The Ann Arbor Chronicle » infrastructure it's like being there Wed, 26 Nov 2014 18:59:03 +0000 en-US hourly 1 Downtown Library To Close for Elevator Repair Wed, 13 Aug 2014 22:41:16 +0000 Chronicle Staff The Ann Arbor District Library’s downtown building at 343 S. Fifth Ave. will be closed indefinitely starting Thursday, Aug. 14 for repair of the public elevator.

AADL director Josie Parker gave an update on her director’s blog: ”It will remain closed into next week for certain. The repair requires casings that are concreted into the elevator shaft to be removed. A drilling rig will be brought in on Thursday, and the work area will be exposed in such a way that makes it impossible for the Downtown library to be open to the public.”

The elevator has been out of commission since this spring, after leaks had developed in the hydraulic piston, causing it to fail a weight test. At their July 21, 2014 meeting, trustees authorized a $93,598 contract with Schindler Elevator Corp. to repair the elevator. A week after the July 21 meeting, the board called a special meeting for July 29 to address additional issues related to the elevator. The four board members present at that meeting voted to authorize an additional $75,000 for elevator work.

The plan at that time was to attempt to keep the downtown library open as much as possible during the work, with the caveat that it was still unclear exactly what would be required to make the repair.

The AADL is also undertaking a major renovation to the front entrance of the downtown library. Construction work on that project has not yet begun. On July 21, AADL trustees authorized a $425,523 construction budget for that project, which has been in the works for several months. The budget covers new doors, a redesigned facade, and heated sidewalks, among other changes. The construction manager is O’Neal Construction of Ann Arbor.

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Ann Arbor OKs $480,000 for Traffic Signals Fri, 08 Aug 2014 01:34:19 +0000 Chronicle Staff A contract with Carrier & Gable Inc. for the purchase of $480,000 worth of traffic signals has been approved by the Ann Arbor city council. Action came at the council’s Aug. 7, 2014 meeting.

The list of signals covered in the contract includes:

  • Varsity and Ellsworth pedestrian signal upgrade ($25,000)
  • King George and Eisenhower pedestrian signal upgrades ($35,000)
  • Maintenance operations, including wear-out and accident damage, and support of other city projects ($300,000)
  • Addition of flashing yellow arrows for left turn movement at the following locations ($55,000): Fuller & Glenn; Barton & Plymouth; Plymouth & Broadway; Eisenhower & Stone School; Cedar Bend & Fuller; Fuller & Glazier Way; Fuller & Fuller Ct.; Fuller & Huron High
  • Division and Catherine ($65,000)

The council approved the contract with Carrier & Gable as a sole-source contract, because they are the only area distributor in Michigan and Indiana for the Eagle Signal Company. All of the city’s signalized intersections use equipment manufactured by Eagle. According to the staff memo accompanying the resolution, the advantages of sole-source supply for these materials include: reduced inventory requirements, as well as the need to train technicians in the repair of only one type of product.

This brief was filed from the city council’s chambers on the second floor of city hall, located at 301 E. Huron.

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AADL Makes Infrastructure Investments Thu, 31 Jul 2014 13:58:08 +0000 Mary Morgan Ann Arbor District Library board meeting (July 21, 2014): Action at the July board meeting allocated in total nearly $570,000 toward three infrastructure projects, mostly related to the downtown library. A special meeting on July 29 added $75,000 to that amount.

Rachel Coffman, Ann Arbor District Library, The Ann Arbor Chronicle

Rachel Coffman spoke during public commentary to earn points in the AADL summer game. (Photos by the writer.)

Most of the funding was for renovations of the downtown library’s front entrance. The board authorized a $425,523 construction budget for that project at 343 S. Fifth Ave., which has been in the works for several months. The budget covers new doors, a redesigned facade, and heated sidewalks, among other changes. The construction manager is O’Neal Construction of Ann Arbor.

Also related to the downtown library, trustees authorized a $93,598 contract with Schindler Elevator Corp. to repair the public elevator, which has been out of commission since this spring.

A week after the July 21 meeting, the board called a special meeting for July 29 to address additional issues related to the elevator. The four board members present at that meeting voted to authorize an additional $75,000 for elevator work.

Because of the elevator repair work, the Friends of the AADL bookshop is now located in the main first-floor lobby of the downtown building, rather than its normal location in the lower level, which is closed. It’s been in the lobby since June 30, and is open all of the hours that the building is open. Books are sold at the circulation desk.

The third infrastructure project approved on July 21 was $50,000 for carpet replacement in parts of the downtown library, as well as at the branch located at the Westgate Shopping Center.

The money for all three projects will be taken from the fund balance, which stood at $8.17 million as of June 30.

In other action on July 21, the board approved five adjustments to the 2013-14 budget, for the prior fiscal year ending June 30, 2014. The adjustments totaled $96,300.

Public commentary was dominated by fans of AADL’s summer game – in part because they could earn points by speaking to the board. Other issues raised during public commentary included concerns about communication, outreach to underserved populations, the cost of renovations to the downtown library entrance, and the “purging” of reference books.

The board’s August meeting is canceled. The next scheduled board session is on Sept. 15.

Downtown Entrance Renovations

The board was asked to approve a $425,523 construction budget for renovations to the downtown library’s front entrance, at 343 S. Fifth Ave.

Margaret Leary, Nicole Wallace, Josie Parker, Ann Arbor District Library, The Ann Arbor Chronicle

AADL trustee Margaret Leary, left, talks with Nicole Wallace of O’Neal Construction, center, and AADL director Josie Parker after the July 21 board meeting. Leary is chair of the board’s facilities committee.

The resolution also increased the capital outlays line item in the 2014-2015 budget by that same amount to cover the work, transferring it from the library’s fund balance. As of June 30, the fund balance stood at $8.17 million.

The construction budget was presented by O’Neal Construction Inc. At its June 16, 2014 meeting, the board had voted to hire O’Neal for construction management of these renovations. The project involves adding new doors and a redesigned facade facing South Fifth Avenue, along with changes to address accessibility issues.

The construction budget includes funding for heated sidewalks and two new flagpoles. Those were among the items that were considered discretionary, but were recommended by the board’s facilities committee. [.pdf of construction budget resolution]

The existing teal porcelain panels that wrap around the downtown building’s front facade, part of architect Alden Dow’s original design from the mid-1950s, will be replaced with a “concrete skin” panel. The entrance will continue to be oriented to South Fifth Avenue, with new doors into the building. Leading from the front of the building into the vestibule will be two balanced double doors, which will be easier to open than the existing entry, and a single automatic door. A matching set of these doors will lead from the vestibule to the interior of the building.

The overall project was originally expected to cost about $250,000. Work will begin later this summer.

Nicole Wallace at O’Neal Construction, the project’s supervisor, attended the July 21 meeting but did not formally address the board.

Downtown Entrance Renovations: Board Discussion

AADL director Josie Parker reported that the project has been submitted to the city for building permits, and bids will be going out soon. She hoped that the cost would be lower, but that won’t be clear until after bids are submitted. There will be a lot of concrete work.

Nancy Kaplan, Ann Arbor District Library, The Ann Arbor Chronicle

Trustee Nancy Kaplan.

The amount was in line with what she had anticipated, Parker said. There were some adds that the facilities committee requested – three flagpoles that are lit, for example – which increased the cost.

Parker noted that the heated sidewalks also increase the cost quite a bit – by $67,834. There are several reasons why it makes sense to add this feature, she said, noting that it hadn’t been part of the board’s original discussion.

Because the library is working with the city to eliminate the step at the front curb, that means the grade needs to be handled somewhere else. So to remove the step, the grade will have to be accommodated in other ways. In addressing that, the concrete on the north side of the building will be removed and repoured. That’s why the library has asked that the ArborBike program delay installation of its station at that site, Parker said. That way the conduit they’ll be using to power the bike-sharing station will be placed underneath the concrete.

All of this new concrete work will be adjacent to the surface of the city-owned Library Lane underground parking garage, which already includes heated sidewalks. So the entire approach from the parking structure into the library will be clear of ice and snow, Parker said. She noted that the area was designed so that cars could pull into Library Lane to drop off library patrons, rather than stopping on South Fifth Avenue. Drivers can let people out on the passenger side, rather than having people get out next to traffic on South Fifth – a one-way, southbound street.

There will also be a heated sidewalk on the incline leading to the south of the building, which is exposed to the elements, Parker explained. The walkway under the overhang won’t be heated, because it won’t be exposed. But the steps in the front and the concrete deck in front of the building will be heated.

Rebecca Head characterized it as a balance between energy use and safety. Parker said it’s a one-time cost to put the heating in now, while the concrete is being ripped up for the renovation.

Parker also explained the $9,042 in additional expense related to cladding material. Under the front windows outside, there’s white material that’s peeling off, she said. A greenish-colored cladding will be placed over that.

New signs are not included in this construction budget, because the library will be handling that separately, Parker said.

Margaret Leary reported that the facilities committee had discussed this construction budget for about an hour. This was their recommendation to the board.

Outcome: The construction budget received unanimous approval.

Downtown Entrance Renovations: Public Commentary

During public commentary at the end of the meeting, Donald Salberg said he hadn’t planned to speak until he heard about “the apparent inflated costs” for O’Neal to replace the front entrance. He noted that Josie Parker had previously indicated that she hoped to keep the costs under $250,000. He said he wasn’t sure if the total cost now was estimated at $425,000 or closer to $700,000.

Barbara Murphy, Ann Arbor District Library, The Ann Arbor Chronicle

Trustee Barbara Murphy.

AADL director Josie Parker replied, saying “Dr. Salberg, I have no idea where you came up with the number of $700,000.” Salberg said he didn’t know if $425,000 would be the total – he said he’d assumed that was the number. It still represents almost doubling of the original cost estimate. He wondered about the heated sidewalks. Trustee Barbara Murphy clarified that the cost for the heated sidewalks was about $67,000 and characterized it as not very much, compared to the total project.

Salberg said one of the problems with heating coils is that if it doesn’t completely melt the snow as it falls, then you get a thin layer of water that’s being melted, covered by a thin layer of ice and snow. “That could potentially make the walkway slipperier than it would be otherwise.” He also wondered what the expected lifetime of the heat coils would be, how frequently they break down, and if there’s any way to repair them other than breaking up the concrete. It would be nice to know how much more the AADL will have to spend on electricity to operate the coils, he said. Using salt and the manual removal of snow seems to have worked well in the past, he added. He wondered if the expense was entirely necessary.

Carpet Replacement

The board was also asked to authorize the director to seek bids and award a contract for carpeting at the West branch, located at the Westgate Shopping Center, and in portions of the downtown library. The amount was not to exceed $50,000, to be transferred from the fund balance to the capital outlays budget.

Because of the work on the elevator in the lower level of the downtown library and the high use of the spaces there, the carpet will need to be replaced, AADL director Josie Parker told the board. That includes the shop for the Friends of the AADL, the meeting space, the exhibit area and stairwell lobby, as well as the hallway to the emergency exit. In addition, carpeting on the third floor will be replaced. It’s original to that section of the library, which was built in 1990.

After all the renovation work is done downtown, the branch at Westgate will be closed and completely recarpeted. That will likely happen in the fall, Parker said.

There was no board discussion on this item.

Outcome: The board voted unanimously to authorize the carpeting projects and budget.

Downtown Library Elevator Repair

On July 29, the board was asked to authorize a $93,598 contract with Schindler Elevator Corp. to repair the public elevator at the downtown library, located at 343 S. Fifth Ave. A special meeting held about a week later – on Tuesday, July 29 – included only one agenda item: Allocating an additional $75,000 for the repair work.

Ann Arbor District Library, The Ann Arbor Chronicle

The downtown library’s public elevator is broken and barricaded.

The elevator has been broken and out of commission since this spring. AADL director Josie Parker had reported the situation at the board’s May 19, 2014 meeting, estimating it would cost about $100,000 to repair. It’s the same problem that took the freight elevator out of commission a couple of years ago. Leaks had developed in the hydraulic piston, causing it to fail a weight test.

The July 21 resolution authorizing the contract designated $57,988 for elevator repair, plus $35,610 for “well drilling (after-drill) of elevator hole in the existing hoistway and clean out of existing hole and casing.”

The capital outlays line item in the 2014-2015 budget would be increased by a total of $93,598, to be transferred from the library’s fund balance. As of June 30, the fund balance stood at $8.17 million. [.pdf of July 21 elevator contract and resolution]

Downtown Library Elevator Repair: Board Discussion – July 21

Barbara Murphy asked for an explanation of “after-drill.” AADL director Josie Parker explained that the elevator is a hydraulic jack design. It operates using a cylinder with hydraulic fluid that hoists the elevator. The cylinder is as deep as the library is tall, she said. Over time, the wear on the cylinder causes hydraulic fluid to leak, compromising the safety of the elevator. It failed its inspection for weight, she reported.

The same problem occurred with the staff elevator a few years ago, Parker noted. Both elevators had been installed about the same time – around 1990, she said, and it’s fortunate that the library was able to get this many years out of it.

The workers will drain out the hydraulic fluid, then take the jack out piece by piece by lifting it up and cutting off sections to remove. As the jack is removed, the earth around it caves in. So the work entails excavating and drilling the hole again for a new jack and casing.

The new jack and casing will also be brought in section-by-section through the front door, then welded together in the lower level. The workers will bring it in before the library opens, and on those days the library will open later, at noon. “The last thing we need is for someone from the public to come into the building when it’s not open, and go near that hole in the ground,” she said.

Parker noted that anyone who needs to use an elevator in the interim can ask any employee to use the staff elevator. People are asking for help, and the staff is happy to provide it, she said.

Margaret Leary pointed out that the contract with Schindler includes the statement that “the condition of the existing casing and hole is unknown. Removing the existing jack may uncover a cylinder hole full with sand or other debris requiring additional work to install the new jack.” If additional work is necessary, the company will provide a separate proposal for that.

Leary said one important element of this job is that Schindler doesn’t know exactly what they’ll have to do until they take it apart.

Outcome: The board unanimously authorized the elevator repair work.

Downtown Library Elevator Repair: July 29

A week later – on July 28 – the board announced that a special meeting was called for Tuesday, July 29 with one action item: Allocating an additional $75,000 for elevator work.

Prue Rosenthal, Ann Arbor District Library, The Ann Arbor Chronicle

Board president Prue Rosenthal.

AADL director Josie Parker reported that after last week’s board meeting, Schindler made an assessment of the elevator. The well-drillers found that there were three casings in the elevator shaft, nested inside each other. It’s not clear why there are three casings, she said. To meet current code, the jack must be encircled by PVC. But the center casing is too narrow to accommodate the PVC and jack, and isn’t allowing a plumb drop. So the center casing must be removed. If the jack and PVC can be inserted without removing the middle casing, then the cost will be lower, Parker said.

The $75,000 is an amount that would cover the worst-case scenario, Parker said – that all three casings would have to be pulled out, the shaft redrilled for a new outside casing, PVC and jack.

The total authorized by the board for the project would be about $170,000. “If we don’t need it, we won’t spend it,” Parker said. But she didn’t want to keep coming back to the board “every time there a bump that causes to change the scope of this project,” she added, especially becase the board won’t be meeting in August.

Jan Barney Newman asked what the casings were made of. The old casings are steel, Parker replied.

Parker explained that the workers will come in next week and spend the week taking out the casing. The following week, they’ll be drilling for the new casing and prep for the rest of the work. “That’s when things are going to be incredibly noisy in here, and smell bad,” Parker said. The casing is brought into the building in sections of pipe that’s 12-15 feet long, and workers will weld the casing in place, she noted. It’s likely that there will be some closures of the downtown library during that period. The elevator work will be done during the weekdays, so there will be no closing on weeknights or weekends.

Outcome: The board unanimously approved the additional $75,000 for elevator work. Four trustees were present at the July 29 special meeting: Rebecca Head, Jan Barney Newman, Prue Rosenthal, and Ed Surovell.

Finance Report

Eli Neiburger, AADL’s deputy director, presented the June 2014 financial report at the July 21 meeting. [.pdf of finance report] He noted that this report was for just the month of June, not for the close of the fiscal year, which ends June 30.

Eli Neiburger, Ann Arbor District Library, The Ann Arbor Chronicle

Eli Neiburger, AADL deputy director.

Through June 30, the library has received tax revenue totaling $11.256 million for the fiscal year. This is the library’s low cash time of year, Neiburger said, between the end of the fiscal year but before the arrival of revenue from summer taxes, which are collected in July.

Through the fiscal year, the library showed an operating surplus of $460,616. A lot of that related to positions that were open and that are now being filled, Neiburger said. The library had $8.77 million in unrestricted cash at the end of June, with a fund balance of $8.17 million, up from $8.001 million a month ago.

Revenue from state aid for the year was $153,000 more than budgeted, Neiburger noted. The library always budgets very conservatively, he added, because they’re not sure how much state aid will be awarded. Other revenue items that were higher than budgeted include interest and grants/memorials. Overall, revenue for the year was $12.3 million, “which was just about right on target,” he said.

Neiburger reported that five line items were slightly over budget for the year – purchased services, software, copier expenses, supplies and library programming. Purchased services are slightly over budget because the library paid for a survey in March. Regarding software, the library had planned to make a larger capital purchase, but it turned out that half of that purchase was actually a software license. Copier expenses were slightly higher than expected.

Regarding the supplies line item, Neiburger explained that every year, the library budgets for big capital projects but many individual purchases for those projects are typically under $1,000 each. That makes them assets that aren’t tracked, he said, so they can’t be paid for from the capital outlays line item. So every year at this time, the board is asked to transfer funds from the capital outlays line item to cover expenses in the supplies line item. These purchases are for things like computers and monitors that used to be capital outlays, but that are now much less expensive.

Library programming was $536 over budget for the year. “On a $273,000 [programming] budget, that’s pretty close,” Neiburger said. That line item went over budget primarily because of last-minute travel expenses related to visiting musicians performing in June concerts.

Neiburger noted that the board would be asked to make budget adjustments for FY 2013-14 later in the meeting.

The board had no questions about this presentation.

Outcome: The board voted unanimously to approve disbursements for June.

FY 2013-14 Budget Adjustments

The board was asked to approve five adjustments to the 2013-14 budget, for the prior fiscal year ending June 30, 2014. The adjustments totaled $96,300.

Eli Neiburger, AADL’s deputy director, had previously indicated that such adjustments would be necessary.

The resolution would authorize transfers in the following line items:

  • $22,500 from capital outlays to supplies.
  • $49,800 from capital outlays to software licenses/maintenance.
  • $17,000 from utilities to purchased services.
  • $6,500 from utilities to copier expense.
  • $500 from utilities to library programming.

There was no discussion of this item.

Outcome: The board unanimously approved the budget adjustments.

Summer Game

The AADL’s summer game launched in mid-June, and it was a theme throughout the June 21 meeting – for the public, staff and board.

Ann Arbor District Library, The Ann Arbor Chronicle

This sign was posted outside the boardroom door where the AADL board held its July 21 meeting. Chronicle readers can get these 500 points too – because it’s like being there.

Players can earn points for traditional activities like reading a book, but the game includes tasks that are done online, like tagging an item in AADL’s catalog or commenting on a blog post. Points can be traded in for merchandise that’s available at AADL’s online store.

People can log on, sign up and earn points for completing tasks like checking out a book or other item (50 points), tagging an item in the AADL catalog (10 points), writing reviews (50 points), or posting a comment (50 points). One point per page or minute is awarded for reading, watching, or listening to media, with a 100-point bonus for finishing an item. You can get between 200-500 points for attending an AADL event – including board meetings – where you’ll be given a code that allows you to redeem the points and earn “badges.”

On July 21, points were awarded for attending the meeting, with additional points for speaking during public commentary.

Summer Game: Public Commentary

Rachel Coffman told the board she was in second grade going into third grade. She really loves the summer game, and so do her sisters. They love it so much that they’ve been hiding codes all over their house, in places like the toothbrush cabinet, and they’ve made badges out of paper. “I just really love the summer game,” she said.

