Powers Gets Admin Nod; Recycling Revisited

Ann Arbor city council meeting (July 18, 2011): Councilmembers completed their first two significant tasks in under an hour on Monday evening.

During the time reserved for council communications at the start of the meeting, councilmembers decided to reconsider a 5-4 vote they’d taken on July 5. That vote, which failed to achieve a six-vote majority, had the outcome of rejecting an increase to Recycle Ann Arbor‘s contract to provide curbside recycling service in the city. After agreeing to reconsider the vote, the issue was again fresh before the council.

Councilmembers then unanimously agreed to postpone action on the contract until the next meeting, which falls on Aug. 4 – after the Aug. 2 city council primary elections. Based on remarks from Carsten Hohnke (Ward 5), it appears likely that the council may discontinue a contract with RecycleBank (an incentive program provider) in order to free up funds to supplement Recycle Ann Arbor’s contract.

Next up was a resolution that had been moved forward on the council’s agenda to a spot before all the consent agenda items. After brief deliberations, the council agreed to offer its open city administrator position to Steve Powers. The decision for Powers over another finalist, Ellie Oppenheim, came after two rounds of interviews on July 12-13, including a televised session on the morning of July 13. [Previous Chronicle coverage: "Search Concluding for Ann Arbor City Admin"]

Although Monday’s meeting was brief, the council ticked through a raft of significant votes after those two main business items. The expected start of the East Stadium bridges reconstruction project was reflected in the approval of stormwater control projects near the construction site, and in the approval of a deal to use land as a construction staging area. For a property just down State Street from the bridge, but unrelated to the project, the council approved a sanitary sewer hookup at the location where Biercamp Artisan Sausage and Jerky has opened for business.

Related to the city’s emphasis on the natural environment, the council approved a contract that will allow the planting of 1,200 trees in city rights of way, and added 110 acres of land to the city’s greenbelt program.

The city renewed its membership in the Urban County, a consortium of local governmental entities that allows the city to receive federal funds through a variety of federal U.S. Housing and Urban Development (HUD) programs. The council also appointed Tony Derezinski (Ward 2) as a hearing officer for liquor license revocation recommendations. Initial approval was also given to two ordinance changes related to employee benefits – one of them for union employee retirement benefits, the other for non-union retiree health benefits.

Only three people addressed the council during public commentary at the start of the meeting. Two of them were the owners of businesses – Earthen Jar and Jerusalem Garden – adjacent to the construction site of the underground parking structure along Fifth Avenue. They reiterated the same theme they’d conveyed to the board of the Ann Arbor Downtown Development Authority (DDA) at that body’s July 6 meeting – their business is suffering due to the construction.

And related to the DDA, Stephen Kunselman (Ward 3) continued a pattern of using his council communications slot to update his colleagues on his campaign to press the DDA to provide more information about its budget. It’s a highlight of his re-election campaign in Ward 3, where he’s contesting a three-way primary on Aug. 2.

New City Administrator

In front of the council for its consideration was a resolution to offer the job of city administrator to an unnamed candidate. The council moved the item towards the start of its agenda on Monday evening and deliberated briefly on the choice. Consideration of the resolution came after two rounds of interviews on July 12-13, with the two finalists – Steve Powers and Ellie Oppenheim – including a televised session on the morning of Wednesday, July 13. During the July 13 discussion among councilmembers who attended those interviews, a preference had been indicated for Powers. [Previous Chronicle coverage: "Search Concluding for Ann Arbor City Admin"]

Powers currently serves as county administrator of Marquette County, Mich. – a position he’s held since 1996. Oppenheim most recently served as CEO of the Reno-Sparks Convention and Visitors Authority.

The city’s chief financial officer, Tom Crawford, has been serving as interim city administrator since April 28 – he was appointed to that position at the city council’s April 19, 2011 meeting. Previous city administrator Roger Fraser announced his resignation at a Feb. 28 city council working session. Fraser took a job with the state of Michigan as a deputy treasurer.

New City Administrator: Council Deliberations

The first part of the council’s deliberations on Monday involved amending the resolution to add a candidate name.

