EDITORIAL: Using Fees as Backdoor Taxes
THE CITY ADMINISTRATOR’S proposed $99 million General Fund budget was released ahead of last week’s Ann Arbor City Council meeting. The budget projects that expenses will outstrip revenue, and in what has become a commonplace occurrence, residents have been told there will be a projected budget shortfall of $1.8 million in 2016-2017 budget.
Since the hiring of City Administrator Steve Powers, compensation for city employees has risen sharply. In 2010, 13 employees earned six-figure base salaries. After three years of Powers’ at the helm, that number has doubled. One-quarter of all city employee total compensation packages now $100K and above—up from 6.5 percent of staffers in 2010.
When former City Administrator Roger Fraser was in the job, 6.5 percent of the city’s 800 staffers had total compensation packages of $100,000 or above. Under Steve Powers, one-quarter of all of Ann Arbor’s 686 regular FTEs in 2013 had total compensation packages worth $100,000 or above.
Powers is the second highest paid city employee with regular pay totalling $163,865.40 in 2013. He earned slightly less in pay than did City Attorney Stephen Postema, who brought in $165,534.76 in regular pay. However, in total compensation, including salary, benefits, severance pay and allowances, in 2013 Powers’s total compensation was $234,010.69. Postema’s compensation totalled $196,436.19.
Between 2009-2013 total FTEs decreased from 800 to 686. In 2009, taxpayers spent $50.91 million in salaries for those 800 full-time FTE city staffers. In 2013, taxpayers paid $80 million to a total of 686 regular FTE employees and 1,089 part-time and full-time temporary FTEs. A list of part-time and full-time temporary FTEs revealed that some have been employed annually in full-time jobs without benefits for almost a decade.
In this week’s issue of the newspaper, it was reported that former city employee Ralph Welton was allowed to resign, but then given a separation agreement that guaranteed him pay and health care benefits for six months in exchange for staying home. The agreement also guarantees Welton will vest in the city employee retirement system.
Had Welton been fired, he would have come up six months shy of the five-year vesting period and, as a result, would not have collected a pension and retiree health care benefits paid for by city taxpayers.
In the City Administrator’s budget this year water system revenues are projected to rise 4.3 percent, sewer system revenues by 6 percent and stormwater revenues by 6.5 percent. Charges for these services have been raised almost annually in order to avoid raising the city’s property tax rate. Hiking the property tax rate would, no doubt, take a significant political toll on local elected officials who have, for years, touted the cost-savings of cutting the number of city employees and allowing police officers to take early retirement.
Mr. Powers needs to be given clear direction by City Council members that before hiring consultants, cutting services and raising fees, he must make every effort to economize where the compensation, benefits and perks for city managers are concerned. Using the city’s utilities to fleece the public and prop up the political careers of local elected officials must come to an end. Perhaps if taxes were raised, voters would turn out in August for the primary elections.