Cherie Burkheiser said she was there because she’s addicted to the summer game. Last year she discovered the game late in the season, so she jotted this year’s start date into her calendar “and I was there the first day it started.” She also wanted to make some comments. She’s lived in Ann Arbor her whole life, so she assumed all library websites were like AADL’s. But she recently looked at some other library district’s sites, and said that many are difficult to search. She asked that AADL make improvements to the online commenting, however, to make it easier to follow comment threads.

Tom Brown, Lydia Brown, Ann Arbor District Library, The Ann Arbor Chronicle

Tom Brown and his daughter Lydia Brown spoke about the AADL summer game during public commentary.

Regarding summer game codes placed in parks, she requested that the staff make sure the codes are permanent. One code was graffiti on a bench that was subsequently sanded off and painted over, and another code was for signs that have been removed. She said she looked forward to when her son is older and can help with the summer game.

Sara Mayman said she enjoyed the summer game and the library. She also offered a general suggestion, noting that there’s a lot of outdated equipment, like Betamax videocassettes and Zip drives. She was hoping that AADL could have a media room or make this equipment available for checkout. People could donate the equipment, and perhaps volunteers from Maker Works could manage the upkeep. When she was cleaning out her parents’ house, she came across these kinds of things and wasn’t sure what to do with them. Most people don’t need to use this kind of equipment very often, or for very long, she noted. It would be useful to be able to transfer your old media to new media at the library, using equipment there. It would be expensive for someone to buy, especially just to use one time. She offered to volunteer if there’s a committee that would work on this.

Tom Brown and his daughter Lydia Brown told the board that they were enjoying the summer game. They described some of the things they’ve done, like attending the Emerging Writers workshop and Kids Read Comics, and visiting all the AADL branches. They went to Parker Mill to get their codes, and saw a deer. They also went to the Barton Nature Area. Tom Brown said he’s lived in Ann Arbor 22 years and had never been there before. “The code made me go there, so that was cool.” They saw a deer there too. And when they went to Mary Beth Doyle Park, they saw a badger. In total, they’ve earned 78 badges. They also participate in a summer game team with the youth group at their church. Lydia reported that she collects buttons – including some vintage AADL buttons – and put them on her AADL bag. AADL director Josie Parker noted that “vintage” means pre-district, when the library was part of the public school system and called Ann Arbor Public Library.

Jinny Potter introduced herself as a summer game “fangirl.” Her family moved here about four years ago from the ??south. In the south, people are friendly and like to get together. When her family moved here, they initially lived in the metro Detroit area and the library there only had events for her and her young son once a month. She never felt like a part of that community. When they moved to Ann Arbor, her husband has a longer commute but it’s been worth it. Having the library here has helped with her homesickness, Potter said. The summer game has been a great way to learn about local businesses, the parks system and it’s a lot of fun to play with her family. She hopes that the recent success with expanding public transit “means that maybe we can revisit the expansion of the downtown branch.” It’s already pretty awesome, she said, but it’s exciting that it could be even more of a resource for the community. She’d love to volunteer to work on that, because the library has given so much to her family.

A girl named Rosie said that this spring, she and her sister Margaret started talking about how they couldn’t wait for the summer game to begin. Their mom was confused about what that meant, “and then we got her hooked.” She thanked the board and staff for doing a wonderful job, and for encouraging reading and other modes of learning. She also thanked the library for hosting Nerd Nite, saying it was “awesome and very informative.” She’ll be sad when August comes and the game ends.

At the meeting’s final opportunity for public commentary, Donald Harrison quipped “the code’s making me do it!” He said he’s a fan of the summer game and of AADL’s non-traditional collections. The musical instruments have been a great addition, and he’s used most of them. Recently he saw a little green table on the shelves, so he checked it out and took it to a family reunion that weekend. He set up the table and net, and within minutes, “we’re playing ping pong at the family reunion, so family members who hadn’t seen each other in years were having a really great time.” Things like that create a lot of value, he said. Harrison joked that this might put some pressure on the parks and recreation department to add public ping pong tables in the parks.

Summer Game: Director’s Report

As part of her director’s report, Josie Parker highlighted the popularity of AADL’s summer game, as reflected in some of the public commentary. She noted that it requires a lot of work from staff. For example, the staff goes out into local parks to find where codes could be located. It’s gratifying to hear that the library is sending people out to visit parks they haven’t been to before, or to local businesses. “It’s the library bringing the community together in a game, but then sending the community out,” she said. “I don’t want us to lose that, because that’s what I think is so important about this way of playing the summer game. And it’s reading, reading, reading – there’s no way to play the game without reading or being read to.”

Parker also noted that teens are volunteering to package the prizes that players are redeeming with their points. It counts as community service for their high school, but many of them have finished that requirement and continue to volunteer, she said. Adults are also volunteering too.

Some badges are easy to earn, Parker noted – like the one called “Josie’s Chickens,” which entails going to her office and retrieving the code. But other badges take hours or days, because the clues are nuanced and complicated to figure out. “That’s why people love this – it makes you think,” she said. The game is teaching children how to use the resources of the library – its catalogue and databases – as well as getting them out into the community to find codes. If board members haven’t tried the game, Parker encouraged them to do it.

Committee Reports

The board has seven committees: communications, budget and finance, facilities, policy, director’s evaluation, executive, and strategic plan. Because membership on each committee consists of only three trustees, which is fewer than a quorum of the board, the meetings are not required to be open to the public under Michigan’s Open Meetings Act. The board has the option of making its committee meetings open to the public, but has chosen not to do so.

There were two committee reports on July 21: communications and facilities.

Committee Reports: Communications

Rebecca Head, chair of the communications committee, reported that they met on June 17. Other members are Margaret Leary and Prue Rosenthal. They reviewed the recommendations of the Allerton-Hill Consulting report regarding different ways to ratchet up the library’s communications. [.pdf of Allerton-Hill report]

Rebecca Head, Ann Arbor District Library, The Ann Arbor Chronicle

Trustee Rebecca Head.

They agree that the communication is already pretty good, she said, but there’s always more that could be done. For example, AADL director Josie Parker has a blog, Head noted, as do other staff. That’s useful for getting information out, she said. The print newsletter that was mailed out earlier this year was a success, she added, and so those mailings will continue. The winter newsletter will focus on why people use the library, so that people understand what’s available.

There are plans to do more outreach to the townships that are part of the district.

The committee also talked about how to ratchet up services related to social equity, such as reading readiness and job search assistance. The library does an extreme amount of partnering in these areas, she noted, and are very connected to schools and other organizations. “But we’re always looking for new ways to get these messages across.”

Barbara Murphy mentioned that the board received a list of all AADL partners earlier this year. She didn’t think it had been part of the minutes or board packet. AADL director Josie Parker replied that it’s available for anyone who wants it. Murphy suggested posting it on the AADL website.

Committee Reports: Facilities

Margaret Leary, chair of the facilities committee, reported that the group met on June 25. Other members are Ed Surovell and Jan Barney Newman. Most of their discussion related to items on the board’s agenda that night, including the construction budget for the downtown entrance. They reviewed the most recent schematic drawings with Cory Lavigne of InForm Studio. They also went over the proposed budget for that work, she said.

The committee also discussed two other items that were on the board’s July 21 agenda: repair of the downtown library’s public elevator; and a proposal for carpeting in portions of the downtown library and the West branch.

Library Stats

The board is provided with monthly library statistics in five categories: Collections, users, visits, usage and participation. The data is compared to year-ago figures, when available. The information for June 2014 was presented by Eli Neiburger, AADL’s deputy director.

Ann Arbor District Library, The Ann Arbor Chronicle

AADL collections data: June 2014.

Ann Arbor District Library, The Ann Arbor Chronicle

AADL users data: June 2014.

Ann Arbor District Library, The Ann Arbor Chronicle

AADL visits data: June 2014.

Ann Arbor District Library, The Ann Arbor Chronicle

AADL usage data: June 2014.

Ann Arbor District Library, The Ann Arbor Chronicle

AADL participation data: June 2014.

Neiburger noted that the presentation of these stats will be retooled in the future, because some of it isn’t very meaningful if there’s little year-to-year variation. It’s also an opportunity for some strategic planning, he said, to identify some key performance metrics.

Here are some highlights from Neiburger’s commentary:

  • Collections: The AADL collection continues to grow in most categories compared to a year ago. In the digital collection, the category of photos saw the biggest growth (117%) with most of that coming from the Old News collection.
  • Users: There are 199,613 known computer users, up 6.6%. Borrowers were up 8.3% to 123,437. The number of active borrowers during the month was 58,711. June is a big month for new library card sign-ups because of the summer game. New online registrations almost doubled compared to June 2013, mostly related to the summer game. This year there were 937 new library cards issued – 5% higher than last year. The number of cards issued to non-residents, businesses and organizations is also growing, he noted, thanks to the efforts of AADL’s outreach staff.
  • Visits: The number of visits are down at all locations, but Neiburger said there’s missing data at several branches. For example, there was no data for five days in June at the downtown library. The door-counting hardware isn’t performing well, so the staff will be looking at how to get more accurate data. A ceiling-mounted system might provide better results. “However, our event attendance was crazy in June,” Neiburger said, with nearly 15,000 attendees – up 31.8% compared to a year ago. Online visits to AADL’s “devblog” – where staff posts information about the software they develop – was up over 100%.
  • Usage: Checkouts were down in most categories, aside from art prints and tools/kits. The decrease of 2.2% for books is “really within the realm of noise, in terms of use of the collection month-over-month,” Neiburger said. Use of DVDs and CDs are falling off significantly more, he noted. Even though checkouts of Bluray decreased, that’s because most of the collection is checked out – there’s actually growing demand for it. The total collection value in all categories stands at $15.58 million. For online usage, image downloads increased 64.4% compared to a year ago, and video use is up 90%.
  • Participation: For the first time, attendance at films and shows exceeded the turnout for storytime events, Neiburger reported. Attendance for the category of talks, which includes Kids Read Comics, was up about 200%. Overall, the library held 4% fewer events in June compared to last year, but attendance was up 32%.

Neiburger also gave highlights of some “Top Tweets” that mentioned @aadl during June. One was by Midwestern Gothic (@MWGothic), a literary magazine based in Ann Arbor. They tweeted about a reading that AADL hosted in early June for the magazine’s contributors. Neiburger pointed out that AADL has licensed the full run of Midwestern Gothic, and it’s available for immediate download to keep.

Some of the Tweets highlighted new items from the AADL collection, including the Bounty Hunter Junior metal detector, giant checkers, disc golf and Kubb – a Swedish lawn game. Neiburger described it as a cross between horseshoes and cornhole. The library just got 10 more sets of it.

Ann Arbor District Library, The Ann Arbor Chronicle

Tweet from @AADL.

Ann Arbor District Library, The Ann Arbor Chronicle

Tweet by Kathleen Folger.

Ann Arbor District Library, The Ann Arbor Chronicle

Tweet by Ken Varnum.

Director’s Report

AADL director Josie Parker covered several topics during her director’s report, some of which are reported elsewhere in this article.

Parker showed the board a slide show about Visions 2014, a vendor fair held on May 14 at Washtenaw Community College for people who are blind and physically handicapped. The two-minute presentation is also posted on AADL’s website. The library continues to get good feedback on that event, she said.

Parker also noted that the Friends of the AADL bookshop is now located in the main first-floor lobby of the downtown building, because of the closure of the basement area where the bookshop normally operates. It’s been in the lobby since June 30, and is open all of the hours that the building is open. Books are sold at the circulation desk.

She reported that many people didn’t realize there was a bookshop, so it’s become very popular. Nancy Kaplan asked if there’s the possibility that it could remain in that location, even after the elevator repair is finished. Parker replied that it’s a possibility. “That conversation is one we’ll have to have,” she said.

Margaret Leary said it’s a fabulous example of a good outcome from a situation that was challenging. It’s creative and opens the door to new ways of thinking about the bookshop.

Resolution of Thanks

The board’s agenda included a resolution of thanks to Wendy St. Antoine, who is retiring on Aug. 15. She joined the library in December 1996.

AADL director Josie Parker reported that St. Antoine came into the system as a head clerk at the Northeast branch. “We no longer have head clerks, and we no longer have the Northeast branch,” she noted. St. Antoine is known throughout AADL for her quiet strength, Parker said. She deals well with all sorts of people, and does it respectfully and in a way that everyone finds approachable.

When Parker joined AADL in 1999 “and found myself managing the circulation department as well as the youth department during that financial crisis, suddenly I had over half the employees under my supervision, two-thirds of the budget, and all these desks everywhere. Wendy is the person who taught me how to think about that in the right way, so that it was manageable in my mind. I’ll always be grateful to her for that.” Everyone has a story like that about St. Antoine, Parker said.

Cancelation of August Board Meeting

The board was asked to cancel its Aug. 18 meeting.

Margaret Leary pointed out that board president Prue Rosenthal and AADL director Josie Parker had discussed this, and they don’t foresee any business that will need to be addressed at that time.

Parker said that actions by the board regarding facilities projects, in votes taken earlier in the July 21 meeting, give her the authorization she needs to move forward on that work – on the downtown library front entrance, the downtown library elevator repair, and the carpeting replacement.

The next board meeting will be on Monday, Sept. 15.

Outcome: A proposal to cancel the Aug. 18 meeting was moved and supported, but Rosenthal did not call for a vote on this item. The board appeared to have consensus, though no official action was taken. A meeting cancelation notice has been posted on the AADL website.

Public Commentary

Of the 12 people who spoke during public commentary, most of them talked about the summer game. They earned summer game points for both attending the meeting and for public commentary. Those comments are included earlier in this report.

Public Commentary: Communications

Lyn Davidge introduced herself as a Scio Township resident who also loved the summer game, and who’d spent the past 15 minutes looking for codes in the library. She said she hated to stand there and be the grinch, “but there’s one in every crowd.”

Lyn Davidge, Ann Arbor District Library, The Ann Arbor Chronicle

Lyn Davidge.

She’d been pleased to attend the informational meeting on July 14 for potential AADL board candidates. She’d been looking on the AADL website, MLive and The Ann Arbor Chronicle for information about the session’s date and location. She was surprised to see an item published by The Chronicle on Sunday morning, July 13 at 11 a.m., announcing the session for the following day. “In my opinion, that was incredibly short notice to the public.” [The Chronicle received the AADL press release via email on the morning of July 13, though it was dated July 9.]

To double check herself, Davidge said she went back to the AADL website and still couldn’t find any announcement there. She still couldn’t find anything in the online or print editions of MLive. It was possible that she simply missed the previous announcements, she said. “On the other hand, I was left with the uncomfortable feeling that maybe the short-notice notice in The Chronicle was the only notice of the potential candidates meeting – and you know what that looks like, don’t you? It looks like you were hoping no one would show up.” She hoped they really didn’t want to give that impression, even to one constituent at one time.

Similarly, she said, the July 21 AADL board meeting was being held at the downtown library. But months ago, it had been announced that the meeting would be held at the Pittsfield branch, she noted. She knew that the venue had been changed, because a couple of trustees had given her the heads-up about it. They knew that she thought it was a good idea for the trustees to be visible in all of the branches. They also knew that she disagreed with the decision not to hold the July meeting at a branch. [The June 16, 2014 meeting was held at the Traverwood branch, and had drawn only one member of the public.]

Davidge said she could respect the board’s decision, but she couldn’t understand why the change in the July meeting venue wasn’t just announced during the June meeting. That way, people would have had very timely notice of that schedule change, she said. “Again, it looked like you were hoping no one would show up tonight.” That’s the impression people get, she said. Thank goodness there were a lot of people attending that night’s meeting – the word got out, she said. She hoped there would be more publicity in the future.

Kathy Griswold told the board that the Ann Arbor community is fortunate to have such an excellent library and truly excellent staff. She wanted to talk about one lost opportunity and two minor areas of weakness. The lost opportunity is that the library isn’t addressing part of its mission statement for underserved populations and low-income students, she said. Griswold said she’d tried to engage some of these students in the summer game, but she didn’t have the resources to do that. The library needs to go out into some of these communities, she said. There are several nonprofits who work with underserved youth but have limited financial resources, especially compared to the library. They are providing books to students in some of the subsidized housing units, she said. Griswold also noted that Ann Arbor Kiwanis recently provided a grant to the Family Learning Institute to buy a modified bookmobile. She’d really like to see the library revisit using a bookmobile that includes computers.

Regarding weaknesses, Griswold cited communications as something that needed work. She noted that the Detroit Free Press had recently sued the University of Michigan board of regents over alleged violations of the state’s Open Meetings Act. “I believe that their regents operate similar to the way that trustees operate, and that is just within the limits of the Open Meetings Act.”

Griswold also said she cringed to see that material had been printed out for trustees in “slide mode” rather than “handout mode,” which wastes a tremendous amount of toner – because the printouts had white letters on black background.

Margaret Leary, Ann Arbor District Library, The Ann Arbor Chronicle

Trustee Margaret Leary.

Finally, Griswold noted that a step at the Traverwood branch hadn’t yet been repaired. It’s a minor issue, but it’s a safety issue that needs to be addressed, she said.

Later in the meeting, AADL director Josie Parker responded to comments about the underserved. Parker pointed out that the library does provide services to underserved populations through its partnerships with nonprofits, as well directly through the library’s outreach to schools. “We are considered sort of the foundational location for many of them, because they don’t have budgets that give them space,” she said. The Ann Arbor Public Schools English-as-a-second-language (ESL) classes are held at the library, as are sessions for Washtenaw Literacy and the Family Learning Institute. So the library’s outreach to the underserved – children and adults – is a long tradition, Parker said, “and not one that we would abandon.”

Margaret Leary clarified with Parker that it would not be accurate to say that the library doesn’t address the needs of the underserved, whether they’re children or adults. Parker said it’s fair to note that the library can’t solve all the issues that face the community. Root causes like illiteracy are of real interest to the library, and have always been, she said. Poverty, lack of health care and other issues are outside the mission of the public library, she added.

“However, we definitely serve those nonprofits trying to meet that mission, by giving them space to meet, space to bring those populations together,” Parker said. One example is the Proyecto Avance: Latino Mentoring Association (PALMA), a University of Michigan student group that provides tutoring in English. She said it’s important to be very careful in using the term “underserved” and labeling people.

Barbara Murphy highlighted the fact that AADL gives a book to every newborn – it’s one of her favorite programs.

Public Commentary: Reference Books

Gladwin McGee, an Ann Arbor resident, said he’s concerned about the purging of large numbers of reference books from the downtown library in recent months. There are several references that he’s used in the past, but they’ve been removed from the shelves. These include a three-volume encyclopedia of television, a three-volume encyclopedia of musical theater, and an eight-volume encyclopedia of the American Constitution. Just last week there was a Merriam-Webster encyclopedia of literature that had been removed, as was the American Decades series of history and culture.

“I would have hoped that it would be part of the philosophical groundings of librarians to respect various pathways of learning discovery, including respecting the choices of those of us who cherish various print reference works, who’ve found enrichment in them and would like to have the opportunity to continue using them.” He said it seemed like it was happening in almost “bibliocidal proportions.” It’s true that the Internet provides an almost unprecedented collection of facts, and would lead some to claim that print reference books are outmoded and could be dispensed with. However, the best reference works are more than just a collection of facts. They provide outstanding contextual frameworks for highlighting and exploring connections among related but independent sets of facts. “It saddens me greatly to see their removal.” He noted that he’d made an appointment to talk with the AADL director about this.

Responding to a follow-up query from The Chronicle, AADL director Josie Parker indicated that the library regularly removes outdated materials, and has not changed that process. Some print reference work also is now available in electronic databases.

Present: Rebecca Head, Nancy Kaplan, Margaret Leary, Barbara Murphy, Prue Rosenthal.

Absent: Jan Barney Newman, Ed Surovell.

Next regular meeting: The August meeting has been canceled. The next regular board meeting is on Monday, Sept. 15, 2014 at 7 p.m. at the downtown library, 343 S. Fifth, Ann Arbor. [Check Chronicle event listing to confirm date]

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Council Acts on Infrastructure Items Tue, 22 Jul 2014 03:47:28 +0000 Chronicle Staff The Ann Arbor city council’s July 21, 2014 meeting featured action on a raft of infrastructure items – from street and sidewalk construction and bridge inspections to the purchase of pumps for the wastewater treatment facility.

