The Ann Arbor city council audit committee met on Dec. 19 to review the audit for FY 2011, which ended June 30, 2011. Clockwise, starting with Stephen Kunselman (Ward 3), with his back to the camera, are Sabra Briere (Ward 1), Sandi Smith (Ward 1), city administrator Steve Powers, auditor Alan Panter, accounting services manager Karen Lancaster, and Margie Teall (Ward 4). Carsten Hohnke (Ward 5) was absent. (Photo by the writer.)

In mid-December, the audit committee of the Ann Arbor city council received what could be considered good news from the final audit for the last fiscal year. It was clean. The city also managed to add incrementally to its fund balance, instead of using more than $1 million from that balance, which it had anticipated doing.

The council’s audit committee met on Monday, Dec. 19 at 6 p.m. just before the council’s last meeting of the year, which started at 7 p.m. Last year, the committee did not meet at all, a point of complaint made by committee member Stephen Kunselman (Ward 3) at a recent council meeting.

Alan Panter of the accounting firm Abraham & Gaffney, P.C. presented the audit committee with an overview of his findings for fiscal year 2011, which were summarized in the report as “an unqualified (‘clean’) opinion on the City of Ann Arbor financial statements for the year ended June 30, 2011.”

One finding that was not deemed a “material weakness” – but was nonetheless described as a “significant” deficiency in internal controls – involved adequate documentation of employee purchase card (P-Card) use. It’s an issue familiar to the city from previous audits.

In terms of the overall financial state of the city, as reflected in the audited numbers, the city added around $127,000 to its general fund balance.

That’s significant, because the city council-approved FY 2011 budget had anticipated drawing around $1.5 million from the fund balance reserve to help cover about $81.5 million in planned general fund expenditures. So on balance, the city appears to have done at least $1.6 million better than it had planned for FY 2011. No single factor was identified during the audit committee’s discussion to account for the better performance.

At the end of FY 2011, the city’s fund balance reserves stood at around 13.6% of expenditures – which is within the range of 12-15% that Panter said was recommended.

The audit committee’s discussion included the fact that the city’s audit is required by the city charter to be completed by Sept. 30 each year – within 90 days of the end of the fiscal year. This year’s audit was not completed until Dec. 9. Based on discussion among the audit committee members and accounting services manager Karen Lancaster, missing the charter’s deadline has become routine. Lancaster indicated that the first year she’d worked for the city, in the early 1990s, that deadline had been met.

In order for the city’s overall audit to be completed, the audits from the component units have to be done first. Lancaster attributed at least part of the now-routine delay to the fact that two such units – the Ann Arbor Downtown Development Authority and the city employees’ retirement system – have their own accounting staff. That was not the case when she first began working for the city. Because the auditor first works with those separate staff to complete their individual audits, the overall process is slower than it might otherwise be, she said.

The audit committee voted to recommend acceptance of the auditor’s report.

Based on its responsibilities described in the 2006 council resolution creating the committee, next up for committee members in 2012 will be working to come up with a recommendation on the selection of an auditing firm – the contract with Abraham & Gaffney expires with this year’s audit.

FY 2011 Audit

The main business of the committee’s meeting was to receive a presentation from the city’s auditor on the report for this year.

FY 2011 Audit: Introduction

Small talk near the start of the meeting included a quip by Abraham & Gaffney’s Alan Panter that he feared most of his work winds up in someone’s drawer. Stephen Kunselman (Ward 3) indicated he stored the past years’ audit reports in milk crates in his basement.

Panter noted that the committee had been given the comprehensive annual financial report (CAFR) as well as the “single audit,” which includes federal program testing. He told the committee that the process had gone very well. He thanked accounting services manager Karen Lancaster and her staff for their help and assistance during the audit. Panter said the city was well prepared when he arrived.

Panter said he’d spent a total of four weeks on site. He’d spent time at the Ann Arbor Downtown Development Authority, with the city’s employees’ retirement system, and with the 15th District Court. On Dec. 9, he said, the audit was finalized. He called that a typical schedule. The procedures started back in May, he said, and he returned in September. He’d finished in December.

FY 2011 Audit: Working Through the CAFR

Panter pointed committee members to page 8 of the CAFR – the independent auditor’s report. He highlighted the fact that the point of the audit is not to detect fraud – it’s an opinion on the city’s financial statements. He noted that the opinion he’d given the city was “unqualified,” which means a “clean” opinion. That’s the best you can get, he noted.

A clean opinion, Panter said, means in part is that the city’s books are formatted correctly according to the governmental accounting standards board (GASB). Also, Panter said, “the numbers are good,” which means they are “materially correct.” Panter pointed the committee to page 10 of the CAFR – management’s discussion and analysis. This is the part the city compiles – a plain English discussion. Panter encouraged people to read it.

Panter then pointed to page 24 of the CAFR – governmental funds balance sheet. That’s a snapshot as of June 30, 2011 of the city’s assets, liabilities and fund balances, he said. The major funds are shown – the general fund, capital funds, and special revenue funds. The “business type activities” are not included in that page.

FY 2011 Audit: Fund Balance

Focusing on the general fund, Panter noted its unassigned fund balance of $10.5 million. As a percentage of total expenditures, that’s 13.6%, he said. Panter said that the recommended “sweet spot” is 12-15%. Sandi Smith (Ward 1) asked if that range was an absolute minimum or was more like what is “acceptable.” Panter indicated that it depends on your outlook on the future, as well as economic and political factors. In some cases, he said, an organization might be building a fund balance for a capital project, for example.

Lancaster indicated that the city’s policy is to maintain a fund balance reserve of 8-12%. Panter responded to the lower range cited by Lancaster, saying that he recommended a little more, because local governments are currently under revenue pressure, due to declines in property taxes and state shared revenue.

The bottom line for the general fund for the year, Panter said, is that $127,667 was added to the fund balance over the course of the year. The general fund had around $76.7 million in total revenues, which is about $600,000 more than last year. Some categories went up, while some went down, he said. Property taxes went down $2.2 million, but that was made up partly through state shared revenue, parking payments, as well as investment income, he said. [For FY 2010, the city's CAFR shows $51,215,295 of property tax revenue to the general fund, which dropped to $49,019,013 in FY 2011.]

Blue bars show FY 2011 audited figures and red bars show FY 2010 audited figures. Despite a $2.2 million drop in property tax revenue, total revenue to Ann Arbor's general fund increased by around $600,000. In nearly every other revenue category, there were marked increases, most notably in investment income, from $47,994 in FY 2010 to $841,999. The "miscellaneous" category grew from $210,822 in FY 2010 to $835,982 in FY 2011. (Chart by The Chronicle)

The $127,667 mentioned by Panter is the difference between $13,454,777 (the general fund balance as restated at the end start of FY 2011 on July 1, 2010 to reflect the closure of the city’s economic development fund) and $13,582,444 (the general fund balance on June 30, 2011). The $10.5 million figure cited by Panter as “unassigned” is the portion of the general fund balance that “may be used to meet the government’s ongoing obligations to citizens and creditors.”

In addition to “unassigned,” the new fund balance policy adopted by the city council on June 20, 2011 to conform with the latest GASB guidelines includes the following categories of funds: (1) non-spendable – not in spendable form or legally/contractually unable to be spent; (2) restricted – constraints on funds placed by creditors or through enabling legislation; (3) committed – specific constraints placed on use of funds by the city council (for example, funds set aside by council resolution); and (4) assigned – constrained by the intent of the city, but not restricted or committed (for example, those funds to which authority for assignment is given to the chief financial officer).

At the audit committee meeting, Lancaster noted that the city had planned to use more than $1 million from the general fund balance reserve in FY 2011, so to add more than $100,000 is better than the city thought it would do.

By way of background, the FY 2011 budget was approved by the council in May 2010. The proposed budget from the administrator included a planned use of fund balance of around $1.5 million. Through a series of budget amendments made by the city council, revenue was added (boosted notably by a $2 million payment from the Ann Arbor Downtown Development Authority and more optimistic revenues for state shared revenue and parking fines) along with additional expenditures. The effect was that the amended revenues essentially matched amended expenditures, leaving intact the plan to tap the fund balance reserve for around $1.5 million.

PROPOSED FY 2011 ANN ARBOR BUDGET
-$1,532,012 initially proposed impact on fund balance

ADDITIONAL REVENUE ADDED THROUGH COUNCIL AMENDMENTS
 $2,000,000 DDA payment
   $952,000 more optimistic state shared revenue
   $625,000 projected increase parking fines
    $62,000 capital expense eliminated for fire department

ADDITIONAL EXPENDITURES ADDED THROUGH COUNCIL AMENDMENT
-$1,585,783 police officer layoffs avoided
-$1,509,620 firefighter layoffs avoided
  -$283,000 restored mowing cycles in parks
  -$260,000 restored human services

ADOPTED FY 2011 ANN ARBOR BUDGET
-$1,531,415 planned impact on fund balance

-

In the audit report, Sandi Smith zeroed in on $835,000 worth of miscellaneous revenue. Lancaster characterized some of those revenues as reimbursements. Smith wanted examples of those kinds of revenues.

FY 2011: Federal Programs

Panter told the committee that for expenditures by Ann Arbor of federal grants, he’d tested four major programs – a justice assistance program, a transportation grant, a community development block grant, and one involving drinking water funds. There were no findings as a result of his testing, he said. Panter noted that the “strings that come with federal money” is a large focus of what he does.

It’s significant, he said, that Ann Arbor as an auditee qualifies as “low risk” – it’s a designation earned by the city. It means the audits of the federal programs are clean, proper internal controls are in place, and the result of the testing shows that the city is generally aware of and follows the federal requirements. As a result of the “low risk” designation, only 25% of Ann Arbor federal programs are required to be tested.

FY 2011: Significant Deficiency – P-Cards

Panter introduced the one deficiency identified in the audit by first describing a different kind of more severe deficiency, which was not the kind he was reporting. From the single audit:

A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. … We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above.

But the other sort of finding, continued Panter, is still a “significant deficiency” – a weakness that’s less significant than a material weakness, but still significant. He noted that the issue has been identified before: documentation associated with the city’s purchasing cards (P-Cards). P-Cards provide a way for city employees to make needed smaller purchases (less than $3,000) without creating a purchase order. At the committee meeting, Lancaster gave as an example the need for a field services employee to buy nails for $4.99 . [For a recent column that includes discussion of P-Cards, see "Culture of Spending: JunketSleuth"]

Panter said generally that some documentation of P-Card expenditures was lacking. Documentation of support and approval was lacking, as was documentation of the business purpose for purchases. Panter said he looked at it in light of the city’s Policy 512. Panter noted that Policy 512 had been developed and adopted based on the fact that the city had been alerted to the problem in the past (as recently as last year). “It’s there again,” he said.

Although the missing documentation eventually had been tracked down for the problematic transactions, the audit report still concludes that the issue is not resolved:

During our analysis of internal controls over the purchasing card process in 2010 we noted that several transactions sampled contained no purchasing card statement listing the details of transactions that occurred during the month. The receipts detailing the purchases and the appropriate business purpose pertaining to these statements were also missing. Credit card payments are made by the City on a monthly basis so the City had paid for these transactions without valid review of the statement or any supporting receipts to authorize the purchase and determine that there was a business purpose for the transaction. Resolution: A similar issue was noted in our current year audit comments. We do not consider this issue resolved.

Sabra Briere (Ward 1) acknowledged that the P-Cards had been an issue previously. [One episode had involved the purchase of plasma screens for use out at the Wheeler Center. More detail can be found in The Chronicle's write up of the budget retreat held at the Wheeler Center in January 2009.]

Lancaster’s subsequent remarks indicated agreement with Sandi Smith (Ward 1), who ventured that the current issue was not “malevolent behavior.” The previous [plasma screen] issue had been a case of willful circumvention of the policy, Lancaster said. In that case, Lancaster said, the only word to describe it was “appalling.” [Employees had apparently pooled cards together to overcome the $3,000 limit.]

Lancaster reported that the city’s CFO, Tom Crawford, has now assigned a person to go through every statement and look for missing signatures and make sure all the documentation gets turned in. Crawford had hoped that it would not have been necessary to assign someone to babysit the process, but that turned out not to be the case.

To illustrate the nature of the problem, Lancaster gave an example of a park employee who failed to document that a Gordon Food Service charge was for a day camp at the park – so the business purpose for the expenditure was not documented. From the employee’s perspective, it was self-evident that the charge was for the day camp.

Briere acknowledged that when she’d inquired last year about charges to P-Cards involving charges to local lodging establishments, Lancaster had eventually been able to produce the receipts and to account for the charges. Some of the local lodging charges were for people who had to be relocated temporarily by the office of community development to complete mold removal in their dwellings. Other charges were related to lodging snow plow drivers overnight, so that they could be more easily available for their plowing shift when an extraordinarily heavy snowfall was forecast.

Responding to a question from Stephen Kunselman (Ward 3) about the idea of using P-Cards as opposed to purchase orders, Lancaster explained that for very small purchases, the cost of processing the transaction exceeded the dollar amount of the transaction – if the city were to use purchase orders. She noted that the total number of transactions on P-Cards makes up 10% of accounts payable transactions, but is only a fraction of a percent of the dollar value.

[Part of the audit committee's responsibility is to oversee the auditor's recommendations, including those on P-Card documentation.]

Outcome: The committee voted to recommend acceptance of the audit report.

Audit Committee

Just after the November elections, the city council establishes several subcommittees for the next year. [.pdf of 2012 committee appointments] This year’s edition of the five-member audit committee is: Sabra Briere (Ward 1), Sandi Smith (Ward 1), Stephen Kunselman (Ward 3), Margie Teall (Ward 4) and Carsten Hohnke (Ward 5). It’s the same audit committee from last year with the exception of Briere, who is replacing Stephen Rapundalo. Rapundalo lost his Ward 2 election to Jane Lumm.

The council established the audit committee through a resolution passed in 2006. The content of the resolved clause from that 2006 resolution is reflected in the description of the committee in the city’s online Legistar system [emphasis added]:

Purpose: To interview and recommend to the City Council the selection of the auditor, oversee the audit process, and oversee the implementation of the auditor’s recommendations. Special Qualifications for Appointment: Councilmember appointed by the Mayor pursuant to Section 4.2(8) of the City Charter. Meeting Times and Frequency: As needed. Membership / Committee Composition: 5 councilmembers.

Audit Committee: Meetings, Chair

At the council’s Sept. 22, 2011 meeting, during his communications, Stephen Kunselman (Ward 3) raised the question of when the audit committee would meet, noting that in the previous year, the audit committee had not met. In his remarks, he was essentially challenging the decision of the committee’s chair at that time, Stephen Rapundalo, not to call any meetings the previous year. From The Chronicle’s meeting report:

Stephen Kunselman (Ward 3) said he was a member of the audit committee and there had not been a meeting held the previous year, but that he would try to meet with the auditor to discuss the FY 2011 audit this year. [Other members of the council's audit committee include: Carsten Hohnke (Ward 3), Stephen Rapundalo (Ward 2), Sandi Smith (Ward 1) and Margie Teall (Ward 4).]

Rapundalo responded to Kunselman’s point on the audit and the apparent lack of a meeting. He said the decision not to call a meeting of the audit committee was based on the fact that there was little to discuss in the report and that instead, the audit came to the full council, which accepted it and passed it. There was no need to meet, he said. Rapundalo said he was awaiting the FY 2011 audit to see if it merits a meeting of the audit committee or if it can go straight to the full council.

It fell to Rapundalo to call the meeting, because Rapundalo was chair of the committee – but Kunselman had questioned how Rapundalo had been selected as chair, if the committee had not met to select its chair.

Robert’s Rules of Order are supposed to govern the council’s workings, unless Robert’s Rules are in conflict with other explicitly stated council rules. From Robert’s Rules on the issue of committee chairmanship [emphasis added]:

Unless the assembly has appointed a chairman, either directly or through its presiding officer, the first named on a committee, and in his absence the next named member, becomes chairman, and so on and should act as such unless the committee by a majority of its number elects a chairman, which it has the right to do if the assembly has not appointed one, and which a standing committee usually does.

At the audit committee’s Dec. 19 meeting, Teall began to preside over the meeting – she was the most senior member of the committee. Briere asked Teall to pause. Briere noted there’d been some question about how the chair of the committee was determined. There was apparent interest in having an election, she said – and she was willing to elect a chair. In Briere’s remarks, she seemed to indicate that she had no objection to Teall chairing the committee, but rather simply wanted to engage in the deliberate act of electing Teall as chair.

Smith pointed out that Teall had more seniority than any one of them – by three elections. Teall responded to the idea of voting on who would be chair, saying that she was concerned about the precedent that an election would set.

Accounting services manager Karen Lancaster, who was taking minutes for the committee, inquired if the committee members would be voting. Briere indicated she would be content if it was simply explicitly documented that Teall would be chair, based on her seniority on the council.

Consistent with Briere’s preference, the meeting minutes submitted by Lancaster read:

The committee discussed how the chairperson for the Audit Committee was selected. It was agreed that the selection based on Council seniority was appropriate.

As chair, it’s up to Teall to call any future meetings of the audit committee, but any two members of the committee can also call a meeting. From Robert’s Rules:

It is the duty of the chairman to call the committee together, but, if he is absent, or neglects or declines to call a meeting of the committee, it is the duty of the committee to meet on the call of any two of its members.

Although the audit committee dispatched with its main business of the year on Dec. 19 – by voting to recommend that the audit be accepted by the whole council – the committee will likely need to meet again in 2012.

Audit Committee: Selection of Auditor

One of the prescribed duties of the audit committee as reflected in the council’s 2006 resolution establishing the committee is to interview and recommend a selection of the auditor to the council. Abraham & Gaffney’s five-year contract, with a one-year extension, was approved by the council in April 2006.

With the one-year extension, the city of Ann Arbor’s contract with Abraham & Gaffney expires after this year’s audit. That means that the audit committee will need to interview and recommend an auditor.

This year, the city paid the auditing firm a total of $42,100 through Nov. 17.

Timely Completion of Audit

The remarks Stephen Kunselman made at the council’s Sept. 22, 2011 meeting – asking if the audit committee would meet – were timed to a deadline set by the city’s charter for completion of the audit. Ninety days after the close of the fiscal year translates to Sept. 30. From the city of Ann Arbor’s charter [emphasis added]:

Independent Audit SECTION 8.15. An independent audit shall be made of all accounts of the City at least annually, and more frequently if the Council deems it necessary. The annual audit shall be made by certified public accountants employed by the Council and shall be completed within ninety days following the close of the fiscal year. The audit shall be made public in such manner as the Council may determine.

Timely Completion: Component Units

At the audit committee’s Dec. 19 meeting, Kunselman again questioned why the audit had not been completed until Dec. 9 – well after the 90-day deadline. Accounting services manager Karen Lancaster indicated that the city typically does not meet that deadline. It had been met once when she’d first begun working for the city in the early 1990s.

Lancaster identified part of the problem as receiving the other ancillary reports that go into the city’s audit. If all those ancillary reports were turned in by Sept 15, the city could potentially get its audit done by Sept 30, she said – but the city can’t compel component units of its organization to get things done. Kunselman asked Lancaster if one of the component units that couldn’t get its audit completed quickly enough was the Ann Arbor DDA.

Alan Panter of Abraham & Gaffney (which also performs the DDA’s audit) indicated that the schedule had been moved up this year and the DDA’s audit information was released earlier than in the past. Lancaster indicated that a certain skill set is required to provide the information for the audit. She said she previously handled all the component units within one financial system. But because the DDA now has its own financial system, it needs its own audit.

Kunselman asked why the city doesn’t bring the DDA’s accounting and financials back under the city’s financial services. Answered Lancaster: “That’s a political discussion.” She indicated she’d lost that battle previously when the systems were separated years ago. She indicated she was worried that when the accounting for an organization (like the DDA) is handled through a one-person accounting shop, in a “church secretary” approach, there are fewer checks and balances.

Kunselman inquired further about why, years ago, the responsibility for the DDA’s accounting had moved from the city to the DDA’s own staff. Lancaster said the issue had emerged when the DDA did not want to get city council approval for every purchase order. The DDA had said it was its own authority and began handling its accounting separate from the city, Lancaster explained. With the pension system, it was a similar issue, she said. The pension system wanted The Northern Trust Company to do its accounting – there wasn’t one precipitating event. It had been a struggle between the city council and the retirement board, Lancaster said.

Sandi Smith – who serves on the DDA board, as well as the city council – asked Lancaster if she would need more staff in order to re-absorb the accounting services for the DDA and the retirement system. Lancaster indicated she would need at least one more accountant, but the city would charge out the cost of the accounting services to the other funds it would be supporting.

Margie Teall ventured that the city sees the financial statements for the component units anyway, even though the accounting is separate. Lancaster indicated that the city does not see all of the detail. For expenditures that rely on bonds issued by the city, she said, the city does see all the detail, but not necessarily for other items. The retirement system, she said, used to have a director and secretary – now it has a staff of four. Back in the early 1990s, she said, the DDA had a director, Reuben Bergman, and no one else.

Kunselman asked about the problem the DDA’s audit had identified with an expenditure of more money than had been appropriated, noting that the city council adopts the DDA budget along with the rest of the city’s budget. Lancaster indicated that the DDA amends its budget and doesn’t ask for approval. Kunselman asked why not. Lancaster replied that she didn’t know. Kunselman wondered how the DDA can even spend that money. Lancaster indicated that it is because the DDA keeps its own books and has their own bank accounts.

Addressing the overage identified in the DDA’s audit, Abraham & Gaffney’s Alan Panter, who also performed the DDA audit, told Kunselman that as a separately reported component unit, DDA issue is not material to the city’s financial condition. [See Chronicle coverage: "DDA Accepts Audit, Violation Noted"]

Committee members present: Sabra Briere (Ward 1), Sandi Smith (Ward 1), Stephen Kunselman (Ward 3), Margie Teall (Ward 4).

Also present: Accounting services manager Karen Lancaster, city administrator Steve Powers.

Absent: Carsten Hohnke (Ward 5).

Next meeting: TBD

Ann Arbor city councilmember Christopher Taylor, left, accepts a ballot from Tim Doyle, right, a park advisory commissioner. In the center is Sam Offen, who was re-elected as chair of PAC's budget committee. Taylor is a non-voting ex-officio member of PAC.

The report – including 16 recommendations for changes to improve the Burns Park center and senior services – is the latest in an effort that dates back to 2009, when the city considered closing the center. Suggestions include: (1) expanding programs to other locations, particularly to low-income senior housing; (2) partnering with other programs in the area, such as the popular travel program offered by Pittsfield Township’s senior center; and (3) possibly making the Burns Park facility more of a community center, and renaming it to reflect that broader mission.

Staff will be taking this report and incorporating elements of it into a strategic plan, which will be reviewed by PAC and city council before action is taken.

The meeting also included votes to recommend awarding contracts for renovations at Island Park, and support for a bioremediation pilot project at Southeast Area Park. Matt Naud, the city’s environmental coordinator, told commissioners that the test would determine the effectiveness of an approach to remove an existing vinyl chloride plume. The process would involve giving nutrients to naturally occurring microorganisms that can break down the contaminant. The plume resulted from vinyl chloride being released from the now-closed city landfill into groundwater on the south side of Ellsworth Road.

Margaret Parker, a member of the Ann Arbor public art commission (AAPAC), gave a presentation about two potential public art projects along the Huron River – at the Argo Dam bypass, and the Gallup Park canoe livery. Since the work would likely be on city-owned parkland, members of the parks staff and park advisory commission would be part of a task force for the project. Laura Rubin, executive director of the Huron River Watershed Council, also attended PAC’s meeting. She spoke in support of a more comprehensive vision for art as part of RiverUp!, an effort to improve a 104-mile stretch of the Huron River.

During public commentary, commissioners heard suggestions for several ways to improve non-motorized connections between South State and South Main streets.

The October meeting also included a review of FY 2011 and first-quarter FY 2012 financials for the parks system, and PAC’s annual election of officers. There were no deliberations, and current officers – including PAC chair Julie Grand – were re-elected unanimously.

Senior Center Report

Two consultants hired to analyze operations of the Ann Arbor senior center presented their report to the commission at PAC’s October meeting. Frank Bednarek of Hooker DeJong and Kevin Woods of Woods Consulting Group reviewed highlights of the report, and answered questions from commissioners. [.pdf. of Senior Center report] PAC had most recently received a staff update on the senior center at its June 24, 2011 meeting.

By way of background, the report stems from city budget talks in 2009, when city officials were looking to cut costs and said that closing the senior center would save about $150,000 annually in the city’s general fund. In response to objections from local residents, the city formed a task force to develop strategies to keep the center open.

In November 2010, the city council approved a $34,750 contract for the consulting firm Hooker DeJong to develop a long-term strategic plan for the senior center. The Ann Arbor Area Community Foundation funded $16,949 of that amount, with the remainder coming from the city’s general fund.

Hooker DeJong’s 60-page report makes 16 recommendations regarding the senior center. They include: (1) expanding senior programming to other locations, including North Community Center and Bryant Community Center; (2) exploring partnerships with senior centers outside Ann Arbor, such as Pittsfield Township’s senior center, which offers a popular travel program; (3) using more volunteers to expand programs and activities; (4) reaching out to affordable housing developments to do programming for low-income seniors; (5) marketing to seniors over 70; (6) possibly eliminating the word “senior” from marketing materials; and (7) making future development program-based rather than facility-based.

The report also recommends that the current senior center at Burns Park be used for non-senior programming as well, and that the center be renamed to reflect that broader use – possibly as the Burns Park Community Center.

The consultants said that one thing they heard loud and clear in their research is that people who are on the younger edge of the Baby Boomer generation don’t see themselves as seniors. People who are 55-64 look at themselves as active older adults, so the challenge is to design strategies that speak to that group, Woods said. He also noted that people in a higher-income bracket have many more options, and might not be as likely to seek out activities at the senior center. That’s why the consultants see an opportunity to reach out to lower-income seniors, who might benefit from programming for seniors.

The report recommends continuing the same kinds of programming at the Burns Park location, but if the city wants to expand, staff should look at other locations, Bednarek said. The report includes an analysis of the building where the center is currently located, and makes several recommendations for reconfiguring the space and making renovations.

Woods noted that demographics indicate higher concentrations of seniors in the city’s north and east sides. Those are possible places to add senior services, if expansion occurs. There are also about 800 units of affordable housing in the city, Woods reported, targeted to seniors below the $40,000 income level. Offering services at those locations would be another way to expand.

Woods said the message should be that Ann Arbor wants to provide recreational activities for all citizens to be physically active to the highest extent possible for their entire lives. Gwen Nystuen quipped: “And mentally!”

Senior Center Report: Commissioner Discussion

Nystuen asked if the consultants had come up with any options for new names for the center. Not really, Woods said, adding that it would need to be something other than “senior,” to broaden its appeal. Christopher Taylor asked if the resistance to being identified as a senior lessens over time – that is, will these people change their view as they age? Woods said it might be that people start to think of themselves as seniors when they reach ages 75-80.

Bednarek noted that this isn’t an issue unique to Ann Arbor. Boomers aren’t using senior services in the same way that people have in the past. He also noted that the consultants didn’t find a silver bullet that will suddenly double participation in the senior center’s programs. Nor did they find anything being done that’s particularly awful, he said. The center has solid programming that appeals to a certain demographic – bridge, for example, is especially strong.

Frank Bednarek of Hooker DeJong, and Pamela Simmons, facility supervisor for the Ann Arbor senior center.

Tim Berla asked if there are any activities unavailable elsewhere, that the senior center could offer to draw people in. Though the goal is to make sure the center breaks even, it’s not a business, he said. Part of the point is to offer services that people can’t get anywhere else. Woods said there’s nothing compelling that would cause people to rush in. People want diverse options – birding, hiking, bridge – but most activities are already available in the city.

Bednarek identified the top three things that bring people to the senior center now: (1) the need for socialization, especially for people over 70; (2) bridge; and (3) meals. There’s a strong core group of people – about 350 seniors – who use the center now and who really want those services. It costs the city about $84,000 to do that, he noted.

Sam Offen asked if the consultants had talked with other agencies that provide senior services. Was there much conversation about having more interaction between these entities? Woods said the Turner Resource Center, which is operated by the University of Michigan Health System, is very interested, as is the Chelsea Senior Center and others. They don’t see each other as competition, he said.

Offen asked what kind of services are offered at market rate senior housing. You’d be more likely to find amenities like fitness centers and programmed activities, Woods replied. Bednarek added that for affordable housing sites, there might be arrangements for social services, but not recreational offerings.

Karen Levin said it seemed like a travel program would be a big draw, but the report didn’t recommend that. Bednarek noted that the city had previously solicited proposals for someone to operate a travel program, but there were no responses. The consultants talked to a reputable travel agent, Bednarek said, and to see how the agent reacted to the possibility of starting a travel program here.

Bednarek said the agent felt it would take three to five years to build a program from scratch. That led the consultants to look at other travel programs for seniors in this area, including the one offered by the Pittsfield Township Senior Center. The report recommends possibly negotiating to provide referrals to other travel programs, perhaps in exchange for a fee paid to the city for referrals.

Levin felt that even if Ann Arbor started a small travel program, it could still be a draw. Woods pointed out that if so, the city might want to consider a higher-end offering, because the mid-level market was competitive. The city would also be competing against educational travel programs offered by the University of Michigan, he said.

Taylor observed that it seemed the most fertile ground was for the over-70 resident – is that where the consultants suggest focusing the city’s services for seniors? Yes, Woods said, but don’t ignore the younger ages either. It’s important to offer multi-generational programs – just don’t label them as being for “seniors.”

But why not just walk away from services for the 55-70 age group? Taylor asked. Playing devil’s advocate, he wondered why the city should compete with existing alternatives, if the city can provide more focused options for people over 70. Bednarek said that in practice, the city is already doing that – they’re providing non-generational activities like golf and swimming that attract people in the 55-70 age group.

Julie Grand said that if they focus on activities for people over 70, that frees up space in the senior center for other purposes, which might serve as an entree to the center, and get younger people into the building. She really liked the idea of using it as a community center – but she noted that perhaps people over 70 won’t be comfortable with 4-year-olds running around.

Tim Doyle said there’s an opportunity for the center to be a conduit of information regarding broader city offerings. He lives four blocks from the center and he’s a senior – though he said he doesn’t admit to it. Until PAC’s discussion, he didn’t know what went on at the center. If forms and sign-ups are available there for any city program, then that could draw people of all ages to the center, he said. When they’re older, they might remember that it offers services for seniors, too.

Grand also noted that the city is fortunate in that there are a lot of college students here. UM students in social work, kinesiology and health care might be interested in working with the senior center in some way, she said. They could be a valuable resource, especially in delivering services in a low-cost way to low-income seniors.

During the first public commentary of PAC’s meeting – prior to the senior center presentation – Margaret Leslie, a member of the senior center task force, had asked whether the task force’s work was now done. She wondered who would be responsible for carrying out the report’s recommendations, and when those recommendations would be implemented.

Toward the end of PAC’s discussion later in the meeting, Colin Smith, manager of city parks and recreation, responded to her questions. This is the start toward a strategic plan, he said – the report is not the plan itself. It gives the city tools and information for developing a plan. The staff will review this report, he said, and return to PAC this winter with a plan on implementing some of these recommendations. A lot of the recommendations will likely be acted on, he said, but probably not all of them.

FY 2011, First-Quarter FY 2012 Financial Update

Sam Offen, chair of PAC’s budget committee, reported that the first-quarter report for parks  and recreation looks good. He noted that PAC had reviewed preliminary year-end budget numbers for FY 2011, which ended June 30, at its July 2011 meeting. The financial report included final FY 2011 results, as well as a report on the three-month period of FY 2012 from July 1 through Sept. 30 [.pdf of first-quarter financial statement]

Year to date for FY 2012, revenues of $787,837 are 33% ahead of budget, Offen noted. Expenses of $965,047 are 27% over budget, but offset by the higher-than-budgeted revenues, he said. The full-year FY 2012 budget projects a $1.2 million contribution from the city’s general fund.

Colin Smith, manager of parks & recreation, noted that the FY 2011 budget had called for a $1.227 million contribution to parks from the city’s general fund. The year ended with a $1.219 million draw from the general fund. Getting that close to the projected budget, he said, required coordination and management of many individual budgets within the parks program. He credited his staff for making that happen, noting that while revenues were about $100,000 less than budgeted, expenses had been kept down by about an equal amount.

Park commissioners Gwen Nystuen and John Lawter.

John Lawter asked whether the parks system gets to keep excess revenues, if revenues are higher than projected. Smith noted that for areas that operate as enterprise funds – like the public market or golf courses – then any excess goes to the fund balances for those units. But for parks in general, because they receive general fund support, any excess at year’s end would be returned to the general fund. Gwen Nystuen clarified with Smith that revenues from fees are also returned to the general fund.

Lawter said that in that case, if a unit sees an excess, they’re almost encouraged to spend it – the money can’t be carried over to the next year. That might be true if each parks unit operated in isolation, Smith replied. But managers across the entire parks system are encouraged to work collectively, and they realize they’re all in this together, he said. If one facility does better than expected, that might offset a different facility that had unexpected expenses or less revenue than expected. That way, in aggregate, the overall parks budget hits its target. Last year, for example, the pools didn’t do as well, but the canoe liveries did better than expected, Smith said. This year, the opposite was true, because of construction at Argo – the pools bailed out the liveries a bit, he said.