Marcia Higgins (Ward 4), who chaired the search committee, said a lot of the council’s sentiments on the two candidates had been expressed during the work session held on Wednesday, July 13. She said she felt Powers was a stronger candidate for what the city needs. She cited as a strength the fact that Powers is already familiar with Michigan. She pointed to the very dynamic things he’d accomplished with Marquette County. Higgins described his approach as thoughtful, and reiterated that she felt he was a stronger candidate.

Tony Derezinski (Ward 2) echoed Higgins’ sentiments. He pointed out that the process had narrowed down 60 applicants to three. The council was very thorough, he said, and had a lot of information. Based on the discussion at the work session, one candidate was favored, he noted. Because Powers had headed a municipal entity for 15 years, he knew how you handle conflicting things, Derezinski said. Like Higgins, he pointed to Powers’ background in Michigan as important. He noted that Powers was trained as a city administrator, but had found his future with a county. Now Powers was coming back to what he studied to be. Either candidate could have done the job, said Derezinski, but Powers was the better of the two.

Mayor John Hieftje said he’d heard several residents who appreciated the discussion that the council had had. It was a very good discussion about the candidates, he continued. The council had spent a lot of time with the decision, but it was clear to all of the councilmembers that Powers was a better fit. Powers’ desirability was also confirmed by another government, said Hieftje, who noted that Ann Arbor’s hire was close to being on schedule.

[Powers made a list of four finalists for the open county administrator job in Polk County, Iowa, where the city of Des Moines is located. The day after the Ann Arbor city council made its offer to Powers, Polk County added another finalist to their list of interviewees.]

Carsten Hohnke (Ward 5) allowed that he didn’t attend the round robin interviews on July 12 or the presentation and question/answer session on July 13. But he said he’d had lengthy conversation with both candidates at the July 12 public reception. He was able to review the video of the July 13 session and review the material that the city’s HR department had provided.

Hohnke said the city has a great opportunity to bring someone like Powers into the community. Both candidates had the skills and knowledge to fill the position more than adequately, he said. But for Hohnke, it came down to which candidate that had strengths that matched up with needs of Ann Arbor at this time. Powers’ familiarity with Michigan was appealing to him, as well as his ability to drill down to specific answers to questions. What stood out for Hohnke was Powers’ success at collaboration with his peers, his ability to take input in a sincere way, his ability to be fair and consistent, and his interest in how the city will measure the success of the city administration. Powers was able to dive down and be specific about tracking performance, Hohnke said.

Hohnke continued his comments by saying it’s a great opportunity and he thanked both candidates – it’s a lot of work to apply for a job, he said. He also thanked Tom Crawford, the city’s chief financial officer who has served as interim city administrator, noting Crawford still has some work to do. Hohnke also extended his thanks to the city council search committee.

Outcome on adding Powers’ name to the resolution: The council voted unanimously to amend the resolution by filling in the blank with Steve Powers’ name.

The deliberations on the main motion were brief. Sabra Briere (Ward 1) noted that it was the most important decision the council would make – unlike councilmembers, who might only serve a two-year term, city administrators stick around for more than two years, she said.

Outcome on city administrator selection: The council voted unanimously to extend an offer of the city administrator position to Steve Powers.

The resolution approved by the city council on Monday specifies that the appointment of Powers is contingent on signing a contract. The council’s city administrator search committee had recommended targeting recruitment of a city administrator with a base salary in the $145,000-$150,000 range. Negotiations on the council’s side will be handled by members of the search committee: Marcia Higgins (Ward 4), Sabra Briere (Ward 1), and Christopher Taylor (Ward 3).

Recycle Ann Arbor Deal

At the council’s July 5 meeting, a vote to change the contract under which Recycle Ann Arbor provides curbside recycling service failed to pass. On July 18, the council reconsidered that vote.

Recycle Ann Arbor Deal: Background

The proposal first considered at the council’s July 5 meet was a change to the city’s contract with Recycle Ann Arbor (RAA) for curbside collection of the city’s single-stream recycling carts – from $3.25 to $3.55 per month per cart, for a total of $107,042 annually. The vote was made without any deliberations and resulted in 5 votes for it and 4 against. Voting against it were Stephen Kunselman (Ward 3), Carsten Hohnke (Ward 5), Mike Anglin (Ward 5) and Sabra Briere (Ward 1). The 5-4 vote meant that the proposal did not achieve a required six-vote majority, and thus failed.