The council approved a $1,537,608 construction contract with Bailey Excavating Inc. for the Springwater subdivision improvements project. That work will cover the reconstruction of streets and some utilities – on Butternut Street from Cardinal Avenue to Springbrook Avenue, and Nordman Avenue from Packard Road to Redwood Avenue.

Funding for the project will be drawn from the street millage fund ($883,316), stormwater fund ($903,065), and drinking water funds ($489,574) for a total project cost of $2,275,955.

Funding from the drinking water and stormwater funds is based on the fact that the project includes replacing the existing water main and performing stormwater system improvements – including construction of sand filters within the Butternut Street and Nordman Avenue right-of-way. Construction is expected to start in August 2014 with completion expected this fall.

The council also approved a $3,445,200 agreement with the Michigan Dept. of Transportation (MDOT) for the Stone School Road improvements project – between I-94 and Ellsworth Road. The planned work consists of reconstructing Stone School Road as a two-lane road with on-street bike lanes and concrete curb and gutter.

A new 5-foot-wide concrete sidewalk will be constructed on the west side of the roadway from Pheasant Run Circle to Ellsworth Road. Included in the project is the replacement of the existing 16-inch water main in Stone School Road. The water main has broken several times. A short segment of 8-inch sanitary sewer is included in the project. Bioswales and “in-line” stormwater detention will be included. An existing jack-arch culvert under Old Stone School Road along Malletts Creek will be removed, in order to improve creek hydraulics, habitat and stormwater quality. New street lights along Stone School Road will also be installed.

The council also approved an agreement with MDOT, which will require about $250,000 of local funding. It will establish the city as construction manager for the construction of sidewalks on the south side of Scio Church Road between Delaware Drive and Maple Road, and on the south side of Barton Drive from about 250 feet west of Chandler Road to Longshore Drive. A portion of the funding for both projects will be derived from a special assessment of adjoining property owners.

Here’s how the funding breaks down:

Project Funding
               Scio Church    Barton       TOTAL
Federal Share     $164,000   $36,000    $200,000
Local Share        199,474    42,626     242,100
Spcl Assess          1,626     1,980       3,606            

TOTAL             $365,100   $80,606    $445,706


In other action taken at its July 21 meeting, the council was set to give final approval of the assessment roll for the construction of a new sidewalk on Pontiac Trail, after a public hearing. But the council postponed the item until its next meeting, to allow for one of the property owners to protest. The total cost that would be assessed to adjoining property owners is $72,218.

According to the staff memo accompanying the resolution, sidewalk construction would be done as part of the reconstruction of Pontiac Trail beginning just north of Skydale Drive to just south of the bridge over M-14. The project will also be adding on-street bike lanes and constructing a new sidewalk along the east side of Pontiac Trail to fill in existing sidewalk gaps and to provide pedestrian access to Olson Park and Dhu Varren Road. That’s part of the city’s Complete Streets program.

In addition to the sidewalk, approximately 1,960 feet of curb and gutter is being added north of Skydale along Pontiac Trail to protect existing wetland areas. [.pdf of Pontiac Trail sidewalk special assessment area]

Also at its July 21 meeting, the Ann Arbor city council approved a $104,107 contract with DLZ Michigan Inc. for the regular bridge inspection program. The city is required by federal law to inspect its bridges every two years. The city’s approach is to inspect about half of its bridges each year in order to even out the cost.

Bridges to be inspected include the section of the Library Lane parking structure that is located under Fifth Avenue, which is considered a bridge.

According to the staff memo accompanying the resolution, the following bridges will be inspected in 2014: Island Drive over the Traver Creek; Maiden Lane over the Huron River; Fuller Road (eastbound and westbound) over the Huron River; Huron Parkway over the Huron River, Norfolk Southern Railroad and Geddes Avenue; and Wastewater Treatment Plant Drive over the Huron River.

And in 2015, the following bridges will be inspected: Broadway over the Huron River; Broadway over Depot Street and the Norfolk Southern Railroad; E. Stadium Boulevard bridge over S. State Street; E. Stadium Boulevard bridge over the Ann Arbor Railroad tracks; Fuller Road over the Norfolk Southern Railroad; East Medical Center Drive over the Norfolk Southern Railroad; Eisenhower Parkway over the Ann Arbor Railroad; the portion of the Fifth Avenue parking structure under South Fifth Avenue; and the University of Michigan tunnel under Huron Parkway.

Funding will come from the major street fund ($133,500) and the sewage disposal fund ($2,500). The University of Michigan and the Ann Arbor Downtown Development Authority will reimburse the city for about $6,600 for inspections related to facilities they maintain.

And finally, the purchase of six new pumps for the wastewater treatment plant – from Premier Pump Inc. for $425,682 – was also given approval during the city council’s July 21 meeting.

According to the staff memo accompanying the agenda item, the city’s wastewater treatment plant has six 150-horsepower secondary effluent pumps that are about 35 years old. When the plant is operating in typical mode, two of the six pumps are in continuous operation. Occasionally, when the Huron River is at high levels, additional pumps are used to pump secondary effluent simultaneously to the sand filters and the river.

Over the past three years, three of the pumps have failed. One of the pumps was irreparable, and the other two pumps were repaired but are not reliable for long-term use. The remaining three pumps are fully functional, but in a worn condition.

Failure of the secondary effluent pumps was unforeseen, according to the staff memo, so the cost of their replacement was not included in the design of the Facilities Renovations Project (FRP) currently under construction at the wastewater treatment plant. The city’s attempt to include replacement of the pumps in the FRP and to receive funding through the state’s revolving fund loan program was rejected by the Michigan Depart. of Environmental Quality, according to the staff memo.

This brief was filed from the city council’s chambers on the second floor of city hall, located at 301 E. Huron.

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Infrastructure Items Get Council OK Tue, 08 Jul 2014 03:02:57 +0000 Chronicle Staff Several infrastructure items received approval at the Ann Arbor city council’s July 7, 2014 meeting – related to sidewalk special assessment rolls, pool liners, and street repair.

Receiving final approval were special assessments of property owners to help pay for construction of three different sidewalks – on Stone School Road, Barton Drive and Scio Church Road.

The new sidewalk on Stone School Road will be on the west side of the road. This work will be done in conjunction with the Stone School Road reconstruction project from I-94 to Ellsworth Road. The total sidewalk project cost is roughly $128,500, of which about $55,000 will be special assessed. A public hearing on the special assessment took place at the council’s July 7 meeting. Three representatives of the Jehovah’s Witnesses, which owns property on Stone School Road, addressed the council about the amount of the special assessment they’ve been assigned. They asked for some kind of waiver, given the nonprofit status of their organization. Mayor John Hieftje indicated that city staff would provide them with options.

The Barton Drive sidewalk project will extend eastward from Bandemer Park at Longshore Drive. The cost of the Barton Drive sidewalk has been calculated to be $80,606. Of that, about $36,000 will be paid from federal surface transportation funds. Of the remaining $44,606, the city’s general fund would pay $42,626, leaving just $1,980 to be paid through the special assessment.

For the Scio Church sidewalk project, the total cost is expected to be $365,100. Of that, about $164,000 will be paid from a federal surface transportation grant. The remaining $201,100 will be paid out of the city’s general fund and by the special assessment of just $1,626.

Several other contracts appeared on the council’s July 7 agenda that were related to infrastructure maintenance and repair. The council approved a $344,600 contract with Cadillac Asphalt LLC for repair of streets after water mains, storm and sanitary sewers are repaired. The city’s public services area does not have the equipment or the staff to perform these types of street repairs, which often involve the replacement of the concrete base or the concrete street surface, according to the staff memo accompanying the resolution.

The city council also awarded a $175,000 contract to replace a clarifier drive in the drinking water treatment plant – to Titus Welding Company. According to a staff memo, the drive to be replaced is original to the plant and was installed in 1965. It had an expected life of 30 years. It has begun to show signs of failure, included seizing, high vibration, and bearing failure. The drive has been assessed by the manufacturer and it has been determined that it is not cost-effective to repair, according to the memo.

Also approved by the council was a $205,055 contract with Renosys Corp. to install PVC pool liners at Buhr and Fuller pools. The city is switching to PVC from Marcite, which is, according to a staff memo, a “cementitous product that covers the pool shell creating a smooth and waterproof surface.” The new product has a smoother surface, and won’t require the yearly patching required due to harsh winters and wear and tear on the pool, according to the staff memo.

Also approved at the July 7 meeting was a $80,836 contract amendment with Tetra Tech Inc. for environmental consulting services at the now-closed Ann Arbor landfill. That brings the total amount on the contract to $624,221. According to a staff memo, for several years the landfill has had a plume of 1-4 dioxane and vinyl chloride contamination offsite primarily in Southeast Area Park, northeast of the landfill. A slurry wall was constructed along most of the boundary of the landfill to eliminate groundwater passing through the landfill, and three purge wells were used to attempt to capture the offsite contamination.

And finally, the council passed a resolution approving $125,000 contracts with Stantec Consulting Michigan Inc. and Fishbeck, Thompson, Carr & Huber Inc. for general civil engineering and surveying services. Those services include a range of activities, according to the staff memo accompanying the resolution: design and management of capital improvement projects; private development construction plan review; private development utility and road construction inspection; traffic engineering; civil engineering design; construction inspection; drafting; and surveying.

This brief was filed from the city council’s chambers on the second floor of city hall, located at 301 E. Huron.

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DDA Acts on Infrastructure, Governance Sun, 06 Jul 2014 21:53:15 +0000 Mary Morgan Ann Arbor Downtown Development Authority board meeting (July 2, 2014): Much of this month’s meeting was devoted to infrastructure projects and organizational matters, as the DDA board restructured its committees and elected new officers for fiscal 2015, which began on July 1.

Bob Guenzel, Sandi Smith, John Mouat, Ann Arbor DDA, The Ann Arbor Chronicle

From left: DDA board members Bob Guenzel, Sandi Smith, John Mouat. Smith officiated her last meeting as chair on July 2, and Mouat was elected to serve as chair for fiscal 2015, which began on July 1. (Photos by the writer.)

The board approved a $390,000 grant related to an extended-stay hotel project on the downtown’s west side. The development is by First Martin Corp. at 116-120 W. Huron – the intersection of Huron and Ashley streets. The grant will be used to pay for a new 12-inch water main, sidewalk improvements along Ashley, and landscape maintenance in the public right-of-way.

This was the first grant awarded after the board adopted a grant policy earlier this year.

The board also gave a one-year extension to a previously-awarded $650,000 brownfield grant for the 618 S. Main apartment complex. It was originally awarded in 2012, but the project is not yet completed – in part because of the recent harsh winter. The funds would help pay for upsizing a water main to 12 inches, as well as streetscape improvements and a rain garden for stormwater management.

Also related to infrastructure, the board established a project budget of $100,000 for tree maintenance and sidewalk repairs in downtown Ann Arbor in fiscal 2015.

Related to personnel issues, the board held a closed session to evaluate Susan Pollay, the DDA’s executive director. After about 15 minutes, the board emerged and voted to give Pollay a 5% raise, increasing her salary from $109,119 to $114,570.

In describing the rationale for the raise, Roger Hewitt noted that Pollay had received “good raises” in the last two years, but for the six years before that she had not received a raise because of the difficult economy. Her position as a city employee is in the Level 2 category, which has a salary range from $95,000 to $157,000. Several board members indicated a desire to move Pollay toward the midpoint of that range over the next few years. Sandi Smith characterized it as “catch up” to compensate for the years when Pollay didn’t get a raise. Hewitt said the intent is to bring her up to that midpoint salary of $126,000 “within a fairly short time period.”

Casting the sole vote against the 5% increase was city administrator Steve Powers, who said he’d be more comfortable with a 3% raise, and hoped there would be a more robust evaluation process in the future.

Immediately after its regular monthly meeting, the board held its annual meeting to elect officers for the coming fiscal year. John Mouat was unanimously elected to serve as chair of the board. Other officers are Roger Hewitt (vice chair), Rishi Narayan (treasurer), and Keith Orr (secretary). Outgoing chair Sandi Smith was thanked for her service, and received a gift from staff – a small pin from the former Selo/Shevel Gallery, which Pollay indicated evoked a cityscape of tall buildings. Pollay said it was inspired by a trip that several DDA staff and board members took last year to New York City for the International Downtown Association conference.

Also at the July 2 meeting, the board dissolved its two existing committees and created four new committees: (1) marketing, (2) partnerships/economic development, (3) finance, and (4) operations (parking/transportation/construction).

In supporting the idea of a separate marketing committee, Narayan noted that if a staff member is hired to focus on marketing and communications, “this area might become more fleshed out very quickly.” Previously, a marketing subcommittee had been part of the partnerships committee. The new finance committee was created in part in anticipation of the DDA’s growing budget, and a desire for more financial oversight.

During updates, Hewitt reported that work continues on a possible north/south commuter rail between Ann Arbor and Howell known as WALLY – the Washtenaw and Livingston Line. A recommendation will be coming soon to locate a stop on the east side of the railroad tracks between Liberty and Washington streets, opposite of the former city maintenance yard. He stressed that this transportation service is probably a significant way off from being offered. If the project moves forward, the recommended stop wouldn’t be a full station – it would simply be a platform with canopies, and would be built entirely within the railroad right-of-way. Hewitt plans to make a short formal presentation about the recommendation at a future DDA board meeting.

Also related to transportation, Orr reported that the new Greyhound ticket office at the Fourth & William structure will be opening next week – ahead of schedule. Next week also will be the grand opening of the nearby Blake Transit Center, operated by the Ann Arbor Area Transportation Authority.

In other updates, Hewitt noted that members of the DDA’s operations committee continue to work on a downtown ambassadors program, and are likely to bring two potential service providers in for interviews by the end of this summer.


Grants for two projects appeared on the DDA board’s July 2 agenda: a one-year extension for a previous brownfield grant to the 618 S. Main Street project, and a new grant to the 116-120 W. Huron Street hotel project.

Grants: 618 S. Main

The 618 S. Main project is an apartment complex that Dan Ketelaar’s Urban Group Development Co. intends to market to young professionals. The 7-story building, between Mosley and Madison, would include 190 units for 231 bedrooms, plus two levels of parking for 121 vehicles.

The original $650,000 brownfield grant to the 618 S. Main project was approved by the DDA board at its June 6, 2012 meeting, a week before the city council gave its approval to the project on June 18, 2012.

The $650,000 total breaks down as follows:

 $85,000 Streetscape costs (sidewalk adjacent to project on Mosley/Main)
$384,500 Streetscape costs (sidewalk on west side of Main north of project)
$100,000 Rain garden to infiltrate stormwater, rather than detain and release
$ 80,500 Upsizing the water main under Ashley Street to a 12” pipe

$650,000 TOTAL


That total is to be disbursed over four years in the following amounts: $100,000, $225,000, $225,000, and $175,000. None of the money is to be awarded before the taxes are paid each year. The DDA will use the tax increment finance capture from the project to make the grant payments.

In introducing the resolution on July 2, Joan Lowenstein noting that there’s sunsetting language in the DDA’s grant policy:

The DDA’s grant will automatically expire by June 30th at the end of the fiscal year following the fiscal year the grant was approved by the DDA if a developer has not requested and received all necessary City construction permits, and the project footings/foundations are not completely installed. The DDA grant will automatically expire by June 30th at the end of the third fiscal year following the fiscal year the grant was approved by the DDA if construction has not been completed and a CO issued for the project.

The project is underway, Lowenstein said, but it has been delayed by the harsh winter. Without an extension of the grant, it would expire automatically. The length of the extension, to receive all construction permits and to complete the project, is one year. The partnerships committee reviewed the extension and recommended that it be granted.

John Mouat said he’d read that the site next to 618 S. Main, where Happy’s Pizza had been located, is going to be redeveloped. The building where Happy’s Pizza was housed had been destroyed by fire earlier this year. The site is at the southwest corner of Main and Madison.

Mouat said that’s a great sign, because the DDA had hoped that the whole area along South Main “would start to rise.” He called the changes at the Happy’s Pizza site a “fortuitous happenstance, in some ways.”

Keith Orr joked that it was rising from its ashes.

There was no other discussion.

Outcome: The vote on the 618 S. Main grant one-year extension was unanimous.

Grants: First Martin Hotel Project

John Mouat brought forward a proposal for a $390,000 grant related to an extended-stay hotel project. The development is by First Martin Corp. at 116-120 W. Huron, at the intersection of Huron and Ashley streets.

First Martin Corp., Ann Arbor planning commission, The Ann Arbor Chronicle

Rendering of proposed hotel at the northeast corner of West Huron and Ashley. The One North Main building is visible to the east.

The new building will be an 88,570-square-foot structure with a ground-floor restaurant or retail space. The extended-stay hotel will occupy the upper five levels and will be operated by Marriott. The city council gave approval to the site plan at its June 16, 2014 meeting. The project also had been reviewed and recommended for approval by the city’s planning commission on May 20, 2014.

The grant was recommended by the DDA’s partnerships committee.

Mouat said that First Martin had been very patient while the partnerships committee developed its grant policy over the past few months. The First Martin project will be used as a kind of test for the new policy, he added.

The $390,000 breaks down like this:

$340,000 New 12” water main on Ashley Street, and related hardscape 
$ 10,000 Sidewalk enhancements on Ashley Street 
$ 40,000 Right-of-way landscape maintenance (20-year commitment) 

$390,000 TOTAL


The $390,000 amount is to be distributed over three years – $100,000 (Year 1); $145,000 (Year 2); and $145,000 (Year 3).

The maximum amount that can be awarded to a project under the DDA grant policy – adopted by the DDA board at its June 2, 2014 meeting – is 25% of the tax increment capture due to the project that the DDA receives for the first 10 years after the project is built. That amount is about $390,000, according to First Martin Corp. based on an annual figure of $156,515. But the DDA’s resolution indicates the figure has not yet been verified by the city assessor. Grants are not awarded until after the taxes are paid.

Grants: First Martin Hotel Project – Board Discussion

Mouat reported that the partnerships committee had focused on two factors in considering the grant. The first was whether this was an area where the DDA would like to promote development. The committee felt that the area had been lacking, so the project met that criteria, he said. The second factor was whether the grant would result in benefits for the community, he said, such as opportunities for other sites to be developed, or for the street to be improved. It met that criteria, too, he said.

Mike Martin, First Martin Corp. Ann Arbor DDA, The Ann Arbor Chronicle

Mike Martin of First Martin Corp.

The public benefits are the new 12-inch water main on Ashley, sidewalk enhancements on Ashley, and right-of-way landscape maintenance for 20 years. Mouat said the bulk of the grant – $340,000 for the water main – isn’t very sexy, but it would help future development in that block.

Regarding the landscape maintenance contract, Mouat said that street trees in Ann Arbor suffer. They aren’t always cared for, and sometimes they die and are unsightly, he said. So the owners of the site will be responsible for those trees and landscape features. Mouat hoped it would serve as a nice precedent for projects in the future.

Board chair Sandi Smith invited First Martin’s Mike Martin and Darren McKinnon to the podium. Martin described the location where improvements are proposed along the street and alley. He highlighted the minimum amount of work that would have been required, compared to what First Martin is actually doing.

Roger Hewitt agreed that the water main and sidewalk improvements are clear public benefits. He expressed caution about the right-of-way landscape maintenance commitment. In this case, he said, he had no concern – because First Martin has a superb reputation for maintaining its properties. But for future grants, unless the DDA has a way to monitor and enforce the agreement, he would be less interested in doing it.

Martin replied that it’s his understanding that there would be an agreement to cover those details and allay Hewitt’s concerns. Hewitt again stressed that he wasn’t worried about First Martin, but “I just don’t know if other developers will be as conscientious.” Smith said she assumed there’d be a remedy for default, if the developer didn’t follow through on maintenance.

Steve Powers said it was a great example of the DDA being part of a public/private partnership that will help improve downtown. He assumed that the partnerships committee was satisfied that the grant meets the criteria that the DDA spent several months developing.

Smith passed out copies of the grant policy. It states that the project should address significant elements of these 12 criteria:

1. Addresses a documented gap in the marketplace or underserved markets of commerce within this sector of downtown.

2. Demonstrated that the project will act as a catalyst for additional revitalization of the area in which it is located which will trigger the creation of additional new tax revenue.

