The AVL snow plow tracking system is supposed to provide residents with real-time information on the status of plowing activity, through GPS devices mounted on the trucks. The devices monitor not only a vehicle’s location, but also whether the plow is deployed, along with other vehicle performance information. The city’s snow plow status page currently requires manual updates and has not always been a top priority to keep updated during snowstorms. The city council authorized the $88,000 purchase last year at its Nov. 4, 2010 meeting. The system was then hoped to be deployed sometime during the winter of 2010-11. The software purchase was justified not based on the ability to track snow plows, but rather on the ability to monitor all of a vehicle’s various engine codes remotely, which is anticipated to save the city on maintenance costs in the longer term.

The local development finance authority is funded through a tax increment finance (TIF) mechanism for the same geographic district as the Ann Arbor and Ypsilanti downtown development authorities. The LDFA currently receives no revenue from the Ypsilanti portion of its district. The taxes on which the increment is captured are local school taxes. The impact of the LDFA tax capture is spread across school districts statewide, due to the way that local school taxes are pooled by the state of Michigan and redistributed to local districts. Based on data available through A2OpenBook, in fiscal year 2011, the LDFA generated $1.475 million in tax capture. The LDFA contracts with Ann Arbor SPARK to operate a business accelerator.

The presentation by the AATA is likely to focus on a four-party agreement that the city will shortly be asked to sign with AATA, Washtenaw County, and the city of Ypsilanti. The agreement would be a step towards establishing a countywide transit authority under Michigan’s Act 196 of 1986, because it would provide part of the mechanism for a transition from the AATA’s governance (under Act 55 of 1963) to a new countywide transit authority based on Act 196. The agreement would establish an arrangement for Washtenaw County to incorporate a new transit authority under Act 196 and for the two cities (Ann Arbor and Ypsilanti) to pledge their transit tax funds levied currently for use by the AATA to the new Act 196 organization, once its governance and basis for its funding is clear. [For background on the state of transportation initiatives, see recent Chronicle coverage: "Washtenaw Transit Talk in Flux"] [.pdf (annotated) of draft four-party agreement]

At its Nov. 10, 2011 meeting, the council gave initial approval to a further tweak to the city’s pedestrian safety law. The language given initial approval reads: “When traffic-control signals are not in place or are not in operation, the driver of a vehicle shall stop before entering a crosswalk and yield the right-of-way to a pedestrian stopped at the curb or ramp leading to a crosswalk and to every pedestrian within a crosswalk, without regard to which portion of the roadway the pedestrian is using.” The council had agreed to hold a working session on the topic before taking a final vote.

The city council work session officially begins at 7 p.m., but sometimes are 10-15 minutes late in starting. The sessions are broadcast live on CTN Channel 16, and streamed online live.

The LDFA is funded through TIF (tax increment financing) capture in a geographic district comprising the Ann Arbor Downtown Development Authority and the Ypsilanti Downtown Development Authority districts. However, TIF revenue for the LDFA is generated only in the Ann Arbor DDA district. The principal activity of the LDFA is a business accelerator. The LDFA contracts with Ann Arbor SPARK to manage the accelerator.

Staebler took a position starting in the summer of 2011 as vice president of economic development for Wayne State University, after previously serving with the Michigan Economic Development Corp.

Staebler currently serves on the city’s Housing and Human Services Advisory Board, which was established in 2007 to replace two other bodies: the Community Development Block Grant (CDBG) executive committee and the city’s housing policy board. The function of the HHSAB is to make recommendations on policies and programs to address the needs of low-income residents, to monitor the implementation of Ann Arbor’s housing policy and the creation of a city housing coordinator.

Staebler lost a close Democratic primary race for District 53 state representative against Jeff Irwin, who was elected to that position in November 2010.

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

Christopher Taylor (Ward 3), Marcia Higgins (Ward 4), and Stephen Kunselman (Ward 3) before the city council's Sept. 19 meeting. (Photos by the writer.)

Public commentary was dominated by the theme of public art, with several people weighing in against a proposed change to the city ordinance setting aside 1% of all capital improvement projects for public art. One of the changes would exclude the use of funds generated by the street/sidewalk repair tax from inclusion in the public art program. Those taxes are on the Nov. 8 ballot.

The deliberations on the public art ordinance provoked some overt politicking at the table between Carsten Hohnke (Ward 5) and Stephen Kunselman (Ward 3), which concluded with Kunselman challenging his council colleagues to direct the city attorney to write a formal legal opinion justifying the legal basis for the public art program.

The proposed changes to the public art ordinance were motivated in part by a desire to assure voters that their street/sidewalk repair millage would not instead be spent on public art. However, the council postponed the public art ordinance revision until its second meeting in November – after the vote on the millage. That’s also well after the planned dedication ceremony for the Dreiseitl water sculpture on Oct. 4 – a project paid for with public art funds.

At its Monday meeting, the council also postponed a vote on a resolution of intent expressing the council’s plan for spending the sidewalk/millage money.

The council also considered a proposal to cancel a 10-year contract signed last year with RecycleBank, a company that provides a coupon-based incentive program for city residents to participate in the city’s recycling program. The data from the first year of the contract was not convincing to councilmembers that the RecycleBank program was having a positive impact.

However, councilmembers voted instead to direct city staff to negotiate towards a revised contract that RecycleBank had offered, which reduces RecycleBank’s fee by one-third.

The council approved a settlement with its police union, retroactively to 2009. The new contract is similar to those that other city unions have also settled on – including no wage increases, and pension and health care plans that require a greater contribution from employees than in the past. The city still has two unions (firefighters and police command officers) with contracts yet to be settled. Contracts with those unions will now have to conform to the requirements of new state legislation, effective Sept. 15, that limits the amount that the city can contribute to the health care costs of its employees.

Also related to police staffing, the council authorized the use of federal money to hire five police officers, if the city is awarded a grant for which it has applied.

In another employment-related issue, the council gave final approval to a revision to its retirement system, which lengthens the vesting period to 10 years and computes the final average compensation (FAC) based on five years instead of three.

Land use and property rights were a recurring theme throughout the meeting. Those items included: approval of the sale of a strip of city-owned downtown land to the Ann Arbor Transportation Authority; postponement of a request from a medical marijuana business for rezoning a parcel on South State Street; authorization of city staff to begin with the systematic annexation of township islands located within the city boundaries; and initiation of the process to levy a special assessment of Dexter Avenue property owners to fill in sidewalk gaps.

Items fitting the general category of economic development included a tax abatement for Picometrix, the setting of a tax abatement public hearing for Arbor Networks, and the expression of the council’s intent to establish a property assessed clean energy (PACE) district. The PACE program is a way for the city to offer loans to commercial property owners for the purpose of making energy improvements.

Among other items on the agenda, the council also passed a resolution calling on Gov. Rick Snyder not to sign legislation that would eliminate same-sex domestic partner benefits for public employees. 

Public Art Ordinance Revision

On the agenda was a resolution revise the city’s public art ordinance – a law that currently requires setting aside 1% of all capital improvement projects for the acquisition of public art.

Public Art: Background

The proposal, sponsored by Sabra Briere (Ward 1), would change the Percent for Art program by explicitly excluding sidewalk and street repair from projects that could be tapped to fund public art.

The timing of the ordinance change is related to two ballot proposals on which Ann Arbor residents will vote on Nov. 8: (1) renewal of a 2.0 mill tax to fund street repair; and (2) imposing a 0.125 mill tax to fund the repair of sidewalks – which is currently the responsibility of adjacent property owners.

Some councilmembers had previously understood the public art ordinance already to exclude replacement of sidewalk slabs from its definition of capital improvement projects.

But based on additional information from the city attorney’s office, the proposed ordinance revision was meant to spell that out explicitly [added language in italics]:

Capital improvement project means any construction or renovation of any public space or facility including buildings, parks, recreation areas, parking facilities, roads, highways, bridges, paths, sidewalks in locations where sidewalks do not already exist or as part of a larger capital improvement project, streetscape improvements and utilities. This definition includes only those projects designed to create a permanent improvement or betterment, and does not include projects that are primarily for the purpose of ordinary maintenance or repair. It does not include sidewalk crack repair, sidewalk cold-patching, sidewalk slab replacement, sidewalk leveling or sidewalk slab grinding.

The ordinance revision also would explicitly exclude the Percent for Art program from applying to any projects funded with money from the street repair millage. Another feature of the ordinance revision would exclude general fund money from being allocated to public art under the Percent for Art program.

The ordinance revision would also require that any money allocated for public art under the program be spent within three years, or be returned to its fund of origin.

On two previous occasions in the last two years (Dec. 21, 2009 and May 31, 2011), the council has considered but rejected a change to the public art ordinance that would have lowered the public art earmark from 1% to 0.5%. The city’s Percent for Art program was authorized by the council on Nov. 5, 2007. It is overseen by the city’s public art commission, with members nominated by the mayor and confirmed by the council.

Public Art: Public Comment

Robert O’Neal introduced himself as a retired physician and a 50-year Ann Arbor citizen. He pointed to the history of public art in general and its positive impact. Why should a city like Ann Arbor not be a leader in public art? he asked. He hoped that the city council would not pull back from public art, when now is a time it can use the boost that public art can provide.

Connie Brown introduced herself as a business owner, a 30-year resident of Ann Arbor, and a member of the Ann Arbor public art commission (AAPAC). In times of economic stress, she said, you should not give up on your future. Public art attracts visitors and ensures art is available to all. She noted that AAPAC is charged with master planning and coordinating the effort and selecting artists. She pointed to the commission’s current activity: a call for artists for additional art for the Justice Center; the solicitation of statements of qualifications (SOQs) and a request for proposals (RFP) for Fuller Road Station; a mural project in Allmendinger Park; art in connection with the Stadium bridges project; the possibility of an art walk from the Argo canoe liveries to the greenway. She also pointed to the recently completed West Park sculpture. She asked the council to keep the funding for the public art program the way it is.

John Kotarski spoke in support of public art in Ann Arbor. He said that art creates a sense of place and identity. He asked if Ann Arbor could afford it. Yes, we can, he said. It makes good business sense, he said, citing a May 2009 article in Forbes. From the article:

[Public art] is also, strangely, economically viable, despite its often high price tag. New York’s Waterfalls cost about $15.5 million; they brought in, according to the Public Art Fund, $69 million for the city. “There are 1,400 cultural institutions in New York that [collectively] bring in more than $6 billion to the economy,” says [Susan K.] Freedman [president of the Public Art Fund in New York City]. “More than 40,000 people are employed in the arts, and the arts bring in 25 million annual visitors. I think there is clearly an economic impact.”

Kotarski said that some people would object that it’s not a good comparison, because New York is not Ann Arbor, but added, “I beg to differ.” Ann Arbor, he contended is a “creative hot spot” for the region and the nation. In addition to making good economic sense, it also makes good common sense, he said. We need to be creative, he continued. Every farmer knows not to sell seed corn, and creativity is our seed corn, he said. Public art reminds us that creativity matters. It’s hard to teach creativity, he allowed, but Google encourages its employees to spend 20% of their time working on something creative, not necessarily related to their specific duties. We need to plant more seeds of creativity, not less, he concluded.

Margaret Parker introduced herself as past chair of the public art commission. She began by saying that bad news is easy to find. She said that Ann Arbor is lucky because in 2008 it had started a savings account (the public art fund) by allotting 1% from all capital improvement projects for public art. From that “frugal plan” and a volunteer art commission, she said, public art projects are being realized in the city. She alluded to Connie Brown’s description of some of those projects.

Parker then ticked through some of the many steps that results in a long timeline for project. AAPAC analyzes priorities in the city’s capital improvement plan, and considers a diversity of projects (for example, large and small), and a diversity of artists, materials and styles. The commission considers which projects are going into construction each year and puts together a list. Each project needs a commissioner to champion it, Parker said. A task force gets set up for the selection process. It could take months before an artist signs a contract, and months more before construction is started.

Parker said that the council should not “dump funds” after three years – because that doesn’t acknowledge the time it takes to put a project together.

In support of the idea that the city’s public art program promotes collaboration, Parker mentioned that the Detroit Institute of Arts wants to partner with the city. The Ann Arbor Rotary Club also wants to work on beautifying traffic medians, and the University of Michigan wants to work with the city on Fuller Road Station.

Mark Tucker introduced himself as an art teacher at the University of Michigan. He told the council that with his students, they had started public art projects in the city – Festifools and Foolmoon. He noted that those projects don’t get any money from Percent for Art. He called the decision to establish a public art program one that was made by forward-thinking individuals. He said that 26 states and 90 municipalities have public art programs. Public art is a reminder that there’s a happy, creative, productive community here. It’s not a frivolous expense, he said, but a long-term investment.

Tucker asked rhetorically if Ann Arbor is a city that embraces art. He answered by pointing to the long histories of the art fairs, the Ann Arbor Film Festival, the Ann Arbor Symphony Orchestra, the Ann Arbor Art Center, the University Musical Society, among others, as evidence that “we believe in the arts in this town.” However, he contended that “we’ve missed the boat in branding ourselves with the arts.” He contended that more visitors come to Ann Arbor due to the arts than all the sporting events combined. Yet if you’re a visitor or new resident, it’s not readily apparent that Ann Arbor embraces the arts, he contended. Public art makes Ann Arbor’s commitment to the arts visible. It might be cheaper to not make that commitment, he allowed, but we’ve made a decision to live in a city that has a pulse and a soul, and we’ve decided that living a full, interesting life is a goal worth seeking.

Jill McGinn introduced herself as a citizen of Ann Arbor for over 35 years. She said she supports the public art program. She told the council she teaches world history at Slauson Middle School. Part of the curriculum involves learning the characteristics of a civilization, and one of those is the arts. She described to the council how she tried to connect ancient pieces of art with modern art. To that end, she used a photo of a mosaic on one of the city’s parking structures. She asked the council to maintain “the meager penny on the dollar” for public art.

Public Art: Communications from Council

There are three slots for communications from councilmembers at various points during the meeting. The conversation on public art began in earnest during one of the early slots, before any of the substantive agenda items had been handled.

Tony Derezinski (Ward 2) led things off by reporting on his new assignment as an appointee to the public art commission, replacing Jeff Meyers, who resigned earlier this summer. Derezinski said he’d been to “one whole meeting” of AAPAC. He described the commissioners as incredibly dedicated people. He noted that both a former chair and the current chair of the commission [Margaret Parker and Marcia Chamberlin] were in the audience that night. He contended it’s a “fairly recent” program. [It was approved by the council in November of 2007.]

Derezinski said he was impressed with the commission’s willingness to collaborate. He’d met with members of the Arts Alliance and had an upcoming meeting with the Detroit Institute of Arts. He noted that AAPAC was looking at working with the Rotary Club to put some plantings and signage at the traffic median at the confluence of Washtenaw Avenue and Stadium Boulevard.

Derezinski then turned to other entrances into the city and the need to beautify the city – South State Street as well as North Main. The soul of the city is reflected in its values, Derezinski said. He asked rhetorically: “Do we stick do our guns?” Derezinski described now as a time when the public art program is just getting going. He said it takes a long time for art to be produced under the program.

Derezinski then adduced “Endymion” by the English poet John Keats [1795-1821], quoting its opening line: “A thing of beauty should be a joy forever.” [The passage is a sketch of a pastoral scene, in which the things of beauty are elements of nature – the sun, the moon, trees, sheep, and the like.]