The city council had voted on March 15, 2010 to adopt the single-stream recycling program, which began exactly one year ago, on July 5, 2010.

At that time, the city approved a contract with RAA that called for a payment of $3.25 per month for each cart that is deployed in the the city (whether it is set out for collection or not), plus a per-ton payment of between $18.74 and $30.00. The amount of revenue RAA has received through these two kinds of payment was less than projected for the last fiscal year. Specifically, the tonnage payments received by RAA for fiscal year 2011 (which ended June 30) for recyclable material were projected to be $406,332 but in fact only generated $187,560 for RAA – only 46% of what was expected. The shortfall was $218,772.

Also, the city expected to distribute 32,779 carts, but it turned out that only 29,734 carts were deployed, or 9.3% fewer than planned. A staff memo accompanying the July 18 resolution explained the reduced number this way: “… many of the smaller multi-family residential units that were previously using the 11-gallon recycling ‘totes’ are able to share recycle carts, resulting in a smaller number of deployed carts.” In terms of revenue, the reduced number of carts meant that RAA received only $1,159,626 compared to the projected $1,278,381 – for a shortfall of $118,755.

Summing the shortfalls in the two kinds of revenue ($118,755 + $218,772), RAA received $337,527 less than it expected for FY 2011. The increase in the monthly per-cart service fee requested (but rejected by the council) – for all five years of the five-year contract – would have worked out to nearly cover the annual shortfall that was due only to the decreased number of carts: $107,042 versus $118,755.

The overly-optimistic projections were made by the city’s recycling consultant Resource Recycling Systems and RecycleBank, a company that administers a coupon-based incentive program to encourage residents to recycle. When the council approved the single-stream recycling contract with RAA last year, it also struck a 10-year deal with RecycleBank, at up to $200,000 per year, to administer a coupon-based incentive program to help boost recycling rates in conjunction with the single-stream rollout.

At the time, Stephen Kunselman (Ward 3) questioned the length of the RecycleBank contract, and established in the course of deliberations that the city’s opt-out clause would be less costly than the cost of the contract. He was concerned that the city had options in the event that RecycleBank’s incentives did not boost recycling tonnage to the levels that were forecast. [Chronicle coverage: "Council Banks on Single-Stream Recycling"]

According to city of Ann Arbor staff, participation in the RecycleBank program stands at 10,000 of 23,600 Ann Arbor households. In the first five months of 2011, Ann Arbor residents ordered 7,153 rewards. The rewards range in value, generally around $5-20.

Tom McMurtrie, solid waste coordinator for the city of Ann Arbor, provided to The Chronicle truck-level data at the Materials Recovery Facility (MRF) for the period July 2009 to April 2011. Graph 1 is the result of filtering that data just for curbside recycling and grouping it by calendar week.

The plot suggests that the increase in curbside recycling tonnage collected – roughly 20% more – was realized with the rollout of the single-stream recycling program, and was not enhanced much by the RecycleBank coupon incentive program. That is counter to the expectation expressed at the council’s March 15, 2010 meeting, when the council approved the RecycleBank contract – at that time they were told that the RecycleBank program is what “gives it that shot in the arm.”

Recycle Ann Arbor Deal: Council Deliberations

Margie Teall (Ward 4) led off the first slot on the agenda for council communications by telling her council colleagues that she was sorry to have missed the last meeting, because there was an issue on solid waste that was voted on. As a member of the environmental commission involved in solid waste task forces over the last few years, she was disappointed not to be able to participate in that vote.

She said she would support bringing that vote back for reconsideration. [Because she did not attend the meeting, Teall could not make the motion for reconsideration herself. That motion must come from someone who voted, and specifically someone who voted with the prevailing side. In the case of that 5-4 vote, the four in the minority were actually the prevailing side, because the motion was defeated for lack of a six-vote majority. Carsten Hohnke (Ward 5) voted against the measure, so he was eligible to make the motion for reconsideration.]