Offen noted that parks gets $1.2 million from the general fund, so there’s a ways to go before they see any excess as a whole.

Smith reviewed results from several individual units, including the senior center, Mack Pool and the golf course enterprise fund. [PAC had received detailed updates on the senior center and Mack Pool at its June 2011 meeting.]

For Huron Hills, the net cost for FY 2011 was expected to be $259,000, but the course ended up with a net cost of $230,000 – a little better than budgeted, Smith noted. Leslie had budgeted for a net cost of $223,000 but ended up a bit worse, he said, at $243,000. Originally the staff had projected the two courses would lose a total of about $494,000 – and that’s roughly where they ended up, he said.

However, at the end of 2011 the staff had revised their estimate for the projected loss, setting it at $390,000, Smith said. For the golf courses, the first half of the season – July through December – is used to project performance in the second half, January through June. Historically, the courses recognize just less than half of the total year revenues during the first half of the year. Based on that historical trend and the $632,000 in revenues from July to December of FY 2011, staff revised its budget estimate and projected that total revenues for FY 2011 would reach $1.265 million.

However, the spring was an historically poor one, Smith said, with more rainy days than usual. The result was total FY 2011 revenues of $1.15 million – or about $100,000 less than budgeted. For all of April and May, Smith noted, there were only two periods that didn’t see consecutive days of rain. “That’s kind of what we were up against,” he said.

David Barrett asked why Huron Hills did better than Leslie Park for the year. [Huron Hills posted a net loss of $230,051 for FY 2011, compared to a net loss of $243,112 at Leslie.] At Huron Hills, Smith said, golf cart use was higher than projected.

Barrett asked about fees for use of the city’s Fuller Park soccer fields, which have been recently renovated. Smith said it was wrapped into the overall category of park use fees. Use fees totaled $291,084 for FY 2011, up slightly from $289,859 in FY 2010. Tim Berla noted that when fees were set for use of the soccer fields, they were set at a rate that was keyed to anticipated costs of operating the fields. He requested a report on that, to see if the fees are set at a financially sustainable rate.

Smith said they could make a report at an upcoming meeting. He explained that the use fees are a little behind budget so far this year, mainly because of refunds that were made due to rainouts.

In response to a question from Offen, Smith said that he and Matt Warba, field operations supervisor, would be coming to PAC in the next few months with some suggestions for spending part of an accumulated fund balance from the park maintenance and capital improvements millage – about $1.5 million, out of a total of roughly $25 million in millage proceeds over the past five years.

Parks Capital Projects

Amy Kuras, the city’s park planner, gave a quarterly update of capital projects that are completed or in the works. Later in the meeting, commissioners voted to recommend awarding contracts for two renovation projects at Island Park.

Parks Capital Projects: Quarterly Update

Kuras gave brief descriptions of work being done in more than a dozen of the city’s parks, including Beckley Park, Buhr Park, Hunt Park, Riverside Park, and several others. [.pdf of full capital project update]

The city will be notified in November if it received the state grant for improvements at the Gallup Park boat launch and canoe livery, Kuras said. A conceptual design is finished for livery renovations, an entry path and the dock area. The scope of the improvements will depend in part on whether those grant funds are awarded. [For details, see Chronicle coverage: "PAC Supports Grants for Skatepark, Gallup"] Kuras said a state grant was awarded for preliminary engineering of a boat launch at Gallup, which also needs renovation. The city will apply for a construction grant following completion of that engineering work.

A public meeting was held to discuss renovations at Riverside Park, Kuras said. [See Chronicle coverage: "Work Planned at Ann Arbor's Riverside Park"] The work there will be coordinated with repair to Canal Street by the city’s public services unit.

Problems with West Park’s underground storm management system are still being addressed. Additional work will be done during the next construction season. [As part of the city's recent renovation of West Park, underground swirl concentrators were installed – four each near the north and south entrances of the park off Seventh Street. It was later discovered that all were in some state of failure or were suspected to be on the verge of failing. This summer, a city staff memo indicated that the city expects to recover any additional costs due to the failures – either from the manufacturer or the design firm.]

Parks Capital Projects: Island Park Renovations

On the agenda for PAC’s October meeting were two resolutions related to Island Park, located next to the Huron River – north of Fuller Road and east of Maiden Lane.

PAC was asked to recommend approval of a $92,586 contract with Legacy Custom Builders Inc. for repair of the Island Park Greek Revival shelter. The price includes an $84,169 bid and a $8,417 (10%) construction contingency.

According to a staff memo, the shelter was built in 1914 and has been renovated several times, most recently in 1995. Weather, insect and animal damage has caused the structure to deteriorate. Four contractors made bids on the project, and Legacy Custom Builders proposed the lowest bid. The firm is based in Northville, Mich.

In a separate resolution, the commission was asked to approve a $71,500 contract with Saladino Construction Company Inc. to restore the Island Park bridge and the concrete portions of the Greek Revival shelter. The price includes a $65,000 bid and $6,500 (10%) construction contingency.

The bridge was built in 1916, two years after the shelter. The work includes the repair and sealing of cracks, repair of spalling concrete, and repainting the bridge. Structural concrete support would be added to the shelter, which has sunk slightly in one corner, causing cracks in the concrete walls. According to a staff memo, the city’s Historic District Commission has been consulted on the renovations, though the park is not in an historic district.

Sam Offen said he thought it was interesting that for both projects, four companies submitted bids – and three of those four bid on both projects. But in each case, it was the company that only bid on one project that got the contract, he noted.

Park planner Amy Kuras said that the three companies bidding on both projects are general contractors. But the bids were awarded to companies with specific expertise in the necessary work, she said – Legacy is a builder, and Saladino does concrete work. She said the staff talked about whether to package the work into one bid, but ultimately decided two separate bids would possibly result in a better price.

Funding for these projects is already allocated from the approved FY 2012 Park Maintenance and Capital Improvements Millage proceeds.

Outcome: On separate votes, commissioners unanimously approved both resolutions recommending the contracts for work at Island Park. Both contracts require approval by the city council.

Bioremediation at Southeast Area Park

Matt Naud, the city’s environmental coordinator, solicited a recommendation from PAC regarding whether to pursue a bioremediation pilot test in a section of Southeast Area Park, a 26.5-acre city park at Ellsworth and Platt roads. The test would determine if technology to remove an existing vinyl chloride plume is effective. The plume resulted from vinyl chloride being released from the now-closed city landfill into groundwater on the south side of Ellsworth Road.

Aerial view of a section of Southeast Area Park, showing the location of the city's bioremediation project. (Links to larger image.)

Naud told commissioners that the city has been managing “legacy problems” at the former landfill since it closed in 1982. In the 1990s a slurry wall was built to stop potential contaminants from polluting clean groundwater. The wall did not extend across the landfill’s northern side. Instead, extraction wells are used there to pull the groundwater and contaminants back to the extraction wells, where the water is discharged to the sanitary sewer for treatment.

The city isn’t legally required to do more than it’s already doing, Naud said, but they’d like to try an additional approach. The pilot project would test a different type of remedial process called bioremediation, where naturally occurring microorganisms are given food and nutrients to encourage the metabolic breakdown of the contaminant. [.pdf of bioremediation proposal] Consultants Patti McCall and Mike Kovacich, who’ll be working on the project, were on hand to answer questions from commissioners.

According to Naud, the park would be affected for three days. The park would remain open, but a portion of it would be fenced off while testing is conducted.

Naud assured commissioners that no park users would be exposed to hazardous materials – the plume is at least 25 feet underground. Soybean oil would be injected in eight locations. They’d likely use a fire hose to push down and distribute the oil for the bacteria, then wait 4-5 weeks and repeat the process. They’d monitor the plume to see if there’s any improvement.

Naud said he’d talked through possible worst-case scenarios with Colin Smith, the city’s parks and rec manager. The worst outcome could be if a hose broke and soybean oil spurted out, he said. Even so, he wanted to make sure the public was aware of what they’re doing, and that the process is open.

Bioremediation: Commissioner Discussion

David Barrett indicated that it seemed the only risk was for public relations – when he hears “bioremediation,” he imagines people in white hazmat suits. Naud said the staff thought about that, because it’s not something the city is required to do. But this community usually tries to do more than it’s required to do, Naud said. If they were pumping contaminated groundwater out of the ground, or doing it near kids, that would be different, he said. But since this is trying to augment a natural process, he thought it was worth at least proposing it.

Naud said the city staff is reaching out to nearby housing cooperatives – residents there are primary users of the park. Sam Offen asked if there was any contamination leading underneath the housing units. No, Naud replied. All of the contamination is south of I-94. As a practical matter, there was more concern about methane gas coming off the site. A collection system is in place to handle that, which is also used to generate electricity. The city has done sampling of some basements in the housing cooperatives and never detected methane, Naud said.

There is some 1,4 dioxane in groundwater underneath one of the cooperatives related to contamination from Pall/Gelman, Naud added, but there are no private wells there – the housing units are hooked up to the city water system. The 1,4 dioxane is not above regulated standards, he said. That’s why they’re focusing on the vinyl chloride plume.

Doug Chapman pointed out that some people might think the city is introducing new bacteria, but they’re really just trying to increase the population of existing bacteria so that more bacteria will break down the vinyl chloride. Kovacich explained that the microorganisms breathe in vinyl chloride, but need to feed on a hydrogen source – in this case, soybean oil.

Julie Grand asked about the tripping hazard of pipes that will be used at the site. The one-inch pipes will be flush-mounted, Naud said, similar to those that are in other locations in town, like the Armen Cleaners site.

Grand asked if this process could be used to clean up other contaminated sites in the city, noting that several sections of a proposed greenway need remediation. It’s typically an expensive process, she noted. Naud said it depends on what kind of contamination is present. He offered to hold a working session for commissioners with more information on that, if they wanted.

Barrett asked whether Naud would let PAC know about the results of this bioremediation effort. “We always tell you good news,” Naud joked. The consultants already test samples from the former landfill every quarter. This will be added to their testing, he said, and those results can be shared.

Smith then read a resolution supporting the project. It directed city staff to inform and educate neighbors in the area about the project before starting, and asked staff to provide updates to PAC on its progress. The resolution states:

WHEREAS, A vinyl chloride plume exists underneath Southeast Area Park;
WHEREAS, A bioremediation pilot is being proposed to treat the vinyl chloride plume;
WHEREAS, Funding is available from the Solid Waste Fund;
RESOLVED, That staff and consultants provide educational outreach to the Southeast Area Park neighborhood prior to implementation of the bioremediation;
RESOLVED, That staff proceed with this bioremediation pilot, and;
RESOLVED, That staff report back to the Park Advisory Commission after regular monitoring is able to determine the efficiency of the bioremediation pilot.

Outcome: Commissioners voted unanimously to move forward with the bioremediation project.

River Artwalk Proposal

Margaret Parker, a member of the Ann Arbor public art commission (AAPAC), gave a presentation about a potential public art project along the Huron River. The art commission’s annual plan for FY 2012 calls for possibly adding public art at two locations on the river. Since the work would likely be on city-owned parkland, members of the parks staff and park advisory commission would be part of a task force for the project.

As one of 10 priorities for the year, Parker told park commissioners that the annual public art plan identified two possible locations for public art along the river: At the Gallup Park canoe livery, and the Argo Dam headrace. Both are attractive locations because they are centrally located and accessible to the public. The plan calls for evaluating this possible project – nothing more, she said.

The first step, Parker said, was to meet with members of the city’s parks staff: Colin Smith, head of parks and recreation; park planner Amy Kuras; and Cheryl Saam, head of the city’s canoe liveries. The staff had three recommendations for possible public art at Gallup Park:

• A memorial wall that combines art with donor names on the north side of the livery building – this was the staff’s preference, Parker said.
• Artwork on the far shore, across the river from the livery.
• Decorative elements on a walkway that will be built between the livery and new docks, as part of a renovation project at the park.

For the second site – at the Argo headrace, near Argo Pond – parks staff cited four possibilities for public art locations:

• At the end of the headrace near Broadway, where a public area with an amphitheater is planned.
• On top of the embankment: A way-finding system could feature the area’s history – its use as a Native American path, for example, or the location of mills.
• Along the river: A way-finding system could mark a water trail.
• At the area connecting Argo Dam with the headrace.

Maintenance and graffiti were mentioned by the parks staff as issues that need to be considered, Parker said.

Parker took these ideas to the public art commissioners, and after discussing the ideas at their August meeting, they were supportive, she said. So the next step was to meet with PAC and get their input. [.pdf of memo to PAC regarding possible Huron River art projects]

These two art projects could connect to a broader vision for art along Huron River, Parker said, as part of RiverUp!, an effort to improve a 104-mile stretch of the Huron River, starting from the north at Milford through Ann Arbor and Ypsilanti, and downstream to Flat Rock. [See Chronicle coverage: "RiverUp! Focuses on Revitalizing Huron River"] Public art at Gallup and Argo could be considered as pilot projects for a larger river artwalk, she said.

The Huron River Watershed Council, which is taking the lead in organizing RiverUp!, could also manage the larger river art project, Parker said. Laura Rubin, the council’s executive director, was on hand to voice her support for the art project. Several groups are working together on a river renaissance, Rubin said, trying to orient communities toward the river. She strongly supports the public art proposal, and noted that the University of Michigan – which also owns property along the river – is interested in this too. With a diverse partnership involved, Rubin said, they can create something beautiful.

River Artwalk: Commissioner Discussion

Tim Berla said it would be cool to have an open-ended call for proposals, not tied to specific sites and with the understanding that funding hasn’t yet been identified. The art commission could vet the proposals, with input from city staff and PAC. He also suggested that they think about creating something that’s meant to be covered with graffiti. “I’m just saying take advantage of our community,” he said.

Sam Offen asked whether the projects were meant to be outside, or perhaps would they be located inside – like in the livery building, for example. Parker replied that the process is generally to set up a task force, which would then analyze each site in more detail to determine where the artwork might go. Exterior pieces are more accessible, but an interior work might be possible, she said.

Offen said he likes the idea of an artwalk along the river. He asked how it would be funded. Colin Smith, manager of the city’s parks and recreation unit, explained how the Percent for Art program works. A percent of the budget for each city capital project – up to $250,000 per project’s budget – goes toward public art. That includes capital projects in the parks system. Money earmarked for the Percent for Art program must be used for public art that somehow relates to the original funding source. Offen observed that capital projects for parks in general contribute funding to public art – whether the city does this particular art project or not.

Gwen Nystuen described the artwalk as an exciting project – she especially liked the idea of public art for way-finding along the river.

Smith said the next steps would be to set up a task force, and brainstorm all the things they need to consider. It will also be important to get feedback from the public about what they’d like to see along the river. He reminded commissioners of the art installation by the visiting artist at the University of Michigan. [In 2009-10, William Dennisuk, a visiting artist at UM's Witt Residency program, proposed an art installation of large wire vase-like sculptures in and near the Huron River, as a way to conceptually bridge the town and campus communities. See Chronicle coverage: "Sculptor Tries to Weld City, University."]

Smith said he personally liked Dennisuk’s sculptures, but he recalled that there was a great deal of opposition to the project, and even some anger. So a full discussion about what might go into an area that’s very special to a lot of people is important, he said.

PAC Officer Elections

Julie Grand, who has served as PAC chair since April 2010, said she hoped the gods of the bylaws would forgive the commission for not holding their annual elections in September. [PAC's September meeting was cancelled.] She noted that terms for several commissioners will be expiring in the coming year, so that should be a factor in their nominations.

PAC chair Julie Grand and Mike Anglin, a city councilmember and ex-officio member of PAC.

Gwen Nystuen nominated Grand for another one-year term as chair, and John Lawter for another term as vice chair. Tim Doyle nominated Sam Offen for another term as chair of PAC’s budget committee. There were no competing nominations for any of these positions.

Colin Smith, manager of parks and recreation, noted that Offen’s term ends on June 15, 2012. Doyle offered to serve as chair-in-training for the budget committee. Other PAC members with terms expiring in 2012 include Nystuen in May, David Barrett in August, and Lawter in December. They are all term-limited and can’t be reappointed.

“Change is good,” Offen said. Grand acknowledged that they’d be welcoming some new energy to PAC, but added that there will clearly be losses.

PAC bylaws require that votes be taken by secret ballot, so commissioners wrote their choices on paper and passed them to Smith, who tallied the votes. ”OK,” he said wryly, after counting the ballots. “I have some not especially surprising results.” Grand, Lawter and Offen were re-elected unanimously.

Misc. Communications, Public Commentary

During every meeting there are typically updates from staff and commissioners, as well as two opportunities for public commentary.

Misc. Comm/Comm: Non-Motorized Paths

Eric Boyd spoke during time set aside for public commentary at the beginning of PAC’s October meeting. His comments focused on the need for more non-motorized connectivity between west and south central Ann Arbor – essentially the area between South Main to South State streets. He noted that on South State, from the corner of East Hoover to Eisenhower, is a two-mile stretch. That’s out of the way for someone trying to go from south central Ann Arbor to southwest Ann Arbor – for example, if you’d like to go from the Produce Station on South State, to Busch’s grocery on South Main, after the East Stadium bridge is torn down.

Currently, there are only three ways to go from South State to South Main, he said:

1. Via East Stadium – but that route won’t be available during reconstruction of the East Stadium bridge, which will begin later this year. It also requires a roundabout path through Stimson and South Industrial.
2. Via the University of Michigan field hockey field to Kipke – but the university has restricted use of that route to the hours of 7:30 a.m. to 5 p.m.
3. Via a short gravel path between UM’s varsity tennis facilities and Lynden Glen Drive. That’s a relatively unknown route, Boyd noted, and would be a mess in the winter.

There are several options the city could pursue, Boyd said, and some of those could fall under the aegis of the park advisory commission:

• Create a section of the Ann Arbor Greenway linking East Hoover with the intersection of South State and Stimson, with a spur connecting to Kipke/Stadium Way. This would enable passage from Kipke to Stimson without going along the university field hockey field.
• Work with the UM golf course to create a publicly accessible non-motorized path linking South State to South Main along the southern border of the golf course.
• Work with the UM varsity tennis facility to create a non-motorized connection to Golfview.
• Pave the short gravel section between the university soccer facilities and Lynden Glen Drive. Add signage for non-motorized transportation on South State and South Main showing the path.
• Work with the university to reopen the connection between South State and Kipke for all hours – or at least until 8 p.m., when most commuters have gone home.

Tim Berla thanked Boyd, and requested that he email the suggestions to PAC.

Misc. Comm/Comm: Parks and Rec Manager Update

Colin Smith, parks and recreation manager, told commissioners that work on the Argo Dam bypass is well underway. It’s pretty exciting to see the outline of the series of pools being built, he said. [PAC had recommended approval of the project at its October 2010 meeting. The $1,168 million project is being designed by Gary Lacy of Boulder, Colo., and built by TSP Environmental, a Livonia firm. The project includes removing the canoe portage, and replacing it with a series of “drop pools” so that no portage is required.] Smith said Lacy thinks they’ll be able to run water through the pools this year, to see how it will work.

Colin Smith, manager of Ann Arbor parks and recreation.

Smith said the staff has been working on a plan for improvements to the city’s baseball and softball fields. Some areas are in real need, he said – it’s analogous to the former conditions of the soccer fields, which underwent a major upgrade over the past few years. [PAC member David Barrett, who took the lead on assessing the conditions of the fields, presented a report at PAC's September 2010 meeting. There are 28 fields at Ann Arbor public schools, and 26 owned by the city. .pdf file of Barrett's ballpark report] An item regarding the baseball and softball fields will likely be on PAC’s November meeting agenda, Smith said.

Smith also mentioned that he’d driven down Fuller Road and utility work is happening along both sides – DTE was replacing a gas main in an easement granted by the city on the north side of Fuller Road, and sanitary sewer pipes are being replaced on the south side.

Tim Berla asked whether any of this work is related to the proposed Fuller Road Station, which hasn’t yet been approved by city council. Smith replied that the work would need to be done anyway, but that it’s likely there could be a tie-in to Fuller Road Station at some point. Berla observed that the city council hasn’t take a vote on the project – a partnership with the University of Michigan to build a large parking structure, bus depot and possible train station on city-owned property that’s designated as parkland. He noted that it’s possible the project won’t be approved.

Smith said his understanding is that an operating agreement is being developed between the city and UM. He acknowledged PAC’s previous request to see such an agreement prior to it being presented at city council. Staff is aware of that request, he said, but there’s no update at this point. Gwen Nystuen asked whether Smith is part of the negotiations for the operating agreement. No, he said – nor has he seen a draft of the document. As far as he knew, it hasn’t been added to the agenda for any upcoming council meetings at this point.

Mike Anglin, one of two councilmembers who serve as ex-officio members of PAC, said the commission could request an update from Eli Cooper, the city’s transportation program manager, or any of the managers involved in the Fuller Road Station project. [Most recently, Cooper briefed PAC on the project at its May 2011 meeting.]

Berla noted that sometimes people ask him about Fuller Road Station, and he’d like to know the truth so that he can respond to them. He wanted to confirm that the council wasn’t sneaking into it and that just because utility work is taking place, that doesn’t mean Fuller Road Station is “a go.”

Present: David Barrett, Tim Berla, Doug Chapman, Tim Doyle, Julie Grand, Karen Levin, Sam Offen, Gwen Nystuen, John Lawter, councilmember Mike Anglin (ex-officio), councilmember Christopher Taylor (ex-officio). Also Colin Smith, city parks manager.

Next meeting: PAC’s meeting on Tuesday, Nov. 15, 2011 begins at 4 p.m. in the city hall second-floor council chambers, 301 E. Huron St., Ann Arbor. [confirm date]

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View from the sixth floor of Ann Arbor's city hall, facing south and overlooking East Huron Street. Workers are installing tile in the plaza. The long trough, at a right angle to the street, will be the location for Herbert Dreiseitl's water sculpture. A dedication of the piece is planned for early October, after installation. (Photo by the writer.)

The working session has been discussed as potentially taking place on Sept. 12. But Tony Derezinski – a city councilmember who is AAPAC’s newest commissioner and who attended his first meeting on Wednesday – said he hoped to push back the commission’s presentation to the city council until a later date. [As of late Aug. 29, no city council working session has been scheduled on the city's Legistar system.]

Derezinski characterized it as an extremely important opportunity for AAPAC to convince the council of the value of the Percent for Art program, noting that he has defended it twice when other councilmembers previously proposed cutting it.

Margaret Parker, a local artist who’s served on AAPAC since its inception, suggested making the working session presentation after the formal dedication of Herbert Dreiseitl’s water sculpture in front of city hall – so councilmembers will first have the chance to “bask in some glory” of the program’s efforts, she said. The dedication is being planned for early October, to coincide with Dreiseitl’s next trip to Ann Arbor to oversee the sculpture’s installation.

The Dreiseitl work, costing more than $750,000, will be the second completed piece under the Percent for Art program, which was created in 2007. During Wednesday’s meeting, commissioners also discussed the possibility of using public art funds to buy existing artwork, rather than only commissioning pieces, as they’ve done to date. Although Parker expressed some concerns, they agreed to explore this approach as a way to quicken the pace of public art acquisition.

Commissioners also discussed several projects that are in the formative stages, including artwork for the proposed Fuller Road Station, a mural for Allmendinger Park, and a possible artwalk along the Huron River. A previous recommendation for a mural along the Huron Parkway, near Huron Hills Golf Course, has been postponed, based on negative feedback from residents.

Future of AAPAC, Percent for Art

The city’s Percent for Art ordinance creates a mechanism for funding public art by allocating 1% of all capital improvement projects – with a cap of $250,000 per project – to be spent on public art. The ordinance stipulates that a nine-member public art commission oversees the program. Cheryl Zuellig, who chairs AAPAC’s planning committee, noted that AAPAC has previously discussed the possibility of adding more commissioners, motivated by having more manpower to do the commission’s work. She said that Sue McCormick – the city’s public services administrator – brought up the idea again at a recent meeting with the planning committee, and that McCormick asked AAPAC to consider it.

When commissioners discussed the idea in the past, commissioner Elaine Sims said, they were reluctant to pursue it, because they feared that if they drew attention to the program, it might result in attempts to curtail it instead. But McCormick had indicated that shouldn’t be a concern, Sims said.

Marsha Chamberlin, AAPAC’s chair, suggested that it could be an item to bring up at the possible Sept. 12 city council working session. AAPAC has been asked to give an overview of the Percent for Art budget and current projects, she said, and to answer questions or make suggestions for improvement.

Tony Derezinski told commissioners that as part of his efforts to get up to speed on AAPAC’s work, he’d talked with McCormick and Connie Pulcipher, a member of the city’s systems planning staff who has facilitated planning meetings for the commission. When he learned about the working session, he strongly suggested that AAPAC’s presentation be rescheduled, in part because he didn’t feel like he’d be ready to contribute to the discussion by Sept. 12.

In addition, he felt like ”things need to simmer down a little bit, to be very blunt.” This was likely an allusion to comments made by mayor John Hieftje at the Aug. 4, 2011 city council meeting. From The Chronicle’s report of that meeting:

In the early part of the meeting, mayor John Hieftje effectively headed off a debate that might have otherwise unfolded among councilmembers on the relationship between the taxes collected for street and sidewalk repair and the city’s public art program. The mayor announced that he’d be nominating Tony Derezinski (Ward 2) to serve on the public art commission as a replacement for recently resigned commissioner Jeff Meyers. And Hieftje went on to say that in September he wanted to take a longer look at the city’s public art program.

That assurance was enough for now to hold off a council discussion of an explicit restriction on the street/sidewalk repair tax – a restriction that would prevent those tax monies from being used to pay for public art under the city’s Percent for Art program.

…

Hieftje said he’d been looking into the art commission, and had met and talked with various people. The feedback he’d heard is that people support the public art program, but want to know where the art is. A profusion of art in the city hasn’t happened as a result of the program, he said. This is not the same situation as with the housing commission, he added. [In March 2010, the city council undertook the wholesale replacement of the city's housing commission. Derezinski was the city council liaison to the housing commission.] Hieftje said that Derezinski was willing to be appointed to the public art commission, if someone else would step forward to become the liaison to the housing commission.

The mayor continued by saying he wants to pause in September to take a look at why there isn’t more art in the city. He acknowledged that there’d been a proposal by Marcia Higgins (Ward 4) [in connection with the past year's budget discussion] to reduce the percentage allocation to art. The council might decide to do that, he said, but he wanted to bring that discussion forward for September.

At AAPAC’s Aug. 24 meeting, Derezinski told commissioners that whenever they do make a presentation to city council, people will be watching it very carefully. The fact that other councilmembers have on two occasions proposed to cut back the program shows that AAPAC needs to make a strong case for it, he said. A working session is not to be feared, he added, it’s to be taken advantage of – but they need to be prepared. McCormick would likely be the staff person to make the actual presentation, he said, and commissioners should “orchestrate” what they want their message to be. They should provide examples of the program’s value, and why it should continue, he said.

Derezinski said he hoped the “powers that be” would agree to postpone the presentation, at least until the new city administrator, Steve Powers, arrives. Powers is due to start his job in mid-September.

Based on that, Zuellig said, it made sense to table a discussion about adding commissioners.

Future of AAPAC, Percent for Art: Procurement?

Zuellig reported another item from the planning committee’s meeting with McCormick. McCormick had suggested that AAPAC consider procurement of artwork – buying pieces that are already made, rather than commissioning new art – as a way to add more quickly to the city’s collection of public art. If AAPAC decides to take that approach, Zuellig said, they’d need to determine how to manage it.

Chamberlin said there are several positive things about that approach, particularly for certain sites. It would certainly reduce the timeline considerably.

But Margaret Parker expressed caution. When you buy art that’s already made, she said, it might not fit the site for which it’s intended. Elaine Sims disagreed – sometimes, an existing piece can fit beautifully on a site. AAPAC could look for opportunities where this approach might work, Sims added. One way to start would be to create a database of artists and their portfolios.

Sims said she had a piece on display at the University of Michigan Hospital by a Chicago artist that was available for sale. [Sims is director of the UM Health System Gifts of Art program.] She also suggested that they consider buying work from artists at the annual Ann Arbor art fairs.

After further discussion, commissioners agreed that the planning committee would explore this approach. It was decided that Aaron Seagraves, the city’s public art administrator, would research what other communities are doing, and develop a proposal for how to proceed. The planning committee will give that proposal an initial review before bringing it to the full commission.

Current Projects: Dreiseitl, Murals, Fuller Road Station

The commission discussed several ongoing projects at their August meeting, ranging from one that is near completion – the Herbert Dreiseitl water sculpture at the new municipal center – to some that are in much earlier stages.

Current Projects: Dreiseitl Sculpture

Marsha Chamberlin reported that Herbert Dreiseitl will be in Ann Arbor from Sept. 25 through Oct. 5, to oversee the final testing of lighting in the water sculpture he designed for the city. The piece, commissioned by the city at AAPAC’s recommendation, is being installed this month in front of the new municipal center at Fifth & Huron. Blue bulbs will be embedded in the elongated bronze piece, over which water will flow.

By way of background, in 2010 the city council approved a budget of $737,820 for the Dreiseitl piece. The city had previously paid Dreiseitl $77,000 in preliminary design fees. Funding comes in part from the Percent for Art stormwater funds, because the sculpture is designed as part of the site’s stormwater management.

Previously, AAPAC had discussed coordinating a dedication ceremony for the sculpture with whatever event the city planned for the dedication of the municipal center – the complex that includes the new police/courts building plus the renovated city hall and plaza in front of those two buildings, where the sculpture will be located. But Chamberlin said city officials have decided not to have a dedication for the municipal center, so AAPAC is free to choose a date and time for the sculpture dedication alone.

Commissioners discussed possible dates and times, noting that holding the ceremony at dusk would allow for a more dramatic presentation of the lit sculpture. Other factors included holding it later during Dreiseitl’s visit, to ensure that the sculpture would be completely installed, and to avoid a conflict with the Oct. 3 city council meeting and with Rosh Hashanah, the Jewish new year celebration that begins at sunset on Sept. 28. They settled on a tentative date of Tuesday, Oct. 4 for the dedication, with a backup date of Oct. 3. The public relations committee will handle details, including putting together a VIP list of invitees. The dedication will be open to the public.

Current Projects: Mural Program

Jeff Meyers, who had championed a pilot mural program, resigned from AAPAC in July 2011. Wiltrud Simbuerger, one of the newest AAPAC commissioners, agreed to take over leadership of that effort. A task force had previously recommended two sites for the first murals: A building at Allmendinger Park, and a retaining wall along Huron Parkway. Simbuerger reported that, based on positive feedback from residents regarding a mural at Allmendinger, and some negative feedback regarding the Huron Parkway project, the task force has decided to put the Huron Parkway mural on the back burner.

The task force is moving forward with the Allmendinger project, Simbuerger said. Aaron Seagraves, the city’s public art administrator, reported that $8,000 from a Richard T. Whitaker foundation grant will be allocated to the mural – $7,200 for the artist, and $800 set aside for future maintenance. Another $5,000 will come from Percent for Art funds, for a total budget of $12,200, excluding maintenance. The grant funds need to be spent this year, he said.

Marsha Chamberlin noted that AAPAC had originally passed a resolution recommending $10,000 for a mural at Allmendinger and another $10,000 for one along Huron Parkway. Cheryl Zuellig suggested that they vote again, and simply vote to accept the current recommendations of the mural task force report. [.pdf of task force report] In addition to Simbuerger and Seagraves, task force members include Connie Pulcipher, Mariah Cherem and Hannah Smotrich.

Outcome: Commissioners voted unanimously to accept the recommendations of the mural task force.

Simbuerger said the city’s legal staff needs to review a statement of qualifications (SOQ) to elicit potential artists for the mural project, and she wasn’t sure how long that would take. The SOQ will be issued as soon as the city attorney’s office signs off on it, she said, with a tentative Oct. 24 deadline for submissions. A selection panel would meet in early November to pick finalists, who would then have until Dec. 30 to submit proposals. Interviews with finalists would take place in early January, and a recommendation would be made at AAPAC’s Jan. 25 meeting.

Based on this timeline, the mural could be completed in the spring of 2012.

There was some debate among commissioners about whether more time should be allowed for artists to respond to the SOQ. Simbuerger noted that the timeline depended in part on when the city attorney’s staff completed their review, and it’s difficult to anticipate how long that will take. Several commissioners observed that historically, review by the legal staff takes a long time.

Another concern was that the grant money, which is administered by the Ann Arbor Area Community Foundation, needs to be spent this year. Seagraves indicated there could be some flexibility on that.

Connie Rizzolo-Brown noted that for the West Park artist selection, the task force allowed just three weeks and received 13 responses. However, the current SOQ deadline for art in the lobby of the city’s new justice center had to be extended, because few responses were received. She felt the decision on a timeline should be made by the mural task force.

Current Projects: Fuller Road Station

The city council hasn’t formally approved the Fuller Road Station (FRS), a joint project of the city and the University of Michigan to build a large parking structure, bus depot and possible train station on city-owned land near the UM medical complex. But a task force has been formed to incorporate public art into the building’s design, which is already underway. Task force members are: Dave Dykman, the city’s project manager; Doug Koepsell, UM’s project design manager; Connie Pulcipher of the city’s systems planning unit; Aaron Seagraves, the city’s public art administrator; AAPAC members Cathy Gendron and Connie Rizzolo-Brown; Larry Cressman, a faculty member with the UM School of Art & Design; and Angela Pierro, a representative of the public.

