Because Act 88 predates the state’s Headlee legislation, the board does not need to put the issue before voters in order to levy the tax. The county board could, by the Act 88 statute, levy such a tax up to 0.5 mills, or more than 10 times the amount it has chosen to levy the last two years.

Last year in November, the county board approved the Act 88 tax with just a six-vote majority on the 11-member board. Kristin Judge, Mark Ouimet and Wes Prater dissented. Jessica Ping abstained, and Rolland Sizemore Jr. was absent from that Nov. 3, 2010 meeting.

For 2011, the allocation of the roughly $611,266 raised by the countywide Act 88 tax broke down as follows: $200,000 to Ann Arbor SPARK; $50,000 to SPARK East; $100,000 to the Eastern Leaders Group; $144,696 to the county’s department of economic development and energy; $15,000 to fund a Michigan State University Extension agricultural innovation counselor for Washtenaw County; $27,075 to fund horticulture programming for the Washtenaw MSUE horticulture educator; $59,229 for 4-H activities, including allocation to the Washtenaw Farm Council for operating the Washtenaw County 4-H Youth Show & 4-H agricultural programming for the 4-H extension educator; and $15,000 to support the work of the Food System Economic Partnership (FSEP).

SPARK is also supported by Ann Arbor taxpayers through a contract with the city of Ann Arbor for business development services. At its June 20, 2011 meeting the city council authorized the city’s annual $75,000 contract with SPARK. That translates to the rough equivalent of 0.017 Ann Arbor city mills. (Each mill levied within the city of Ann Arbor translates to roughly $4.5 million.) Together with the countywide Act 88 millage, direct Ann Arbor taxpayer support of economic development translates to the equivalent of at least .06 mills (0.043 + 0.017) or roughly $270,000.

Ann Arbor SPARK is also the contractor hired by the city’s local development finance authority (LDFA) to operate a business accelerator for the city’s SmartZone, one of 11 such districts established in the early 2000s by the Michigan Economic Development Corp. (MEDC). The SmartZone is funded by a tax increment finance (TIF) mechanism, which in the current fiscal year captured around $1.4 million in taxes from a TIF district – the union of the Ann Arbor and Ypsilanti Downtown Development Authority districts, though revenue is generated only in Ann Arbor’s district. The specific taxes on which the increment since 2002 is captured are the school operating and state education taxes, which would otherwise be sent to the state and then redistributed back to local school districts.

This brief was filed from the city council’s chambers on the second floor of city hall, located at 301 E. Huron. A more detailed report will follow: [link]

Stephen Kunselman (Ward 3) peruses a marked up copy of medical marijuana legislation. (Photos by the writer.)

On Monday, before the postponements, the council amended both medical marijuana laws, making changes to the versions to which they’d already given initial approval – all city ordinances must receive two affirmative votes at different meetings of the council. Based on the amendments approved Monday night, the votes taken on June 6 will likely count only as the first reading. If the council makes a substantive change to an ordinance after its initial approval, then the ordinance must receive an additional first reading.

Public commentary during the evening included remarks from several medical marijuana advocates, who have become a familiar cast of characters over the past year. One highlight of that commentary included corroboration of a 2004 sidewalk encounter – between a medical marijuana petition circulator and the city attorney – which had been described during public commentary at the council’s previous meeting.

Other public comment at Monday’s meeting focused on the upcoming fiscal year 2012 budget approval, with many of the remarks centered on human services funding. The council had a specific resolution on its agenda that would have allocated funding to local nonprofits that provide human services support – but the council decided to postpone the item. The funding level in the resolution would have been about 9% less than fiscal 2011 funding.

Remarks during the budget public hearing by the president of the local firefighters union focused on the number of deaths due to fire over time. During council communications, Stephen Rapundalo (Ward 2), the chair of the council’s labor committee, reiterated a point he’s made before – that if unions make concessions on their contribution to the city’s health care plan, they can mitigate some (but not all) of the currently planned layoffs.

Public commentary at Monday’s meeting also featured remarks from county clerk Larry Kestenbaum on the following day’s single-issue election, along with an update on possible changes to state election law.

The council unanimously approved the site plan, development agreement, and brownfield plan for Packard Square, a residential development planned for the former Georgetown Mall property. Two days later, the county board of commissioners postponed their approval of items related to the Packard Square brownfield plan.

In other business, the council set a public hearing on a tax abatement for Sakti3; approved several interagency technology agreements that allow for partnership between the city, Washtenaw County and the Ann Arbor Transportation Authority; and postponed consideration of some large vehicle purchases. The council was also introduced to Paul Krutko, new CEO of Ann Arbor SPARK, the local economic development agency.

Also at Monday’s meeting, Washtenaw County commissioner Yousef Rabhi explained how his interest in public service originated in connection with the Buhr Park Wet Meadow project, led by Jeannine Palms. Palms and others involved with the project, which began in 1996, were honored with a mayoral proclamation. 

Medical Marijuana

Before the council were two local laws on medical marijuana, one on zoning and another on licensing. Both laws had previously received initial approval, but after approving several additional amendments to both proposed laws on Monday, the council decided to postpone them to its June 6 meeting.

• Clean .pdf of zoning regulations as amended May 2, 2011
• .pdf showing how zoning was amended on May 2, 2011
• Clean .pdf of licensing regulations as amended May 2, 2011
• .pdf showing how licensing was amended May 2, 2011

The medical marijuana zoning ordinance received its initial approval by the council at its Oct. 18, 2010 meeting. The delay since the initial Oct. 18, 2010 zoning vote stems from the city of Ann Arbor’s strategy for legislating zoning and licensing of medical marijuana businesses. That strategy has been to bring both licensing and zoning before the city council at the same time for a final vote.

Assistant city attorney Kristin Larcom (left), councilmember Sabra Briere (Ward 1) and city attorney Stephen Postema before the start of the May 2 meeting.

The context for development of zoning regulations was set at the council’s Aug. 5, 2010 meeting, when councilmembers voted to impose a moratorium on the use of property in the city for medical marijuana dispensaries or cultivation facilities. The council also directed the city’s planning commission to develop zoning regulations for medical marijuana businesses.

Subsequently, the city attorney’s office also began working on a licensing system. The council undertook several amendments to the licensing proposal at four of its meetings over the last three months: on Jan. 3, Feb. 7, March 7 and March 21. The council finally gave its first initial approval to the licensing proposal at its March 21 meeting. [.pdf of Michigan Medical Marijuana Act]

Medical Marijuana: Public Comment

Chuck Ream thanked the council for their work. In terms of growing medicine, council should drop all that language on cultivation facilities, he said. Such facilities are already regulated under state law. He also asked the council to drop record-keeping requirements – such requirements would create a list of “juicy targets” for prosecution. He told the council that they held the lives of good people in their hands.

He asked the council not to keep city attorney Stephen Postema in charge of the medical marijuana legislation or it would never get finished. He reminded the council of the remarks made at the April 19, 2011 council meeting by Trena Moss, who reported a 2004 sidewalk encounter with Postema, when she was gathering signatures for the petition to place a local charter amendment on the ballot – it eventually passed. According to Moss, Postema had told her that he had a strategy to block it, even if voters approved it. Ream has conveyed to the council the statement written by Moss on April 23, 2004 and the photo “line up” out of which she identified Postema as the man she’d encountered. Ream asked councilmembers to protect caregivers like they would protect a woman’s right to choose.

Rhory Gould began by saying Ream is hard to follow – Ream had said everything so well. Gould said he is a longtime Ann Arbor resident and a registered voter. He thanked the council for their thoughtfulness and hard work, and for considering the needs of patients and caregivers. He called the ordinances well-written, but issues remain that still need to be addressed, he said.

Keeping records for caregivers and cultivation facilities is a bad idea, Gould said. Landlord records are also a bad idea, he said. There should be no dollar amount on labels. That requirement is motivated by the best of intentions but is not necessary. He asked the council to move forward by passing a medical marijuana ordinance that addresses the needs of caregivers, patients and residents of Ann Arbor.

Kirk Reid thanked the council for listening. He identified himself as a patient who suffers from multiple sclerosis. He told the council he would never sign up under the proposed Ann Arbor ordinance, citing the vagueness and uncertainty of words such as “deem appropriate,” “deem to prohibit” and “justification.” Whose justification? he asked. He invited the council to sit down with patients and caregivers and work with them.

John Henry Kaiser had signed up in advance to speak to the council, but when his name was called, Ream told the council that Kaiser is a cancer patient, and could not attend.

During his turn at public commentary reserved time, Thomas Partridge touched on a range of topics, but also included his view that “we do not need Ann Arbor to be known as the Marijuana Headquarters of the United States.”

Dennis Hayes thanked the council for giving advocates the right to speak. He allowed that he and Partridge didn’t agree about much, but would agree on the importance of the special education millage that was on the ballot the next day – everyone should pay attention to that. He said he’d previously made remarks about proposed amendments. He said he would welcome an opportunity to take a look at the amendments before the council voted. It’s important to pay attention to problems of regulating caregivers. He encouraged the council to take a lighter hand rather than a heavier hand. Ream reminds him frequently, Hayes said, that there are rights in the state statute, which shouldn’t be nullified by the local ordinance. The council should pay attention to what voters have said, as well as patient and caregiver needs.

Medical Marijuana Zoning: Council Deliberations

In broad strokes, the zoning regulations stipulate where medical marijuana businesses can be located geographically. From the regulations as amended on May 2, 2011:

(3) Locations of medical marijuana dispensaries and medical marijuana cultivation facilities.
A medical marijuana dispensary or medical marijuana cultivation facility may be located in the City only in accordance with the following restrictions:
a) Medical marijuana dispensaries shall only be located in a district classified pursuant to this chapter as D, C, or M, or in PUD districts where retail is permitted in the supplemental regulations.
b) Medical marijuana cultivation facilities shall only be located in a district classified pursuant to this chapter as C, M, RE, or ORL.
c) In C districts, buildings used for medical marijuana dispensaries or medical marijuana cultivation facilities shall meet the minimum parking requirements of Chapter 59 for retail uses, with no exceptions for existing nonconforming parking.
d) No medical marijuana dispensary or medical marijuana cultivation facility shall be located within 1000 feet of a parcel on which a public or private elementary or secondary school is located.

The deliberations by the council dealt first with the challenge of handling the vast array of changes to the text of the zoning regulations, which were last before the council for consideration at its Oct. 18, 2010 meeting. On that occasion, the council had given the zoning regulations its initial approval.

The sheer number of changes to the text led to discussion at the outset on how to proceed – line by line, or all in one go. Very early on in the deliberations, the council suspended its rules on the number of speaking turns allowed by councilmembers on each motion – they’re ordinarily limited to two turns.

Medical Marijuana Zoning: Amendment – Omnibus Staff Recs

Sabra Briere (Ward 1) began by moving all of the amendments recommended by city staff at once.

She asked city attorney Stephen Postema to summarize the changes. He explained that many of them were motivated by a desire to coordinate the language in the zoning regulation with that of the licensing scheme.

For example, the legislative intent section for the zoning is now just what the licensing says. Five definitions are now taken straight from the Michigan Medical Marijuana Act, Postema said. Other words and phrases have specific definitions – for cultivation facilities, dispensaries and home occupations. They’re unique to the zoning ordinance, and aren’t included in the state statute, so they’re defined.

Postema said the recommendations for amendments were sent to council on April 26, so he felt the council had had time to look them over.

By way of example of the kind of changes that were included in the staff-recommended amendments, the new definitions included one for “medical marijuana cultivation facility”:

ii. “Medical marijuana cultivation facility” means building [sic] where marijuana plants are being grown in compliance with the MMMA, other than as a medical marijuana home occupation.

New in that definition was the inclusion of “medical marijuana” as part of the term to be defined. That entailed inserting “medical marijuana” before instances of “cultivation facility.”

Marcia Higgins (Ward 4) asked about a revision that struck “medical” from the phrase “medical marijuana plants”:

In a single family dwelling in any zoning district, no more than 72 medical marijuana plants shall be grown on the premises, regardless of the number of registered primary caregivers and/or registered qualifying patients residing in the dwelling.

Postema said that when it’s just the plants themselves, it’s just “marijuana” – because the state statute doesn’t call the plants “medical marijuana.”

Councilmembers then expressed uncertainty as to the process for approving the entire set of amendments recommended by the city attorney’s staff. One approach would have been first to vote on the set of amendments, then consider additional amendments, voting on them as well. A second approach would have been to amend the proposed amendments.

The consensus appeared to be that they’d take the first approach. But mayor John Hieftje indicated there would not be a vote on all the staff-recommended amendments. That statement was met with surprise from some councilmembers. Higgins sought confirmation: “We’re voting, right?” Christopher Taylor (Ward 3) indicated that he did not understand the process. Carsten Hohnke (Ward 5) noted that after voting, additional amendments could be brought forward.

Briere stated that it’s the council’s choice how to proceed. She’d earlier begun to go through her own proposed amendments, but appeared now ready to vote on the staff-recommended amendments, then consider additional amendments.

The council opted to vote on the staff-recommended amendments, then consider other amendments.

Outcome on Omnibus Amendment: The council unanimously approved the set of staff-recommended amendments.

Medical Marijuana Zoning: Amendment – Code Reference

Sabra Briere (Ward 1) proposed the following amendment [deleted material is struck through; added material in italics]:

h) An annual zoning compliance permit signed by the owner shall be required, and must be renewed prior to the anniversary date of the issuance of the original permit shall be required consistent with Section 5:92.

She noted that zoning compliance permits are not unique to medical marijuana facilities – they have very broad requirements. She apologized to Marcia Higgins (Ward 4) for referencing another section of the code. Briere was alluding to Higgins’ historical objections to referring to other sections of code, which forces the reader to look up some other section. [.pdf of Section 5:92 of the city code]

It’s “simple business compliance,” no more or less than any other business, said Briere. The rationale behind the amendment was that the ordinance should not convey the idea that any group is being singled out or that records are being kept on a group of people.

Higgins confirmed that in the licensing scheme, the zoning compliance permit is not handled by the licensing board.

Tony Derezinski (Ward 2) asked city attorney Stephen Postema what his opinion was. Postema said the reason the language had originally been included was to let people know what the requirements are without having to go back and look at another part of the city code. Referencing the other section is also acceptable, he said.

Outcome on Amendment: The council unanimously approved replacing specific requirements with a reference to Section 5:92.

Medical Marijuana Zoning: Amendment – Plant Limit

The zoning regulations already included a limit of 72 marijuana plants in connection with a business operated as a home occupation.

Sabra Briere (Ward 1) proposed an amendment that added a limit of 72 plants on the premises of any medical marijuana cultivation facility. That’s a maximum of 72 plants per address, she said.

City attorney Stephen Postema focused the council’s attention on the fact that a “medical marijuana cultivation facility” is defined as a building where plants are being grown.

Marcia Higgins (Ward 4) wondered what the difference is between a cultivation facility and a home occupation, if both are limited to 72. Briere explained that essentially it’s expected that it will be caregivers who grow the plants – either in their own home, or not in their own home. If they did not grow in their own home, that would make it a cultivation facility.

Outcome on Amendment: The amendment limiting the number of plants in a medical marijuana cultivation facility to 72 passed, with dissent from Higgins.

Medical Marijuana Zoning: Amendment – Home Occupation

Sabra Briere (Ward 1) offered another amendment very much in the spirit of a previous one that removed a description of specific requirements and instead referenced another part of the city code – Section 5:92.

A list of (a)-(j) items were reduced to just four with Briere’s amendment.

Tony Derezinski (Ward 2) again wanted city attorney Stephen Postema’s opinion, who characterized it as the same issue they’d looked at before. Briere reiterated the rationale – if people are not familiar with the entire code, they may read the zoning regulations on medical marijuana as if the city is establishing special rules for a special category of people. That’s avoided by reference to other code sections.

Mayor John Hieftje agreed with that strategy. Sandi Smith (Ward 1) wondered why one of the items had been left in the section: “No transfer of marijuana to registered qualifying patients other than those residing in the dwelling shall occur.” Smith said it did not involve any vehicle trips, because there are no home visits. She wanted to know why the clause was still in there.