3. Is “connected” to the adjacent sidewalk with uses on the first floor that are showcased using large transparent windows and doorways to give pedestrians a point of interest to look at as they walk by the project.

4. Creates a large office floor plate.

5. Will facilitate the creation of a large number of new permanent jobs.

6. Is a mixed use development, that will encourage activity in the daytime, evening, and weekend, such as a development with a mix of commercial and residential.

7. Adds to downtown’s residential density.

8. Reuses vacant buildings, reuses historical buildings, and/or redevelops blighted property.

9. Number of affordable housing units created on site or funded by the project elsewhere in the community, which are beyond what is required by the City.

10. Environmental design is at or above a Gold LEED certification, or an equivalent environmental assessment.

11. Architecturally significant building or project design.

12. Strengthens Ann Arbor’s national visibility.

Smith said she wanted to review the grant process at the partnerships committee’s July 9 meeting, to make sure everyone is comfortable with it after this first grant has been awarded using the new policy. They wouldn’t change the grant itself, she noted, but they might recommend tweaks to the guidelines.

Bob Guenzel and Keith Orr also supported the grant, saying it benefited that area and the entire downtown. Orr said he was thrilled that the DDA is again awarding partnership grants, saying it’s what the DDA’s mission is about, especially related to infrastructure.

Mouat noted that the project meets all the elements outlined for eligible improvements in the grant policy. The policy states:

To be eligible, the public improvements should include elements that extend beyond the public ROW directly adjacent to the site; this may include streetscape enhancements (and on-going maintenance), street and crosswalk resurfacing, crosswalk and bike lane pavement marking upgrades, innovative public stormwater treatments, and upsizing water, storm or sewer mains. Inclusion of any of the above elements may then allow site adjacent public improvements to be eligible as well.

Mouat also highlighted the fact that the project met 8 out of the 12 elements mentioned in the policy, which he called “quite extraordinary.” Smith said there were two additional elements – adding to the downtown’s residential density, and strengthening Ann Arbor’s national visibility – that could have easily been considered as benefits that the project brought. The partnerships committee discussed whether having a national hotel chain located downtown raises the city’s visibility, she said. The hotel will be operated by Marriott.

Martin reported that a lot of people locally are excited about the project. Raising the site’s visibility within the community isn’t part of the DDA’s list, he said, but people locally are excited about having another hotel option for out-of-town guests.

Outcome: On a 9-0 vote, the board awarded the grant to First Martin’s hotel project. Al McWilliams abstained on the vote, but did not indicate why. Russ Collins and Cyndi Clark were absent.

Funds for Sidewalks, Trees

The July 2 agenda included a resolution to establish a project budget of $100,000 for tree maintenance and sidewalk repairs in downtown Ann Arbor in fiscal 2015. The item was introduced by Roger Hewitt, and had been recommended by the DDA’s operations committee.

Ann Arbor DDA, The Ann Arbor Chronicle

This list of DDA board priorities is now posted on the boardroom wall.

The work will include repairs like displaced bricks and uneven sidewalk flags, as well as pruning of trees. The money to pay for the work will be drawn from tax increment finance (TIF) revenue, which the DDA is authorized to capture under state statue.

Hewitt noted that traditionally, the DDA has done sidewalk maintenance – things like repairing cracks and replacing slabs. There are numerous trip hazards and other minor maintenance issues for the sidewalks, especially after such a harsh winter, he said. Many of the thousand or so trees downtown are not in good shape, he added, and haven’t been pruned in many years. Some trees are dead and need to be replaced.

There’s money set aside in the DDA’s FY 2015 budget for sidewalk work, Hewitt noted. This $100,000 would be specifically designated for sidewalk repairs and tree maintenance or replacement.

Sandi Smith pointed out that a list of projects generated from DDA board retreats is posted on the boardroom wall, to remind them about their priorities. She said the resolution clearly aligns with some of the priorities that the DDA board has identified.

Al McWilliams stressed that by doing the work now, it will save money in the future – because the problems will only get worse if left unaddressed.

John Mouat asked whether the board could consider approving a budget for a three-year period – $100,000 for each year. Hewitt said the intention is that the DDA will spend at least this much every year. But since they haven’t approved the budgets beyond fiscal 2015, it’s better just to designate the amount for this year. He noted that in the somewhat distant past, the DDA budget had a separate fund for this kind of work, but eliminated it because it was cumbersome from a reporting standpoint, he said.

Mouat observed that one-year timeframes are tight, if the DDA is coordinating with the city for this kind of work. Hewitt again stated that it was the intent to spend money on this kind of thing in the future, and that the $100,000 for FY 2015 wouldn’t address all the problems, because maintenance has been deferred for years. “This will be a first step,” he said.

Outcome: The board vote was unanimous in support of the allocation.

Executive Director Raise

The July 2 agenda included a closed session for “a periodic personnel evaluation.” The agenda also included a resolution regarding compensation for the DDA executive director, Susan Pollay. The resolution for a salary adjustment was drafted prior to the closed session, and included this whereas clause: “Whereas, The DDA Executive Committee recommends that Ms. Pollay be provided with a salary adjustment beginning July 1, 2014 to increase her salary from $109,119 to $XXX,XXX; …”

The executive committee members are Sandi Smith (chair), John Mouat (vice chair), Keith Orr (secretary) and Roger Hewitt (treasurer). Pollay serves as a non-voting ex officio member.

Susan Pollay, Mike Martin, Darren McKinnon, Ann Arbor DDA, The Ann Arbor Chronicle

Susan Pollay, Mike Martin, Darren McKinnon

Before going into closed session, board member Keith Orr noted that a closed session isn’t required unless the person being reviewed requests it. He said the review was being conducted in closed session at Pollay’s request. The closed session was held in Pollay’s office.

The board emerged after about 15 minutes and Roger Hewitt brought forward the resolution for her salary adjustment. Board chair Sandi Smith said the evaluation of Pollay was extremely positive, saying that Pollay worked well with board members, general community entities, and is “a wonderful ambassador for the city.”

Hewitt noted that Pollay’s current salary is $109,119. He said she had received “good raises” in each of the last two years. However, she did not take a raise during the six years before that, he added, and that had been at her request because of the difficult economy. Hewitt said her eight-year average raise comes out to about 1.9% annually, which he said is below the rate of inflation. “It’s actually a losing position versus the cost of living,” he said.

Pollay is a Level 2 in the city’s pay range, Hewitt reported, which has a salary range from $95,000 to $157,000. The midpoint is $126,000 annually, he noted. Given her evaluations, he added, Pollay should be receiving a salary that’s closer to the midpoint.

However, even though Ann Arbor is doing well, the state is still not doing very well, Hewitt said. So he suggested giving her a 5% raise, which would be about $5,456 – bringing her total salary to $114,570. About half of the raise would cover cost of living increases, he said, and the other half would be to move her more toward the midpoint of the Level 2 pay range.

Board chair Sandi Smith said she hoped that future executive committee members would keep that record in mind when they evaluate Pollay’s salary in the coming years, saying there’s some “make up” that needs to happen.

Bob Guenzel asked if there was any consideration given to doing a longer-term look at her salary, for the next two or three years. Hewitt replied that the executive committee didn’t discuss it, but “the intention is that there will be continued raises above the cost of living to bring her up to a level that is appropriate for her responsibilities.” Guenzel said it would be nice to see Pollay reach the midpoint. Hewitt replied that the intention is to bring her up to that midpoint salary of $126,000 “within a fairly short time period.”

Steve Powers, Rishi Narayan, Ann Arbor DDA, The Ann Arbor Chronicle

From left: DDA board members Steve Powers and Rishi Narayan.

Steve Powers said he would not support a 5% raise. He understood the reasons given for it. He thought the movement of Pollay’s salary to a midpoint level, which is being tied to her performance, needs to be part of a more robust evaluation process. Also, according to a University of Michigan economic report, he noted, inflation has been between 1.7% to 1.9%. Powers said he was more comfortable with a 3% raise.

Smith replied that Pollay hadn’t received a raise in 8 of the past 10 years, “and I think there’s some opportunity for some catch-up.” She characterized a 5% raise as “extremely modest.”

Al McWilliams asked Powers if there were precedent for this raise compared to other positions within the city. Powers replied that the management employees of the city received a 3% increase this year. Last year they also got 3%. Prior to that there’d been a one-time adjustment, he said, and salary freezes during the recession.

The resolution regarding the increase states that “a number of important DDA projects were undertaken in FY 2014 under Ms. Pollay’s leadership, including opening the new First and Washington parking structure, creating a Street Framework planning initiative in partnership with the City, and working with the City Council to approve amendments to the DDA ordinance.”

The resolution also states that board members provided reviews of Pollay’s work in FY 2014, and the reviews “noted how effectively she works with the DDA Board to support board member involvement and effectiveness, how effectively DDA programs and projects are managed, and that Ms. Pollay serves as a vital resource for downtown stakeholders, and the community at large…”

Pollay has served as the DDA’s executive director since 1996.

Outcome: On a 9-1 vote, the board approved a 5% increase to Pollay’s salary, over dissent from Steve Powers. Russ Collins and Cyndi Clark were absent.

Annual Meeting

Immediately after its regular monthly meeting on July 2, the DDA board held its annual meeting to elect officers and form committees.

Annual Meeting: Election of Officers

John Mouat was nominated to serve as chair of the board for the coming fiscal year, which began on July 1, 2014. The nomination of Mouat as chair was made in accordance with the custom of the DDA board over the last several years – to elect the vice chair from the preceding year as chair. Mouat is a partner in the downtown firm of Mitchell & Mouat Architects.

Mouat’s term on the DDA board runs through Sept. 6, 2015. He was first appointed in 2007.

Other officers nominated by the board included Roger Hewitt as vice chair, Rishi Narayan as treasurer, and Keith Orr as secretary. Outgoing chair Sandi Smith was thanked for her service. She presided over the annual meeting until the end, as Mouat’s term began at the conclusion of the meeting.

There were no competing nominations.

Outcome: All officers were elected unanimously.

The executive committee consists of these four officers: chair, vice chair, treasurer and secretary. They serve in those positions for one-year terms. Given the custom of the board, Hewitt is now in a position to become the next chair. He has served on the DDA board since 2004 and his current term runs through Aug. 19, 2016. He owns two businesses in downtown Ann Arbor – Red Hawk restaurant, and Revive + Replenish shop.

Annual Meeting: Committee Structure

In other business at the annual meeting, the board discussed what committees it wanted to create or continue in the coming year.

The board’s bylaws state that committees can be created to advise the board. From the bylaws:

Committee members shall be members of the Board, any board member may serve on any committee of the Board. The Chair of the Board shall appoint the members and select the chair of the Board committees and will solicit volunteers to chair the standing committees. The committees may be terminated by vote of the Board. At the annual meeting, the committees will be evaluated and reappointed or dissolved.

Sandi Smith noted that for the last several years, all members of the board served on every committee. That way, she said, everyone got the meeting notices and packets. “I don’t know whether that’s a good practice or a bad practice, but it’s time that we bring that forward,” she said. Smith added that she believed she got the opportunity to appoint the committee chairs, as board chair.

The two existing committees were (1) partnerships/economic development/communications, and (2) operations. The partnerships committee includes a subcommittee on marketing. The board first considered whether to dissolve these committees.

Annual Meeting: Committee Structure – Partnerships, Marketing

Keith Orr advocated for keeping the partnerships/economic development/communications committee as is, with its marketing subcommittee working as needed. He didn’t think there needed to be a separate marketing committee.

Al McWilliams said he tended to agree with Orr. While marketing and communications activity is “picking up steam,” he didn’t think it was mature enough yet to need its own full committee.

Ann Arbor DDA, The Ann Arbor Chronicle

The Ann Arbor DDA board.

Rishi Narayan pointed out that the partnerships meetings are getting unwieldy, so it might be better to pull out marketing and communications. If it turns out that a separate marketing/communications committee eventually isn’t needed, the board could dissolve it, he noted. This would allow there to be two separate meetings, each one shorter than the current combined committee.

Orr advocated for keeping it unchanged, and noted that the board can create a separate marketing committee during the year, if they feel they need it.

Joan Lowenstein agreed with Orr, saying she didn’t think the partnerships meeting was unwieldy. She noted that the board members are volunteers, and creating new committees requires yet another block of time to devote to the work. She thought it worked better for people’s schedules to consolidate as much as possible.

McWilliams then suggested creating separate committees, but holding back-to-back meetings.

Narayan said that in the future, if there’s a staff member focused on marketing and communications, “this area might become more fleshed out very quickly.” He noted that there’s been talk about hiring another employee for that purpose in the future, although he characterized that possibility as a “fantasy” at this point.

Smith picked up on McWilliams’ suggestion – having the partnerships meeting run from 11 a.m. to 12:30 p.m., then a marketing committee could meet as needed at 12:30 p.m. People attending the partnerships meeting could stay for marketing if they’re interested, she said.

Mouat encouraged board members to arrive at committee meetings on time, saying it would help save time and make the meetings more efficient.

Steve Powers asked that the DDA board chair or executive director remind the partnerships committee members who represent other taxing jurisdictions about the purpose of the committee and the changes that are being made, “so that their expectations are in line with the DDA board’s expectations for that committee.”

Smith said it sounded like there was consensus for a new marketing committee. She asked that McWilliams serve as chair. She asked anyone who was interested in serving on the committee to raise their hand. She, McWilliams and Narayan raised their hands.

At this point, DDA executive director Susan Pollay asked whether the board was going to vote to dissolve the existing partnerships/economic development/communications committee, and vote to create the marketing committee.

Orr repeated his preference to keep the current committee structure.

Outcome: The board voted to dissolve the partnerships/economic development/communications committee.

Roger Hewitt then moved to create a partnerships committee and a marketing committee. As a friendly amendment, Keith Orr suggested that the partnerships committee be named partnerships/economic development.

Outcome: The board voted to create a partnerships/economic development committee and a marketing committee.

Sandi Smith asked Joan Lowenstein and Al McWilliams to serve as co-chairs of the partnerships/economic development committee. Other board members who volunteered to serve on the committee are Bob Guenzel, John Mouat, Rishi Narayan, Keith Orr, Sandi Smith, John Splitt.

Smith noted that “committee participants” of the partnerships/economic development committee are: Ken Clein (city planning commission); Jane Lumm and Margie Teall (Ann Arbor city council); Charles Griffith (Ann Arbor Area Transportation Authority); and Jason Morgan (Washtenaw Community College). Based on an emailed response to a Chronicle query to Pollay, the DDA’s position appears to be that historically, membership on the partnerships committee was always restricted to DDA board members – because it has been a “board committee” under the DDA bylaws.

By way of background, however, the DDA bylaws provide for a second committee type – “advisory committees” – that do not have a requirement that members be DDA board members. It’s been assumed by at least some city councilmembers that those who are now being described as “committee participants” have been actual “members” of the partnerships committee and that the partnerships committee has been an “advisory committee” under the bylaws. To the extent that the DDA board committees function without taking formal votes or observing rules on quorum, the issue of committee membership as compared to “participation” could be considered moot.

At the July 2 meeting, Smith added that there was an “ongoing invitation” for representatives from Washtenaw County government and the Ann Arbor District Library to participate. “They know that they’ve been invited to come and share during the update time” during the partnerships meetings, she said.

By way of background, the DDA captures taxes from the following jurisdictions that collect taxes in the DDA district: the city of Ann Arbor, Washtenaw County, Washtenaw Community College, the Ann Arbor Area Transportation Authority, and the Ann Arbor District Library. The partnerships committee includes representatives from each of those entities, with the exception of the AADL and Washtenaw County. Until last year, county commissioner Leah Gunn was a DDA board member and served on the partnerships committee. Former county administrator Bob Guenzel is on the DDA board and the partnerships committee.

When queried by The Chronicle via email, AADL director Josie Parker stated that she hadn’t been formally invited to join the committee. She said she did participate on the partnerships committee several years ago, but hasn’t been part of it at all in the last few years. That was her choice, she said.

Annual Meeting: Committee Structure – Operations, Finance

Roger Hewitt noted that the DDA has a budget of about $24 million. During the operations committee meetings, there’s a lot going on, he said, and the financial piece tends to not get the attention that it needs, given the size of the budget. Having a separate committee that focuses strictly on the financial aspects of the organization would be beneficial, he said.

Roger Hewitt, John Splitt, Ann Arbor DDA, The Ann Arbor Chronicle

DDA board members Roger Hewitt and John Splitt.

So Hewitt preferred two separate committees. He suggested that operations could continue to meet at 11 a.m., then would break for lunch and continue with a meeting of the finance committee. Anyone who’s on operations could attend the finance committee meeting, he said, but it would focus in more detail on the organization’s financial records and reports.

Keith Orr said he thought it made sense to have separate committees for operations and finance. Finance is an important enough subject to warrant its own committee, especially as the DDA’s budget continues to grow, he said. It’s important to develop people on the DDA board who are comfortable with the financial oversight role – especially since there are now term limits, he said. [The city council voted last year to impose a limit of three terms for DDA board members, which amount to 12 years.]

Hewitt then brought forward one resolution to: (1) dissolve the existing operations committee, and (2) form two new committees: the finance committee, and the operations (parking/transportation/construction) committee.

Outcome: The resolution passed unanimously.

Smith appointed the new board treasurer, Rishi Narayan, as chair of the finance committee. Other board members who volunteered for the committee were Bob Guenzel, Roger Hewitt, John Splitt and Keith Orr.

Smith then appointed John Splitt as chair of the operations committee. Other board members who volunteered to serve on the operations committee are Bob Guenzel, Roger Hewitt, Joan Lowenstein, Rishi Narayan, Keith Orr.

Annual Meeting: Committee Structure – Executive

Sandi Smith noted that the executive committee consists of the board officers: chair John Mouat, vice chair Roger Hewitt, secretary Keith Orr, and treasurer Rishi Narayan. Smith, as the most recent former board chair, is a non-voting member. The DDA’s executive director, Susan Pollay, is a non-voting ex officio member.

Annual Meeting: Committee Structure – Membership

Committee membership was determined by board members volunteering for the committees on which they wanted to serve. The committee chairs were appointed by outgoing DDA board chair Sandi Smith. The four new committees have the following membership:

  • Marketing committee: Al McWilliams (chair), Rishi Narayan and Sandi Smith.
  • Partnerships/economic development committee: Joan Lowenstein and Al McWilliams (co-chairs), Bob Guenzel, John Mouat, Rishi Narayan, Keith Orr, Sandi Smith, John Splitt. Listed as “committee participants” of the partnerships/economic development committee on the agenda are: Ken Clein (city planning commission); Jane Lumm and Margie Teall (Ann Arbor city council); Charles Griffith (Ann Arbor Area Transportation Authority); and Jason Morgan (Washtenaw Community College).
  • Finance committee: Rishi Narayan (chair), Bob Guenzel, Roger Hewitt, John Splitt and Keith Orr.
  • Operations (parking/transportation/construction) committee: John Splitt (chair), Bob Guenzel, Roger Hewitt, Joan Lowenstein, Rishi Narayan, Keith Orr.

Two board members – Cyndi Clark and Russ Collins – were absent, and will likely be joining one or more of the committees.

Steve Powers noted that he hadn’t volunteered for any of the committees, but he’d try to attend meetings if assistance is needed. He encouraged the committee members to make sure that the purpose of the committees is clearly understood by committee members, staff and the public. It’s important to be aligned regarding the role of the committees, he said, and to maintain the positive relationship between the DDA board, staff, and the other jurisdictions.

Smith agreed, saying that in September each committee should kick off their meeting with a re-introduction of members, and a discussion of purpose.

Powers said he appreciated that the board priorities were posted on the DDA boardroom wall, saying that it’s a powerful reminder about why the DDA is here and what they’re focusing on. He suggested doing something similar for the committees. Smith joked that “it’s easy to be swayed by shiny objects.”