At the Aug. 24 AAPAC meeting, Gendron and Rizzolo-Brown reported on the latest meeting of the FRS public art task force. [.pdf of task force report]

Of the $250,000 allocated to the project, $200,000 will be available to the selected artist. The remaining funds are earmarked for project management costs ($20,000); contingency costs ($25,000); stipends for the five artists selected as finalists whether their project is selected or not ($5,000 – that is, $1,000 per artist). Dykman is planning to spend 1% of his time on the project devoted to the public art project management, Gendron said.

Gendron noted that the city will be contributing only a portion of the $250,000 – $55,000, based on the 22% share of construction costs that the city is expected to shoulder for FRS. [Details of an agreement between the city and UM have not been made public, but based on a memorandum of understanding previously signed by the two entities, it's anticipated that UM will pay for 78% of the project, and have control over that percentage of the parking spots in the structure.]

Even though there’s no formal agreement yet on FRS, Gendron reported that Sue McCormick, the city’s public services administrator, indicated that planning for the public art component can move ahead.

The other issue raised by commissioners related to maintenance costs. Gendron said McCormick had clarified that regular maintenance costs would be paid for by the unit where the artwork is located. For example, the city’s parks and recreation department will pay for maintenance of the metal tree sculpture in West Park. Extraordinary maintenance – like the repair for the Sun Dragon sculpture (see below) – will be treated as new projects, and must go through AAPAC’s selection process.

Gendron noted that the Percent for Art ordinance doesn’t stipulate that projects include set-asides for future maintenance costs. Yet AAPAC’s guidelines do include a provision for maintenance. From the guidelines:

Every public art project funded with Public Art Funds will reserve (10%) of the proposed budget for long term maintenance and conservation of the work(s) of art unless a different amount is required for a particular work of art.

After consulting with McCormick, Gendron said the planning committee will work to revise the guidelines to be consistent with the ordinance. That way, it would not require review by the city’s legal staff. She noted that approval of AAPAC’s bylaws by the legal staff had taken over a year.

The city attorney’s office is also involved in reviewing the statement of qualifications (SOQ) to seek artists for the FRS project. The office has been reviewing the document since May, Gendron said, and the task force wondered if the delay could be tied to the lack of a formal agreement with UM. McCormick believes an agreement with UM won’t be completed until at least September, Gendron said, but that the SOQ will likely be approved by legal staff by the end of August.

Current Projects: Sun Dragon

Connie Rizzolo-Brown reported that the city has received a proposal for the design and preparation of construction documents for repairing the Sun Dragon, a sculpture by Margaret Parker made of colored plexiglas that’s attached to a beam holding Fuller Pool’s solar-heated shower. [Parker, a local artist, is a member of AAPAC.] The sculpture was damaged in the spring of 2010 by workers who were repairing a beam that supported the piece.

Rizzolo-Brown said the city doesn’t yet have a full cost estimate for labor to repair the sculpture, and for the structure that will hold it.

Parker expressed frustration that the project has taken so long. [It has been a topic discussed at several AAPAC meetings for more than a year. In March 2011 AAPAC voted to approve up to $2,000 to hire a city engineer to assess the repair and make cost recommendations.] Parker urged Rizzolo-Brown to reconvene the task force that’s handling the repair project, and to include the city’s structural engineer at the meeting. Rizzolo-Brown agreed that it was taking a long time, but said the city has assigned a project manager to deal with it and she didn’t want to act outside of that person’s authority.

Future Projects: Riverwalk, Stadium Bridges, Washtenaw Avenue

Margaret Parker gave a report on steps that she and Malverne Winborne have taken to explore a possible art riverwalk along the Huron River. [.pdf of Parker's report] AAPAC’s annual plan for FY 2012 calls for possibly adding public art at two locations on the river.

Parker said she met with three members of the city’s parks staff: Colin Smith, head of parks and recreation; park planner Amy Kuras; and Cheryl Saam, head of the city’s canoe liveries. The staff had three recommendations for possible public art at Gallup Park:

• A memorial wall that combines art with donor names on the north side of the livery building – this was the staff’s preference, Parker said.
• Artwork on the far shore, across the river from the livery.
• Decorative elements on a walkway that will be built between the livery and new docks, as part of a renovation project at the park.

Funding would likely come from a $300,000 state grant that the city has applied for, to complete the renovation work at the Gallup Park livery. Update: Smith later clarified for The Chronicle that no state funds would be used for public art. Funding for artwork would likely come from city matching funds.

For the second site – at the Argo headrace, near Argo Pond – parks staff cited four possibilities for public art locations:

• At the end of the headrace near Broadway, where a public area with an amphitheater is planned.
• On top of the embankment: A way-finding system could feature the area’s history – its use as an Indian path, for example, or the location of mills.
• Along the river: A way-finding system could mark a water trail.
• At the area connecting Argo Dam with the headrace.

Maintenance and graffiti were mentioned by the parks staff as issues that need to be considered, Parker said. She also felt that the staff wanted to put limits on what artists could do, and said she couldn’t find a way to describe to the parks staff why artists should be allowed to “think big and amaze us.”

Elaine Sims drew an analogy to putting art in your living room. If you do it, you might just put something above your sofa. But an interior designer might come up with a vision that you’d never consider. Cheryl Zuellig noted that it’s also true that no one knows your living room as well as you do – it made sense to collaborate with the parks staff, she said. Cathy Gendron said she didn’t think projects could be successful unless artists were involved in the very earliest stages.

Parker suggested that perhaps the city’s river art project could be part of a larger riverwalk. She was meeting later in the week with representatives from the Huron River Watershed Council and Andy Buchsbaum, head of the National Wildlife Federation’s Great Lakes Natural Resources Center in Ann Arbor. Both groups are involved in RiverUp!, an effort to improve a 104-mile stretch of the Huron River, starting from the north at Milford through Ann Arbor and Ypsilanti, and downstream to Flat Rock. [See Chronicle coverage: "RiverUp! Focuses on Revitalizing Huron River"]

Zuellig noted that it wasn’t necessary for AAPAC to be the champions of a riverwalk – the watershed council or another group could do it, and take a more holistic approach beyond the boundaries of Ann Arbor. AAPAC could participate, but not necessarily take the lead, she said. There was further discussion about AAPAC’s role in this effort, and whether they were the appropriate group to develop a vision for the riverwalk. Tony Derezinski said they shouldn’t be too concerned if their role is ambiguous at this point. He likened it to initial talks about the Reimagine Washtenaw project, with representatives from multiple jurisdictions sorting out their roles in revitalizing Washtenaw Avenue.

Marsha Chamberlin reminded commissioners that Peter Allen had attended an AAPAC meeting in January to advocate for an Argo Pond artwalk. Where does he fit in? she asked. Parker noted that Allen owned property on the west side of Argo Pond, off of North Main Street. [AAPAC recently awarded Allen's development company a Golden Paintbrush award for rock cairns on its North Main property.] He might be willing to contribute to the broader riverwalk effort, she said.

Derezinski said that others in the city are looking at ways to improve North Main as an entrance to the city. He and fellow councilmember Sandi Smith had taken a walk along that stretch earlier this year with Homayoon Pirooz, head of the city’s project management unit, to talk about what could be done as part of a resurfacing project scheduled for next year, he said. The Near North affordable housing project will be built in that area, he noted. Other related projects include the Allen Creek greenway, and making Bandemer Park more accessible, he said.

Parker said she’s been asked to loop in the city’s park advisory commission regarding possible artwork along the river, and will make a presentation at one of PAC’s future meetings, then report back to AAPAC with feedback.

Future Projects: Washtenaw Avenue, Stadium Bridges

Aaron Seagraves reported that city staff had suggested the non-motorized path being built along Washtenaw Avenue might be a good place for public art, and he asked for feedback from commissioners. A wide path is being built on the north side of Washtenaw, between Toumy and Glenwood. Construction will likely be finished in September.

Commissioners wondered where artwork could be located, given that the project is almost done. Cheryl Zuellig noted that one possible location in that area – though not connected to the path – was the triangular traffic island at the intersection of Washtenaw and Stadium. [The location has previously been the target of an Ann Arbor Newshawk satirical news report.]

Tony Derezinski reported that the Ann Arbor Rotary might “adopt” the location, and representatives were to meet later in the week with Homayoon Pirooz, head of the city’s project management unit, to talk about the possibility. At Zuellig’s suggestion, Derezinski said he’d bring up the possibility of Rotary partnering with AAPAC on the project.

Later in the meeting, Zuellig reported that she and Wiltrud Simbuerger would be meeting with city engineer Michael Nearing later this month to talk about the East Stadium bridges reconstruction, and how public art might be a component of that project.

Administrator’s Report: Budget, Inventory, Arts Alliance

Aaron Seagraves, the city’s public art administrator, reported on several items during the meeting.

Administrator’s Report: Art Inventory

At AAPAC’s July 27, 2011 meeting, Seagraves told commissioners that CultureNOW, which runs a project called Museums Without Walls, had contacted the city about being included in a national online inventory of public art projects. Based on feedback from that meeting, he arranged to include some pieces from the city of Ann Arbor’s art inventory on the CultureNOW website. He reported that University of Michigan artwork is also on the site – UM has an extensive public art collection.

Administrator’s Report: Arts Alliance

Two items were brought up during the meeting that related to the nonprofit Arts Alliance, which is based in Ann Arbor. Seagraves said the alliance has asked the city to sponsor its Sept. 20 Arts Convergence conference, to be held at Eastern Michigan University’s student center. The sponsorship cost is $250. Commissioners discussed whether it was valuable to be a sponsor. Margaret Parker advocated for sponsorship, noting that the alliance is a countywide organization and that a sponsorship would make a statement that AAPAC plays a pivotal role in the community.

Elaine Sims, who will be one of the speakers at the event, felt AAPAC should have a policy on this kind of thing, rather than make sponsorship decisions on an ad hoc basis.

There was some discussion about whether funds were available for this purpose. Seagraves said it would likely come out of the Percent for Art administrative budget. Commissioners asked him to find out how much was available.

Parker suggested skipping the sponsorship, and using that money instead to make printed materials that could be handed out to showcase the Dreiseitl sculpture and other projects. Commissioners seemed to reach a consensus on that approach.

Later in the meeting, Cathy Gendron – during her report from the PR committee – noted that the 2011 ArtWalk, which is organized by the Arts Alliance, is set for Oct. 21-23. The Dreiseitl sculpture will be one of the featured pieces, and Gendron encouraged commissioners to volunteer for a “shift” at the sculpture, to talk to the public about the project and the city’s public art program.

Administrator’s Report: Percent for Art Budget

Seagraves included an updated summary of the Percent for Art budget in the meeting packet, showing line items for expenses as well as balances available for public art. [.pdf of budget summary] The report shows $1,142,509 available for future projects, after factoring in previously allocated funding.

Commissioners present: Connie Rizzolo-Brown, Marsha Chamberlin, Tony Derezinski, Cathy Gendron, Margaret Parker, Wiltrud Simbuerger, Elaine Sims, Cheryl Zuellig. Also Aaron Seagraves, the city’s public art administrator.

Absent: Malverne Winborne.

Next regular meeting: Wednesday, Sept. 28 at 4:30 p.m. at city hall, 301 E. Huron St. [confirm date]

Purely a plug: The Chronicle relies in part on regular voluntary subscriptions to support our coverage of publicly-funded programs like the Percent for Art, which is overseen by the Ann Arbor public art commission. Click this link for details: Subscribe to The Chronicle.

A mock-up section of the sculpture by Herbert Dreiseitl that's commissioned for the entrance to the Ann Arbor municipal center. The piece is made of bronze, with blue glass lights embedded. In this photo, water is flowing over the section, as it will when installed. (Photo courtesy of Quinn Evans Architects)

One issue: How to proceed with recommending a replacement for Jeff Meyers, who resigned from AAPAC in June, mid-way through his three-year term. The main concern among commissioners is who can take over leadership of a new mural program that Meyers had initiated. Margaret Parker indicated she’ll also be leaving the commission in the coming months, creating another vacancy on the nine-member commission.

The mayor, John Hieftje, is responsible for making nominations to AAPAC. Those nominations also require confirmation by the full city council. On Wednesday, AAPAC commissioners discussed the need for better communication with Hieftje, and said they hoped to find out what criteria he was using to make the selection – the most recent appointment Hieftje made to AAPAC was done without their input, after he rejected someone they’d recruited. Communication has also been lacking regarding Meyers’ resignation – in a phone interview with The Chronicle following AAPAC’s July meeting, Meyers said the mayor hasn’t acknowledged his resignation.

In other topics at Wednesday’s meeting, commissioners briefly discussed a written update they’d received about the Herbert Dreiseitl water sculpture being built for the entrance to the municipal center. Installation is still on track for next month.

Also in August – at city council’s Aug. 4 meeting – winners of the annual Golden Paintbrush awards will be honored. AAPAC selected the winners, who are recognized for their contributions to public art, via an online poll last month. This year, winners are: (1) Krazy Jim’s Blimpie Burger, for the Snow Bears sculptures they build each winter in front of their business at Packard and South Division; (2) Mary Thiefels and Treetown Murals for the mural outside the Alley Bar along West Liberty; and (3) Peter Allen & Associates, for rock sculptures on North Main Street.

Commissioner Resignation, Mural Program

Jeff Meyers, who was appointed to a three-year term on the Ann Arbor public art commission in early 2010, sent a formal notice of resignation to mayor John Hieftje in June. The news was discussed at the July 27, 2011 AAPAC meeting, as commissioners considered who might take over leadership of a task force for a new mural program that Meyers had initiated.

His resignation was foreshadowed at AAPAC’s June 2011 meeting, which he did not attend. AAPAC chair Marsha Chamberlin had told other commissioners that Meyers wanted to relinquish his leadership of the mural program – she said he felt like the project had stalled. That announcement prompted some commissioners to speculate on whether Meyers was still interested in serving on AAPAC, noting that he hadn’t attended a meeting since April. [The May AAPAC meeting coincided with a public forum for the mural project, which Meyers did attend.]

At previous meetings, Meyers – managing editor of the online magazines Concentrate and MetroMode – had expressed frustration about the mural program’s progress. He developed it as a way to generate more public art in the community, and to set up a process by which similar programs could be modeled. Funded by the city’s Percent for Art program, which AAPAC guides, the mural program was unanimously approved by AAPAC in November 2010, with the intent of creating at least two murals per year in the city. It has an estimated budget of $25,000 this year.

Meyers formed a task force, which recommended two sites for the first murals: A building at Allmendinger Park, and a retaining wall along Huron Parkway. AAPAC approved those sites at a special meeting in March, but city staff later determined that the meeting hadn’t been properly noticed, so a second special meeting was called in April and the vote was retaken.

Then, city staff determined that AAPAC’s 2011 annual public art plan, which includes the mural program, hadn’t been officially approved by Ann Arbor city council. Though the plan was approved last year by AAPAC and forwarded to city staff, it was never placed on council’s agenda. [The language in AAPAC's bylaws indicate that a plan must be submitted to council, but does not state that the plan requires council approval. For additional background, see Chronicle coverage:  "What's Ahead for Public Mural Program?"] The council formally received the plan at its June 20, 2011 meeting, when it approved the clerk’s report of communications, of which the plan was a part.

City staff also determined that neighborhood meetings were needed to get input on the sites – those meetings were held earlier this summer. But the city has not yet solicited proposals from artists for the murals, and it’s doubtful that the murals will be completed before winter arrives. Meyers had originally hoped to have both murals finished by September.

Commissioner Resignation, Mural Program – Communication

The mayor is responsible for making nominations to the nine-member public art commission. Those nominations also require confirmation by the full city council.

At Wednesday’s meeting, commissioners discussed the need to communicate with Hieftje about possible nominations. Cheryl Zuellig noted that AAPAC had spun its wheels during the last nomination process – it seemed that the commission and Hieftje moved along different, parallel tracks. The commission didn’t know what Hietje was looking for, and AAPAC members had invested a lot of time into recruiting.

[This issue has been discussed at length at previous AAPAC meetings. Last year, AAPAC members had recruited Lee Doyle, a member of the UM President’s Advisory Committee for Public Art who also oversees the UM Film Office. But Hieftje subsequently conveyed that he wanted to appoint someone who resides in Ann Arbor – Doyle lives outside the city. That prompted a long discussion at AAPAC's September 2010 meeting, as commissioners speculated on how to improve the recommendation process for new commissioners. In October 2010, Hieftje nominated Malverne Winborne – an Ann Arbor resident and director of Eastern Michigan University’s Charter Schools Office – without consulting or informing AAPAC about his choice in advance. Winborne is now AAPAC's vice chair.]

On Wednesday, Margaret Parker noted that the Percent for Art ordinance doesn’t stipulate that AAPAC commissioners live in Ann Arbor, but Hieftje had felt it was important. Zuellig indicated that the main issue is for AAPAC to understand what Hieftje’s criteria are, so that AAPAC can make recommendations that are appropriate. [Most AAPAC commissioners live in Ann Arbor. Zuellig lives in Ypsilanti. The issue of her residency was raised by councilmember Marcia Higgins when Zuellig was nominated to AAPAC in late 2008.]

Winborne asked whether AAPAC had any written criteria itself. Parker indicated that she had some documentation, which she said she’d “resurrect.” Commissioners discussed the importance of centralizing these kinds of documents – that’s a project that Aaron Seagraves, the city’s art administrator, will take on.

Commissioner Resignation, Mural Program – Comments from Meyers

In a phone interview with The Chronicle following AAPAC’s July meeting, Meyers said he’d reached a point where he couldn’t justify the time he’d been investing in the mural program and AAPAC, given his job, family and other commitments. Noting that he’d started developing the program nearly a year ago, he said at nearly every turn he encountered seemingly arbitrary requirements, incomplete or contradictory information, and new layers of requirements identified by city staff.

Meyers said he’s passionate about the city’s Percent for Art program and public art in general. But since the Percent for Art program was started in 2007, only one piece – a sculpture at West Park – has been completed, he noted. [Another project – the Herbert Dreiseitl sculpture at the city's new municipal center – is set to be installed in August.] There’s not yet a systematic process in place for moving projects forward, he said, and no clarity from staff or the city council about AAPAC’s role.

One way to improve the situation is for a city council representative to be appointed to AAPAC, Meyers suggested – it seems especially appropriate since AAPAC makes recommendations for the Percent for Art budget. There’s a disconnect when the taxicab commission has a council representative, but AAPAC does not, Meyers said. Having input from city council would help AAPAC understand what councilmembers want from the program. Does the council want AAPAC to initiate projects, or simply facilitate projects that the city identifies? These are the kinds of decisions that should have been made long ago, Meyers said.

Meyers said he plans to produce a written report or attend a future AAPAC meeting to make some recommendations for improving the Percent for Art program. He didn’t attend the July meeting because the status of his resignation was unclear – he said he’s gotten “zero response” from the mayor to his letter of resignation. [Update: On Aug. 1, Hieftje forwarded to The Chronicle a copy of a July 5 email he says he sent to Meyers in response to Meyers' June 21 resignation email. Meyers told The Chronicle he has no record of Hieftje's email. .pdf of emails from Meyers and Hieftje]

Commissioner Resignation, Mural Program – Next Steps

At AAPAC’s July 27 meeting, Parker recommended a next step related to leadership of the mural task force. She suggested that Seagraves contact Wiltrud Simbuerger, a commissioner who serves on the task force but who did not attend Wednesday’s meeting. Parker felt Simbuerger would be interested in championing that program.

Commissioners also discussed the general status of the program. Public meetings held for neighbors of the two proposed sites – at Allmendinger Park and along Huron Parkway, near Huron Hills golf course – were one reason the original timeline had been pushed back. Parker indicated that this was the first time that public meetings had been held prior to the start of a public art project, so it was “breaking new ground.”

Zuellig clarified that there hadn’t been public meetings prior to the city’s commissioning of the Dreiseitl sculpture. No, Parker said, there was a public presentation, but that occurred after Dreiseitl had been chosen to do the work. Parker said the mural project was also the first time that an online survey had been used by the city to get feedback on a public art project. Because parks are involved, the city has a whole process of public input, she said.

Zuellig suggested that commissioners consider whether they should use this same process for all future projects. It seemed to her that the reason these public meetings had been added was because there was negative feedback about the mural program. Parker said that wasn’t her understanding – she thought Meyers had asked to get input from neighbors.

[Public meetings with neighbors had been scheduled at the request of city parks staff, because the murals were being planned for locations at or near city parks. The issue of negative feedback was raised later, and was discussed at AAPAC's April 27, 2011 meeting. From Chronicle coverage:]

Venita Harrison – a management assistant who works for Sue McCormick, the city’s public services administrator, and who currently serves as support staff to AAPAC – mentioned that there might be a problem with the mural program. The city council had never officially approved the 2011 public art plan, she said – until that happened, her understanding was that the project couldn’t move forward.

She said the process of getting city council approval likely fell through the cracks during the transition last year, after former public art administrator Katherine Talcott stepped down from that role. More recently, a councilmember had read media reports about the mural program and raised questions about who had authorized it, Harrison said. They tried to find a record of when the city council had approved the 2011 annual plan – which included the mural program – but the plan didn’t turn up in records of council proceedings.

On Wednesday, Zuellig noted that although the public meetings might have been reactionary, if the feedback was valuable, then AAPAC should consider scheduling similar meetings in a proactive way. She cautioned that AAPAC needs to be mindful about reaching out to a broad group, noting that people often tend to show up to meetings if they don’t like something.

Parker suggested that instead of selecting sites and then seeking neighborhood support, one approach would be to find community or neighborhood groups who are eager to have a public art project in their area.

Parker also asked about the results of online surveys for the two mural sites. Seagraves reported that response had been low – only about 4-5 surveys had been completed for each location. From that small sample, the responses for Allmendinger were supportive, he said, but all responses for the location along Huron Parkway were against it.

Dreiseitl Sculpture, Justice Center Art

As they had last month, commissioners received a written report on the water sculpture designed by Herbert Dreiseitl, which the city commissioned for the outside entrance to the municipal center at Fifth and Huron. The report was prepared by Ken Clein of Quinn Evans Architects, project manager for the municipal center construction and renovation. [.pdf of July 2011 Dreiseitl report]

A wooden mock-up of the base for the Herbert Dreiseitl sculpture being built in front of the municipal center at Fifth and Huron, facing Huron. Installation of the sculpture is expected to occur in August. (Photo courtesy of Quinn Evans Architects.)

Malverne Winborne asked when a formal dedication was being planned. Aaron Seagraves, the city’s art administrator, wasn’t certain, but said that it would likely be part of an overall dedication of the municipal center.

Margaret Parker said AAPAC should be involved in planning the dedication, adding that she keeps bringing it up monthly because no one seems to be acting on it. [At AAPAC's June meeting, Marsha Chamberlin – the commission's chair who also serves on the public relations committee – said the PR committee would be working on a dedication ceremony for the Dreiseitl sculpture. Parker did not attend that meeting.]

Seagraves reported that the sculpture would be a stop on this year’s ArtWalk, which will take place Oct. 21-23. Funds from the Dreiseitl project are being used to pay for an ArtWalk sponsorship, he said. [Last year, the city council approved a budget of $737,820 for the sculpture. The city had previously paid Dreiseitl $77,000 in preliminary design fees. Funding comes in part from the Percent for Art stormwater funds, because the sculpture is designed as part of the site’s stormwater management. An ArtWalk sponsorship is about $350, according to Seagraves.]

The PR committee will handle sign-ups for volunteers to be present at the sculpture during the ArtWalk hours, Seagraves said, and to provide information about the sculpture and the city’s Percent for Art program.

Also related to art at the municipal center, Seagraves said the statement of qualifications/request for proposals was reissued in June for art in the police/courts building lobby, which along with city hall is part of the municipal center. [.pdf of justice center art SOQ/RFP] The project has an artist’s budget of up to $150,000 – the deadline for responses to the SOQ/RFP is Sept. 1. A total of $250,000 had been budgeted for that piece, plus additional artwork in an outdoor courtyard behind the municipal center, facing Ann Street.

Updates from Art Administrator

Aaron Seagraves gave several updates and communications during Wednesday’s meeting.

Updates: Meeting with the Mayor

Seagraves reported that he and AAPAC chair Marsha Chamberlin had met with mayor John Hieftje to give an update on AAPAC’s work and to get the mayor’s ideas about the public art program. They also toured the site of the Dreiseitl installation. In general, Hieftje encouraged AAPAC to do more projects, Seagraves said. When asked by commissioners for specific ideas that Hieftje had mentioned, Seagraves cited the River Art Trail around Argo Pond, which is in AAPAC’s annual art plan for FY2012. He added that he hadn’t brought his notes from that meeting and didn’t remember all of Hieftje’s comments.

Margaret Parker urged Seagraves to communicate more details of the meeting, saying that the mayor is one of the people that AAPAC needs to hear from.

Updates: Art Inventory

CultureNOW, which runs a project called Museums Without Walls, contacted the city about being included in a national online inventory of public art projects. Seagraves said he knows that the city had done an inventory and has a database of public art, but he hasn’t been able to access it yet – he’s working with IT staff to find where it’s located within the city’s computer system.

There was some question among commissioners about whether AAPAC has the authority to make a decision to join this national network. However, they agreed that they couldn’t make a formal recommendation at that meeting, since they did not have a quorum of members. Seagraves said he’d get more information about the project and put a resolution of recommendation on the August AAPAC agenda.

Parker cautioned that Seagraves should find out how much time would be involved in participating, before making a commitment. She also pointed out that the University of Michigan has an extensive online inventory of its public art collection, and that it would be good to have the university participate as well – that would more than double the amount of public art that would be inventoried for Ann Arbor, she said.

Updates: Mural for Avalon Housing

The nonprofit Avalon Housing, which provides affordable housing to low-income residents, recently contacted the city, Seagraves said. The nonprofit is interested in having AAPAC help oversee a mural project for some of Avalon’s properties. Although the properties aren’t owned by the city, he noted, Avalon is supported by public funding, including money from the city’s housing trust fund, the federal HOME program, and the Ann Arbor Downtown Development Authority.

Seagraves said he’s asked the city attorney’s office for advice about how to handle a project like this. The project would likely use donations, and the murals would be on private property.

Updates: Open Meetings Act

At a previous meeting, commissioners had raised a question about whether their committee meetings needed to conform to the state’s Open Meetings Act. On Wednesday, Seagraves highlighted two relevant resolutions passed by city council:

City Resolution, passed November 1991:  “All city boards, task forces, commissions, committees and their subcommittees hold their meetings open to the public to the best of their abilities in the spirit of Section 3 of the Open Meetings Act.”

City Resolution, passed December 2000: “… all City committees commissions and authorities, when required to meet in open session, hold all of their meetings in a public building.”

Those resolutions indicate that committee meetings need to be held in a public building, he said, like city hall or the library, and not at a private business. [By way of background, until mid-2009, AAPAC held its regular monthly meetings at the conference room of JJR – a landscape architecture and urban design firm where Zuellig works – until concerns about public accessibility prompted them to move to the seventh floor of the City Center building at Fifth and Huron. The city rented office space there while renovations were underway at city hall. AAPAC now meets back at city hall.]

Updates: Budget

Seagraves briefly reviewed the current Percent for Art budget. The balance at the end of fiscal 2011, which ended June 30, stood at $1.57 million.

Ann Arbor Percent for Art budget. (Links to larger image)

Seagraves noted that the balance doesn’t reflect funding that’s anticipated to be used for the mural project or the proposed Fuller Road Station. [A task force has been formed to look at public art for the Fuller Road Station, although that project – a joint city of Ann Arbor/University of Michigan parking structure, bus depot and possible train station – hasn't been officially approved by city council.]

At the start of FY 2012 – on July 1, 2011 – $292,216 in additional revenues became available for the Percent for Art program. That includes funds from the street millage ($133,772), the parks millage ($11,714), the solid waste fund ($3,910), the water fund ($40,397), the sewer fund ($89,543) and the stormwater fund ($12,880).

The Percent for Art program, established in 2007 by a city council resolution, captures 1% from the budget of all city capital projects, to be set aside for public art. That amount is capped at $250,000 per project. The ordinance stipulates that each public art project must relate to the source of funding – for example, public art funded from the street millage must be located near a street or have a transportation theme. [link to the Ann Arbor city code – click on Chapter 24: Public Art, which lays out the responsibilities of AAPAC.]

Updates: Annual Plan

Seagraves wanted to touch base with commissioners about the 2012 annual art plan. Though most projects that are listed in the plan identify a commissioner who will take the lead on those efforts, he said some projects didn’t yet indicate which commissioner would take that role.

Commissioners clarified that he had been looking at a draft – the final plan did assign commissioners to each project. [.pdf of 2012 annual public art art plan] However, Jeff Meyers had taken the lead on two projects: (1) the mural program, and (2) a possible public art project coordinated with painting of the Manchester Road elevated water tank, which is scheduled to occur in FY2013. Because Meyers resigned from AAPAC last month, other commissioners will need to take on those projects.

Cheryl Zuellig said it was helpful for commissioners to review the status of projects in the annual plan, and asked that Seagraves continue to do that in future meetings.

Committee Reports: PR, Projects

Every AAPAC meeting includes reports from three committees: public relations, planning and projects. The planning committee did not meet during the last month, and had no report.

Committee Reports: PR – Golden Paintbrush

No members of the public relations committee attended Wednesday’s meeting, but a written report announced the results of the annual Golden Paintbrush awards.

From a Chronicle file photo taken in January 2011: One of several rock cairns on the east side of North Main Street in Ann Arbor, near property owned by developer Peter Allen.

Since their last meeting, commissioners had voted online and selected three winners: (1) Krazy Jim’s Blimpie Burger, for the Snow Bears sculptures they build each winter in front of their business at Packard and South Division, (2) Mary Thiefels and Treetown Murals for the mural outside the Alley Bar along West Liberty, and (3) Peter Allen & Associates, for rock sculptures on the developer’s North Main Street property. [Peter Allen had attended AAPAC's January 2011 meeting to propose a sculpture park in the Argo Pond area, funded through the city's Percent for Art program. There's been no action on that proposal; however, a River Art Trail – which would include Argo and Gallup parks – is listed as a potential project in the 2012 annual art plan.]

Margaret Parker wanted to know when the awards would be presented to city council. Aaron Seagraves, the city’s art administrator, thought it would be on the council’s Aug. 4 agenda. [Golden Paintbrush awards are, in fact, included on the city council's Aug. 4 agenda.]

Parker expressed concern about whether the logistics of the presentation were being handled. It’s the responsibility of the public relations committee. Parker said the Golden Paintbrush presentation to council is one of the best ways to highlight public art. [These art projects aren't funded by the city's Percent for Art program, nor did AAPAC have any input into the projects. They are "public art" in that they are located in venues visible to the public – but on private property.]

Other commissioners indicated they were confident that the public relations committee, which has handled the presentation in the past, would be prepared for it this year, too.

Committee Reports: Projects – Sun Dragon

Connie Brown reported that the city has received estimates from an engineer and fabricator for repair of the Sun Dragon, a sculpture by Margaret Parker made of colored plexiglas that’s attached to a beam holding Fuller Pool’s solar-heated shower. It was damaged in the spring of 2010 by workers who were repairing a beam that supported the piece. Since then it’s been the topic of discussion at several AAPAC meetings, including a lengthy one at the March 2011 meeting. At that meeting, commissioners ultimately voted to approve up to $2,000 to hire a city engineer to: (1) perform a structural evaluation of the Sun Dragon’s support system and the piece itself; (2) to determine if design alternations or changes in fabrication are needed for ease of maintenance; and (3) to provide design and fabrication cost estimates.

Brown said the estimates have been forwarded to Sue McCormick, the city’s public services area administrator, for her review. Brown hoped to bring a recommendation to AAPAC at its August meeting.

Private Donation for Public Art

Neel Hajra, chief operating officer for the Ann Arbor Area Community Foundation (AAACF), recently contacted the city about making an $8,000 donation toward public art from the Richard T. Whitaker foundation, which AAACF manages. Aaron Seagraves, the city’s art administrator, told commissioners on Wednesday that Hajra was looking for suggestions for what might be a good fit for the foundation to support. Seagraves and Marsha Chamberlin, the art commission’s chair, had suggested the public mural program.

The community foundation would like to set up a sub-fund for this donation within the existing AAPAC endowment fund that’s housed with the community foundation.

Commissioners raised several questions and concerns. Margaret Parker noted that the city can only use interest on the principal of the existing endowment fund – would the same be true for the proposed donation? If so, interest on $8,000 isn’t much, she noted. The existing endowment can also only be used for maintenance. In addition, other funds have been set up with the AAACF in the past for specific art projects – these were made by donors before the city instituted its Percent for Art program in 2007, Parker said. Even though those projects are completed, some money remains in those funds – “dribs and drabs,” Parker said. Parker added that the city needs to revisit whether that money can be pooled and spent on other projects.

Donations can be given directly to the city, Parker said. Seagraves reported that he had talked with Abigail Elias of the city attorney’s office, who told him that any donations would need to be approved by city council and would be added to the general fund.

Parker suggested the best way to handle donations would be to set up a public art fund and teach people to give to that, rather than give donations dedicated to a specific project. It’s better to let AAPAC decide how to use the donations, she said. Cheryl Zuellig countered that a lot of people want to know how their money will be spent. The city needs to make it as easy as possible to accept donations – AAPAC should make it a priority to figure out a process, and not to make it overly complicated, she said.