Postema said this was consistent with the language approved a long time ago. Smith said she understand that, but it’s one of three surviving clauses in the section – it mystified her. It’s irrelevant if you say the transfer can’t occur, she said. Postema told Smith that the council had talked about the fact that it didn’t want transfers to take place except at patients’ homes. If that’s not what the council wishes, then it can be changed.

Christopher Taylor (Ward 3) also supported deletion of the clause. He said it struck him as interference – an unnecessary burden. If other restrictions are consistent with Section 5:92, then he felt it was a reasonable balance.

Carsten Hohnke (Ward 5) said that looking through all the changes, it makes perfect sense. The clause in question is highlighted as one exception, so he supported Smith’s additional amendment. He said he was not sure why they would call out transfers specifically.

Hieftje noted that with a 72-plant limit, that amounted to a limit on the number of clients.

Stephen Kunselman (Ward 3) asked Wendy Rampson, head of the city’s planning department, to explain zoning compliance permits. He wanted to know how Section 5:92(1) would be applied, which reads in part:

It shall be unlawful to begin the excavation for the construction, the moving, alteration, or repair, except ordinary repairs as defined in Chapter 98 of the Ann Arbor City Code, of any building or other structure, including an accessory structure, costing more than $100.00 or exceeding 100 square feet in area …

He wanted to know if it’s possible that a zoning compliance permit wouldn’t be required if the $100 limit were not exceeded. Rampson said it’s hard to say, but she thought Kunselman’s conclusion was right – with the exception of a day-care facility. She suggested that people obtain a compliance permit in case someone calls to complain, but the city would not necessarily require one.

Outcome on Amendment: The amendment replacing specific language on home occupations with a code reference was unanimously approved.

Medical Marijuana Zoning: Amendment – 1000-foot Buffer

Carsten Hohnke (Ward 5) proposed amending the required buffer between dispensaries and cultivation facilities and schools from 1000 feet to 1010 feet. He said that round numbers are not necessarily any better. The 1% difference does a better job of accomplishing what they’re trying to accomplish, he contended. The intent is not to impact existing dispensaries – it’s to make sure they’re not cutting off parts of blocks.

At the request of Tony Derezinski (Ward 2), Hohnke asked Wendy Rampson, head of planning for the city, to explain. Hohnke confirmed with her that the extension of the buffer by 1% would in certain locations help to bring a complete block into the buffer zone. Rampson said there’s no magic number. Sabra Briere (Ward 1) asked Rampson if she’d drafted some maps depicting the 1010 buffer. No, Rampson said, the question came up after they’d looked at the issue. The city has a map showing the 1000-foot buffer. Briere asked by the next meeting to have maps with 1000, 1100 and 1250-foot buffers shown. She said she’s uncomfortable with a 10-foot change – she found that odd. She noted that Sandi Smith (Ward 1) had actually wanted to decrease the buffer.

At that point mayor John Hieftje asked city attorney Stephen Postema if the changes they’d undertaken to that point were substantive enough to require an additional reading before the council, if the council voted to approve the main motion. Postema said that many of the amendments are small enough, but the deletion of the prohibition on transfer, and tinkering with the 1000-foot buffer, could amount to substantive changes. The wiser course would be to have an additional reading, he advised.

Hieftje said he needed clearer advice. Postema suggested postponing to the council’s first meeting in June.

Weighing in on the buffer question, Smith said it doesn’t make sense to add 10 feet – there is already a limit on the number of dispensaries. She said she thought 500 feet is adequate, and 1000 feet is more than cautionary – so 1010 makes no sense.

Outcome: The council voted down the amendment changing the buffer to 1010 feet. Voting for it were Tony Derezinski, Stephen Rapundalo, Christopher Taylor, Carsten Hohnke, and Mike Anglin, which was one short of the six votes it needed.

Medical Marijuana Zoning: Motion to Postpone

A motion was made to postpone the zoning ordinance.

Christopher Taylor (Ward 3) elicited from city attorney Stephen Postema the view that it was a “close call” as to whether the council would need to give the zoning ordinance an additional approval, if council voted to approve the ordinance that night.

In light of the fact that possibly another reading before the council would be required, even after voting that night, Taylor said, “I’m all for voting.”

Alluding to the revised legislation that is marked up with color-coded revisions, mayor John Hieftje said he’s wanted for a long time to have something to read without colored print. He suggested trying to get a clean page before voting.

Final Outcome on Zoning: The council voted to postpone the zoning ordinance until June 6. Sandi Smith and Christopher Taylor dissented.

Medical Marijuana Licensing: Council Deliberations

Over the course of the council’s months-long consideration of medical marijuana licensing requirements, among the more significant revisions has been to exclude home occupations from licensing requirements. On Monday, several amendments were passed, but the most significant one excluded another major category from licensing requirements: cultivation facilities.

Medical Marijuana Licensing: Amendment – Insertions

Sabra Briere (Ward 1) led off with a set of changes that involved wholesale insertions of language. The amendment added “medical marijuana” before instances of “dispensary” or “cultivation facilities.” The amendment also inserted “registered qualifying” before instances of “patient” and inserted “registered primary” before instances of “caregiver.”

Outcome on Amendment: The council unanimously approved the insertion of the various phrases.

Medical Marijuana Licensing: Amendment – Completeness

The second amendment proposed by Sabra Briere (Ward 1) made clear that the link between the cap on licenses and applications is for complete applications. In amended form, that section of the ordinance reads:

The first year’s licenses shall be capped at a number 10% higher than the number of complete applications for licenses submitted to the City in the first 60 days, after the effective date of this chapter, but not more than 20 medical marijuana dispensary licenses shall be issued in the first year. Any license terminated during the license year returns to the City for possible reissuance.

Outcome on Amendment: The amendment specifying the completeness of applications was unanimously approved.

Medical Marijuana Licensing: Amendment – Cultivation Facilities

Sabra Briere (Ward 1) then proposed that references to “cultivation facilities” be removed. In arguing for the exclusion of cultivation facilities from licensing requirements, she said that according to the Michigan Medical Marijuana Act (MMLA), they are supposed to be cautious. She cited the relevant passage from the MMLA:

Possession of, or application for, a registry identification card shall not constitute probable cause or reasonable suspicion, nor shall it be used to support the search of the person or property of the person possessing or applying for the registry identification card, or otherwise subject the person or property of the person to inspection by any local, county or state governmental agency.

Briere said that passage tells her the city is not supposed to be looking at or keeping records or inspecting property of applicants for the state registry identification card. While dispensaries have decided to go public, she said, caregivers have not. She said she could not understand why the city sought to license caregivers.

Sandi Smith (Ward 1) said she wholeheartedly supported removal of cultivation facilities from licensing requirements. She felt it was inviting people to aggregate a large number of mature plants and register with the city, and it was an invitation for the DEA to come in.

Stephen Rapundalo (Ward 2) asked the city attorney Stephen Postema to weigh in. Postema said that in some ways, this is a policy decision for the council. He said he disagreed with Briere that there’s anything in the state law that prevents the city from having reasonable regulation.

Christopher Taylor (Ward 3) asked Wendy Rampson, head of planning for the city, how she saw the role and utility of having cultivation facilities in the licensing scheme. For the zoning regulations, cultivation facilities are included. Rampson said that cultivation facilities are different from home occupations. Home occupations are in someone’s own home, whereas cultivation facilities are a commercial operation. That’s why the city planning commission recommended specific zoning districts where it would be appropriate to have a cultivation facility, she said.

Taylor asked if the limit of 72 plants for cultivation facilities – now amended into the zoning regulations – would address the planning commission’s concern. Rampson allowed that the 72-plant limit would address some concerns. Based on the information staff had received, they were talking about quite large operations and they were concerned about that.

Rampson said there could still be an agglomeration of facilities in multiple tenant spaces. But mayor John Hieftje said that possibility had been eliminated. Taylor suggested that the concern of scale should disappear with the 72-plant limit.

Postema interjected concerns about not having a license on something that is a commercial facility. He contended that security concerns are the same, whether it’s large scale or small scale. Safety and security concerns are theoretically there whether the operation is large or small, he said. Safety and security is a hallmark of all licensing, he said.

Smith asked if a change in use for any building would set off an inspection process for city that would take care of risks associated with health and safety. Smith said security measures would be inherent in the product being grown.

Marcia Higgins (Ward 4) made the same observation she’d made in connection with the zoning deliberations: The only difference between a home occupation growing operation and a “cultivation facility” is that a cultivation facility is offsite from a residence. If the limit is 72 plants, she wondered, how can you have the medical marijuana co-ops, which already operate in the city? She asked if the passage of the 72-plant requirement and their exclusion from the licensing requirement would shut down the co-ops? Briere replied that she hoped so.

Taylor said he was confident in the strength of the 72-plant limit in the zoning regulations.

Without a licensing requirement, Stephen Kunselman (Ward 3) asked if there is a limit somewhere on number of cultivation facilities. [If cultivation facilities were required to be licensed, the cap on the number of licenses would provide that limit.] He noted there are a lot of property vacancies, and having grow operations could be a good way to pay the rent. He expressed concern that the community could be overrun with a lot of grow operations.

Briere said a problem with restricting the number of cultivation facilities is that there may be more than the city can see today. The city doesn’t want them to be large cultivation facilities, she said. The number of 10 as a limit was a number that was suitable, she said, when the council believed the city might have to deal with large grow facilities.

Kunselman replied that if the city doesn’t license cultivation facilities, they won’t know the facilities are there, and the grow operations will show up without signs. Briere responded by saying that if the city licenses cultivation facilities, it starts collecting information on caregivers, and that becomes available to the federal government. The state can protect its information, but it’s harder for local governments to protect it, she said. Smith said it would be excellent to charge the licensing board with examining the issue and bringing that as a recommendation after a year.

Stephen Rapundalo (Ward 2) asked Postema to weigh in. Postema said that initially when the council addressed the issue, aggregation was the concern. He suggested that another tool available to the council, separate from licensing, is another zoning tool: restrictions on how near to another facility a cultivation facility can be.

Kunselman pressed Briere to explain how gathering information on cultivation facilities was different from gathering information on dispensaries. Why don’t we treat them the same? Briere explained that deciding to grow away from your home doesn’t mean you want to grow it for the public. Maybe you want to do it because of children, or whatever personal reasons, or maybe there’s no space, she said. So by growing away from your home, you become a “cultivation facility” – even though you’re just an individual patient or caregiver. A cultivation facility is not a commercial activity only, even though it’s logical to assume that, she said.

On another level, Briere continued, they should think about whether the city is pushing people to grow marijuana as a home occupation. The more restrictions the city places on people growing marijuana away from their homes, she said, the more the city encourages growing in homes, thus in neighborhoods.

Some people are growing marijuana to make money, Briere said, and some are growing for a patient whom they love – and they’ll do that in a basement, closet, attic or warehouse. It’s difficult to decide if they should be paying a fee for a license. She said she didn’t have an answer and that’s why she had proposed the amendment.

Tony Derezinski (Ward 2) said the discussion was coming at a late date. He wanted a comprehensive ordinance, and part of that includes facilities for growing marijuana, he said. His reading of the statute is that you can have authority as a city to regulate – it’s a question of whether Ann Arbor wants to regulate in that way. His own sense is that it’s easier to be more restrictive, then if the regulation is not needed, it can be relaxed, he said.

Hieftje inquired of Briere if the motivation is to eliminate a layer of documentation – yes, said Briere, and to simplify the law. Carsten Hohnke (Ward 5) saw it also as also a matter of fairness to those who choose to grow not in their own home.

Outcome on Amendment: The council approved the amendment eliminating cultivation facilities from licensing requirements, with dissent from Tony Derezinski, Stephen Rapundalo and Marcia Higgins.

Medical Marijuana Licensing: Amendment – Strike “Federal”

The next amendment suggested by Briere was to strike the word “federal” as follows:

(5) The license requirement set forth in this chapter shall be in addition to, and not in lieu of, any other licensing and permitting requirements imposed by any other federal state or local law.

Outcome on Amendment: The amendment to strike “federal” was approved, with dissent from Stephen Rapundalo.

Medical Marijuana Licensing: Amendment – Council Approvals

The final amendment handled on Monday was again introduced by Sabra Briere (Ward 1) and included a motion to change the title of the licensing board to “Medical Marijuana Licensing Board” and to establish a procedure for approval or rejection of each license application by the city council.

Stephen Rapundalo (Ward 2) asked city attorney Stephen Postema for his thoughts. Postema said he had no issue with that.

Christopher Taylor (Ward 3) wondered if the instruction should be that the council had to act on each application, or if it should simply allow the council to act. Postema said the language means that a recommendation from the board must be given an up or down action. Mayor John Hieftje said he had a concern there, because the issue has already taken over large chunks of the council’s time. He wondered if there was any way they can limit it. Marcia Higgins (Ward 4) said she didn’t think she’d ever seen a recommendation coming from a board that says the council must act.

Briere offered to change the recommendations from the licensing board to the council to make them an annual event instead of an ongoing process. The council settled on an annual process, though Sandi Smith (Ward 1) expressed a preference for a quarterly process.

Outcome on Amendment: The council unanimously approved the amendment specifying how the council approves each license.

Medical Marijuana Licensing: Motion to Postpone

Sabra Briere (Ward 1) said she’d be happy to end the deliberations, but said she was nearly done with the major part. Mayor John Hieftje asked how much time she figured remaining amendments would take. Briere estimated 30 minutes. A motion was made to postpone the licensing ordinance in its form as amended.

Outcome on Licensing: The council voted unanimously to postpone consideration of the medical marijuana licensing ordinance until its June 6, 2011 meeting.

Human Services Allocations

Before the council was a resolution to allocate funding for nonprofits that provide human services in the city for fiscal year 2012, which begins July 1, 2011. The $1,159,029 in the resolution reflected a 9% reduction from FY 2011.

The city’s support for human services is allocated in coordination with additional funding from other agencies: United Way of Washtenaw County ($1,677,000), Washtenaw County ($1,015,000) and Washtenaw Urban County ($363,154).

Human Services Allocations: Budget Public Hearing

On Monday, the council held its public hearing on the fiscal year 2012 budget, which will be considered formally on May 16. Several of the speakers directly or indirectly addressed human services spending in that budget.

Thomas Partridge said the budget shouldn’t be passed without reviewing it for progressively-scaled fees. People have suffered too long under regressive taxes, he said, which had culminated in an effort to recall Gov. Rick Snyder. He reminded the council that the right to recall elected officers can be applied to local officials, as well. He called on the mayor and the council to live up to their responsibility to come up with a budget, tax and fee structure that is progressively-scaled to give consideration to the most vulnerable in society.

Susan McGarry introduced herself as the minister at St. Aidan’s Episcopal Church – she also serves on the Interfaith Council for Peace and Justice (ICPJ) working group on racial and economic justice. She urged the council not to make cuts to the community’s safety net. She said she’s been a professional minister for over 30 years. The church had started sheltering by letting people sleep in their basement. Since then so much has improved, she said. We have a community where we can be proud, she said. She argued against those who would say that “we make it too easy for poor people.” It’s a hard budget, but it’s difficult for the most vulnerable among us, she said. In a difficult time, we need to keep that good work going forward.

Lucia Heinold also introduced herself as a member of ICPJ. She said that Ann Arbor is a caring community. We need good fire protection, but we need to keep the poorest among us in our minds, she said. It does us no good to have a great park system if we have people who are too poor and sick to get to the parks. She thanked the council for all the work they had done. As treasurer of some organizations, she knows how hard it is to keep things running in the current economic climate.

Michael Appel with Avalon Housing supporters, who are holding more than 4,000 paper cranes to represent the number of people who have used Avalon's services.

Michael Appel, associate director of Avalon Housing, was joined at the podium with a supporting cast of people holding 4,738 paper cranes – one crane for every person that Avalon Housing had served in 2010 through its homelessness programs. The beauty of that many colors, he said, contrasted with the sheer number of people who had lost their housing. For over a year volunteers had been making the cranes to help visualize the scale of the problem. He reminded the council that they would be acting that night only on the human services part of the budget, but said that it was connected to the rest of the budget. People are not using public safety services, if they’re using Avalon’s services.