Hohnke indicated he would be happy to move to reconsider that vote – it wouldn’t hurt to discuss the issue further. He said he was disappointed that the council didn’t have some of the data from the city staff he wanted to see, because it was not available. He suggested that the council could reconsider and postpone it. He said that if RecycleBank is not benefitting the city, then transferring the money from the RecycleBank contract to Recycle Ann Arbor might be a healthy solution.

Outcome: The motion to reconsider the Recycle Ann Arbor vote was unanimously approved.

With the resolution again before the council, Hohnke said he’d prefer to postpone action, given that there’s an analysis taking place that’s still not available. Tom McMurtrie, solid waste coordinator for the city, was not available at the meeting.

Mayor John Hieftje said he appreciated the reconsideration, because it would allow for some more investigation of the RecycleBank program. Hieftje said there may be some misperception that Recycle Ann Arbor had done something wrong – that was not the case, he said. Instead, Recycle Ann Arbor’s contract was based on incorrect estimates about the number of carts that would be deployed in the field.

Christopher Taylor (Ward 3) got clarification that the intended postponement was until the council’s next meeting on Aug. 4. Marcia Higgins (Ward 4) was interested in making sure that the council would see the requested data sooner than the council meeting.

Outcome: The council unanimously approved postponement of the Recycle Ann Arbor contract until Aug. 4.

Bridge Project Stormwater Controls

In front of the council for its consideration was authorization of petitions to the Washtenaw County water resources commissioner for the design and construction of stormwater controls as a part of the East Stadium bridges replacement project. The bridge project is expected to start construction in the fall of 2011.

The council authorized two petitions – one for the Allen Creek drainage district ($1,094,059 – with the city’s portion being $1,051,391) and the other for the Mallets Creek drainage district ($1,284,330 – with the city’s portion being $1,188,005).

The stormwater controls will provide for detention to slow the rate at which stormwater enters the two creeks. That will help reduce bank erosion and excessive runoff and washout. In addition, the stormwater controls will help remove E. coli, phosphorus, and other suspended solids that diminish the stream quality.

The city has been approved for a low-interest state revolving fund loan at an interest rate of 2.5%. The projects will be financed over the course of no more than 20 years. [Google Map showing watersheds and bridge construction location]

Outcome: The council voted unanimously, without discussion, to approve both stormwater controls projects.

Use of Parcel for Bridge Construction Staging

The council was asked to approve a $70,000 payment to the owner of the parcel at 1501 S. State St., for use as a construction staging area for the East Stadium bridges reconstruction project. The parcel is located immediately adjacent to the bridge over State Street, east of State Street and south of Stadium Boulevard. The money for the use agreement will come from the city’s street repair millage.

Construction on the bridge project is expected to start in the fall of 2011.

Outcome: The council unanimously approved the deal to use the parcel for a construction staging area – it was a part of the consent agenda.

Sanitary Sewer Connection

Councilmembers were asked to consider approval of a sanitary sewer connection to a property – at 1643 S. State St. – that lies in a township island (Ann Arbor Township) within the city. The property, which currently has a septic field, is the location of Biercamp Artisan Sausage and Jerky.

The property is already serviced by city water, which the city of Ann Arbor approved in 1937. The staff memo to the resolution, which appeared on the council’s consent agenda, indicates that all water improvement charges, sanitary sewer charges and sidewalk improvement charges have been paid in full. The owners of the property applied for annexation and rezoning of the property in May 2011.

In the brief deliberations, Sabra Briere (Ward 1) commended the staff for dealing with the parcel, which is currently a township island, in a creative way. Mayor John Hieftje said that the business couldn’t get county health department approval without a sanitary sewer connection.

Outcome: The council unanimously approved the sanitary sewer connection.

Tree Planting

In front of the council for its consideration was approval of a $301,475 contract with Marine City Nursery Co. to plant 1,200 trees in the right-of-ways of streets in the Malletts Creek, Allen Creek, Traver Creek and Swift Run drainage districts. [.pdf of map showing areas to be targeted for tree planting]

The money for the tree planting will come from the stormwater fund’s capital budget. The Washtenaw County water resources commissioner has obtained a low-interest loan on behalf of the city through the state’s revolving fund loan and will reimburse the stormwater fund for part of the project. The rationale for use of stormwater funds to plant trees is based on the idea that trees have a positive impact on the volume and quality of stormwater flow.

