Late on Thursday, October 1, 2026, the following resolution was posted on the city of Ann Arbor’s government website; it will be considered during the City Council meeting on October 5. Our responses are in bold.
Title
Resolution Encouraging Ann Arbor Voters To Vote “No” on Proposal E
Staff
Reviewed by: Atleen Kaur, City Attorney
Body
Whereas, Proposal E is a citizen-initiated petition to modify the Ann Arbor City Charter to create a Municipal Electric Utility Board and require the City to establish a municipal electric utility;
Whereas, Proposal E would vest in a nine-member Ann Arbor Municipal Electric Utility Board broad powers the City Charter now reserves to the City Council and the City Administrator, including independent authority to acquire property, enter contracts, borrow money, and hire and direct staff;
Response: It’s false that the muni board would have independent authority to borrow money. Our charter amendment’s borrowing clause (amendment section 7) refers explicitly to chapter 8 of the current city charter, which gives City Council authority over borrowing, and specifies the types of bonds the city may issue and the procedures for doing so. All other Board decisions would be subject to direct Council oversight (see next paragraph).
Whereas, Proposal E would let the City Council amend or void the Board's operational decisions only by eight affirmative votes, an extraordinary threshold that inverts ordinary majority control and strips residents of meaningful elected oversight of an enterprise able to obligate millions of dollars in City funds;
It’s false that the utility would be “able to obligate millions of dollars in city funds.” Its budget would in fact be “adopted in accordance with the provisions of chapter 8 of the Charter” (amendment section 6). Charter chapter 8 gives City Council sole authority to set budgets and lays out detailed procedures for the budgeting process. The eight vote requirement for operational decisions, including personnel decisions, was included in order to add an extra layer of Council oversight, not to “strip residents” of that oversight. Note that eight Council votes are required by the Charter to amend an adopted budget. It’s reasonable to apply the same standard to amending the utility’s operational decisions.
Whereas, Proposal E would create internal inconsistencies within the City Charter by conflicting with existing provisions that vest the creation of boards and departments, contracting authority, property acquisition, and staffing decisions in the City Council and the City Administrator;
The city charter can be amended to create new boards and departments. Most recently, in 2024, it was amended to create a Sustainable Energy Utility (SEU) by ordinance. Our charter amendment proposes to do the same thing for a municipal electric utility (MEU). It’s true that the MEU would not be under the direct authority of the City Administrator, but this model of a semi-independent municipal utility has long existed in cities like Lansing, Holland, Traverse City, Grand Haven and Marquette. All these municipal utilities work harmoniously and in close cooperation with the rest of their respective city governments.
Whereas, Proposal E identifies no tax, millage, or other funding source;
No funding source is needed. Proposal E carries no financial obligations. We would expect that the city would dedicate a few hours a month of staff time to support Board meetings, and possibly some additional staff time to help draft the ordinance setting out the utility’s procedures. Nothing more. This should be easily accommodated by the city’s annual budget. But City Council may decide to not fund the utility at all. It has that ability, should it choose to exercise it.
Whereas, To fund Board operations, the litigation certain to accompany the Board's creation and any acquisition of DTE's distribution assets, and create any resulting utility, the City would have to raise taxes, borrow without any identified means of repayment, divert other revenues, or cut existing services;
This is false. The Board would be unpaid, and “Board operations” would amount to arranging meeting space, creating meeting agendas and recording minutes--a few hours of staff time a month. Our charter amendment does not authorize the acquisition of DTE’s distribution assets, and in fact explicitly refers (amendment section 2) to the state laws that govern that process, which would require a government decision to begin condemnation proceedings and an eventual vote of the people on the contract to acquire DTE’s assets.
Any litigation from DTE or its proxies challenging Proposal E should be handled by the City Attorney’s office within its current budget, like the recent lawsuit by the Ann Arbor Responsible Energy Coalition against the City Clerk that was dismissed at the county level and again on appeal. The City is currently party to over a dozen active court cases, and none of them has required raising taxes, new borrowing, or cuts to existing services.
Whereas, Establishing a municipal electric utility would, as a practical matter, require the City to forcibly acquire DTE's local distribution system at a cost of hundreds of millions of dollars, possibly exceeding $1 billion;
This is completely false. Establishing a municipal electric utility, as Proposal E would do, does not authorize the acquisition of DTE’s assets, much less “require” it.
Whereas, Acquiring that system would require condemnation proceedings that would be prolonged, uncertain, and costly, committing the City to millions of dollars in legal fees;
It’s true that acquiring that system would require condemnation proceedings that would be costly (although not nearly as costly as DTE and its proxies are claiming). But, again, Proposal E does not authorize such condemnation proceedings.
Whereas, The Uniform Condemnation Procedures Act could require the City to place the estimated value of DTE's distribution system in escrow years before collecting a dollar in rates, an obligation that would bankrupt the City of Ann Arbor, literally;
This is false. Placing the value of DTE’s distribution system in escrow would only be required under the UCPA’s so-called “quick take” condemnation procedure (“interim possession,” to expedite the condemnation process. (MCL 213.59.) Under quick take, the city would take possession of DTE’s assets (and its revenue stream) before the final purchase contract and costs were worked out. The standard condemnation procedure does not require an advance escrow deposit. Proposal E does not propose “quick take” condemnation, or in fact any kind of condemnation. Even if it did, condemnation would not “bankrupt the City of Ann Arbor.”