Ellen Schulmeister, director of the Shelter Association of Washtenaw County, described a client who had been helped through the association’s programs – a man named Charlie who, among other challenges, suffered from migraine headaches. He was falling through cracks in the system, and in late 2010 came to the Delonis Center, out of ideas. He entered the center’s residential program, she said, where a case manager helped him design a plan. The first step was to get his medical needs addressed. His case manager helped him apply for Social Security, which gave him a monthly income, and he was able to take the step of finding stable housing. He moved into that housing on Feb. 1.

Diana Neering, who is also with the Shelter Association, gave the council a second sketch of one of the association’s client success stories. It was the story of Matthew, who appeared at the shelter wearing boots and dark sunglasses. He had a mental disorder and would talk of owning 40 Internet businesses and being a friend of the University of Michigan president. Staff finally convinced him to give the shelter a try. He received mental health treatment through a prescription. His case manager had helped him apply for Social Security benefits and he was quickly approved. He now has income, health insurance, housing and treatment. “We didn’t give up on him,” she said. So she asked the council not to give up on the shelter.

Nicole Adelman, executive director of the Interfaith Hospitality Network of Washtenaw County at Alpha House, told the council that the city had supported human services funding for many years, and they should be proud of that. She asked the council to please not cut the budget this year. Ultimately, that money keeps people out of emergency rooms – it saves the community money, she said.

Joanne Motino Bailey, director of nurse midwifery service at the University of Michigan Health System, said she also worked with Planned Parenthood and has watched the funding be used to change women’s lives and provide the integrated care they need. She strongly encouraged the council to continue the funding.

Barbara Niess May, executive director of SafeHouse Center, noted that SafeHouse receives human services funding from the city. The long-term support that the city council has given to human services funding is part of what makes Ann Arbor a safe and pleasant place to live. She pointed out that the majority of funding that’s invested stays in the community and often leverages other resources. She said she’d be remiss not to thank the council for this gift, but said it’s also a necessary investment.

Pam Smith introduced the council to Child Care Network as a 33-year-old nonprofit that helps families find childcare. It had enjoyed 30 years of support from city of Ann Arbor. The nonprofit helps the most economically vulnerable, but they pay a portion of the child care – that helps keep parents involved. Clients have gone on to hold jobs as bank mangers and customer services representatives in the community, she said.

Also addressing the council for the Child Care Network was Lori Bush, director of family support programs. She told the council it’s difficult to get parents to come represent the nonprofit’s programs because they have time commitments, so she read a letter from one of their parents who is a client, who described how the nonprofit had helped her.

Julie Steiner, executive director of the Washtenaw Housing Alliance, encouraged the council to continue funding. She told the council that nonprofits don’t just stand before the city and ask it for money. She described starting a program for a “single point of entry” to save people’s energy. She described how the money allocated to WHA helps the organization bring additional money – leveraging the money it receives – $1.5 million had been obtained through the federal stimulus (AARA) for rapid rehousing.

Former councilmember Jean Carlberg said it was very nice to be in front of the council. When she’d left the city council, she went to the Washtenaw Housing Alliance, because she appreciated the fact that the alliance included 25 partners to work on homelessness. But she said her interest is more than homelessness. She noted that those who benefit from human services are not just clients, but also friends and neighbors.

Referring to the 4,000 paper cranes presented by Michael Appel and his group, Carlberg said that number would need to be multiplied by 5 to include people who are in crisis and near crisis. The issue concerns more than just people who receive services directly. She also pointed out that the money stays here and multiplies in the community. It’s a relatively small amount, she said. It’s a difficult choice, but she compared it to choosing between temporary inconveniences versus taking away a basic human need. There’s not a temporary consequence to that, she said. The city’s money would be well spent in the community.

Human Services Allocations: Council Deliberations

Mary Jo Callan, head of the joint city/county office of community development, described the human services funding levels this year compared to last year as a $116,000 reduction. The office as a whole had made a 7% reduction, even though the target was 2.5%. As Callan explained during a February 2011 working session, the previous year’s budget had assumed federal funds that did not, if fact, materialize. So they were “starting in a hole,” she said.

Mayor John Hieftje asked whether the 2.5% target was met, leaving the federal funds out of the equation. Callan confirmed that the federal funding is essentially the difference between the 7% reduction compared to the 2.5% target.

Referring to the coordinated funding approach to support nonprofits that provide human services, Sandi Smith (Ward 1) said that in Washtenaw County, we are doing something unique in aggregating funds. That approach really maximizes and leverages the available funding. She commended the work that had gotten the community this far. She asked Callan to comment on the coordinated funding model.

Foreground to background: Councilmembers Sandi Smith (Ward 1), Margie Teall (Ward 4), Marcia Higgins (Ward 4), and city attorney Stephen Postema.

Callan confirmed that her office uses a coordinated funding model that includes public entities – the city of Ann Arbor, Washtenaw County and Urban County – and the Washtenaw United Way. The idea is for these entities to examine how best to invest and amplify the effect of their funding. A review team representatives from each governing board helped evaluate the criteria set out for applicants beforehand. They’re funding a total of 63 nonprofit programs. The city of Ann Arbor funds aren’t directly supporting all of those 63, Callan said, but the availability of city funds allows decisions to be made about all of the nonprofits.

Smith asked Callan to illustrate how city dollars are leveraged by giving the ratio of dollars invested to dollars brought in. Callan told Smith that two years ago, a local dollar brought in $10 in additional support. That figure has now grown to $13, she said. The growth, she said, is due to a couple of factors. First, nonprofits are relying on being entrepreneurial and going after funds to support their core mission. Second, as the city allocates funding, it is now demanding “capacity” from those nonprofits, so the city is investing in nonprofits who know how to generate dollars.

Stephen Rapundalo (Ward 2), who was one of the architects of the scoring metric used to evaluate nonprofits that apply for city funds, asked Callan about Meals on Wheels. He said he fully supported its mission and they do great work. But the fact of the matter is that it’s a University of Michigan program. “Yet they come to us?” he asked. Surely UM can find that amount of money, he ventured. So he asked Callan why Meals on Wheels comes seeking city dollars.

Callan told Rapundalo that other people have asked that too. Callan said she did not have an answer that would be good enough for some folks – but Meals on Wheels uses local dollars to leverage money, too. Part of it is also a policy issue – the city has always funded some programs.  They’re a part of the portfolio. Callan told Rapundalo that she appreciated his acknowledgment that Meals on Wheels does really good work. Rapundalo replied to Callan’s remark – she told him it’s a legitimate question – by saying that’s why he brought it up.

Sabra Briere (Ward 1) said she’d like to postpone the resolution, because she was not prepared to vote that night. She held out hope that between now and the council’s next meeting, the city can find “an additional dime.”

Outcome: The council voted unanimously to postpone consideration of human services funding.

Packard Square

Before the council were resolutions to approve the site plan and development agreement, as well as the brownfield redevelopment plan, for the Packard Square project, which is located at the site of the former Georgetown Mall. The development would include 230 apartment units, 23,790 square feet of retail space, 454 parking spaces and stormwater detention facilities.

At its March 15 meeting, the Ann Arbor city planning commission had unanimously recommended approval of the Packard Square site plan. [Chronicle coverage: "Packard Square, Fraternity Site Plan OK'd"]

The total investment by the developer for this project is about $48.2 million. The amount of that which falls under the brownfield plan’s eligible activities is $2.82 million – for site preparation, demolition, footing drain disconnects and sanitary sewer upgrades, and remediation of contaminants from the former dry cleaning business on that site.

Packard Square: Public Hearing

Mary Krasan thanked Margie Teall (Ward 4)and city planner Jeff Kahan for their time and effort in expediting a solution to the Georgetown Mall situation. The Packard Square project is not perfect, she said, but she hopes it will be a beneficial one to the neighborhood’s quality of life. The neighborhood has been lucky – it’s looking at an end to that particular blight, when other neighborhoods have no certain end in sight. Neighborhoods need protection against the impact of blight on property values and on morale, she said.

Jeanne Horvath told the council that her property abuts the old Georgetown Mall site. She described the proposed project as not the best, but better than what they have now.

Thomas Partridge introduced himself as a Democratic Party leader calling on council to pass amendments to the development agreement, saying the council needed to table it for this agenda. The amendments should ensure access for the most vulnerable – students, adults and families. There needs to be adequate access to the development, he said.

Packard Square: Council Deliberations

Marcia Higgins (Ward 4) reported that the city’s brownfield committee had met several times looking at the request. [The project is located in Ward 4.] She explained that the soil contaminants [tetrachloroethylene] will be removed to a concentration meeting a 10(-5) standard instead the more stringent 10(-6) standard. The reason for that, she said, is that a vapor barrier would be installed, at the request of the Michigan Dept. of Environmental Quality. The brownfield committee will be bringing a resolution before the council to ask the city’s environmental commission to review brownfield plan policies and to update them to add precautionary measures that were not available 10 years ago.

Margie Teall (Ward 4) said she’s delighted the site plan was in front of the council. She said the residents are excited about it. Higgins echoed Teall’s comments – it’s not often that near neighbors say they really want the council to move forward on a project. It’s become a real community dialogue, she said. Teall added that it’s been a dialogue between developer and residents.

Outcomes: On separate votes, the council unanimously approved the site plan, development agreement and brownfield plan for Packard Square.

Sakti3 Abatement

Before the council was a resolution to set a public hearing on the granting of a tax abatement to Sakti3, a University of Michigan battery technology spinoff from the University of Michigan. Sakti3 is led by UM professor Ann Marie Sastry. The public hearing will be held as part of the city council’s June 6, 2011 meeting, which starts at 7 p.m.

Sakti3 is requesting an abatement on $200,000 of real property improvements (electrical construction work) and $2.2 million of personal property (battery cycling equipment, thermal chambers, machine shop equipment, server system).

If granted, the abatement would reduce the annual tax bill on the new improvements by about $17,000 for each year of the abatement. According to city staff, the new real and personal property investments would generate about $22,500 in property taxes each year.

At their March 21 meeting, the council voted to set a public hearing on the establishment of the industrial development district under which Sakti3 is applying for an abatement. And on April 4, the city council approved the establishment of the district.

Outcome: The council voted unanimously without comment to set the public hearing date for the Sakti3 tax abatement.

Municipal Center Construction

The city’s new municipal center, located on the west side of city hall (the Larcom Building) has its main entrance off Huron Street. The street address for city hall is now 301 E. Huron.

Municipal Center Construction: City Administrator Update

During his communications time, interim city administrator Tom Crawford gave the council an update on renovations that are being done on the Larcom building.

In the basement, the area that had flooded due to a burst pipe dried well and there’s no mold, he said. Radon levels are below the action level for residential construction, he said. On the first floor the sprinkler piping is finished – drywall installation and asbestos abatement continue. Two elevators in the west tower are complete and have passed inspection. The old elevators are permanently out of service.

Municipal Center Construction: Wheeler Contract Extension

Before the council was a contract extension with William Wheeler for oversight of the municipal center construction project. In March 2010, the council had voted to continue Wheeler’s services as the municipal center project manager – Wheeler is a former city of Ann Arbor employee.

The contract language stipulated that it would expire when Wheeler hit a maximum compensation of $126,000 or by April 30, 2011. The council approved a contract extension of 60 days, with no increase in the cap on total compensation.

Outcome: The council voted unanimously without comment to approve the contract extension for William Wheeler.

Interagency Technology Agreements

The council was asked to consider the approval of several interagency agreements on the use of technology with: (1) Washtenaw County and the Ann Arbor Transportation Authority; (2) Washtenaw County for data storage services; and (3) Washtenaw County for backup services.

The AATA board had discussed the collaboration at its April 21 meeting. The data storage services to be provided by the county will cost $73,632 for four years. The backup services to be provided by the county will entail an annual service cost of $102,607 for four years.

Marcia Higgins (Ward 4) is not getting a tutorial on how to pack a snowball. As interim city administrator Tom Crawford noted during his communications – it's spring.

Tom Crawford, the city’s CFO and interim city administrator, noted that the state looks at this kind of collaboration favorably. Marcia Higgins (Ward 4) asked whether the city’s recent arrangement to provide the city of Chelsea with IT services would count as collaboration from the state’s point of view – yes, said Crawford, if Ann Arbor gets to count things it’s already started.

Dan Rainey, head of IT for the city, explained the nature of the shared storage and shared backup – there will be one machine at city hall and one at the city’s Wheeler Center. Mayor John Hieftje said some people might question the cost. What would happen if the city didn’t spend the money, he asked. Rainey said the city would be at significant risk of not being able to recover data. That might mean the loss of critical data like maps, financial data, data on the wastewater plant, and day-to-day operations. It’s really important to have a means to back up and recover it, Rainey said.

Sabra Briere (Ward 1) noted there are some people who think the city spends way too much money on IT. She asked Rainey to describe how much of the city’s IT operations are handled by his department. He explained that his department operates across the entire organization – 98% of all the city’s IT costs are in the IT department’s budget. Briere concluded that this reflects a change in the way the city government does business.

In response to a question from Hieftje, Rainey said that IT costs have remained relatively flat over the last three years. Sandi Smith (Ward 1) asked if the city would eventually move to cloud-based technology. Rainey explained that several of the applications used by the city are already cloud-based: including HR, payroll, and law enforcement and courts system software. He also said the city is shrinking its physical footprint by converting paper documents to digital form.

Outcome: The council unanimously approved the three interagency IT agreements on its agenda.

Street Closings

On its agenda were approvals of several street closings. Christopher Taylor (Ward 3) asked his colleagues to excuse him from voting on one of them. Grizzly Peak, which was requesting a closing of Washington Street in connection with a Sept. 16-17, 2011 Oktoberfest celebration, is a client of  the law firm Butzel Long, where Taylor works.

Other street closing requests were for: 1) the Ready Set Fly 5K on Saturday, May 21 from 8:45 A.M. to 11:00 A.M., and 2) The Event on Main, a fundraiser for the University of Michigan C.S. Mott Children’s and Women’s Hospital, on South Main Street between William and Liberty, from 6 a.m. on Thursday, June 23 to 2 a.m. on Friday, June 24.

Outcome: The council voted unanimously to approve all the street closing requests.

DTE Power Line Relocation

On the council’s agenda was the finalization of an agreement with DTE to relocate power lines in connection with the East Stadium Bridges reconstruction project. Sabra Briere (Ward 1) asked Sue McCormick, public services area administrator, if the lines would be buried. The answer – yes – was provided by Homayoon Pirooz, head of project management for the city, who stayed until the end of the meeting, along with city engineer Michael Nearing.

Outcome: The council voted unanimously to approve the agreement with DTE.

Large Vehicle Purchases

The council was also asked for authorizations to purchase two large vehicles – an Elgin street sweeper and a combination sewer truck – and a large piece of truck-mounted equipment (a rodder for clearing out sewer lines).

Higgins said she felt like the ghost of Chris Easthope was sitting in her seat – she had questions about whether the purchases were necessary. [After the meeting, she told the Chronicle that former councilmember Easthope had on occasion questioned the purchase of some large vehicles when staff had recommended acquiring them – if a truck had limited miles on it, then the age of the vehicle wouldn't necessarily justify its replacement.]

After confirming with Sue McCormick, public services area administrator, that the staff did not need the council to act urgently, Higgins moved to postpone the sewer truck purchase. Sandi Smith (Ward 1) later moved postponement of the street sweeper.

Outcome: Votes on the two vehicles were unanimously postponed, but the rodder was approved at a cost of $87,500.

AATA Appointments

Before the council were two nominations that had been made at the council’s previous meeting to reappoint Charles Griffith and Rich Robben to the board of the Ann Arbor Transportation Authority.

Outcome: Griffith and Robben were unanimously confirmed as members of the AATA board.