Stephen Kunselman (Ward 3) responded to Derezinski’s comments by saying he appreciated all those who came to the meeting to support public art. But he then read aloud an email he’d received from a constituent about the use of dedicated millage funds, which called the practice of taking dedicated millage funds to pay for a different purpose “government corruption.” If this practice is not illegal, it should be, wrote Kunselman’s constituent. [The city's public art program uses a portion of millage funds designed for specific purposes – like street repair – for public art.]

Kunselman then went on to cite a Michigan Supreme Court case, South Haven v. Van Buren County board of commissioners, and read aloud from the opinion, which included in part:

However, a fundamental rule of statutory construction is that the Legislature did not intend to do a useless thing. If funds that voters approved for the purpose stated on the ballot could be redirected to another purpose without seeking new approval, there would be no reason for including the purpose on the ballot. Indeed, voters could be lulled into voting for a millage for a popular purpose, only to have the funds then used for something they may well have never approved. This is contrary to the General Property Tax Act.

By way of background, the South Haven v. Van Buren case involved a city suing a county over the disbursal of funds collected under a county road millage. The city did not have any county roads for which the millage could be used. The city filed suit, asking the court to force the county to “disgorge the funds” to the city based on a statutory formula, which the county should have used, absent any agreement between the city and the county for a different distribution. The court found that the county should have used the formula, but ruled that it was not the city, but rather the state attorney general who had the ability to enforce that statute. In other words, the legislation did not provide a specific cause of action for the city itself to take.

The passage cited by Kunselman is the court’s explanation for why the city was also not entitled to the funds on some other ground – the city was not a unit of government specified by the ballot language to receive funds from the millage. Voters across the county had not authorized the millage for city roads, but rather for county roads.

Public Art: Council Deliberations

When the actual agenda item came before the council, it was Sabra Briere (Ward 1) who led off the conversation – she had sponsored the amendment to the public art ordinance. Briere said the council could talk at length about public art and could try to be as eloquent as the members of AAPAC who spoke during public commentary. She told her colleagues that the proposed changes are not an attack on public art, but clarify what money can be used to fund it.

In providing an explanation for the thought behind the amendments, Briere explained that it was a surprise to her that taking tar and filling cracks in asphalt with it counts as a “capital improvement” under the current ordinance. Also, replacing a sidewalk slab is a “capital improvement,” under the language of the ordinance, she said, which was a surprise to her.

Briere said it seemed like an easy vote in 2007. [Though Briere was present at the Nov. 5, 2007 meeting, she was not elected to the council until the following day and did not make her first vote until the council's second meeting that month, on Nov. 19, 2007.] She had not been not aware of all the items that count as capital improvements, she said. She said she was dismayed that the funds accumulate for a long period of time. She could appreciate that the program is just getting started, but four years seems like a long time. She concluded her initial remarks by asking for her colleagues’ support on first reading. On the second reading, she said, the council could talk about it.

Responding to Briere’s contention that her amendment was not an attack on public art, Tony Derezinski (Ward 2) insisted that it is, in fact, a diminution of funds to public art and the effect is the same. He pointed to a number of projects in the pipeline and talked about how the entrances to the city can be improved in a way that related to the streets. He suggested that the program risked being eliminated in different ways – either through 1,000 cuts, or just eliminated outright. He insisted that four years is a short time. Before the council takes any action, a comprehensive look should be given to the program, he said, including the strictures on expenditures on the funds.

Marcia Higgins (Ward 4) stated that no one is looking to eliminate the program. But she allowed that she didn’t think the current draft of the ordinance was quite ready yet. She said she didn’t think the council could have a better version ready in two weeks, so she wanted to know when the planned work session on public art was scheduled. Derezinksi said the current thinking was for November. AAPAC could be ready for a report by then, he said. Higgins moved to postpone the vote until the second meeting of November. Higgins stated that during the work session, she would like the public to have an opportunity to talk to the council.

[Michigan's Open Meetings Act requires that public bodies allow the public to address them during meetings. However, Ann Arbor's city council does not allow for public comment during its work sessions, on the basis of the claim that these sessions are not "meetings" under the OMA statute. The American Civil Liberties Union has encouraged the inclusion of public commentary at Ann Arbor city council work sessions. Other entities, including the Washtenaw County board of commissioners, provide time for public commentary at work sessions.]

Briere noted that the public art ordinance revisions mention the street repair millage that’s on the ballot in November. She wanted to know if there were any legal implications to postponing past the election. City attorney Stephen Postema deferred to assistant city attorney Abigail Elias, saying that she has studied that issue. After some back-and-forth, Briere finally elicited from Elias that there was no legal problem with postponing the public art ordinance revisions.

Sandi Smith (Ward 1) said she couldn’t support a postponement. She wanted to see it withdrawn or voted down.

Margie Teall (Ward 4) said she concurred with Smith. She wanted the topic off the table. She said she needed to hear from AAPAC.

Margie Teall (Ward 4). In the background, front to back, are Marcia Higgins (Ward 4) and Carsten Hohnke (Ward 5).

Christopher Taylor (Ward 3) said he was eager to hear from AAPAC and saw no harm in postponing. After the work session, he said, if it’s the council’s collective view to push it forward, then the council would push it forward; if not, they wouldn’t. That’s a perfectly useful process, he said.

Carsten Hohnke (Ward 5) said he supported the postponement, because he generally supported approving an ordinance revision at first reading based on the habit and practice of advancing ordinance revisions to a second reading. However, he said he didn’t support the ordinance revisions.

Hohnke then said he wanted to encourage Stephen Kunselman (Ward 3) to take some action on the topic that Kunselman has been “heatedly expounding on” at recent council meetings. Hohnke said it’s important that the public not have a misunderstanding about what the city is doing. Hohnke characterized the public art ordinance as articulating a policy on how the city builds the things that it chooses to build.

He admonished Kunselman that it’s not appropriate to make statements in order to “score points,” saying it’s important to take action on that which councilmembers espouse.

Kunselman responded to Hohnke by saying that he agreed with Hohnke’s point about action and said he would have co-sponsored the proposed ordinance revision with Briere, but he had been out of town. Kunselman said the council should reflect on the fact that for four years, the council had not received a city attorney opinion on the subject. He said he could not look back at old emails he might have received from the city attorney when he was a member of council from 2006-2008, because they were deleted during the year he was not on the council. [Kunselman voted for the public art ordinance in 2007. He lost the 2008 Democratic primary to Christopher Taylor, but won back his seat the following year by defeating Leigh Greden.]

Kunselman noted that the city attorney had said if the council directs him to do so, he would write an opinion and file it with the city clerk. But that’s not what the charter says, Kunselman noted. [A Chronicle column addressed this issue: "Getting Smarter About City Charter"] Kunselman noted that the public art ordinance had been approved under a previous city administration. He called on his council colleagues who supported public art to bring a resolution to give direction to the city attorney to write a formal opinion explaining the legal basis for the public art ordinance. He said he would not sponsor such a resolution himself.

Stephen Rapundalo (Ward 2) eventually interrupted Kunselman with a “point of order,” a motion that is permitted at all times in order to achieve enforcement of the parliamentary rules. The rule Rapundalo wanted enforced was the requirement that when a postponement has been moved, it’s the postponement that must be the subject of the deliberation. Kunselman responded to Rapundalo by pointing out that he was responding to Hohnke [who had also strayed somewhat from the topic of the postponement] and stated that he would support postponement.

Mayor John Hieftje said he still hears from residents that the public art ordinance takes away from the city’s ability to fund police and firefighters, but he insisted that it does not do that.

By way of background, police and fire protection is paid from the general fund. The public art ordinance reads as follows:

1:834. – Inclusion of public art as part of a capital improvement project; pooling of funds for public art; use of pooled funds.
(1) Funds for public art that are included as part of a capital improvement project financed from the city’s general fund may be used as part of that capital improvement project for the creation, purchase, production or other acquisition of art incorporated as a part of the capital improvement project, including art located on the site where the project is located.
(2) Funds for public art that are included as part of a capital improvement project financed from the city’s general fund may instead be pooled in a separate public art fund within the General Fund.

As a practical matter, general fund dollars are not typically spent directly on capital improvement projects. However, some revenue sources previously received by the general fund, like revenue from antenna rights, were made a part of the financing plan for construction of the police and courts facility, which was a project that contributed to the public art program.

Outcome: The council voted to postpone the public art ordinance revisions until Nov. 21. Dissenting were Margie Teall (Ward 4) and Sandi Smith (Ward 1).

Intent on Use of Street/Sidewalk Repair Tax

The council also considered a resolution of intent on the use of proceeds from a street/sidewalk repair millage that will be on the Nov. 8 ballot.

Voters will be asked to approve two separate proposals: (1) a 5-year renewal of a 2.0 mill tax to support street repair projects; and (2) a 0.125 mill tax to pay for sidewalk repair.

Use of Street/Sidewalk Repair Tax: Background

The resolution of intent would specify that the street repair millage will pay for the following activities: resurfacing or reconstruction of existing paved city streets and bridges, including on-street bicycle lanes and street intersections; construction of pedestrian refuge islands; reconstruction and construction of accessible street crossings and corner ramps; and preventive pavement maintenance (PPM) measures, including pavement crack sealing.

The resolution of intent would stipulate that sidewalk repairs inside the Ann Arbor Downtown Development Authority district will not be funded by the sidewalk repair millage, except when the sidewalks are adjacent to single- and two-family houses. Both inside and outside the DDA district (otherwise put, throughout the city), the sidewalk repair millage would be used only to pay for sidewalk repair adjacent to property on which the city levies a property tax.

One impact of that resolution of intent, if it’s adopted, is that the city’s sidewalk repair millage will not be used to pay for repairs to sidewalks adjacent to University of Michigan property.

Use of Street/Sidewalk Repair Tax: Council Deliberations

Sabra Briere (Ward 1) led off by saying the resolution was simply a clarification of the city’s goals for the millage, not a change of anything in the language on the ballot.

Homayoon Pirooz, head of project management for the city, answered questions about the resolution and the millage.

Christopher Taylor (Ward 3) noted that among the activities listed is construction of pedestrian islands, but not reconstruction. He wanted to know if that was intentional. Pirooz explained that the city had constructed the first pedestrian island in 1986, so it hasn’t been an issue, yet. Taylor pressed on, saying that he understood the items to be “exclusive” – that is, that the money can’t be used for anything else except what’s listed. Pirooz characterized the list as guidelines for activities the city used the money on, and with fact sheets the city had previously distributed.

Taylor responded that he would rather include flexibility in the list to devise solutions, without revising policy on the fly in the future. So he said he wanted to add “reconstruction” of pedestrian refuge islands.

Taylor asked why the information about the securing of grants from the federal surface transportation fund was included. Pirooz explained that the grants are not an extra expenditure, but rather expressed how the street reconstruction millage has allowed the city to secure those matching dollars. It’s significant for the public to understand that the 2.0 mill tax gives them more than 2.0 mills worth of funding for street repair, through the leveraging of federal and state dollars, Pirooz said.

In response to comments from Mike Anglin (Ward 5), Pirooz said that over the life of the millage in the last five years, the city had received an additional $27 million in outside funding, which includes around $17 million for the Stadium bridges reconstruction project.

Margie Teall (Ward 4) questioned the need for the resolution. Normally, she said, there’d simply be a “fact sheet.” Briere responded by saying that the council had expressed its intent in connection with the parks capital improvement and maintenance millage, when it was on the ballot in 2007 – the resolution answers questions about how the city would spend the money. It’s a benefit to the public and to the council to have a record of the goals of the millage, Briere said.

Stephen Kunselman (Ward 3) scrutinized “crack sealing” as an activity – he wanted to know if that has always been the city’s practice. Pirooz explained that the city has not typically used millage money for that, and has instead used Act 51 money. [Act 51 funds are revenues from the state, collected primarily from gas taxes.] The crack sealing is preventive maintenance, Pirooz said, when 3-4 years after a road is repaved, you see cracks due to natural oxidation of the asphalt. That’s the time to seal those cracks, he said. Although the city hasn’t done much crack sealing with street millage money, he said that in 2011, the city is using $80,000 for crack sealing. He called it a good investment. Contrasting with crack sealing is pothole repair. That’s “ordinary maintenance,” said Pirooz, and not paid out of millage funds.

Stephen Rapundalo (Ward 2) identified a redundant inclusion of the word “separately” in the list.

Taylor then asked what the rationale was for the restrictions on spending within the DDA for properties that are not single- or two-family houses. Pirooz noted that it’s part of the ballot language the council had approved in August. The rationale, he said, was that the DDA receives a share of the street repair millage [through its tax increment finance capture district] so it makes sense for the DDA to cover the costs within its geographic district.

Taylor then suggested that to the bullet points it might be useful to include language to allow more flexibility: “… may be used for street and bridge projects, including without limitation …”

Briere asked how Taylor’s suggestion would apply to how money was spent. Pirooz said it would not have any impact that he could think of that night. Briere said she was fine with Taylor’s suggested change.

Marcia Higgins (Ward 4) then expressed concern that the council was amending things on the fly, and wanted to see a complete version. She asked Pirooz if a postponement would interfere with the timing of the preparation of the city’s fact sheet. Priooz said it wouldn’t.

Outcome: The council voted unanimously to postpone the resolution of intent on the use of the street/sidwalk millages.

RecycleBank Contract

On the council agenda was a resolution to end its 10-year contract with RecycleBank, a company that organizes a program to provide incentives to residents to set out their single-stream recycling carts for curbside collection. The contract has been in place for a year.

RecycleBank Contract: Background

A substitute resolution was eventually put forward directing the city administrator to negotiate a contract revision offered by RecycleBank that would reduce the per-household charge by about one-third, from $0.52 to $0.35 – which translates into a monthly payment reduction from $12,400 to $8,371. Under the new to-be-negotiated contract, if the tonnage of recyclables collected increases above current levels, RecycleBank could earn an additional $50 per ton, for each ton collected above existing levels. There would be a cap of $150,000 per year.

The resolution to cancel the contract had been postponed from the council’s Aug. 4 meeting. The cancellation resolution indicates termination would have given savings to the city of $149,167 per year on that contract. RecycleBank would have been entitled to $120,000 for the depreciated cost of equipment in recycling trucks as part of this program.

The impetus for canceling the contract had been based in part on skepticism that the first year’s worth of data really showed a measurable positive impact on recycling in Ann Arbor due purely to ReycleBank’s coupon incentives.

The interest in canceling the contract was also based in part on a desire by some councilmembers to find replacement revenue to fund a $107,042 annual increase in the contract with Recycle Ann Arbor (RAA), the company that the city hires to empty the curbside recycling carts. That increase was seen as necessary due to the financial stress under which RAA was operating, exacerbated in part by the lower-than-expected value of the contract with the city. The city deployed fewer curbside carts citywide than projected, and because RAA’s contract was based in part on the number of carts deployed, it received less revenue than had been forecast.

RecycleBank Contract: Public Comment

Atul Nanda, of RecycleBank, ticked through some points showing the positive impact of RecycleBank’s program. Among other items, he said that there’d been a 36% increase in recycling participation. Households that participate in the program have higher cart set-out rates than those that don’t participate. Last month, he said, residents had been able to order 2,400 rewards, the highest number of rewards since the program’s rollout. He pointed to avoided landfill disposal costs as a result of the program. He also reported that RecycleBank had received tremendous feedback from residents.