Malverne Winborne agreed: “Let’s find a way to streamline this process.”

Seagraves said he’d get additional information from Hajra about how the sub-fund might be structured, and would get guidance from Sue McCormick – the city’s public services area administrator, who oversees the Percent for Art program – about other issues raised by commissioners.

Communications, Public Commentary

Malverne Winborne, who chaired the meeting in the absence of Marsha Chamberlin, reported that Ann Arbor had been listed No. 6 in American Style magazine’s top 25 ranking of mid-sized cities for art. The magazine’s top five art destinations are St. Petersburg, Fla.; Savannah, Ga.; New Orleans, La.; Charleston, S.C., and Scottsdale, Ariz.

Bob Miller attended Wednesday’s meeting, after talking with some of the commissioners at the July 18 pre-art fair Townie Party, where AAPAC had an information table. During the time available for public commentary, Miller told commissioners that he was interested in learning more about the group. He has a degree from the Art Institute of Chicago, has worked in ceramic sculpture and photography, and is also a builder and realtor. He confirmed for commissioners that he lives in Ann Arbor – they joked that this could make him eligible to serve on the commission, and said they were glad he’s interested in getting involved.

Commissioners present: Connie Brown, Margaret Parker, Malverne Winborne, Cheryl Zuellig. Also Aaron Seagraves, the city’s public art administrator.

Absent: Marsha Chamberlin, Cathy Gendron, Wiltrud Simbuerger, Elaine Sims.

Next regular meeting: Wednesday, Aug. 24 at 4:30 p.m., in the sixth floor conference room at city hall, 301 E. Huron St. [confirm date]

Purely a plug: The Chronicle relies in part on regular voluntary subscriptions to support our coverage of publicly-funded programs like the Percent for Art, which is overseen by the Ann Arbor public art commission. Click this link for details: Subscribe to The Chronicle.

From left: Michael Morris and Leslie Morris, who are donating $50,000 to rehab South University Park, and Colin Smith, the city's parks and recreation manager.

In brief remarks to commissioners, Leslie Morris – a former Ward 2 city councilmember – explained how she and her husband had played a role decades ago in creating the park, which is located at South University Avenue and Walnut. They hope their donation will help develop the park based on current needs of the neighborhood, she said.

Michael Morris noted that before they became involved in forming that neighborhood park, their civic engagement primarily had been limited to voting. But getting involved in that project ultimately led to much deeper engagement, culminating in the service of Leslie Morris on council. ”It’s been a rewarding time for us,” he said, “and I’m pleased we’re able to do more to continue the life of that park.”

Later in the meeting, commissioners got updates on the Ann Arbor senior center and Mack pool. Both facilities rely on general fund support and had been at risk of closing, when city officials were looking to cut costs in 2009. Residents rallied, and the city formed two task forces to develop strategies – both for raising revenues and cutting expenses – to keep both facilities open.

The reports given at PAC’s June 21 meeting were updates for the first fiscal year that these strategies took effect. Neither facility completely hit its target budget goals, but each took steps toward closing the gap between revenues and expenses.

Commissioners also got a quarterly update on capital improvements in the park system, including plans to renovate the Island Park Greek Revival shelter and the pergola at West Park, and to replace a path at Leslie Science & Nature Center – a project that might use recycled crushed glass as a porous surface. PAC members voted to recommend approval for funding of two specific projects: renovation of locker rooms at Veterans Memorial Park, and of tennis courts at West Park.

At the end of the meeting, Steve Thorp spoke during public commentary, urging the city to give West Park a new name – Central Park West – and to possibly put a dog park there.

Gift for South University Park

One of the first items on the June 21 agenda was news of a gift to support South University Park, located at South University Avenue and Walnut. Colin Smith, the city’s parks and recreation manager, introduced Leslie and Michael Morris to make some remarks about their donation.

Leslie Morris described how their family had moved to the neighborhood in 1969, when they’d been among many families with young children there – it was less expensive than the Burns Park neighborhood, and located near Angell Elementary School. But there was one clear problem: Two vacant houses, in poor condition, were a source of trouble for the neighborhood. An absentee landlord had hoped to rezone the land and redevelop it, but when the rezoning was denied, he had abandoned the property, Morris recalled.

They enlisted the help of their councilmember at the time, Bob Faber, who convinced the owner to demolish the structures and let the neighbors use the land as a park. Neighbors rose to the occasion, Morris said, and developed it themselves, digging a sandbox, putting in playground equipment and other amenities, planting flowers and taking care of maintenance like mowing and snow removal. It was heavily used, she said. In the winter, they’d borrow firehoses from the fire department and spray water for an ice rink. They raised money for the park by picking up and taking large trash items to the dump – something the city didn’t do at the time.

After about five years, they convinced the city to buy the land and add it to the parks system, she said, using funds from proceeds of a 1971 bond for parks. But over the decades, children in the families grew up and the neighborhood changed. Their own children grew up, she said, and she and her husband moved to a different part of town. The playground equipment aged and was removed, but wasn’t replaced. Housing got more expensive – university students “could always pay more,” Morris noted – and it became too costly for young families to buy homes in that area. Nothing was done at the park for years.

The park is located in a densely populated area, she said, and needs to be redeveloped to suit the needs of the people who live in the neighborhood now. They hope that the parks staff will engage the neighbors in a discussion of how to redevelop the park, and use their contribution to get things started.

Michael Morris added that when they initially moved to the neighborhood, they were just ordinary, quiet citizens – as quiet as it can be when raising four children. Their civic engagement was voting, and not much more, he said. It was their efforts years ago to organize the neighbors for that park led them to become more civically engaged – culminating in the election of Leslie Morris to the Ann Arbor city council in Ward 2. She served for six years in that role in the late 1970s and early 1980s. She had also served as a park commissioner. He recommended that others get involved in the community in whatever way they can. ”It’s been a rewarding time for us, and I’m pleased we’re able to do more to continue the life of that park.”

As they finished, Smith prompted them to tell the commission how much they are giving: $50,000. Leslie Morris said they know it will take more, but they hoped it would get things started.

PAC chair Julie Grand thanked them for both their donation and their commitment to the city’s parks. Smith described the gift as incredibly generous, and said it would go a long way toward redeveloping South University Park. It’s exciting to have people who are willing to make this kind of investment in the city’s parks, he said.

Responding to an email query, Smith later explained that the donation will be deposited into Fund 34, for parks memorials and contributions. Project codes are set up within Fund 34 for specific uses – the South University/Morris project will be established, with its use designated for South University Park.

Updates: Senior Center, Mack Pool

Commissioners got updates on two facilities that had been at risk of closing two years ago: the Ann Arbor senior center in Burns Park, and Mack pool, located inside the Ann Arbor Open School. In 2009, city officials were looking to cut costs, and said that closing the senior center would save about $150,000 annually from the city’s general fund, while Mack pool’s closing would save another $100,000. Residents rallied, and the city formed two task forces to develop strategies – both for raising revenues and cutting expenses – to keep both facilities open.

The reports heard at PAC’s June 21 meeting were updates for the first fiscal year that these strategies took effect. Neither facility hit its target budget goals, but each took steps toward closing the gap between revenues and expenses.

Updates: Senior Center

Pam Simmons, facility supervisor for the senior center, gave the report to PAC, saying that the center was struggling with some challenges but was making great progress. [For background on the senior center, see Chronicle coverage: "Shoring Up the Ann Arbor Senior Center."]

The task force recommendations had set a goal of reducing the center’s reliance on the general fund by $97,872 in fiscal 2011, which ran from July 1, 2010 through June 30, 2011. That goal was to be met through a combination of raising revenue and reducing costs, she said. To date, however, they had achieved $83,806 of that goal.

From left: Deputy parks and recreation manager Jeff Straw, senior center facility supervisor Pam Simmons, and city councilmember Mike Anglin (Ward 5).

There were several areas that fell short. The center instituted membership fees, which were expected to generate $12,500 but instead brought in only $7,110. There are 324 members – their goal had been to sell 500 memberships. Individual annual memberships cost $25, or $35 per couple.

The task force had also recommended starting a travel program, Simmons said, hoping to raise $3,390 this first year. However, a request for proposals (RFP) for someone to run the program drew no responses, she said. Although it was an important goal, the city didn’t have the staff resources to pursue it. A consultant – Hooker DeJong – was hired to develop a long-term plan for the center, which will include recommendations about the travel program, Simmons said. Hooker DeJong is expected to present its full report to the city later this summer.

Rental revenue at the center has almost doubled from FY 2010 to FY 2011 – from $6,681 to $12,374. The highest percentage of rentals (43%) is from Washtenaw Community College, which holds several classes at the center, followed by 33% from celebrations – like birthday and anniversary parties – and 24% from clubs and community groups. Upgrades to the building will improve opportunities for more rentals, Simmons said, and the city is working on a brochure to promote it as a venue.

Another goal for FY 2011 was to reduce staff costs. That was accomplished by changing the center’s operating hours and employee schedules, and using more volunteers. In total, they saved $7,960 – but still short of the $12,588 goal.

The center also tried to raise an extra $3,000 in new revenue from selling more ads in its “Zest” newsletter. However, only $430 more was raised compared to the previous year.

Also falling short was the amount of revenue expected from programming. The goal was to bring in an additional $13,076, but only $5,603 more was raised than last year. The name “senior” is a challenge, Simmons said – some people might not attend programs because they don’t see themselves as seniors. The center’s programs are also competing with many other offerings in the community, she noted.

The center also didn’t see the revenue increase they’d hoped would result from changing agreements with instructors who teach there. Previously the center only received 20% of revenue from such courses. In the restructured agreements, the center gets 40-46%. They lost one of their popular instructors mid-year because of illness, Simmons said, and one yoga instructor left to teach her course elsewhere, taking her students. But now they have a new yoga instructor who focuses on seniors and people with disabilities, and the course is growing. There are opportunities for revenue increases in the future, Simmons said.

There were some areas that exceeded the amount budgeted. More donations were raised than budgeted, Simmons reported – $4,583, compared to an expected $3,500. And though the budget called for just $4,000 in savings from information technology (IT) costs, the center cut $14,844. This is due to a decrease in the number of computers and software applications they use, Simmons said.

An additional $39,000 in revenue came from four sources: (1) an $18,00 grant from the McCalla Trust; (2) $15,000 from Stonyfield Yogurt, from winning a contest in which residents voted to decide which facility would receive the Stonyfield donation; (3) a $4,000 Kiwanis grant; and (4) a large-screen TV valued at $2,500. It’s used for playing Wii games as well as for watching TV, Simmons said.

Simmons told commissioners that the city hired Hooker DeJong to develop a long-term strategic plan for the center, which it will be presented later this summer. [The city council approved a $34,750 contract for those services in November 2010. The Ann Arbor Community Foundation funded $16,949 of that amount, with the remainder coming from the city's general fund.]

The consultants are finding that some of the challenges include the center’s location – many seniors don’t live close to it, Simmons noted – and its size. However, she said they think services can expand 30-40% without overflowing the building. The building has a capacity for 96 people, but can comfortably accommodate about 50-60.

Facility improvements – new paint, resanded floors, and a new picture window in the entry, among other things – will make the building more attractive for classes, rentals and other events, Simmons said. She praised the city’s Kim Mortson for developing marketing materials, which have helped publicize events and activities at the center. But another challenge is the lack of a daily printed newspaper in Ann Arbor, Simmons said – it’s difficult for seniors to find things out in the traditional ways.

In summary, the center isn’t quite where it wanted to be at this point, but they’ve made a lot of progress, Simmons said.

Updates: Senior Center – Commissioner Discussion

Karen Levin asked about the membership fee – what was the response when it was instituted? Simmons said they did lose some people who felt their tax dollars alone should fund the center. About 50 people who were part of the former travel group left, she said, as did some social bridge players and others. But overall, the response was positive, she said.

Gwen Nystuen asked if there are any benefits to membership. Simmons reported that members get the newsletter, “Zest,” which comes out quarterly, and reduced fees on classes and other activities. One benefit was supposed to be access to a travel program, but that didn’t happen this year, she said.

Sam Offen asked about the fact that the center isn’t located on a bus line – is that a problem? That’s been an issue for many years, Simmons acknowledged. People can take a taxi, but there’s no close bus stop. The other challenge is parking – especially in the summer, when people who are not affiliated with the senior center come to Burns Park and use parking spaces in the senior center’s lot.

David Barrett asked about competition for programming – it is primarily from the YMCA? Simmons said the Y offers similar classes, as does Ann Arbor Rec & Ed and private fitness businesses. There’s also competition from other lecture series. Simmons said if this were a small community like Gregory, where she lives, then all the offerings at the center would be popular. But in Ann Arbor, there’s a variety of choices.

In light of the disappointing outcome from new programming, Simmons said they’re concentrating on increasing rentals, especially on evenings and weekends. When the consultants report their recommendations, that might include suggestions for programming, she added, which the city staff will evaluate.

In response to another question from Offen, Simmons said that the center has had a memorandum of understanding (MOU) with Washtenaw Community College for the past 2-3 years, related to WCC renting space at the center. However, it’s not clear that WCC will renew the MOU this year, she said, so the city staff is looking at other options, like finding other established programs that need to rent rooms.

Barrett asked if it’s possible to give donations that are earmarked for specific things at the center. It can be handled either way, Simmons said. For example, the $100,000 bequest from James Flinn Jr., given to the center in 2007, didn’t specify a use – the center drew about $37,000 from the Flinn bequest this year for operations.

Christopher Taylor, an ex-officio PAC commissioner and city councilmember who represents Ward 3, where the center is located, asked about the center’s FY 2012 budget. Was it adjusted to reflect the results of FY 2011? Yes, Simmons said – the FY 2012 budget calls for the center to generate about $83,000.

Colin Smith, the city’s parks and recreation manager, said that while the center didn’t manage to totally bridge the gap between expenses and revenues, they did a good job. And because other facilities in the park system outperformed their goals, “it all balances out.”

Updates: Mack Pool

Dan McGuire, supervisor for Mack and Fuller pools, briefed commissioners on results from FY 2011 for Mack – its season runs from September through May, but is closed during the summer. [For previous Chronicle coverage, see: "Task Force Floats Ways to Save Mack Pool," "More Options for Ann Arbor's Mack Pool," and "Proposals for Mack Pool, Senior Center Approved"]

Like the senior center, Mack didn’t generate as much revenue or achieve all the savings that were budgeted for the year. The pool had been subsidized with $102,413 from the city’s general fund, and the goal was to decrease that subsidy by $46,955. Instead, the pool came in at $32,720 for the year.

The budget had called for $12,000 in energy savings, but only $1,900 were realized. A pool blanket was installed and it did reduce water heating expenses, McGuire said, but not by as much as expected – in part because the cost of energy increased. Natural gas usage dropped 16% during the year, for a savings of $1,200. Installation of LED lighting helped cut electrical costs by 8%, for a $700 annual savings.

Increased fees for master classes and season passes were expected to raise $8,375 in additional revenue, but only brought in an extra $1,267. When gathering public input, McGuire said, the task force consistently heard that fees were too low – that’s why the task force recommended that fees be raised, and those increases were approved by PAC and city council. Season pass revenue increased by 3.3% and visits were up 14%, he said. For master swim sessions, revenue increased 9.4% but participation was down 11%. McGuire attributed much of that to coaching turnover, and noted that new coaches who started using Mack during the year are still building their following.

Programming was expanded during the year, with the addition of a Saturday morning masters session, Aqua Zumba sessions offered through a contract with Fitness RX, a Sunday “fun day” on the second Sunday of each month, and Red Cross swim lessons and lifeguard lessons. They also offered a new program called Swim Fast & Fun, which offered sessions for kids interested in competitive swimming, but who aren’t quite ready for that level. The program was popular and had a waiting list, McGuire said, so they plan to offer it again. Some of the other programming – like the fitness classes – had a low participation, however. People aren’t looking at Mack for fitness training, he said, because there are so many other options in the area.

The city also retooled its agreement with the Ann Arbor Public Schools, which expanded the amount of pool time available to the city by 14 hours per week. It allows the city to hold morning public swim times on Tuesday and Thursday from 7:15 a.m. to 1 p.m., to extend its daily lap swim from 11:30 a.m. to 1 p.m., and to schedule “tot splash” hours on weekdays from 11:30 a.m. to 1 p.m. and on Mondays, Wednesdays and Fridays from 7-8:30 p.m.

Rentals brought in more revenues than expected, McGuire said – an additional $16,554, compared to a budgeted increase of $12,500. New rentals came from Swim Smart Academy and Club Wolverine for competitive youth swimmers.

Marketing was increased during the year, McGuire reported, including increased use of social media, traditional advertising and more visible signs. He also noted that Mack pool realized $11,124 in reduced information technology costs, on par with the amount budgeted.

They saw success in some areas while not hitting their goals in others, McGuire concluded – they’ll keep working at it.

Updates: Mack Pool – Commissioner Discussion

Julie Grand asked about the rental revenues – it seemed like they should have seen more from that. Jeff Straw, deputy parks and recreation manager, noted that while the pool received $8,000 from Swim Smart and $22,500 from Club Wolverine, that was offset in part because they lost about $22,000 in rental from the departure of a synchronized swimming group.

Doug Chapman asked whether the energy savings from the pool blanket and LED lights covered the cost of those items. Not yet, McGuire said. The lights cost $800 each, for a total of $12,000. The pool blanket cost about $4,000. It will take several years to recoup their costs, he said.

Colin Smith, the city’s parks and recreation manager, noted that the lights and blanket were paid for out of the parks millage, so it’s not included in the pool’s operating expenses. But he acknowledged that they had expected to see more energy savings, especially as a result of the pool blanket. He said they had scaled back their original projections, and he’s glad they did – it wasn’t the windfall they’d hoped for. In response to a query by Sam Offen, Smith said they’d based their estimates on information from the pool blanket manufacturer and the city’s energy office.

Tim Berla asked about Mack pool’s cost to the general fund – how did they end the year? Straw said that the roughly $102,000 subsidy from the general fund had been reduced to about $75,000 for FY 2011. They’re budgeting a $70,000 subsidy for the pool in FY 2012.

Smith noted that this is the first year they’ve tried new programs and adjusted the schedules, and it wasn’t realistic to expect everything to succeed. Staff will make adjustments, he said. “It’s a work in progress every year, that’s for sure.” They’re working with Kim Mortson of the city’s communications staff to increase their marketing, including on social media sites like Facebook, he said. Mortson is also developing core lists of contacts to do targeted promotions, and they expect to see results from that in the coming year.

Mike Anglin, an ex-officio PAC member who represents Ward 5 on city council, asked about the relationship with AAPS. Cost-sharing was adjusted based on the percentage of time the city uses the pool, Smith said, adding that it’s going well from an operational perspective.

Parks Capital Projects

Amy Kuras, the city’s park planner, gave a quarterly update of capital projects that are completed or in the works. Later in the meeting, commissioners voted to recommend awarding contracts for two projects: locker room renovations at Veterans Memorial Park, and upgrades to the West Park tennis courts.

Parks Capital Projects: Quarterly Update

Kuras gave brief descriptions of work being done in more than a dozen of the city’s parks. Highlights include:

• Renovations are completed or nearly complete at the Buhr Park ice arena, which was repainted, and for upgrades of the Veterans Memorial Park tennis courts. Barrier-free access improvements were also made at Veterans Memorial, and a shade structure is being built there with solar panel on it – a project that’s being paid in large part through the city’s energy office. Upgrades to the locker rooms are also in the works. Among other things, they’ll be adding rubberized flooring to make it easier for ice skaters and hockey players to use the rooms. [Commissioners recommended approval of that project later in their meeting.]
• The Chapin Street house on property adjacent to West Park has been torn down to improve visibility into the park, increasing the sense of openness as well as safety, Kuras said. Construction will start later this summer on tennis court upgrades at West Park. [Commissioners recommended approval of that project later in their meeting.]
• A walkway is being built in Wellington Park, between Miller and Dexter-Ann Arbor roads, in conjunction with street repair work in that area.
• Playground equipment is being replaced at Beckley Park off of Pontiac Trail, and a path to Argo is being rebuilt. A trail next to Beckley, by the Fairview cemetery, is being widened. Also, the city is installing a bocci ball court at Beckley Park, at the request of neighbors.
• At Winewood Thaler Park, parks staff will be clearing invasive plants from a dense wooded area there. They’ll also relocate the playground to a more central spot within the park, and renovate the basketball courts and asphalt walkways.
• Access stairs will be built into Hunt Park, off of Daniel Street – it’s on the east side of the park, near the Project Grow gardens. They’ll likely put that project out to bid soon, Kuras said.
• Repairs are planned at the Island Park Greek Revival shelter and historic bridge. An architect has been hired to do a structural evaluation – damage from water and insects is a problem, so any reconstruction will likely be done with more durable materials, Kuras said. As it moves forward, the project will need approval from the historic district commission.
• The pergola at West Park, off of Miller, is also in need of repair. They’ll be getting a structural evaluation of that as well.
• The raptor center trail at Leslie Science & Nature Center will be replaced, and the city is looking at possible use of porous material for that project, Kuras said – possibly made of recycled glass. It’s possible that the city’s Materials Recovery Facility (MRF) could provide the recycled glass for this project – if not, they’ll use a different porous material, she said.
• Upgrades are planned for the entry and parking lots at Buhr and Riverside parks. At Riverside, it’s possible they’ll relocate the parking lot because of problems with flooding.
• Improvements at the Gallup Park boat launch and canoe livery are in the works. The city has applied for state grants to fund this project, and the scope of the improvements will depend in part on whether those grant funds are awarded. [For details, see Chronicle coverage: "PAC Supports Grants for Skatepark, Gallup"]

Parks Capital Projects: Quarterly Update – Commissioner Discussion

Gwen Nystuen asked whether porous materials are being used for all projects. Kuras replied that it adds significantly to the cost, and in some cases the same environmental goals can be achieved in other ways – by using bioswales on the site, for example. They evaluate each project and consider porous materials where it makes sense, she said. Maintenance costs are also a factor, she said, because porous surfaces must be vacuumed to remove particulates.

Chronicle file photo from April 2011 of damaged swirl concentrator pieces at the northwest section of West Park after excavation from underground.

If they use porous materials at the Leslie Science site, Sam Offen suggested they include some kind of signs to explain how the porous surface works and why it’s valuable to take that approach. Colin Smith, the city’s parks and recreation manager, noted that it might be possible to pay for those projects out of the city’s stormwater fund.

David Barrett asked for an update on the swirl concentrators at West Park, which had collapsed earlier this year. [At PAC's February 2011 meeting, commissioners got a report from Craig Hupy, head of systems planning for the city, who described the "catastrophic failure" of at least one of the devices, an partial failure of others. Eight had been installed underground as part of broad stormwater management system at the park.]

Kuras said the city hired an engineering firm to evaluate the situation, and to determine a fix. That process is still underway, but she hoped the work could be completed during the current construction season.

Parks Capital Projects: Contracts for Locker Rooms, Tennis Courts

PAC considered two resolutions related to capital projects at its June 21 meeting. Commissioners were asked to recommend approval of a $131,670 contract with Construction Solutions Inc. to renovate locker rooms at Veterans Memorial Park Pool and Ice Arena. The contract includes $119,700 for the work, plus a 10% ($11,970) contingency. It was the lowest of four bids submitted for the work.

According to a staff memo, the locker rooms get heavy use and were last renovated 20 years ago. Renovations would include installation of barrier-free shower stalls, benches and toilet partitions, rubberized flooring, energy efficient light fixtures, new windows and an upgraded ventilation system. The project would be paid for from the approved FY 2011 proceeds of the park maintenance and capital improvements millage.

Sam Offen asked where the company is located, and was told that it’s an Ann Arbor firm.

Outcome: Commissioners voted unanimously to recommend approval of the contract with Construction Solutions Inc. The recommendation will be forwarded to the city council for final approval.

A separate resolution recommended approval of a $182,964.60 contract with ABC Paving Co. for the renovation of West Park tennis courts, which were built in the 1970s.

Chronicle file photo from September 2008, when major improvements to West Park were only under discussion. Just west of the tennis courts in West Park lies this shuffleboard court in need of a resurfacing. (Image links to September 2008 article.)

The contract includes a 10% ($16,633) contingency. It was the only bid received for the project, but park staff said it’s in line with other tennis court renovations the city has completed. The company is based in the Detroit area.

The project will include replacing the asphalt, fencing, retaining wall, shuffle board court, and entry walk, as well as repairing a second existing retaining wall. The configuration of the courts will remain unchanged. The project would be paid for from the approved FY 2011 proceeds of the park maintenance and capital improvements millage.

Offen wondered why there was only one bid. Kuras said she didn’t know, but guessed that it might be because the project is more complicated due to the retaining walls.

Outcome: Commissioners voted unanimously to recommend approval of the contract with ABC Paving. The recommendation will be forwarded to the city council for final approval.

Communications: Parks Manager Report, City Council

Colin Smith, who leads the city’s parks and recreation department, briefed commissioners on several items. He reported that the June 19 re-opening of West Park was a success, with about 500 people passing through during the day.

Smith reported that he and park planner Amy Kuras would be meeting later that week with representatives from the state Dept. of Natural Resources on a site visit related to the city’s DNR grant applications. Those include applications for the skatepark and Gallup Canoe liveries, which were approved by the city council at its March 21, 2011 meeting – the council revised the priority ranking given by the city so that the skatepark was put ahead of the Gallup Canoe liveries.

In reporting on parks operations, Smith said the spring hadn’t been kind. The wet weather has caused revenues to be significantly lower than budgeted, but expenses are also down nearly an equivalent amount, he said. In April, there were only two days in a row when it didn’t rain, he noted, and May was a similarly rainy month. At the canoe liveries, for example, it’s only been in the past week or so that they could offer river trips – the water levels have been too high. Pools are doing pretty well, he said, and the golf courses will come in as originally budgeted. PAC will get a budget update in July.

Gwen Nystuen asked for updates on the pathways being built along Washtenaw Avenue and on work at Argo Dam. [The city council approved a $1.17 million project to build a bypass channel in the Argo dam headrace and add whitewater features. See Chronicle coverage: "PAC Recommends Argo Dam Bypass"] Smith said the Washtenaw Avenue work isn’t a city parks project, so he couldn’t provide information on that. Regarding Argo, the city has submitted a permit application to the state and is awaiting a response. It’s a very lengthy review process, but they’re in the final stage, he said. While they don’t yet have a permit to move earth, they’ll continue to do work on removing dead vegetation and pumping water out of the headrace.

Christopher Taylor, a Ward 3 city councilmember and ex-officio member of PAC, reported that the city council had passed the FY 2012 budget at the end of May, and that it had included the $90,000 requested by PAC for additional mowing in high-use areas.

Mike Anglin, who represents Ward 5 on city council and is another ex-officio PAC member, asked about negotiations with Veterans Administration hospital – is parks staff involved in that? Smith clarified that Anglin was referring to the VA’s interest in generating hydroelectricity from the city’s dams. [See Chronicle coverage: "Hydropower at Argo Dam?"]

The issue was previously raised at PAC’s October 2010 meeting. From Chronicle coverage:

[PAC commissioner David] Barrett mentioned a hydro feasibility study that the Veterans Administration hospital in Ann Arbor had recently conducted, looking at possible electricity generation from the dams along the Huron River. That possibility is still in play, he said, and his understanding is that the VA is serious. The city obviously can’t make its decision based on that, he said, but it was something to keep in mind.

Molly Wade, the city’s water treatment services manager, said the VA has shared its report with city staff – the study looked specifically at Argo and Geddes dams. It shows a shorter payback period for Geddes compared to Argo, she said, adding that the city has no idea how the VA intends to proceed.

Barrett said his understanding is that the VA is looking at those dams as a package, to fulfill their federal green energy credit requirements. If they were to assume full or partial responsibility for those dams, he said, that would alleviate some costs for the city. Wade stated that the city hasn’t yet had those talks with the VA.

At the June 21 meeting, Smith reported that conversations are ongoing. If any agreement is reached, he said, there would almost certainly be some kind of cost-sharing arrangement for maintenance, at the least.

Public Commentary

Steve Thorp was the only person to address commissioners during public commentary. He thanked the city for the renovations at West Park and for the grand re-opening celebration there on Father’s Day. Thorp noted that the park is around 100 years old – it was once a farm. It’s near Allen Creek, near the place where the first settler cabins were located. The park’s eastern boundary is also the downtown boundary.

Thorp said that he and Bob Dascola would like to offer “Central Park West” as the new name for the park. Based on an informal survey of friends and neighbors, there’s support for that idea, he said. The name offers an association with one of the most beautiful and famous urban parks in the world. He noted the park’s “Olmsteadean vistas” and forested places, broad play areas, curvilinear path system. Thorp said he’s already spoken to city council about this idea, and plans to talk to the Ann Arbor Downtown Development Authority and the downtown area citizens advisory group too.

Secondly, Thorp said he’d heard rumors about having a more centrally located dog park. He suggested putting it in West Park, perhaps as a dual use with the baseball field during the off season – that section of the park is already partially fenced. City staff have told him that people don’t pick up their dog’s poop, he said, but there are ways to deal with that. He said he’s putting the idea out there for further discussion, ”over a beer or during a meeting or whatever.”

Present: David Barrett, Doug Chapman, Tim Berla, Tim Doyle, Julie Grand, Karen Levin, Sam Offen, Gwen Nystuen, councilmember Mike Anglin (ex-officio), councilmember Christopher Taylor (ex-officio). Also Colin Smith, city parks manager.

Absent: John Lawter

Next meeting: PAC’s meeting on Tuesday, July 19, 2011 begins at 4 p.m. in the city hall second-floor council chambers, 301 E. Huron St., Ann Arbor. [confirm date]

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Councilmember Sabra Briere (Ward 1) makes a point during budget discussions at the Ann Arbor city council's May 31, 2011 session. In the background is Sandi Smith (Ward 1). (Photos by the writer.)

An amendment to extend funding for four police officer positions for an additional three months failed on a 5-6 vote. That means that 20 total full-time positions in the police and fire departments will now be eliminated. In terms of sworn officer positions, that translates into a loss of six police (four through layoffs) and seven firefighters (three through layoffs).

Successful amendments to the budget included: (1) use of $85,600 in general fund reserves to add to human services funding; (2) use of $90,804 in general fund reserves to add to the parks allocation; (3) use of $7,000 in general fund reserves to cover the cost of an additional city council primary election (as proposed, the FY 2012 budget anticipated primaries in only two of the city’s five wards); and (4) acknowledgment of an additional $87,452 from the Ann Arbor Downtown Development Authority’s parking fund to the city’s general fund, resulting from a newly ratified parking contract. A proposed amendment to reduce allocations to the public art program failed.

In other business related to the city’s budget, the council ratified a new contract with the DDA for management of the city’s public parking system. It’s a contract that runs for 11 years and will transfer nearly $3 million of public parking revenue to the city every year. The council rejected on a 2-9 vote a proposed amendment that would give the city council veto power on the DDA’s authority to set parking rates.

The council also approved a resolution to waive the city’s share of excess TIF (tax increment finance) capture in the DDA’s district – that amounts to $712,000 that won’t be paid to the city.

City-DDA Parking Contract

Christopher Taylor (Ward 3) introduced the agenda item on the new contract under which the DDA would continue to manage the city’s parking system – the item was added to the agenda that night at the council table. Taylor has led the city council’s “mutually beneficial” committee’s work in its negotiations with the DDA’s own committee – a process that has lasted more than a year since first moving into public view. The contract was originally supposed to be ratified by Oct. 31, 2010.

In broad strokes, the contract would transfer 17% of the parking system’s gross revenues to the city. The contract is to run over an initial 11-year term, with one 11-year renewal option.

Under the new contract, the city would also be required to report to the DDA on a regular basis about its street maintenance activity in the downtown area, as well as its parking enforcement activity. The new contract also defines a specific geographic region as the area where the DDA will manage any parking facilities.

Under the old contract, the DDA proposed parking rate changes, which were then automatically enacted unless the city council acted to veto them. The new contract only requires consultation by the DDA with the city on parking rate changes.

The new contract also includes an “underwriting” or “backstopping” clause, which was added late in the negotiations. Key features of that clause include: (1) it’s applicable only through 2016; (2) it’s triggered if the combined DDA fund balance falls below $1 million; (3) the trigger is evaluated based on the annual audit of DDA books in September or October, for the previous fiscal year; (4) if underwriting were triggered, it would take the form of reducing existing payments that the DDA makes to the city; (5) the city’s liability is limited to $1 million annually and $2 million cumulatively; and (6) any money the city is deprived of through this underwriting would be restored to the city, at whatever point the DDA’s cumulative fund balance reaches $4 million.

City-DDA Parking Contract Deliberations

Taylor told his colleagues that what they were considering reflects a great deal of work. He then reviewed the basic features of the contract. He argued for the DDA’s rate-setting authority by saying that the DDA already controls rates and hours. Even though the city has had a veto, in memory, that veto has not been exercised, he said. The DDA has performed its responsibilities for management of the system admirably, he said.

The 17% of gross parking revenues in the contract is an amount that would bring the city millions of dollars extra, compared with the current contract, Taylor said. It would also plug a $1.8 million hole in the city’s budget.