Work Session Minutes

Before the council voted on approval of various sets of minutes from prior meetings, Stephen Kunselman (Ward 3) inquired why the March 14, 2011 work session did not include councilmember attendance. He was assured that the record of attendance would be added.

Outcome: The council voted unanimously to approve minutes from previous meetings.

Communications and Comment

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

Comm/Comm: Taxicab Rate Increase – Public Hearing

As a part of his interim city administrator’s report, Tom Crawford noted that the city’s taxicab board is recommending a rate increase. At the council’s May 16 meeting, a public hearing will be held and the recommendation will be considered. The rate increase would affect only the mileage component of fares, which were last approved on May 19, 2008. The mileage increase from $2.25/mile to $2.50/mile had been requested by several taxicab companies in light of rising fuel prices. The taxicab board has indicated with this increase, it does not anticipate considering another rate change until the gas prices were over $5/gallon for at least two consecutive months.

Comm/Comm: Downtown Development Authority

Christopher Taylor (Ward 3) reported that there was some “confusion” but then rejected that as “too strong a word” and settled on “a couple of different interpretations” of the city ordinance governing TIF (tax increment finance) capture for the Ann Arbor Downtown Development Authority district, which will be need to be worked out. That’s why a resolution had been struck from the council’s agenda – it would have allowed the council to ratify a new contract under which the DDA would continue to manage the parking system.

Taylor said that Tom Crawford, the city’s CFO and interim city administrator, was involved in working out the issue along with city attorney Stephen Postema. There may be a larger explanation at the council’s working session on May 9, he said. [Without ratifying a new contract, the city would receive about $2 million less in parking revenues than it has planned as part of its 2012 fiscal year budget. Chronicle coverage: "DDA Delays Parking Vote Amid TIF Questions"]

Comm/Comm: Park Advisory Commission – Budget

Christopher Taylor (Ward 3) reported on a conversation held at the most recent meeting of the parks advisory commission (PAC). Taylor is one of two ex-officio representatives of the city council to that body – the other is Mike Anglin (Ward 5). Taylor said that PAC had reviewed the FY 2012 budget and new fee schedule. PAC members had discussed cuts in the parks department, which are divided across two units – community services and public services. [Chronicle coverage: "Council to Get Reminder of Parks Promise"]

The cuts on the public services side are, as currently proposed, in excess of the cuts compared to other units. He said PAC had been told by Matt Warba, field services supervisor with the city, that the services to be provided will not be cut, but rather that the costs have gone down, because of greater efficiencies. The services will be consistent year over year, said Taylor. In addition to increased efficiencies, the proposed parks budget involves the shifting of cost burdens, for example, to money provided by the METRO Act. PAC passed a resolution exhorting city council to re-fund the public services budget.

Anglin added that PAC had discussed the gradual funding reduction to parks over the years. As the parks maintenance and capital improvements millage will again be before the voters for renewal in 2012, it’s important to have the policies for administration of that millage in place, he said.

Anglin said he doesn’t like to use the word “asset” in reference to parks, because it leads to treating the parks like a business. He reported that he’d talked to young people in their 30s, about how they’d taken advantage of some nice recent weather – they’d taken long bike rides and hung out in the parks. This is what we want to protect, Anglin said. He wants to look at policies for administration of the millage before it’s placed on the ballot next year and he wants to keep the parks whole, if possible.

During the budget public hearing, Julie Grand – chair of the city’s park advisory commission – told the council that she and Sam Offen, chair of PAC’s budget and finance committee, were there to talk about the two resolutions passed at PAC’s last meeting. The first one recommends that the council adopt the proposed budget, she said. The second one raises a couple of considerable concerns. The first concern is the cuts themselves and the second relates to the timing. The cuts would require change to the city’s administrative policy on parks funding allocations, she said. Given the fact that the millage will be up for renewal next year, the perception is that the millage will simply substitute for general fund support of parks.

Offen reiterated and supported the points made by Grand about park operations. The finance committee had talked with Colin Smith, the city’s parks and recreation manager, about parks and recreation. The conversation had been well-planned, with plenty of notice and information. Offen commended Smith and Sumedh Bahhl, who heads all of community services, for their hard work, communication skills, and ability to provide a clear message to PAC. Offen said that the community is lucky to have people like that working for the city.

But Offen expressed concerned about the park operations side of the budget. PAC had had very little time to digest it. Offen said that PAC had significant questions about the lasting ability of state funds [like the METRO fund] to support it, and the fact that the proposed FY 2012 budget doesn’t adhere to the 2006 administrative policy on general fund support for parks. That policy had been a controversial issue at that time, Offen pointed out.

No one spoke during a public hearing on fee adjustments in the community services area, which included rate increases and new fees for new activities in the city park system. [.pdf of recommended fee increases]

Comm/Comm: Labor Negotiations – Fire-Related Deaths

Stephen Rapundalo (Ward 2), noting the budget-related theme of some of the council communications, said it’s useful to remind people that the budget that former city administrator Roger Fraser had proposed before leaving the city ties a labor strategy to the budget: A certain number of planned layoffs in police and fire protection could be mitigated through union concessions.

If police officers adopted the same health care plan as non-union employees, then at least four full-time police officers would not need to be laid off. And if firefighters adopted the same health care plan as non-union workers, that would be sufficient to pay for more than two full-time firefighters, Rapundalo said. There is still time before deliberations at the council’s next meeting on May 16 to make those concessions. He said there’d been speculation that the council won’t follow though on plans to cut public safety workers. But Rapundalo said the budget is very challenging and there’s no place else to get those savings.

Mayor John Hieftje supported Rapundalo’s contention that the council was prepared to follow through on the cuts. A year ago, he said, Margie Teall (Ward 4) was able to make a statement that they had been able to find some additional funding, but there would not be that kind of comment this year. No year has been as tough as this one, Hieftje said – cities across the state have run out of strategies.

Matt Schroeder, president of Ann Arbor's Local 693 of the International Association of Firefighters, waits with others for his turn to speak during the budget public hearing.

During the public hearing on the budget, Matt Schroeder, president of Ann Arbor Local 693 of the International Association of Firefighters, addressed the council. He told the council that top city administrators had contended recently that the fire department’s initial response times probably won’t be affected by more cuts. In the last decade, he said, the city has eliminated 37 firefighter positions, closed one station and eliminated two trucks – average response time has risen, he said. The situation continues to worsen with rotating closures of stations, he warned. Fires are 2-3 times faster and hotter today, he said.

Schroeder said it’d been suggested that Huron Valley Ambulance (HVA) could handle the medical runs, and that the only reason the fire department responds is due to union protocols. In fact, Schroeder said, firefighters respond to medical runs because they’re trained for that and licensed by the state of Michigan. Citizens are not benefited by police officers going to those calls, he said, who are not licensed. The city and HVA determine together which calls firefighters go on – lives can be saved with firefighters responding to EMS runs. In just the last week, there were two occasions when firefighters had arrived well before HVA, and they were able to use basic life support skills to render assistance to two citizens, he said.

Schroeder then turned to statistics on deaths due to fire in Ann Arbor. From 1991-2005, he said, three people were killed in fires – that’s an average of 0.2 lives per year. Since 2006, 12 people have been killed in fires – 2 lives per year. That’s a 1,000% increase in lives lost during a period where there was a 29% staff reduction.

It’s been stated that the city is “comfortable” with more cuts, Schroeder said. He wondered if the city was comfortable with the fact that citizens needed to jump from balconies and roofs while they waited for enough firefighters [4] to arrive on the scene to enter a building to extract victims.

The International City/County Management Association (ICMA) study currently commissioned by the city targets first-arriving fire department companies only, Schroeder said. It does not look at second, third, and fourth arriving companies. He said that firefighters are being vilified – they’re doing more with less. The local union does believe it can work together with the city, he said. Schroeder drew a round of applause from the audience when he concluded his remarks.

Susan McGarry, who addressed the council in support of human services funding during the same public hearing, noted that she was in a car accident and had been very well served by the fire department on that occasion.

Comm/Comm: Elections

Larry Kestenbaum told the council he was pleased to see them. He introduced himself as the Washtenaw County clerk, noting that he is also co-chair of the Michigan Association of County Clerk’s legislative committee. He noted that the next day was election day. In Ann Arbor, there was just one issue on the ballot: the WISD special education millage renewal.

Washtenaw County clerk Larry Kestenbaum glances through his notes before addressing the council on the subject of elections.

Because it’s a single-issue stand-alone election with one item on the ballot and the city no longer has a daily paper, it’s pretty much a given that there’ll be low turnout, Kestenbaum said. Back in 2005 the number of elections started to be consolidated with a limit of four elections per year – in February, May, August and November. Since then, a lot of elections have been pushed to November, Kestenbaum said. [For example, the Ann Arbor Public Schools board of trustees election shifted from May to November, and the Ann Arbor District Library had to follow suit. Chronicle coverage: "School Election Change Would Affect Library" and "Ann Arbor Library Board Moves Elections"].

The state legislature is now considering a bill to force all school board elections to take place in November, Kestenbaum said. [.pdf of legislative analysis of House Bills 4005 and 4006 introduced by Kurt Heise, District 20]

He said there is also a proposal to change to just two elections per year – in May and November. That means that primarie would be in May, when more people have the opportunity to participate, not in the middle of the summer, in August. For most cities, the primary is the election, Kestenbaum said, so the increased opportunity for participation in the primary is important.

Thomas Partridge announced that he was there to speak on very important issues in the history of America. It was the eve of an important special education millage renewal. It’s vitally important that people show up at the polls, he said. He encouraged people to find their polling places – sometimes they’re assigned alternate locations.

Partridge also said it was important for everyone to take cognizance of the effort to recall Gov. Rick Snyder. He noted that the petition language had been the subject of a clarity hearing on April 29, and the election board had voted to find that the language was clear. The recall effort criticizes Gov. Snyder for turning his back on the most vulnerable residents like seniors and disabled people, public employees including school teachers, he said.

Comm/Comm: Economic Development

Stephen Rapundalo (Ward 2), as chair of the local development finance authority (LDFA), introduced Paul Krutko as the new CEO of Ann Arbor SPARK. He’d been selected after a national search. Krutko told councilmembers that he will give them a report on SPARK at their work session on May 9. Standing before the council, he said, is like being at home. Having spent 30 years working in economic development in cities like Cleveland, Jacksonville and San Jose, he is familiar with the city-manager form of government, he said.

Paul Krutko, CEO of Ann Arbor SPARK, approaches the podium to address the city council.

Krutko characterized Ann Arbor as a great community with great potential on the national and world stage. He said he can attest that companies can start in an incubator and become a major player on the world stage.

He said there is an excellent team at SPARK, which is a blessing and curse. When Michael Finney was tapped to lead the Michigan Economic Development Corp. by newly-elected Gov. Rick Snyder, he had taken key staffers with him to the state, Krutko said. So there are a number of key positions to fill at SPARK. That day was his 11th day on the job, he said. He concluded by thanking the councilmembers for the opportunity to appear before them.

Comm/Comm: Planning Commission Retreat

Tony Derezinski (Ward 2) is the city council’s representative to the city planning commission. He reported on the commission’s retreat on April 26, which had a theme of a regional approach to planning. The idea is to coordinate with other communities. At the retreat, the commission had focused on Washtenaw Avenue, the area’s busiest corridor. Commissioners had done a “community crawl” using an Ann Arbor Transportation Authority bus for the afternoon.

The bus stopped along the way at various points: across from Whole Foods; Arborland; and Glencoe Hills. At Glencoe Hills, the commission visited with Albert Berriz, CEO of McKinley, which owns that property. They also heard from Mandy Grewal, supervisor of Pittsfield Township, and Ypsilanti Township supervisor Brenda Stumbo, and a city of Ypsilanti planner. Derezinski called the corridor a good possibility for urban collaboration. The planning commission took a positive step in hearing what other communities thought, he concluded.

Comm/Comm: Wet Meadow – Buhr Park

Jeannine Palms was on hand to receive a mayoral proclamation honoring her work and those of several other volunteers in connection with the Buhr Park Wet Meadow Project. In her remarks, Palms traced the effort to establish the three wet meadows back to 1996. The plantings help protect Mallets Creek. She noted the educational aspect of the project.

Tony Derezinski (Ward 2) and county commissioner Yousef Rabhi chat before the start of the meeting.

Andy Brush, the webmaster for Washtenaw County, said he’d been volunteering with the project since he met Jeannine when a bulldozer was out working to sculpt the wet meadow. He thanked several people, including Amy Kuras (city parks planner), Jeff Dehring (former city parks planner who’s now with the county), Jason Frenzel (former Ann Arbor natural areas preservation volunteer coordinator, who’s now with the Huron River Watershed Council); Janis Bobrin (the county water resources commissioner), and all the members of the community who volunteered for the project.

Brush’s daughter Clare also addressed the council, telling them that she’d started volunteering with the wet meadow when she was three years old, still in preschool. Sophia Werthmann also dated her involvement to the age of three.

Also tracing his history with the project to his youth was current Washtenaw County commissioner Yousef Rabhi. The project meant a lot to him on a personal level, he said – it had shaped his University of Michigan degree. It had inspired him to run for public office. He took the opportunity to make a “shameless plug” for people to show up to the May 15 planting day – it goes from 10 a.m. to 4 p.m. at Buhr Park.

Comm/Comm: Wet Sanitary Sewer

Interim city administrator Tom Crawford, who is the city’s chief financial officer, spoke about the city’s sanitary sewer system. Due to the wet spring, local soils are now saturated, so any additional rain that falls becomes runoff. During the last week of April, from 7 a.m. Wednesday to 7 a.m. Thursday, he said, two inches of rain fell, and that runoff flowed into the Huron River.

During a three-hour period on April 28, the river peaked above flood stage, he said. [USGS flow rates for Huron River]. That morning, many trunk sewers were surcharged, running “more than full.” The system stands a risk of overflowing with additional rain. A few weeks of little or no rain will be required to dry the system out.

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: May 16, 2011 at 7 p.m. in the second-floor council chambers at 301 E. Huron. [confirm date]

Though federal legislation expanded the types of businesses that can use the bonds, a national credit crunch has essentially slowed potential deals to a halt. “We await the projects,” said John Axe, the EDC’s bond counsel. Unless extended by Congress, the program expires at the end of 2010.

Recovery Zone Facility Bonds: No Takers Yet

Washtenaw County has been allocated just over $33 million in Recovery Zone Facility Bonds, as part of the American Recovery and Reinvestment Act – the federal stimulus bill –  passed in February 2009. Designed to spur private-sector investment, these tax-free bonds must be used for projects within a defined “recovery zone.” In September 2009, the county board of commissioners designated the entire county as a recovery zone for those purposes. The EDC board, which handles applications for these bonds, reconvened that same month, for the first time since March 2005.

In the past, facility bonds were mostly restricted to use by manufacturers. But last year’s legislation expanded the range of businesses that can apply for the bonds. Now, the only exceptions are: 1) rental or residential properties; 2) private or commercial golf courses; 3) massage parlors, hot tub or suntan facilities; 4) race tracks or other gambling establishments; or 5) any store whose principal business is the sale of alcoholic beverages for consumption off premises.

“This opens it up big-time,” said John Axe of Axe & Ecklund, a Grosse Pointe Farms firm that provides bond counsel services to public entities across the state.

Though the county would issue the bonds, other elements are required. Most importantly, a business would need to secure financing – and banks aren’t making many loans these days, Axe said. The situation isn’t unique to Washtenaw County, he said. [This issue was highlighted recently in a March 15 Wall Street Journal article, which used Ypsilanti-based Michigan Ladder Co. and the Bank of Ann Arbor as examples of how small businesses are being squeezed by a national credit crunch.]

Banks are needed to do a credit analysis on the deal, Axe said, and to buy the bonds or issue a letter of credit. From the EDC’s perspective, he added, if the deal is satisfactory to a bank, it would be satisfactory to the county.

Stephen Ranzini, an EDC board member and president of University Bank, noted that community banks are more likely than big banks to make loans at this point. But because of their smaller size, community banks are more limited in the size of loans they can make. Ranzini said that’s why he has contacted his peers at other local community banks, hoping to form a consortium that would allow them, as a group, to finance larger deals.

