This week, City Council will consider first reading of an ordinance amendment to renew and add terms to Ann Arbor’s utility service agreement with DTE Gas. Two years ago, elected leaders boasted that in negotiating a new agreement, the City would promote carbon neutrality and reduced pollution. The agreement on this week’s agenda includes very few commitments toward those goals. As negotiated by the City: DTE has agreed to fund $500,000 in grants to landlords and $300,000 in direct payments to labor unions.
C-1 (25-0675) An Ordinance to Amend Chapter 34 (Gas Franchise) and Replace it with a New Heating Franchise And Adopt Accompanying Agreement Regarding Climate Action
BACKGROUND
The City’s current agreement with DTE Gas was established in 1997 with a term of 30 years (through 2027). A new agreement will last ten years. As explained in the staff memo:
Rather than lasting 30 years like a typical gas franchise, this franchise only lasts until 2035, signaling to DTE Gas, developers, and residents that the City is exploring alternatives for heating that better align with A2ZERO goals (geothermal, electric heat pumps, etc.). This does not mean the City could not choose to enter another franchise with DTE Gas (or another utility) at the end of this franchise term, but another franchise is not guaranteed.
Renegotiation of this contract was prompted by a resolution two years ago. In 2023, MLive reported:
[C]ity officials are hoping it brings DTE to the negotiation table on moving away from gas.
…
“Residents in Ann Arbor are demanding reliable, affordable, healthy and safe energy and our A2Zero plan calls for carbon-neutrality by 2030,” said Council Member Jen Eyer, D-4th Ward, one of the council leads on the issue.
…
“The fact that the franchise is up gives us an opportunity to have those discussions with DTE,” she said, adding she doesn’t want to presume the outcome.
…
“This is a great time to begin talking with DTE about how we can reduce dangerous pollution and provide more energy choices for our residents,” she said, suggesting Ann Arbor’s transition away from gas could serve as a model for the country.
“OPPORTUNITY” AND OUTCOME
This week, we see the outcome of a renegotiated gas franchise: an initial “work plan” with very few details. DTE commits to generally “collaborate” and “reasonably support” and “reasonably assist” and “reasonably work together” and “reasonably pursue” various projects with the City. In reference to one initiative, the agreement includes explanation: “DTE will determine in its sole discretion, the level of financial support.” Apart from a schedule for meetings and regular reports, the only hard commitments extracted from DTE are $500,000 to benefit property owners (landlords, specifically) and $300,000 in direct payments to labor unions.
DTE commits $500,000 in support of property improvements at rental properties (i.e. money for landlords):
“The Parties will jointly design an energy efficiency pilot program specifically focused on renters and landlords located in the City. As part of such program, DTE will make available $500,000 in energy efficiency incentives to program participants.”
The work plan refers to City plans to directly invest in the Local UA 190 Plumbers and Pipefitters office, with unspecified support from DTE:
“DTE agrees to reasonably support, the City’s third-party fundraising activities (e.g., government funding and/or private funding), for the potential installation of a geothermal training center at the Local UA 190 Plumbers and Pipefitters office that can be used for technical career training.”
Additionally, DTE agrees to make payments adding up to $300,000 to labor unions, in support of training and workforce development:
“DTE agrees to provide $50,000 per calendar year for three years to Local UA 190 to support the implementation of the Training Plan and another $50,000 per calendar year for three years to Local UWUA 223 to support additional thermal energy network and/or geothermal system workforce development.”
You can read the whole work plan here:
https://a2gov.legistar.com/View.ashx?M=F&ID=14000152&GUID=37DEAA61-89F5-4670-8985-E8C33C51A643
RETURN ON INVESTMENT: LABOR UNIONS
In recent years, political action committees (PACs) affiliated with labor unions have shoveled enormous amounts of money into our local elections to influence outcomes. Campaign finance reports show labor union PAC donations of over $35,000 to Mayor Christopher Taylor and current members of City Council, plus $75,000 in opposition to local campaign finance and electoral reforms on the 2024 ballot.
Donations listed in official campaign finance reports are only the tip of the iceberg. Recently, Ann Arbor has seen more and more political campaigns funded by “dark money,” which is harder (but not impossible) to trace. E.g. In 2024, labor union PACs funded multiple mailers in opposition to campaign finance reform and electoral reform.
https://www.mlive.com/politics/2024/10/fake-trump-ads-are-latest-twist-in-debate-over-ann-arbor-ballot-proposals.html
Labor union funding for those “dark money” mailers was in addition to the $75,000 reported as direct donations opposing campaign finance and electoral reform on the 2024 ballot.