He then sketched out some of the terms of the offer that RecycleBank had made to reduce the cost of its contract with the city. That includes reducing RecycleBank’s per-household charge by about one-third, from $0.52 to $0.35 – which translates into a monthly payment reduction from $12,400 to $8,371. Also, RecycleBank would be willing to accept current recycling levels as a new baseline (680 pounds per household). If recycling levels increase beyond that, RecycleBank could earn an additional $50 per ton, for each ton collected above existing levels. There would be a cap of $150,000 per year.

RecycleBank Contract: Council Deliberations

Carsten Hohnke (Ward 5) asked city solid waste coordinator Tom McMurtrie to describe in more detail some of the options sent to the city, including the one that RecycleBank’s representative had characterized during public commentary.

McMurtrie went over the features of the RecycleBank proposal, which he described as a “hybrid” proposal from RecycleBank. On the hybrid approach, he said, the reduction of the fee by one-third would cut city costs by $50,000 per year. The incentivized system (of additional payments based on increased tonnages from current levels) would allow for RecycleBank to prove its worth, McMurtrie said, with a cap of $150,000. If recycling tonnage increased dramatically, the city wouldn’t see its costs increase beyond what they are today, McMurtrie said.

Another option was to discontinue RecycleBank for one collection day (Wednesday). On that option, on Oct. 1, RecycleBank would discontinue their coupon incentive program in the area served on that collection day. Then, after six months, the city would measure that collection day compared with the other four days. In April 2012, the city would look at the impact. That approach would provide some measurable data to show the effect of RecycleBank’s program.

On either option, McMurtrie said, the city could look at the contract at budget time and decide whether to cancel the contract or not.

Hohnke reviewed the points of the “hybrid” option and concluded that the downside was that if recycling tonnage did not increase, the city would continue to pay the contract – but he noted that the city is already doing that. McMurtrie agreed with that characterization, but noted that the city would continue to pay the contract at a lower rate – $100,000 annually compared to $150,000.

Hohnke confirmed that the city maintains the option of exiting the contract if funds aren’t available in the budget.

[The 10-year RecycleBank contract's termination clause includes language about terminating the contract based on availability of funds. To reduce legal risk, the city could decline to allocate the funds for the contract during its regular annual budgeting process. At Monday's meeting, the council revised its agenda to include a closed session just before deliberating on the RecycleBank contract, claiming an exception under the Open Meetings Act that allows a public body to consider written documents in a closed session if those documents are not required to be disclosed by statute.]

Christopher Taylor (Ward 3) wanted some clarification about the $50/ton payment for additional tonnage. He wondered if the city’s “profit” on extra tons covered the payment to RecycleBank. McMurtrie explained that currently the city clears $75 on the tonnage as a commodity and avoids $25 in landfill disposal fees – so RecycleBank’s payment for increased tonnage would take half the $100 the city realized.

Tony Derezinski (Ward 2) asked if RecycleBank had had a chance to review the options. Which one does RecycleBank favor? he asked. Derezinski also wanted to know if there would be sufficient data by the end of the fiscal year to evaluate the impact of RecycleBank. McMurtrie explained that RecycleBank had a preference for the hybrid solution – it was RecycleBank that came up with it. As for the question of sufficient data, he said the city could get a good indication of what RecycleBank’s incentive program is doing in that time frame.

Briere noted it’s unusual to face three options for a single resolution. She said she’d be happy to see a substitute resolution on the floor with the direction to negotiate the hybrid contract. [From a parliamentary point of view, the wholesale substitution of an alternate resolution is an "amendment" to the original resolution.]

Briere then read aloud the resolution, which directed city staff to renegotiate the RecycleBank contract along the lines of the hybrid solution.

Margie Teall (Ward 4) said that the direction the city is going is to try to increase recycling. She invited a student who works with RecycleBank, promoting its services to residents, to the podium – the student told the council that they’d never received a negative response.

Briere noted that one of the city’s goals was eventually to roll out the RecycleBank program to multi-family housing. She wondered if there is a way to address that part of the proposal. McMurtrie suggested that this could come back at a future meeting. Briere ventured that extending the program to multi-family housing is already in the contract. McMurtrie clarified that the contract says RecycleBank would provide pricing to the city to expand the service to multi-family housing units.

Teall said she supported that idea and thought that RecycleBank programs would appeal to a greater degree to multi-family housing.

Sandi Smith (Ward 1) said she appreciated the additional time the council had spent on this issue. [She was alluding to the fact that it had been postponed from the council's Aug. 4 meeting.] Smith said she was happy the council didn’t respond with a knee-jerk reaction of eliminating the program. In hindsight, Smith said she wished the city had not rolled out the single-stream system with automated carts at roughly the same time as the RecycleBank incentive program. She said she still hears that people love the single-stream recycling, but she has not heard that people like RecycleBank.

Taylor said he’d support the hybrid option and thanked RecycleBank for its flexibility, even though the contract is suboptimal from the company’s point of view.

Stephen Kunselman (Ward 3) said he’d support the hybrid option, but stressed that it’s important to keep their eye on the ball – namely, the next budget year. The city staff has indicated the solid waste fund will be challenged, he said, so it’s about fiscal responsibility as the city moves forward.

Hohnke concluded deliberations by saying that he took “gentle issue” with Smith’s description of the original resolution as a “knee-jerk reaction.” He said that after looking at the data, it wasn’t clear that the city was getting value out of that contract.

Outcome on the amendment and the full resolution: The council voted unanimously to renegotiate the RecycleBank contract.

Police Union Settlement

The council was asked to approve a new contract with the city’s police officers union, based on an agreement mandated by an arbitration panel’s award signed on Sept. 14, 2011.

The arbitration panel worked through the binding arbitration procedure for labor disputes in police and fire departments, which in Michigan is governed by Act 312 of 1969.

The new contract is retroactive for the period from July 1, 2009 to June 30, 2013. In an email to The Chronicle, Tom Crawford, the city’s CFO, wrote that the panel’s determination does not include any liability for the city dating back to the start of the contract.

Highlights of the new deal include a redesigned health care plan, which offer options for health care contributions based on a calendar year. For single-person coverage, for example, the “low plan” would include no monthly premium but a $1,000 deductible. The “high plan” would include a 10% monthly contribution with a $300 deductible.

The new contract includes no across-the-board wage increases.

Pension contributions by employees would increase from 5% to 6% of pay on a pre-tax basis starting Jan. 1, 2012. Employees hired after Jan. 1, 2012 would not be vested in the pension program until 10 years, and their final average compensation (used to determine pension benefits) would be based on the last five years of service. Retirees would have an access-only type retiree health care plan with a retiree health care reimbursement account. Each employee would receive a one-time deposit of $500 in a health retirement account on Jan. 1, 2012.

Stephen Rapundalo (Ward 2), who chairs the city council’s labor committee, ticked through the highlights of the contract. He said he was sorry that 312 arbitration had to be used to get to that conclusion. If the city had had the agreement in place at budget time in May, he said, that would have saved a number of police positions that had to be laid off.

Rapundalo said that now six of eight city unions have settled contracts, so the city has slowly but surely made a lot of progress. He said he appreciated unions and employees stepping forward, but noted that some “rich contracts” had been put in place in the 1990s.

There’s still no contract with the firefighters or command officers union, Rapundalo said. Now that Gov. Rick Snyder has signed new labor legislation that restricts how much the city can contribute to employee health care, Rapundalo said the city would have a couple of options to discuss with those two unions: whether to take the 80/20 percentage – in which the city would pay for no more than 80% of an employee’s health care premiums – or the hard cap. Those unions had the opportunity to come on board before the legislation was signed, Rapundalo said, but didn’t.

Outcome: The council voted unanimously to approve the police union agreement.

Federal Grant Application to Fund Police

On the agenda was a resolution to authorize acceptance and appropriation of a federal grant, if it is eventually awarded to the city, to fund the hiring of additional police officers. The city submitted an application on May 24, 2011 to ensure a May 25 deadline was met.

The application was submitted for five officers at a total amount of $1,398,745. The grant would pay for the officers for three years.

The competitive grants were announced in May 2011 as part of the U.S. Dept. of Justice office of community oriented policing services (COPS).

At Monday’s council meeting, chief of police Barnett Jones described the features of the funding.

Sabra Briere (Ward 1) asked what the effects of grant funding would be, were it to be awarded, on next year’s budget. Jones said there was no effect, because the grant doesn’t require a local match. Briere said in the past the city has not embraced this kind of grant because it comes with certain conditions. She ventured that there was a required commitment not to lay off officers hired under the program. Jones allowed that was true, and that a kind of “super-seniority” would need to be established for those officers, and that would need to be talked through with the union.

Jones said that a previous requirement associated with such grants, that officers hired under the program would need to be retained for a year after the grant funding ended, no longer existed. In response to a question from Christopher Taylor (Ward 3), Jones said that the grant did not require maintaining any particular overall level of staffing.

Briere asked if laid-off officers could be brought back under the program. Jones said it was a matter of timing. If the grant were approved next week, then he’d use the funds to rehire the same officers who were laid off.

Outcome: The council voted unanimously to authorize receipt of the grant, if it is awarded.

Retirement System Revision

The council considered a resolution to give final approval to an ordinance revision that increases the city’s pension vesting period for non-union employees hired after July 1, 2011 – from five years to 10 years. It also changes the final average compensation computation so that it’s based on the the last five years of employment, not the last three years.

Retirement System: Background

The ordinance change had been given initial approval at the council’s Sept. 6 meeting.

The preparation of the ordinance change came at the direction of the city council, which passed a resolution at its June 6, 2011 meeting asking the city administrator to bring forward ordinance revisions that for non-union employees would change health care benefits and aspects of the city’s pension plan.

Specifically, the June 6 resolution pointed to ordinance revisions that would base the final average contribution (FAC) for the pension system on the last five years of service, instead of the last three. Further, employees would be vested in the pension plan after 10 years instead of five. Finally, all new non-union hires would be provided with an access-only style health care plan, with the opportunity to buy into whatever plan active employees enjoy.

At its Aug. 4, 2011 meeting, the council gave final approval to an ordinance change that addressed the health care provision from the June 6 resolution. That ordinance change distinguishes between “subsidized retirees” and “non-subsidized retirees.” A non-subsidized retiree is someone who is hired or re-employed into a non-union position with the city on or after July 1, 2011. In their retirement, non-subsidized retirees will have access to health care they can pay for themselves, but it will not be subsidized by the city.

The city expects that when it reaches a point when all non-union employees have been hired under the revised pension plan, the city’s costs will be $230,000 less than they would be under the current plan.

Retirement System: Public Hearing

During the public hearing, only one person spoke. Thomas Partridge introduced himself as a recent candidate for 18th District state senate seat and as an advocate for senior citizens and public employees.

Partridge said he took exception to the mayor’s continuing to abrogate freedom of speech by making the equivalent of “shots across the bow” – it’d been done repeatedly, Partridge said, and he thought it was abhorrent. He said he opposed the passage of the ordinance because he didn’t think the council and the community had considered implications of going back on past promises. The council should think long and hard, he said, and postpone taking a vote. They should find a way to fully support the funding of pensions.

Outcome: The council voted unanimously, without discussion, to approve the revision to the retirement ordinance.

Land Sale to AATA

On Monday’s agenda was a resolution to authorize the sale of a six-foot-wide strip of city-owned downtown land to the Ann Arbor Transportation Authority. The strip forms the southwestern border of one of the parcels where the AATA’s Blake Transit Center is located. The $90,000 sale price of the 792-square-feet of land was determined to be the fair market value by an independent appraisal.

Land Sale to AATA: Background

The desire of the AATA to acquire the six-foot strip has been mentioned at several AATA board meetings during routine updates. It’s part of the AATA’s plan to reconstruct the BTC on the South Fifth Avenue side of the block; the BTC currently stands on the South Fourth Avenue side, with a canopy that stretches towards Fifth. The AATA hopes to finalize the design of the new transit center by the end of December 2011, with construction to start in early 2012.

Although she was an alternate speaker for public commentary reserved time at the start of the council meeting (there’s a limit of 10 speakers), Rita Mitchell did not have an opportunity to speak at that time. At The Chronicle’s request, she forwarded her prepared remarks. [.pdf of Mitchell's prepared remarks]

In Mitchell’s remarks, she acknowledges the fair market value approach used to establish the price of the land sale to AATA, but then asks:

Why not use the same approach for Fuller Road Park? Show us, the public, the business plan for the parking structure project that addresses the risks, costs and potential benefits of the project. Get an updated appraisal of the land, and propose its sale to the University, followed by the public vote on sale of park land that is required by our city charter.

Mitchell was referring to the site where the proposed Fuller Road Station – a joint city of Ann Arbor/UM parking structure, bus depot and possible train station – is planned.

Land Sale to AATA: Council Deliberations

Sabra Briere (Ward 1) asked what the impact would be for the future of the former YMCA (now city-owned) lot at Fifth and William, of which the strip of land was a part. The city’s chief financial officer, Tom Crawford, offered that he was not the most knowledgable person on that issue, but that the site to the south of the strip (the former Y lot) is maintained as buildable, with the zoning that’s currently on it. Wendy Rampson, head of planning for the city, indicated that the allowable floor-area-ratio (FAR) goes down a very little amount, as a result of removing that strip of land. But from a configuration standpoint, she said, it shouldn’t have an impact.

Stephen Kunselman (Ward 3) asked Crawford if the real estate appraisal was based on taking a proportional fraction of the $3.5 million the city had paid for the land, on which it is still making interest-only payments. Crawford stated that the city did not get an appraisal of the larger parcel in connection with the strip of land. Kunselman noted that the $90,000 proceeds are stipulated to go into the general fund, not to make payments on the interest for the property. Crawford noted that the council could direct finance staff to use the proceeds towards the interest payment, but that the interest payment has already been budgeted.

Mayor John Hieftje called the deal a good example of intergovernmental cooperation.

Outcome: The council voted unanimously to approve the sale of the land to the AATA.

Rezoning for Medical Marijuana

The council was asked to consider a resolution to rezone a property on State Street, so that it could be used as a medical marijuana dispensary.

Rezoning for Med Marijuana: Background

The owner of Treecity Health Collective, a dispensary at 1712 S. State, had requested that the city planning commission recommend the location be rezoned from O (office) to C1 (local business). The owner had also asked that the area plan requirement for that location be waived.

However, at their Aug. 16, 2011 meeting, planning commissioners recommended denial of the requests, based on a staff recommendation, stating that C1 zoning is not consistent with adjacent zoning, land uses and the city’s master plan.

And at their Sept. 19 meeting, councilmembers were hesitant to vote down the rezoning, and instead decided to delay their vote.

The Treecity Health Collective opened in 2010. This summer, the Ann Arbor city council approved amendments to the city’s zoning ordinances that prevent medical marijuana dispensaries from operating in office zoning districts – those changes were set to take effect on Aug. 22, 2011. Rather than relocate the dispensary, the business owner is asking for the zoning change. The property – located on the west side of State, south of Stimson – is owned by Francis Clark.

