The Ann Arbor City Council voted 9-2 in favor of the new 2019 fiscal budget Monday evening. The decision came after debate of the various new amendments including Amendment 1, which proposed to set aside funds to finance and effectuate settlement of the litigation related to the former “Y lot” at 350 S. Fifth Ave.
In another installment of the “Y lot” saga, the council voted to set aside almost $1.3 million from the general fund to cover settlement, bond insurance and closing costs in addition to taxes. The settlement comes between the city of Ann Arbor and local real estate developer Dennis Dahlmann.
Dahlmann sued the city in an effort to keep the lot after the city had decided to repurchase the property for $4.2 million. The lot was originally sold in 2014 to Dahlmann under a contract that stipulated he would redevelop the site within four years and build a new mixed-use building with part dedicated to affordable housing. Dahlmann failed to do so, thus prompting the city to repurchase the lot. Dahlmann claims the city made it impossible for him to build and filed a lawsuit for legal ownership of the lot.
Councilmember Chip Smith, D-Ward 5, who introduced the amendment in the meeting, said the council was undergoing this action of settlement to eliminate any risk of the lot being lost in litigation and ensure it is used to build affordable housing.
“My concern is that we could end up in a worst-case scenario, in which the property could be flipped to any developer who then could build a market-rate development, with the limits allowed by zoning,” Smith said. “Under that scenario, everyone in the community, I believe, loses.”
Councilmember Jane Lumm, I-Ward 2, was opposed to the amendment as she saw it as an inappropriate use of a budget amendment.
During the middle of a fiscal year, a decision to allocate funds to pay a settlement that was not otherwise budgeted – like the proposed allocation – would take eight votes. However, during a budget meeting it only needs six votes to be included in the next fiscal year’s budget. Lumm had strong words against this motion.
“(The amendment) uses the budget as a tool in a little game rather than what it should be: a document to reflect the priorities of our residents,” Lumm said.
Councilmember Zachary Ackerman, D-Ward 3, supported the amendment and pointed out each amendment goes through the same process of only needing six votes during a budget meeting.
“I think that in particular when a piece of real estate is involved, some may have the expectation that eight individuals must vote in the affirmative, but I do want to offer a counter case,” Ackerman said. “We just heard 10 amendments to this budget. If these same budget items were to be augmented two weeks ago or in two weeks, they would require eight votes – but tonight they require six. Through this same process, we are attempting to settle a lawsuit and avoid potential legal risk.”
Along with the amendment to the budget, the Council passed a resolution to accept the settlement offer to resolve Dahlmann v. City of Ann Arbor out of court, using the money allocated to settle.
Another debate surrounding the resolution to provide direction to the City Administrator on the provision of solid waste services was also given critical time during the meeting. City Council had previously allocated funds and the city administrator contracted out a consulting firm to make a solid waste plan.
The resolution proposed, and eventually passed, directs the city administrator to not seek further privatization of solid waste services as a solution, and requires the city administrator to stop using temporary employees on a long-term basis unless City Council approves such an action.
The resolution was supported by the American Federation of State, County and Municipal Employees, the union to which the current city employees in the waste management department belong. In a public comment, Curtis Morris, president of the local AFSCME chapter, shared his support for the resolution.
“What I ask of the council members and administration is do not build a wall up — listen,” Morris said. “Truly listen and understand where we are coming from. Listen to the frustration; also listen to the insight that they are going to provide. They deal with day to day, they will let you know the quality of service they provide for the citizens.”
Councilmember Jack Eaton, D-Ward 4, stressed his support of the resolution.
“I believe that privatization of our services is contrary to our community values.” Eaton said. “The way that a private corporation attempts to save money when providing services is by paying lower wages, we have to simply admit that. That attacks core values that I think that most of us on council respect.”
Councilmember Kirk Westphal, D-Ward 2, expressed his support for unions and union jobs, but he commented he could not support a resolution that would limit the consultant’s ability to provide information.
“We just don’t know, and we won’t know if we close the door on information we are paying really good money for,” Westphal said. “I would rather go into this with my eyes open.”
Ackerman was in support of this resolution and stated even if the consultant were to come back with a plan for privatization, he would not support it.
“If we want a culture of customer service, if we want to have an organization that guarantees customer service, we need to employ the people that provide that customer service,” Ackerman said. “I am pleased to provide this, and I want to be honest and upfront that I would not support a plan for privatization down the road. Cutting that off now I think is the best course forward to focus our consultant on plans that we would support eventually.”