The city received only two bids for the tree-planting contract, and only the bid from Marine City Nursery Co. was determined to be a responsible bid.

During the brief deliberations, Sabra Briere (Ward 1) highlighted the fact that 1,200 trees would be planted in four different creeksheds. The effort would deal with the loss of many trees from the emerald ash borer. Mayor John Hieftje added that the city knew it was going to take a while to replace all those trees.

Mike Anglin (Ward 5) said he was happy the resolution is coming forward. He’s been hearing that sometimes when trees are planted in the right of way in front of someone’s property, people who live nearby don’t water them. He estimated it would cost only $300 for the water it would take to maintain a new tree. He asked that if residents are not planning to water the new trees, to let the city know.

Marcia Higgins (Ward 4) questioned whether the city asked residents to water trees planted in the right of ways. Hieftje indicated that he believed the city did ask residents to do that.

Outcome: The council voted unanimously to approve the tree planting contract.

Greenbelt Addition

On the July 18 agenda was a resolution to authorize of the purchase of development rights for a 110-acre property along Pleasant Lake Road in Lodi Township – the Lindemann-Weidmayer property. The city’s cost for the PDR will be $387,372. The total budget for the project is $699,992, including contributions from other funding sources.

On Feb. 7, 2011 the council had approved a grant application to the federal Farm and Ranch Land Protection Program for the purchase of development rights on the property. And on June 6, 2011 the council approved the acceptance of $312,620 from the U.S. Dept. of Agriculture for the purchase. The deal had been recommended by the city’s greenbelt advisory commission, after discussion in a closed session at its Feb. 9, 2011 meeting.

The brief council deliberations included a description by Carsten Hohnke (Ward 5) of the parcel’s location. Hohnke is the city council’s representative to the greenbelt advisory commission.

Outcome: The council voted unanimously to approve the purchase of development rights for the Lindemann-Weidmayer property.

Urban County Renewal

In front of the council for its consideration was a resolution to join the Washtenaw Urban County for a second three-year period, from July 2012 through June 2015.

“Urban County” is a designation of the U.S. Dept. of Housing and Urban Development (HUD), identifying a county with more than 200,000 people. With that designation, individual governments within the Urban County can become members, making them entitled to an allotment of funding through a variety of HUD programs, including the Community Development Block Grant (CDBG) and HOME Investment Partnerships. Those two programs provide funding for projects to benefit low- and moderate-income residents, focused on housing, human services and other community development efforts.

Washtenaw County and the townships of Ann Arbor, Ypsilanti, Pittsfield, Superior, Northfield, Salem, and Bridgewater got the Urban County designation in 2002. Later, the city of Ypsilanti and Scio Township joined, and in 2009 the city of Ann Arbor – which previously received HUD funding directly – joined as well, roughly doubling the amount of money available in the Urban County’s funding pool. Earlier this summer, the Saline city council also voted to join the Urban County.

Renewal applications need to be submitted to the Detroit HUD Field Office by July 15, 2011 from all participating jurisdictions.

Margie Teall (Ward 4), who serves as the council’s representative to the Urban County, expressed her support for the city’s continued membership in that body. [The Urban County's executive committee meets on the fourth Tuesday of each month. However, its July 26 meeting has been cancelled.]

Outcome: The council voted unanimously to approve renewal of its membership in the Urban County.

Corrections Grant Application

Councilmembers were asked to approve a $421,801 grant application to the Michigan Dept. of Corrections for the Ann Arbor/Washtenaw community corrections advisory board. The state grant will be supplemented by $295,890 in fees, and a $292,369 general fund match from Washtenaw County, bringing the total program budget to $1,010,060.

The advisory board was established in August 1989 through resolutions approved by the Washtenaw County board of commissioners and the Ann Arbor city council. The purpose of the advisory board is to formulate a comprehensive plan for the development, implementation, and operation of the community correctional services in Washtenaw County and Ann Arbor, and to develop a plan for the administration, monitoring, and control of the community correctional services under the comprehensive plan.