A recent court of appeals ruling has raised legal questions about the existence of dispensaries under Michigan’s Medical Marijuana Act. However, the Ann Arbor city council decided at its Sept. 6 meeting to proceed with the appointment of four out of the five members of its medical marijuana licensing board. At Monday’s meeting, council appointed the fifth member, Gene Ragland. That body was to meet for the first time on Sept. 21.

Rezoning for Medical Marijuana: Public Comment

Dori Edwards spoke in favor of rezoning the property. She described Treecity as a nonprofit medical marijuana collective. Though the land is zoned for office, she said it’s not a traditional office use. There’s a set of converted old houses along that stretch of South State – one is a palm reader, another is a masseuse. She noted that Treecity occupies the whole building, so no one else in the building can be disturbed by Treecity’s patients. She also told the council: “Our neighbors like us!”

Edwards noted that the planning commission had expressed concerns about “spot zoning” at its Aug. 16 meeting. But she reminded the city council that they had the discretion to do that and in fact the city already does that in the form of planned unit developments (PUDs). A PUD requires that the project be in the public interest, she noted, but she contended that allowing Treecity to continue is in the public interest.

Rezoning for Medical Marijuana: Council Deliberations

Sabra Briere (Ward 1) led off deliberations by alluding to another parcel rezoning request that will be coming to council – for a site where Biercamp Artisan Sausage & Jerky is located, across the street from Treecity. The purpose of the rezoning might differ, but the council has the same kind of issue to contemplate, she said. Briere suggested the council should think about the effect of rezoning that stretch of State Street collectively.

Wendy Rampson, head of planning for the city, explained the planning commission’s unanimous recommendation against the rezoning request for Treecity’s parcel. The requested commercial zoning is inconsistent with the city’s master plan, Rampson explained – the site is recommended to be zoned as office. Zoning it as commercial would result in “spot zoning.”

Responding to a query from mayor John Hieftje, Rampson explained that the parcel where Biercamp is located includes an annexation request. The rezoning request won’t come to the council until it’s annexed into the city. The owners of Biercamp have requested a commercial zoning (C3), but the city planning commission has also recommended denial of that request, reported Rampson.

Hieftje asked about possible traffic issues. Rampson explained that rezoning to a more intense use allows for expansion of use. The planning commission is uncomfortable with rezoning, Rampson said, until the city moves forward with a corridor study of South State Street. [Earlier this year, plans for that study were put on hold amid concerns over its cost – even though the council had previously authorized funding for it as part of the annual budget.]

The planning commission had left the door open for expanding the commercial node at the intersection of Stimson and State, but not before revising the master plan after a study of the whole corridor. Responding to a query from Hieftje, Rampson explained that the light industrial zoning the Biercamp parcel will inherit from Ann Arbor Township would allow the sale of products produced on that site.

Tony Derezinski (Ward 2), who is the city council’s representative to the planning commission, noted that Rampson had underscored the fact that the corridor study was a factor. The challenges of the study would be exacerbated by having a big box store across the border, he said. [Derezinski was alluding to the planned construction of a Costco at the intersection of State and Ellsworth, in Pittsfield Township.] A similar issue with State Street had been confronted by a committee charged with the task of reevaluating the areas of the city zoned as R4C – the area has outgrown the zoning, Derezinski contended. We need a comprehensive look at the corridor, Derezinski said.

Stephen Kunselman (Ward 3) asked Rampson if “conditional rezoning” had been considered. Rampson said that in the early part of the process that came up as an option, but the request needs to come from the applicant – which they’d opted not to pursue. Asked why the applicant had not considered conditional rezoning, Rampson indicated that staff did not know. Also in response to Kunselman, Rampson said it would be possible to consider that as an option, but that the planning commission would need to review it, and see if the restrictions imposed as conditions would satisfy concerns about spot zoning, traffic, and use.

Sandi Smith (Ward 1) asked what the implications are for “spot zoning,” given that such a rezoning would not change the current use that Treecity has for the property. Rampson responded by saying that the current use, as a medical marijuana business, was not authorized, so that’s not a measuring stick that can be used. Spot zoning, Rampson explained, is when a single parcel is not zoned as other surrounding similar properties. Responding to a query from Smith, Rampson said she felt like spot zoning the parcel could set a precedent citywide.

Outcome: The council voted unanimously to postpone the decision on rezoning the 1712 S. State parcel.

Nominations/Appointments: Medical Marijuana

Ordinarily, nominations and appointments to boards and commissions are a two-step process, with nominations coming from the mayor at one meeting and confirmation at a subsequent council meeting.

In the case of the fifth member appointed to the medical marijuana licensing board, a physician, the mayor asked the council to make the appointment of Gene Ragland in a one-step process so the entire board could be seated for its meeting later in the week. The four other members had been previously appointed.

Outcome: Gene Ragland was unanimously approved as the fifth member to the medical marijuana licensing board.

Systematic Annexations from Townships to City

A resolution on the agenda directed the city staff to begin taking a strategic but systematic approach to annexing the 580 township islands from Ann Arbor, Pittsfield and Scio townships into the city of Ann Arbor.

Staff would begin with the annexation of properties owned by utility companies and publicly owned lands within the ultimate boundary area of the city. After that, the next priority for annexation are clusters of township islands. [.pdf of staff recommended analysis and strategy]

The council’s resolution calls for a report back to the council in January 2013 on progress with the annexation work.

The only person to speak at a public hearing on the issue was Thomas Partridge, who told the council he’d moved to the Ann Arbor area in the early 1990s. He said he didn’t think it’s in the interest of neighboring townships to give up valuable land using “ancient, unjust annexation laws” that should have long ago been replaced. He called it a part of the “bullying mindset” that is all-too prevalent in the state of Michigan. He said he’d not heard one word justifying the annexation action. He said the council had also not heard from the townships. If annexation happens, it should be done through the merging of local units into one regional government, he said.

During the communications time immediately following the public hearings, Sabra Briere (Ward 1) noted that the council had just heard Partridge discuss annexation of clusters – some of which have houses on them. She said that she could not speak to the concerns of each township supervisor. However, she reported that she had spoken to Ann Arbor Township’s supervisor [Michael Moran]. She was told they’d been prepared for years for these annexations and had based their budgets on that expectation. So it doesn’t cause a significant hardship, she concluded. Briere allowed that she couldn’t say that the same opinion is held by all township supervisors, because she had not met with them all.

When the item came up, mayor John Hieftje echoed the sentiment that Briere had previously expressed, saying the annexations have been planned for a decade. He described the townships as happy, because they don’t have to provide services across the boundary into Ann Arbor.

Outcome: The council voted unanimously to give staff direction to begin systematic annexation of township islands within the city.

Dexter Avenue Special Sidewalk Assessment

Before the council was a resolution to start the process for a special assessment on property owners along a stretch of Dexter Avenue, in order provide the required 20% local funding component for sidewalk, curb and gutter improvements. The other 80% of the project would be paid with federal funds.

There are several gaps in the sidewalks along that stretch [photo]. An administrative hearing for residents is planned for Oct. 3.

This first step by the council essentially directs the city administrator to prepare plans and provide an estimate of the cost. The project is part of the city’s capital improvement plan (CIP). A neighborhood meeting was held on the topic in June 2011.

Next steps, with their expected timing, include: Sept. 20 – mail administrative hearing invitation to residents; Oct. 3 – administrative hearing with residents; Nov. 10 – council approval of resolutions specifying costs to property owners, and a public hearing date; Dec. 5 – public hearing and a council vote on the special assessment.

During deliberations, Sabra Briere (Ward 1) noted that the resolution is a good reminder that special assessments are how the city builds new sidewalks – it’s not done that often. She observed it’s not paid for with millage dollars that could be approved in November. The sidewalk repair millage dollars would be restricted to existing sidewalks. Dealing with gaps in the sidewalk are a challenge, she said, and a property assessment is a good solution.

Carsten Hohnke (Ward 5) noted that this work is in preparation of the reconstruction of Dexter Avenue between Maple and Huron.

Stephen Kunselman (Ward 3), noting the portion of the project to be paid by the Michigan Dept. of Transportation, observed that a lot of the city’s sidewalk gaps are in neighborhoods. He wanted to know if those gaps were eligible for such MDOT funding. The answer Kunselman got from Homayoon Pirooz, head of project management for the city, was basically no.

Mike Anglin (Ward 5) reported that there’d been good turnout at the meetings with the community on this project in the spring, and those meetings went well. He said it might be a hard pill for people to swallow, but 80% of the cost is being picked up, which would be a “salve for their pocketbooks.”

Outcome: The council voted unanimously to start the process for the Dexter Avenue special assessment.

Tax Abatements: Picometrix, Arbor Networks

On the agenda were resolutions to approve one tax abatement and to set a public hearing for another.

The resolution on a tax abatement was for Picometrix LLC, located at 2925 Boardwalk in Ann Arbor. Picometrix is a supplier of high-speed optical receivers.

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

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

The industrial development district in which the Picometrix tax abatement is sought was established in 2006. The public hearing on the request from Picometrix was held at the council’s July 18 meeting. Only one person spoke at the hearing.

Also at its Sept. 19 meeting, a separate resolution set a hearing for a tax abatement for Arbor Networks. That hearing will take place at the city council’s meeting on Oct. 17, 2011. Arbor Networks is a computer network security company. The abatement would be on $883,527 in real property and $7,790,454 in personal property. Under the requested abatement, the tax bill on the additional real and personal property for Arbor Networks would be reduced by about $84,700 annually for five years. The new building improvements and personal property investments are estimated to generate about $107,800 in property taxes for each year during the five-year abatement period.

During the brief deliberations, Stephen Kunsleman (Ward 3) wanted to know how previous abatements had worked out with Picometrix. The city’s CFO, Tom Crawford, told Kunselman it had worked out well – they’ve met their requirements. Kunselman noted he’d had a tour of the facility and said it’s very impressive.

Outcome: On separate votes, the council unanimously approved the Picometrix tax abatement and the setting of a public hearing on Arbor Network’s abatement request.

Property Assessed Clean Energy (PACE) Program

The council considered a resolution to formally express its intent to establish an Energy Financing District and a Property Assessed Clean Energy program (PACE). The resolution also included setting a public hearing for the council’s first meeting next month, on Oct. 3, 2011.

The resolution of intent refers to a report, which describes in detail the project and property eligibility for PACE, as well as project size, application process, and financing, among other elements.

At its March 7, 2011 meeting, the council had voted to set up a $432,800 loan loss reserve fund to support the city’s planned PACE program. The money for the fund comes from an Energy Efficiency and Conservation Block Grant (EECBG) awarded to the city by the U.S. Department of Energy.

Through its PACE program, the city of Ann Arbor will help commercial property owners finance energy improvements through voluntary special assessments. By establishing a loan loss pool, the city can reduce interest rates for participating property owners by covering a portion of delinquent or defaulted payments. [Some previous Chronicle coverage of PACE: "Special District Might Fund Energy Program"]

After the public hearing, the city council would still need to pass a resolution establishing the program.

During deliberations, Carsten Hohnke (Ward 5) asked Matt Naud, the city’s environmental coordinator, to sketch out how the program works. Naud also brought Wendy Barrott to the podium, who is coordinating the PACE program for the city. One point that was highlighted was the fact that the state enabling legislation currently covers only commercial property, but that includes multi-family housing.

Sabra Briere (Ward 1) noted that she was already fielding questions about when property owners can apply, and she drew out the fact that on Oct. 3 after the public hearing, the council can establish the program. At that point the city can accept applications from commercial property owners who already have an energy assessment in place.

Outcome: The council voted unanimously to pass the resolution of intent to establish a PACE program.

Same-Sex Benefits

On the agenda was a resolution urging Gov. Rick Snyder not to sign House bills 4770 and 4771, which prohibit public employers from providing certain benefits to public employees and which will eliminate benefits for domestic partners of the same gender.

Steve Powers, the new city administrator, shares a laugh with Sandi Smith (Ward 1) before the Sept. 19 meeting.

The language of the resolution notes that a number of public entities provide health care benefits for domestic partners of either gender – including the state of Michigan, public universities, as well as city and county governments, and public school districts.

The resolution was sponsored by Sandi Smith (Ward 1).

Jeff Irwin – a Democrat who represents state House District 53, which includes most of Ann Arbor – voted against the bills and argued on the House floor against them: “If this becomes law, we will have two employees working side by side with the same qualifications and experience and the employee living in a traditional family will receive significantly greater compensation. That is clearly unfair and discriminatory.”

The council resolution reaffirmed Ann Arbor’s “commitment to a diverse and accepting culture.”

Smith led off the brief deliberations by saying that Ann Arbor has always been a leader in human rights. She noted that many public employers provided benefits to domestic partners. She cast it as an economic issue – it’s about attracting talent to Michigan, she said. If Michigan puts forward that it’s intolerant, Michigan will not be able to attract the best and the brightest.

Mayor John Hieftje said he appreciated Smith bringing it forward. She’d done a good job of citing the reasons, he said.

Outcome: The council voted unanimously to urge Gov. Rick Snyder not to sign the two bills affecting same-sex benefits.

Cleaning Contract

The council was asked to authorize a $580,680 cleaning contract with Kristel Cleaning Inc. for janitorial service at the city’s municipal center, Wheeler Service Center, the water treatment plant, the Ann Arbor Senior Center and various smaller locations.

The contract had been postponed from the council’s Sept. 6 meeting, when Sandi Smith (Ward 1) had raised questions about the need for a 5-day cleaning schedule for the new municipal building and city hall.

At the Sept. 6 meeting, Smith had wanted to understand what factored into the frequency of cleaning: Does it depend on the number of public visitors or the number of people who work there? What are the problems with a 3-day schedule? Alluding to the fact that the city had dropped down to a 3-day schedule from a 5-day schedule, mayor John Hieftje suggested that it would be appropriate to ask if the city is spending more for cleaning now than three years ago. Interim city administrator Tom Crawford had said “fruit flies and critters like that” were an example of some problems with the 3-day schedule.

The council did not deliberate on the resolution at its Sept. 19 meeting.

Outcome: The council voted unanimously to approve the cleaning contract.

Thank You to Interim City Administrator

The council acted on a resolution to recognize the service of the city’s CFO, Tom Crawford, who served as interim city administrator from the end of April until Sept. 15.

New city administrator Steve Powers attended his first council meeting. He’d attended a work session the previous week, though he had not officially assumed the post at that time.

Marcia Higgins (Ward 4) introduced the resolution, added late to the agenda. She said Crawford would be given a $10,000 bonus in recognition of his service. [Crawford was selected from internal candidates who applied to be interim administrator.]

In accepting the acknowledgment and the ovation he received from the council, Crawford’s comments were brief, saying that the work that gets done is done by city staff.

Outcome: The council voted unanimously to approve Crawford’s bonus.

Local Development Finance Authority (LDFA) Board Membership

On Monday’s agenda was a resolution to amend the agreement between Ann Arbor and the city of Ypsilanti so that a councilmember who serves on the local development finance authority (LDFA) board will not serve on that board past the time they are a member of the city council.

Under the change to the agreement, the city council representative to the LDFA board would cease to be a member of the LDFA immediately when that person ceases to be a member of the city council. The change addresses the fact that appointments to the LDFA board are for four years, while councilmembers are elected to just two-year terms on the council.

To take effect, the change must still be approved by the Ypsilanti city council, and then the LDFA board must change its bylaws to be consistent with the agreement.

