Weekly Whopper: "Ann Arbor’s Long Term Debt Has Increased from in $119M in 1999 to $246M in 2010."

On March 3, 2011 Council member Christopher Taylor sent out an email to Ward Three constituents that purported to “explain” the extent and reasons for the city’s ballooning debt load. AnnArbor.com published Taylor’s assertions in its print version, and the next day followed up online with a piece that excerpted portions of Taylor’s email. Taylor writes, “As you will see from the attached documents, Ann Arbor’s long term debt – its mortgage debt, if you will – has increased from in $119M in 1999 to $246M in 2010.  This is a substantial change and you should understand the reasons behind it.  The short answer is ‘Infrastructure’.”

Alas, Ann Arbor’s total long-term debt has quadrupled from $119 million to $461.133 million, not merely doubed to “$246M” as Mr. Taylor “explains” to Third Ward constituents in the error-riddled email he shared with AnnArbor.com and, which in turn, AnnArbor.com shared with its readers.

As A2Politico revealed in the March 7, 2011 entry in which a Certified Public Accountant went through Mr. Taylor’s email about the city’s debt, and checked his claims for accuracy and completeness, the CPA writes:

Incredibly, Taylor left out the city’s retirement debt. The city’s Blue Ribbon Committee issued a report in May 2005 making recommendations on reforming the plans. According to the retirement plan actuarial reports, on June 30, 2005 the city had an unfunded retiree healthcare liability of $121,568,000 million. It’s pension plan was overfunded by $14.322  million (plan’s actuary said the assets were $14.322 million more than needed to make future pension payments).  Five years later, as of June 30, 2010, Ann Arbor had a retiree healthcare debt of  $169,637,000 million and a pension debt of $45,496,000 million.

Unfortunately, Christopher Taylor represented the city’s total debt load as some $215,133,000 dollars less than it actually is. While Third Ward Council member Christopher Taylor claims in his email that the city’s total long-term debt is “$246M,” the long-term debt is, in fact, almost double that amount, or $4,100 for every man, woman and child who lives in Ann Arbor. Put another way, this pension debt is equal to $307,332 for each of Ann Arbor’s 700 city employees, and taxpayers must pay it off.

AnnArbor.com posted a piece on March 4, 2011 titled, “Christopher Taylor explains why Ann Arbor’s debt has doubled to nearly $250 million.” In that piece we read that, “Taylor goes on to explain that the city’s debt has accrued due to the sale of bonds — money borrowed to cover long-term capital improvements.” Then, Taylor lists three projects for which city officials, including Mr. Taylor, voted to float bonds. AnnArbor.com simply repeats Mr. Taylor’s assertions. In fact, AnnArbor.com had under-reported the rise in total and per capita city debt in a piece posted on February 28, 2011. In that post, reporter Ryan Stanton, like Taylor, neglects to include the city’s retirement debt when he reports that, “The city of Ann Arbor has seen its total primary government debt more than double from $107.6 million to $248.2 million while Fraser has been city administrator, city records show. On a per capita basis, the city’s debt has gone up from $943 to $2,199.”

In a piece posted to the news blog in April 2010, Stanton had also under-reported the city’s total debt. He writes that “the city’s total debt — general obligation and all others, “has risen more than 25 percent over three years, from $167.2 million in June 2006 to $209.9 million in June 2009, city records show.”

This Whopper of the Week goes to both AnnArbor.com and Council member Christopher Taylor. AnnArbor.com originally understated both the city’s total long-term debt, as well as the per capita debt. Council member Taylor, in seeking to “explain” why the city’s debt has experienced a “substantial change,” misrepresented the severity of the increase by neglecting to include $214,133,000 in long-term pension obligations.

In February of 2011, while newspapers across the country reported on the impact their city’s pension debts have on their respective operating budgets and city services, AnnArbor.com and Christopher Taylor together, completely ignored hundreds of millions of dollars owed in pension debt, while seeking to “explain” and “report” on Ann Arbor’s total long-term debt obligations. Mr. Taylor, in his professional opinion as an entertainment lawyer, brightly included this in his March 3, 2011 email, “Based upon the dedicated and allocated revenue and payment streams directly associated with these recently issued bonds, I believe that we can meet our obligations without difficulty.”

In his February 28, 2o11 piece, AnnArbor.com’s Ryan Stanton repeats Taylor’s conclusion which, of course, is based on under-stating the total debt which must be paid by taxpayers by about 87 percent: “Based on the dedicated revenue streams for each of those projects, Taylor says he believes the city can meet its debt obligations without difficulty.”