In addition to the county’s available allocation of recovery zone bonds for the private sector, the city of Ann Arbor was also allocated about $17 million under the same program. Ranzini – who also serves on the Ann Arbor EDC board – reported that like the county, the city hasn’t yet done any deals. [There are 10 EDCs countywide, but only Ann Arbor and Washtenaw County have been allocated recovery bond funds through this program.]

However, Ranzini said there are some potential projects that might move forward: 1) a company that’s working with the University of Michigan, possibly to lease lab space at the former Pfizer complex, which UM now owns; 2) a hotel in the Briarwood Mall area, and 3) a hotel/conference center development proposed by Valiant Group on the city-owned Library Lot site.

Mike Finney, CEO of Ann Arbor SPARK – the region’s economic development agency – attended Monday’s meeting and said he had recently sent a potential deal to Axe for review, as a project for the county’s recovery bonds. It involves a data center project, he said, at roughly $30 million. However, the business has not yet secured bank financing, Finney said.

There was some discussion about the minimum amount that would qualify a deal for consideration. Finney had been under the impression that the total project had to be at least $10 million. Axe and Ranzini clarified that there was no such minimum. Axe said that as a practical matter, anything under $2 million probably wasn’t worth doing from the perspective of the business – given the fees, legal costs and other expenses associated with completing a deal.

At the EDC board’s September 2009 meeting, a fee schedule had been distributed to board members. For private-sector financing, fees include: 1) $500 to apply, 2) $500 at the time when a “resolution of inducement” is issued, 3) $500 when the project’s plan is approved, and 4) 1/8% of the face amount of the bond issue, paid at closing. In addition, processing costs – which vary, depending on the deal – would be charged to the applicant, and include the cost of the bond counsel. For deals over $1 million, the minimum fee for the bond counsel is $12,000.

Deadline Approaches, Possibility of Extension Discussed

John Axe told the EDC board that it typically takes five to six months to complete a deal, though it might be possible to do one in four months or so. But if they don’t have a “live project” by August or September at the very latest, they probably wouldn’t have time to get it done by the end of the year, when the bond program expires.

Washtenaw County administrator Bob Guenzel asked whether Congress might extend the program. Axe said it was difficult to know – currently, health care legislation is taking priority in Washington. It doesn’t look promising, he added, but like the Michigan legislature, Congress often acts at the last minute in the midnight hour, when no one is watching.

Axe also noted that a congressman from Michigan – Rep. Sandy Levin (D-Royal Oak) – recently became chairman of the powerful House Ways & Means Committee. It’s possible that Levin can provide more information, and indicate what he’d be willing to do to extend the legislation, given that it’s not a particularly partisan issue, Axe said.

Marketing the Recovery Bond Program

During Monday’s meeting, Ranzini pressed Finney about marketing the bond program. Ranzini had raised the issue at the September 2009 EDC board meeting as well. From the meeting minutes:

Stephen Lange Ranzini asked Mike Finney about the kinds of advertising or marketing SPARK has in place for getting the word out regarding the allocation to the WCEDC. Finney replied that none was in place due to the new nature of the funding opportunity. He added that it would be advantageous for the WCEDC to examine SPARK’s “pipeline” of current projects and find ways to reach the 300 or so companies that are in their retention program using other methods of marketing. Finney committed to create a one-page marketing program outlining how SPARK would get the word out to the business community regarding the Recovery Zone Bond opportunity.

On Monday, Ranzini said he hadn’t seen mention of the bond program in SPARK’s weekly newsletter, which he described as one of SPARK’s primary marketing tools. Finney replied that information had been included in the newsletter, and that the program had received good media coverage. Finney said SPARK had issued a press release, and had posted information on its website.

Ranzini said he thought that SPARK should refresh its marketing efforts, saying that executives he’d talked with at McKinley and DTE hadn’t heard about the program. “I think more could be done,” he said.

Finney said it would always be possible to find people who weren’t aware of a program, and noted that executives of both McKinley and DTE are involved with SPARK and have received information about the bonds. [McKinley CEO Albert Berriz is on SPARK's board; Trevor Lauer, DTE Energy's vice president of marketing, is on SPARK's executive committee.]

Rob Aldrich, the EDC board’s chair, asked Finney to loop in EDC board members with whatever marketing materials SPARK distributes.

Ottawa County Request

The EDC board also discussed a request from Al Vanderberg, administrator of Ottawa County. Vanderberg is asking that Washtenaw County transfer any unused allocation of its recovery bonds to Ottawa County. In a March 8, 2010 email sent to Bob Guenzel, Vanderberg wrote that Ottawa County has used its allocation of $31 million and has at least another $60 million of projects that could use the bond funding. “We believe that the state might be willing to transfer unused RZFB allocations between counties if both counties are willing,” he wrote.

John Axe suggested holding off on any decision at this point, given that there’s still time for projects in Washtenaw County to come forward. He also pointed out that even if Washtenaw County relinquished its allocation back to the state, there’s no guarantee that the state would reallocate that amount to Ottawa County.

There was some discussion about what Ottawa County is doing to attract projects that require the additional bond financing. [According to a Feb. 24, 2010 article in the Grand Haven Tribune, Ottawa County's entire $31 million recovery bond allocation will be used for a proposed $90 million powdered milk processing facility at a former Delphi plant in Coopersville, northwest of Grand Rapids.]

Mike Finney offered to try to find out whether there are actual additional projects in the works, or whether Ottawa County officials are just “tire kicking.”

Guenzel said he’d inform Vanderberg that the earliest they’d make a decision is at their next meeting, on June 15.

Memorandum of Understanding with Ann Arbor SPARK

During Monday’s meeting, the EDC board also discussed revising a memorandum of understanding (MOU) with Ann Arbor SPARK. The existing MOU was executed in 2002 between the EDC and the Washtenaw Development Council – the predecessor to Ann Arbor SPARK – outlining support services that the WDC would provide, such as marketing and outreach. [.pdf file of current MOU]

Under the MOU, the EDC makes payments to the WDC – now SPARK – only when the EDC collects fees from completed deals.  Mike Finney, SPARK’s CEO, said because there’s so little activity, the existing agreement would be fine. The workload for SPARK’s staff won’t change because the demand for work related to the EDC is so low, he said. The county staff is handling administrative tasks related to the EDC, such as taking minutes at board meetings.

Rob Aldrich, the board’s chair, questioned whether the existing MOU was still valid, given that Ann Arbor SPARK had merged with WDC. Finney clarified that after the merger, the WDC was actually the surviving entity – it had simply been renamed Ann Arbor SPARK.

Aldrich said the document should be reviewed – Jim Libs, the board’s treasurer, will take on that task. Libs was chair of the EDC board when the original MOU was completed.

Board members present: Rob Aldrich (chair), Stephen Ranzini (vice chair), Ingrid Ault, Bob Guenzel, Pam Horiszny, Jeff Irwin, Jim Libs, Michael Simon, Conan Smith. Others: Mark Ouimet, Curtis Hedger, Verna McDaniel, John Axe, Stephanie Jensen.

Next meeting: The EDC board has scheduled quarterly meetings, with the next one on June 15, 2010. The meetings begin at 3:30 p.m. in the county administration building’s board room, 220 N. Main St. in Ann Arbor.

The Vandenberg Room at the Michigan League was packed for a state legislative hearing on funding for higher education.

The three presidents of institutions in Michigan’s University Research Corridor – backed by students and economic development leaders from each region – testified at a state Senate Higher Education Subcommittee hearing on Friday held in Ann Arbor, making a plea for additional state funding. But while legislators at the hearing acknowledged the importance of higher education, they also gave a bleak outlook for Michigan’s financial health, with one senator describing state revenues as “almost in a freefall.”

State Sen. Jim Barcia, a Democrat from Bay City, told the 50 or so people gathered at the Michigan League that a revenue estimate released earlier in the day was “worse news than anticipated.” The Senate Fiscal Agency estimated that revenues could be $2.1 billion lower than projected for the coming fiscal year, which begins Oct. 1. Even in the current fiscal year, the state faces a $1.3 billion deficit that has prompted another round of cuts. Despite that, Barcia said the students who testified on Friday – including a recent University of Michigan graduate who has launched a new company – gave him reason for optimism.

Following comments from legislators, including Ann Arbor’s state Sen. Liz Brater, the hearing began with testimony from UM president Mary Sue Coleman. [.pdf file of Coleman's opening and closing remarks] Mentioning initiatives at Michigan State University and Wayne State University (the two other institutions in the University Research Corridor), Coleman then described UM’s purchase of the former Pfizer research campus as an example of the university’s contribution to the local economy. The site will eventually include an incubator for the private sector and is expected to add nearly 3,000 jobs to the area over the next 10 years, she said.

State Sen. Liz Brater (D-Ann Arbor) is a member of the Senate Higher Education Subcommittee and attended Friday's hearing in Ann Arbor.

“As with many of our respective projects, not only will we broaden our contributions as a research university, we also will stimulate new business in region,” Coleman said. “We believe the two objectives go hand-in-hand.”

Testimony from MSU president Lou Anna Simon and Jay Noren, president of Wayne State, highlighted contributions that their institutions make to the state’s economy as well. Those remarks were followed by testimony from leaders of economic development agencies that work closely with the three universities: David Hollister, president of Prima Civitas in Lansing; Randal Charlton, executive director of TechTown in Detroit; and Mike Finney, CEO of Ann Arbor SPARK.

Finney recalled the history of his organization, which was founded in part with the backing of UM. He read an excerpt from an April 16 Detroit Free Press article, which described Ann Arbor as a hub for startups and venture capital, and which reported that UM and SPARK were the two most-cited reasons that entrepreneurs located in Ann Arbor.

Finney’s comments echoed remarks he’d made at a May 11 Partnership for an Innovation Economy forum hosted by UM. He said that the relationship between UM and SPARK is critical in four ways: 1) providing access to talent, 2) helping create and bolster entrepreneurial ventures, 3) helping work with existing businesses, and 4) assisting with business transformation, specifically in transitioning from an economy dominated by auto manufacturing to one that’s fostering emerging industries. He concluded by saying that you couldn’t separate the economic development agencies from the universities they work with and get the same same results. He urged legislators to support funding for higher education, and in particular for the University Research Corridor institutions.

Jeff LeBrun, a recent UM graduate, co-founded a company that's developing clean energy technology.

Three students, one from each of the URC universities, testified as well. Jeff LeBrun recently graduated from UM’s Erb Institute with an MBA and graduate degree from the School of Natural Resources & Environment. He described how a company he co-founded, Algal Scientific, recently won the Clean Energy Prize, a $65,000 award from DTE Energy to encourage the commercialization of clean energy technologies. Their company is developing treatments for municipal and industrial wastewater, with a byproduct that can be used for biofuels.

LeBrun said he didn’t come to UM intending to be an entrepreneur, but during his studies he encountered the kinds of resources and training that led him in that direction. He said he has his eye on the incubator site that UM plans to start in the former Pfizer campus. “That’d be a great place to set up shop,” he said.

The five senators at the hearing had questions and comments after the testimony. Sen. Bill Hardiman, a Republican from Kentwood, cited state revenues that were disappearing “almost in a freefall” and asked if online education was being considered as a way to curb capital outlays. UM’s Coleman told him that online education was not inexpensive, and that while all the universities have worked on ways to economize – and “gladly” take on economic development efforts – “none of this comes without cost,” she said. MSU’s Simon noted that Michigan is falling behind in building research lab space, and that’s an important capital outlay for the state.

In her remarks, Brater said that every dollar invested in higher education generates $25 in spinoff economic benefits. Noting that her spouse is a faculty member of UM’s English and theater departments, she said that investment in the arts and humanities also relates to economic development. She mentioned that John Warner, a pioneer in green chemistry, had recently spoken at the Ecology Center’s annual meeting, where he’d criticized science education for not teaching about environmental impact. She asked what the universities were doing in that regard.

UM president Mary Sue Coleman, center, listens to testimony given by university students at Friday's hearing. She is flanked by MSU president Lou Anna Simon and Wayne State president Jay Noren.

Coleman said that one of the Erb Institute’s principles was to look at the environmental impact of a product or building’s life cycle. That issue is coming to the fore across all disciplines, she said. MSU’s Simon quipped, “I’m always for green anything.”

Brater also asked for an update on how the URC is leveraging federal research dollars. Coleman said they’d be releasing their third annual report with details on that topic at the Mackinac Policy Conference later this month. (Coleman will be on a panel there, along with former UM regent David Brandon of Domino’s Pizza, titled “Changing the Environment in Michigan to Encourage Growth through Innovation.”)

Sen. Glenn Anderson, a Democrat from Westland, asked how universities were preparing for the inevitable likelihood of declining state support, at least over the next several years. He said that once federal stimulus funds coming into the state were used, Michigan would be in an even worse situation financially.

Simon said that working collectively, as the URC institutions are doing, is one strategy. But she told legislators they need to ensure that the value of a degree appreciates over time, and that higher education in the state is a magnet. “If we can’t do that, the numbers will only get worse,” she said. The universities are going through internal budget reductions, while maintaining a strong commitment to financial aid. Quality of and access to education are key, she said, as is research to drive the future of Michigan.

Coleman said there’s a correlation between the education of the population and the prosperity of the state. She told lawmakers that the state government needs to grapple to find a revenue model for the 21st century, and that she didn’t envy their jobs. She said the universities must have both quality and access, and noted that “it costs a lot to do what we do.”

Our coverage ended as the hearing took a break. Later in the day, the committee was to hear testimony from UM-Dearborn executives and Mike Boulus, executive director of the Presidents Council, a group representing the state’s 15 public universities.

Layers of history are preserved on the wall of SPARK East in downtown Ypsilanti.

On Friday, May 8, the renovated Ypsilanti storefront that houses SPARK East will be open to the public for a look at the business services offered there. The event is part of a larger economic development effort on Washtenaw County’s east side, an effort that’s getting a boost from federal stimulus funding – or what one county official called “Obama bucks.”

Last Thursday, about 40 members of the Eastern Leaders Group got an overview of the 2009 Recovery and Reinvestment Rapid Response Strategy Business Plan, which had been approved by the ELG executive committee in mid-April. Held at the brick-walled SPARK East office on Michigan Avenue, the meeting covered a lot of ground, from neighborhood revitalization efforts to a plan for microloans to businesses.

The Chronicle dropped by to hear about the plan too. Though the meeting was decidedly forward looking, there was an element of history at SPARK East as well – more on that later. We’ll start with a look at the three main topics covered on Thursday: 1) business development and employee training, 2) microloan programs, and 3) community revitalization and stabilization plans.

David Behen, deputy county administrator, introduced the presentation by listing some concrete things the Eastern Leaders Group had done, a list that included helping to open SPARK East. Last year activity slowed down, he said, but when federal stimulus dollars became available, that provided an opportunity to act.

He noted that when the ELG steering committee met on April 14 to vote on the plan being presented to the group that evening, the person who made the motion was Peter Fletcher. (Fletcher is a longtime Ypsilanti businessman, a Republican stalwart and an erudite man not known for mincing words.) “He’s someone who makes sure it’s right before he’s behind it,” Behen said. “Well, he’s behind it.”

Business Development & Employee Training

Diane Keller, president of the Ypsilanti Area Chamber of Commerce, started off the discussion about business development by noting that nearly all the services that any business would need are available within a two-block area of downtown Ypsilanti.  She ticked off a few of those: Eastern Michigan University’s College of Business and its Center for Entrepreneurship, the chamber, SPARK East, Congressman John Dingell’s office, the Michigan Small Business & Technology Development Center, the Ypsilanti Export Assistance Center and others.

The idea is to bring these groups together in a “mega” partnership, Keller said, with the goal of creating or retaining 25-30 businesses, creating 250-300 new jobs, and training 200-400 people. The partnership could provide customized job training, marketing and technical assistance, microloans and referrals to other federal, state or local resources, she said.

Trenda Rusher, director of the county's Employment Training and Community Services (ETCS) department.