By way of background, the amount of the transfer to the city under the new contract would be more than $2.5 million. The DDA is already obligated under the current contract to transfer around $800,000 to the city’s street repair fund. The new contract combines all individual payments into a single percentage-of-gross payment. So during deliberations, councilmembers used the round-figure of $1.8 million as the additional value the city was getting out of the contract.

Carsten Hohnke (Ward 5) called the contract a pretty significant undertaking, providing $1.8 million extra revenue to the city. He thanked Taylor and DDA board members Roger Hewitt and Joan Lowenstein for their work. He said that at no point did he ever believe the DDA was not negotiating in absolute good faith. Hohnke noted that at one point during the conversations it was suggested that perhaps the city should just let the DDA know how much money it wanted and the DDA would simply set rates to achieve that revenue – that made a lot of sense to him.

Joan Lowenstein and Roger Hewitt, board members of the Ann Arbor Downtown Development Authority.

The DDA has no statutory or moral standing to direct the city about how to manage the parking fund, Hohnke continued. But the city is in a contractual agreement, and his view was not the only one that was a part of the conversation, he said. What came out in the end, Hohnke added, was the best the city can hope for. He said that a good negotiation should leave both sides feeling like they’ve been beaten up pretty well, and this one did that.

Marcia Higgins (Ward 4) had some questions about the map accompanying the contract that defines the “parking area.” Taylor confirmed that the boundaries of the area in which the DDA would manage parking would be the subject of an open conversation. Higgins had some specific concerns about the boundaries along State Street, but seemed content that those issues could be addressed administratively.

Stephen Kunselman (Ward 3) asked how many FTEs (full-time equivalent jobs) in police and fire will it save? He had concerns about assigning that much money and power to a non-elected body, when there is no opt-out clause for the city. He contended that the contract really has tied the hands of future councils. He also reminded his colleagues that they’d received an email from a past councilmember who said he would never choose to contract with the DDA to manage parking again. Without an opt-out clause, the city council is abdicating its authority to a non-elected body, Kunselman said.

Responding to Kunselman’s question about FTEs, interim city administrator Tom Crawford said it worked out to 16-17 FTEs. Hohnke responded to the issue of an opt-out clause and rate-setting authority by telling Kunselman that the committee couldn’t negotiate their way there – that was not going to be acceptable to the DDA. Hohnke stressed that he didn’t mean to suggest that the DDA was controlling the conversation, but it was important to get to as high a percentage as possible for the financial term of the contract.

Sabra Briere (Ward 1) picked up on the contract’s financial aspect. A question for her was exactly what the driving issue was during the negotiations. How big a role did the other terms of the actual agreement play in the discussion? Hohnke contended that the other non-financial terms played a very significant role. The city council had provided guidance on how to negotiate – some things that would provide benefit to the DDA had to fall out of the conversation, he said.

The benefit to the DDA in the new contract includes a clearly defined geographic area, and greater control for parking rates. Separate from the contract was greater responsibility for downtown planning. Hohnke also pointed to “second tier” issues on which greater clarity had been achieved – like the purposes for which the parking structures can be used.

Briere then registered some discontent with the council’s committee about the level of their communication back to the council during the negotiations and the council’s ability during that long process to weigh in as a body on the content of the contract. What had prevented the committee from conveying specifics of the contract to the council for prior consideration, so that the council would not be sitting on the last night of the last day of the month and not be satisfied with what was in front of them? She wondered what had prevented the committee from communicating more – either with individual councilmembers or in public view.

Hohnke allowed that there’s always a benefit to more communications. He said he recalled Taylor giving updates to the council during communications time at previous meetings. It was well-covered by the local press, he said. [Basic terms of the new contract were summarized in The Chronicle's coverage of the DDA's December 2010 board meeting.]

Hohnke continued by saying the committee had tried to communicate as much as possible. Briere said she’d read everything that was written and she did not feel uninformed. However, she felt that the council as a body didn’t have an opportunity to discuss it.

Mayor  John Hieftje noted that the council had voted to give direction on the financial component of the contract in April. At that time, councilmembers could have talked about the contract, he said. Briere told the mayor that she’d asked if the council could talk about the other, non-financial terms of the contract on that evening and she’d been told they could not.

Kunselman came back to his point that future councils should not have their hands tied. He wanted an opt-out clause. Hohnke noted that beginning in 2022 there is an opt-out provision.

Kunselman noted that before that time, if there is a breach, then the city and the DDA would end up in court. He wondered if the issue of excess TIF collected in the DDA’s district – which had introduced uncertainty into deliberations a month earlier – amounted to a breach of contract. Kunselman also wondered about the status of the DDA’s compliance with some of the statutory reporting requirements.

From the state’s Downtown Development Authority Act 197 of 1975:

(3) Annually the authority shall submit to the governing body of the municipality and the state tax commission a report on the status of the tax increment financing account. The report shall be published in a newspaper of general circulation in the municipality and shall include the following:
(a) The amount and source of revenue in the account.
(b) The amount in any bond reserve account.
(c) The amount and purpose of expenditures from the account.
(d) The amount of principal and interest on any outstanding bonded indebtedness.
(e) The initial assessed value of the project area.
(f) The captured assessed value retained by the authority.
(g) The tax increment revenues received.
(h) The number of jobs created as a result of the implementation of the tax increment financing plan.
(i) Any additional information the governing body or the state tax commission considers necessary.

Kunselman said he’d asked the DDA and the city clerk if that status report had been submitted and no one had responded. Is that is a breach of contract, if the DDA hasn’t met their obligations under the state enabling legislation?

City attorney Stephen Postema characterized it as a two-fold question. If there’s any breach, then there’s a notice provision and a time period for cure. But here’s been no notice with a cure period that has ended, Postema said. The proposed new contract includes a breach provision. The excess TIF capture issue is separate from the parking contract, so as far as excess TIF capture goes, it does not cause the DDA to be in breach of the parking agreement, Postema said. Board chair Joan Lowenstein, who attended the May 31 session, provided a publishing order confirmation for a report that the DDA had published in AnnArbor.com earlier this year.

Sandi Smith (Ward 1), who also serves on the DDA board, said it’s not as if this is a new partnership – it’s been an ongoing relationship for around 20 years. The DDA has a habit of doing long-term planning over 10-years and planning a maintenance schedule longer than that, and assiduously reserving money for maintenance so that the parking structures don’t fall into a state of disrepair. She said that 17% is as close as they can get without deferring maintenance, and even so, some maintenance will still be deferred. Part of the mutual benefit is the ability to do long-term planning. Good things will come out of this for both sides, she said.

Taylor allowed that 11 years is long-term, but it’s a contract with the DDA, with whom the city has worked already for decades. In addition, he said, 11 years functionally is just a four-year extension, given that the current contract runs for another seven years.

City-DDA Parking Contract: Parking Rate-Setting Authority

Briere then proposed an amendment that required parking rate changes to be forwarded to the city council for addition to the  council’s agenda and council approval.

Taylor said he wouldn’t support Briere’s amendment, though he understood its rationale. He said it would render the agreement unacceptable to the DDA and prevent the city from obtaining additional revenue. He said he was satisfied that the authority for rates and hours is suitable to rest with the DDA. In fact, the DDA has had the authority for years, subject to council’s veto.

Hohnke also said he wouldn’t support the amendment. He said he thought the amendment would result in laying off 16 additional safety services personnel because of the $1.8 million shortfall. He drew an analogy to the Ann Arbor Transportation Authority, which does not come before the city council to get confirmation for fare changes. It would be onerous if the AATA had to do that, he concluded.

Higgins confirmed with DDA board member Roger Hewitt that in his memory, the council had not exercised its veto on parking rates. She asked him to explain it from the DDA’s perspective. Was the current system not working well? Hewitt said it worked well for a three-rate system: surface lots, parking structures and metered street parking. But as the DDA transitions to parking demand management, there will be different rates based on geography and time.

Hewitt noted that in the new contract, there’s a requirement for public input and council input. There’s a required joint working session of the city council and the DDA board. There’ll be more input than there’s ever been in the past, he said. Higgins wanted some assurance that the input would be more than just a posted public meeting. Hewitt responded by saying the goal is to educate the public on what the DDA is doing.

Higgins said that based on Hewitt’s explanation, she was becoming more inclined not to support the amendment. She got additional clarification from Hewitt that rate changes would very likely happen only once a year. Hewitt said clearly the DDA was not planning to do something that will enrage the citizenry or the city council. The DDA is there to help downtown. And if everyone tells them this doesn’t help downtown, he said, they’d be stupid not to listen to that.

Briere asked Hewitt about rapid mid-year corrections to parking rates. Hewitt explained if there are obvious signs that rates are not working from a financial or operational perspective, those corrections might be sought, but the DDA wouldn’t want to do something significant without council and public involvement. The council would have to trust that the DDA wouldn’t make a radical change without consultation, he said.

Briere observed it would be wildly irrational for the city council to nitpick by suggesting a dime here or there. Hewitt replied that some things will undoubtedly not be popular. People want parking to be plentiful and free, he said. Briere said her concern was not about whether the matrix of rates associated with a parking demand management system is good matrix – rather, it’s the abandonment of the council’s authority. In this case, the DDA is just a contractor. She noted that even from city staff, the council questions fee recommendations. She said she did not understand why parking rates could not come for approval to the council around budget time. Hewitt replied that the new contract gives the DDA a new responsibility to pay $2.5 million or more to the city annually. With that responsibility, the DDA needs the authority – you can’t have that responsibility without authority, he concluded.

Stephen Rapundalo (Ward 2) said that he, too, had reservations around the rate-setting authority. The council shouldn’t fool themselves into thinking they’d become experts in a demand-based system, he said. But Rapundalo wondered what the impact has been when changes to rates have been made. Hewitt told Rapundalo that the best example was when on-street spaces were the least expensive and structures were most expensive. The economics were that it made sense to get a parking ticket. When that price schedule was reversed, it led to increased usage in the parking structures. Rapundalo asked why it was not contemplated that the public hearing on parking rates [required in the parking contract] be held during the evening instead of at noon, when the DDA board meets. Hewitt said no decision has been made on that – the DDA would like to hold the public hearing at a time when people can attend. Rapundalo observed that while the city can dissolve the DDA, that’s not a simple thing to do.

From left: Ward 3 councilmembers Christopher Taylor and Stephen Kunselman.

Kunselman said he had no interest in dissolving the DDA. But he noted that the city council sets rates all the time. He suggested setting maximum rates under which the various parking demand management rates could fall. Just let us have our real authority, Kunselman stated. He said he’d support Briere’s amendment.

Tony Derezinski (Ward 2) said he wouldn’t support the amendment taking back rate-setting authority for the city council. He said really objected to mischaracterization of the vote as being about abandoning the council’s authority. It’s about a process of negotiation, he said. It’s about stability that a longer-term contract can bring. He characterized the contract as a very tightly tuned instrument. The people at the DDA are not strangers, he said.

Margie Teall (Ward 4) said she appreciated Derezinski’s remarks. The negotiation has been about compromise. Briere asked Teall to explain what the city is getting out of the contract. Teall replied: $1.8 million. Briere concluded, “So it’s about the money.” Teall replied that it has to be about the money and she didn’t think there’s anything untoward about that.

Mike Anglin (Ward 5) said he wanted better communication between the DDA and the city council. He was also concerned about access to handicapped parking – he wanted to see that addressed in the next round of conversation. He said he didn’t think it would be a problem to get rate changes approved in a timely way. Hewitt said it’s not a time issue – it’s a matter of picking and choosing one individual rate in the matrix. Changing one thing would have an impact elsewhere.

Kunselman went back to his suggestion of setting three maximum rates – for on-street, lots, and structures. The DDA could then set rates under those maximums. Hewitt feared the perception would be that the maximum rate would apply everywhere. The maximum rate becomes the number in the public’s mind, he said.

Smith said the contract as proposed takes the conversation away from politics. She did not want to see decisions on parking rates made because someone wanted to make a political point. Smith said she wouldn’t support this or any amendment.

Higgins said she’d been a long-time opponent of giving rate-setting authority to the DDA. But the explanation Hewitt had given provided her some comfort. She also pointed to the annual joint meetings. It’s important that there’s a balance of power. She said she would not support the amendment. Higgins echoed sentiments expressed by Briere earlier by saying she wished that the council could have aired this sticking poin much sooner.

Hieftje responded by saying that the committee meetings and the negotiations have been covered by the press. If amended in the way that Briere was suggesting, he felt the DDA wouldn’t accept it.

Briere concluded the discussion on her proposed amendment by saying she appreciated what Hieftje and Higgins had said – it was not her intent to destroy the opportunity to reach a contract agreement. Rather, her intent was to get the issue discussed. As a council, they had not had group input. She said she appreciated the work everyone has put into the contract. But she rather resented that now councilmembers had to accept things as they sit in front of them, or everything implodes.

Outcome on the rate-setting amendment: The council voted down the amendment. It received support only from Briere and Kunselman.

City-DDA Parking Contract: Shall We Say “Shall”

Higgins took issue with a phrase in the contract related to hours of enforcement: “City shall use best efforts to emphasize areas, hours, and methods of parking enforcement within the DDA Parking Area per DDA’s request.” After interaction with Taylor and Hewitt, Higgins was satisfied that the operative part of the phrase was “best efforts” and that the DDA would insist on “shall.”

Kunselman took issue with the “backstopping” clause of the contract. The city already guarantees all debts incurred by the DDA, he said. The clause meant that the city will be laying off its own staff before laying off DDA staff. Hewitt countered that the DDA employs four people and manages annual revenues over $19 million, with responsibility for assets [the parking structures] worth over $100 million. Four people doesn’t seem excessive, Hewitt said.

Kunselman then introduced the topic of an unpaid invoice of $1 million that the city had sent the DDA. Financial services manager Karen Lancaster explained that the city gets $2 million from the DDA under parking meter rent in the FY 2011 [the current year's] budget. The first $1 million had been paid in October 2010, she said.

Kunselman asked if it was legally possible for the city to enter into a contract with an entity that owed it money. City attorney Stephen Postemna explained that to be in default, the DDA would have to have been given notice and then not cured the situation. Smith drew out the fact that this $2 million was money the DDA had granted to the city last year, outside the requirements of the existing parking contract. She did not understand why a bill had been sent.

Kunselman insisted that even “a gentleman’s agreement is an agreement.” Higgins followed up on Kunselman’s point by asking DDA board chair Joan Lowenstein why the DDA was holding on to the money. Lowenstein indicated that she did not understand why there’s an invoice. She said there’s a check, it’s been signed, and it will go to the city.  It’s the DDA’s intention to pay it before the end of the fiscal year. Hieftje said the $2 million grant allowed the city to prevent eliminating 18 positions. The first part had been paid in the first half of the fiscal year. The DDA will pay the second half in the second half of the year. [The check was physically handed over at the DDA's board meeting the following day.]

Hieftje then made some general remarks on the purpose of downtown development authorities, calling them a key to economic success. Ann Arbor’s DDA has done a great job in Ann Arbor, he said. He noted that there are certainly opportunities for grandstanding on this issue.

Hohnke said it’s possible to resent the fact that there are consequences to not supporting the contract, and resent the fact that it’s a contract. But absent any alternative to making up the financial gap, he said, he’d be supporting the contract.

Kunselman contended there are alternatives to assigning responsibility for management of the public parking system to the DDA. The council could set up an advisory board, for example. Kunselman said he felt there was not really any choice now but to vote for the contract. He said he wished the council had discussed the contract as a body, like the DDA board had done.

Higgins said she really appreciated the opportunity to have members of the DDA board present to answer questions in depth. She also appreciated the work of the committee.

Outcome: The council voted unanimously to ratify the new parking contract under which the DDA will continue to manage the city’s parking system.

Excess TIF Capture

The resolution on how to treat excess TIF (tax increment finance) capture in the Ann Arbor Downtown Development Authority district was added to the agenda just before the fees and budget for fiscal year 2012 were set. It was Christoper Taylor (Ward 3) who added the item. He had led the “mutually beneficial” committee’s efforts on behalf of the city in negotiating the new parking agreement with the DDA.

The resolution addressed how the city of Ann Arbor would treat its share of excess TIF capture that had bee collected in the DDA district since 2004. The total amount of excess TIF capture that has accumulated since 2004 in the DDA district is, according to DDA calculations, $1,185,132.

Questions had been raised by the city of Ann Arbor on Friday, April 29, about the implementation of the city’s ordinance governing TIF capture for the DDA district. Those issues were raised shortly before Monday, May 2, when the city and the DDA had originally been scheduled to vote on their new contract under which the DDA would continue to manage the city’s parking system. The city’s DDA ordinance (Chapter 7) includes a clause stipulating that if the growth rate in the TIF capture exceeds what is anticipated in the DDA’s formal TIF plan, at least half of the excess must be divided proportionately among the taxing authorities that had some of their taxes captured in the TIF district.

The DDA had already voted to return $473,365 in taxes previously captured as part of the DDA’s tax increment finance (TIF) district. The money will be divided among three taxing authorities: Washtenaw County ($242,179); Washtenaw Community College ($156,520); and the Ann Arbor District Library ($74,666). But the expectation was that the city of Ann Arbor would waive its share of the excess – $711,767. That includes any amount due to the Ann Arbor Transportation Authority, which receives the revenues from a public transit millage levied by the city. The language of the resolution in front of the council on May 31 describes how the AATA will apparently still get the amount it would have received, if the city had not waived its share:

RESOLVED, That the City Administrator is authorized and directed to determine what proportionate amount of the acknowledged remittance of $711,767 may be payable to the Ann Arbor Transportation Authority and to make any credit adjustments necessary as part of the City/Ann Arbor Transportation Authority annual reconciliation process; …

While the language is somewhat vague, a source at the AATA has indicated to The Chronicle that they’ve been told the AATA will be “made whole.”

Excess TIF Capture: Council Deliberations

Carsten Hohnke (Ward 5) indicated he would support the resolution, but said he was concerned about how they got here. He asked interim city administrator and CFO Tom Crawford to identify which organization’s process the issue had “slipped through.” Crawford declined to place blame, but told Hohnke that the city had noticed the issue as questions had arisen about the TIF capture in the district.

[As the city and the DDA had gone back and forth about financial terms of the parking contract over the last several months, the overall DDA fund reserve balance became an issue. Councilmembers were keen to demonstrate that the DDA's future TIF capture would allow it to maintain an adequate overall fund balance, even if a substantial percentage of public parking revenues were transfered to the city.]

Crawford indicated that the city financial staff members do research when they receive questions, and they had discovered the issue in that context. It’s an old ordinance, he said, and they had not noticed it in a while – that was just an oversight. Mayor John Hieftje thought the explanation that best fits it is that the ordinance had never been triggered over a long period of time – that is, no excess TIF had been captured. Crawford reported that city staff had circled back with every party involved and said there’s now a process in place to ensure that the TIF capture is calculated correctly.

Ward 4 councilmember Marcia Higgins.

Marcia Higgins (Ward 4) asked about the issue with the AATA, which would be due to receive more than $80,000 in return of excess TIF – if the city of Ann Arbor did not waive the excess. She wondered why the city was considering the issue, given that it’s AATA’s millage. Crawford clarified that it’s actually a mass transit millage, not the AATA’s millage to levy. Hieftje noted that every year, there’s a reconciliation process that goes on between the city and the AATA, and the excess TIF capture will be part of the discussion.

Sabra Briere (Ward 1) inquired whether the calculations were the same year by year. The question did not lead to a discussion from Crawford of a central issue behind the calculations of excess capture.

By way of background, at least two interpretations are possible. Interpretation A would be that each year when the tax rolls are closed (after the Board of Review has handled all appeals), that year’s valuation is compared with the previous year’s, and the percentage difference is calculated. That percentage is compared with the percentage growth forecast by the TIF plan between those two years. Interpretation B would compare a given year’s valuation against the valuation in the first year of the plan (not the previous year) and compute the percentage difference between them. That percentage difference would then be compared against the percentage growth forecast by the TIF plan from the beginning of the plan to the current year. The DDA is using interpretation A. That falls in favor of the DDA by a total of at least $1 million, according to The Chronicle’s calculations.

Stephen Kunselman (Ward 3) indicated surprise that no staff report was included with the resolution. He said that to compute the excess, his understanding is that the DDA is looking at the projections in the TIF plan labeled “optimistic” instead of “realistic.” He pointed out that Crawford had previously mentioned to the council that he’d estimated the excess was based on “realistic” projections.

Kunselman continued by saying that the “realistic” projections are in bold-face, so you’d think that would be the one they’d use. [According to The Chronicle calculations, use of the "realistic" projections would result in the return of roughly an additional $110,000, across all taxing units in the DDA's TIF district.] Kunselman also complained that he hadn’t received an answer from the city staff about how this affects previous audits. Does the city have to amend its past audits? Why does the resolution need to be passed tonight? he aksed. Does this have anything to do with the budget?

Kunselman said he was a little “queasy” about what the other taxing units might have to say about the calculations. This raises all kinds of confusion, Kunselman said. Hieftje contended it was something that had a simple answer: Whose decision is it? Hieftje directed the question to assistant city attorney May Fales, who stated simply: The responsibility is the DDA’s. Crawford said he would not speculate about what an auditor might say. The reason it’s in front of the council now, he said, is that the DDA needs to understand what its resources will be for its budget. Kunselman concluded by indicating his frustration that no staff report had been included and that the decision about the calculation was being left to the DDA.

Briere said she’d support the resolution, in part because it lays a groundwork for approving the DDA’s budget, which is part of the city’s budget. If the council fails to approve the resolution, she said, the DDA’s budget is put in jeopardy, and it throws the city’s budget discussion into a state of limbo.

Outcome: The council unanimously approved waiving of the excess TIF owed to the city by the DDA.

Water Main Study

In front of the council on May 16 had been a resolution to approve a $208,984 contract with AECOM for a study of the city’s water distribution system. The money for the study, which dates from a 2007 request for proposals (RFP), was allocated in the fiscal year 2011 budget of the city’s water fund. The level of service (LOS) study to be done by AECOM would recommend a sustainable level of service for the city’s water distribution system, and determine how much investment it would take to achieve that level. The study would also help the city decide, for example, which water mains should be replaced first.

Before tabling the item on May 16, the council had amended out a $10,550 contingency. The item had been tabled for essentially two reasons. First, councilmembers expressed concern about the general issue of using consultants to communicate with residents, instead of relying on city staff. Second, councilmembers had concerns about the cost of the study, and they were inclined to delay action on all budget-related issues, given their plan that evening to delay action on the FY 2012 budget. It was taken off the table and put before the council at its May 31 session.

Water Main Study: Council Deliberations

Public services area administrator Sue McCormick addressed the council by challenging the idea that the consultant was being hired to do a public engagement effort. AECOM would be providing deliverables that include laying out a water main replacement strategy and a recommendation on what the city needs to do to fund that strategy. Only one piece of that is speaking to the public, along with the city staff. She stressed that it’s a small piece of what the city is paying AECOM to do.

Marcia Higgins (Ward 4) responded to McCormick by saying that on May 16, Cresson Slotten – unit manager of the systems planning unit – had told the council it’s a public engagement process. That’s also what she’d heard McCormick say in her remarks just then. So Higgins said she wouldn’t not support it. She’s reluctant to spend more money on studies, saying she felt it could be deferred for six months. She asked if there is any reason the city needs to do the study. McCormick said the city is required to do a water distribution master plan every 5 years – she was not certain if the legal requirement had been meet already in the first phase of the study.

Mayor John Hieftje said he wanted more time to review some material that McCormick had provided. The bottom line, said Hieftje, is nothing in the resolution affects the city’s general fund and would have no effect on job cuts.

After an additional brief interaction with the mayor, Higgins moved to postpone the resolution until July 5.

Outcome: The council voted unanimously to postpone the resolution on the water main study until July 5.

FY 2012 Fees

Before the council was a raft of fee changes in the community services and public services area. They included items in parks and recreation services, like bumping daily admission at public swimming pools from $4 to $5. Fee changes also included items like increasing fees for removal of utility poles in the right-of-way from $70 to $72.50 – the charge for each additional pole increased from $27 to $28.75. [.pdf of all fee changes as proposed]

FY 2012 Fees: Council Deliberations – Trash Carts

Sandi Smith (Ward 1) proposed eliminating one of the proposed new fees – a $45 per month per cart refuse collection fee in the downtown. She said the new fee had not been communicated to merchants well. Mayor John Hieftje thought some merchants in the downtown actually supported the fee.

Smith had talked to some merchants who only generate one bag a month – they were against the new fees. Hieftje asked why some merchants were in favor of the fee. Smith speculated that such merchants might have a dumpster. Sabra Briere (Ward 1) said in her discussion with a single downtown merchants association, they’d already made a decision as a group to outsource their trash collection. Margie Teall (Ward 4) said the city’s commercial recycling is set up in such a way as to encourage the use of larger dumpsters or a compactor. It’s designed as a tool in the tool box to encourage more recycling, which is a free service, she said.

Smith replied by saying she failed to see how this helps with reducing waste. For a small business, $45 per month is a big deal. Small businesses feel like they’re being taxed and poked and prodded from all sides. She contended there’s no way to opt out. She suggested that the council should strike the fee and come back with a better communication plan. It needs to be re-thought and re-presented, she concluded.

Stephen Kunselman (Ward 3) elicited from public services area administrator Sue McCormick that the zone for the commercial waste franchise is across the entire city. Currently, those using dumpsters are paying, but those with carts are not, she said.

Briere noted that the new fee isn’t affected by volume or frequency – it’s three times a week. The city is implementing a $45 per month per cart fee for property owners, but that could be as varied as one large building, or a small store in a large building, she said.

Teall said as she recalled, there was a public rollout of the future cart charges when the city added commercial recycling. Responding to his council colleagues’ concern about the lack of an opt-out provision, Christopher Taylor (Ward 3) said the information provided to the council notes a waiver provision, if there’s a sharing of a dumpster.

Hieftje said he would not support the removal of the fee – there are ways to get around it.

Outcome on Smith’s amendment on trash carts: The amendment failed, with support only from Smith, Briere and Anglin.

Outcome on fees: The council unanimously approved the new set of fees for the fiscal year.

FY 2012 Budget

Discussion by the council of the FY 2012 budget took the form of various amendments. Their deliberations also included a turn at the podium from Barnett Jones, head of public safety services.

By way of background, the budget proposed by city administrator Roger Fraser – made before he left that position at the end of April to become a deputy state treasurer – included the elimination of 20 full-time equivalent positions (FTEs) in the public safety area – police and fire. The breakdown for those eliminations was as follows:

 5 police officer layoffs
 1 police officer vacancy
 3 police support staff layoffs
 4 police support staff vacancies *
 5 firefighter layoffs
 2 firefighter vacancies
------------
20 total safety services eliminations

* Two of these positions were not included in the
budget impact sheets presented to the city council
in February – they were positions still on the
books but with no budgeted dollars.

The city council had been presented with this breakdown at a February 2011 work session.

FY 2012 Budget: Public Safety Discussion

Mayor John Hieftje asked Jones to the podium to clarify how the cuts in public safety positions would translate in terms of layoffs for officers and firefighters. There would be five layoffs of sworn police officers and five layoffs of firefighters, Jones said. There are other cuts as well, but those 10 are sworn officers. Based on the report of one recently announced retirement, that number would drop to four police officers to be laid off. Two announced retirements would drop to three the number of firefighters to be laid off.

Hieftje asked if there was anything else that could be done. Jones said he’d talked with both assistant fire chiefs, who had over 50 years of experience in the fire service. He mapped out the strategy if the loss of the five firefighter positions could not be avoided.

The fire department works based on three 24-hour shifts A minimum complement for five stations – each with a truck, and two trucks at the downtown station – is three firefighters per truck, plus a battalion commander. That translates to 19 firefighters per shift. Jones said that with better management of overtime, if they cut three FTEs, it should be possible to manage without closing a station. Hieftje confirmed with Jones that this would eliminate the need to close a station on a rotating basis, which is currently the strategy.

Mayor John Hieftje, talks with councilmember Sandi Smith (Ward 1) before the start of the city council's May 31 session.

Stephen Rapundalo (Ward 2), who chairs the council’s labor committee, clarified with interim city administrator that some of the layoffs – four in police and two in fire – could be mitigated if the respective unions adopted the city’s benefit plan, which requires employees to contribute part of the cost of their health care. With the one retirement in police and two in the fire department, that meant that all layoffs in police and two out of the three in the fire department could be avoided, if the unions adopted the city’s health care plan, Rapundalo concluded.

Hieftje asked Jones to clarify the impact of losing police officers. Jones said that if he lost officers, he would move people who are currently outside of the patrol division into patrol duties.

A total of 56 officers are assigned to patrol – 28 officers for day patrol and 28 at night. There are a total of 89 officers in patrol and command – so the bulk of the force is assigned to patrol. Marcia Higgins (Ward 4) clarified with Jones that all layoffs in the police department would be in the patrol division. Higgins asked if more positions could be saved if additional officers retired. Jones told her yes, but he had no retirements.

Sabra Briere (Ward 1) asked interim city administrator Tom Crawford about other staff in the city – outside of the police and fire departments – putting in for retirement as well. Some of those retirements are funded out of the city’s general fund. Crawford assured Briere that every retired position is evaluated as it comes through. Briere said she did not want to see empty positions carried forward if they’re not going to be filled. Crawford told her that if the city can operate without a position for a year or two, that indicates it’s not needed. Sometimes, though, instead of eliminating a position as soon as it becomes vacant, the city tests out whether it can manage without the position.

Stephen Kunselman (Ward 3) asked Crawford about the additional FTE that has been added to the DDA over the last year. Can that position be moved to the police department? Crawford told Kunselman it could not be moved – that’s the DDA’s money and they have the purview to spend it, Crawford said.

FY 2012 Budget: Public Safety Amendment

After the other budget amendments had been handled, Marcia Higgins (Ward 4) introduced a budget amendment that would restore funding for four police officers for a period of three months. Higgins noted that the city has asked the unions to consider contributing to their health care costs, and the city would like to maintain the positions, but the city needs the police officers. Briere said she supported Higgins’ amendment initially, because the council had heard it might not need to lay off firefighters – they’d heard sufficient numbers might retire. In support of the strategy of extending funding for another three months, she said, it’s good to have carrots and “repercussions,” thus eschewing the word “stick.”

Hieftje said the extension of funding would be “leading people on.” Crawford noted that negotiations with both police and fire unions operate under Act 312 – which includes binding arbitration.

Rapundalo thanked Crawford for making the point about Act 312 arbitration. Rapundalo said he’d like to save the positions as much as anybody. He said he’d tried for many months to encourage public safety unions to be more accommodating, to take on health plans that salaried employees and smaller unions have already accepted. He felt Higgins’ amendment would lead people on and doesn’t give them any incentive.

Christopher Taylor (Ward 3) asked if there was anything special about the three-month time frame. Higgins responded by saying there’s a lot going on at the state that the city is still waiting for – police officers could still interview elsewhere.

Hieftje said if the concern is that there are still laws to be passed at the state level [which would cap the contribution by governments to public employee health care costs at 80%], the city’s Lansing lobbyist thinks that legislation will pass in June.

Carsten Hohnke (Ward 5) said he was not sure he followed the logic behind the amendment: either there’s a greater contribution to health care, or there’s a greater contribution to health care – there’s no difference in the outcome. Briere noted that one path is voluntary, while one would be state mandated. What we’re buying is a grace period, said Briere.

Hieftje confirmed with Crawford that people could be hired back, after being laid off, if they’re still available.

Outcome on three-month amendment: The council voted 6-5 against the amendment. Voting against it were Smith, Derezinski, Rapundalo, Taylor, Hohnke and Hieftje. Voting for it were Briere, Kunselman, Teall, Higgins and Anglin.

FY 2012 Budget: Human Services

In front of the council was a resolution it had tabled on May 16. That resolution made allocations to nonprofits in the amount of $1,159,029. The amount to be allocated reflected a 9% reduction from FY 2011 human services funding levels. The council had postponed consideration of the human services allocation at its May 2, 2011 meeting in order to explore ways of “finding another dime.”

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

Sabra Briere (Ward 1) introduced a resolution on May 31 to increase the funding for the office of community development – which coordinates the funding – by $85,600 to partly mitigate the 9% reduction.

Ward 1 councilmember Sabra Briere is interviewed by WEMU reporter Andrew Cluley.

Sandi Smith (Ward 1) said that on the surface, she supported the amendment. But she said that everybody would like to have no reductions on anything. Ann Arbor is still funding human services at an amount greater than other cities, she said. Stephen Rapundalo (Ward 2), who was one of the architects of the scoring matrix for assigning allocations, said he’d been torn about this as well. But the fact of the matter is that last year nonprofits were given notice that they’d need to prepare for cuts. He said in good conscience he could not tap the general fund reserve in the way the amendment proposed.

Margie Teall (Ward 4) said she’d support the amendment, reasoning that the council has made cuts to human services support over the years. Nonprofits are experiencing cuts from everyone. She noted that she’d sat on the task force that had made recommendations about how funds would be distributed. She asked how the funds would be distributed among the nonprofits, if they were restored?

Mary Jo Callan, who heads up the joint city/county office of community development, said that the review team had asked that any restored funds go to nonprofits that had received the top tier rating. She also noted that since the reviews were completed, her office had learned about an additional $14,700 cut. Teall confirmed with Callan that city of Ann Arbor funds would be going to fund organizations that would not otherwise be funded through coordinated funding sources.