Annual Meeting: Committee Structure – Coda, Future Meetings

The board discussed the possibility of canceling its committee meetings for July. Roger Hewitt indicated a possible need to meet to discuss renovations at the Fourth & William parking structure, but that might be handled by a subcommittee. Sandi Smith wanted to have a partnerships meeting in July but not August. She wanted to evaluate the partnerships grant policy, after awarding its first grant under the new policy. She thought the committee should review the policy while the action was still fresh, rather than waiting until August or September.

After further discussion, the board decided to leave the July committee meetings in place.

According to the DDA’s website, upcoming committee meetings will take place at the DDA offices, 150 S. Fifth, Suite 301:

  • Partnerships & Economic Development: Wednesday, July 9 at 9 a.m.
  • Marketing: Wednesday, July 9 at 10:30 a.m.
  • Operations: Wednesday, July 9 at 1 p.m. and Wednesday, July 30 at 11 a.m.
  • Finance: Wednesday, July 30 at 12:30 p.m.

In addition, the board has scheduled a meeting on Wednesday, July 9 at 11:30 a.m. to discuss the design of the Fourth & William stair tower & elevator tower. All committee meetings are open to the public.

Communications, Committee Reports

The board’s July 2 meeting included the usual range of reports from its standing committees and the downtown citizens advisory council, as well as public commentary. Here are some highlights.

Comm/Comm: Downtown Area Citizens Advisory Council

Reporting out from the downtown area citizens advisory council, Ray Detter said the group recently welcomed two potential new members who live and work downtown. He said the advisory council would welcome the participation of others who live or work in the downtown area and who are interested in shaping developments downtown. There are three more membership openings. The group meets on the first Tuesday of every month except August at 7 p.m. in city hall.

He noted that by next fall, new developments will open that bring hundreds of residential units to the downtown, and “amazingly, our group is in full support of most of them.” Those developments that avoid having a negative impact are being undertaken by local developers, he noted.

But most of the advisory council’s July 1 meeting had been focused on the future of the Library Lane site, Detter reported, where a current surface parking lot is located atop the underground parking structure there. He noted that the city council provided direction to the city administrator to hire a broker to explore selling the development rights for that site, while reserving a portion of the property for a downtown park.

Members of the advisory council strongly support a significantly sized public plaza on the Fifth Avenue side of that location, Detter said. They also support pedestrian walkways to Liberty Plaza, and believe that all future development should take into consideration the needs of the Ann Arbor District Library and possible connections to the Blake Transit Center as well as nearby historic properties, and businesses. They encourage the possibility of a new tax-generating private or public development on the major part of that Library Lane property, he said.

Detter noted that the issue of improving Liberty Plaza has apparently been moved to the city’s park advisory commission. He said most of the citizens advisory council believe that changes to Liberty Plaza should be part of a larger plan for the entire block. The city about a decade ago spent $250,000 on redesigning Liberty Plaza – with $50,000 from the city’s parks department, and the rest provided by the DDA, he said. It’s a beautiful park, Detter added, and he hoped it would be part of a larger plan for the block.

Comm/Comm: Streetscape Framework Project

John Mouat noted that there was no agenda item for an update on the DDA’s streetscape framework project. He asked Amber Miller, the DDA’s planning and research specialist, to provide an update.

Miller said the staff and consultants had done some on-the-ground outreach, getting feedback from people who were using the streets downtown. They heard from over 200 people and got a lot of good feedback. She said they’ve also pulled in an “economics team” that focuses on retail and ground-floor uses, to make sure that any streetscape improvements would benefit those active uses. That team made its visit on July 1 and July 2, she said, meeting with some DDA board members and walking around the downtown district. More information would be provided at the project’s next advisory committee meeting, Miller said.

The next advisory committee meeting is Tuesday, July 8 at 9 a.m. at the DDA’s office, 150 S. Fifth, Suite 301. The meeting is open to the public.

By way of background, at its Nov. 6, 2013 meeting, the DDA board authorized the consulting contract SmithGroupJJR and Nelson\Nygaard to manage the project. According to the project’s website, a “comprehensive set of design, construction, and maintenance standards can enhance and maintain the high quality experience provided by some streets and improve the identity and functionality of others. A framework plan will be a tool to ensure downtown streets provide a high quality of place for all users, while also meeting broader community goals.”

Feedback is also being collected via an online survey and a wiki mapping tool.

Comm/Comm: Connector Study

Roger Hewitt reported on the status of the connector study. [By way of background, an alternatives analysis is currently being conducted by the Ann Arbor Area Transportation Authority for the corridor running from US-23 and Plymouth southward along Plymouth to State Street, then further south to I-94. The alternatives analysis phase will result in a preferred choice of transit mode (e.g., bus rapid transit, light rail, etc.) and identification of stations and stops.]

The technical oversight committee met last week, Hewitt said, and are very close to wrapping up its preliminary conclusions. A public meeting is planned for Sept. 17, he reported. That will take place in the evening at the Ann Arbor District Library to bring the public up to date, with two sessions – at 4 p.m. and 6:30 p.m.

Hewitt described it as a long and arduous process, going through reams of data. They’re close to making recommendations, depending on public input, he said.

Comm/Comm: WALLY

Roger Hewitt also gave an update on the federally funded study regarding a railroad station for a north/south commuter rail running between Ann Arbor and Howell. [The project is known as WALLY – the Washtenaw and Livingston Line.]

railroad, WALLY, Ann Arbor, The Ann Arbor Chronicle

View looking south toward Liberty along the railroad tracks between Washington and Liberty. If the commuter rail project known as WALLY moves forward, a proposed train stop might be located here, in the railroad right-of-way east of the tracks – on the left side of this photo.

Hewitt said this service is probably a significant way off from being offered, but there had been funding for a study to recommend station locations. The consultants evaluated “every possible location” between North Main Street south to where Fingerle Lumber is located, he said.

The final site recommendation for a stop is for the east side of the railroad tracks between Liberty and Washington streets, Hewitt reported – opposite of where the former city maintenance yard was located [at 415 W. Washington]. He said it wouldn’t be a full station – it would simply be a platform with canopies and a ramp to Washington Street to the north and a sidewalk connection to the south onto Liberty.

The stop would be built entirely within the railroad right-of-way, he explained – there would be no taking of public or private property.

Hewitt said he’d like to make a short formal presentation about the recommendation at a future DDA board meeting.

Comm/Comm: Communications & Marketing

Rishi Narayan reported that the marketing/communications subcommittee was still collecting data to determine what the DDA’s place might be in marketing the downtown. Traditionally, marketing hasn’t been part of the DDA’s role, he noted, so if they decide to do it, they need to make sure it’s efficient in time, money and staff energy.

Narayan said they’re working with a company, at no cost to the DDA, to develop a plan that would give the DDA some macro-economic data. They’ve also started talking with Republic Parking, which oversees the city’s parking system under contract with the DDA, to see if there’s a way to extract information from Republic’s data.

Because the art fairs are approaching, people don’t have a lot of time to talk about this, Narayan noted. He hoped to come back with recommendations in the coming months. It might mean partnering with the downtown area associations and the Ann Arbor Convention and Visitors Bureau to do more, such as grants for events.

Al McWilliams noted that the CVB is doing data collection during the art fairs, to show what the impact of those events are. The CVB will be sharing that data with the DDA.

Comm/Comm: Fourth & William Renovations

John Splitt reported that the subcommittee for renovations at the Fourth & William parking structure had met with the design team. Construction drawings for the elevator and stair tower are moving forward. By way of background, the board had approved the $5 million project budget at its May 2, 2014 meeting, with Carl Walker Inc. handling the design.

Image from preliminary drawings by the Carl Walker design team for renovated elevator and stair tower for the Fourth & William parking structure.

Image from preliminary drawings by the Carl Walker Inc. design team for renovated southwest elevator and stair tower for the Fourth & William parking structure.

The subcommittee is still fleshing out general concepts about the rest of the potential build-out along Fourth and Williams, Splitt said. They want to be as flexible as possible, and would like to see wheelchair access, awnings and ways to break up the horizontal surfaces. Architect Carl Luckenbach has come up with some different concepts that the subcommittee is considering.

They haven’t decided where bathrooms might be installed, and aren’t certain how much space they can build out without triggering city code issues for ventilation and fire suppression, Splitt reported. The subcommittee is meeting with the design team again in the next week, and might emerge with answers to some of these questions.

John Mouat said they’d be reaching out to “our realtor friends” to get advice about what the “white box” might be for this build-out, to make sure that it’s viable for potential tenants.

Roger Hewitt reported that the subcommittee already had one meeting with real estate professionals. The feedback was that there’s big demand for business incubator start-up space, he said.

Keith Orr told the board that construction of the Greyhound ticket office at the Fourth & William structure is underway, and the bus company will be relocating there next week – ahead of schedule. The office was previously located at the site on West Huron where First Martin is now constructing an extended-stay hotel.

Comm/Comm: Ambassadors

Reporting out from the operations committee, Roger Hewitt noted that a meeting had been held with several representatives of local social service agencies, as well as Ann Arbor police chief John Seto and Mary Kerr from the Ann Arbor Convention & Visitors Bureau. They discussed how an ambassador program might be integrated into existing efforts, and complement those efforts.

Now they’re trying to figure out how to frame an RFP (request for proposals), Hewitt said. They’d like to bring the two potential providers here for interviews, he added. A meeting is set for Wednesday, July 9 at 1 p.m. to discuss exactly how to structure the interview process.

Hewitt expected to set up interviews sometime before the end of this summer.

Comm/Comm: Parking Update

Roger Hewitt said there was nothing new to report, other than the monthly permit data that was provided in the board packet.

Comm/Comm: City Updates

City administrator Steve Powers gave a couple of updates that related to the DDA district. The city council, as part of its approval of the fiscal 2015 budget, has authorized hiring three new police officers. Two of the three positions will be community engagement officers who’ll be starting by the end of July, he said. Downtown will be a priority area for their work over the summer.

Sandi Smith asked Powers to elaborate on the nature of the community engagement work. Powers described it as an initiative that police chief John Seto has been advocating since he took that position. Currently there is one officer doing community engagement – Sgt. Tom Hickey. The additional officers will help Hickey engage with three areas of emphasis: downtown businesses, neighborhoods and public schools. Their work will contrast with patrol activity or calls for service, Powers said, in that they’ll be more pro-active.

Powers also noted that during this year’s art fairs, the city’s police, fire and emergency management staff will be using Liberty Plaza – on the southwest corner of Liberty and Division – as staging area and a cooling station for the public. There will be misting and water available, as well as shade, he said. Red Cross will be participating, as will the city’s volunteer community emergency response team (CERT).

Comm/Comm: Real-Time Parking Data

During public commentary, Ed Vielmetti noted that in 2009, he’d approached the board with ideas and a prototype of a system to monitor and provide real-time information about the city parking system. At the time, the DDA board was not interested in supporting it, he said, and the DDA removed access to the real-time information. He said he’s recently spoken to staff at Republic Parking, which manages the city’s parking system under contract with the DDA, and showed them some prototypes. They’d been receptive to some of the ideas, he said, but had made it clear that a good first step would be to talk with the DDA board.

Vielmetti said his system could provide real-time alerts when parking structures are full, for example, among other features. He said he’s built all of this on his own, mostly as a demonstration project. He’d be happy to share the results of the prototype with board members. He’s doing a similar project for a solar energy-monitoring system.

Sandi Smith suggested that Vielmetti talk with DDA executive director Susan Pollay, as well as the board’s operations committee.

Comm/Comm: TiniLite

Changmin Fan introduced himself as the owner of TiniLite World. He said the company is registered in Ann Arbor, and he has a factory in China that’s building a prototype. He’d like to manufacture the product here, however. He said all four mayoral candidates are great, but noted that Sally Petersen has pointed out the city’s economic development needs. The economic ecosystem isn’t very good for him, Fan said. Small businesses and people – not just the University of Michigan – are the engine for economic development in this city. Communications are also important, he added, and there needs to be smart signs on the street. The DDA can take a leadership position on this, he concluded.

Comm/Comm: BTC Open House

Nancy Shore, director of the getDowntown program, invited board members to the Blake Transit Center grand opening on Monday, July 7 at 10 a.m. There will be tours, food and “dignitaries aplenty,” she said. The getDowntown office is located on the second floor, and she urged them to drop by.

Shore also reported that there is a community space within that facility where meetings can take place. It might be a nice location for a retreat, she said.

The Blake Transit Center is the downtown hub for the Ann Arbor Area Transportation Authority. It’s located north of William Street between Fourth and Fifth avenues.

Comm/Comm: Bill’s Beer Garden

Board chair Sandi Smith noted that the DDA board would be gathering that night at Bill’s Beer Garden at 6 p.m. She joked that the purpose was “to have some very serious discussions about Original Gravity, IBUs and things like that.” She said it would be open to the public, and is a celebration of hard work by a lot of volunteers.

Comm/Comm: Staff Thank You to Board Members

At the end of the annual meeting, executive director Susan Pollay made a presentation to the board, saying it was the staff’s chance to thank the board. DDA board members are volunteers, she said. “I don’t know that that’s widely understood out in the community.” She thanked the board for their service.

Pollay also said that it’s a tradition for the staff to present a small gift to the outgoing board chair. This year, the gift was inspired by a trip to New York, she said. “It was a wonderful moment for many of us to actually be in one of the most fabulous cities in the world.” [The trip was for the International Downtown Association conference in October 2013.] The gift comes from Selo/Shevel Gallery on Main Street in Ann Arbor, which closed earlier this year. It’s a pin that evokes a cityscape of tall buildings, Pollay said.

Smith received a round of applause from staff and the board.

Present: Al McWilliams, Bob Guenzel, Roger Hewitt, Steve Powers, John Splitt, Sandi Smith, Rishi Narayan, Keith Orr, Joan Lowenstein, John Mouat.

Absent: Russ Collins, Cyndi Clark.

Next board meeting: The board does not meet in August. The next board meeting is at noon on Wednesday, Sept. 3, 2014, at the DDA offices, 150 S. Fifth Ave., Suite 301. [Check Chronicle event listings to confirm date.]

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DDA OKs $100K for Sidewalks, Trees Wed, 02 Jul 2014 17:07:11 +0000 Chronicle Staff Tree maintenance and sidewalk repairs in downtown Ann Arbor will get $100,000 of support from the Ann Arbor Downtown Development Authority as a result of board action taken at its July 2, 2014 meeting.

The work will include repairs like displaced bricks and uneven sidewalk flags, as well as pruning of trees.

The money to pay for the work will be drawn from tax increment finance (TIF) revenue, which the DDA is authorized to capture under state statue.

The project was recommended by the DDA’s operations committee. The board vote was unanimous.

This brief was filed from the DDA offices, 150 S. Fifth Ave., Suite 301, where the DDA board holds its meetings.

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Ann Arbor LDFA Looks to Extend Its Life Tue, 24 Jun 2014 17:21:11 +0000 Dave Askins Ann Arbor Local Development Finance Authority board meeting (June 17, 2014): The LDFA board’s meeting convened around 8:20 a.m. – about seven hours after the city council’s meeting adjourned the previous evening. And the council’s meeting was the topic of small talk among LDFA board members as they waited for their meeting to convene.

Carrie Leahy is chair of the LDFA board.

Carrie Leahy is chair of the LDFA board.

The council’s meeting was of more than just passing interest to the LDFA board members – because the council voted at that meeting to table a $75,000 contract for business development services with Ann Arbor SPARK, a local nonprofit economic development agency. Ann Arbor SPARK is also the LDFA’s contractor – but not for the same kind of services that SPARK delivers under its contract with the city. The council will likely take up its contract with SPARK again at a future meeting, possibly as soon as July 7.

The city’s annual contract with SPARK, which is paid for with general fund money, is meant to cover the attraction and retention of mature companies to the Ann Arbor area. In contrast, the LDFA contracts with SPARK for entrepreneurial support services – for companies that are in some phase of starting up.

On the LDFA board’s June 17 agenda was the annual contract with Ann Arbor SPARK for entrepreneurial support services – which the board voted to approve. This year that contract is worth nearly $2 million – $1,891,000 to be exact.

An unsuccessful bid by councilmembers made during the city’s FY 2015 budget deliberations would have reduced the total LDFA expenditures by $165,379. The goal of that expenditure reduction would have been to increase the fund balance that was available for infrastructure improvements in the LDFA district – specifically, for high-speed telecommunications. At the LDFA’s June 17 meeting, city CFO Tom Crawford indicated that sometime in the FY 2015 fiscal year, the city would be making a proposal to install fiber throughout Ann Arbor.

The contract between the LDFA and SPARK covers a range of items, with the top two line items consisting of staffing for the business incubator ($420,000) and provision of services to start-up companies in Phase III of their development ($550,000). SPARK classifies its engagement with companies in terms of phases: preliminary screenings (Phase I); due diligence (Phase II); intensive advising (Phase III); and accelerating opportunities (Phase IV). [.pdf of FY 2015 budget line items] [.pdf of LDFA-SPARK FY 2015 contract]

At its June 17 meeting, the LDFA board also approved a routine annual $42,600 contract with the city of Ann Arbor – for administrative support services. Those include items like the preparation of meeting minutes, stewardship of public documents, and preparation of budgetary analyses. [.pdf of FY 2015 LDFA contract with city of Ann Arbor]

The final voting item for the board was approval of its meeting schedule for the next fiscal year. The LDFA board meets in eight out of 12 months, with the next meeting taking place on July 15, 2014, starting at 8:15 a.m. in the city council chambers. [.pdf of 2014-2015 meeting schedule]

These voting items did not, however, generate the majority of the board’s discussion at its June 17 meeting.

The board focused most of its discussion on issues surrounding its application for an extension of the LDFA past its current 15-year lifespan, which ends in 2018. Legislation passed in 2012 allowed for either a 5-year or a 15-year extension – with different criteria for those time periods. The 15-year extension requires an agreement with a satellite LDFA, with two communities currently under consideration to partner with Ann Arbor’s LDFA: Brighton and Adrian. Flint had also been a possibility, but is no longer on the table.

With an extension, the LDFA would continue to capture school operating millage money, which would otherwise go to the state’s School Aid Fund. At least some of the school taxes subject to capture by LDFAs statewide are required to be reimbursed to the School Aid Fund by the state. Questions about how that applies to Ann Arbor’s LDFA have been raised – and a review of the state statute appears to support the conclusion that the key clause requiring reimbursement is inapplicable to the Ann Arbor SmartZone LDFA. That understanding was confirmed to The Chronicle by the Michigan Dept. of Treasury communications staff in a telephone interview on June 23.

The exact nature of that tax capture arrangement and possible reimbursement was also the subject of LDFA board discussion on June 17 – because the LDFA board is being pressed by city councilmembers to account for how the LDFA tax capture impacts the state’s School Aid Fund. Board member Stephen Rapundalo expressed some frustration about that – based on his perception that this material had been well explained in the past: “What’s it take – for them to understand unambiguously how that works? I mean, we have told them. Why is the onus on the LDFA to have to show them that?”

Besides the tax capture mechanism, two other issues raised by city councilmembers are factoring into the LDFA board’s approach to seeking an extension of its term. Board chair Carrie Leahy told her colleagues that she took away two main messages from recent appearances in front of the Ann Arbor city council. Some councilmembers, she said, would like to see: (1) an independent audit of job creation numbers; and (2) a provision for infrastructure investments as part of an LDFA extension.

On the infrastructure side, the LDFA board’s discussion focused on the existing TIF (tax increment finance)/development plan, which provides for investments in high-speed telecommunications (fiber) networks, but not for projects like street construction, sewer construction and streetlight installation. The question was raised as to whether the LDFA could use its school tax capture to pay for a fiber network in the whole geographic district of the LDFA – or if school taxes could only be used to fund a fiber network to an business incubator.

The Ann Arbor LDFA’s district covers the geographic areas of the Ann Arbor and Ypsilanti downtown development authorities – although Ypsilanti’s DDA area does not generate any LDFA tax capture. As a consequence, money captured by the LDFA is not spent in the Ypsilanti portion of the district. But that could change under an extension of the LDFA – based on board discussion at the June 17 meeting.