Mike Anglin (Ward 5) is the city council’s representative to that board, which includes the county sheriff, Ann Arbor chief of police, a circuit court judge, a probate court judge, a district court judge, a county commissioner, a councilmember, a prosecuting attorney, a criminal defense attorney, and a circuit court probation agent or district court probation officer. The board also includes representatives from the fields of mental health, public health, substance abuse, employment and training or community alternative programs, the business community, communications media, and the general public.

The brief council deliberations consisted of Anglin’s summary of the advisory board’s program. He described the program’s goal as trying to keep people out of prisons. That’s consistent with the ethic in the community that attempts to make people as productive as they can be, he said.

Outcome: The council voted unanimously to approve the grant application.

Liquor License Hearing Officer

A resolution on the July 18 agenda called for the appointment of Tony Derezinski (Ward 2) as the hearing officer for all future liquor license revocation hearings – for any reason – conducted by the city on recommendation of the council’s liquor license review committee.

At the council’s March 7, 2011 meeting, councilmembers had already approved Derezinski’s appointment as hearing officer for all future appeals of non-renewal recommendations that arise from the liquor license review committee’s annual review.

The March appointment was somewhat controversial. The appointment of Derezinski as a single hearing officer, in place of the three-member liquor license review committee as a hearing board, came as a floor amendment (during the meeting) to the council’s resolution. Voting against the change to a single hearing officer that night were long-time chair of the liquor license control committee Stephen Rapundalo (Ward 2), as well as Sabra Briere (Ward 1), Marcia Higgins (Ward 4) and Stephen Kunselman (Ward 3).

Liquor License Hearing Officer: Council Deliberations

Rapundalo noted that this past year was the first year that the establishments holding liquor licenses went through an annual review. A few establishments had required a hearing, and those were disposed of appropriately, Rapundalo said. He continued by explaining that the committee had discovered it didn’t have a process for handling situations between the times of the annual review. The liquor license review committee has adopted some regulations and parameters on which hearings will be conducted for situations not associated with the annual review. Those hearings will be handled to coincide with the appointment of Derezinski as hearing officer.

Rapundalo continued by saying that in the annual review process, $42,000 to $43,000 of back taxes had been recovered that had been in arrears.

Higgins then raised a “housekeeping” question – should Derezinski’s appointment be through Dec. 5 and then added to the council’s committee list, so that the council is reminded each year that the appointment needs to be made? Derezinski responded by saying he’d defer to the city attorney. City attorney Stephen Postema indicated there was not a problem handling the hearing officer appointment that way. Rapundalo felt it was an excellent idea. The resolution was amended to reflect Higgins’ housekeeping suggestion.

Mike Anglin (Ward 5), who serves on the liquor license review committee along with Rapundalo and Derezinski, alerted the public that the committee meetings are public. During the time he’s been on the committee, Anglin said, Rapundalo has done a good job of guiding the committee’s work. Anglin thanked Derezinski for stepping forward to do the work of the hearing officer.

Outcome: The council voted unanimously to appoint Tony Derezinski as the hearing officer for all appeals hearings on liquor license revocation.

Local Development Finance Authority

Added to the agenda the evening of the July 18 meeting was a resolution to reappoint Stephen Rapundalo (Ward 2) to a four-year term to represent the city council on the Local Development Finance Authority board.

The LDFA is funded through tax-increment financing (TIF) in a manner similar to the way the Ann Arbor Downtown Development Authority is supported. A TIF district allows authorities like the LDFA and the DDA to “capture” some of the property taxes that are levied by other municipal entities in the district. The LDFA contracts with the economic development agency Ann Arbor SPARK for various business development services. [For more background on the LDFA, see Chronicle coverage: "Budget Round 5: Economic Development"]

The appointment to the LDFA board exceeds the length of a city council term, which is two years, because the terms for LDFA appointments are expressed in the LDFA bylaws as only for four years. Based on the brief council discussion between Rapundalo and Marcia Higgins (Ward 4), it appears that an LDFA board bylaws change to address that issue is on the horizon.

The council’s interest is in establishing the LDFA council appointment as a regular, routine part of the council’s committee appointment schedule, which it conducts with each new constitution of the council after November elections.