Rapundalo responded to Teall’s contention that there’d been cuts by saying that the city had been operating under fairly full funding levels for the last few years. Carsten Hohnke (Ward 5) said the city’s human services funding is a good investment, and it’s intrinsically linked to maximizing the safety services investment. It’s a smart policy, he said, but at the same time, dipping into the fund balance isn’t a good policy. He called it a case of the city imposing on itself a limit so that cuts are aligned with an overall decrease in the budget. He said that regrettably, he wouldn’t support the amendment.

Briere said she appreciated the comments she’d heard so far. She was simply trying to identify one-time dollars in this year’s budget not allocated for next year. That’s why she felt moderately comfortable in taking money from the fund balance. For a few years, human services funding has remained stable – it’s not fallen or risen. She reminded her colleagues that they’d received information that day about the impact of the nonprofit community on the economy.

Higgins said since she’d begun serving on the city council, the amount of human services funding had actually increased by $250,000 and it’s stayed at that amount. It’s hard to watch federal and state governments reducing funds – it’s a core value. She contended that when you’re out in the community talking to people, this is where they want money spent – these are families and children. It’s why the council decides every year to extend funding – to help those citizens most in need. She concluded by saying it was her hope that the council could do that again.

Teall invited Callan to describe other savings that her office had achieved. Callan said there’s a reorganization going on at the county to merge the office of community development with other departments. They had identified at least $26,000 in annual operational savings. If that had been analyzed before the administrator’s budget had been proposed, it would have been part of her budget presentation to the council.

Mike Anglin (Ward 5) asked how many volunteers were involved in the nonprofits the city was funding. Callan said that 365,000 hours are donated to the 40 different nonprofits that the city funds, equivalent to 200 full-time employees.

Outcome: The council passed the human services resolution on a 6-5 vote. Voting for the allocation were Briere, Kunselman, Teall, Higgins, Anglin and Hieftje. Voting against it were: Smith, Derezinski, Rapundalo, Taylor and Hohnke.

Crawford pointed out that the budget, per the city charter, must be ratified by seven votes. But as the resolution contained an amendment, it needed only the six votes it received.

When the council considered the FY 2012 budget as an item unto itself, later in the meeting, the council’s vote on the human services amendment was unanimous.

FY 2012 Budget: Parks Amendment

An amendment proposed by Christopher Taylor (Ward 3) tapped the general fund reserve for $90,804 to bring the support of the parks system back in line with the administrative policy established in 2006 in connection with the parks capital improvements and maintenance millage. At the council’s May 16 session of the same meeting, councilmembers had voted to modify the 2006 policy to allow for use of non-millage funds to count as general fund support for the parks system, even if those funds do not come from the general fund. For additional background, see Chronicle coverage: “Council to Get Reminder of Parks Promise.”

Taylor, who serves as an ex-officio city council representative to the city’s park advisory commission, said that for him the resolution met the test of balance between tapping the general fund reserve and honoring the promise to voters.

Sandi Smith (Ward 1) said that just as she was against tapping the general fund reserve for human services, she was also not in favor of doing it for parks. The council has to keep making hard choices, she said, and she would reluctantly not support the amendment.

Carsten Hohnke (Ward 5) also said he would reluctantly not support the amendment. He shared the same concerns that Smith had. He said it was not a good policy to dip into general fund reserves.

Mike Anglin (Ward 5) noted that the savings the city had identified, which would now being restored, came from the mowing cycle – mowing would have occurred less often, without the restored funding. It’s what they’re encouraging the city staff to do, he said: to become more efficient. The reason the city’s park advisory commission had discussed the issue was that commissioners saw it as a cut.

Sabra Briere said if this money could be identified as a new activity or as meeting a new gap, that would be different from what the amendment did. What the council would be doing is just putting in more money. She said they should be saying, Hooray, we saved money on mowing and maintenance! The extra money might meet some need of tidiness, but the rest of the city is left in the same state of untidiness, she said. This amendment would be a disincentive to efficiency. But she noted that the city council had asked the parks system to take on more responsibility – to maintain two dams.

Taylor said he felt that reasonable minds could differ on the issue. It’s a desire of the city’s park advisory commission to improve the mowing service – 19 days is suboptimal. It’s perhaps enough to maintain tidiness, but it doesn’t maintain the soccer fields sufficiently for kindergartners who have a tough time knocking the ball around.

Taylor said the fidelity to the promise made to voters in 2006 led him to support the amendment. He allowed that it’s awkward in light of the fact that the savings had been achieved in the area of mowing, and it’s mowing where the additional funds would likely be applied.

Stephen Kunselman (Ward 3) noted that considering how much rain had fallen this spring, it’s obvious they need the extra mowing. Mayor John Hieftje said he did not want to go back on the 2006 resolution. He also noted that the parks system did absorb the extra cost of maintaining Argo Dam, but he cautioned that the extra allocation needs to be a one-time thing.

Outcome: The extra $90,804 allocation to the parks system using general fund reserve dollars passed on a 6-5 vote. Voting for it were: Briere, Rapundalo, Taylor, Kunselman, Anglin and Hieftje. Voting against it were Smith, Derezinski, Teall, Higgins and Hohnke.

FY 2012 Budget: Primary Elections

An amendment receiving only brief discussion was to tap the general fund reserve for $7,000 to pay for one more city council primary election than the proposed budget had forecast. The city administrator’s proposed budget had anticipated primaries in only two of the city’s five wards.

Noting that the resolution stated that the “City Clerk has been notified of a third ward that will need a primary election …” Stephen Kunselman (Ward 3) joked that he figured he needed to support the amendment.

Outcome: The council unanimously approved the amendment to adjust the city clerk’s budget by $7,000 to pay for an additional primary election.

FY 2012 Budget: Public Art

An amendment proposed by Marcia Higgins (Ward 4) directed the city attorney to prepare a revision to the city’s public art ordinance, that would reduce the percentage of all capital projects designated to support public art – from 1% to 0.5%.

By way of background, the public art ordinance has been somewhat controversial, since its approval in 2007. [.pdf of ordinance text as approved on Nov. 5, 2007] As far back as Feb. 1, 2009 at a council Sunday caucus, Higgins publicly expressed her concern about the amount of money the program was generating.

Later that year, at a Dec. 7, 2009 meeting, the council gave initial approval to an ordinance revision that would have reduced the allotment from 1% to 0.5%. But at the council’s following meeting, on Dec. 21, 2009, the council voted down the ordinance revision, with councilmembers citing art as key to Ann Arbor’s identity.

The legality of the program has been questioned by Stephen Kunselman (Ward 3), in its tapping of some funds that are restricted in their use – parks millage funds, and funds that receive revenue from fees. Kunselman has repeatedly asked that the city attorney make public an opinion that would provide a legal basis for the use of restricted funds for the public art program. Kunselman has cited a city charter requirement that such opinions be made public. To date, city attorney Stephen Postema has demurred.

Deliberating on the amendment on May 31, Margie Teall (Ward 4) said it was essentially cutting something for the sake of cutting something. She said she would not support it.

Sabra Briere (Ward 1) suggested that the use of fund balances in each of the funds upon which the public art program draws can be valuable – for unexpected expenses. The city had experienced such unexpected expense last week, in connection with the heavy rains, she said.

Public service area administrator Sue McCormick indicated that the relative amounts as a percentage of the fund balances were decimal points – adding that she’d never say it’s insignificant. However, relative to the fund balances, it’s small, she said. Mayor John Hieftje drew out the fact that $48,000 would be restored to the sewer fund, but the sewer fund has a reserve of $40 million.

Stephen Kunselman (Ward 3) wondered why the city had just borrowed $1.2 million to do footing drain disconnects. Based on $22,000 that was taken out of the water fund, at a cost of $150/foot, he figured that would come to around 150 feet of water main that could be replaced. He said the city had a lot of water main breaks – there’d been four on two blocks in his neighborhood. So the money could actually be used to accomplish quite a bit. Kunselman alluded to the water main consulting proposal for $200,000.

Art is not losing out, Kunselman said – this town has a lot of art. The city’s public art commission is having a hard time finding places to put art, he continued. He supported taking the money and putting it into infrastructure. The funding for art could be brought back when times are better, Kunselman concluded.

Tony Derezinski (Ward 2) said he remembered well the debate the council had had about a year ago – between the first and second reading of the resolution, support had dwindled on the council to only two people who had supported the reduction from 1% to 0.5%. In tough times, you define what you are, Derezinski said. The issue was thoroughly debated before and he was in favor of leaving it as it is. Art is part of the heart and soul of Ann Arbor, he contended. He allowed that for the ArtPrize in Grand Rapids, they’d had a “sugar daddy” who helped. [The ArtPrize is funded by the DeVos family.] He was especially against a cut, Derezinski said, if it’s just symbolic.

Sandi Smith (Ward 1) noted that the council had seen a parade of supporters when the council had previously considered reducing the program. And she allowed that the show of support for art demonstrated that Ann Arbor really takes it to heart. Still, she said it continues to be prudent to look at the program on an annual basis. She agreed with Derezinski’s point that there are private donors in Grand Rapids who contibute to public art. But if Ann Arbor is all about art, she said, she would challenge the citizens of Ann Arbor to be a part of it: Create something like ArtPrize in Ann Arbor.

From left: Ward 5 Ann Arbor councilmember Carsten Hohnke and Tom Crawford, chief financial officer and interim city administrator.

Carsten Hohnke (Ward 5) said it’s merely a symbolic cut and would only have the effect to decrease what is plainly a part of our civic community. A reduction would not save any jobs, but would only serve to alter funds by a few decimal points. It’s a symbolic move with negative symbolic consequences, he said. Hohnke said he would not support the amendment. In reviewing other programs, there were very few half-percent-for-art programs across the country, he said. Further, it’s been shown to be a very good investment for economic development. It creates a sense of place, he said. The program has no impact on the general fund and there is no crisis within the funds to which the money would be returned.

Mayor John Hieftje said he also wouldn’t support the amendment. He said the fact is that not a penny of the money could be used to pay for salaries in the general fund. It’s appropriate that $6,000 be taken away from parks funding through the public art program, because the city sees art sprout up in the parks as a result, he said. [The Percent for Art program funded tree sculptures in West Park, and murals have been proposed at sites in Allmendinger Park and near the Huron Hills golf course.]

Outcome: The amendement that would have reconsidered the Percent for Art program was defeated on a 4-7 vote. Voting for the reduction in arts funding were: Smith, Briere, Kunselman and Higgins. Voting to preserve arts funding at current levels were: Derezinski, Rapundalo, Taylor, Teall, Hohnke, Anglin, Hieftje.

FY 2012 Budget: Priorities – Home Inspections

Sandi Smith (Ward 1) introduced an amendment that affected priorities set forth in the budget document. She wanted to eliminate the inspection of property upon its sale as a city priority. Stephen Rapundalo (Ward 2) indicated that he’d been the one who’d suggested it [at one of the council's offsite budget retreats five months ago]. He noted that Ann Arbor was one of only a few communities that did not have such a requirement. It was simply a request that the city staff look at it to see if it had any merit at all. The city should explore all potential revenue, he said.

Smith said if they want to have a housing recovery, putting a layer of bureaucracy on top of it would not help. They’d be slowing down what’s beginning to become a recovery. Rapundalo responded by saying that Smith was presupposing a debate, when the council had no information in hand. He reiterated his view that the city should look at all opportunities for revenue. He told Smith he understood how passionate she was about it. [Smith earns her livelihood in the real estate business.] But Rapundalo concluded that if the council was going to have a debate, it should have that debate with full information.

Outcome on the amendment of priorities: The amendment failed, with support only from Smith and Anglin.

FY 2012 Budget: Priorities – Retail Recruitment

Smith continued the discussion on priorities, saying that the city could not cut its way to prosperity. The economic development agency Ann Arbor SPARK does good job, she said, but the direct return to taxpayers is not great. She was not proposing that funding to SPARK be eliminated, but said that the city should dovetail its efforts. The city should look at beefing up its outreach to flesh out a proposal for economic development in the city specifically for retail business.

Hieftje said he thought SPARK is doing a great job and the city is getting an excellent return on the investment.

Derezinski said he agreed on the importance of economic development, but that it’s a discussion for another time. Economic development is not a dirty word, he said. SPARK has done a magnificent job. Their brand of Ann Arbor USA is being accepted as a concept. But the discussion should be deferred to another time.

Rapundalo said he agreed with Derezinski and Smith in that it behooves the city not to try to develop its own priorities independently. That should be done in tandem with SPARK. Rapundalo differed with Smith by saying that SPARK’s outcomes and deliverables have been quite good. Recruitment of retail is not going to get a good return on investment, he said. What’s needed is to get medium-size companies in the tech sector. Briere said the council could have this discussion – on the economic development of non-tech businesses – more fully at a later date.

FY 2012 Budget: Concluding Discussion

Hieftje said the work on the next budget needs to start early, maybe in June, and the council’s goal needs to be not to cut any employees next year. The council needs to sit down and work it out that the city doesn’t lay off anyone. The new 80/20 legislation that has already been approved by the Michigan state Senate might help, he said. The city’s Lansing lobbyist says it’s very likely it’ll pass in the House as well – it would mean that public employees will have to pay 20% of their health care costs effective Jan. 1, 2012. Hieftje said he was a proponent of universal health care, but that didn’t happen nationally, so they need to take what they can get.

Briere said philosophically, people have problems with the idea of different funds as “buckets.” She said she’d heard people suggest eliminating a fund and putting the money into the general fund. She would like for the city council to think about whether dedicated funds are working. If they are working, perhaps they should think about including a dedicated millage for staff health benefits. That would free up general fund dollars, she said.

Outcome on the budget: The council voted unanimously to approve the FY 2012 budget as amended.

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: Monday, June 6, 2011 at 7 p.m. in the council chambers at 301 E. Huron. [confirm date]

Laptop with Fuller Road Station presentation, given by Eli Cooper, the city of Ann Arbor's transportation program manager.

Eli Cooper, the city of Ann Arbor’s transportation program manager, reprised a presentation he’s given dozens of times over the last two years to various public bodies and community groups. The newest details relate to recent federal funding earmarked for the project – $2.8 million from the Federal Rail Administration, to pay for environmental assessment and engineering at the site. Cooper admitted he had started to feel a bit like the boy who cried “Wolf!” regarding potential funding, but he noted that the “wolf” has materialized – in the form of the grant award.

The $2.8 million won’t come close to covering the estimated $121 million cost of the full project, including a rail station, which is estimated to cost about $18 million. But more than the funding itself, Cooper said, the award is significant because it indicates the FRA’s willingness to be the lead federal agency for this project.

Cooper also reported that the agreement being crafted by UM and city staff is nearing completion, and will likely be made public within a month. It will govern the construction, operation and maintenance of Fuller Road Station, and will include details about the project’s financing. Cooper told PAC that they would have the chance to review the agreement before it heads to the city council for approval.

Fuller Road Station

Commissioners had received their last briefing on Fuller Road Station at their July 2010 meeting, though the project has come up informally at other meetings since then. The site plan received approval from the city’s planning commission at their Sept. 21, 2010 meeting, but has not yet been approved by city council.

The project – at what’s now a city-owned surface parking lot south of Fuller Road, east of East Medical Center Drive – is being planned by the city and the University of Michigan as a large parking structure with bus bays and a bike station, with plans eventually to build a train station on the same site. PAC has been interested in the project because it’s on land that’s long been part of the parks system – revenues from UM for leasing the current parking lot contribute to the city’s budget for parks.

Eli Cooper, the city’s transportation program manager, gave Tuesday’s presentation. Also on hand was Dave Dykman, project manager for Fuller Road Station.

Fuller Road Station: Public Commentary

At the beginning of the meeting, George Gaston spoke to commissioners during public commentary time. He told them he lived in a condominium across from Island Park, overlooking the Huron River, Fuller Road and the University of Michigan medical complex. He has a vested interest in the Fuller Road Station project. PAC should not allow the project to move forward without full public engagement, he said. If they believe that building this structure is in the best public interest, then the parks system, as landlords, should at least receive adequate income from it. He cautioned that once they open the door to development on parkland, “it will be a hard door to close.”

Other locations for the project should be considered, Gaston said, such as the DTE/MichCon property across from the current Amtrak station, or property between North Main Street and the Huron River, or on UM’s Mitchell Field. Wherever it’s located, Amtrak should be on board and committed from the start. Putting together the ribbon of parks along the river has taken too long and involved too many people to just blithely begin dismantling, he said. It is PAC’s responsibility as park stewards to make sure that doesn’t happen.

As a sidebar issue, Gaston said, the Greek Revival shelter on Island Park needs attention – the roof is leaking and is starting to rot.

Fuller Road Station: Staff Update

Cooper began by reviewing some background on the project. He first mentioned the Amtrak station, saying that it was one of the original motivations for exploring a new rail station. He noted that the recent $2.8 million in federal funding is earmarked for environmental studies related to relocating Amtrak to the Fuller Road Station site.

City planning over the years has also set the stage for Fuller Road Station, Cooper said, citing the city’s 2006 Model for Mobility initiative, as well as the 2009 transportation master plan update.

Finally, the University of Michigan’s parking needs in the Wall Street area, based on demands from its growing medical campus south of Fuller Road, also came into play, Cooper said. It was the convergence of all these issues – combined with regional planning for rail by the Michigan Dept. of Transportation (MDOT) and the Southeast Michigan Council of Governments (SEMCOG) – that started discussions leading to Fuller Road Station. Those talks involve other partners, he noted, including the Ann Arbor Transportation Authority.

Ann Arbor city councilmember Mike Anglin, left, talks with Eli Cooper, the city's transportation program manager, prior to the start of the May 17, 2011 park advisory commission meeting. Anglin serves as an ex-officio member of PAC.

President Obama’s administration has put a priority on high-speed rail, Cooper said, and one of the corridors that’s receiving attention – and funding – runs between Chicago and Detroit.

Cooper noted that in previous presentations, he’s highlighted the rail station and other aspects of Fuller Road Station, rather than the parking component. This time, he said, “let’s put it up top” – the first phase will include a structure with about 1,000 parking spots. Other elements include five bus bays and a storage area for around 191 bikes. There will also be upgrades to the shared-use paths on the site, and a public art component. [A task force for public art at Fuller Road Station has already been meeting – as a capital project, the station includes $250,000 set aside for public art. At its April 2011 meeting, the Ann Arbor public art commission received an update on the task force's work, including a timeline for selecting artists.]

In addition to being a transportation hub for pedestrians, cyclists, motorists, buses and rail, Fuller Road Station will serve as a gateway to the city, Cooper said. Iconic architectural elements are planned for the design to achieve that goal, he said – though he alluded to critics of the initial project renderings by saying that “beauty is in the eye of the beholder.” The project will also include sustainable design features, he said.

Cooper noted that Fuller Road Station will be contained in the footprint of the current surface parking lot that’s on the site, and that the adjacent soccer field will remain in place.

Fuller Road Station: Staff Update – Phase 1.1

At a city council work session a few months ago, councilmembers had asked about how the first phase – the large parking structure and bus bays – related to possible rail service. In response to those questions, Cooper said, a new design was developed to incorporate platforms for possible commuter rail. He emphasized that this new intermediate design phase – dubbed Phase 1.1 – was not likely to be implemented, and would not be presented in the site plan for city council approval.

Commuter rail platforms would be far shorter than those needed for intercity rail, Cooper said – 340-380 feet, compared to 900 feet. A separate track would also need to be built, alongside the existing track, so that commuter rail and high-speed rail both could be accommodated safely.

The Phase 1.1 design also entailed some reduction in parking capacity, due to the need for commuter rail platforms, he noted. The design would be consistent with the designs that MDOT is developing for stations in Ypsilanti and Detroit Metro airport, he said. But he again emphasizing that at this point, there are not plans to implement these changes. Although that could change, Cooper said he didn’t think it would, in large part because recent federal funding superseded the need for an intermediate phase like this. He apologized for any confusion this might cause.

Fuller Road Station: Staff Update – Next Steps

Cooper outlined what will happen in the next several months related to Fuller Road Station. The city council will be asked to approve formally the project’s Phase 1 site plan, following the successful completion of an agreement with UM to build, operate and maintain the facility.

After the council gives approval, the city would start immediately with work to relocate utilities on the site – bids have already been secured, he said. That might start in June or July, although there’s no firm date for council approval. Construction of the structure itself would ideally begin in the winter of 2011-12, he said, to be completed in 2013. It’s a 14- to 18-month project, and the start date hinges on completion of an agreement with UM, Cooper said, which is being “intensely negotiated.”

That agreement will give details about the project’s financing, based on terms set in the memorandum of understanding (MOU), Cooper said. One key interest for PAC was the preservation of parking available for parks users, he noted – that will be reflected in the agreement. Also included will be details about the facility’s operation and long-term maintenance. Cooper said it was a sensitive document and he didn’t have details about it at this time, but these elements were the framework.

Environmental assessment has been underway since November 2009, Cooper said, when the city signed its MOU with the university. A draft report has been submitted to both the Federal Transit Administration and the Federal Rail Administration. The city is awaiting execution of an agreement with FRA, which will become the lead federal agency for this project. They’ll be reviewing the draft environmental report, and making a final declaration on it – possibly by the winter of 2011-12.

Fuller Road Station: Staff Update – Phase 2

On Monday, May 9, local, state and federal officials converged for a press conference in Detroit, where U.S. Transportation Secretary Ray LaHood announced $200 million in federal funds for advancing high-speed intercity rail service in Michigan. That’s in addition to $160 million announced last year, earmarked for high-speed rail pending a final agreement between the Federal Rail Administration and the state.

Cooper, who attended the May 9 event, said Gov. Rick Snyder spoke and had made positive remarks about the value of high-speed rail for the state’s economy. That was the first time he’d heard Snyder comment in that way, Cooper said, and it was good news to hear the governor seemed supportive of the concept.

Ann Arbor’s $2.8 million grant was part of that $200 million, and is designated for environmental assessment and preliminary engineering studies – for the station and drop off area, as well as for the rail platform and rail work, including track, switches and signals. The city has not yet received formal notification of the federal award, which will outline terms and conditions, Cooper said – those details will influence the city’s next steps.

Cooper noted that if they’d had a shovel-ready project, they might have been able to get more federal funding.

He said it’s noteworthy that a federal agency – the Federal Rail Administration – is now interested in the project, as evidenced by the $2.8 million grant. The Federal Transit Administration never signed on in that way, though the city had been working with that agency. FRA officials will determine whether the project needs just an environmental assessment report, or a more complex environmental impact statement, Cooper said.

After the FRA signs off on the environmental assessment, Phase 2 design can begin in earnest, Cooper said. It would build off of Phase 1, and include a relocated intercity passenger rail station and associated rail work. The city will engage Amtrak as a stakeholder, he said – the rail agency has provided a 65-page design manual, with details about its needs. A design for this phase would allow the city to pursue grant funding for it, Cooper said.

Phase 2 could cost $20-$30 million, Cooper said. Details regarding cost-sharing would need to be determined, with partners including MDOT, Amtrak and SEMCOG.

Fuller Road Station: PAC Comments, Questions

Commissioners asked a range of questions over more than an hour. This report provides highlights the discussion, organized by topic.

Fuller Road Station: PAC Comments, Questions – Funding

Gwen Nystuen asked how much the city has spent on this project to day. Dykman replied that the only expenditures approved by council was about $640,000 to JJR for their design and environmental assessment work. Their contract is coming to an end, he noted. Nystuen asked whether the cost of city staff time had been calculated so far – it had not, Dykman said. [The Chronicle has queried the city about how much has been paid for the work of Mitchell & Moaut, the Ann Arbor design firm that's been working on the project, and what entity is covering those costs. That information has not yet been provided.]

Park advisory commissioners Doug Chapman and Gwen Nystuen.

David Barrett asked what the legislative process entailed actually to receive the $2.8 million in federal funding. He noted that some states had refused the grants. Cooper wasn’t sure – those details weren’t yet available, he said, so it’s not clear whether the funds will come directly to the city from the federal level, or via MDOT. He reiterated that the important step isn’t just the funding – it’s that the FRA has now become the federal agency responsible for this project.

What’s the timeframe for receiving the funds? Barrett asked. Cooper said he didn’t want to speculate on what Gov. Snyder may or may not do – the focus now is on the state budget, and the feds haven’t put a timeline on accepting the funding. But unlike government leaders in Ohio, Wisconsin and Florida, Snyder and others have indicated an interest in the evolution of high-speed rail in Michigan, he said.

Nystuen clarified that the $2.8 million is related to the high-speed rail infrastructure, not commuter rail. Yes, Cooper said. They haven’t pursued commuter rail funding, instead relying on MDOT and SEMCOG for that work. The city is cooperating with those efforts, but not taking the lead.

Tim Berla wanted to make sure that when the agreement between the city and UM is revealed, it will clearly indicate the costs for Phase 1, where the funding will come from, and other terms, like contract length. He confirmed that the agreement will be a public document. Colin Smith, the city’s parks and recreation manager, said that PAC will be briefed on the agreement in advance of city council taking action.

Sam Offen wanted Cooper to remind the city’s negotiating team that PAC felt the city’s parks system was receiving insufficient funds from UM to compensate for use of the property, based on terms outlined in the memorandum of understanding. He wanted to make sure that someone spoke up for the city in that regard. Cooper said he would communicate that message, and Smith told Offen that he had already raised the issue.

By way of background, a year ago PAC considered a resolution that called for the city council to abandon the Fuller Road Station project, or at the least to get a better deal from the university in terms of revenues provided to the city for leasing the structure. [Chronicle coverage: "Better Deal Desired for Fuller Road Station"] That caught the attention of mayor John Hieftje, an advocate of the project, who attended PAC’s May 18, 2010 meeting and asked commissioners for their support. [Chronicle coverage: "Hieftje Urges Unity on Fuller Road Station"]

His request led commissioners to reconsider their position, dropping a call to stop the project but still urging city council to work for a more open process and to ensure a better financial deal to benefit the parks system. [Chronicle coverage: "PAC Softens Stance on Fuller Road Station"]

Fuller Road Station: PAC Comments, Questions – Environmental Impact

Barrett asked if any permits have been pulled for work next to the Huron River. Dykman said no work is being done by the river at this point. The city has applied to the MDEQ for a permit to work on restoring a detention basin for the existing surface parking lot at the Fuller Road site, he said, but they haven’t yet received the permit.

Offen noted that environmental assessment work had started in 2009. What were the findings? Cooper said the recommendation that’s now been delivered to the Federal Rail Administration is that the assessment found no significant environmental impact to the site. But only the FRA can make that finding official, he said, and the agency hasn’t made a determination yet.

Fuller Road Station: PAC Comments, Questions – Amtrak

Nystuen asked whether the city has been in communication with Amtrak regarding whether the rail agency would want to relocate into Fuller Road Station.

Cooper replied that for Amtrak, stations are actually a nuisance. In his initial conversations with Amtrak, officials indicated interest in relocating to a new station that met their design specifications, as long as it was cost-neutral to them – that is, as long as they didn’t have to pay for it, and that it didn’t cost them more than it did to operate their current station on Depot Street. He said Amtrak has been a full supporter of Fuller Road Station, but building a new station would require careful coordination with their needs and with MDOT, as the state sponsor of Amtrak.

Nystuen asked whether the city would be responsible for operating the station. It would clearly be a city-owned structure, Cooper said, but details of the operation and maintenance would need to be worked out. Although sometimes Amtrak chooses to contract with local entities for that service, Cooper said he didn’t want to speculate whether such a contract might be with MDOT or a transit authority like AATA. Ultimately, though, the city would be responsible for the station. Responding to another question from Nystuen, Cooper said he wasn’t aware that the city had paid Amtrak anything at this point.

Mike Anglin wondered why Ann Arbor’s station wasn’t picked for improvements, as part of the commuter rail demonstration project. It’s an ugly site, he said. The nearby DTE/MichCon property is highly contaminated and might be eligible for brownfield cleanup, he said. But that isn’t being considered.

Cooper said the intent of the commuter rail demonstration project was to keep costs as low as possible – the idea was to build on existing stations. He said he didn’t think SEMCOG, the lead agency in that project, had given full consideration to Ann Arbor. There are a lot of issues associated with commuter rail, he said, but the primary needs relate to station access and parking. The city has talked to MichCon about using the property in that area for parking, but they haven’t gotten anywhere, he said. Cooper also noted that Amtrak doesn’t do commuter rail, so it’s not interested in issues related to getting commuter rail off the ground. There’s a lot a work ahead before that can happen, he said.

Fuller Road Station: PAC Comments, Questions – Design

Nystuen said that when this project was first unveiled, the focus had been on a “glorious” train station. Later, the station and the parking structure had been separated into two phases. Why did that happen, she asked.

Cooper said the original thought was to keep the project as one structure, but after a two-day workshop with key stakeholders, the idea emerged that the train station should be an “architectural gem,” separate from the parking structure. The footprint has been unchanged, however – the same as the current parking lot, with the intent to minimize intrusion into parkland.

There have been questions about the design and layout, he said, but this is just a starting point. As the project is reviewed and developed, and as the city applies for additional funding, the design could change, Cooper said. “Where we wind up could be different.”

Fuller Road Station: PAC Comments, Questions – Trail Systems, Roundabout

Christopher Taylor asked for an update at the Fuller Road/Maiden Lane/East Medical Center Drive intersection. In February 2011, Ann Arbor city council had authorized a $460,139 contract with DLZ Michigan Inc. to study and engineer a possible roundabout there.

Julie Grand, chair of the Ann Arbor park advisory commission, and Christopher Taylor, a city councilmember and ex-officio member of PAC.

Cooper said the city has been looking at improving that intersection since he took this job in 2005. It’s being handled separately from the Fuller Road Station because the intersection needs to be addressed, regardless of the other project. In addition to the contract with DLZ, the city has a separate agreement with North Carolina State University’s Institute for Transportation Research and Education (ITRE) to analyze previous studies that have been done there.

Taylor asked whether construction of Phase 1 or 2 of Fuller Road Station would impede construction of a roundabout. Cooper pointed out that the intersection work has not been funded. His sense is that Phase 1 would be well underway before the city figures out what to do with that intersection. Dykman added that it would be preferable to wait until after Fuller Road Station is completed before starting work on the intersection, because construction traffic could damage the road.

Berla noted that the Fuller Road/Maiden Lane/East Medical Center Drive intersection is inconvenient for anyone taking the Border-to-Border trail, and he was disappointed that the design didn’t address that. Instead, it seems there will be a roundabout – which would be even more difficult for pedestrians and cyclists to navigate. And there would be additional cars coming to that area because of Fuller Road Station. Wouldn’t it be better to address the trails as part of the design?

Cooper said the existing trail going through the site will be widened to 10 feet. He said he wouldn’t debate whether more cars will be passing through – there’s clearly a fairly high level of activity there. There’s less activity on the north side of Fuller Road, so that would be a safer, calmer path. But he’d leave it to the parks staff to figure out how to guide pedestrians and cyclists to use that route instead.

DLZ will be taking the lead on this as well, looking at previous studies done at that intersection, Dykman said. He noted that ITRE has looked at different scenarios for pedestrians there, and thought there could be benefits from installing HAWK (high intensity activated crosswalk) signals on each of the four legs of the roundabout, like the HAWK installed last year at Huron and Chapin. They’ll be looking at a variety of options for pedestrians at that intersection, he said.

Offen said he’d noticed references to two trails on the map showing the site design. He asked for more details about those. Cooper said that when they started talking about this project, they asked parks staff to participate. They’re also interested in incorporating elements of the city’s non-motorized transportation plan into the site. The trails might be incorporated into the Fuller Road Station project, or handled separately, he said.

Fuller Road Station master concept plan. (Links to larger image.)

Julie Grand asked if there had been any changes to the site plan to incorporate concerns raised about pedestrians or cyclists. Cooper said there haven’t been changes in that regard.

Offen confirmed with park planner Amy Kuras that the trail system planned for that area hadn’t been redesigned since the Fuller Road Station was proposed. Commissioners and staff discussed ways to connect the trails in that area, including how the trails might cross the railroad tracks, either via an underpass or bridge.

Cooper noted that the master plan calls for constructing elevated platforms on the north and south sides of the railroad tracks, connected via a skybridge.

Nystuen said it seemed obvious that the trail system should be built and functional before Fuller Road Station is constructed – it should certainly be included as part of the project. Cooper replied that Phase 1 of the project has never included trails, and that he’s not aware of any plans that would fund trails as part of it.

Later in the discussion, Smith returned to the topic, saying that the original Border-to-Border trail runs north of Fuller – it’s intended for recreation. There’s also a path on the south side of the road that’s used more by people who commute by bike. He thought he understood that there might be opportunities to look at how that commuter path interacts with traffic near the proposed Fuller Road Station. Cooper replied that there will be an on-road bike path, and the existing path will be widened to 10 feet. Beyond that, he said he’d not meant to imply that any other changes are planned.

Smith said the reality is that although they can try to get people to use the northern path, people will use the path that best works for them. He hoped they could do whatever possible to improve it.

Cooper noted that Phase 1 of Fuller Road Station calls for a bike station, and is intended as a transfer point for people who ride their bikes there, then walk or use a bus or train to their final destination. Fuller Road Station will be very busy, particularly at certain times of the day, he said – that alone might be enough to encourage people to use the northern path. But ultimately, people make their own choices. For him, Cooper said he preferred riding a bike on the street – it seemed safer and less annoying in the traffic flow than dodging pedestrians.

