 million needed. The city will save about $630,000 per year in rent when it moves from the county courthouse and city center building. But the annual operating costs of the new building is estimated to be $334,000. When the additional cost of special court security are added, the total operating costs of the new building will be about the same as the present rental costs. That means the rent savings will not be available for bond payments.

The direct way to pay for the Rog Mahal is to ask residents to approve a tax increase. That allows voters to decide whether the proposed municipal complex is worth paying higher taxes. City Administrator Roger Fraser and members of Council have refused to consider this option.

There are also back door tax increases. Instead of a tax to pay for the building, residents can be asked for a tax to restore service cuts made to pay for the building. Suppose the city borrows the $48 to $49 million shortfall. To get $3.5 million per year for the next 30 years of bond payments would require drastic general fund service cuts.

For example, $3.5 million could be found by cutting the street tree budget in half, closing all recreational facilities and laying off 20 police officers.

Another type of back door tax increase is to raise fees and divert the additional money to pay for the new building. City staff have already floated the idea of using utility fees to pay for the project by using a PILOT (payment in lieu of taxes). The city water and sewer funds would pay “taxes” to the city, which would be used for Rog Mahal bond payments. Utility rates would be raised to cover the increased cost of operating the utilities.

Another option is to increase the rent the city charges the DDA for the parking facilities by $3.5 million, forcing the DDA to raise downtown parking rates. Raising hourly rates by 30 cents and monthly permits by $35 would raise the additional $3.5 million.

And there is always the possibility of selling off city assets. The city is preparing an RFP for sale of the old city yard at 415 West Washington and many believe sale of the North Main yard is not far behind.


Such a sale could be attractive to McKinley because it would guarantee spaces for its tenants, but would require the city to build a nearby replacement structure. The DDA parking fund would pay for the structure, which may require an increase in parking rates.

A much cheaper option is keeping the city court at the county courthouse, as was proposed in 2000. Keeping the courts together will allow the city and county to share the substantial annual cost of court security. It will also avoid duplicate costs for items such as prisoner sally port and holding areas, jury assembly room and victim/witness waiting areas. While the county's charge for courthouse rent will increase because Ann Arbor is currently getting a very good deal, it should be possible to work out an arrangement with the county that is far less than the cost of a separate city court building.

Council, rather than the voters, will decide how much to spend for the Rog Mahal, what it will look like, how big it will be, and where the money will come from.
The Allen Creek watershed, Greenway and arts advocates want one or both of these sites for public uses. The value of these sites is unknown because the city refused a freedom of information request for the appraisals but the sale price won't come close to paying for the Rog Mahal.

Selling park land
Many city residents fear the city will sell off some of the golf courses. In March 2006, the city's chief financial officer estimated that selling 22 acres of Huron Hills would raise $300,000 per acre, or $6.6 million. Council members deny sale is an option but they refuse to take it off the table. Sale of park land requires voter approval. City officials have given inconsistent answers about whether the golf courses are park land. Even if it is considered park land, a loophole allows the city to reclassify park land as surplus and then sell it.

City insiders say there have been discussions of selling the Liberty Square parking structure to McKinley, which could raise at least $10 million dollars. Council will decide which city properties will be sold (requires 8 yes votes), which fees will be increased (requires 6 yes votes) and how much money will be borrowed (requires 6 yes votes). Under the City Charter, city administrator Roger Fraser decides which services will be cut when he proposes a budget. It takes 7 Council votes to change Fraser's budget. But once the money is borrowed, the options are limited.

At a Council meeting earlier this year, Mayor Hieftje said that going forward with a new city hall will tie the city's hands for years to come because there will be no money to do anything else. According to the Ann Arbor News, council member Easthope says he has 6 votes to go forward with the project, even after 2 new members join council. If you want to have a say in what happens, you need to let your voice be heard:
-Write a letter to the editor: click here.
-Email council: click here for addresses.
-Email the Board of Commissioners
-Attend the 9/25/07 meeting: click here for information.
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[Demeter]

1. I Have Found That Reason Doesn't Apply Here in Ann Arbor

City Hall feels entitled to a spiffy new facility with all the perks. In the 7th year of the latest Depression, it's a bit much to ask of a populace devastated by unemployment.