Outcome: The council voted unanimously to appoint Stephen Rapundalo to the LDFA board.

Police Service Specialist Pension

The council was asked to give initial approval to a change in the pension system for members of its police service specialist union. The council had approved the collectively bargained changes at its June 20, 2011 meeting.

Currently union members make a 5% post-tax contribution to their pension. That will change to a 6% pre-tax contribution made by members of the police service specialist union. The change will be effective starting Aug. 14, 2011.

Because the change to the police service specialist retirement package requires altering a city ordinance, it will require a public hearing and a second, final approval by the council at a subsequent meeting.

Outcome: The council voted unanimously, without discussion, to give initial approval to a change in the police service specialist union pension system.

Retiree Health Change

Councilmembers considered initial approval of a revision to the city’s ordinance that covers how a city retiree’s health care is paid for. The revision to the ordinance distinguishes between “subsidized retirees” and “non-subsidized retirees.” A non-subsidized retiree is someone who is hired or re-employed into a non-union position with the city on or after July 1, 2011. In their retirement, non-subsidized retirees will have access to health care they can pay for themselves, but it will not be subsidized by the city.

At its June 6, 2011 meeting, the city council had directed the staff to prepare an ordinance change along these lines. Because it is a change to a city ordinance, the initial approval given to the change in the city’s retiree health system will require a public hearing and a second, final approval at another meeting.

During the brief deliberations on the ordinance, Marcia Higgins (Ward 4) said she appreciated the city staff moving the ordinance forward based on the council’s resolution on June 6.

Outcome: The council voted unanimously to give the retiree health care change its initial approval.

Picometrix Tax Abatement Public Hearing

On the council’s July 18 agenda was a public hearing on a tax abatement for Picometrix LLC, located at 2925 Boardwalk in Ann Arbor. Picometrix is a supplier of high-speed optical receivers.

The 5-year abatement would apply to $2,434,882 of personal property that Picometrix is acquiring. From the application for abatement: “Due to the projected increase in production volume, the company will need to purchase assets to maximize production and support added staffing.”

The list of personal property included in the application ranges from garden-variety desks and cubicles to digital oscilloscopes and laser beam profilers. If the abatement were approved, it would reduce the company’s annual tax bill for the new equipment by about $16,500 annually. The new personal property would generate approximately $20,700 in property taxes for each year during the abatement period, according to a city staff memo accompanying the resolution.

The industrial development district in which the Picometrix tax abatement is sought was established in 2006.

Thomas Partridge was the only person to speak during the public hearing. He stressed that tax certificates should be considered as IOUs, not unlimited grants.

No council action on the Picometrix tax abatement was scheduled for the July 18 meeting.

Communications and Comment

Every city council agenda contains multiple slots for city councilmembers and the city administrator to give updates or make announcements about issues that are coming before the city council. And every meeting typically includes public commentary on subjects not necessarily on the agenda.

Comm/Comm: Underground Parking Structure Impact

Owners of two local businesses addressed the council about their situation – being located next to the construction site of an underground parking structure on Fifth Avenue, between Liberty and William streets. The two had also addressed the Ann Arbor Downtown Development Authority board at its June 6, 2011 meeting.

[On the opposite side of the block, on Division Street, is another local business, the Mail Shoppe, which also has seen its business drop during the construction period. Mail Shoppe owner Carolyn Hough told The Chronicle her business has been down by 25%, and walk-in business specifically was down 50%.]

At the July 18 council meeting, Pushpinder Sethi introduced himself as the owner of Earthen Jar – he was there to ask for some kind of compensation due to the underground parking garage that’s being constructed next to his business. He described the turmoil surrounding the construction project and how business is going down. It was not expected that the construction project would last this long, he said. His sales are down 50% – he’s losing $6,000 every month. He said it’s hard to survive. He requested some compensation from the city in the form of a tax abatement.

Ali Ramlawi reminded the council that he had attended a city council meeting a couple of months ago, talking about the Downtown Development Authority. The Jerusalem Garden owner said he was not going to go out of business, but that’s because of the University of Michigan [which uses the restaurant's catering business] and the restaurant’s dedicated followers. He said he’d asked the DDA for help one year ago, but that request had been rejected by DDA executive director Susan Pollay, saying it was an ordinary civic construction project. But Ramlawi contended the project is not ordinary – Fifth Avenue has been closed for a year.