At that point, Trenda Rusher, director of the county’s Employment Training and Community Services (ETCS) department, took over the presentation  and outlined the industries for which job training will be prioritized. Among them are “green” industries like alternative energy or environmentally friendly construction, medical/life sciences, telecom, and companies focused on electrification (such as the development of batteries for vehicles). High-skilled, high-wage, high-demand industries will also be a priority, she said.

Also in the ELG plan is a Center for Transitional Talent, which will provide retraining and other services to executives, middle managers, dislocated workers and retirees who are returning to the workforce. Programs could include paid internships and apprenticeships.

Yet another program will focus on training and jobs for youth from ages 14-24 years old, Rusher said. Partners include EMU’s Early College Alliance and the Business Side of Youth, another EMU program.

Microloans

Skip Simms, managing director of Ann Arbor SPARK’s business accelerator and manager of the Michigan Pre-Seed Capital Fund, gave an overview of a microloan program that’s part of the strategic plan for eastern Washtenaw. The goal, he said, is to provide funding for small businesses as well as startups founded by people who took early retirement or buyout offers. The county is planning to provide about $200,000 to fund these programs.

There are two components. One fund, managed by the Center for Empowerment & Economic Development (CEED), will provide small loans to businesses that are having cash-flow problems and that perhaps can’t get a line of credit. These microloans could be leveraged to bring in additional dollars from the U.S. Small Business Administration (SBA), which could potentially provide 7-to-1 matching funds.

A second fund, managed by Ann Arbor SPARK, will target companies with global markets and the potential for high growth, Simms said. That means the loans – capped at $50,000 – would be high risk, he said, but “the opportunity is huge.” The goal is to create 185 jobs within two years.

Community Revitalization & Stabilization

Mary Jo Callan, director of the city/county office of community development, said that economic development goes hand-in-hand with neighborhood revitalization, and she described several programs in the latter category.

Ongoing community development programs in the county aim to assist low- and moderate-income residents find and maintain housing, she said. Her department also funds community projects designed to improve the quality of life for residents. (The department’s website gives examples of improvements to parks in Ypsilanti Township and sidewalks in Salem Township.) They’re spending about $1 million annually on the eastern side of the county, Callan said.

Callan also described a new federal program to fund neighborhoods hit hard by foreclosures. All of the $3 million in funding will be used on the east side of the county – in Ypsilanti, Ypsilanti Township and Superior Township. [See previous Chronicle coverage of the program here.] Separately, the county hopes to find funding sources for improving the housing stock around the Eastern Michigan University campus.

Washtenaw County is also getting $4.1 million to help weatherize homes of low- to moderate-income residents, Callan said. A large part of that federal Recovery Act grant will be used on the eastern side of the county, she said, and will result in a triple bottom line: 1) homeowners save money on their utility bills, 2) the county creates “green” jobs related to weatherization and possible alternative energy initiatives, and 3) the program ultimately helps the environment by reducing the amount of energy used.

Callan described two other initiatives: a land bank being formed by the county treasurer’s office that will buy, redevelop and resell residential or commercial properties that had been abandoned or foreclosed on, and 2) energy efficiency and conservation block grants (EECBG), which can be used by homeowners or businesses. The county is getting $750,000 through these grants – Callan said one possibility might be to start a revolving loan fund that people could tap to make energy efficiency improvements.

Deputy county administrator Verna McDaniel and Shamar Herron, manager of SPARK East, at a reception following the April 30 meeting of the Eastern Leaders Group.

Next Steps

After the presentation, deputy county administrator David Behen urged ELG members to sign up for specific “action teams” focused on the areas that had been discussed. The roughly $8 million in federal dollars that’s funding many of these programs must be spent within 18 months, he noted. But the point is that they now have the funding to be successful, he said: “That’s something that should get this room excited.”

The plan will be officially launched at a June 2 breakfast hosted by the Ypsilanti chamber, and Behen said they planned to promote the initiative in print, TV, radio and online. He told the group: “We’re gonna get this done this time.”

Friday’s open house at SPARK East, 215 W. Michigan Ave. in Ypsilanti, runs from 1:30 to 8 p.m. Tours of the facility will be held from 1:30 to 5 p.m., with a ribbon cutting to take place at 2:30 p.m.

One Final Note: Peeling Back History

In the lobby of SPARK East is a section of plaster covered with plexiglass. It stands out because the rest of the walls are exposed bricks, mostly covered with artwork. There’s a story about that piece of plaster, which is pictured at the beginning of this article. A close-up is shown below.

There were actually several layers of plaster on the walls that workers removed to expose the bricks. As they stripped away one section, they found that workers in November, 1941 – who were also doing remodeling work in the building – had signed their names lightly on the wall. So the section was left up, signed and dated by workers who did the current remodel, to connect the present to the past in one small way.

A close-up of a section of plaster at SPARK East, which had been signed in 1941 by workers remodeling the space. The section was uncovered during a more recent remodel this year – those workers signed their names above the older signatures.

As part of their look to the future, LDFA board members placed their sticky notes identifying the purpose of the LDFA to a giant poster on the wall. (Image links to high resolution image of entire poster.)

It was not anything personal, said Stephen Rapundalo to Skip Simms, who was sitting across the U-shaped configuration of tables from Rapundalo. He had just voted against Simms’ appointment to the Local Development Finance Authority board.

But over Rapundalo’s objection, shared also by his colleague on the board, Rob Risser, the body voted to add an ex-officio, non-voting seat to the LDFA board, which was filled by Simms. The occasion of the vote on Tuesday morning, held at the SPARK Central Incubator on Liberty Street, was the LDFA board’s regular meeting, which was also billed as a retreat – a facilitator was on hand to lead the group through an exercise to reflect on the organization’s purpose.

As Rapundalo’s assurance to Simms reflected, the new seat on the board was not created for Simms personally, but rather was specified as the designee of “the accelerator’s CEO,” who in this case was Michael Finney of Ann Arbor SPARK. Finney had designated Simms. SPARK contracts with the LDFA to provide services to high-tech start-up companies, and Simms is SPARK’s managing director of business acceleration as well as manager of the Michigan Pre-Seed Capital Fund.

Simms already had a seat at the physical board table when the board’s deliberations took place on the creation of the ex-officio position. So why were Rapundalo and Risser opposed to the expansion of the board in this way?

Who Else Was at the Table?

We begin by setting a bit more of the scene on Tuesday morning, which began at 7:30 a.m. over breakfast. Others who were technically in the audience at Tuesday’s meeting, but who sat at the physical table, included Greg Fronizer, SPARK’s director of finance, and Kurt Riegger, a consultant for SPARK and currently managing partner of Business Engines, as well as a board member of Great Lakes Entrepreneur’s Quest and Ann Arbor Angels.

The LDFA is currently contemplating funding the administrative costs for Ann Arbor Angels, a point scrutinized by Ann Arbor city councilmember Marcia Higgins at council’s last meeting. The occasion of Higgins’ scrutiny was the presentation to council of the LDFA’s annual report by board chair Richard King.

Deliberations on Board Appointment

The dissenting board members to the new board appointment – Stephen Rapundalo, president of MichBio, and Rob Risser, CFO of Advanced Photonix, Inc. – cited the potential conflict of interest created by having a contractor with the LDFA board also sitting on the board. Any potential conflict, however, seems embedded in the 2002 agreement between the cities of Ann Arbor and Ypsilanti, which was required in order to create the LDFA under the SmartZone enabling legislation. It’s worth noting that the Washtenaw County board of commissioners needed to sign off on the SmartZone as well. On Tuesday morning, the  agreement between the cities was cited by board chair Richard King as the legal basis for the board appointment:

The Board shall appoint two (2) ex-officio non-voting members consisting of a representative of the MEDC and a representative from the Accelerator. In addition, the Board may appoint other ex-officio non-voting members of the Board.

In this case, “the Accelerator” seems not to be defined within the document outlining the agreement. However, the term would be understood in the context of the 2002 application to the Michigan Economic Development Corporation (MEDC) by the Ann Arbor-Ypsilanti SmartZone for $.5 million in funding as a part of the MEDC’s business accelerator program. In the council resolution supporting that application, it’s the Ann Arbor ITZone – which eventually merged with Ann Arbor SPARK – that is identified as the energy behind the accelerator program. And it was the ITZone’s Kurt Riegger who directed the accelerator program. Now in 2009, it’s thus Ann Arbor SPARK’s business accelerator that would be understood as the referent of “the Accelerator” in the agreement between the two cities.

Board members who argued for the appointment cited the new position’s non-voting status as ameliorating the potential for the conflict of interest. Board member Lisa Kurek, managing partner of Biotechnology Business Consultants, also argued that it was important for people with information relevant to the board’s deliberations to be able to convey that information to the board in a timely fashion.

Later in the meeting, Rapundalo would illustrate a possible parliamentary mechanism by which non-board audience members can contribute relevant information, by noting its lack of application. Riegger, an audience member seated at the board’s table, began speaking without his participation having been solicited by a board member, as required by Robert’s Rules of order, and this was met by Rapundalo with: “Mr. Chairman, a point of order!” King then quickly called on Riegger to speak.

Outcome: The position was created and Simms was accepted as a participating but non-voting member of the LDFA board.

SPARK and Reflecting on the LDFA Purpose

After the board was expanded, the group then heard a presentation from SPARK team members on its activities. The presentation included an explication of how high-tech companies grow, an overview of other organizations involved in various economic development activities, and how the University of Michigan fits into the picture. It also included  a rough breakdown of SPARK’s core budget of around $2.8 million, 38% of which the LDFA funds. Elizabeth Parkinson, manager of marketing and public relations for SPARK, gave an overview of the marketing efforts on behalf of the Ann Arbor region, and pointed to the recent article in the Detroit Free Press identifying Ann Arbor as a great place in Michigan for entrepeneurs. Parkinson put the value on an advertising purchase of comparable value to the Detroit Free Press article at around $50,000.

The board then turned to the meeting’s main event, which began with  the exercise of writing down individual thoughts about the purpose of the LDFA and posting them on a common sheet on the wall labeled “Purpose.”

We provide below rough approximations of what each board member said about their yellow sticky notes as they posted them on the wall.

Tom Crawford: (i) provide resources to achieve the unique community needed to protect growth, and (ii) utilize community experts on the LDFA board to guide economic development efforts.

Standing is Richard King. Seated are Kurt Riegger (left) and Stephen Rapundalo (right).

Stephen Rapundalo: (i) provide supporting services and resources to high-tech start-up ventures, (ii) show a demonstrated return of investment of tax dollars in the form of enhanced economic development, and (iii) enhance infrastructure, whether that is capital or other kinds of infrastructure (roads, sewers, internet conduits).

Rob Risser: (i) acceleration and growth of high-tech companies, (ii) education about the process in the community, as well as among entrepreneurs – it’s not a marketing push, it’s a technology push, (iii) networking  infrastructure – people,  (iv) infrastructure – meeting rooms, incubators, organizations that provide specific services, and (v) oversight for taxpayer investment.

Richard Beedon: (i) oversight, adherence to charter in spending of money, (ii) come up with new ways to develop programs that work – best practices for creation of high-tech companies, and  (iii) analyze effectiveness of programs.

Darryl Daniels: (i) determine priorities for using the money, (ii) monitor effectiveness and efficiency of money that is spent, (iii) identify and support a service provider that supports early-stage technology businesses with counsel and coaching, (iv) identify a service provider that integrates the multiple resources for the benefit of entrepreneurs, (v) encourage early-stage high-growth potential businesses that aren’t in Ann Arbor to re-locate to Ann Arbor, and (vi)  market the SmartZone – put a marketing “sizzle” to it: you want to be in Ann Arbor, if you want to be where business development is happening.

Richard King: (i) work with and fund the economic development service provider, and (ii) provide  strategic direction and oversight.

Lisa Kurek: (i) provide management and oversight to protect investment, (ii) facilitate the growth of the technology-based economy, and (iii) get positive economic outcome from that tech-based economy.

Theresa Carroll: (i) foster strategic economic development in the SmartZone, and (ii) ensure appropriate use of taxpayer funds.

Mark Maynard: (i) contribute toward a culture of entrepreneurship that’s attractive to graduating students, (ii) create an infrastructure able to sustain university start-ups, and (iii) encourage risk-taking generally.

LDFA board member Roselyn Zator was initially handed a yellow Sharpie to write on yellow sticky notes (background), but negotiated successfully for a green pen. Michael Korybalski drew an analogy to green golf balls that drew a laugh.

Skip Simms: (i) make the connection to the university, (ii) capital development [three keys to developing business: good idea, talent, and capital] possibly by adding a microloan fund; investments for sustainable source of capital when TIF revenue flattens out, (iii) talent attraction [C-level activity  "I'd rather have an A-team and a B-product, than an A-product and a B-team." "Technology follows talent."] and (iv) sales development training.

Michael Korybalski: (i) facilitate business acceleration, (ii) facilitate development of companies in multiple ways – stage I, stage II, stage III, and (iii) provide incubation space to small companies, a space to network.

Roselyn Zator: (i) identify how to implement support of business incubation, (ii) implement a cluster of high-tech activity, and (iii) identify how to measure effectiveness of the implementation.

The Chronicle left the meeting as the final sticky notes were posted on the wall and lunch was getting delivered. The board’s early afternoon task was to thrash the individual ideas into categories and prioritize them.

Misc: Why People Are on the Board, or Not

Although we identified Stephen Rapundalo as president of MichBio at the beginning of this article, his name will be more familiar to many Chronicle readers as a Ward 2 representative to Ann Arbor city council. In fact it’s his presence on the LDFA that satisfies the requirement – per the agreement between the city of Ann Arbor and the city of Ypsilanti, which allowed the creation of the LDFA – that one of the six positions afforded the city of Ann Arbor on the LDFA board must be a member of Ann Arbor city council.

Previously, the Ann Arbor city council slot had been filled by Mike Reid, who also continued to serve on the LDFA after leaving council, until he resigned in early October of last year, citing in his resignation letter:

… dissent over recent LDFA board decisions to refuse to demand immediate repayment [by Ann Arbor SPARK] for known instances of over-billing, instances where contemporaneous time records were never kept at all, and instances where employees or family members of employees were paid to consult for their own companies.

Richard Beedon was appointed to fill the vacancy left by Reid.

Rapundalo had joined Reid at the LDFA’s September 2008 meeting in opposing a resolution on a memorandum of understanding that did not require immediate repayment by Ann Arbor SPARK for cases of over-billing.

Based on minutes from the LDFA’s April 2, 2009 board meeting, Rapundalo has continued since September 2008 to push for active attention by the LDFA board to the possible perception of ethical issues:

Note for the following resolution: A conflict of interest issue was raised, the matter was discussed and the Board determined there was no conflict of interest and decided to move forward. [Mark] Maynard moved, seconded by Kurek to authorize expenditure up to $6,500 from the Cantillon Web Based Education Development budget to obtain the usage data needed to evaluate Cantillon usage to date. Motion approved unanimously.

Though the minutes don’t reflect who raised the question, in a followup phone conversation with LDFA board member Mark Maynard, he clarified that the conflict of interest issue was, in fact, raised by Rapundalo. The question was based on the fact that the $6,500 was a contract awarded to the University of Michigan, Maynard’s employer.

Maynard is marketing manager for the University of Michigan Tech Transfer Office, which is headed by Ken Nisbet, member of the SPARK board of directors.

Maynard was put on the LDFA board last fall by Ypsilanti city council, which makes three of the LDFA’s board appointments. The geographic area of the Ann Arbor-Ypsilanti SmartZone LDFA comprises the area of the two cities’ respective Downtown Development Authority districts. Currently the only taxes captured by the joint district come from Ann Arbor, which totaled $1.1 million for fiscal year 2008.

Marcia Higgins (Ward 4) holds a red ribbon representing the general fund dollars in the Ann Arbor city budget. In the background are Mayor John Hieftje and Jim Mogensen, who gave a presentation during public commentary.

Ann Arbor City Council Meeting (April 20, 2009): At its Monday night meeting, Ann Arbor city councilmembers approved around $1.3 million in human services funding (after a “red-ribbon” presentation during public commentary on that subject).