Fuller Road Station: PAC Comments, Questions – Project Management

Offen asked who’ll manage the project. Those details are still being worked out in the agreement between the city and UM, Cooper said. The city will be managing the utility relocation work, but the university is expected to take the lead on the overall Fuller Road Station construction.

Fuller Road Station: PAC Comments, Questions – Sale of Land, Public Process

After Cooper had left the meeting, commissioners returned to the topic of Fuller Road Station for additional discussion. Barrett said it would be useful to make clear to the public how the city got to this point regarding the use of parkland. The feedback he’s getting is that people feel the commission isn’t doing its job to protect parkland. It would be helpful to explain how the process evolved to make Fuller Road Station happen without a vote on the sale of land. Taylor replied that the process is the absence of a sale. Barrett said he didn’t want to debate, but that if it quacked like a duck – well, he said, “let’s stand up and say how we got here, that’s all.”

Smith clarified that the land is zoned PL, which stands for public land, not parkland. The planning commission had recommended amending the permissible uses for public land at its May 4, 2010 meeting. [The planning commission recommended changing to language in Chapter 55 of the city code, which lists permitted principal uses for public land (PL). The change was to delete the use of “municipal airports” and replace it with “transportation facilities.” The city council later approved the change at its July 6, 2010 meeting.]

Nystuen said that Barrett had raised a very important question. It’s confusing, she said. If the city council approves the Fuller Road Station site plan, then the land becomes a transportation facility, not parkland. But it’s been city parkland since the 1930s, she said. Taylor observed that it’s been a parking lot since the early Clinton administration.

Nystuen replied that it wasn’t previously a sale of the land. Nor is it now, Taylor said. But Nystuen contended that the parking lot is a use for parks. As Fuller Road Station, the 10-acre site would no longer be parkland.

Tim Berla, Ann Arbor park advisory commissioner.

Berla argued that Fuller Road Station doesn’t break the city charter amendment that states the city must get voter approval before selling parkland – even though some people see it as a de facto land sale. By way of analogy, “just because I consider my car to be a Rolls Royce, it’s not – it’s a Subaru,” he said. And the land hasn’t been sold, he said. If you’re against the project, that’s a political decision, he added, and you should contact your city council representative and ask them to vote against it.

Grand noted that PAC has already made a statement on this issue. [PAC passed a resolution at its June 15, 2010 meeting that called for city council to make available a complete plan of Fuller Road Station – including any significant proposed agreements, such as what the university will pay the city for use of the structure – allowing sufficient time for a presentation at a televised PAC meeting before council votes on the project. The resolution also asked that staff and council ensure the project results in a net revenue gain for the parks system.]

Grand also pointed out that there’s a public perception that PAC has control over the city’s parkland. “We have no control,” she said. “We can just advise, and we have made a statement to that effect.”

Fuller Road Station: Public Commentary Redux

At the end of the meeting, Larry Deck of the Washtenaw Bicycling and Walking Coalition talked about the trail system as it relates to Fuller Road Station. He reminded commissioners that WBWC had presented them with a statement last year on this issue. The trail system in that area has been planned for a long time, he said. When bridges were built over Huron River there in the 1980s, accommodations were made for future trails to run underneath. He agreed that it would be good to build the trails before Fuller Road Station is constructed, but if that’s not possible, they at least need to show where the trails would run, especially between the existing trail and the underpass at East Medical Center Drive. There are topographical issues to consider. There’s no sense in having plans if those plans are ignored every time a development comes up, he said.

Alice Ralph said as she’s absorbed all the information about Fuller Road Station, it seems that they’ve missed some early opportunities to improve this project. With the new emphasis on rail and a new train station, the thing that’s bogging this down is the parking garage. The future plans for that site possibly make the parking garage less relevant. She wondered what design energy and money would be available if they eliminated 800 spaces in a parking garage and devoted that to all the other components of the project. It’s something to think about sooner rather than later, she said.

Council Report: 2006 Millage

Gwen Nystuen asked for a report on the Monday, May 16 Ann Arbor city council meeting. Christopher Taylor, a city councilmember who serves as an ex-officio member of PAC, reported that council had revised its administrative policy on how the 2006 parks millage is to be spent. Funds outside the general fund can now count as general fund money for the purpose of the policy, as long as those funds are not drawn from the parks millage.

However, Taylor said, they took no action to restore $90,000 to the proposed FY 2012 budget for parks – that’s the amount that the original administrative policy would require, if it had not been amended.

Nystuen asked whether the resolution that council passed would return to the original policy regarding funding for the city’s natural areas preservation program (NAP). [The city council had revised the 2006 administrative policy during the FY 2010 budget cycle, so that millage funding for NAP would not automatically increase by 3% every year, as had previously been the case.]

No, Taylor said, that wasn’t part of the resolution.

Nystuen said she was very concerned that council seems to have retreated from its original policy regarding how the 2006 parks millage can be used.

Parks and recreation manager Colin Smith weighed in, saying he’d attended Monday’s council meeting. He reminded commissioners that the change in policy regarding NAP happened last year and had been approved by PAC at the time. [Nystuen had been the lone commissioner voting against that move. See Chronicle coverage: "Park Commission OKs Fee Increases, Budget"]

Taylor said they were still working to figure out how to restore $90,000 to the parks budget in FY 2012 – Monday’s council meeting has been continued to next Monday, May 23, because of lingering budget issues.

Parks Manager’s Report: Gallup, Argo, SNAG, Omnibus Millage

Smith updated PAC on recent grants received by parks and recreation. Huron Hills Golf Course received a $12,000 grant from the National Recreation and Parks Association to pilot a program called SNAG – Starting New at Golf – aimed at children 4-5 years old. The city was one of only 14 agencies nationwide to pilot this program, Smith said, and it’s a good opportunity for Huron Hills, since it fits with the course’s goals.

Also, the city was awarded a $7,500 state grant for the design of the Gallup Park boat livery. They’ve applied for larger grants and are still awaiting word on those, he said, but it’s good news that this small grant came through so quickly.

Ann Arbor park advisory commissioner David Barrett, left, and Colin Smith, the city's parks and recreation manager.

There’s no construction happening at Argo, Smith reported, referring to a major project that would reconstruct a bypass channel in the Argo Dam headrace and add whitewater features along the Huron River. The city has submitted a permit application to the state, which reviewed it and asked for more information. The city responded to that request in early May. Smith said they still expect to start work this summer, to be completed by mid-November.

Smith also reported on an item related to current budget talks. At a May 9 city council work session, some councilmembers had asked what the parks budget would look like if all operations were funded by a millage. It would take roughly $9 million – about twice what the current millage covers. This gives the council an idea of the scope of parks operations, and Smith said he only mentioned it to PAC as a point of information. He said he was sure there’d be more questions regarding that in the future.

He also said staff will be bringing a resolution to PAC’s June meeting for approval of architectural and engineering services contracts – to select consultants that are on retainer for parks projects. This cycle, 26 firms applied and staff has selected five to be put on retainer, he said. During interviews, city staff asked firms how they’d handle renovations for the Greek Revival shelter on Island Park – an item that was brought up during public commentary earlier in the meeting – as well as repairs of the pergola at West Park. Both historic structures are in need of repair, he said, and that work will likely be done in the fall.

Finally, Smith reported that the city’s outdoor swimming pools are slated to open on May 28 for the season. If it’s 55 degrees over Memorial Day weekend, he said, that would be bad.

Present: David Barrett, Doug Chapman, Tim Berla, Julie Grand, Sam Offen, Gwen Nystuen, John Lawter, councilmember Mike Anglin (ex-officio), councilmember Christopher Taylor (ex-officio). Also Colin Smith, city parks manager.

Absent: Tim Doyle, Karen Levin

Next meeting: PAC’s meeting on Tuesday, June 21, 2011 begins at 4 p.m. in the city hall second-floor council chambers, 301 E. Huron St., Ann Arbor. [confirm date]

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]

Over the last half decade, Ann Arbor’s annual spring budget conversation has evolved to include a discussion of public parking system revenues.

In discussions about parking revenue, it's been suggested that what the city of Ann Arbor is proposing is the equivalent of a tax on downtown parkers. (Photo illustration by The Chronicle. This is not what Ann Arbor parking meters actually look like. Yet.)

This year is no exception. The city council’s public hearing on the budget takes place at its May 2 meeting, with a vote on the 2012 fiscal year’s budget scheduled for May 16. At that May 2 meeting you’ll also hear the city council discuss revenues from the public parking system. The board of the Ann Arbor Downtown Development Authority – which manages the city’s public parking system – will meet at noon the same day to ratify its side of a contract renewal.

As likely as any other scenario is an offer from the DDA for the city to receive 17% of gross revenues from the public parking system for each year of an 11-year term. But that offer stands a decent chance of getting rejected by the city council. The city’s last bargaining position was 18% for a 10-year term and multiple three-year renewals.

Public parking revenues were already part of council deliberations at a city council budget work session on April 11, when city administrator Roger Fraser had given a dress rehearsal of his budget proposal. At the work session, councilmembers and Fraser played out a scene, in which councilmembers offered up questions to Fraser to elicit this conclusion: If the city does not extract enough revenue from the city’s public parking system, the city will need to lay off additional police or firefighters – four this year and two the following year.

The scene was reprised on April 19, when the city’s budget was formally premiered. The budget did not appear to depart in significant ways from the department-by-department budget impacts that city managers have presented to the council at a series of work sessions since the beginning of the year.

On April 19, it was the city’s CFO Tom Crawford (later in the meeting to be appointed interim city administrator) who played the role of the “numbers guy.” So it was Crawford who gave the recommendation in response to councilmember prompts: Without sufficient revenue from the public parking system, he would recommend laying off an additional four public safety officers. That’s in addition to the five police officers, three other non-officer positions in the police department, and five firefighters who are already slated for layoff.

Councilmembers Christopher Taylor, Carsten Hohnke, Marcia Higgins, Stephen Kunselman and mayor John Hieftje played starring roles in their portrayal of elected officials that evening. But more to the point of this column, I wonder who the city council’s imagined audience is for this sort of theater? Presumably it’s for an audience that pays the price of admission. But in Ann Arbor, it’s an audience that typically doesn’t pay much attention: the city’s shareholders.

Yes, that’s exactly the word I want. Shareholders.

I want that word in order to give myself some room to think about calling the voting public “shareholders” instead of “voters” or “residents” or “citizens.” It’s not because Michigan Gov. Rick Snyder campaigned on a slogan saying he’d run government like a business, and has continued that kind of talk since taking office.

It’s because I think a different word, “stakeholder” – as it’s used in Ann Arbor’s public discourse – has lost its original contrastive meaning. It was coined originally not as just a shorter way of saying “people who have a stake in this thing.” It was coined almost a half-century ago specifically to contrast with the term “shareholder.” And I think it’s worth reminding ourselves of that contrast.

Shareholders, Stakeholders

Back in 1963, the term “stakeholder” was coined in an internal memo at the Stanford Research Institute (now SRI International). Stakeholders included “shareowners, employees, customers, suppliers, lenders, and society.” At the time, elevating those groups in importance was a fairly radical challenge to the prevailing view in business circles that shareholders are the only stakeholders that truly matter when company mangers make choices.

Writing in his 2003 book “Authentic Leadership: Rediscovering the Secrets of Lasting Value” William George, a professor of management practice at Harvard Business School, describes the stakeholder model of a business and how he learned about it:

… the criterion for measuring the success of our leaders should be how well they serve everyone that has a vested interest in the success of the enterprise. This is known as the stakeholder model. I was first introduced to it by Henry Schacht, the CEO of Cummins Engine, at a 1970s conference on corporate responsibility. Schacht outlined the stakeholder concept of serving all those who had a stake in the enterprise:

• Customers
• Employees
• Shareholders
• Suppliers
• Communities

… Serving all your stakeholders is the best way to produce long-term results and create a growing, prosperous company.

Schacht’s predecessor and mentor, J. Irwin Miller, one of the authentic leaders of this era, initiated the stakeholder model. Miller had a keen appreciation of the importance of building a motivated employee based and a thriving community in the company’s small hometown of Columbus, Indiana, in order to serve its customers, its suppliers and its shareholders. Although Miller was not widely known outside business circles, his picture once appeared on the cover of Fortune magazine during the Watergate era with the caption, “This man should be President,” noting that the values and character Miller represented were precisely what America needed in its leaders.

Many of my elementary school classmates in early 1970s Columbus, Ind. had parents who worked for Cummins – stakeholders. In 1957 the Cummins Foundation had paid for architect Harry Weese to design the Lillian C. Schmitt elementary school, where I attended kindergarten through sixth grade. So even though my own family did not have a direct connection to Cummins, we lived there – so we were stakeholders, too, and we derived a specific return from our stake in Cummins.

I think it’s easy for progressive Democrats to look at the example of Cummins Engine and conclude that yes, that’s what corporate responsibility should be – decisions should be made by considering not just shareholders, but also stakeholders.

What happens, though, if we try to apply the idea of a stakeholder model of business to our local government? Who are the shareholders? Who are the other stakeholders besides the shareholders in a local government? It makes some kind of sense to think that among the shareholders are property tax payers – but not all of them get to vote. So perhaps it is simply voters who are the best pure analog to shareholders.

If we believe in a stakeholder model of business, and think it’s appropriate to apply a business model to local government, that leads to a somewhat startling conclusion: We should expect city management decisions to be based not just on the short-term interest of voters.

One way to reject that conclusion is to reject the premise that government should be run anything like a business. But here in Ann Arbor, we do appear to believe in government as a business – inasmuch as the term “stakeholder” is sprinkled easily through the talk of residents, as well as our appointed and elected officials.

From the recent resolution adopted by the city council, which tasked the Ann Arbor Downtown Development Authority with leading a process to explore alternate uses of a limited set of city-owned downtown surface parking lots [emphasis added]:

• Hold meetings with business and community stakeholders to determine professional assessment of the Parcel-by-Parcel Plan

For some folks, that language was not inclusive enough of “the public” and two additional clauses were strengthened with the word “robust” – which provoked some debate among councilmembers. From the resolution that was eventually passed:

• Solicit robust public input and conduct public meetings to determine residents’ Parcel-level downtown vision
  …
• Solicit robust public input and confirm the extent of community consensus for the Parcel-by-Parcel Plan through public meetings and surveys

A different way of including “the public” or “the people” would be to prefix “shareholders and” anytime the word “stakeholder” is invoked. And once we’re speaking the language of “shareholders and stakeholders,” then we have a way of talking about different points of view that’s closer to neutral than “the people” and “special interest groups.”

So that’s what I’d like to do in considering the question of how revenues from the public parking system should be spent.

Parking System Revenues: Background

The conversation about revenues from the public parking system is one that the city of Ann Arbor has successfully framed as a question of control: Should it be the city council or the Ann Arbor Downtown Development Authority that decides how to spend the revenues from the public parking system?

The Ann Arbor DDA is a tax-increment finance district, formed under the state’s Downtown Development Authority Act 197 of 1975. The DDA does not levy property taxes directly, but rather “captures” them from other taxing authorities. The DDA does not capture the entire tax on a property – it captures just the tax on the difference (the “increment”) in the baseline value and the value of improvements to the property. The DDA does not capture taxes on the appreciated value of the property.

While a downtown development authority formed under Michigan’s state statute is a “public body corporate” that can sue and be sued, a DDA is not empowered by state statute to run a public parking system.

But since 1992 it has been the DDA that has managed the city’s parking system by contractual agreement with the city. The shift of responsibility from the city to the DDA was motivated by the fact that some of the city’s parking structures had fallen into such a state of disrepair that they needed to be demolished or dramatically renovated. Two examples are: (1) the deck at Fourth & Washington  – demolished and now rebuilt; and (2) the deck at First & Washington – demolished, with the parcel waiting for developer Village Green to finalize its $3 million purchase agreement, for a construction start this summer on Ann Arbor City Apartments, a nine-story residential project that includes a parking deck on the first two floors.

Skipping ahead to 2005, in that year the city and the DDA revised a parking contract that they’d signed in 2002, so that in addition to a payment to the city’s street repair fund, the city would receive $1 million per year from parking revenues in “meter rent.” As part of that 2005 agreement, the city had the option of requesting an accelerated payment of $2 million per year – as long as the total amount paid to the city did not exceed $10 million.

Somewhat predictably, the city requested the maximum per-year payment of $2 million in each of the first five years, and then asked to renegotiate the contract. At public meetings over the last year, DDA board member Sandi Smith (who’s now also a city councilmember) has stated that there was no doubt in her mind in 2005 that the city would max out its allowable payment, then ask to renegotiate.

Even without negotiating the contract, the Ann Arbor DDA elected last year, in 2010, to transfer $2 million to the city that was not required under the terms of its contract with the city. The city administrator’s proposed budget last year had not factored in the $2 million, and had proposed police and firefighter layoffs. In that drama, the city council portrayed itself as hard-working heroes who used the additional “unexpected” revenue to avert layoffs in the police and fire departments.

That allowed the mayor last year to campaign for re-election on a perfect record of never having laid off a police officer in the course of a decade in office. Up to this year, the reduction in Ann Arbor’s police force has been achieved through attrition and early-retirement buyouts. In the last decade, the city council has never allowed layoffs to be a consequence of collective bargaining that did not achieve desired savings.

Parking System Revenues: Control, Money

The recent negotiations over the use of public parking revenues have been handled by committees from the city council and the DDA board. In concept, those committees originated in January 2009. But discussions between them did not become public until the summer of 2010.

The discussion about the contract revision can be divided into broad categories: (1) control; and (2) money.

For the first category, the two committees have settled on contractual language that includes the following key points, which are not included in the current contract:

1. Rate Setting: DDA would have the authority to set parking rates, with certain requirements on public input before rate changes would be changed. Currently the city council can veto rate changes – that veto would not be a part of the new contract.
2. Geographic Area: The geographic area where the DDA will have authority to manage the parking system would be precisely defined. The motivation behind this language is to prevent situations like one in 2009, when the city enacted a plan to install meters in additional locations where the DDA felt meters were inappropriate for a variety of reasons.
3. Communication: A standing committee with representatives from the DDA and the city would be formed to coordinate parking enforcement activity with rate policies. Regular reporting by the city to the DDA on enforcement and street repair activities would also be required.

For the financial part of the contract, the committees have moved away from a collection of separate payments to a percentage-of-gross arrangement. The separate payments that are currently reflected in historical practice, if not under the terms of the contract are: (1) meter rent – $2 million per year; (2) street fund – currently $840,000 per year with a formula-based increase; and (3) revenue from 415 W. Washington and Fifth & William surface parking lots – $170,000 per year.

The two negotiating committees have tried to arrive at a percentage-of-gross number that would roughly approximate (over the life of the contract) the city’s withdrawals from the public parking system in recent years.

Earlier this month, the positions of the two bodies on the percentage of gross public parking revenues that the city should withdraw had reached an impasse of sorts. The city council’s position, as reflected by its committee, was 16% in the first two years of a 10-year contract and 17.5% in remaining years – the 16-16-17.5 scenario. The DDA’s committee, after going back to the full DDA board on two occasions, had raised its offer to 16% in all years of a 10-year contract – a flat-16 scenario.

By way of orientation to the scale of the parking revenue fund, its projected revenues for FY 2012 are around $16 million. Fixed costs for the DDA’s subcontractor, Republic Parking, come in at around $7.4 million. The DDA typically allocates a little over $2 million per year to its maintenance program for the parking decks. Debt service paid out of the parking fund and a transfer to the DDA’s bond fund totals around $4 million. An annual grant to fund the go!pass program for getDowntown takes another $0.5 million.

The DDA’s position is based on the financial stress the parking fund and the entire organization would be under, if the DDA were to agree to the higher percentage-of-gross figures. To relieve pressure on the parking fund, the DDA has already deferred its maintenance schedule for the decks and has decided to allocate a portion of the bond payments for the Fifth Avenue parking deck from its TIF fund. On a flat 17% scenario, the parking fund would show a balance of -$157,000 in FY12 and -$327,000 in FY13.

At the April 19 city council meeting, councilmembers instructed their committee to go back to the DDA, not with support for the committee’s prior negotiating position, but rather with an escalated request: 18% of gross revenues every year.

This kind of “negotiating” strategy leaves room to wonder if the city’s collective bargaining conversations with its unions are equally bizarre – where the city seeks to increase the gap between established positions, instead of closing it.

But leaving aside for a moment the city’s schizophrenic negotiating strategy, it’s worth thinking about the basic concept behind a percentage-of-gross arrangement as opposed to some kind of flat payment.

The idea is that the interests of the DDA and the city are aligned under such a scheme – because revenues to both organizations increase or decrease in parallel. And there’s no built-in check on rate increases – on a percentage-of-gross arrangement, both the DDA and the city have an interest in seeing parking rates be set as high as possible without causing demand to decrease.

Otherwise put, with respect to public parking system revenues, the percentage-of-gross arrangement gives the city and the DDA a parallel stake in the system.

Parking System Revenues: Shareholders, Stakeholders

The city and the DDA have historically conceived the issue of public parking revenue as one about organizational stakeholders – the city of Ann Arbor versus the DDA.

Portraying the question as the competing interests of organizational stakeholders works to the city’s advantage for at least two reasons.

First, many Ann Arbor residents have a built-in skepticism of the DDA. Why? Because its board members are appointed, not elected. Of course, it is elected officials who appoint DDA board members – nominations by the mayor and confirmation by city councilmembers. But that additional layer of accountability makes some Ann Arborites uneasy. It’s that audience to which councilmember Stephen Kunselman was playing when he said at the council’s April 19 meeting that he didn’t think there was a single Ann Arbor resident who was interested in giving the DDA more control over the city’s public parking system.

Second, if the conversation is defined as being fundamentally about the competing interests of two stakeholder organizations, then it’s fair to ask: Which organization’s financial health should be given priority – the DDA’s or the city’s? It’s on that basis that much of the conversation unfolded at the city council’s April 19 meeting. City councilmembers were keen to portray the city’s undesignated fund reserve as taking priority over the DDA’s fund balances.

But what if we took very seriously the idea that this is not a question just about two organizational stakeholders, but rather one about a whole range of stakeholders – as well as shareholders?

I’ve made this point before, in a column written last year:

The question of how excess parking revenues should be spent is a pure public policy question, that is not necessarily contingent on who gets to make the public policy choice. But the negotiation between the city and the DDA has focused the public’s attention on the “who” of the policy choice, instead of the choice itself. The “who” making the choice is in some sense a surrogate for how we feel about the choice itself.

With respect to decisions about how public parking revenues are spent, the shareholders include at least the voting public in Ann Arbor. And if the decision is made based purely on the short-term interest of the shareholders, then excess parking revenue would likely be invested in the city’s general fund to pay for expenses like administration, the city attorney’s office, parks, police and firefighters. Certainly, I think it’s fair to say that most councilmembers perceive that this is the majority view of the shareholders.

But if we adopt a stakeholder model of governance, then it’s not just the short-term voting public’s interests – i.e., the interest of shareholders – that elected representatives should consider. On the stakeholder model, they should consider the long-term interests of the shareholders as well as the interests of the stakeholders.

So who else, besides the voting public, count as stakeholders in the public parking system? It’s not hard to come up with examples: businesses located downtown whose employees want to drive to work; the employees of those businesses; retail businesses whose customers want to drive and park downtown; downtown property owners who want to be able to lease their buildings to tenants who desire parking availability; downtown residents who want to own a car and store it close by for occasional use.

The point here is not to try to make an exhaustive list. It’s simply to point out that the decision about how public parking system revenues are spent should include at least all these stakeholders. And if we really believe in a stakeholder model of governance, then we can’t simply say: Well, yes, all those groups are also stakeholders with legitimate interests, but ultimately, the short-term interest of shareholders trumps that of mere stakeholders.

At a March 28 meeting of the council and DDA committees, Roger Hewitt, a DDA board member, identified downtown parkers as a group of stakeholders for which the DDA has historically been an advocate. Over the last several months of committee meetings, Hewitt has displayed increasing frustration with the fact that the DDA’s position as a lobbyist for downtown parkers puts it in a situation where it cannot succeed – because the city’s eye is only on the short-term revenue from the system.

Hewitt himself is a downtown business owner – of Red Hawk Bar & Grill, Revive and Replenish. On March 28, he pointed to a contrast between his employees, who must pay for parking, and the beneficiaries of the parking revenue when it’s withdrawn from the public parking system by the city. The beneficiaries, Hewitt said, are city workers who enjoy salary and benefits far exceeding what his own employees could hope to achieve. Hewitt echoed the same sentiment on April 27, at a DDA operations committee meeting [officially known as the "bricks and money" committee].

Translating Hewitt’s point to the language of shareholders and stakeholders: While city employees are certainly stakeholders in the public parking system, so too are downtown employees who pay to park. So part of the conversation about the use of public parking revenue should be about how to balance appropriately the interests of those two stakeholder groups.

As part of that same conversation on March 28, Hewitt’s frustration was evident when he floated a proposal to eliminate the need for an annual battle about the amount to be transferred from the public parking system revenues to the city:

Hewitt’s “Take As Much as You Need” Proposal: Each year the city informs the DDA what dollar amount of public parking revenue it needs for the upcoming year. The DDA sets rates as high as necessary to generate that amount of revenue.

In connection with that proposal, Hewitt also raised the specter of signage in parking structures and on parking meters with a pie chart indicating something like “N% of your parking dollar goes to the city of Ann Arbor’s general fund.”

It’s fair to say that the councilmembers at the table – Carsten Hohnke, Christopher Taylor and Margie Teall – were flummoxed when Hewitt floated that proposal. In scrambling to reject the idea politely, they essentially argued that in spirit that’s what the contract with a percentage-of-gross arrangement was attempting to formalize – the only difference was the need for the city to articulate each year what amount of parking revenue it needed.

The explicit take-as-much-as-you-need idea also received little traction from the DDA board when Hewitt floated it at a March 30 meeting of the DDA’s operations committee. Part of the reason I think it foundered was this: It would have made completely transparent the relationship between parking revenues and the city’s general fund. That’s a political cost the city council is unwilling to accept, because it would highlight the fact that it is a body that lacks discipline.

Discipline

Part of the fundamental concept of a TIF authority like the DDA is that certain tax revenues are not put through the regular budget process of the taxing authorities whose taxes are “captured” by the TIF. This very fact is objectionable to some of Ann Arbor’s shareholders. In his last two city council campaigns – for the Ward 5 city council seat currently held by Carsten Hohnke – John Floyd has raised exactly this issue.

The way Floyd sees it, investments in the downtown should be able to compete with investments elsewhere in the city as part of the regular budgeting process for the city and for the other taxing authorities whose taxes are captured. On Floyd’s view, if the city council (or the Ann Arbor District Library board, or the Washtenaw Community College board, or the AATA board, or the Washtenaw County board of commissioners) sees fit to make investments in Ann Arbor’s downtown as part of their regular budgeting process, then it will do that fair and square.

Historically, the city has elected to contract with the DDA to operate its public parking system – in a way that puts at least some of those public parking system revenues in the same category as TIF capture. That is, public parking revenues are, by contract with the DDA, not all subjected to the regular budgeting process of the city. Instead, decisions about the spending of parking revenues are made outside of the city’s regular budgeting process.

One way of thinking about both TIF capture and contractually-obligated public parking system revenues is that they’re both a way for the city to self-impose a certain discipline on itself. That discipline is essentially to make a long-term commitment to investments in the downtown and in the public parking/transportation system – investments that prioritize long-term value for all stakeholders over short-term value for shareholders. For example, the disciplined approach is one that leads the DDA to invest parking revenue to subsidize bus passes for downtown employees through the go!pass program, which is administered by the getDowntown program.

Imagine a regular budgeting process that asks shareholders to choose between (1) reduced park maintenance and fewer assistant city attorneys; and (2) eliminating free bus rides for employees of downtown businesses. I think that an accurate representation of short-term shareholder interests would favor park maintenance and city attorneys every single time. That would be all the more true if you set it up as a choice between police officers and free bus rides.

And that’s exactly why I think the choice to self-impose this kind of discipline is a good one. The fact is that we as a community have made a choice for this kind of discipline – by establishing a DDA. And the city council in 2005 made an apparent choice for discipline by limiting its use of parking revenue to $1 million a year. One could imagine self-imposing a different kind of discipline – one that would require that we hew to the short-term interests of shareholders. However, we haven’t done that in any explicit way.

The Ann Arbor city council is not, as a group, very disciplined. Instead of living with its choice to limit itself to $1 million a year in parking meter rent, it built into the contract with the DDA the option to withdraw $2 million per year, until it reached its limit. And now the council has decided to take the approach of simply withdrawing as much parking revenue as it can.

A disciplined city council might have opted back in 2005 to say: “Okay, we need to align our labor and budget strategy; if we can’t get the kind of collective bargaining concessions we need from unions for their health care and pension costs, then we’ll reduce staff proportionately based on the cost of those benefits.” It’s only this year that we’ve heard the city administrator take that fairly obvious step.

Instead of exercising discipline, the city council has chosen over the last half decade to avoid layoffs of public safety workers – either by paying for early retirements or by using public parking system revenues to maintain staff levels.

It’s not surprising that they’ve chosen an undisciplined path as a body – some of them are undisciplined individually. To illustrate, last year at the council’s Jan. 19, 2010 meeting, mayor John Hieftje – by the description of two of the mayor’s strongest supporters on the council, Carsten Hohnke and Christopher Taylor – showed “leadership” by choosing to declare publicly that he would be offering a voluntary give-back of 3% of the salary he receives for the job.

That night, Hohnke and Taylor clearly stated their willingness to participate in the 3% giveback, as did some other councilmembers. Except for Sabra Briere, Stephen Kunselman and Mike Anglin, all councilmembers eventually (either that same evening or else at subsequent meetings) seemed to give a public indication that they’d also be participating in the 3% giveback. It turns out that even Briere also wrote a check, but not for 3% – it was for $100, or a bit over a half percent.

On Feb. 22, 2011 – more than a year after the public promises were made – The Chronicle inquired with the city’s financial office about the status of those payments. Not all had paid. But by March 7, 2011, all those who said they’d participate had finally made good on their commitment – it took The Chronicle’s inquiry to get them to follow through. According to city staff, it had been the expectation of some councilmembers that they would be invoiced with an incremental payment plan. And apparently when they didn’t receive an invoice from the city, they didn’t have the discipline to make the payments on their own.

So far this year, the mayor has not chosen to announce a 3% give-back. So it’s somewhat ironic that the chair of the council’s labor committee, Stephen Rapundalo, has stressed publicly that the city’s firefighter’s concessions made last year were only for the six months remaining on their contract. Under collective bargaining laws, of course, the firefighters continue to work under the contract concessions they agreed to. Councilmembers so far have not expressed any eagerness to continue their voluntary 3% give-back through this year.

Political Reality

The stark reality of the politics concerning public parking revenues is that the decision will be made as a negotiation between the city council and the DDA – which will likely not involve any deep discussion of stakeholders, shareholders or discipline.

At the Monday, April 25 meeting of the two committees from the DDA board and the city council, those around the table reflected on the city council’s performance a week before, on April 19.

That was a meeting where the council had voted to direct its own negotiating committee to escalate the city’s expectation of percentage-of-gross parking revenue payments – upward from the city committee’s previous position to a flat 18% in all years of a 10-year contract. That direction came after the council entertained an even higher percentage-of-gross public parking revenues for use in the city’s general fund – 19%.

On Monday morning, DDA board member Roger Hewitt thanked Christopher Taylor – because Taylor had been the only member of the city’s committee who had displayed the discipline to vote the committee’s position against the rest of the council. Hewitt pointed out to Carsten Hohnke that Hohnke himself had abandoned the city committee’s position and voted for the amendment of the resolution to 18%, as well as for the resolution itself. Margie Teall had voted against the amendment, but ultimately for the resolution.

Hohnke’s explanation to Hewitt was that he’d argued for the committee’s position – but when it became apparent that the consensus of the council was not aligned that way, he felt compelled to stand with his fellow councilmembers. He characterized his decision as the same one that Teall had made one step later and that Taylor had made two steps later – that very morning, in choosing to accept the council’s direction to continue negotiations based on the 18% figure.

Hewitt expressed concern that it was not just the financial part of the contract that was in doubt. Based on sentiments expressed at the council’s April 19 meeting, he wondered if there was adequate support on the council to ratify the non-financial aspects of the contract – those that involved giving the DDA more control over the parking system it is supposed to manage. Taylor tried to downplay the sentiments that had been expressed by some councilmembers (like Stephen Kunselman) as those of “outliers.”

Taylor suggested to Hewitt that for the non-financial parts of the contract, he could count four votes for sure: the three committee members (Taylor, Hohnke, Teall) plus Sandi Smith, who serves on both the DDA and the city council. Taylor ventured that without wild speculation, one could come up with two more votes, for the six (out of 11 councilmembers) they’d need to ratify the contract.

However, at the DDA’s operations committee meeting two days later, on April 27, Sandi Smith indicated that she felt like nobody really cared about the conversation the DDA was having over the percentage-of-gross figure, because it was going to be “shut down” on May 2 by the council. She doesn’t think there’s sufficient support for the non-financial aspects of the contract for the council to ratify it.