Ramlawi told the council he wanted to talk about the role of the DDA and the future of the city. Recently, the city council gave more power to the DDA with respect to parking fees and enforcement and more influence on future development of city-owned parking lots. He characterized it as a transfer of power to non-elected officials. That kind of power transfer needs to go before voters, he contended. There need to be some ballot initiatives to see if people are comfortable with that power transfer. People don’t know what the DDA is, he said. He called for more transparency. The general public doesn’t know how DDA board members are appointed or what they do.

Following their commentary, Mike Anglin (Ward 5) said it’s hard to find the businesses and wondered if some signage might be useful.

Comm/Comm: Kunselman and the DDA

During his communications slot at the end of the council meeting, Stephen Kunselman (Ward 3) noted that the Ann Arbor Downtown Development Authority has submitted its missing TIF status reports from prior years. He summarized the excess of expenditures over revenues for FY 2008 ($138,000), FY 2009 ($1.9 million) and FY 2010 (3.8 million). He said that FY 2011 had just closed out, but on DDA estimates, the excess expenditures over revenues is $3.9 million. [.pdf of report compilation]

Kunselman suggested that the only way to close that gap was to open up the spaces in the new parking garage and increase rates. He characterized the situation as “fiscally irresponsible.”

Kunselman has made the DDA’s financial accountability a campaign theme for his Ward 3 Democratic Party primary election race. He faces two challengers: Ingrid Ault and Marwan Issa.

In an uncharacteristic break from the form of the agenda’s communications slot, mayor John Hieftje responded to Kunselman’s remarks by telling Kunselman that if he felt that way, then he shouldn’t have voted to approve the DDA’s budget back in May. [Hieftje sits on the DDA board and appoints its members, with confirmation from the city council.]

Kunselman responded to Hieftje by noting that the budget books that are presented to the council do not include past years’ information, and it is not presented in a way that highlights excesses of expenses over revenues.

Comm/Comm: First and Washington, Village Green

Interim city administrator Tom Crawford gave the council an update on the Village Green City Apartments project located at the city-owned First and Washington lot. Village Green plans to build a 9-story, 99-foot-tall building on the lot, with 156 dwelling units.

He reminded the council that they’d last heard from him on the subject of a “bathtub” foundation design, which resulted in the council reducing the purchase price for the land by $100,000, from $3.3 to $3.2 million. Design work has been progressing, Crawford said, and a refinement of the interior is being undertaken to provide a best-as-possible parking experience for people. He said it would probably require another 60-day extension on the purchase option agreement. He wanted to give the council a heads up. Village Green is still hoping to start work on the project this construction season.

Comm/Comm: Progressive Agenda, Unity

Thomas Partridge addressed the council during public commentary at the beginning and the end of the meeting. He introduced himself as a Washtenaw County Democrat, a father and grandfather, and an advocate for all those who need government services – a majority of the residents of the state and city. He reminded everyone of the recall effort against Gov. Rick Snyder. The deadline is Aug. 5, he said.

Ann Arbor, Washtenaw County, and all local governments in the state are suffering from a reduction in state shared revenues, Partridge said. He called on the city council to act in a progressive, democratic manner with respect to all fees, including water and sewage fees. About all land use, planning, and zoning, and funds spent on capital improvements the council should think progressively, Partridge concluded.

Partridge also reminded the council of the recent death of President Gerald R. Ford’s wife, Betty Ford, of Grand Rapids, Mich. He called on all parties to come together with intelligent compromises and to be aware of the dire state that the residents of Michigan have been put in by the Michigan legislature and Gov. Snyder.

Present: Stephen Rapundalo, Mike Anglin, Margie Teall, Sabra Briere, Sandi Smith, Tony Derezinski, Stephen Kunselman, Marcia Higgins, John Hieftje, Christopher Taylor, Carsten Hohnke.

Next council meeting: Aug. 4, 2011 at 7 p.m. in the second floor council chambers of city hall, located at 301 E. Huron. [confirm date]