The change was previously discussed at the council’s July 18, 2011 meeting, when Stephen Rapundalo (Ward 2) was appointed by his council colleagues to a four-year term on the LDFA. Rapundalo, a Democrat, faces a challenge in the Nov. 8 general election from Jane Lumm, who is running as an independent. Lumm has assembled a long list of endorsements from prominent Democrats and Republicans.

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

Rapundalo explained that the bylaws for LDFA board appointments, specifically with respect to councilmembers, are inconsistent with the agreement. But the agreement between Ypsilanti and Ann Arbor has to be amended first.

Marcia Higgins (Ward 4) wanted to know when the Ypsilanti city council was meeting to decide the issue. At their Oct. 4 meeting, Rapundalo said.

Outcome: The council voted unanimously to approve the change in the Ypsilanti-Ann Arbor LDFA agreement.

Leaf Trucks

In his first communication as city administrator, delivered earlier in the meeting, Steve Powers had ticked through the various options available to residents for leaf pickup – carts, bags, or mulching in place.

Steve Powers, Ann Arbor city administrator.

The council was asked to consider a resolution to rent eight rear-load trucks for $138,000 for use in connection with fall leaf collection.

Sue McCormick, public services area administrator, answered some questions from councilmembers about the truck rental.

Sabra Briere (Ward 1) noted that the city no longer picks up leaves by asking people to rake them into the street, and instead requires residents to use carts or bags. McCormick allowed that Briere was right – the trucks to be rented simply supplement the city’s regular trucks, and reduce the number of times that trucks would need to be emptied as they cover their routes. They supplement the fleet, she explained.

In response to a query form Sandi Smith (Ward 1), McCormick said that when the city budgeted for 2011, it expected to save $104,000 by moving to containerized leaf collection. In fact, there’d been a $200,000 reduction. She cautioned that the figure was unaudited. For the 2012 fiscal year, the city is estimating $150,000 in savings, she said. There would be a slight increase in truck rental costs, she said, but it’s still expected to be more efficient than bulk leaf collection.

Communications and Comment

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

Comm/Comm: City Council Liaison to Housing Commission

During council communications at the conclusion of the meeting, Stephen Kunselman (Ward 3) elicited from mayor John Hieftje that Hieftje had decided not to accept Kunselman’s offer, made at the council’s Sept. 6 meeting, to serve as the city council’s liaison to the Ann Arbor Housing Commission.

The post of council liaison to the commission became vacant when it was announced at the council’s Aug. 4 meeting that Tony Derezinski (Ward 2) had volunteered to replace Jeff Meyers on the city’s public art commission, if some other councilmember could be found to replace Derezinski as housing commission liaison.

Hieftje announced at the Sept. 19 meeting that two councilmembers had volunteered to be the housing commission liaison: Kunselman and Margie Teall (Ward 4). Hieftje said he’d be bringing forward Teall’s name as the nomination at the council’s next meeting.

Were Kunselman appointed as council liaison to the housing commission board, he would have been working closely with a body that now includes Leigh Greden, whom Kunselman defeated in the 2009 Ward 3 Democratic Party primary election. Teall was one of Greden’s strongest allies on the council during the time that he served.

Comm/Comm: Welcome to New Administrator

Mayor John Hieftje welcomed new administrator Steve Powers to his first council meeting.

Powers thanked the council for its confidence in him. He said he was excited to be living in Ann Arbor. He was eager to join the team and to move the community forward.

Comm/Comm: Video Surveillance Ordinance

Sandi Smith (Ward 1) has told her colleagues at previous meetings that she expected a video surveillance ordinance to be brought forward soon. She told them there’d been some additional concerns about homeland security issues that had delayed it. She thought it would be ready for the council’s next meeting and the text would be available well before the next meeting.

Comm/Comm: Audit Committee

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

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

Comm/Comm: A2OpenBook

At the Sept. 19 meeting, CFO Tom Crawford announced the launch of A2OpenBook, an online tool that residents can use to follow the city’s revenues and expenditures. The information on the system is refreshed daily from the city’s LOGOS financial system.

The online system allows users to look at expenses and revenues by service area, by fund and by expense type. The information is downloadable in MS Excel format so that users can search for and manipulate data as desired. Information is available for expenses beginning July 1, 2010 – data is updated daily.

There’s a possibility that data for P-Cards – the city’s purchasing cards – might be added in a second phase of the project.

A similar system – called OpenBook – was launched a year ago by Washtenaw County government.

Comm/Comm: Public Speaking Time

Michael Benson introduced himself as a Ward 2 resident. He noted that councilmembers might also recognize him as president of the University of Michigan graduate student body, but he said that’s not why he was there.

Benson led off by thanking councilmembers for their service. He pointed out that the council would soon be reviewing its rules. [This is a regular activity each November after the new edition of the city council is elected.] With respect to public speaking turns, he asked that the council enforce the current rules. Specifically, in selecting speakers for the 10 slots available at the start of a meeting, people who are speaking on agenda items are supposed to be given priority over those who are not speaking directly to some agenda item.

Benson also asked the council to consider looking at the topic of diversity. The whole point of Michigan’s Open Meetings Act is to let people participate, he said. Benson also noted that some people speak on similar issues over and over again – it might be useful to give preference to people who have not spoken at an immediately preceding meeting.

Comm/Comm: Sidewalks, Line-of-Sight

Kathy Griswold began by thanking the city for its cooperation with the Kiwanis Club – the council had agreed at its Sept. 6 meeting to lease part of the building at 415 W. Washington to Kiwanis for its warehouse sale.

Alluding to the Dexter Avenue sidewalk assessment the council had voted on, Griswold noted that for a section of sidewalk near King Elementary that would need to be installed to allow moving a crosswalk to a four-way stop intersection, neighbors had been willing to pay for it. She pointed to an ongoing $5,400 expense for a crossing guard that could be eliminated if the crosswalk were moved.

Griswold pointed to a problematic area located off Stone School road where branches are obscuring sight lines. On Sept. 9, a woman pulled out and was hit by someone travelling southbound, Griwold reported. She said she sent photos to the police chief. We shouldn’t have to wait for an accident, she said. There needs to be adequate site distance.

Comm/Comm: Recall Snyder

Thomas Partridge introduced himself as an advocate for people who can’t attend the meetings. He called on people to support the recall of Gov. Rick Snyder and other Republican members of the legislature. He called on everyone to protect the most vulnerable citizens – ethical access to law enforcement and affordable transportation, housing and education and health care. Things are going downhill under Gov. Snyder, and under the Republican-dominated U.S. Congress, he contended. He asked people to re-examine their political viewpoints and to unite everyone under a new governor.

Later, during public comment time at the end of the meeting, Partridge reiterated complaints he’s made before the Ann Arbor Transportation Authority board about quality of service provided by AATA. Responses from the AATA are too often surly and resentful, he said.

Comm/Comm: Energy Farms

Kermit Schlansker called for a variety of approaches to deal with the diminishing resources caused by increased affluence. He told the council that solutions needed to be found for feeding and housing the poor. He described a wide range of initiatives, including the planting of nut trees in city parks and digging cisterns. He called for the creation of energy farms that would include biomass digesters, solar and wind energy generation.

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

Next council meeting: Oct. 3, 2011 at 7 p.m. in the council chambers at 301 E. Huron. [confirm date]

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Stephen Rapundalo (Ward 2) sets up his presentation on the Local Development Finance Authority (LDFA) before the start of the April 12 council budget meeting. Rapundalo sits on the LDFA board as the Ann Arbor city council's representative, and currently chairs the board.

At the April 12 budget meeting, the council heard presentations on two related entities: the Local Development Finance Authority (LDFA) and Ann Arbor SPARK. The LDFA contracts with Ann Arbor SPARK for various business development services.

The two key themes that emerged from the LDFA presentation were consistent with the overall topic of the city’s budget: (i) Where does the LDFA get its money? and (ii) What does the LDFA spend its money on?

Part of the LDFA’s revenue goes towards economic development activities – a business accelerator – for which it contracts with Ann Arbor SPARK. The presentation to the council from SPARK’s CEO, Michael Finney, was followed by testimonials of companies who said they had benefited from SPARK’s efforts.

Development activities are just one kind of investment that the LDFA could make under its TIF (tax-increment financing) plan. It could also make investments in physical infrastructure. During question time, Sandi Smith (Ward 1) drew out from Stephen Rapundalo (Ward 2) the possibility that the LDFA could contemplate an investment in a fiber-optic network. Rapundalo, who serves on the LDFA board, indicated that such an LDFA investment might be possible, even if Google does not select Ann Arbor as a test community for its current fiber-optic initiative.

The council also heard from the economic development community about how the name “Ann Arbor” is perceived in the rest of the world.

The part of the council’s meeting dedicated to deliberations on its own budget was comparatively brief. Councilmembers were keen to portray in a positive light a couple of different issues, among them a potential increase in the city’s debt load resulting from a failure to complete a $3 million sale of property at First & Washington, as well as proposed increases in water rates.

Local Development Finance Authority (LDFA)

The presentation to councilmembers on the LDFA was made by their colleague, Stephen Rapundalo (Ward 2), who sits on the LDFA board in the slot designated for a city councilmember, and currently chairs the body.

A point of emphasis for Rapundalo – to counter what he characterized as “misinformation” – was to make clear that there are some taxes not captured by the LDFA.

The two kinds of taxes identified by Rapundalo and displayed on the slide in his presentation as not captured by the LDFA are Ann Arbor Public Schools debt service and the enhancement millage. Ann Arbor’s public schools “remain whole,” Rapundalo said, due to the way property taxes are redistributed by the state.

LDFA: Where the Money Comes From – Capture

By way of more detailed background, it’s worth considering what’s meant by “capturing taxes.”

The LDFA is funded through tax-increment financing (TIF) in a manner similar to the way the Ann Arbor Downtown Development Authority is supported. A TIF district allows authorities like the LDFA and the DDA to “capture” some of the property taxes that are levied by other municipal entities in the district.

There’s a contrast, then, between property taxes that are “levied” by a municipal entity that has the right to collect (i.e., levy) them, and taxes that are “captured” by an authority like the LDFA or the DDA.

The notion of “capture” conveys at least two ideas. First, a TIF authority does not itself levy taxes – the legal right for the collection of taxes stems from some other municipal entity, like the city of Ann Arbor, or Washtenaw County or the Ann Arbor Public Schools (AAPS). This is sometimes one of their selling points: Creation of a TIF district does not contemplate creation of new taxes or raising taxes.

Second, if a particular TIF authority did not exist, the taxes it captures would be collected anyway, and those monies would have some other “destiny.” In most cases, that destiny would be direct use by the municipal entity that levied the tax. By way of a concrete example, one of the kinds of taxes captured by the DDA is the city of Ann Arbor’s general operating millage. If the DDA did not exist, then the portion of city of Ann Arbor taxes currently captured by the DDA would go to the city’s general fund.

In the case of the LDFA, the story of an alternative destiny for some of its captured taxes has an extra wrinkle. That’s a wrinkle involving capture on the increment for the AAPS general operating millage. If the LDFA did not exist, then the taxes collected on behalf of the AAPS for its general operating millage would not be used directly by AAPS, but rather would go to the state’s School Aid Fund, for redistribution among school districts statewide based on a per-pupil formula as determined on a specified “count day.” This is what underlies Rapundalo’s explanation that local schools would “remain whole.” [Previous Chronicle coverage with a primer on how public schools are funding in Michigan: "Does It Take a Millage?"]

The TIF plan for the LDFA discusses the potential impact to local school funding as follows:

Based on current state law, this Plan shall have no direct impact upon the local school districts, as it has no direct impact upon the per pupil reimbursement from the State to the public schools. The impact to the State School Aid Fund will be approximately $24,000,000 over the 15 years of the LDFA plan. This translates to approximately $1,600,000 annually, or $0.79/student statewide.

The state of Michigan’s School Aid Fund is administered in a way such that some districts get back more from the state than their millages contribute to the fund, while others get back less. Those that get back less – like AAPS – are known as “donor districts.”

The Ann Arbor school district’s status as a donor to the School Aid Fund is sometimes heard in defense of any possible negative impact on statewide school funding potentially caused by the LDFA’s tax capture. That is, the LDFA can be seen as a mechanism by which the Ann Arbor area recoups millage dollars that are lost to other areas of the state due to its “donor” status in the School Aid Fund. This recouping, of course, does not recover millage dollars for the direct benefit of the public schools.

The specific taxes that are captured by a TIF authority are spelled out as part of the set of formative documents for such an authority. For the Ann Arbor DDA, the relevant taxes that are captured are spelled out as follows [emphasis added]:

Per Public Act 197 (1975), as amended, the Ann Arbor Downtown Development Authority collects the tax revenues levied by the City of Ann Arbor, Washtenaw County, the Ann Arbor Transportation Authority (AATA), Washtenaw Community College, and the Ann Arbor District Library on the initial taxable value of all new real and personal property within the DDA District.

Prior to 1994, the DDA also captured Ann Arbor Public Schools taxes and the Washtenaw Intermediate School District taxes.

For the LDFA, the taxes to be captured are spelled out as follows [emphasis added]:

Under this Plan, tax increment revenues subject to capture by the LDFA shall include, to the maximum extent permitted by Act 281 of 1986, as amended, the following: Ann Arbor portion of the district – 50% of operating millage of local school districts and 50% of the State Education Tax levied upon the Captured Property. Ypsilanti: no revenue shall be captured at the present time. The LDFA shall not capture tax revenues attributable to the levies of any other taxing jurisdiction.

The specific geography of the LDFA district mentioned here – the union of the geographic areas specified in the respective DDAs of Ann Arbor and Ypsilanti – is one of two ways that the amount of taxes to be captured by a TIF authority is limited: geography and increment.

LDFA: How Much Gets Captured – Putting the “I” in TIF

If a TIF authority captured all of the property taxes levied by a municipal entity everywhere those taxes are collected, then there would be no tax revenue to the municipal entity. That is not how TIF authorities are set up. The first limitation is geographical – the specific area in which the Ann Arbor DDA can capture taxes, for example, corresponds to an area generally described as downtown Ann Arbor.

The area in which the DDA can capture any portion of property taxes levied by a municipal authority is defined to be property inside the red line. (Image links to a .kmz file in the city of Ann Arbor's Data Catalog, which can be opened in Google Earth.)

The second limitation is how much of the tax levy is captured in a defined TIF district. The “increment” in “tax increment financing” is the difference between some baseline of taxable value for properties in the district, compared to increases in the taxable value.

In the case of the DDA, the increment is defined to be the difference between the value of new construction and the previous value of the property. Any subsequent increases in the taxable value of the property as a result of market forces is not included in the increment on which the DDA captures taxes. This is sometimes called a “one-time increment.”

For the LDFA, the increment is defined as follows:

Beginning in 2003, the LDFA will capture ad valorem and specific tax levies on all new and incremental growth from the initial assessed value of Captured Property determined on the basis of assessments as of December 31, 2001. The initial taxable value of the LDFA District is $261,776,313. The LDFA will capture tax dollars for fifteen (15) years, commencing with levies imposed in 2003 through the levies imposed in 2018.

As reflected in the section of the LDFA TIF plan previously cited, it is not the entire amount of the increment that is used to define tax capture for the LDFA, but only 50% of it.

LDFA: How Much Is That in Dollars?