The operations committee also entertained some discussion of the “nuclear option” of dissolving the DDA, to which Carsten Hohnke had vaguely alluded at the April 25 meeting. That allusion came in the context of comments made by DDA board member Russ Collins. Collins noted that if “bombs are thrown over the transom” in order to create political movement, that thinking in cartoon terms, sometimes it’s best to catch them and throw them back. Hohnke told Collins that what Collins might be detecting among councilmembers is this: One could come to the “not irrational conclusion” that there’s an alternative available to provide a better net return.

At the April 27 DDA committee meeting, Leah Gunn observed that if the city wanted to dissolve the DDA it could do that – but Smith labeled that as a false argument. It was not financially realistic, she said. However, back in December 2009, the city’s chief financial officer Tom Crawford told the city council at a budget retreat that dissolving the DDA would result in a net positive to the city’s general fund of $700,000 per year. It’s not more partly because the DDA has committed $0.5 million per year in TIF revenue to help make bond payments on the city’s new municipal center.

In any event, the DDA’s operations committee decided that it would put a resolution before the full board for the noontime meeting on Monday, May 2 to ratify a new parking contract. That contract will include a percentage-of-gross figure of 17% in every year of an 11-year contract, and one 11-year renewal option. The somewhat odd 11-year number corresponds to the currently scheduled lifetime of the DDA, which goes through 2033. Based on the conversation at the operations committee meeting, it appears there could be attempts to amend that proposal at Monday’s board meeting. Hewitt indicated that he’d been led to believe there was enough support on the council to approve the 17% figure.

The DDA’s operations committee stressed that the board’s ratification of the contract on May 2 would be contingent on the city council’s ratification of the entire contract – which it will consider later the same day, at its evening meeting. The newest member of the DDA board, Bob Guenzel, noted that if the city council chose to alter the non-financial language or the financial figure, that would amount to a counteroffer, and would not bind the DDA based on whatever the board had ratified.

In any case, there appears to be growing sentiment on the DDA board that if the city council does not ratify the parking contract in unamended form, it might be best to just let the existing contract run its course. It currently runs through 2015, with a three-year renewal option.

For example, at the April 25 meeting, Collins indicated that he believed running the parking system was actually a distraction to the DDA. He said his understanding was that one of the DDA’s “most politically progressive board members” was content to leave things the way they are. And at the April 27 meeting, DDA board member John Mouat wondered if they’d reached a point where the DDA should just let the city take back the parking system.

On the scenario where the current contract runs its course, the city’s revenue from the public parking system would be $2 million less per year than what it’s received in the last few years – though the city would still receive roughly $1 million per year (the payment to the street repair fund, plus payments from 415 W. Washington and Fifth & William surface parking lots).

But if the council does not ratify the same contract as the DDA on May 2, some councilmembers reportedly feel they have another option that stops short of dissolving the DDA. That option would be to simply transfer the funds from the DDA to the city as part of the budget resolution that council will approve on May 16.

In 2007, the city council amended the DDA’s budget using a simple resolution – but on that occasion, the change did not result in a transfer of funds. If the council did undertake a fund transfer, it would sure be interesting to see what happened next. On that kind of scenario the financial transaction would still need to be effected by the DDA. The DDA maintains its own funds in its own bank accounts.

The DDA’s board chair would need to sign the check. And it’s a check that would need to be endorsed, ultimately, by a majority of the city’s shareholders.

Leading up to the city administrator delivering a proposed budget in April – for FY 2012, beginning July 1, 2011 – the city council is also holding a series of work sessions on the budget. Their typical scheduling pattern is for the weeks between council meetings. Previous work sessions have taken place on community services, as well as the 15th District Court and police and fire services. On Feb. 28, the council held its final budget work session of the season – on public services and the city attorney’s office. [.pdf of  combined public services budget impact sheets provided on the city of Ann Arbor's budget impact web page.]

Streets, sidewalks, trash collection, trees in the right-of-way, water and sewers are all included under the general label of “public services” in the city. At Monday’s budget work session on those kinds of activities, public services area administrator Sue McCormick did not present the council with any news more dramatic than Roger Fraser did when he announced at the conclusion of the session that he’d be leaving his job by the end of April.

But McCormick did present the council with options for meeting reduction targets that would, if enacted, have a significant impact on the range of services offered by the city. In at least one case, the range of service would expand – the city (instead of adjoining property owners) could assume responsibility for sidewalk repair and replacement.

In another case – which McCormick stressed was not a recommendation, but rather just an informational ballpark amount for potential annual savings to the city ($2.1 million) – the city would get out of the business of trash collection. In another month, the city expects to give the council a report that provides more detail on possible alternatives to having city workers perform that task, including some kind of franchised trash collection operation.

Many of the specific reduction target tactics presented on Monday evening involved assigning costs to a unit outside the general fund. While the city’s total budget includes around $340 million in expenses, the annual discussion typically spotlights the general fund, which gets revenue from the general operations millage [listed on tax bills as CITY OPER] – and is currently levied at a rate of roughly 6 mills. The widely reported projected deficit of $2.4 million for the city’s budget is for the general fund.

During the work session, the assignment of costs to other funds caused Sandi Smith (Ward 1) to wonder if it was just a matter of “shuffling” money from one bucket to another. The answer she heard was: No – it’s a matter of assigning costs appropriately to whatever fund should properly bear the cost of a particular activity.

One of the largest instances of such a cost reassignment would use the stormwater utility fund, instead of the general fund, to pay for forestry operations for trees in the right-of-way. That move would save the city’s general fund around $660,000 a year.

Another example of that kind of “shuffling,” albeit with a smaller dollar figure ($35,000), was a proposal from the city attorney’s office to charge capital projects part of the cost of a paralegal specializing in easements, instead of burdening the city attorney’s budget with that expense. The city attorney’s reduction strategy, which had originally been scheduled for a prior work session, was also part of Monday evening’s presentation.

Basic Background

As budget planning began in December 2010 with the first of two off-site budget retreats, the city’s chief financial officer, Tom Crawford, had projected a $2.4 million deficit for the general fund. That amount assumed that: (1) the city would continue to receive roughly $2 million in “rent” from the Ann Arbor Downtown Development Authority for use of city facilities to operate the city’s public parking system; (2) that state shared revenues would remain relatively constant; and (3) that union contracts would settle with no wage increases and with greater employee contributions to the benefits plan.

However, based on the state budget recently proposed by Gov. Rick Snyder, city administrator Roger Fraser has estimated the additional negative impact to the city’s budget – including statutory and constitutional state shared revenue and fire protection grants – as ranging from $0.5-1.7 million.

But for the part of the public services budget that is supported from the general fund, public services area administrator Sue McCormick offered some brighter news – she’d identified more reductions than her target for both years of the budget planning exercise: nearly $600,000 in FY 2012 and $500,000 in FY 2013. If those savings can be realized, it could offset a significant part of the reductions proposed by the state.

Current reduction targets for different departments vary from 2.5% to 4.0%, depending on the number of employees who are not on the city’s new benefits plan – departments with higher reductions are those with a greater number of workers whose benefits packages are more expensive to the city. It’s part of the city’s attempt to align its budget strategy with its labor strategy.

Forestry: From Field Ops into Stormwater

McCormick told the council that across the country, more and more governments have recognized the importance of forestry in helping to manage stormwater. This year, she continued, when the city applied for and received a $0.5 million grant from the state’s revolving loan fund for sanitary and stormwater utilities, it was for planting trees. So the state of Michigan is aware that – based on the state of the art in stormwater management – the benefit of an urban forestry program is predominantly for stormwater management, she concluded.

What she’s proposing is to move forestry operations out of the general fund and into the stormwater utility fund for a savings of $659,798 to the general fund. Some forestry expenses would remain in the general fund – expenses associated with past retirees, for example. Moving forestry to the stormwater utility would include the elimination of two vacant full-time positions, and a strategy of contracting out services like tree trimming, planting, and stump removal. Tree planting levels would be maintained, McCormick assured the council. [Previously. the city has paid for some stump grinding activity out of the stormwater fund.]

During council discussion of forestry and stormwater, Mike Anglin (Ward 5) expressed concern about the trees, saying they were the most important thing in Ann Arbor. McCormick told Anglin: “I don’t disagree.” She said that moving the payment from the general fund to an enterprise fund like the stormwater utility would bring with it “an ethic of asset maintenance.” You recognize that you have an asset, she said – it’s a mental shift that would be of value to the city. The city had recently done an asset inventory of all the trees in the city, she pointed out. That includes the age, condition and maintenance activity on the tree. [Chronicle coverage of the inventory as it was underway: "Where Are Ann Arbor's Trees?" The result of the geomapped inventory is available as a .kml file on the city's Data Catalog]

McCormick noted that the city does not trim trees just for aesthetics, but to protect the health of an asset.

Anglin was also concerned about the use of contracted services instead of filling vacant staff positions. By way of reply, McCormick noted that the question is how to do the work most cost effectively. The work load isn’t constant, McCormick replied, saying that contracted services gives the city flexibility to achieve the scale it needs to deal with backlogs – like stump grinding, for example, and planting.

When McCormick discussed the stormwater fund, she noted that the reason the stormwater utility could afford to absorb the cost of forestry operations this year is that a certain amount of loans the city had received through the county had been forgiven through federal stimulus funding. The planned rate increase would be 3.25% in FY 2012 instead of 2.25%, and 3.50% in FY 2013 instead of 2.30%, she said. That extra revenue would have otherwise gone into debt service, instead of supporting forestry operations.

Each 1% increase in the stormwater rate across the whole system is about $60,000, McCormick said. The roughly $2.7 million fund is comparatively small, she said. So if the city were trying to move the forestry operations into the fund at any other time than when it had this extra capacity, it would be difficult.

Streetlighting: LEDs Plus More Conversation – Golf?

McCormick pointed out to the council that an upcoming meeting agenda included an item authorizing an expenditure to buy LED fixtures for those city-owned streetlights that have not already been converted to lower energy fixtures. [The March 7, 2011 agenda item shows 500 LED cobra head fixtures at a cost of $315,968.] Anticipated energy and maintenance savings from installation is expected to be $32,000 in FY 2012 and $47,000 in FY 2013.

The budget impact sheet that McCormick presented for FY 2013 showed a $120,000 savings, which she characterized as a “placeholder” – it’s the same target they’d had when they implemented a program to deactivate lights in some areas of the city last year, as part of the FY 2011 budget. The city council eventually voted to restore the lights in October 2010. [Chronicle coverage: "Streetlights Back On"] McCormick stressed that it was not a proposal to reimplement the de-lighting program, but rather to engage the community in a conversation about how to fund streetlighting. [Options discussed last year during the council's budget work session included streetlighting special assessment districts: "Budget Round 4: Lights, Streets, Grass"]

Also in field operations, McCormick pointed to $158,248 in savings that is expected from using temporary labor in park operations to accomplish work done by workers in now-vacant full-time positions. McCormick reported that the city had discussed with its AFSCME union the idea of keeping positions open in order to provide soft landings in case there are operations in the city that it chose not to keep in the future. So if the city eliminates a position in one area, it could transfer that worker to another job that’s been kept vacant elsewhere.

[One of the potential legacy costs to converting Huron Hills to a non-golf use would be two union workers – one AFSCME and one Teamster – for whom other city positions would need to be found, if golf operations were ended at Huron Hills. At the community services budget working session, the city council had expressed a consensus that for the next two years, which corresponds to the duration of the five-year plan put in place for improving financial performance at the city's two golf courses, Huron Hills would remain a golf facility.]

Sidewalks, METRO, Street Repair Millage

A total of roughly $200,000 in field operations savings is forecast for FY 2012 as a result of reallocating costs from certain field operations – snow removal, graffiti removal, and some mowing operations – to the METRO expansion fund. To do that, future METRO money needs to be freed up. So what does METRO money pay for currently?

[The METRO fund gets its revenue from payments made by the state, based on telecommunications companies that pay to use the city's right-of-way under Act 48 of 2002, which established the Metropolitan Extension Telecommunication Rights-of-Way Oversight (METRO) Authority. Expenses/revenues for the city's METRO fund in the council's authorized FY 2011 budget were $635,000. However, budget impact sheets from the working session showed $340,000 for FY 2011 as well as for FY 2012-13.]

Over the last few years, the city has chosen to spend most of its METRO funds on maintenance in the right-of-way – McCormick explained that a restriction on the use of the METRO funds is that they must be used in the right-of-way. The city has chosen to pay for general fund obligations out of the METRO fund, so that it effectively supplements the general fund, McCormick said. [The METRO money is not a part of the general fund.] For example, the city has used METRO funds for streetlight pole replacements. Early in the program, the city used METRO funds for tree planting.

METRO funds also pay for administrative expenses associated with the city’s sidewalk replacement program – the marking of slabs, notification of property owners and the like, McCormick said. That’s key to understanding a significant impact on the way that the city might fund sidewalk maintenance and replacement in the future.

By way of background, the city’s sidewalk replacement program is a systematic way of ensuring compliance with the city code on sidewalk maintenance and replacement, which places responsibility on adjoining property owners to maintain and replace sidewalks. From Chapter 49 of the city code on sidewalks:

All sidewalks within the City shall be kept and maintained in good repair by the owner of the land, adjacent to and abutting upon the same; and if any owner shall neglect to keep and maintain the sidewalk or any walks and ramps leading to a crosswalk along the front, rear, side of the land, owned by her or him, in good repair and safe for the use of the public, the said owner shall be liable to the City for any damages recovered against the City sustained by any person by reason of said sidewalk being unsafe and out of repair.

The city’s experience with the sidewalk replacement program was uneven, with many property owners complaining about a failure by the city to communicate adequately. From a September 2008 Chronicle report of a city council caucus:

Residents along Second Street reported a variety of problems with adequate notification – including invoices sent from the city after work had been completed, work begun by the city without adequate notification, and lack of adequate marking. Under the rules of the program, property owners are supposed to make arrangements with private contractors to complete the work, with the city only undertaking the work when a property owner does not comply. During a period of low activity for the sidewalk program, council suspended it temporarily between November 2007 and March 2008 so that an ad hoc council committee could implement a clearer set of communication guidelines. Problems along Second Street this year could be remnants of ineffective communication beginning last year.

At the budget working session, Mike Anglin characterized the sidewalk replacement program as “an opportunity to get to know your neighbors under duress.”

In the upcoming months, McCormick told councilmembers, they would be asked to appropriate some additional fund balance from the METRO fund to make sure that the first cycle – the current one – of the city’s sidewalk replacement program is closed out. The closing out of the first cycle of the program would take place over the course of the summer, McCormick said. And that will, for the future, take the METRO fund out of the sidewalk replacement funding picture. What will take the METRO fund’s place in sidewalk replacement?

What the city is now contemplating, as McCormick laid it out, is for the city to start paying for the sidewalk maintenance and replacement – using the street reconstruction millage. Anglin wanted to know: What about property owners who already paid to replace sidewalk slabs under the old program?

McCormick explained that the idea of using METRO funds to close out the first cycle of the program is that all property owners, in the interest of equity, should have experienced one complete iteration of the program. This would entail, in part, performance of work by the city that property owners should have done. Property owners would be billed for the work, but the city would have upfront costs.

Making the city responsible for sidewalk replacement would require changing the city code on sidewalks as well as revising the street reconstruction millage language the next time it’s put on the ballot – on Nov. 8, 2011. Voters last approved the street repair millage in 2006 for a period of five years and a rate of 2 mills. The street reconstruction millage is listed as CITY STREETS on tax bills.

The point that some alternative revenue would be required – like redefining the street reconstruction millage – emerged during councilmember discussion by Marcia Higgins (Ward 4) and Christopher Taylor (Ward 3), who agreed that “it’s not magic.”

McCormick said there’d of course need to be a conversation about whether to roll the sidewalk replacement program into the street reconstruction millage. She said she’d heard some interest in making it a five-year millage, as well as some interest in seeing it be a 10-year millage.

On an ongoing basis, then, METRO funds in the future would not be used for administration of the sidewalk program, McCormick explained. That would free up METRO money to pay for other activities in the right-of-way. Among those activities proposed to be paid for out of METRO funds would be snow removal on sidewalks fronting publicly owned property, graffiti removal, and traffic island mowing and brush clearance. Paying for those activities out of METRO funds would relieve the general fund of around $200,000.

Customer Service – Return to Larcom

McCormick said she felt that a reduction on the $265,206 projected expenses for FY 2012 in customer service would be difficult to achieve in the first year, but doable in the second year. The return to the Larcom building – also known as city hall, which is currently being renovated – would provide some efficiencies due to co-location of some service desks.

Due to some changes in job classifications, she said, the city would have some ability to adjust staffing levels so that by FY 2013, half of one staff position could be eliminated. That move would actually result in exceeding the combined reduction target for both years.

Larcom Building: Five-Day Janitors

The facilities unit – with $1,406,393 in projected expenses in FY 2012 – was actually proposing several increases, reported McCormick. However, it is implementing decreases where it can. Those reductions include small adjustments in the IT fund, the elimination of a managed clothing program and the elimination of half of a facilities maintenance tech position.

The increases include restoration of janitorial services from three days per week to a five-day service. That move from five-day service down to three-day service, McCormick said, proved to be the “worst thing we could have done.” Exacerbating the issue is the age of the building, and there’s ongoing construction adjacent to the building, plus the fact that more people will be returning to work there. So next year’s budget proposes five-day service – an additional expense of $33,500 per year. In the new municipal center, McCormick said, a three-day-a-week janitor service would be a “recipe for decline” in the new building.

By way of brief background, the new municipal center has been constructed directly adjacent to the existing Larcom building (city hall) and is physically connected to it.

Several renovations to the Larcom building amount to roughly $350,000 in additional costs over FY 2012-13. The renovations reflect the reality of the decision to keep city offices in the Larcom building for the foreseeable future, said McCormick. She spoke of holding the building together with “baling wire.” In taking the ceilings apart to do some of the renovations, they’d found “systems” of keeping water off the ceiling tiles. She said that everyone had experienced some of the issues with bathroom drains backing up.

Asbestos mitigation is underway in the east end of the building now, because the plumbing in the bathrooms is failing. Fixtures need replacement – the bathrooms are deplorable, McCormick said. In the course of the next two years, the city wants to put a fresh bathroom on each floor next to the east elevator tower. In the second year, the city wants to do a complete renovation of bathrooms on the west side of the building.

Sabra Briere (Ward 1) wanted to know if the improvements to the Larcom building were in the capital improvement plan (CIP). She also asked for confirmation that the renovations were not expenses that were anticipated when construction started: “It’s add-on, yes?”

McCormick said the answer was actually: yes and no. The city had originally intended the renovations of the Larcom building to focus only on areas intended for repurposing. For example, the planning department formerly on the sixth floor is being moved to the renovated first floor. The reason these activities don’t show up in the CIP, McCormick said, is that generally you don’t put capital improvements from the general fund into the CIP – they’re typically funded from operations.

McCormick clarified further that the Larcom building is a general fund facility. It shows up in the general fund, but to some extent those costs can be allocated – using the municipal service charge – to the departments that actually occupy the space, if they’re not general fund departments.

Bus Passes

The environmental/energy fund, which is part of the systems planning unit, had projected expenses of $113,478 for FY 2012. A savings of $8,800 was proposed to be achieved by reallocating the expense of participation in the getDowntown go!pass program. The go!pass program allows employers like the city to purchase unlimited bus passes for its workers at a cost of $5 apiece for the year. The passes are subsidized by a grant from the Ann Arbor Downtown Development Authority.

McCormick’s proposal was to move the payment for the go!passes to the alternative transportation fund, which is not part of the general fund. Later in the discussion, Stephen Kunselman (Ward 3) got clarification that the alternative transportation fund gets its money from Act 51, which is the state statute under which state gas tax money is allocated.

Dams

In the utilities budget, McCormick said, the city had historically supported maintenance and operation of dams from the drinking water utility. She noted that the staff has had significant discussion with the council about how dams are funded. [At its Nov. 10, 2010 meeting, the council approved a resolution that directed the city administrator to end the payment for repairs, maintenance and insurance of Argo and Geddes dams from the city’s drinking water fund. The shift in dam activity funding is supposed to be effective with the start of FY 2012, which is July 1, 2011].

McCormick said that funding for the city’s four dams – Barton, Argo, Geddes, and Superior – would be shifted around, in order to accommodate the council’s direction.

Barton dam, she said, has a hydroelectric function, but is also source water for drinking water. So the city staff believe it is appropriate to allocate some of the Barton dam administration and maintenance activities to the drinking water fund. Responding to a question from Sandi Smith (Ward 1), McCormick explained that the amount of water drawn from Barton Pond, compared to the city’s well field, depends on the time of year – in the winter, more is drawn from the well field to moderate the water temperature.

In the snapshot presented by McCormick, Geddes and Argo were grouped together as recreational dams, with Barton and Superior grouped as hydroelectric dams. In FY 2011, $88,938 for Geddes and Argo was spent from the drinking water utility, but nothing was spent from the parks millage. In FY 2012, roughly $90,000 is proposed to come from the parks millage for those two dams, but nothing would be spent from the drinking water fund.

In contrast, Barton and Superior were not funded with any drinking water money in FY 2011, but in FY 2012, $19,661 is proposed to be spent on Barton – because of its role in the drinking water supply.

Maintenance, operation and insurance on all four dams will have expenses of around $330,000 per year over the next two years.

Sabra Briere (Ward 1) wanted to know if the picture could change depending on what the VA Hospital wound up proposing – the VA has expressed interest in a collaboration on retrofitting Argo and Geddes with hydropower. McCormick said there would be an impact and that would need to be part of any conversation with the VA.

Utility Fees

McCormick walked the council through the projected rate increases for drinking water. In the last three years, the rate of increase has been somewhat higher than what’s been projected through FY 2017. Starting in FY 2009, the city has had annual increases of 4.62%, 3.61%, and 3.88%. Starting in FY 2012, the chart provided by McCormick to the council indicates increases of 3.36%, 3.25%, 3.50%, 3.38%, 3.38%, and 3.68%.

Mayor John Hieftje mentioned a study showing that Ann Arbor had some of the lowest rates in the state. McCormick said she predicted that Ann Arbor would maintain that distinction.

For the sanitary sewage system, the rate increases were higher, compared to drinking water. For the last three years, starting in FY 2009, the sanitary sewage rates have increased by 3.20%, 3.10%, and 3.00%. Starting in FY 2012, rates are projected to increase by 4.00%, 4.25%, 4.50%, 5.00%, 6.00% and 6.00%. McCormick said she felt that these increases were not outrageous.

Hieftje asked McCormick to give an update on the solids handling project at the waste water treatment plant. The city is just now wrapping up that project and bringing it online, testing the functionality. That was about a $22 million project, she said. The next step is replacing half of the liquids handling part of the plant – design is complete and it’s going out to bid in the next six months, McCormick reported. Much of it had been built in the 1930s, she said.

When the city builds infrastructure but depreciation isn’t built into the system to accumulate funds for its replacement, it’s financially difficult to undertake capital improvements. So the city has adopted a strategy of a “levelized rate increase” – where rates increase incrementally every year, in order to save up money to make a down payment on capital improvements, McCormick said. She later clarified for Hieftje that around $40 million has been accumulated through that strategy. To undertake the $110-120 million investment in that facility, in less than 6-7 years with only moderate rate increases, she characterized as “really quite an accomplishment.”

The city is still looking at applying for the state’s revolving loan fund for the project, which would be a nice benefit, McCormick said. But there would be some administrative burden, she allowed. The real problem is that the state does not typically fund projects that large. So the city may look at ways of staging the project. There’s a balance between bidding out a project in pieces in order to qualify for a state revolving loan, and taking advantage of a contractor’s market, which McCormick characterized as “hungry.”

Trash Collection

The budget impact sheet for solid waste includes a revenue drop of $226,077 from the solid waste millage. [The 2.5 mill levy shows up as CITY REFUSE on tax bills.] Contract increases for operators of the city’s recycling curbside pickup, its materials recovery facility and the commercial franchise recycling are expected to total $320,000.

On the savings side, McCormick showed the council a budget impact sheet that included nearly $600,000 in savings due to efficiency gains at the materials recovery facility, which are due to single-stream processing. Additional savings of $80,000 come from eliminating a full-time supervisor position at the compost facility – the city council authorized the outsourcing of its compost operations last year. Improvement in the market for recycled material is expected to add $250,000 in revenue.

A reduction in one full-time position for trash collection will be made possible through eliminating one trash collection route. In addition to savings on the labor side, McCormick pointed to savings of $84,500 in FY 2013 that the city would gain by not having to replace one of its garbage trucks. McCormick said the single-stream recycling effort – which added automated cart pickup for recyclables – had also allowed Recycle Ann Arbor to reduce a route as well.

In a followup phone interview with The Chronicle, solid waste manager Tom McMurtrie explained that having fewer routes (six instead of seven) would, for the vast majority of residents, not change the day of the week on which their trash and recyclables are picked up from the curb. For some areas, that would change, however – probably sometime this spring. Both trash and recycling carts, he said, would continue to be emptied on the same day of the week. Yard waste collection routes are somewhat variable, he said, and there’s no expected change in those.

“For illustrative purposes only,” at the work session, McCormick gave the council a sheet that included a savings of $2,132,000 if the council and the community decided the city should get out of the business of trash collection. She noted that some households need more trash collection service than others. Some households are now approaching zero waste, with the availability of the larger single-stream recycling carts, she said. Some households might be able to share service, she said.

It’s something that the city would likely want to regulate through some kind of franchising agreement to ensure quality of service – one vendor providing service throughout the city instead of multiple vendors running trucks through the city. That would be one possible model, she said. In about a month, the council would be given a report on various approaches to trash collection, but McCormick stressed that it’s not part of the city’s budget plan.

Hieftje was eager to make clear that before making a decision to move away from city-provided solid waste collection, there would need to be “a ton” of community input and there would need to be a lot of discussion. Stephen Kunselman (Ward 3) expressed his lack of enthusiasm for the idea by venturing that he was not sure he even wanted to have that discussion.

Vehicles: Fleet

In fleet services, McCormick said the city would be taking advantage of eliminating a vacancy due to a retirement, for a savings of $113,000. Another position would also be eliminated, for a savings of $84,309, based on reduced workload as a result of better preventive maintenance. Repair response times, however, could increase. A $45,000 savings was expected from a reduction in on-hand inventory for repair parts. The city will, said McCormick, attempt to reduce the amount of spare part inventory – they will monitor to see if that works.

Fleet rates charged to other departments are expected to be decreased for FY 2012 by 0.53% but increased by 8.26% in FY 2013.

Sabra Briere (Ward 1) wanted some information about why the number of large pieces of snowplow equipment had been reduced from 15 to 14 snowplows on the road, but only 12 of them had been available for service during the most recent storm. [Snow removal was discussed by the council at its last council meeting.]

Craig Hupy, head of systems planning for the city, clarified that the extra piece of equipment that the city previously owned was a front-end loader – not effective for plowing streets, but somewhat useful for clearing cul-de-sacs. As the city had moved to a containerized collection system for leaves, and discontinued the loose leaf program, retaining and replacing a front-end loader was not a priority, Hupy explained.

Hupy said he was not sure of the details about why the two plows were down at the start of the storm. Briere asked if there was adequate staff for all the equipment – Hupy assured her that staffing was not a problem. In the most recent storm, they had staff for all the equipment that was available. He called that group of employees dedicated – “they answer the call,” he said.

Stephen Kunselman (Ward 3) wanted to understand whether the city’s Wheeler Service Center was being used to its fullest capability. That came in the context of mechanics positions that appeared to be slated for elimination. He wanted to know what percent of the maintenance center’s capability was being utilized. McCormick said she would have to defer to Matt Kulhanek, who’s head of fleet services, on that question. He was not at the meeting, but McCormick said she’d pass along the question to him. She allowed that it’s not the case that the city operates the center with three shifts, with all bays full. The city runs two shifts – the second one is smaller.

But the maintenance center was not, she explained, originally programmed for that kind of use – the center is relatively new, dating from 2007. She clarified for Kunselman that although there had been discussion with Washtenaw County about possibly collaborating on the use of the facility, the county had elected not to collaborate. There have been discussions, she said, about collaborating with the University of Michigan and the Ann Arbor Transportation Authority on the use of the facility. The Wheeler Center has bays that are nose-to-nose, which can accommodate longer buses – that’s why those two organizations are interested in the facility, McCormick explained.

Town-Gown Issues

McCormick gave the council some numbers just as an informational sheet to keep in front of them: costs incurred but not directly reimbursed by the University of Michigan in connection with UM home football games. The costs in question are those associated with signs and signal reconfiguration to manage traffic on football game days. Each home football game costs the city $20,000, according to the information McCormick provided the council.

If additional homeland security measures are implemented for home football game days – by closing Main Street – it’s estimated to cost the city an additional $8,900 per game. McCormick said that in conversations with the university about that proposal, the city has made clear that in order to implement the street closure, the city is interested in getting reimbursed for the expense.

The money to pay for this work comes, for the most part, out of the street maintenance fund, said McCormick, so it affects things like pothole repair, snow plowing, crack sealing.

In response to a question about the December 2010 Big Chill hockey game at Michigan Stadium, Craig Hupy, head of systems planning, said an invoice had been sent to the university for the signs and signals work – he had no information about whether it had been paid.

Responding to councilmember questions, McCormick said the city did not send the university invoices for the regular home football games, because the university has made it clear that it will not pay. McCormick said when she’d notified UM of the city’s intention of invoicing for the Big Chill, the response she gotten was, “We really don’t know how we’ll fund that.” There was little recourse for the city to take, she said, and in the end the city would have to write it off.

Stephen Rapundalo (Ward 2) expressed what seemed to be a council consensus that the university be invoiced as a matter of principle, so that it’s on the record. There should be a constant reminder, he said, especially when the university comes and asks for street closures and other things. Sabra Briere (Ward 1) allowed that the university’s rationale for not paying – that the home football games bring commerce into the city – was correct, inasmuch as they did bring commerce into the city. However, Briere pointed out that the additional commerce does not put money back into the street maintenance fund.

Christopher Taylor (Ward 3) expressed some caution about the possible accounting implications – what might the city’s financial auditors have to say about these amounts that get written off? McCormick said that it does create some complications, but it’s doable. Taylor agreed with the principle of billing the university for the costs, but wanted some additional assurance that it would not cause more administrative hassle than it would be worth.

City Attorney’s Office

The 2.5% target reduction on the city attorney’s $1,912,106 budget amounts to roughly $47,000 in reductions.

City attorney Stephen Postema began his work session presentation by asking the council to consider the reductions he was proposing in the context of three retirements last year, which had resulted in the merging of three positions into just two: an office manager position and two paralegal positions had become just an office manager and one paralegal. The reduction in one staff member, he contended, had a large impact on his small office. [In FY 2011, the current budget year, the city attorney's office was budgeted for 13 full-time positions, including eight attorneys.]

The required reduction this year, Postema said, is being achieved partly through a reduction in “materials and supplies” of roughly $12,000. Materials and supplies, he said, includes the library, much of which is available online through sources like Westlaw.

Postema said that in conversation with Homayoon Pirooz, who is head of project management in the public services area, they had concluded that work done by paralegals on easements in most other cities was done in a department different from the legal department. Postema said the reason easement work is done in Ann Arbor through his department is through happenstance. When Marylou Zimmerman – the paralegal who had previously handled easement work – was originally hired, Postema said, her salary was funded by another department. Now, the legal department pays for it.

Although it hasn’t been done as carefully as it should have been, it’s important now, Postema said, to charge out as much time as possible, through whatever grants are supporting various capital projects – like the Stadium bridges project. So the other reduction is actually a revenue source, he said, to charge out half of the easement paralegal’s time to various projects. That $35,000 in additional revenue, combined with the $12,000 in savings, would meet the $47,000 target for FY 2012.

For FY 2013, Postema said, the savings might have to be realized by reducing the easement paralegal to a half-time position, and he remarked that it would be painful, if the department had to do that.

Sandi Smith (Ward 1) wondered: If a project is not grant-based, and the easement paralegal’s time is charged to the project, doesn’t that amount to shuffling it from one bucket to the next? Postema replied by saying that what’s at issue is the amount of time that is properly and legitimately allocated to capital improvement projects.

City administrator Roger Fraser, also responding to Smith, put the easement paralegal work in the context of an ongoing analysis for all of the city’s operations, regarding what the appropriate sources are for funding different activities. It’s easiest and most convenient, he said, to bill something to the general fund, but the city has not been as diligent as it should have been in making sure that the activity is supported by the appropriate departments.

Postema returned to his earlier point that most city attorney offices do not have a position for an easement paralegal – that position is in the engineering department, he said.

Stephen Kunselman asked if annexations of land to the city from the townships were in the same basic category as easements. There’s paperwork that needs to be done for that, Kunselman said. Postema replied that annexations had not been contemplated as part of the additional revenue projection, but if additional revenue could be realized, then that’s all the better. There have been a lot of annexations in the last two or three years, Postema said, but he was not sure if the volume will continue.

Sue McCormick began her part of the evening’s presentation, which immediately followed the 10-minute discussion of the city attorney’s budget, by providing some additional comment on the question of charging easement paralegal costs to capital projects.

She invited councilmembers to think about how the general fund works. Many of the general fund departments – such as finance– provide support to non-general fund departments. Those services are eventually allocated to the non-general fund departments as part of their operating expense budget. That allocation is achieved with the mechanism of the municipal service charge (MSC). But capital expenses, she said, should be capitalized as part of the project.