On the job creation numbers audit, the June 17 board discussion indicated that the LDFA will now be looking possibly to incorporate a job numbers audit as part of an upcoming financial audit. The financial auditing firm will be asked to provide some explanation of how it might be able to incorporate a jobs audit as part of its scope of work for the upcoming financial audit. The board appears to understand that some type of jobs audit would be important for winning ultimate city council support for a 15-year extension of the LDFA.

The city council’s representative to the LDFA board, Sally Petersen, made that explicit more than once during the June 17 meeting, saying that “taking the lead on establishing an independent audit would go a long way towards getting city council support for an extension.”

The LDFA’s deliberations and other agenda items are reported in more detail below.

Ann Arbor SPARK’s Two Roles

Some of the political chaffing surrounding Ann Arbor SPARK involves a lack of clarity about roles played by SPARK – which are, from SPARK’s perspective, clearly separate and distinct: (1) a somewhat conventional economic and business development agency that attempts to retain mature companies in the Ann Arbor area, and also to attract mature companies to locate in this area; and (2) an organization that provides entrepreneurial services to start-up companies and nurtures them toward commercialization. It’s this second role for which the LDFA contracts with SPARK.

At one point during the June 17 LDFA board meeting, Luke Bonner – SPARK’s vice president of business development – sought to clarify these two distinct roles. Bonner heads up SPARK’s efforts to retain and attract new fully-formed companies. Bonner got clarification that Ann Arbor city council’s discussion the previous evening had centered on the $75,000 business services contract between the city of Ann Arbor and SPARK.

The business development team at Ann Arbor SPARK – of which Bonner is a part – is not under contract with the LDFA, he pointed out. Instead, SPARK’s business development team is under contract with Washtenaw County, the city of Ann Arbor, various other municipalities in Washtenaw County, and Livingston County – in addition to all of the private funding received by Ann Arbor SPARK.

Bonner stressed that the business development and the entrepreneurial services teams operate in two different worlds. Bill Mayer, SPARK’s vice president for entrepreneurial services, followed up Bonner’s observation by pointing out that the kind of companies that Bonner deals with are too big for him to be able to help under the SmartZone (LDFA) guidelines. Mayer described the situation at Ann Arbor SPARK as two separate paths, but under one banner.

Mayer stressed that reports required by the Michigan Economic Development Corp. (MEDC) entail reporting different kinds of numbers. The issue of these different numbers from different reports has been raised as a concern by some members of the public, as well as by some councilmembers.

For outside observers, including some councilmembers, SPARK’s two distinct roles are not as self-evidently separate – because they both fly under the same banner of Ann Arbor SPARK.

The $75,000 contract to which Bonner referred was between the city of Ann Arbor and SPARK for its role as an agency that attracts and retains mature companies.  At the council’s June 16 meeting, the parliamentary motion used to deal with the contract was to “table” the question, which is not debatable under Robert’s Rule of order – so the council voted on the tabling motion, without additional deliberations. That vote came out 6-5 in favor of tabling. With that the council moved along on its agenda.

But at the end of the June 16 council meeting, Ward 1 councilmember Sabra Briere brought up the issue during the council communications time, saying that Ann Arbor SPARK CEO Paul Krutko had expected to be asked questions and respond to councilmembers’ concerns – but that had not happened. Briere alluded to the fact that the issue might come back before the council “sooner rather than later,”  but she wanted Krutko to be able answer some questions at that time – as he had remained in the council chambers until that point.

In the course of the back and forth, Ward 2 councilmember Jane Lumm told Krutko that she would have preferred to postpone it. But in talking to her colleagues during the break, Lumm said, there was greater interest in tabling the resolution.

The back-and-forth between the council and Krutko ultimately did not result in a motion by any councilmember to take up the resolution off the table for a vote. It appears likely that the council will consider the question at its July 7 meeting.

Some of the disparity of jobs numbers in SPARK’s reporting, as claimed by SPARK’s critics, appears to be due to reports that cover different activities: SPARK’s overall business development impact, as opposed to reports made to the state legislature and related to various state grants. [Ann Arbor SPARK 2013 annual report] and [21st Century Jobs Trust Fund 2013 Annual Report]

Contributing to the lack of definiteness on the numbers reported by SPARK is the fact that SPARK uses self-reported company figures for projected jobs – as opposed to independently verifying the creation of actual jobs. That independent verification is not necessarily straightforward, because SPARK may not be able to compel a company to disclose records that would allow such independent verification of a company’s self-reported jobs claims.

SPARK as LDFA Contractor

The LDFA board deals with Ann Arbor SPARK as its contractor for entrepreneurial services – not as an attractor and retainer of companies in the area. And the June 17 LDFA board meeting reflected that. On the agenda were three items related to that specific function of SPARK – the treasurer’s report, the report from SPARK, and the annual contract between the LDFA and SPARK.

SPARK as LDFA Contractor: Treasurer’s Report

Eric Jacobson gave the treasurer’s report. As of the end of May, he could report that spending by the LDFA’s contractor, Ann Arbor SPARK, was well below the amount budgeted for the year. There was an overall positive variance of about $76,000.

Eric Jacobson is the LDFA board treasurer.

Eric Jacobson is the LDFA board treasurer.

He noted that Ann Arbor SPARK had exceeded its budget in two categories – but in both categories the amount by which it had exceeded budget is well below the threshold constrained by the contract.

That meant that SPARK could spend up to a certain amount over budget in any line item – he thought it was a 5% variance. First, SPARK had overspent in the internship and entrepreneur-in-residence program. SPARK had also overspent the budget in the line items to cover expenses for administrative costs for the incubator facility at SPARK Central.

He reiterated that both of those variances were very minor, so he could report that – as SPARK has done historically – the agency is spending within its budget overall, as the last month of the fiscal year approached. The fiscal year ends on June 30.

SPARK as LDFA Contractor: Report from SPARK – Interns, Incubator

The report from the LDFA’s contractor was given by Skip Simms, Ann Arbor SPARK’s senior vice president for entrepreneurial services. Simms sits on the LDFA board in an ex officio, non-voting capacity.

Simms told the board that he did not have much report, beyond what the LDFA treasurer, Eric Jacobson, had just covered. Referring to the overspending on incubator expenses, Simms said that if they were going to overspend, that’s where they would want to be overspending. He explained that the CEO-in-residence program was a way to help retain executive talent – keeping CEOs in the community who might otherwise be inclined to leave the community and work someplace else. The CEO-in-residence program allowed someone to be retained and at the same time provide their experience and expertise to start-up companies in the community. The CEO-in-residence program, not the interns, had caused SPARK to exceed that line item.

The definition of interns was an issue that still needed to be resolved for next year, Simms said. The next cycle of interns would actually be employees of Ann Arbor SPARK, he explained. Simms pointed out that on a couple of other different line items, Ann Arbor SPARK was under budget. Money could be moved around so that it would be “a wash” when the board reviewed SPARK’s quarterly report next month.

Board chair Carrie Leahy asked about the occupancy of the SPARK Central business incubator [in the Michigan Square building adjacent to Liberty Plaza, at the corner of Division and Liberty]. Simms responded by saying that SPARK Central on the lower level had more than 90% occupancy. There was an opening for perhaps one additional company, and there were some companies in line for that space. The third floor of the incubator is filling up, he said. On the third floor, there is perhaps room for one additional company, he said.

The third floor space, Simms continued, is finally breaking even on rent compared to expenses, so he expressed some optimism about that. More importantly, Simms said, companies on the third floor are growing and expanding. As an example, he gave Seelio, which has been acquired. The company is staying in Ann Arbor, Simms reported, and they are probably going to add five more people by the end of the year. The company is going to be squeezed for space, he said, so he was not sure if they were planning to move. If they moved, there would be quite a few seats that would need to be filled in the third floor space, he said. There were some companies in line for that space, however.

Simms then described the incubator environment in the community as a whole as growing. There are a couple of new incubators in town, he said, and the space they’re offering seems to be getting absorbed quickly: As soon as space becomes available, start-ups and early-stage companies are moving in. That was a good indicator for the future, he concluded. It reinforced the need for the LDFA to continue to have the kind of facility that Ann Arbor SPARK has created at 330 E. Liberty, Simms concluded.

Leahy ventured that the newest incubator was associated with University of Michigan. Skip Simms indicated that the incubator to which Leahy was referring was still in the works. Ann Arbor SPARK is in dialogue with the university on that. One of the reasons that Ann Arbor SPARK in dialogue with the university about that incubator, he explained, is that SPARK wants to have a clear understanding of what the goals and objectives are of that new incubator, and what kind capacity they are planning for. Because it would be operated by the University of Michigan, access would be limited, Simms said: Some kind of university relationship will be required to use the incubator, which would eliminate about 60% of the market.

Still, Simms ventured that there could be a partnership opportunity there. One possibility is that companies that started in the university’s incubator could be handed off to SPARK as they got closer to commercialization. He was not sure how far the university was planning to take companies in their evolution toward commercialization.

Responding to a question from Leahy, Simms indicated that university’s incubator concept was for relatively early-stage companies. Leahy said she heard the university was planning to take a percentage of ownership of the companies. Simms thought that was still under discussion. They are looking at a model that does take equity, he said. The university is freer to take that approach than the LDFA is, Simms said.

SPARK as LDFA Contractor: FY 2015 Contract

Board chair Carrie Leahy explained that the LDFA board’s contract committee had reviewed the contract – after Ann Arbor SPARK had reviewed it and proposed updates. A revised draft had then been proposed by the contract committee. That draft was now in front of the LDFA board for its approval, she explained. [.pdf of LDFA-SPARK FY 2015 contract]

Leahy called everyone’s attention to a section that was enclosed in brackets and bolded:

[The reports shall include, as applicable, and only at such times as required, information required to be reported in connection with an extension of the LDFA's term.]

She felt that the bracketed sentence was intended to be included as part of the contract – so it was not meant to actually be in brackets and bold. She checked with Simms to see if it was okay to simply include it. She wasn’t sure if Ann Arbor SPARK had had a chance to comment on the added language. The point of the added language, she explained, was that if the LDFA was awarded an extended term, the required reporting would already be expressed in the contract. She felt that the reporting that was described in the added language was already being done, in any case.

The new contract, Leahy explained, includes updates to the specified years and budget numbers. Another update the contract covers is how the internship program will work, she said. Leahy explained the changes to the internship program. Interns that are being deployed to people now will actually be Ann Arbor SPARK employees, she said. The contract between the LDFA and SPARK is been updated to reflect that arrangement, which has been approved by the MEDC, she said.

Outcome: The LDFA board voted to approve the updated contract with Ann Arbor SPARK.

City of Ann Arbor as LDFA Contractor: Administrative Services

The LDFA does not employ a staff – so it contracts with the city of Ann Arbor for administrative support services. Those include items like the preparation of meeting minutes, stewardship of public documents, and preparation of budgetary analyses. [.pdf of FY 2015 LDFA contract with city of Ann Arbor]

When the board reached the item on its agenda, board chair Carrie Leahy ventured that under the first bullet point, under “services,” the intended word was likely not “secretariat” but rather “secretarial.” There was some lighthearted commentary to the effect that the language had been like that for about 10 years and no one had noticed. [The intended word was, in fact, likely "secretariat" – in the sense of an administrative office or department, especially a governmental one.]

Leahy checked with board treasurer Eric Jacobson that he was OK with the numbers that were included at the end of the contract, and he was. She characterized the contract as the same as in years past, covering administrative support by the city of Ann Arbor for the board of the LDFA.

Outcome: The board approved the administrative services contract with the city of Ann Arbor for support of the LDFA board.

LDFA Extension

At its June 2, 2014 meeting, the Ann Arbor city council had approved a resolution expressing city council support of the local development finance authority’s application to the Michigan Economic Development Corp. to extend the life of the tax capture arrangement for up to 15 years. The MEDC is described on its website as the “state’s marketing arm and lead advocate for business development, talent and jobs, tourism, film, and digital media incentives, arts and cultural grants, and overall economic growth.”

Without an extension, Ann Arbor’s LDFA would end in 2018.

Under a 2012 amendment to the state’s LDFA statute [Act 281 of 1986], the MEDC is empowered to approve extensions of LDFAs for 5 or 15 years. Both extension options would require a greater explicit commitment to greater regional collaboration. But the 15-year option requires the creation of an additional “satellite” geographic area for tax capture:

In addition, upon approval of the state treasurer and the president of the Michigan economic development corporation, if a municipality that has created a certified technology park that has entered into an agreement with another authority that does not contain a certified technology park to designate a distinct geographic area under section 12b, that authority that has created the certified technology park and the associated distinct geographic area may both capture under this sub-subparagraph for an additional period of 15 years as determined by the state treasurer and the president of the Michigan economic development corporation.

The council’s resolution approved on June 2 stated that if the MEDC approves the extension, the city of Ann Arbor will work with the LDFA and the city of Ypsilanti to identify another LDFA – called the “Satellite SmartZone LDFA.” The arrangement will allow the satellite SmartZone LDFA to capture local taxes in its own distinct geographic area for the maximum 15 years allowed by statute.

What is it that would be extended? Ann Arbor’s local development finance authority is funded through a tax increment finance (TIF) district, as a “certified technology park” described under Act 281 of 1986. The MEDC solicited proposals for that designation back in 2000. The Ann Arbor/Ypsilanti “technology park” is one of about a dozen across the state of Michigan, which are branded by the MEDC as “SmartZones.”

The geography of the LDFA’s TIF district – in which taxes are captured from another taxing jurisdiction – is the union of the TIF districts for the Ann Arbor and the Ypsilanti downtown development authorities (DDAs). It’s worth noting that the Ypsilanti portion of the LDFA’s TIF district does not generate any actual tax capture.

In FY 2013, the total amount captured by the Ann Arbor SmartZone LDFA was $1,546,577, and the current fiscal year forecast is for $2,017,835. About the same amount is forecast for FY 2015.

The LDFA captures Ann Arbor Public Schools (AAPS) operating millage, but those captured taxes don’t directly diminish the local school’s budget. That’s because in Michigan, local schools levy a millage, but the proceeds are not used directly by local districts. Rather, proceeds are first forwarded to the state of Michigan’s School Aid Fund, for redistribution among school districts statewide. That redistribution is based on a per-pupil formula as determined on a specified “count day.” And the state reimburses the School Aid Fund for the taxes captured by some SmartZones in the state.

However, the school taxes captured by the Ann Arbor SmartZone are not required to be reimbursed to the state School Aid Fund – which diminishes the amount of funding for public schools statewide. That’s a conclusion based on a reading of the LDFA statute and confirmed to The Chronicle by communications staff in the Dept. of Treasury and the MEDC.

According to the Dept. of Treasury, the Ann Arbor SmartZone LDFA was designated under subsection (8). From the LDFA statute [emphasis added]:

(13) Not including certified technology parks designated under subsection (8), but for certified technology parks designated under subsections (9) and (10) only, this state shall do all of the following: (a) Reimburse intermediate school districts each year for all tax revenue lost that was captured by an authority for a certified technology park designated by the Michigan economic development corporation after October 3, 2002.
(b) Reimburse local school districts each year for all tax revenue lost that was captured by an authority for a certified technology park designated by the Michigan economic development corporation after October 3, 2002.
(c) Reimburse the school aid fund from funds other than those appropriated in section 11 of the state school aid act of 1979, 1979 PA 94, MCL 388.1611, for an amount equal to the reimbursement calculations under subdivisions (a) and (b) and for all revenue lost that was captured by an authority for a certified technology park designated by the Michigan economic development corporation after October 3, 2002. Foundation allowances calculated under section 20 of the state school aid act of 1979, 1979 PA 94, MCL 388.1620, shall not be reduced as a result of tax revenue lost that was captured by an authority for a certified technology park designated by the Michigan economic development corporation under subsection (9) or (10) after October 3, 2002.

A 15-year extension is possible, according to the staff memo accompanying the June 2 city council resolution, “if, in addition to the above requirements, Ann Arbor and Ypsilanti, as the municipalities that created the SmartZone, enter into an agreement with another LDFA [a "Satellite SmartZone"] that did not contain a certified technology park to designate a distinct geographic area, as allowed under Section 12b of the Act…”

A key requirement for an LDFA SmartZone is “significant support from an institution of higher education, a private research-based institute, or a large, private corporate research and development center.” So the possibilities for an LDFA satellite for Ann Arbor’s SmartZone include not just a governmental unit, but also an institution of higher learning.

Currently under consideration for the satellite LDFA are Adrian (Adrian College) or Brighton and Livingston County (with Cleary University). The June 17 LDFA meeting included an update on where Adrian and Brighton are in the process – as they are competing to be the partner designated by the Ann Arbor LDFA.

Only one of the two communities would partner with the Ann Arbor LDFA SmartZone.

LDFA Extension: Board Discussion

Skip Simms of Ann Arbor SPARK gave an update on the status of other communities that are candidates for the satellite LDFA that would be required for the Ann Arbor/Ypsilanti SmartZone to receive an extension. Right now SPARK is talking to both Brighton and Adrian. Brighton would be a Brighton-Howell satellite. Adrian could turn out to be an Adrian-Tecumseh satellite, he said.

Both communities are rapidly moving forward to complete required tasks as communities and LDFAs to comply as satellites. Flint is off the table – because Flint took themselves off the table, he said, and made it clear that they were not interested. Both Adrian and Brighton are on a fast-track to try to beat each other to meet all the compliance for a satellite. Simms invited Ann Arbor SPARK’s Luke Bonner to walk the board through the details of what those communities need to do.

Bonner told the board that the city of Adrian had gone through the first step of the process to create an LDFA – which was that the city council approved a resolution expressing the intent to create an LDFA and set out the district boundaries. They are moving toward the first public hearing. Adrian should have its final approvals done, he believed, by the first week in September. So this would be a new LDFA, where the city of Adrian would be the lead governmental unit. Tecumseh is going to come in as a partner to Adrian after the LDFA is created, Bonner explained.

In the case of Brighton and Howell, Brighton already has an LDFA, so their approvals are pretty simple. They don’t have to go through the time-consuming process of creating the authority itself. Howell has an LDFA that was never actually kicked off – they don’t have board members or a district. It was just approved and left in limbo, he said. So Howell is going to wait until the process is completed in Brighton and then Howell will put its LDFA together for the sole purpose of being a partner to Brighton and of overseeing the school funds to run the incubator and accelerator program.

In both cases, Bonner said, the communities have an educational institution as a partner. Adrian is working with Adrian College, which has established a business incubator program. They have built a facility and dedicated funds, and personnel are working on that program. In Livingston County, in Brighton, Cleary University is the educational institutional partner. Cleary University has an existing business incubator program that they are continuing to scale up, Bonner explained. So there are university partners in both communities.

Board chair Carrie Leahy asked how the process that Brighton and Adrian are undergoing would integrate into the timing of the Ann Arbor/Ypsilanti SmartZone LDFA extension application. In the case of Adrian, Bonner explained, they will make sure that the very first LDFA board meeting happens immediately following the establishment of the authority. The satellite LDFA has to approve the contract with the host LDFA. So the first order of business for the LDFA in Adrian will be to approve its bylaws and then move right into the approval of the agreement. That should be done by the first week in September, he said.

In the case of Brighton, they are looking at doing some informational sessions with the LDFA and the city council in July. And they look to be taking action sometime at the end of August. So the two candidate satellite LDFAs will be completing their work in roughly the same two-week timeframe.

Bonner explained that Brighton has a couple of other issues with its LDFA because it is “underwater” – as its tax capture is not at the point where it can cover debt service. It falls short by about $5,000-$6,000 annually, he said. That issue will have to be addressed, he said. They’re waiting to see what happens with the personal property tax law in the August election. That will also affect how Brighton does business with its LDFA. Leahy ventured that there could be a situation where both communities form an LDFA. Yes, Bonner confirmed.

Leahy invited attorney Jerry Lax to walk the board through the Ann Arbor/Ypsilanti SmartZone LDFA’s next steps. She knew there was a two-page summary that needed to be submitted to the MEDC. She asked Lax what else needed to be submitted.

Lax told Leahy that the only thing that needed to be submitted to the MEDC promptly by June 30 was the two-page summary. The MEDC guidelines provide that the two-page summary be emailed by June 30. That two-page summary has already been drafted, he said. Leahy told Lax she was not sure if board resolutions needed to be attached to the state summary. The guidelines don’t say so, Lax replied.