In his presentation, Rapundalo presented the actual dollars captured to date by the Ann Arbor LDFA:

2004  $   68,578
2005     199,699
2006     333,524
2007     526,624
2008     727,999
2009   1,101,408
2010   1,234,626

-

Based on projections presented by Rapundalo, the captured taxes will steadily increase to around $1.8 million in 2018, when the life of the LDFA currently ends. Summing over the entire 15-year life of the district from Rapundalo’s slide, current projections suggest that the district would capture about $16 million total. That is less than what was originally forecast – before the economic downturn of 2008 – in the formative documents for the district, which estimated that $24 million would be captured over the course of 15 years.

The total amount of taxes captured over the life of the district plays a role if the amount proves to be higher than what was originally estimated. From the LDFA TIF plan [emphasis added]:

Tax Increment Revenues in excess of the estimates set forth in this Plan, or in excess of the actual costs of this Amended Plan to be paid from Tax Increment Revenues will be considered surplus under Act 281. Unless retained to further implementation of the Development Plan set forth in Section III pursuant to a resolution of the Authority, surplus tax increment revenues must revert proportionately to the respective taxing jurisdictions from which collected.

LDFA: How the Money Is Spent: Activities, Infrastructure

The kinds of activities supported under the LDFA’s contract with Ann Arbor SPARK, Rapundalo explained, are centered around the business acceleration, incubator services, entrepreneurial education, and networking among businesses and entrepreneurs.

A business accelerator provides resources to help nascent start-up companies clear the hurdles to becoming a mature company with a saleable product, which in turn could lead to the creation of jobs and increased employment in the area.

The business acceleration services are conceived in terms of phases: Phase I, Phase II, Phase III.  In Phase I, initial contact is made with people who have a business/technology proposition and the idea is screened for programmatic fit, reviewed by advisers and consultants, and vetted for advancement to Phase II. That’s a step that entails an in-depth evaluation of a prospective client to determine capability of business for consulting help in Phase III.

That final phase reflects substantial involvement on the part of SPARK to get a company past start-up phase to a point where the company can attract venture capital investment. In Phase III, strategic issues are addressed, including the development of a business plan, schedule and budget.

Among the questions posed by councilmembers was one from Margie Teall (Ward 4), which focused on the notion of “virtual tenants” for SPARK’s incubator facility. Rapundalo deferred the question to Skip Simms, who is SPARK’s managing director for entrepreneurial business development. Simms explained that virtual tenants had access to internet service, a physical address where they could take a mail drop, and use of conference rooms.

Teall asked if a company needed an Ann Arbor address to become a virtual tenant of the incubator. Simms clarified that a company’s status as virtual tenant was a mechanism by which a company could claim an Ann Arbor address – that of the incubator on East Liberty Street. The question of a company’s address is important, because an Ann Arbor address is required for eligibility for LDFA services.

LDFA: Measurement of Success – Activities vs. Outcomes

In Rapundalo’s presentation, he noted the challenge inherent in evaluating success of the LDFA’s activities. During question time, Sandi Smith (Ward 1) asked Rapundalo about effectiveness. He noted that one kind of comparative metric they looked to was other LDFAs created under Michigan’s SmartZone legislation – what are best practices among other similar such districts? One of the priorities that came out of the board’s 2009 retreat, said Rapundalo, was a focus on an analysis of effectiveness. [Chronicle coverage of that retreat: "Expanded LDFA Board Reflects on Purpose"]

One of the statistics that’s tracked is activity related to the various business acceleration services, measured by the number of companies that used various services: Phase I services (218);  Phase II services (91); Phase III services (61); entrepreneurial boot camp (28); and incubator (34). Those activities were, in aggregate, associated with 106 new jobs, according to Rapundalo’s slide. Balanced against that were five companies that left the LDFA service area, resulting in 11 jobs lost.

One of the difficulties, Rapundalo acknowledged, was that they were dealing with very young companies and that there was a certain volatility associated with that.

Sabra Briere (Ward 1), looking at the 106 new jobs, noted that some would say it’s not enough, but some would say it’s really good. “What is the measure of success?” Briere wanted to know. Rapundalo allowed that this was exactly the crux of the matter.

The LDFA TIF plan does make an estimate of the number of jobs that could be created through the LDFA investment over the 15-year life of the district: 700. From the TIF plan:

The estimation of jobs in the high technology sector and under the program outlined by this Plan is a speculative venture contingent upon many factors outside the control of the LDFA. However, the writers of this plan estimate that 700 jobs may be created as a direct and indirect result of these activities. This estimate is based upon the following assumptions: A survey conducted in 1998 by the Washtenaw Development Council and the Ann Arbor Software Council determined that the average technology company in the area employed 57 individuals after approximately 10 years of operation. Based on the establishment and/or location of two new businesses each year within either the Ann Arbor or Ypsilanti portions of the SmartZone, this would result in the creation of just over 700 jobs during the 15-year life of the LDFA.

Following Rapundalo’s remarks, the city’s CEO, Tom Crawford – who sits on the LDFA board as an ex officio member – added that “we’re creating the environment that nurtures the growth.” The idea, said Crawford, is that one of these companies will “take off.” Pressed by Briere for any examples of a company that has “taken off,” the example of Xoran Technologies was offered.

Rapundalo echoed Crawford’s sentiments, saying that the business acceleration was about “hand holding” and helping companies learn how to walk. There’s high risk of failure, he allowed, but this was balanced against the potential for high return.

The LDFA, said Rapundalo, as an oversight body, needed to make sure that tax dollars were translated into “something meaningful.”

LDFA: Infrastructure Investments – Fiber Optics

In the course of his remarks, Rapundalo mentioned that the LDFA had offered $250,000 in support of Ann Arbor’s response to the Google Fiber initiative: The firm’s request for information (RFI) from communities interested in having Google install a fiber-to-the-home network. Sandi Smith (Ward 1) asked Rapundalo if the LDFA would consider making an investment in a fiber-optic network, even if Google did not choose Ann Arbor as a test community. Rapundalo did not rule out such a possibility, saying that the LDFA had talked a bit about the topic in a broader sense.

Smith was in some sense echoing sentiments the city council had heard before on the need for a fiber-optic network, even if Google did not fund one for Ann Arbor. During the public hearing on the city’s Google Fiber initiative, held on March 15, 2010, Wes Vivian urged the city council to think about how they would achieve a fiber-optic network, if Google did not choose Ann Arbor. [From Chronicle coverage: "Mixed Bag: Phones, Fiber, Fire"]:

Wes Vivian introduced himself as a decades-long telecommunications consultant, and told the council that for the last 15-20 years it’s been clear that either the telephone companies will migrate to fiber-optic networks or face domination by cable television companies. That process has begun, he said – AT&T has installed fiber in many communities.

If Google “coughs up the money” that’s great, Vivian said, but we need to find a way to implement this anyway – even if Google decides not select Ann Arbor as a test site. Fiber, he said, was part of the necessary infrastructure of a city – like a street. It wasn’t necessary to provide a system, he said, but just a hole in the ground or a hole in the air.

The idea of using LDFA funds as infrastructure investments – specifically the kind of high-speed telecommunications infrastructure represented by fiber-optic networks – is made explicit in the LDFA’s formative documents. From the TIF plan [emphasis added]:

The LDFA District is fully developed with roads, sidewalks, lighting and subsurface utilities. The infrastructure is publicly financed and maintained. The Development Plan does not anticipate large-scale improvements to or expansions of this infrastructure. In the event sufficient revenues become available through this plan, investment may be made to facilitate the expansion of high-speed telecommunications infrastructure throughout the District. Alternatively, the LDFA may become a grant recipient for financing designed to encourage this investment.

At the March 2010 meeting of the Ann Arbor Downtown Development Authority board – on which Smith also sits, in addition to serving on the city council – Smith had drawn out the fact that when underground work on streets is undertaken by the DDA, conduit is installed to accept potential installation of various telecommunications.

Ann Arbor SPARK

Ann Arbor SPARK CEO Michael Finney gave a presentation that addressed some of the same issues that Stephen Rapundalo had touched on.

SPARK: Metrics for Success, Job Retention, ProQuest

Among the issues covered by Finney was the challenge in evaluating success – not only in choosing appropriate metrics, but in taking the measurements in a reasonable way. He noted that in calculating the number of “jobs retained,” the idea was to count only those jobs that were actually at risk of leaving. In the city of Ann Arbor for 2009, for example, Finney indicated that 450 jobs had been retained through the activities of SPARK.

SPARK’s activities related to job retention include talent recruitment for companies that are looking to expand. Finney gave ForeSee Results as an example of a company that recently indicated they were looking to hire 10 additional staff. If a company that is looking to grow cannot recruit the staff in the Ann Arbor area that it needs for that growth, there’s a risk that the company could try to achieve that growth in a different region of the county.

Finney had invited representatives of a few companies to speak on behalf of the positive effect of SPARK’s efforts. Among them was Elliott Forsyth, senior vice president of human resources and business services for ProQuest. He explained that in 2006 ProQuest had been financially stressed and that Cambridge Information Group had acquired the company, expressing some interest in moving operations elsewhere.

Forsyth credited SPARK’s efforts at coordinating support from the Michigan Economic Development Corp. and the city of Ann Arbor to encourage ProQuest to stay. The support from the city of Ann Arbor to which Forsyth alluded came in the form of a tax abatement approved at the city council’s March 3, 2008 meeting:

Resolution to Approve Industrial Facilities Exemption Certificate Between the City of Ann Arbor and Proquest LLC. A motion was made by Councilmember Rapundalo, seconded by Councilmember Greden, that the Resolution be approved. On a voice vote, the Mayor declared the motion carried unanimously. Enactment No: R-08-094

In a Dec. 18, 2007 Ann Arbor News article on the $10 million Michigan Economic Growth Authority tax credits awarded to ProQuest, the value of the tax abatement granted by the city of Ann Arbor was put at around $1.2 million.

A search of online Ann Arbor News archives [registration required but free, available through the Ann Arbor District Library] shows that through the early to mid-2000s, a possible tax abatement for ProQuest had been discussed, but rejected until the 2008 approval.

One issue raised by Tony Derezinski (Ward 2) was the question of whether arrangements made to retain companies could be enforced. Finney indicated that agreements are typically contingent on jobs.

In the case of ProQuest’s tax abatement, the deal comes with the following conditions:

6. By December, 31  2009, ProQuest will add not less than Fifty (50) jobs at the facility named on the Application as compared to its number of employees as of the effective date of the Certificate. If ProQuest adds less than Fifty (50) additional Jobs by December 31, 2009, ProQuest shall have materially breached the terms of this Agreement and the City shall have the right to recommend revocation of the Certificate subject to provision 11 of this agreement to the State Tax Commission or taking other appropriate legal action in connection with the default.

7. ProQuest shall comply with all of the requirements of the City’s Living Wage Ordinance.

8. This abatement is being granted by the City in part to allow ProQuest to qualify for application of incentive tax credits by the State of Michigan. This agreement is contingent upon ProQuest receiving approval of State tax incentives within 120 days from the date the Michigan State Tax Commission issues the herein referenced abatement certificates. Failure to obtain approval of State tax incentives during this time will automatically revoke this agreement and the City shall have no further obligations to ProQuest under this Agreement.

9. ProQuest shall maintain operations within the City of Ann Arbor during the period of time for which the State tax incentives are in effect. If ProQuest relocates, whether within or outside of the State of Michigan, ProQuest shall pay to the affected taxing units an amount equal to those taxes it would have paid during the abatement term had the abatement not been in effect.

SPARK: What’s Your Elevator Speech for Ann Arbor?

Michael Finney indicated during his presentation that the name “Michigan” or “Detroit” did not generate a positive response from people he met from other regions of the country. The name “Ann Arbor,” however, had a positive association.

Sandi Smith (Ward 1) asked Finney what his “elevator speech” was for Ann Arbor. [An elevator speech is the short, condensed pitch given to someone in the time it would take to ride an elevator with that person before going separate ways.] Smith said that she’d spoken to Ken Nisbet, director the University of Michigan’s technology transfer office, and that Nisbet had given Ann Arbor’s “quality of life” as his response to the elevator speech question.

Finney’s response focused on the idea of Ann Arbor’s robust entrepreneurial ecosystem. He noted that SPARK itself is a start-up organization. Having the right ecosystem, Finney said, is the key to success. Referring to the possibility of a Google fiber network, Finney said, “we’re drooling about something like that happening.”

However, Tony Derezinski (Ward 2) focused on the idea that it’s not the city boundaries, but rather its regions that are important for the Midwest. He cited a book by Richard Longworth, “Caught in the Middle: America’s Heartland in the Age of Globalism,” as articulating that idea. Finney concurred with Derezinski that southeast Michigan is a relevant region in that sense, and that Ann Arbor could be the focus of that region, expanding outward from Washtenaw County.

City Budget

City administrator Roger Fraser kicked of the short discussion of the budget by noting that the budget would be presented formally at the council’s April 19 meeting, although the budget book has been available for a couple of weeks.

Councilmembers had a few clarificational questions on various aspects of the budget.

City Budget: Debt

Sandi Smith (Ward 1) was puzzled by a line in the budget summary that reads “Loan payment for First and Washington – $150,000,” noting that she did not think the city owed any money on the property.

Fraser allowed that Smith was correct – the city does not owe money on the property. However, the city is expecting $3 million from the sale of the property in connection with Village Green’s City Apartments project, which has site plan approval from the city, but has not moved forward yet due to lack of financing.

Fraser described the $150,000 as a contingency of sorts, borrowing some money to “tide us over” if the $3 million from the sale of that First & Washington property does not come through sometime soon. The site approval option to purchase agreement has been extended once by city council through December 2009, with a provision that the city administrator can authorize two 3-month extensions, which he has done. When the second extension runs out at the end of June 2010, the council will need to act if there is to be an additional extension.

At the council’s Monday budget meeting, the city’s CFO, Tom Crawford, indicated that he’d had recent conversations with Village Green and that they were feeling positive.

Mayor John Hieftje asked Crawford to confirm that the city was within its legal limit for debt load – the city cannot have debt in excess of 10% of the total state equalized value of property. Crawford indicated that the city was at 2.6%, and he thus felt comfortable with the city’s debt level. Crawford also cited other cities’ debt load – Grand Rapids, Lansing and Kalamazoo – as comparable. Ann Arbor’s bond rating, said Crawford, was in the top 20 in the state.

City Budget: Rates and Fees

Sabra Briere (Ward 1) requested that for the various fee changes that were included, a two-year frame of reference be provided – she was concerned that fee increases proposed this year might be coming on top of fee increases already made last year.

Mayor John Hieftje asked Sue McCormick, the city’s public services area administrator, to confirm that the city’s water rates are low compared to other communities in the state. She provided that confirmation, saying that the city’s water and sewer rates were second-lowest in the state. She allowed that the city had a separate stormwater system, whereas some municipalities had their stormwater system integrated with their sanitary sewer, which would cause Ann Arbor’s rates to appear artificially lower.

However, after factoring in stormwater charges, McCormick said, Ann Arbor’s rates were still fifth-lowest in the state – roughly $1.40 for every 1,000 gallons of water. Tecumseh, she said, was an example of a muncipality that had lower rates – $1.25.