This big money game began in 2018 with the Plumbers and Pipefitters union; coincidentally, one of the three unions that will benefit from this week’s “work plan” with DTE.
In 2018, the Plumbers and Pipefitters union funded “dark money” political mailers in the City of Ann Arbor, attacking candidates for local office. MLive reported that all but one of the targeted candidates were “opponents of the City Council majority led by Mayor Christopher Taylor.” The mailers were sent from an entity called Great Lakes Renaissance Fund, whose executive director was TJ Bucholz of Vanguard Public Affairs. MLive reported on it at the time.
https://www.mlive.com/news/ann-arbor/2018/08/dark_money_attacks_on_ann_arbo.html
FRIENDS & FAVORS
In her 2020 campaign for City Council, Jen Eyer consistently advertised herself as a “small business owner” due to her partnership with TJ Bucholz at Vanguard Public Affairs (the same Bucholz who, in 2018, directed dark money mailers funded by Plumbers and Pipefitters). Four months after Eyer’s election to Council, multiple women accused Bucholz of sexual harassment; Eyer was accused of ignoring their complaints and “enabling” Bucholz.
https://www.lansingcitypulse.com/stories/ann-arbor-councilwoman-outed-as-enabler-at-vanguard-public-affairs,16387
Shortly after the publication of that article (above), Eyer denied any ownership interest in Vanguard Public Affairs, explaining to MLive that her campaign advertising had been dishonest:
https://www.mlive.com/news/ann-arbor/2021/03/ann-arbor-council-member-campaigned-as-small-business-owner-now-admits-that-wasnt-true.html
Vanguard Public Affairs no longer exists. Eyer currently owns a consulting business and describes herself this way:
“Jen specializes in promoting labor unions and social advocacy organizations. Jen also serves on the Ann Arbor City Council, where she championed and passed the city’s groundbreaking Best Value Contracting policy.”
https://www.eyerconsulting.com/
The “Best Value Contracting” policy fundamentally changed how public dollars are spent. For years, the City has imposed extra requirements for all contractors: companies doing work for the City must pay a higher wage (“prevailing wage”) and document the benefits that they provide their workers. A committee of City staff assess hundreds of pages in bid documents and score competing bids among companies willing to meet those extra requirements. Prior to 2021, staff made recommendations for contracts based on who met those requirements as the “lowest responsible bidder.”
As applied by the current Council, a new “best value contracting” policy now awards City contracts to much higher, more expensive bids. More concerning: those awards can now happen arbitrarily, outside of any staff review. Three times, Eyer has led last-minute maneuvers at the Council table to switch contractors: rejecting staff recommendations in order to give City work to specific companies she preferred. Since it was approved in 2021, the “Best Value Contracting” policy has cost the city millions of dollars. You can learn more about that in this video:
WHY THIS MATTERS
In 2023, when City Council passed a resolution to pursue a new agreement with DTE Gas, elected leaders suggested that it was an opportunity to promote conversion to electricity and clean energy. This week, a new work plan includes very little that would push us toward those stated goals. Instead, the City negotiated for DTE to make $300,000 in payments to labor unions to fund “geothermal workforce development.”
Is there a need for more qualified people, trained to work in geothermal? Perhaps.
The Michigan state department of Environment, Great Lakes, and Energy (EGLE) offers financial assistance for education and training in clean energy. Any 501(c)(3) organization, 501(c)(6) organization, or small business located in Michigan is eligible to apply and compete for these state funds.
https://www.michigan.gov/egle/about/organization/materials-management/energy/rfps-loans/energy-workforce
In contrast to the EGLE program – funding made available to any nonprofit or local business for education and training – the City of Ann Arbor has persuaded DTE to make direct payments to specific recipients who happen to support their political campaigns.
Why did the City want DTE to provide $300,000 in payments to labor unions rather than make investments that would more directly benefit the City residents who use DTE Gas? In an agreement that includes so few specific terms, how and why would the City prioritize these payments?
This week, no member of City Council asked any questions about these payments or anything else in the negotiated work plan with DTE. Instead, Council members asked four questions about road reconfigurations.