Lax continued by noting that the two city councils (Ann Arbor and Ypsilanti) have already passed resolutions supporting a 5-year extension and supporting the contemplation of creating satellites in anticipation of a potential 15-year extension. But with regard to the 5-year extension, the next thing that has to be done is for the cities to amend the existing TIF plan to accommodate a higher degree of regional cooperation. And both city councils have passed resolutions committing to engage in those discussions, he said.

The requirement is that by March of 2015, the amended TIF plan be available for submission to the MEDC, Lax explained. So the first step is just submitting a two-page summary – and everything is all set to do that, he said. And hopefully, once the LDFA is notified that the MEDC has approved the proposed 5-year extension, the next step for the 5-year extension would be the amendment of the TIF plan, he said.

Lax reported that he has communicated with Mary Fales of the Ann Arbor city attorney’s office and also John Barr, who is the city of Ypsilanti attorney – and both of them are on board with jumping into the process and meeting promptly and dealing with potential amendments to the TIF plan. Both of the city councils will have to attend to those details.

Leahy asked Lax what he meant by “attending to the details.” She asked, “What are we proposing to amend in the TIF plan?”

Lax called that a policy question for the city councils. He did not know how much attention the councils had given to the details of what exactly would need to be amended. Tom Crawford, the city of Ann Arbor’s CFO, ventured that procedurally it would be appropriate for the LDFA board to make a recommendation to the city council and then for the council to consider it. Based on his conversations with Fales and with Lax, Crawford felt that the next step would be for the LDFA to articulate changes, by providing a document with tracked changes that the councils would vote on.

Lax agreed with Crawford that it was entirely appropriate for the initial proposal to come from the LDFA board. But then it would need to be discussed by both councils – because it would involve amendments that the councils need to approve. Leahy got clarification from Lax that the TIF plan and the development plan were combined as one document.

Some back-and-forth unfolded about whether an MS Word copy of the TIF plan still existed. Leahy ventured that it could be scanned in and then cleaned up, prompting Skip Simms to observe that Adobe had improved. Steve Rapundalo said he thought he might have some old documents. Leahy ventured that probably the first order of business was to just get their hands on a copy of the old MS Word document.

A question was raised by an LDFA board member about whether the board needed to wait until the MEDC approved the two-page summary before working on amendments to the TIF plan. Lax ventured that if the MEDC did not approve the two-page summary, then any effort the LDFA board put into revising the TIF plan would be wasted.

But on the other hand, even though it looks like March 2015 is a long way off, he thought it made a lot of sense to give prompt attention to amending the TIF plan. He did not know how soon they could expect the MEDC to approve the two-page summary. Leahy wanted to know if Lax knew of any guidelines the MEDC had provided for the kind of amendments to the TIF plan that they would be looking for.

Lax said he was not aware of any additional guidelines beyond the guidelines in the statute that talk about a higher degree of regional collaboration. Even for just a 5-year extension, this higher degree of regional collaboration is something the MEDC is looking for, he said. Leahy asked Skip Simms if there was anything he recalled from his discussions with the MEDC by way of guidelines. Simms said the key point that the MEDC is looking for had been described by Lax – broader regional collaboration.

The other thing the MEDC has said, Simms added, is that this is an opportunity for the LDFA to make changes to elements of the TIF plan that might have been too restrictive. It would be an opportunity to look at the TIF plan and the development plan with a clean slate and change anything and everything that they would like to see changed, he said. You can start with the core document if you’re happy with most of it, he allowed, but this is the opportunity to make changes.

Once the TIF plan has been changed, it’s unlikely that it would be changed again for another 15 years, Simms ventured. So now would be a good time to take the opportunity to insert everything that they wanted to put into a new TIF plan that might have been missed 15 years ago, he concluded.

Rapundalo suggested that the LDFA board, or a subgroup of the board, go through the TIF plan line-by-line from a conceptual viewpoint and ask about everything that’s included: Is this still valid today? If it is, then leave it in – if not, then take it out and perhaps replace it with something else.

A consensus that seemed to evolve from the board discussion was that the LDFA board’s contract committee would be a suitable group to take up the task of reviewing the TIF plan. Leahy said the issue of infrastructure would be a good topic to review in the TIF plan – because the Ann Arbor city council is suggesting it would like to see infrastructure projects undertaken, but there are certain kinds of infrastructure projects that the LDFA cannot undertake, because they are not in the plan.

Rapundalo suggested it would be useful to collect some best practices from other SmartZones in the state as well as other communities with high-tech concentrations, and try to incorporate some of that into the new plan. Leahy asked Lax if he could inquire with Roslyn Zator at the MEDC to get some direction about what the MEDC would like to see in the TIF plan amendments. Leahy also asked Skip Simms which other SmartZones he thought would be good to look at, as far as best practices – Traverse City, Houghton, Grand Rapids?

Simms said that what he heard from everyone else is that they are modeling everything after Ann Arbor SPARK. Nobody is saying they are doing it better than Ann Arbor SPARK is doing it, he said. Nonetheless, Simms allowed, it would still be important to reach out.

Simms said that Grand Rapids was undergoing a revision, so it would be good to contact Grand Rapids. Rapundalo agreed with Simms’ point about Grand Rapids, saying that Grand Rapids is making changes to their SmartZone that would set them apart structurally from other SmartZones. He thought it would be important to take a look at that and see why Grand Rapids is making those changes.

Simms pointed out that Grand Rapids is also considering applying for a 15-year extension of its LDFA. In terms of out-of-state organizations, Simms suggested taking a look at TechColumbus. Leahy asked Simms to see if he could get a copy of the TechColumbus development plan.

Lax circled back to the idea that the LDFA board should make the first proposal to the city councils about the needed changes to the TIF plan. But he also pointed out that the Ann Arbor city council had expressed interest in seeing greater attention paid to issues like infrastructure. He suggested that the LDFA take into account anything the councils might be interested in seeing at the outset. That way, whatever is ultimately proposed would stand a greater likelihood of being approved by the city councils.

At that point, Lax noted that March 2015 seems like a long way off, but given the potential complexity, it creeps up rather quickly. So the discussion should take place sooner rather than later. He suggested getting some clarity about what people may think they want to know, and what topics they have not known enough about up until now. That would help focus the discussion on what information is available, he said.

Although there are different timelines for requirements to apply for a 5-year extension of the LDFA compared to a 15-year extension, the consensus that evolved at the June 17 LDFA board discussion was that they should be handled pretty much simultaneously. Lax pointed out that the 15-year plan would involve a satellite and there would be some coordination among the various municipalities involved, but some room could be left in the 5-year plan extension to accommodate the addition of a satellite LDFA. Jacobson ventured the right approach would be to redline an amended TIF plan for both a 5-year plan and the 15-year plan.

Bonner suggested that everything be done, based on the idea of a 15-year agreement, with language incorporated into the documents to include satellite LDFAs. Then, if it turns out that only the 5-year extension is approved, the additional language due to the 15-year plan can simply be eliminated through an administrative amendment. The idea would be that it would be convertible to a 5-year plan in relatively short order. Lax agreed that much of the content would be the same in either case – 5-year plan compared to 15-year plan. Lax reiterated that he felt it made sense to think of it all as a unified project.

Crawford pointed out that after an amendment is prepared, you have to go through a process of notifications and public hearings – and it was undesirable to have the document change significantly during that process. Lax suggested that the 15-year component of the plan could be separated out as an “add on.”

Jacobson ventured that they need to think it through so that they have two different versions in their back pocket – that can be pulled out, based on what the MEDC approves. Lax also suggested having prompt discussions with the MEDC about other plans that could be used a model. The MEDC might have some guidance about how complex the amendments to the TIF plan might be, related to a 5-year extension, if a community is also contemplating a 15-year extension.

Simms pointed out that the MEDC review would happen after the council action. Lax allowed that was true, but ventured that the MEDC might have something useful to say in advance of that.

The question was raised about whether Houghton had pursued both types of extension simultaneously – but Simms thought that Houghton had pursued a 15-year extension from the get-go. Simms was not sure if everything had been completed in Houghton, but things have been completed in Marquette, which is supposed to be the satellite. He thought that the current status of that 15-year extension was: Discussions are taking place about the agreement between the satellite LDFA, the host LDFA and the MEDC. He pointed out that that was a whole additional agreement that would need to be amended and addressed.

About the timing, Simms said here’s what “your contractor [Ann Arbor SPARK] is prepared to do: We are prepared to have this dialogue with the LDFA relative to the amendments and changes to the TIF/development plan through the summer.” In September 2014, it will be known whether Brighton or Adrian or both are “real.” And they will know by Sept. 30 whether there’s a legitimate 15-year proposal to submit to the MEDC.

At that point, everything could already be in place for either the 5-year extension or the 15-year extension. Then in early October, “Bang, we go forward with either the 5-year plan or 15-year plan, because it will be clear which one it is,” Simms said. By the end of October, there could be a proposal to give to the two city councils for approval.

Jacobson ventured that it would also be clear from the state at that point which option could move forward – the 5-year or the 15-year option. Lax asked Simms if he knew when the MEDC was likely to give a reaction to the two-page executive summary, as related to a 5-year extension. No, Simms told Lax. But as a point of reference, Simms said the MEDC had responded to Houghton’s application very quickly.

Given the relationship between Ann Arbor and the MEDC historically, Simms had no doubt that MEDC would respond quickly. [The MEDC's current CEO, Michael Finney, is the former CEO of Ann Arbor SPARK.] The MEDC recognizes the importance to all parties – including the MEDC – to making this happen as quickly as possible for everybody, he said. So he was confident that the MEDC would respond rapidly. Leahy said she could get the two-page executive summary submitted that very day when she returned to her office.

Jacobson asked if Simms was suggesting that the contract committee wait until September or October to start reviewing the TIF plan amendments. Not at all, Simms replied. Simms thought the LDFA board’s contract committee ought to meet within the next three weeks and begin this process – because the majority of it is relevant, whether it is a 5- or 15-year extension.

Jacobson asked a question on the 15-year extension, which related to some feedback he thought the MEDC had given to the Ann Arbor/Ypsilanti SmartZone LDFA. At one point the MEDC had given the Ann Arbor/Ypsilanti SmartZone feedback, he thought, that in order to include a satellite that is subsidized by a third-party like a university, the MEDC would expect Ann Arbor to funnel 10% of the expenditures to Ypsilanti. He thought that had been presented as an idea by the MEDC, he said. Is that a requirement that should be considered when the LDFA prepares the 15-year application? Jacobson asked.

Simms said it was something that needed to be looked at and discussed, adding that the LDFA probably needed to go back to the MEDC to get some definitive language.

The idea of funneling money to Ypsilanti had come up in a discussion between the two CEOs – Ann Arbor SPARK CEO Paul Krutko and MEDC CEO Michael Finney, Simms said. Whether that would be a firm position or not has not been clarified. Jacobson wondered if that would be clarified before a 15-year proposal would be submitted. Yes, Simms said, that will be clear. The other thing that MEDC is pushing is the idea of collaboration.

Ypsilanti has been in the Ann Arbor/Ypsilanti SmartZone all along, Simms said, but “Ypsilanti has gotten squat.” Collaboration would mean that it’s a way to get something, he said. What the LDFA has been providing needs to extend outside the city limits, Simms said. So that needs to be considered in thinking about the modified development plan, he said.

The overwhelming benefit at the end of the day, Simms continued, is a significant sum of money that is coming to benefit the city of Ann Arbor that would not be coming at all – not a dime of it – if the LDFA did not get the 15-year extension. The benefit to the city is still enormous, Simms said. So to extend a little bit of that to Ypsilanti seems like a reasonable action, he concluded.

Leahy came back to the point that the next step is to submit the two-page executive summary to the MEDC. She told her board colleagues that she would submit that to Roslyn Zator. The next steps would be for city of Ann Arbor financial services staffer Ken Bogan and Ann Arbor SPARK – as well as Stephen Rapundalo – to look for the MS Word version of the TIF/development plan.

In the next three weeks, the contract committee would schedule a meeting to start going over the changes to the TIF/development plan that they think are appropriate to take to the city councils. Bonner ventured that the satellite LDFA communities might need some support as they go through their process – and he thought it might be appropriate for the LDFA to provide that support in the form of legal counsel from Jerry Lax. That way they could make sure that the resolutions and the agreements are in line with what the Ann Arbor city council would want to see.

The contract committee set a meeting for Tuesday, July 8 to start going over the TIF plan.

Politics of an Extension

The LDFA board’s June 17 discussion included acknowledgment that an extension of the LDFA’s term would likely need to satisfy recent concerns expressed by the Ann Arbor city council:  (1) investments in high-speed fiber telecommunications; (2) audit of jobs creation figures; and (3) clarification of school tax capture by the LDFA.

Politics of an Extension: Jobs Audit

Based on LDFA board chair Carrie Leahy’s conversations with Paula Sorrell, the MEDC ex-officio representative on the LDFA board, and some email exchanges with Rosalyn Zator, it does not look like any other SmartZones are doing audits of job creation numbers. Sorrell said the MEDC would be looking specifically at its grant to SPARK– and not all of Ann Arbor SPARK – just those things that are associated specifically with the grant.

Sorrell explained that there are process audits and financial audits – and they take place every 2 to 3 years. Those are audited by the state, she said. As far as job creation numbers go, those are collected monthly, she said, and those are specific to grants. Spot-checking is done on those numbers as well.

Stephen Rapundalo asked Sorrell to describe how the spot-checking was undertaken. He ventured that all of the numbers are essentially self-reported by the companies. So are you randomly calling companies and saying, “Hey, you said this,” and verifying the numbers? Is that how it works? he asked.

Sorrell told Rapundalo that in a start-up tech company, it would be typical to see a few jobs added at a time. Eventually the only thing that can be done is to just work down the list of all the companies that had been served and to verify whether the numbers that had been quoted were in fact accurate or not. Sorrell said the MEDC also gets reporting from multiple areas, and most of the companies use three or four other grantees at a time, so they can check to see if anybody is reporting different numbers.

Petersen also noted that the previous evening’s council meeting had included quite a bit of discussion about the appropriate metrics – in terms of return on investment. The question had arisen with respect to projected job creation as opposed to actual job creation, she noted.

Tom Crawford, Ann Arbor’s CFO, said he’d heard some the comments about projected versus actual jobs created and he was not sure exactly how that applies. When a company comes in, they are not necessarily incentivized to give you a number that they would overshoot. The system is designed so that they give you a higher number. That’s not a detriment to the entity that is providing the incentive, Crawford said, because the incentive is based on the actual jobs that are provided. He wasn’t sure that everyone understood that point. Historically the state has paid grants based on actual jobs. Companies were only paid tax credits for actual jobs, he said.

For SPARK’s business development team, Luke Bonner said, its metrics for counting jobs are based on what the company says it will do in a public announcement – based on a tax abatement application, or a state grant they are receiving. And those numbers are what are included in Ann Arbor SPARK’s successes annually, Bonner explained.

For example, the company says that they are investing $2 million and creating 75 jobs in Ann Arbor, and that goes into SPARK’s annual report for successes, he said. SPARK continues to meet with that company over time. However, SPARK does not have to track what that company does over time, because they are not committed to SPARK to report anything. If it is a tax abatement, it’s part of the letter of agreement that you can go back and ask them how many jobs they have created. Or if it’s a state grant, the company has to report the actual jobs that they create to the state.

What SPARK’s business development team has been doing that is a little different now, however, is starting to look at the number of jobs a company has created this year as opposed to last year, Bonner said. That allows the business development team to start to measure the health of the local economy. So if a company adds 100 jobs last year and 200 this year, SPARK want to be able to show that difference.

But the LDFA uses really different metrics, Bonner said. LDFA metrics are those from the SPARK entrepreneurial services team. Those are two different areas, he stressed.

Sally Petersen, the city council’s representative on the LDFA, ventured that the council would like to see metrics that show projected versus actual jobs created. Bonner told Petersen that the LDFA should work with Skip Simms and Bill Mayer to look at the programs they’re running, and to figure out the best metrics to report that would satisfy the MEDC, the LDFA board and the city council.

Crawford added that projected jobs numbers are typically associated with incentive-based financial support – which is not what the LDFA board deals with. Stephen Rapundalo pointed out that the LDFA board’s own metrics committee had reviewed the kind of metrics that SPARK reports – and SPARK is already required to report a great deal of information to the MEDC.

Bonner went on to explain that internal to SPARK, they use a different nomenclature to talk about “retained jobs.” The entrepreneurial services team will say that “retained jobs” mean one thing, whereas for the business development team, “retained jobs” mean something else. For the business development team, Bonner continued, if a company says they’re going to move out of this state with their 100 employees and add another 200 employees elsewhere, and through the efforts of SPARK the company were to actually stay, the business development team would characterize that as 100 jobs retained – if not for the effort of the community and the state.

But for the entrepreneurial services team, when a company comes to SPARK, with, say, two employees, then that is their baseline – two retained jobs for when SPARK entrepreneurial services started to work with the company. Mayer added that he refers to the “retained jobs” in entrepreneurial services as a “snapshot” of the growth curve of a start-up. At a moment in time when SPARK “touches” the company, they say the retained number of jobs was three. And then six months later the retained number of jobs is four. That equates to one job created, Mayer concluded.

Board chair Carrie Leahy noted that the  issue of an independent jobs audit had been brought up in multiple city council meetings. Petersen said that a lot of the “noise that is out there” has to do with accountability. Putting aside accusations about whether SPARK is or is not inflating job creation statistics, it’s important to focus on the interest in accountability, she said.

If Ann Arbor were to be the first SmartZone in Michigan to do an independent audit, that would reflect positively on Ann Arbor, Petersen said. That would show that the Ann Arbor/Ypsilanti SmartZone is not afraid of being accountable, she added. The components of such an audit are still unknown, because no one else has done it before, she said. So she felt it was important for the LDFA board to pursue that direction with an intention to do such an audit.

Eric Jacobson asked if Petersen was talking about an audit of metrics or a financial audit of the dollars. Petersen explained that the interest was an audit of the job creation numbers. Stephen Rapundalo ventured that such an audit would have financial implications. How much would it cost? In addition, was the LDFA also planning to do a financial audit?

Jacobson explained that the financial audit is to be done about every two years and usually in the fall. He then explained that a financial audit of the LDFA is done every year in conjunction with the city of Ann Arbor’s audit. Another kind of audit is an audit of the LDFA’s contract with SPARK – which is an audit on contract compliance.

Jacobson said that the firm that had done the financial audit last time had done a great job from his perspective, so he would like to use the same firm again – Abraham & Gaffney. It would be an audit by the LDFA of Ann Arbor SPARK, using a third-party, to go through and check all the LDFA dollars that are going to SPARK, to check to make sure none of the funds had been misappropriated according to the terms of the contract, he explained.

Rapundalo suggested that the scope of the financial audit could be expanded to include the jobs numbers. Leahy asked if an inquiry could be made with Abraham & Gaffney to see how they would propose to check those numbers. Petersen asked if Abraham & Gaffney could be used just because they had done the audit previously – and wondered if they needed to use a bid process and accept the lowest responsible bid.

Jacobson told Petersen that Tom Crawford, the city of Ann Arbor’s CFO, was checking into that issue. Some back-and-forth between Petersen, Leahy and Jacobson led to a tentative consensus that the auditor would be asked to develop a proposal.

But SPARK’s Simms expressed some skepticism: “Wait, wait, wait!” Earlier in the meeting, Bonner had done a nice job of explaining that the job numbers that are projected come from SPARK’s business development team, Simms said. Entrepreneurial services has never provided the LDFA or anybody else “projected” jobs, Simms added. [The LDFA-SPARK contract approved by the LDFA board at the June 17 meeting includes a requirement for reporting to the LDFA "projected new employees" for Phase IV companies: "These reports shall include but not be limited to the following ... 4) the companies that receive Phase IV assistance, description of assistance, number of full time equivalent employees and projected new employees."]

Rapundalo told Simms that they were talking about the metrics that SPARK’s entrepreneurial services team does currently report, which includes jobs created and jobs retained. Petersen explained that this audit was not focused on the city’s contract with SPARK for the business development services. Leahy said that what they were hearing from the city council is that the LDFA is just accepting what SPARK says with no verification.