Left to right: Stephen Kunselman (Ward 3), Sabra Briere (Ward 1) and Stephen Rapundalo (Ward 2) getting ceremonially sworn in at the start of council's Nov. 16, 2009 meeting. Standing to the left out of frame are Marcia Higgins (Ward 4) and Mike Anglin (Ward 5). (Photo by the writer.)

But it would have been a long meeting even without the downtown planning content, which we’ve summarized in a separate report: “Downtown Planning Process Forges Ahead.”

Before postponing the acceptance of the Huron River and Impoundment Management Plan (HRIMP), the council got a detailed update on how things stand on the city’s dispute with the Michigan Department of Environmental Quality (MDEQ) over Argo Dam.

An agenda item authorizing capital improvements in West Park prompted a lengthy discussion of how the Percent for Art program works.

Some public commentary calling abstractly for greater support for inventors and entrepreneurs was followed later in the meeting by an appropriation from the city’s LDFA to Ann Arbor SPARK to fund more business acceleration services.

A consent agenda item on the purchase of parking meters was pulled out and postponed.

The council also heard a detailed report from the city administrator, which covered emergency response time to a recent house fire, ADA-compliant sidewalk ramps, responses to the library lot Request for Proposals, updates on the task forces for Mack Pool and Ann Arbor’s senior center, staff reductions in planning and development, the East Stadium bridges, as well as the upcoming budget retreat on Dec. 5.

Stephen Kunselman’s (Ward 3) use of attachments to the agenda to document questions for city staff received some critique.

Also worth noting, the five winners of recent council elections were sworn in, and Marcia Higgins (Ward 4) was elected as mayor pro tem. Those topics in more detail below.

Huron River and Impoundment Management Plan

On the council’s agenda was a resolution to accept the Huron River and Impoundment Mangement Plan (HRIMP) from the HRIMP committee, along with 30 of its 32 recommendations. The HRIMP contains two different resolutions on the disposition of the Argo Dam – one to remove it and the other to maintain it – because the committee could not reach a consensus on that question.

HRIMP Public Comment

During public commentary reserved time at the start of the council’s meeting, Russ Miller acknowledged the HRIMP committee’s hard work, but expressed some concern about the resolution the council was to consider. First there were two different drafts of the HRIMP attached to the resolution – one from April 24, 2009 and the other from Nov. 12, 2009. The more recent version, he said, contained some data that was different. Neither version, he contended, was the version that the city’s park advisory commission, environmental commission, and energy commission had voted on.

A second issue addressed by Miller was the quality of the data in the report. Miller mentioned a list of items identified by Sue McCormick, director of public services for the city, that would cost around $185,000 in order to gather data on – temperature, dissolved oxygen, sedimentation rate and flow fluctuations. Some of that data, he said, already existed at least in pilot form.

Argo Dam and Embankment Update

During communications from council, Carsten Hohnke (Ward 5) – who co-sponsored the HRIMP acceptance resolution along with Margie Teall (Ward 4) – clarified that the costs mentioned by Miller related to costs associated with the management of the dam, and were not part of the consensus recommendations in the report.

Hohnke asked McCormick to give the council a status report on the situation with Argo Dam. [See previous Chronicle coverage: "MDEQ to Ann Arbor: Close Argo Millrace" and "City, MDEQ Agree: Argo Headrace Shut" and "A2: Argo Spillway"]

McCormick ticked through Argo Dam’s recent history. On Aug. 6, 2009, the MDEQ had ordered the city to take certain actions, which included closure of the headrace and dewatering of it by Nov. 1. The order also included a requirement for the city to have evaluated its options by April 30, 2010. If the city opted to keep the Argo Dam in place, then repairs to the adjacent earthen embankment needed to be completed by Dec. 31, 2010. If the city opted to remove the dam, then its removal needed to be completed by Dec. 31, 2012.

McCormick said that calculating backward from those dates left a short time frame in which to work. To issue requests for proposals (RFPs) and to undertake additional studies, she said, would entail a 15-18 month timeline to get the studies done. She characterized the situation as a “conundrum.” That was one reason the city had challenged the order, she explained.

In response to the city’s formal challenge, the MDEQ granted a 90-day stay on all elements of its order except the one to close the headrace. The city has stopped the flow, McCormick said, but has not pumped out the remaining water.

The hope, explained McCormick, is to convince the MDEQ that the earthen embankment is, in fact, stable. Over the 90-day period of the stay, she said, there’d be a technical discussion with the MDEQ. [The city has installed monitoring devices on the earthen embankment to aid in that discussion: "Finally a Dam Decision on Argo?"] And the city hoped that they would be able to restore the flow back into the headrace as a result of that discussion, said McCormick.

Then the city would be able to go through a thorough process for evaluating the dam – a process that could take two years.

To the two-year time frame, Hohnke offered some resistance, saying that he hoped that the list of tasks to be completed could be re-examined in the interest of reducing that time frame.

HRIMP Resolution

When the resolution on accepting the HRIMP report came up for discussion, Carsten Hohnke (Ward 5) proposed an amendment – which was approved by his council colleagues with dissent from Marcia Higgins (Ward 4) – to revise the language in the resolution so that a councilmember would be appointed at the same time as the other members of the RSC.

The resolution charges with RSC with implementation of the HRIMP, as well as identification of funding sources, including the development of language for a river millage:

RESOLVED, The Ann Arbor City Council supports the establishment of a River Stewardship Committee (RSC) to provide oversight to the implementation of the Plan; …

RESOLVED, The Ann Arbor City Council directs the RSC to provide an implementation plan with funding needs and proposed funding strategies, including language for a river millage, within 6 months;

[A river millage could possibly make for a ballot with several millages if it's brought forward in November 2010, where it could join a second attempt for the WISD school millage, a county human services millage, and a county transportation millage.]

The resolution references funds in the budget for dam operations, which had prompted Stephen Kunselman (Ward 3) to ask if the resolution was a budget item requiring an 8-vote majority. The clarification that it was not such an item was based on the fact that it was a recommendation to no longer fund the dam operations from the water fund, not a decision:

RESOLVED, The Ann Arbor City Council recommends that operation and maintenance of the recreational dams (Argo and Geddes) not be funded from the Drinking Water Enterprise Fund; and

RESOLVED, The Ann Arbor City Council recommends that funds currently used for the operation and maintenance of the recreational dams from the Drinking Water Enterprise Fund be reallocated to implement the Source Water Protection Plan to protect Ann Arbor’s Drinking Water.

Higgins moved for a postponement until Dec. 7, in light of the documentation issues raised during public commentary.  Stephen Rapundalo (Ward 2) supported the postponement, saying that it was not clear whether the council was “accepting” the plan or “adopting” it.

Sabra Briere (Ward 1) also supported the postponement, saying that when they were last confronted with the issue, the council had focused exclusively on the dam-in/dam-out question and may not have given the other 30 recommendations attention.

Hohnke then sought to be recognized to speak again, but was not seen by Mayor John Hieftje. Hieftje asked for the vote, which was taken, with the council approving the postponement. As the vote was taken, Hieftje then noticed Hohnke’s frustration, thus went back to Hohnke for further deliberations on the postponement.

Hohnke said he did not understand the concerns about “accepting” versus “adopting.” He noted that the HRIMP report has “been out there for a long time.” He encouraged his colleagues who had any questions to raise them with the city staff.

As Higgins and Hieftje weighed in on the merits of the resolution and which reports were attached to it, Rapundalo called for a point of order: The deliberations weren’t related to the question of postponement.

Outcome: The acceptance of the HRIMP report was postponed until the council’s Dec. 7 meeting.

West Park Improvements: Percent for Art

The resolution before the council on stormwater improvements generated a lot of discussion, but not on the stormwater improvements per se. [Previous Chronicle coverage: "West Park Improvements Get Fast-Tracked"]

Stephen Kunselman (Ward 3) noted that he’d attached to the agenda questions related to the West Park improvements:

Are funds from the voter approved Park Millage being used for this project? If so:

Are any funds from the Park Millage being directed to the 1% for Art Fund? If so:

Please provide the voter approved Park Millage language that authorizes said funds to be directed to public art. If such language is not explicit, then, please provide a written legal opinion that substantiates the Administration’s position that voter approved Park Millage funds can be directed to other uses such as public art by Council majority approval.

If such is the opinion, is it legally defensible for the City to adopt a 1% for the Homeless program using the same rationale?

Are funds from the Stormwater Fund, a utility enterprise fund, being directed to the 1% for Art Fund? If so:

Please provide a written legal opinion that substantiates the Administration’s position that utility enterprise funds, including loans from the State, can be directed to public art by Council majority approval. If such is the opinion, is it legally defensible for the City to adopt a 1% for the Homeless program using the same rationale?

Kunselman indicated that he’d received a response to his questions from the city attorney, but that he could not share it with the public – it had been marked confidential.

Abigail Elias, of the city attorney's office, is more likely to be explaining legalities of Percent for Art allocations to Stephen Kunselman (Ward 3) than she is to be demonstrating proper technique for fielding a punt. (Photo by the writer.)

However, he did indicate that $16,000 from the park millage and $13,000 from the storm water fund would accrue to the public art fund under the Percent for Art program as a result of the West Park improvements.

Kunselman allowed that he had served on the city council in 2007 when the Percent for Art program had been approved by the council and that he’d voted for it.  But he said that he did not realize at the time that the program would pull money from what he thought were restricted funds. The $16,000 for art that would come out of the parks budget, he said, could pay for a thermal blanket for Mack pool – which is one of the ways the Mack Pool task force has explored to help reduce energy costs.

Mayor John Hieftje weighed in, saying that the Percent for Art money that drew from the parks budget would be spent on art in the parks. Marcia Higgins (Ward 4) pointed out that art for West Park [the exact art project has not yet been determined] could be a teaching tool to educate people about storm water. The art paid for by the Percent for Art program was meant to serve the purpose of the fund it came from, said Higgins.

Stephen Rapundalo (Ward 2) sought clarification on the amount of public art funds that come from the street and road repair millage – was it really the $500,000 that Kunselman had mentioned? Sue McCormick, director of public services for the city, clarified that the figure was actually $285,553.

By way of background, here’s a budget summary as of Oct. 1, 2009 for art in public places:

               Transfers/Revenues  Expenditures   Available Balance
General Fund      $ 12,325         $    804       $  11,520
Street Millage     285,553            9,344         276,208
Parks Millage       20,235              657          19,577
Solid Waste         31,040              331          30,708
Water              289,693            8,459         281,233
Sewer              562,302           24,939         537,362
Stormwater          44,480            2,859          41,622
Airport              6,520              103           6,416
Court/PD Facility  250,000.         109,886         140,114 

Total Available
for Capital /Art  $1,502,150.00    $157,387      $1,344,762

-

As Sabra Briere (Ward 1) brought out later, the $500,000 figure was actually related to the sewer fund. Rapundalo asked McCormick how the principle of the art serving the fund from which it came would apply to something like the street and road repair millage. McCormick said that the art could be incorporated into the streets. She noted that ADA compliance required use of textures on sidewalk ramps, which had potential for art. Use of surface treatments to designate a historic district was another possibility, she said. McCormick also alluded to providing, through art, a visible way of finding the greenway.

Hieftje asked McCormick about the general fund contribution to the art fund, and McCormick said that there was a variance between $850 and $12,000 depending on how Act 51 money was analyzed. The city uses Act 51 money to construct non-motorized facilities, as opposed to just repairing a facility, and as such would fall under the Percent for Art program.

Kunselman concluded that it sounded like the accounting was difficult. He requested in the future that staff provide with each project the contribution that would be made, if any, to the Percent for Art program. McCormick indicated that this would not be possible, because a piece of art was not necessarily associated with a project at the time a project was approved. There was some back and forth between Kunselman and McCormick that ultimately did not appear completely resolved.

Outcome: The council unanimously approved the West Park stormwater improvement project.

Increased Budget to Local Development Finance Authority

During public commentary, Kermit Schlansker introduced himself as a former aerospace engineer for Allied Bendix. He contended there was no good avenue for developing good ideas for inventions – he had several but figured he’d die with them. He called for greater support for entrepreneurs and inventors and for local action to fight global warming.

Stephen Rapundalo (Ward 2), who serves as the city council’s representative on the Local Development Finance Authority (LDFA), suggested during his communications to council that there was an agenda item related to Schlansker’s point. The item increased the LDFA budget by $255,000 $205,000 for additional support to Ann Arbor SPARK’s business accelerator. The increased support – which will allow the hiring of a new full-time manager of the business incubator and an additional .75 FTE of Phase II consultants, spread over two people – is contingent on persistence in increased demand for business accelerator services.

When the item came before the council, Skip Simms, who’s the managing director of entrepreneurial business development at SPARK, answered a few questions from councilmembers, including one from Sandi Smith (Ward 1) about how much of SPARK’s business accelerator is funded by the city of Ann Arbor. Simms clarified that the business accelerator is funded solely by the LDFA. [The LDFA is a tax increment financing district, like the Downtown Development Authority, and captures taxes that would otherwise go to the taxing authorities that levy property taxes in the area. In the case of the LDFA, the taxes captured come from Ann Arbor's downtown area.]

At Mike Anglin’s (Ward 5) invitation, one of the business accelerator clients, Cesar Nerys, talked a bit about his company Boomdash, which had used SPARK’s incubator services. Nerys described the concept underlying Boomdash’s business, which was to allow local advertisers to take advantage of Boomdash’s online advertising platform, but kept Boomdash’s presence in the background through “white labeling.” [According to a Detroit Free Press article from July 2009, Boomdash closed earlier in the year due to a lack of venture capital: "Boomdash's Dreams Go Bust"]

Outcome: The resolution amending the LDFA budget by $255,000 in order to fund expanded SPARK business accelerator services was approved unanimously.

Parking Meter Purchase

The resolution to purchase parking meters, a part of the consent agenda, was separated out from that group of items at Sandi Smith’s (Ward 1) request. [The consent agenda items are by definition moved and voted together, unless an item is specifically singled out as this one was.]

The parking meters were to be installed along Wall Street as part of an effort to generate up to $380,000 connected with the FY 2010 budget, which the city council adopted earlier in the year.

At Monday’s meeting, Smith expressed skepticism that the projected extra revenues would materialize, even if the meters were installed. [Smith has been working to find revenue replacement, to avoid installation of parking meters in neighborhoods near downtown.]

In her remarks about the parking meters, Smith gave a response to Lynn Meadows, who during public commentary had asked about an email exchange from January 2009 among Smith, Tony Derezinski (Ward 2) and Susan Pollay, the executive director of Ann Arbor’s Downtown Development Authority. That email exchange had been produced by the city as a part of a FOIA request. In the exchange, the three had arranged to take a tour of areas around downtown, with Derezinski driving. Meadows wanted to know what the nature of the trio’s discussion was.

In responding to Meadows, Smith said that the city’s budget proposal – which included the installation of parking meters in neighborhoods near downtown – was exactly why three people might be prompted to get in a car together and drive around to look at the specific areas that would be affected.

With Mayor John Hieftje’s encouragement to postpone the resolution until council’s Dec. 7 meeting, when Smith would be bringing a resolution of her own related to parking revenues, Smith moved the postponement.

Outcome: The resolution to purchase parking meters was postponed.