Whereas, Upon acquisition, the City would own an aging distribution system on an as-is basis, would bear the cost of upgrading and maintaining it, and, because that system generates no electricity, would have to purchase power on the wholesale market and demonstrate under state law, at least four years in advance, that it has secured supply sufficient to meet the City's needs;
This is irrelevant to Proposal E, which does not propose or authorize acquisition.
Whereas, The City has no budgeted staff, billing systems, ratemaking capacity, vehicles, equipment, or facilities to run an electric utility and would have to build, buy, or lease every one of these functions from the ground up while delivering reliable, 24/7 service from its first day of operation;
This is irrelevant to Proposal E, which does not propose or authorize acquisition.
Whereas, Even if the City were able to stand up an electric utility utilizing DTE’s distribution system, the process of obtaining an additive supply of renewable energy that would meet the capacity needs of the whole of the City of Ann Arbor would take several years and cost hundreds of millions of dollars;
Debatable, but irrelevant to Proposal E, which does not propose or authorize acquisition.
Whereas, Acquiring DTE's distribution system would remove that property from the tax rolls, eliminating $8.5 million in annual tax revenue, including $2.9 million to AAPS and $2 million to the City of Ann Arbor;
Debatable (municipal electric utilities typically run surpluses that are returned to cities’ general funds in lieu of taxes), but irrelevant to Proposal E, which does not propose or authorize acquisition.
Whereas, The litigation, upgrade, operating, and start-up costs of acquisition fall outside any estimated purchase price and are absent from the proponents' claim that municipalization would cost taxpayers "almost nothing," and together they would place the City's general fund, its existing services, and its taxpayers at substantial and open-ended financial risk;
Irrelevant to Proposal E, which does not propose or authorize acquisition. We’ve never claimed that “municipalization would cost taxpayers ‘almost nothing.’” We have said that Proposal E would cost almost nothing, and stand by that statement. Obviously any decision to acquire DTE’s assets would need to be preceded by a rigorous cost analysis to ensure a value proposition for the public.
Whereas, Proponents failed to explicitly include in the ballot proposal the requirement for a second vote of the people before any “acquisition” of property;
This is false. See amendment section 2. It refers to state laws that require a 3/5 majority vote of the people to “acquire” any utility that serves the public. That’s why we included this section.
Whereas, Ann Arbor voters authorized the Ann Arbor Sustainable Energy Utility (the "A2SEU") in November 2024 by nearly 80 percent;
Whereas, Today, in October 2026, the A2SEU is on track to serve approximately 100 homes in the City - mostly in the Bryant neighborhood - with 100% renewable energy by the end of the year, and plans to expand that service to up to 1,000 homes across Ann Arbor in 2027;
We have always supported the SEU as an innovative and useful model of distributed generation, and as a first step towards a possible municipalization. An MEU would be completely compatible with, and complementary to, the SEU.
Whereas, The City can responsibly advance only a limited number of major priorities at once, has made clear commitments to climate action and affordable housing, and would see Proposal E divert substantial public resources and attention from those commitments and from the clean-energy progress already underway.
Proposal E, because it does not include any cost obligation, would not divert substantial public resources away from anything, certainly not away from the city’s SEU.
Whereas, Opposition to Proposal E does not change the City’s longstanding concerns about DTE rates, service, outages, and the disproportionate impact these have on marginalized and under-resourced residents; and
We acknowledge these concerns and share them.
Whereas, The City remains committed to intervening in DTE rate cases before the Michigan Public Service Commission to oppose unjustified rate increases, advocate for better service, and fight for outcomes that will further the City’s climate goals, and to working with Ann Arbor’s state legislative delegation to strengthen oversight and regulation of DTE;
This is irrelevant to Proposal E. For the record, we have always supported and appreciated the city’s interventions in DTE rate cases.
RESOLVED, That the Ann Arbor City Council concludes that Proposal E is financially reckless, creates inconsistencies within and revises the City Charter, and would burden Ann Arbor taxpayers and ratepayers while jeopardizing progress on the voter-approved A2SEU already advancing the City's energy goals;
Every one of these statements about Proposal E is false. Proposal E carries no financial obligation, amends (not revises) the City Charter, places no burden whatsoever on Ann Arbor taxpayers and ratepayers, and does not affect the SEU.
RESOLVED, That the City Council directs the City Attorney, at the appropriate time, to challenge the legality of Proposal E including but not limited to its revisionary effect on the City Charter; and
We’re confident that our charter amendment is legally sound and entirely compatible with state law. That’s also the opinion of the Michigan attorney general’s office after a review of Proposal E. (Letter from AG office to Governor Whitmer dated August 12, 2026.)
RESOLVED, That the Ann Arbor City Council encourages voters to vote “no” on Proposal E.
Individual City Councilmembers are of course free to communicate their opinions about Proposal E, and to urge a “no” vote. We welcome that conversation. But, to our knowledge, the city has never taken an official position opposing a local ballot initiative. We cannot understand why the sponsors of this resolution are proposing this extreme measure. Or why this resolution includes statements they should know are false and that appear designed to mislead the public and raise unwarranted fears about Proposal E.
Sponsored by: Mayor Taylor and Councilmembers Akmon, Briggs, Ghazi Edwin, and Watson