They also heard the 2008 annual report from the chair of the local development finance authority (who was closely questioned by councilmember Marcia Higgins), allowed Tios an early exit to its lease, accommodated the University of Michigan’s request for a lane closure in connection with the football stadium renovation, and rejected the planning commission’s adopted downtown plan (which was expected) – which bumps the final decision on A2D2 zoning to early July.

During public commentary, council again heard support for  public art, a critique of the proposed early-out option for police officers as a part of the proposed budget, a suggestion to remove the East Stadium bridge, as well as Jim Mogensen’s “red ribbon” presentation.

Roger Fraser also gave the official presentation of the city’s budget, which had been presented twice previously last week – at a working session and also at a town hall meeting.

Human Services Funding

Mogensen’s “red-ribbon” presentation has become somewhat of an annual event on the occasion of the allocation for human services funding. So that’s where we begin.

Jim Mogensen: Mogensen began by displaying a bar chart indicating how much was spent on human services, the attorney’s office, and the finance office – all of which are bars short enough to fit onto the chart he was holding. With the assistance of Steve Bean, he then unrolled a red ribbon used to indicate the bar for the entire general fund – which ran around to his left past Marcia Higgins (Ward 4) – who helped to hold the red strand aloft – around the corner where city attorney Stephen Postema sits. Bean handed off to Mayor John Hieftje, who unfurled the ribbon along the Ward 1 through Ward 3 side of the table, where it was held up by Sabra Briere (Ward 1), then back to the speaker’s podium. The point of the red ribbon, Mogensen said, was to counter the notion that if “liberal Ann Arbor wouldn’t spend so much of the general fund money on human services, that everything would be all right.” He said the city actually outsourced human services funding – issuing RFPs and then not fully funding the RFPs. He asked that council members consider the impact of failure to fund human services on nonprofits and on the police and court system.  What might be cut out of human services, he said, would have to be put back in for police and court services.

Steve Bean begins unrolling the general fund ribbon for Jim Mogensen's bar chart.

Council deliberations: The resolution that was considered by council allocated roughly $1.3 million to fund various organizations providing human services. The issue was summarized by Christopher Taylor (Ward 3) during deliberations as the tension between a giant pile of need versus a much smaller pile of cash.

The presentation on how the allocations were parsed out was made by Mary Jo Callan, director of community development, which is a collaborative venture between the city of Ann Arbor and Washtenaw County.

Callan said there had been 63 applications for a total of $3.4 million – a number not met by the $1.3 million from the city plus around $400,000 from the Urban County. “You can do the math,” she said. Callan said that they’d set out clear criteria against which each application was scored (a 70-point total scale).

[The complete criteria, plus the scores assigned to various proposals, are included in this .PDF file. As an example, "community need" was one area to which scores were assigned. The 0-5 scale for the "community need" item, like the other scales, were defined with descriptors for each point on the scale. For example " ... 1=identifies needs aligned with priority area, but does not evaluate whether the need is currently being met in the community ... 4=proposal identifies needs aligned with priority area; similar services are available but inaccessible by the target population ... "]

Flow chart of process for allocation of human services funds. (Image links to higher resolution file.)

Callan explained that the idea was to “bolster what we have,” but there was also room in the process to include some new programs. New programs, however, had a ceiling of $10,000. Based on the scoring of proposals on the 70-point scale, the proposals were broken down into quartiles, with the funding levels based on those quartiles. The first quartile was assigned a 10% increase over 2008-09 levels. The second quartile was assigned unchanged funding from last year. The third quartile received a decrease of 15%, and the bottom quartile was assigned a 35% decrease until funds ran out. To be funded, a new program had to be among the top two quartiles.

The process elicited praise for its clarity and its objectivity from several councilmembers. Stephen Rapundalo (Ward 2), who has served on the housing and human services advisory board for three years, said that the intent behind the scoring metrics was to steer towards a mindset of a focus on services. The intent was also to encourage consolidation where  appropriate, Rapundalo said.

Carsten Hohnke (Ward 5), who’d submitted an emailed question beforehand on the topic, raised the question of whether there were any implications for the allocations – which come from the FY 2010 budget – given that they’re being made before the budget is adopted. Hohnke noted that the reason the allocations were coming in advance of the FY 2010 budget adoption was the need to meet a Housing and Urban Development application deadline. Callan clarified that the HUD deadline related to the Urban County portion of the funding. An application could be amended, she said. She said that city council and the Urban County were authorizing a “package deal” and that any changes would need to be authorized by both entities.

Callon clarified for Hohnke that the amount of the allocation was the same, but that the contingency amount was slightly different, because the contingency reflected the amount leftover after funding was allocated according to the algorithm.

City attorney Stephen Postema's right foot kept the ribbon from dragging the floor at his corner of the table.

Taylor noted that he was disappointed to see some of the programs that had been left behind and not funded, mentioning specifically some in the Bryant neighborhood. Taylor was thus interested in knowing what kind of resources might exist to which they could appeal. Callan said that she was working with the Community Action Network (CAN) [which had proposed two different programs for the Bryant neighborhood that were not allocated any funds.]

Sandi Smith (Ward 1) inquired how federal stimulus package funds might factor into offsetting some of the gaps. Callan explained that the community development stimulus funds focused on housing and neighborhood revitalization – the kind of projects, she said, that Avalon Housing does. There’s no stimulus funds for services, she said.

Hieftje expressed concern that it was only going to get tougher next year and that to hold the human services funding level this year (as compared to last) was difficult. Callan said that the Urban County was a step in the right direction, as was the consolidation of processes – which the process on the table that evening reflected. That freed up staff time to focus on identifying the outcomes they wanted to see and to work with nonprofits to achieve those outcomes.

Jim Mogensen: Mogensen also spoke at the time allotted at the end of the meeting for public commentary – in response to the nature of the council’s discussion, which had focused on the desirability of scoring metrics and objectivity, as well as the advantages of consolidation of nonprofits. He began by posing the question: “Why is consolidation not a good idea?” He drew analogy to all-in-one business machines that could copy, fax, print, email, but when they failed to function, then nothing at all worked. So he urged caution with respect to the idea of consolidating nonprofits. He also urged councilmembers to consider the unintended consequences of scoring metrics – the possibility that the highest-scoring organizations would up with geographic distributions that weren’t reflective of where people lived who were in need.

Outcome: The allocation was unanimously approved.

LDFA

Richard King, chair of the local development finance authority, began his presentation by giving a quick history of the LDFA in Ann Arbor, which is responsible for overseeing the Ann Arbor-Ypsilanti SmartZone. The SmartZones were created in 2001 by the Michigan Economic Development Corp. to help generate technology-based businesses and to promote job creation in the SmartZone areas.

At the podium is Elizabeth Parkinson, who is managing director for marketing and public relations at Ann Arbor SPARK, and Richard King, chair of the LDFA.

To create the Ann Arbor-Ypsilanti SmartZone, an application was made by the Washtenaw Development Council [which has since merged with Ann Arbor SPARK], together with the IT Zone to the MEDC. Because the SmartZone area covers the geographic regions of both the Ann Arbor Downtown Development Authority and the Ypsilanti DDA, the two cities had to enter into a joint agreement in order to create it. The LDFA board was created in 2003, with six members appointed from Ann Arbor, and three from Ypsilanti, and one MEDC as an ex-officio member.

The LDFA, King continued, is responsible for spending the tax capture in the Ann Arbor portion of the district. He reported that currently this is the only source of revenue for the LDFA, because the tax capture for Ypsilanti had already been committed prior to the creation of the LDFA. King stressed that despite the lack of any funding derived from the geographic area, Ypsilanti participated actively in the SmartZone, and that grants and other funding sources were used to bring activity into that market.

King said that the main activities for the year were to establish the budget and to determine the scope of work for the contractor that the LDFA works with: Ann Arbor SPARK. [LDFA 2008 Annual Report] He said that they’d elected to make Ann Arbor a focus, because the primary funding came from Ann Arbor, and that the primary point of contact had been SPARK.

He described SPARK as having had a successful year. SPARK operated two boot camps for entrepreneurs who showed high potential for growth, and opened an “incubator” on Liberty Street that houses up to 12 businesses and can support a range of “virtual businesses.” There were five tenants that used the incubator, King said, and 17 total businesses engaged with the incubator, including virtual businesses. He reported that SPARK had also held several events for training and networking to add more focus to Ann Arbor, and to excite the congregation of businesses in Ann Arbor. A total of 50 events were held, he said, and hundreds of businesses came through Ann Arbor in conjunction with that.

The main expenditure, King said, was for “accelerator services” for companies that show high potential to grow rapidly if they’re provided with management assistance, help gaining capital from investors, and ways of developing partnerships with major companies. There were 270 companies that sought assistance from SPARK for these services in 2008. Due diligence (an in-depth look) was done on 148 of those, King reported. There were 98 companies that received accelerator services, which includes marketing and business planning.

In  a survey of companies at the end of the year that SPARK had worked with, they’d learned that 46 jobs had been generated in the course of 2008. Over the three years of history that had been tracked, King reported that around 650 jobs had been created through the SmartZone.

Next Tuesday, the meeting of the LDFA will be organized as a “retreat,” in which they will discuss in depth how the LDFA will approach the next few years of activity. In particular, King said, they felt there’d been an increase in the kinds of services offered beyond accelerator services, and that they could go to another level of support for activity in Ann Arbor. He said it was also important to think through the fact that other states had become more competitive in how they approached SmartZone-type economic development of technology businesses. After being at the front when SmartZones were first created, King said, the rest of the world was catching up.

King invited councilmembers to attend the retreat, which will start at 8 a.m. and run until early afternoon.

Questions on the LDFA: Marcia Higgins (Ward 4) engaged King in an extended back-and-forth on a couple of different issues, some of which were clarificational, but others of which were more pointed.

In the clarification category, Higgins elicited from King examples of other states that were competitive in their accelerator services: Pennsylvania, North Carolina, and California.

She also had King clarify that there was no LDFA-supported activity in the Ypsilanti portion of the SmartZone, because there is no funding stream.

Noting that the Ann Arbor-Ypsilanti SmartZone was contemplating supporting private investment groups with tax dollars, Higgins wanted to know whether other SmartZones used tax money in that way. King drew a distinction between administrative support and the use of tax money as an investment in the funds, the second of which  he said was not something the LDFA would do. He said that what was being considered was the use of tax dollars to help an angel group get started – getting a basic framework for operation established. Higgins said that she had real concerns about the use of tax dollars for either purpose. She noted that there were already local and regional venture capital firms that provided angel funding at different levels for appropriately vetted start-up companies. She wondered, therefore, why the city would be using tax dollars to do something that was already being done.

She also asked a general question about how the marketing budget is allocated. King responded by talking about the general effort to publicize the fact that Ann Arbor is a place with entrepreneurial activity. Higgins said she wanted more detail in light of the fact that council had authorized $50,000 for SPARK, which she understood to be for marketing and letting people know just now viable the Ann Arbor area was. [Council approved the $50,000 in August of 2007]. She had concerns, she said, if the LDFA was spending money on the same thing for which the city – through its general fund – was already providing marketing dollars. Higgins also said that comparing Ann Arbor’s contribution to other municipalities in the area, Ann Arbor paid higher fees.

Elizabeth Parkinson, who is managing director for marketing and public relations at SPARK, was on hand to provide some of the details. She described the $50,000 as going into the “core fund” – salary and overhead, which could be spent on advertising as well, because advertising comes from the core budget. The LDFA money, she said, could only be put towards business acceleration and business incubation, which is a very different thing. She reported that her total marketing budget for SPARK was $250,000. Higgins said that when the executive director of SPARK, Michael Finney, had made his presentation in August 2007, she’d understood that the money would be spent on the marketing piece, saying at the time the question was: “What does that $50,000 do for Ann Arbor?”

King said that everything SPARK did connected in some way to the marketing of the area, because the purpose of an economic development organization (like SPARK) was to market the area it represents.

Higgins concluded her questions by asking about the 650 jobs that had evolved over the course of SPARK’s history. “Would any of those jobs have evolved in the absence of LDFA funding?” King allowed that they would have – though perhaps not as quickly or in the same places.

Downtown Plan: When Are We Going to Vote?

The downtown plan as recently adopted by planning commission – which is a part of the A2D2 effort to update master plans and simplify zoning for the city –  came before council Monday night. The vote to reject adoption of the plan was unanimous –  a result that was expected based on amendments to the zoning proposal that council undertook at its April 6, 2009 meeting.

It’s not an option for council to amend the downtown plan and then adopt the amended plan, because state law requires that planning commission and council adopt the same master plan, of which the downtown plan is a part. In this respect, the downtown plan is different from the zoning package recommended by planning commission, which council amended at the zoning package’s first reading and can enact on its own.

Jayne Miller, director of community services for the city, explained that with council sending the downtown plan back to planning commission, that would give planning commission time to make needed revisions in May. It could then come back to council on June 15, 2009, in a form that would be consistent with the zoning amendments that council undertook. That would allow council to consider the final vote on the zoning package on July 6, 2009.

Outcome: Unanimous vote against adoption of the downtown plan.

Lanes, Bridges, and Speed Bumps

University of Michigan Stadium: Last year, Jim Kosteva, director of community relations for the University of Michigan, came before council to request a Main Street lane closure in connection with the football stadium renovation. At that time, councilmembers expressed their dissatisfaction that the university was pursuing a construction work schedule that imposed an undue burden of noise on the neighborhood, not having embraced the idea of voluntary compliance with the city’s noise ordinance. The request was not granted.

On Monday night, Marcia Higgins (Ward 4) in whose ward the stadium sits, said that while the neighbors had still had to contend with dust from construction, they had not been subjected to continual late night noise, and she urged her colleagues to support the lane closure resolution.

From the memo from city staff supporting the closure:

In 2008, the University of Michigan began the construction of the West Arcade Wall at its Football Stadium on the east side of S. Main Street, north of Stadium Blvd. To date the construction project has continued without a long term traffic lane closure at S. Main Street. However in 2010, the contractors must complete the Wall which is 90 feet tall at its highest point.

To ensure the safety of the construction workers and the general public, the contractors have proposed a temporary traffic control plan for the construction phase from March 2010 through July 2010. The plan requires the temporary closure of the most easterly traffic lane at S. Main Street, from Snyder Ave to Keech Ave. The traffic control plan includes maintaining one southbound and two northbound traffic lanes on S. Main Street. The plan also includes an alternate route for the southbound traffic using Pauline Blvd, S. Seventh Street and Scio Church Road. We anticipate some use of the alternate route during afternoon rush hours in the weekdays.

In 2010, W. Stadium Blvd will be under construction. In anticipation of the proposed S. Main Street lane closure plan, we have scheduled the W. Stadium construction to include the work between the Pauline Blvd intersection and the S. Seventh intersection for the months of April 2010 through July 2010. After July 2010 and the restoration of all the traffic lanes on S. Main Street, the construction of W. Stadium Blvd at S. Seventh Street will begin.

In 2010, we could begin the construction of the two bridges at E. Stadium Blvd. This project may begin shortly before July 2010 or later in the summer of 2010. At this time, we do not anticipate any major conflicts between the proposed S. Main Street lane closure plan and the reconstruction of the two bridges at E. Stadium Blvd.

The plan includes provisions for the restoration of the traffic lanes at S. Main Street for the 2010 Ann Arbor Art Festival. All costs associated with the proposed traffic control plan will be the responsibility of the University of Michigan and its contractors.

Higgins made a successful motion to add a “whereas” clause to cover the eventuality that the East Stadium bridge would need to be closed prior to its reconstruction. The clause gives the city the option to rescind the lane closure under conditions where traffic patterns are dramatically changed. The East Stadium bridge is currently being monitored for its safety. If it were to be deemed unsafe, requiring its closure until its reconstruction, the clause would allow the city flexibility of opening the Main Street lane.

Outcome: Lane closure was unanimously approved.

During  public commentary, Arnold Goetzke addressed the East Stadium bridge situation.