Sally Petersen is the city council's representative to the LDFA board.

Sally Petersen is the city council’s representative to the LDFA board.

Simms replied that there has in fact been an audit: “We somehow allowed the thought to occur that there has never been one.” Leahy told Simms that they reported to the city council that there had been a contract audit. But Simms told Leahy he was not sure the council had actually heard that.

So this won’t be the first audit, Simms concluded. Rapundalo felt the council had heard clearly that there had previously been a financial audit. Leahy said they had reported to the council that SPARK has undergone a financial audit, and they were clean and that the results of that audit have been posted.

Petersen wrapped up by reiterating the importance of doing an independent audit of the metrics. The LDFA needs to provide documentation, she said. She wanted an independent audit, even if that meant the Ann Arbor/Ypsilanti SmartZone was the first in Michigan to do it. Ann Arbor would be putting its best foot forward and saying: Here’s what an independent audit of job creation numbers actually looks like. The Ann Arbor/Ypsilanti SmartZone needs to focus on the accountability outcomes first, Petersen concluded.

Politics of an Extension: Infrastructure, City Fiber Initiative

With respect to infrastructure, Stephen Rapundalo asked if the MEDC could provide information about what other SmartZones and LDFAs had done in the way of investing in infrastructure. Paula Sorrell said she had put Carrie Leahy in touch with MEDC contacts. And by-and-large, there are not a lot of SmartZones that have undertaken infrastructure projects.

Leahy reported that so far she’d found the use of TIF for infrastructure on road improvements and sewer connections in Grand Rapids. In Grand Rapids, TIF had also been used for marketing in the SmartZone and for equipment and furniture – updates to their business incubator – which the Ann Arbor/Ypsilanti SmartZone already uses money for. Leahy ventured that furniture in incubators is not what the Ann Arbor city councilmembers mean when they talk about infrastructure. She also described a bridge project in Grand Rapids where there was a question about whether TIF funds were used – and it turned out that TIF funds were not used.

The Ann Arbor/Ypsilanti SmartZone development plan, Leahy continued, states that infrastructure such as roads and sewers and certain other infrastructure are already complete in the SmartZone. So if there were some kind of project like that, she ventured that the development plan would need to be changed.

The one kind of infrastructure project that keeps coming up, Leahy said, is high-speed fiber telecommunications. That seems to be the only type of infrastructure project that has been floated that is specifically addressed in the current development plan for the Ann Arbor/Ypsilanti SmartZone, she said. If that were something the LDFA wants to pursue, then it would not require altering the development plan, she said.

Leahy wondered who would initiate that kind of project. Is it the LDFA that says, We should put money toward fiber? Or does the Ann Arbor city council tell the LDFA to pursue it? “That’s a good question,” allowed Sally Petersen, who is the Ann Arbor city council’s representative to the LDFA board. Like Leahy, she wondered what the next step might be toward high-speed fiber. If it would be helpful for the city council to pass a resolution on the topic, Petersen said she would be willing to try to move that forward.

Tom Crawford is the city's chief financial officer, and serves on the LDFA board in an ex officio capacity.

Tom Crawford is the city’s chief financial officer, and serves on the LDFA board in an ex officio capacity.

City of Ann Arbor CFO Tom Crawford told Petersen that the city staff was working on a proposal for high-speed fiber that would be brought forward. Asked what the timeframe for that project would be, Crawford said it would be some time during FY 2015. [That means before June 30, 2015.]

As for details about projected costs, Crawford told the board that it was a proposal that would be “worthy of this group.” Rapundalo recalled Ann Arbor’s ultimately unsuccessful Google Fiber initiative, toward which the LDFA board at the time had pledged $250,000.

Rapundalo wondered how the LDFA could reach out to the high-tech community to get input on what that community feels is lacking in terms of high-speed infrastructure. Crawford responded to Rapundalo by saying that he would look to Skip Simms specifically, or Ann Arbor SPARK generally to facilitate that inquiry. He ventured that Ann Arbor SPARK conducts that kind of inquiry as a matter of course.

But Simms told Crawford that Ann Arbor SPARK does not do that in a formal way – characterizing it more as an ad hoc approach. The main mechanism for that is through the business development team, Simms continued, through their conversations with the more mature technology companies about their needs. “So far, quite honestly, we’re not hearing any outcry that we need a bigger pipe,” Simms said.

What SPARK is hearing, Simms continued, is “I need job training. I need people with skill sets. I need office space downtown. Those are the things we’re hearing from those companies. They’re not saying … fiber.”

But Simms allowed that could change in five years. Video technology is requiring more capacity – more storage space. So maybe what is needed is more online technology facilities, as opposed to fiber – but who knows? Simms said. He added that it’s important to be careful going forward that the LDFA doesn’t lock itself in and limit itself. Whether the proposal comes from the city council or from Ann Arbor SPARK or from city staff, Simms urged that the approach be kept fairly broad that whatever unfolds 10 years from now – and no one knows what that might be – it can be accommodated.

Crawford agreed with Simms’ remarks. The existing tech companies, Crawford said, are currently very well served – because if you want very good high-speed service, you can just pay for it. What the city has been considering is a broader look that would not necessarily address the issues of technology companies, but that would be a real asset and attraction for new companies to come in and other kinds of companies to start up. So the city’s fiber initiative would not necessarily address the need that existing companies have.

Crawford characterized it not as “incremental” but rather as “supplemental.” It would not take away from anything that Ann Arbor SPARK is already doing, Crawford said. Petersen ventured that there would be some “positive externalities” that would come from the installation of high-speed fiber, which would benefit residents as well. So if this project were viewed as affecting “community prosperity,” it would also help start-ups. Petersen thought there were also a lot of existing, mature businesses and residents who would be helped as well.

Crawford responded to Petersen by saying that it’s somewhat of a chicken-and-egg problem. Without high-speed fiber, innovations are not occurring and we are falling behind worldwide on innovation in this kind of thing, Crawford said.

Responding to a question about whether the city’s high-speed telecommunications fiber project would extend to the neighborhoods or just to the downtown area, Crawford explained that the concept is to include the entire city. Eric Jacobson said that his “gut feeling” was that demand for high-speed fiber capacity from residents would be possibly more than the demand from businesses – just because at home, people are pulling down massive amounts of bandwidth for video programming and things like that.

For a business, there’s some of that, Jacobson added, but perhaps not as much as for residents. He works for a software company [Amplifinity] and all of his company’s bandwidth to the outside world is provided by its hosting facility. But for his company’s office space, the bandwidth requirements are more than met by commercial providers, he said.

Crawford responded by adding that the price point that Americans are paying for the service they get is high compared to international standards, and speeds are uneven for uploading compared to downloading. Improving bandwidth in both directions has the potential to change the way that people do business, Crawford said. It’s not just about adding bandwidth to the business that you have – it’s potentially changing the way you use bandwidth.

Leahy brought the conversation back to the concerns of the Ann Arbor city council.

Leahy told Jerry Lax that she understood the current TIF/development plan limited how TIF funds could be expended on infrastructure. She asked him to provide some additional background. Lax told her he wanted first to look at the TIF/development plan a little more closely, because he has not investigated it in detail. Whatever conclusions might be drawn about its current limitations, he said, the real question is: What would the LDFA board like it to see? The next question is whether there are concerns either in the enabling legislation or elsewhere that would make it difficult to have the TIF/development plan say what the LDFA board has concluded that it wants the plan to say.

Lax wanted some additional time to take a look at what the constraints are in the current TIF/development plan, and also the question of whether in general there might be some limitations on altering the TIF/development plan. Right now, Leahy said, the TIF/development plan says that the roads and sewers and lighting are complete and basically done in the Ann Arbor/Ypsilanti SmartZone district. The only real item that is addressed is high-speed telecommunications fiber.

Lax cautioned that even if that was an accurate statement at one point in time, it might no longer be accurate. Leahy thought that the enabling legislation does in fact permit infrastructure investments, pointing out the Grand Rapids had done it. Lax allowed that his recollection of that portion of the enabling legislation was that there is not a constraint, but he would like to take another look at that.

Luke Bonner then interjected, asking if he could be a “wet blanket” based on his experience. If you look at the local development finance authority legislation that was put together in the 1980s, it’s important to note that’s when things were terrible in Michigan, he said. An LDFA was a tax increment financing mechanism that allowed for reimbursements of infrastructure costs to spur certain kinds of investments – basically for manufacturing in high tech, engineering, and alternative energy, he said. And that is the only type of project that those TIF dollars could be used for – it was very specific.

Then came along the amendment to the LDFA legislation in 2000 that created SmartZones, Bonner said. What the state did was create a new kind of TIF that was a “certified technology park.” That basically meant that if you had an existing LDFA, or if you wanted to create one, you could apply to the state to have a certified technology park designation – and that certified technology park designation basically allows an LDFA to capture school taxes to support business incubation and acceleration services.

The deal that has been put together on almost all of the certified technology parks, Bonner continued, is that if the state is going to contribute funding, there has to be some kind of local contribution – a local match. So if an LDFA already existed, and the LDFA had debt obligations – because it had built roads and bridges and sewer pipes – then the state treasury considered that to be the local commitment: Your local taxes are being used to create local economic development, and so you are allowed to capture school taxes, Bonner said.

In the case of Ann Arbor, there was a downtown development authority (DDA) district that was already established and that was already investing money. The infrastructure in which the Ann Arbor LDFA could invest could serve an incubator or an accelerator program. For example, an incubator could be built and you could run high-speed telecommunications fiber to that incubator. You could, under the enabling legislation [even if not under the Ann Arbor LDFA TIF/development plan] build a road or a sewer connecting to the incubator.

Where the challenge comes is trying to use school millage capture to build out general infrastructure that is not tied to an incubator. Bonner reported that the city of Rochester Hills was actually refused by the Michigan Dept. of Treasury, when the city wanted to use school taxes to help build out local infrastructure. The treasury had said: No way, you have to use the DDA, or a [non-SmartZone] LDFA to do that. The school millage can be used by a SmartZone LDFA to do infrastructure improvements – just as long as it is for an incubator, Bonner contended.

Leahy ventured that the restriction was not that specific and that it could be for infrastructure improvements anywhere in the SmartZone district. That’s what Grand Rapids had done, she thought. Bonner questioned whether what had happened to Grand Rapids was infrastructure improvements through a SmartZone LDFA or through an already-established LDFA.

Stephen Rapundalo said he knew some of the background of the situation in Grand Rapids and characterized the interpretation of the statutory language in that case as “rather liberal.” Grand Rapids had somehow got away with something, Rapundalo said. He told Bonner that he was on the right track in describing how things were supposed to function according to the statute. How Grand Rapids had done what they did, Rapundalo had no idea. Bonner pointed out that Ann Arbor’s LDFA is set up only to manage the use of the school taxes.

The LDFA in Ann Arbor is not set up in the original sense of the LDFA Act passed by the state legislature in the 1980s – which was to set up a mechanism to fund infrastructure improvements to attract manufacturing high-tech and engineering companies. But what Ann Arbor does have is a DDA that can make those improvements as well, Bonner pointed out. He had never looked at the Ann Arbor DDA plan before, but he knew that the DDA built parking decks and made road improvements.

The DDA has a lot of flexibility to make infrastructure improvements within the district, he said – whether it’s high-speed fiber or parking decks or roads or sewers. He noted that the geographic area of the LDFA and the DDA in Ann Arbor are the same district. He suggested again that it would be a good idea to develop an LDFA 101 presentation for the city council to explain how all these entities are very separate and distinct from one another.

Lax pointed out that one question is how the existing enabling legislation is interpreted. He also pointed out that legislation can be changed – although he would not want to suggest that as anyone’s first line of attack – because that is a “forever project.” Leahy ventured that right now the plan does not allow for the funding of the kind of infrastructure projects that the city council is interested in. Bonner thought that the state treasury would challenge an attempt to use LDFA school millage capture to run fiber to the premises in Ann Arbor citywide.

Politics of an Extension: School Tax Capture

Earlier in the meeting, Skip Simms had argued for a 15-year extension. He said if the LDFA did not get the extension, a significant sum of money would not be coming to benefit the city of Ann Arbor.

Stephen Rapundalo is a former city councilmember who serves on the LDFA board.

Stephen Rapundalo is a former city councilmember who serves on the LDFA board.

Sally Petersen picked up on Simms’ observation about the source of funds and the reimbursement from the state. One of the issues that the city council is concerned about, Petersen said, is whether the TIF capture from the Ann Arbor/Ypsilanti SmartZone is coming from the state school aid fund. “That’s still out there,” she said.

Stephen Rapundalo responded to Petersen by asking: “What’s it take – for them to understand unambiguously how that works? I mean we have told them. Why is the onus on the LDFA to have to show them that?” The LDFA has nothing to do with that aspect of funding, Rapundalo continued, saying that all the LDFA knows and understands is how the calculation is made, and therefore how much money is allocated to the LDFA board for the purposes stated in all of the various agreements. [See above for statutory interpretation indicating that the school aid fund is not reimbursed for the Ann Arbor/Ypsilanti LDFA SmartZone tax capture.]

Luke Bonner of Ann Arbor SPARK suggested that it is a lot to ask of current Ann Arbor city councilmembers, who were not around when the LDFA was created, to have a clear understanding. He suggested that the material needed to be broken down into a kind of LDFA 101 presentation.

Rapundalo expressed frustration – because such presentations have been given over the years, which he thought were really dumbed-down. Jerry Lax quipped that maybe they needed better diagrams. Rapundalo ventured that with respect to the school aid fund reimbursement, the council needed to hear from someone at the state level. He did not know who that person might be, but it could be somebody at the highest level of the MEDC, or the Dept. of Education – but it should not be from the LDFA.

Bonner suggested that it might be someone at the Dept. of Treasury – because the treasury department, more so than the MEDC, has to put their stamp of approval on the TIF plan. The state treasury is responsible for taking the money and reimbursing the school aid fund.

Rapundalo said he would ask Ann Arbor SPARK to identify the person who could explain that. “That needs to be cleared up, as much as we can, once and for all,” Rapundalo said. Lax added that many of the issues that city councilmembers might have concerns about are based on the actions of the state legislature in creating the statutory scheme in the first place. So if people have questions about it, they might very well be legitimate questions that need to be addressed – but the fundamental point is that for better or for worse, this is what the state legislature determined would be the mechanism.

If people have questions or doubts or criticism about how reimbursements are made, and where it comes from, and what bucket the money is taken out of, that’s not something that the city council determined or that the LDFA determined, Lax said. That’s something that the state legislature determined in adopting the state legislation in the first place.

Petersen said there are two things that concerned her about how the city council received this kind of information. The council might decide that they don’t like the mechanism at the state level, and to prove that point, the council might not want to support a 15-year extension of the LDFA. There are also remaining questions about whether the city of Ann Arbor public schools are actually getting reimbursed. She understood that representative Jeff Irwin had done some analysis of that, but she was not sure what it was, as she had just heard about it.

Lax ventured that maybe councilmembers feel that the schools ought to be getting more money – but the question of whether the schools are getting more money is a separate question from whether the way the schools are being reimbursed is fair. If the schools in general are getting a dollar-for-dollar equivalent for the captured taxes, then “so far so good,” Lax said.

Petersen stated that city CFO Tom Crawford has stood up and stated that the schools are getting reimbursed. Rapundalo observed that Crawford’s statement does not satisfy some councilmembers, and that’s why they need to hear from somebody who can walk them through the calculations and the whole process at the state level.

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Ann Arbor OKs LED Streetlight Conversion Tue, 17 Jun 2014 03:13:59 +0000 Chronicle Staff A purchase agreement with DTE – to convert 223 mercury-vapor cobrahead streetlights to LED technology – has been approved by the Ann Arbor city council. The up-front cost of the conversion will be $69,555 – but that amount will be reduced to $55,060 after rebates.

The annual electric bill from DTE for the 223 streetlights is currently $45,128. After conversion, the projected annual cost will be $30,910. The savings would result in about a 3.1-year payback period on the net cost of $55,060. City council action came at its June 16, 2014 meeting.

The city is billed for 7,431 streetlights – of which 5,216 are DTE-owned. Of the 2,215 city-owned lights, 1,923 have LED fixtures.

None of the streetlights to be converted under the agreement ratified on June 16 are in the Ann Arbor Downtown Development Authority tax capture district. Streetlights in the DDA district were part of a similar proposal considered by the DDA board at its May 7, 2014 meeting, but postponed by the board at that meeting until June 4. By the time of the June 4 meeting, however, a decision had already been made that the DDA would not be funding an LED conversion this year. [DTE's program has an annual cycle, but is not necessarily offered every year.] If the DDA board had approved funding for converting lights in the DDA district, it would have affected 212 non-LED streetlights.

Streetlight locations are mapped in the joint Washtenaw County and city of Ann Arbor GIS system. Data available by clicking on icons includes ownership as well as the lighting technology used. This one is a high pressure sodium light operating at 400 watts.

Streetlight locations are mapped in the joint Washtenaw County and city of Ann Arbor GIS system. Data available by clicking on icons includes ownership as well as the lighting technology used. This one is a high pressure sodium light operating at 400 watts.

The project the DDA declined to fund this year would have included converting 100 watt MV (mercury vapor), 175 watt MV and 100 watt HPS (high pressure sodium) lights to 65 watt LED (light emitting diode). Further, 400 watt MV and 250 watt HPS lights would have been converted to 135 watt LED. Finally, 1000 watt MV and 400 watt HPS lights would have been converted to 280 watt LED. Currently, the city pays DTE $72,585 a year for the energy used by the 212 downtown streetlights. After conversion, the annual cost for the 212 lights would be expected to drop to $51,895, for an annual savings of $20,690.

In deliberations at the DDA board’s May 7 meeting, DDA board member Roger Hewitt opposed the grant, because the savings that would be realized accrues to the city of Ann Arbor, which pays the energy bills for the lights. Hewitt noted that the relationship between the city and the DDA includes a number of fund transfers to the city. Even though the amount is not huge, Hewitt said, the expenditure of several small amounts could eventually impair the DDA’s ability to pay for major infrastructure improvements.

Other board members joined Hewitt in their concerns, questioning what projects might be sacrificed if the DDA paid for the LED conversion. Concern was also expressed over the possibility that the result of a streetscape framework planning effort could result in a decision to replace all cobrahead lights in the downtown area with pedestrian-scale lampposts. And that would mean that the new LED fixtures would be used for only a short while.

For deliberations at the council’s June 16 meeting, see The Chronicle’s live updates filed during the meeting.

This brief was filed from the city council’s chambers on the second floor of city hall, located at 301 E. Huron.

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Connection Fee Study OK’d Tue, 17 Jun 2014 02:07:58 +0000 Chronicle Staff A $62,800 contract has been approved with Black & Veatch Ltd. covering a water & wastewater system capital cost recovery study for the city of Ann Arbor. The city council’s action came at its June 16, 2014 meeting.

Background to this contract was a June 3, 2013 city council action to change the calculation of the water and sanitary improvement charges for properties connecting to city water mains or sanitary sewers – but only for a two-year period, from July 1, 2013, through June 30, 2015.

The effect of the council’s action was to reduce the connection charges considerably. It was understood at the time that the two-year period would allow for the hiring of a consultant to review the city’s fees and charges for connections to the water and sanitary sewer systems and make recommendations for revision. That’s why the Black & Veatch item appeared on the council’s June 16 agenda.

The principles at stake are described in the staff memo accompanying the item as follows:

When making future changes to improvement charges and connection fees, it is important that various competing elements are satisfied. The fees must be easy to explain and easy to understand to be accepted by the users. The fees must recover costs equitably. The fees must not result in either an undue burden on existing rate payers of the systems or an undue burden on new customers connecting to the systems. The fees must be easily understood and neither over recover costs nor under recover costs. Any under-recovery of costs would place undue and inequitable financial burdens on current rate payers. To meet these goals and gain the experiences of other utilities, it is desirable to contract with a consulting firm that has nationwide experience in this area.

This brief was filed from the city council’s chambers on the second floor of city hall, located at 301 E. Huron.

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