Arnold Goetzke: Goetzke argued for a no-bridge option at the intersection of State and Stadium instead of continuing to invest millions of dollars in bridge construction and maintenance. He said that the making the rail crossing at-grade was reasonable, because there was not sufficient train traffic on the line to necessitate a bridge. He said that in his experience living in Burns Park for several years, he’d never had to stop for a train while driving through town.

Goetzke urged councilmembers to understand how many times trains use the tracks and when they use it before authorizing a bridge project. He said that Ann Arbor was building “a bridge to nowhere” and confirmed the allusion to the critique of a project in Alaska that drew public attention during the presidential campaign of 2008, by saying, “Where is Sarah Palin when you need her?”

In the comment thread on The Chronicle article to which we’ve linked above, there’s a discussion of the no-bridge option.

Iroquois Water Main: Marcia Higgins (Ward 4) asked for a time frame and clarification of scope of work from city staff on the Stadium and Iroquois water main replacement project. It’s slated to begin May 18, 2009, and be finished in September, 2009. The traffic calming devices (a.k.a. speed bumps) on Iroquois – which were installed early in the city’s traffic calming program – will be replaced with a “less aggressive” version that is the current standard. Here’s a Google Street View of speed bumps on Iroquois.

Tios

Lease: At its Feb. 17, 2009 meeting, during public commentary, council heard from Tim and Harriet Seaver, owners of Tios Mexican Cafe, objecting to the city’s plans to demolish the building they leased. The city wants to use it for a surface parking. In July 2008, the city of Ann Arbor purchased the building at 333 E. Huron, where Tios Mexican Cafe is housed, for $605,000. The building sits on the same block as the Larcom Building (city hall). The lease to Tios was set to expire on June 30, 2009.

Council considered a resolution that amended the lease to end a month sooner, inorder to accommodate the Seavers’ plans to move to a new location at 401 E. Liberty, the former location of Salsarita’s Fresh Cantina. According to the lease, the monthly rent specified through March 31 was $2,475. From April 1, 2009 through May 31, 2009, the monthly rent is specified as $620.

Outcome: Council voted unanimously to approve the amendment to the lease.

Liquor: Council considered a resolution to withdraw approval of a Class C liquor license for the former tenant of Tios’ new space, Salsarita’s Fresh Cantina. The license is not tied to the address, but Tios could apply for it.

Outcome: Council voted unanimously to approve the withdrawal of the license.

Public Art

As they had at the previous council meeting, a number of public speakers addressed the issue of public art.

Bob Galardi: Galardi said that the Percent for Art program was a wise and forward-thinking investment in government facilities. With respect to the first public art to be funded through the program, he said that the ecological theme of the rain garden to be designed by German artist Herbert Dreiseitl was appropriate for Ann Arbor, which prides itself on being green. He suggested that years from now children of all ages could look at the project and learn about the combination of art and science. He envisioned that the rain garden could become a regular stop for visitors of the Hands On Museum. Although art was generally the “whipping boy” during tough economic times, Galardi said, public art enhances economic vitality – citing the enhanced walkability of the community as one example.

Mark Tucker: Tucker introduced himself as an art teacher in the University of Michigan Lloyd Hall Scholars Program and founder of the FestiFools event. He described FestiFools as not just an entertainment spectacle, but as a dialogue linking the creative process with the community in which artists live. He said that the Dreiseitl project that is proposed as a part of the new municipal center complex had already begun to engage the community in a stimulating dialogue. It was unfortunate, he said, that much of the dialogue got stuck on topics not related to artistic integrity, such as where the artist was from, or how much it cost. He said that the value of the investment could be found in the community discourse about the art that would continue long after the artwork had been unveiled. He suggested that outstanding public artwork acts as a magnet for the community and draws favorable attention to the community. He asked everyone to unite in supporting the public art program.

Tamara Real: Real introduced herself as the head of the Arts Alliance. She said that she used to run a program like the Percent for Art program in New Haven, Conn. There were about 350 communities in North America that had percent for art programs, she said, and that creative entrepreneurs could choose where they want to do their work. A sense of place is therefore important, she said. The Percent for Art program would allow Ann Arbor to compete on a level that it had not been able to previously. She said when she moved here from Connecticut 20 years ago, she was shocked that there was not a percent for art program in Ann Arbor.

Real stressed the importance of the potential economic impact of public art installations, citing examples in Chicago and New York, while allowing that Ann Arbor was not Chicago or New York. She said that art could generate controversy, but that it could lead to a wonderful community dialogue. Ann Arbor is a community that loves to talk about anything and everything, so let’s talk about art, she suggested.

Budget: Senior Center

City administrator Roger Fraser gave his official budget presentation to city council on Monday night, after previewing it at a working session and a town hall meeting. One of the items proposed in the plan for 2011 is the closing of the Ann Arbor senior center. Last week we asked for some clarification from city staff on the situation with the senior center by asking some specific questions. We were able to do some work on them independently, which we’ve already reported. Answers provided by Jayne Miller, community services director for the city, are consistent with that reporting and fill in many gaps. Our questions are in bold with answers in italics.

1. Is there a legal encumbrance on the property that would preclude using the property for something else? (If not, what would the city’s plan be if the center were closed?)

Answer: Parks and Recreation staff has looked through the historical files on both the Senior Center and Burns Park and have found nothing that suggests that the property can only be used as a Senior Center. A title search through the attorney’s office has yet to be conducted, but could shed further light on the matter.

Answer: The $100,000 gift is kept by the city in a segregated endowed fund, and was received July 10, 2007. The current balance is $103,433 due to interest earned. The Senior Advisory Board (an advisory board to the Senior Center) is working on a recommendation on how to best use the gift. This recommendation would then be brought forward to the Park Advisory Commission and City Council.

Answer: Expenses for FY 2008 were $171,059, revenues were $17,385 – net cost to the general fund was $153,674. Estimated expenses for FY 2009 are $193,968 while revenue is estimated at $31,950 – resulting in a net cost of $162,018 to the general fund. The proposed expenses for FY 2010 are $189,862 and the revenue is forecast at $38,180 – projecting a $151,682 cost to the general fund.

Answer: Approximately 12,000 to 15,000 visits are recorded annually at the Senior Center. Approximately 500 people use the center on a “regular basis.”

Budget: COPS Application

Council considered a resolution to apply for the 2009 COPS grant from the U.S. Department of Justice’s office of community oriented policing.  City administrator Roger Fraser explained that the grant was designed to provide funding for up to four positions in the event that layoffs from the police force were required. Under the currently proposed budget for FY 2010, there are a number of layoffs possible, depending on how many officers opt for the early-out retirement that the city is offering.

When Fraser indicated that technically, the application had already been made, with council’s resolution representing an affirmation of support, Leigh Greden (Ward 3) suggested that city staff convey details of the grant application to Congressman John Dingell’s office. In that way Dingell’s office could track the application and issue a letter of support, Greden said.

Budget: Early Retirements

Also related to the early retirements offered in connection with the proposed FY 2010 budget were the remarks that Karen Sidney, a local accountant, delivered during public commentary.

Karen Sidney: Sidney began by noting that for the two fiscal years 2010-11, the proposed budget proposed cutting 41 positions in the police and fire departments. Instead of paying salary and benefits to these officers to protect us, she said, we’d be paying them pension and lifetime health care benefits for them to do nothing. “Paying people not to work is not a cost-cutting strategy,” she said, characterizing it as an “accounting gimmick.” While the salary savings was realized in the first year, she said, it took two years for the retirement bill to show up.

Sidney identified the problem as providing generous retirement health care benefits, without setting aside money to pay for them. She traced the problem back to 2005, when she said that a blue-ribbon retirement benefit committee appointed by the mayor had indicated that the retiree health benefit commitment was a looming problem. In the four years since the report, she said, the city had failed to implement its recommendations. [Among them were a change in the composition of the trustee board to a majority of independent trustees and the elimination of the city administrator as a trustee.] Sidney cited the recent resignation of a trustee board member over the failure of the city to act on the committee’s recommendation. [Robert Pollack, Jr. resigned in April 2008 and included the failure of the city to act on the committee's recommendation in the reasons for resigning that he gave in his resignation letter.]

Since 2005, Sidney continued, the shortfall in the retirement health care benefit fund has grown from $92 million to $157 million.

Later in the meeting, during the time allotted for communications from council, Mayor Hieftje called Tom Crawford, the city’s chief financial officer, to the podium in an effort to counter some of Sidney’s remarks. Crawford confirmed that the cost for the early retirements would be taken as a one-time payment from the city’s reserve fund.

Progressive Policies

Thomas Partridge addressed council during public commentary reserved time at the start of the meeting, during the public hearing on approval of the Zahn Medical Office Building site plan, and at the end of the meeting. He offered a “plea and a prayer” that city government, the county government, the state and the voters would all unite to work to bring about non-discriminatory fair housing, public transportation, and public education. He called for the elimination of regressive property taxes.

Partridge asked that whenever a site plan is approved that suitable corresponding acreage be identified and set aside for affordable housing.  To improve the lot of those in need of housing, health care and transportation, he said, initiatives comparable to the Manhattan Project were required.

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

Next Council Meeting: Monday, May 4, 2009 at 7 p.m. in council chambers, 2nd floor of the Guy C. Larcom, Jr. Municipal Building, 100 N. Fifth Ave. [confirm date]

Detroit Region Aerotropolis

First up was Wayne County executive Bob Ficano, one of the leaders for the aerotropolis project. Ficano is hoping Washtenaw County will sign on as a partner to help create the Aerotropolis Development Corp. (ADC). The county would pay $150,000 to become a member – a decision the board will make at a future board meeting.

The project is a push to develop the areas surrounding Detroit Metro and Willow Run airports. The corridor between the two airports, which includes parts of eastern Washtenaw County, would become a transportation hub, attracting businesses that rely on air travel and transport. The goal is to create as many as 64,000 jobs on roughly 5,000 acres. Ficano hopes to launch the ADC early next year, and anticipates needing a first-year operating budget of $1 million.

Questioning by commissioners revealed their concern about how the ADC would generate revenues after its initial startup phase. Some said they were generally supportive of the project, but worried that the $150,000 fee would be increased each year. Ficano and his staff said they eventually expect tax revenues to be the main source of income. They plan to set up a Local Development Finance Authority (LDFA), which captures taxes from new business development.

Community Success Project

Tony VanDerworp, director of planning and environment for the county, is one of the leaders for the Community Success initiative, a group that’s developing a strategy for coordinated economic development in this region. (More information about this effort, including a list of the roughly 70 people involved, is on the group’s website. The project is also referred to as Ann Arbor Region Success.) The broad goals are to create jobs, build a tax base that would fund community services, and bring support for the arts and social services.

Also at the meeting to talk with commissioners were Rick Snyder, a local venture capitalist who chairs Ann Arbor Spark’s board of directors, and Rich Sheridan, president of Menlo Innovations and a private-sector leader of the Community Success project. Sheridan said that although negative economic news is garnering headlines, his company and others he’s aware of are actually growing. The goal is to foster companies that are innovative, either in products or services. Sheridan cited Health Media as a great example of this kind of company – they were recently acquired by Johnson & Johnson, but are expected to stay in Ann Arbor and add jobs.

Sheridan talked about some of the things this community needs to do to attract and retain these kinds of companies: strengthen the educational system from early childhood through college, increase the amount and quality of workforce housing in urban centers, build a regional transit system, provide business support such as funding for business incubators or access to loans and grants, and attract and retain workers by mentoring young professionals and developing more “3rd places” such as nightclubs and recreational options (i.e. places to gather outside of home or work).

Snyder told the commissioners that the group was rolling out its strategy starting with this meeting, and would be speaking with other community groups and government entities in the coming weeks. He spoke about the importance of measuring their results, including jobs creation and the local unemployment rate as compared to the national rate. Each of the targeted areas needs a champion to further develop the action plan and make sure it’s implemented, he said. It’s a long-term process: “This is where you have to get that marathon runner approach.”

Regarding workforce housing, commissioner Leah Gunn said that often such projects are resisted by the same people each time something is proposed. She said it would be helpful if young people who actually wanted this kind of housing could make their views known. She also urged the Community Success leaders to be mindful of the needs of nonprofits in the community, and the services they might require.

Commissioner Jessica Ping asked if they were reaching out to the western part of the county. VanDerworp said they’d be meeting with groups in those areas, and that they recognized the importance of communities outside the Ann Arbor/Ypsilanti core.

Ann Arbor Spark

Mike Finney, president of Ann Arbor Spark and another leader of the Community Success project, gave an update on his economic development agency’s work, which is funded in part by the county. Spark focuses on the industries of advanced automotive manufacturing and materials, aerospace engineering and manufacturing, “cleantech,” homeland security and defense, IT/software, life sciences, optics/measurement, and printing and publishing.

He said he’s been asked by state officials to be involved with responding to the current auto industry crisis, because of the model Spark developed when Pfizer announced it was closing its Ann Arbor research campus. He’s working on a white paper about “open source” economic development, a more collaborative approach that involves a broad range of community participation.

He described a new ad campaign being developed called “MichAgain,” which is focused on retaining and attracting talent. One print ad he brought as an example showed a large hand with logos from different companies – including Borders, Domino’s and Google – clustered in the southeast Michigan part of the palm. The text reads, in part, “Where are the up and comers going? Right back where you started from.” Finney estimated it would take $1 million over two to three years to fund the campaign. “We’ll be back to you looking for the first check,” he joked. He also showed commissioners a prototype of a marketing brochure designed to be customized by any community. He said the brochure is in response to calls for Spark to help market areas outside of Ann Arbor.

Finney described the funding that Spark receives from the county – $200,000 annually, plus another $50,000 for Spark East – as “pretty modest,” and said it and other funding from local governments was used to leverage $19 million in investments into the community. “I think that’s the kind of leverage you want to get on every dollar,” he said.

Commissioner Ken Schwartz asked for an update on Spark East, a business incubator project in downtown Ypsilanti on West Michigan Avenue. Finney said he’d just done a walkthrough the previous day and that he’s confident they’ll have the renovation work done by late December or early January. They’d like to open with an anchor tenant, and they’re actively looking for one now. He also noted that the building will have a classroom that will be used for EMU evening courses, which will increase pedestrian traffic in that area.

Commissioner Ronnie Peterson said that while all the presentations tonight were important, they didn’t go far enough in terms of collaboration. He urged the county administration to bring all groups in the community together to better share information and collaborate.

Jessica Ping asked Finney to address the recent news reports of a dispute between Spark and the Ann Arbor LDFA resulting from an independent audit of Spark. [Background: Mike Reid, who served on the LDFA board until Oct. 7, resigned from that body citing his dissent over "recent LDFA board decisions that refused to demand immediate repayment for known instances of overbilling, instances where contemporaneous time records were never kept at all, and instances where employees or family members of employees were paid to consult for their own companies."]

The LDFA provides about $870,000 in funding for Spark. Finney said there was a disagreement about the terms of the contract between the two groups, and that Spark had submitted a recommendation to resolve the issue. He said they’d done nothing illegal or unethical, and that his team acted with great honesty and integrity. He did not want to talk about details of Spark’s recommendation to the LDFA until they’d seen and responded to it – the LDFA’s next meeting is Nov. 14.

Commissioner Mark Ouimet, who was chairing the working session, said that the LDFA audit had created a new level of interest in Spark and that people would be anxious to see the follow-up on it.

Congratulations to state House leaders

Finally, Conan Smith gave a shout-out to Democrats Kathy Angerer and Pam Byrnes, two state representatives from Washtenaw County who were recently elected to leadership positions in the House. Angerer is majority floor leader, and Byrnes is speaker pro tem. Smith’s wife, Rebekah Warren, and mother, Alma Wheeler Smith, are also state representatives, both re-elected on Nov. 4.

Present: Leah Gunn, Mark Ouimet, Ronnie Peterson, Jessica Ping, Karen Lovejoy Roe, Ken Schwartz, Conan Smith

Absent: Barbara Levin Bergman, Mandy Grewal, Jeff “New Daddy” Irwin, Rolland Sizemore Jr.