Updates from the City Administrator

City administrator Roger Fraser gave updates on a range of topics, both during the slot on the agenda labeled for his own communications, as well as when he was called on by councilmembers during the time allotted for their own communications. In response to a question early in the meeting from Marcia Higgins (Ward 4) about sidewalk replacement, Fraser quipped, “Thanks for springing that on me!”

Sidewalk Slab Replacement

Higgins reported several phone calls from residents who were curious to know why sidewalk slabs were being replaced by the city at intersection corners, extending as far back as 20 feet from the curb. Fraser explained that the work had been prompted by a settlement reached not just by Ann Arbor, but by many municipalities, with the advocates of people with disabilities –  to bring about ADA compliance with sidewalk ramps at intersections. He said that this would entail replacement of slabs 10 feet back from the curb, but said it typically shouldn’t require 20 feet. However, due to differences between state and federal requirements on accessibility, in some cases the concrete that had been poured as recently as a year ago was being broken up and re-poured.

As a followup, Higgins wanted to know if there was going to be a sidewalk installed around Allmendinger Park. She noted that there were curb cuts being installed, and if there were to be sidewalks installed to accompany them, she wondered who would be responsible for shoveling the sidewalk. For her part, she said, she would not be shoveling it.

Emergency Response Time

A recent house fire at 1710 Waverly, which killed three people, had raised questions among Ward 4 residents, said Higgins, about the emergency response times by the fire department. Fraser reported that the first call had come in at 2:53 a.m. from someone who had smelled smoke, driven into the neighborhood, and identified a house with excessive smoke coming from a chimney on Greenview, which they believed to be the source of the smell. Two trucks were dispatched to the Greenview location.

Meanwhile, a second call came in from a resident who described the fire they’d spotted as “east of” their Waverly location.  The location of the first house reported, on Greenview, was also east of Waverly. The first call with a definitive location of the fire came in at 3:06 a.m., said Fraser, and from that point the police response time was one minute and the fire department response was two minutes. When they arrived, the house was already engulfed in flames.

Library Lot Request for Proposals

Fraser reported that the request for proposals (RFP) for the top of the city-owned underground parking garage, which had a deadline of Nov. 13, had actually yielded eight proposals, but two had been disqualified because they were late.

To clarify when the proposals would be unveiled to the public, Fraser said that before public consumption, they would first be vetted by the technical review committee, then sent to the advisory committee.

Scott Rosencrans, who chairs the city’s park advisory commission, had originally been appointed by city council to the RFP advisory committee. However, he informed the council of a scheduling conflict, and Sam Offen, also of the park advisory commission, was appointed on Monday to replace Rosencrans. The makeup of that review committee is now: Stephen Rapundalo (Ward 2), Margie Teall (Ward 4), Eric Mahler (planning commission), John Splitt (DDA board), and Sam Offen (park advisory commission).

The technical review committee consists of the following: Jayne Miller (the city’s director of community services), Matt Kulhanek (manager of the Ann Arbor municipal airport), Kevin McDonald (a senior assistant city attorney specializing in planning and development issues), Wendy Rampson (the city’s interim director of planning and development services),  Cresson Slotten (a city senior project manager in systems planning), Alison Heatley (a city senior project engineer), Mike Pettigrew (deputy treasurer for the city of Ann Arbor), Jessica Black (supervisor for the city’s parks and recreation customer service unit) and Susan Pollay (executive director of the DDA, which is building the parking structure).

Stadium Bridges and Task Forces

Fraser also gave updates on the East Stadium Bridge situation, and the task forces charged with studying Mack Pool and the Ann Arbor Senior Center. [Recent Chronicle coverage of those issues: "State Board: No Funding for Stadium Bridges," "Task Force Floats Ways to Save Mack Pool," and "Seniors Weigh in on Fate of Center"]

Use of Council Communications

During the council communications at the end of the meeting, Stephen Kunselman (Ward 3) indicated to his council colleagues that he would in the future be using the agenda attachments to the “communications from council” to record questions on agenda items, as he had for that meeting. He cited the desire to get information out in the open so that it did not need to be requested under the FOIA.

Marcia Higgins (Ward 4) told Kunselman that she understood what his intent was, but contended that section of the agenda is not designed for what Kunselman had in mind.

What the council rules actually specify:

Communications from Council

This place on the agenda is reserved for Council Members to make announcements, request reports and speak on subjects, which they deem important, report out on committees and give notice of future proposed business.

Inasmuch as Kunselman’s attached questions can be construed as a request for reports, his use appears consistent with the council rules.

Public Commentary

Public commentary not already mentioned above included the following:

John Floyd: Floyd posed two questions. The first concerned the willingness of Washtenaw County officials to entertain discussions on the lease to the city for housing the 15th District Court: Did the city receive any communication on or around April 17, 2008 from the county concerning the possibility of reopening an extension to the city’s lease for court space, if the city would submit such a request in writing? Floyd’s second question was addressed to Carsten Hohnke (Ward 5) in reference to a quote by Mayor John Hieftje in an Ann Arbor News article from two years ago, when he included Hohnke as sharing a “big picture” vision of Ann Arbor. Floyd asked if Hohnke meant that Ann Arbor should emulate other cities like Boulder, Portland, and Seattle, or if there was some other big picture vision he had in mind. Later in the meeting, Hohnke would respond by suggesting that he did look to those cities for inspiration, and cited a specific example of recent work in Ann Arbor to look at the pedestrian right-of-way ordinance, which was being informed by ordinances in those cities.

William Hampton: Hampton congratulated councilmembers who had won election and to Marcia Higgins (Ward 4) for her election as mayor pro tem. He introduced himself as the president of the local chapter of the NAACP, noting that the local chapter was celebrating its 60th anniversary, and the national organization was celebrating its 100th anniversary. He reported on the annual Freedom Fund dinner held recently, which honors students who maintain at least a 3.2 grade point average. [Chronicle coverage of that event: "Ann Arbor NAACP Honors Academic Success"] He thanked Sabra Briere (Ward 1) and Stephen Kunselman (Ward 3) for their support, and Mayor John Hieftje for his welcoming address at the Freedom Fund dinner.

Andrew McGill: McGill appeared before the council to thank them, on behalf of the Committee for Preserving Community Quality, for passing the resolution at their previous meeting that called upon the city of Ann Arbor to notify Pittsfield Township of any master plan changes to the Ann Arbor airport, before submitting them to the Federal Aviation Administration.

Thomas Partridge: Partridge called on the mayor, the city council, and the public at large to take cognizance of issues like free and open access to information. He called for integrated countywide public transportation.

City Budget Retreat on Dec. 5

City administrator Roger Fraser announced that the council’s budget retreat would take place on Dec. 5 at the Wheeler Service Center, 4521 Stone School Road. He put it in the context of last year’s two-year plan, which took 10% out of the budget, spread over two years. Now, he said, there needs to be another 11% taken out of the budget on top of that, in order to balance this next year’s budget. He said it would be an “interesting discussion.” The retreat is open to the public.

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

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

At the work session, city administrator Roger Fraser and the city’s chief financial officer, Tom Crawford, indicated that their preferred strategy was not to build any firefighter layoffs into the FY 2010 budget – they wanted to see if they could squeeze the $260,000 out of the budget in the course the first part of the FY 2010, which for the city begins July 2009. There’s uncertainty still, said Fraser, about how many police officers will take advantage of the early retirement offer – a move the city is making to avoid laying off 27 officers for FY 2010. Officers have until mid-June to make a decision. That uncertainty factors into decisions on the FY 2010 budget that council will make on  May 18.

Councilmembers took turns calling city staff to the podium to clarify questions on other topics of interest. That included parking meters – their possible installation in residential areas, as well as the feasibility of maintaining current levels of ticket revenues without as many community standards enforcement officers dedicated specifically to ticketing. Other topics included the Local Development Finance Authority (questions about angels), historic district consultant (likely to be cut in FY 2010, instead of waiting until FY 2011), Project Grow (fund balance seen as too high) and the civic band (has not requested funding). The East Stadium bridges question came up, too (no money from state, but possibly from feds).

No formal decisions were made at the work session.

State Revenue Sharing Reductions

Kirk Profit and Kenneth Cole of Governmental Consultant Services, Inc. presented a grim economic picture to councilmembers in terms of the state shared revenue the city can expect. Of the four means of taxation – property tax, income tax, business tax, and sales tax – it’s sales tax that figures in state shared revenues.

The concept behind the state shared revenue system is that local municipalities in Michigan have a restricted ability to levy taxes, so the state reapportions to local municipalities some revenues out of the 6% sales tax that it collects. It’s 4% out of the 6% that the state can redistribute. The reapportionment comes in two flavors: the constitutional portion (15% of the 4% gross collections of the state sales tax) and the statutory portion (up to 21.3% of the 4% gross collections of the state sales).

Budget planning by the city of Ann Arbor in FY 2010 assumed the same amount of state shared revenue as last year – based on flat dollar amounts since 2005. Those figures were more conservative than the “consensus projected” numbers from January 2009, given by GCSI.  But the most recent projections – based on an Executive Order (2009-22) passed on May 5, 2009 by both the House and Senate appropriations committees – put expected state shared revenues at around $260,000 less that the number used for city of Ann Arbor budget planning.

                           Statutory           Constitutional       Total

A2 budget planning        $2,942,517          $7,884,545           $10,827,062
January 2009 forecast     $3,233,618          $7,763,929           $10,997,547
May 2009 forecast         $2,988,371          $7,576,700           $10,565,071

The reduction in projections for the constitutional portion of the total is due to flagging sales tax revenues, which are coming in at around $22 million below what economists had projected for the current year. The reduction in the projection for the statutory portion stems not just from flagging sales tax revenues. It’s due to a stipulation in the executive order that calls for cities, villages and townships (“CVTs” in state legislative parlance) to get a payment that is only equal to the FY 2008 allocation. Without that executive order, the total revenue sharing amount would have been protected from cuts, even if sales tax collections decreased and caused a reduction in the constitutional portion. That protection is afforded by Public Act 251 of 2008.

Fire Protection

To address the shortfall of $260,000 against the numbers used for city of Ann Arbor budget planning, Tom Crawford, the city’s chief financial officer, suggested that one strategy would be to contemplate earlier layoffs than originally planned in the fire department. Those staff reductions had been planned for FY 2011. In response to a question by Leigh Greden (Ward 3), city administrator Roger Fraser indicated that the budget he wanted to put before council on May 18 would not include the fire department layoffs.

Fraser suggested a wait-and-see approach, in light of the fact that (i) it still was not clear how many police officers would take advantage of the early retirement option being offered, (ii) there was time to see how actual operating expenses played out from July 2009 to the end of the year. On the first point, Fraser said it was possible that more officers would take the early retirement than the minimum needed in order for the city to meet its budgetary goal (which might itself help cover the $260,000). Officers have until mid-June to decide, which is after council votes on the budget. On the second point, Fraser said that the city monitors its spending on an ongoing basis and would be able to evaluate whether it was managing to spend somewhat less than actually budgeted – which could mean layoffs in the fire department would be unnecessary.

On the scenario sketched out by Fraser, if it were necessary to do so next spring, the decision to lay off firefighters could be made through an amendment to the budget. A budget amendment could also be undertaken in July, if the financial picture became clearer by then, he said.

Fire protection was also the one bright spot in GCSI’s report to council. The $1.1 million grant from the state to the city to cover the cost of fire protection for public institutions like the University of Michigan would not be cut. Mayor John Hieftje, however, asked Profit to clarify that this amount did not reflect a “fully-funded” grant, but rather only about 60% of the actual cost of fire protection. Profit allowed that there were some problems with the formula – among them, vacant land can figure into it – but that the kind of fire protection required by the university, with its laboratories and larger buildings, reflected a greater challenge.

In the ensuing discussion, Sandi Smith (Ward 1) asked Fraser to explain where the $1.1 million could be found in the fire department’s revenue statement. Fraser said that the $1.1 fire protection grant was listed as revenue in the general fund, not the fire department specifically, because the city didn’t tie the provision of fire protection to having the grant.

Parking Meters and Law Enforcement

Barnett Jones, director of safety services for the city of Ann Arbor (police chief), was on hand to explain how parking ticket enforcement would be achieved, given the plan to reduce community standards enforcement positions (who are dedicated specifically to writing tickets). Faced with skepticism from Stephen Rapundalo (Ward 2) and Sandi Smith (Ward 1) about patrol officers’ ability to write the same number of tickets, thus preserving ticket revenue, Jones remained cheerful. Jones said that he’d be calling on his officers to respond and that they would rise to the occasion. Patrol officers had always written tickets, and they’d continue to do so.

On the topic of a police officer presence in the downtown, Jones said that he wanted to get those officers assigned to downtown areas (which they have the option to cover by bicycle or on foot) back out on patrol. That didn’t mean that downtown merchants wouldn’t see police officers walking around downtown, he said. That’s because there’s a general directive to patrol officers to spend at least an hour a day outside their cars. Some of that time could be spent downtown, when officers would park and write tickets. A parked police car could help act as a deterrent. The downtown officers that merchants had come to know, he said, would be replaced by a greater number of different officers filtering through.

Carsten Hohnke (Ward 5) tried to get an arithmetic handle on the shift of responsibility of ticketing from community standards officers to patrol officers. If there’s 64 patrol officers, and 5 community standards were to be cut, then each patrol officer is being asked to pick up the slack of 1/12 of a community standards officer, he reasoned. “And that’s what you think they can do?” he asked Jones. Jones’ answer: Yes.

Sabra Briere (Ward 1) expressed concern that the added responsibility for ticketing could have a negative impact on those officers’ ability to fight crime. Jones reiterated his belief that his officers would rise to this occasion. He also pointed out that 54% of the city’s budget is the police department and that he was operating within the reality of a situation where cuts were necessary.

It wasn’t just the ticketing at parking meters that was at issue, but also the possible installation of new meters in residential areas outside the DDA. Field services staffers Mike Bergren and Pat Cawley were on hand with maps to give the same presentation they’d given last week at the DDA board meeting.

There are an additional 208 meter locations proposed in the central business district, in many cases adjoining the University of Michigan hospitals system. Bergren said that the city would like to explore the possibility of having the DDA do the management – the DDA administers the city’s existing parking program. He also indicated that options were being considered for addressing the negative impact on free parking availability for residents in the area.

Sandi Smith (Ward 1) – who had heard the presentation at the DDA board meeting because she serves on that body – pointed out that the addition of meters in residential areas was counter to the recommendation in the Nelson/Nyaagard study, which saw residential areas as appropriate for residential parking permits, but not meters. If parking is not allowed except for residents, that pushes motorists into the parking garages, according to that strategy. Bergren said that if a motorist had to pay to park anyway, then they might choose to park closer to downtown (i.e., in a downtown parking structure). Otherwise put, the goal of getting more people to park closer to downtown could also be achieved with parking meters.

Smith was joined by Briere, Stephen Rapundalo (Ward 2) and Hohnke in expressing their skepticism of the proposal. Hohnke expressed concern that parking meters reflected a “commercial invitation” into residential areas. Rapundalo’s concerns were partly practical. He wondered if motorists would simply move to the next block down where there were no meters. From Bergren, he elicited the revenue projections per meter, which Bergren characterized as on  the low end – 30% occupancy. While a meter could potentially bring in $2,000 a year, they assumed only $500 for estimating revenues for the newly installed meters, he said.

Historic District Consultant

The city’s historic district consultant was originally slated by the budget plan to be cut in FY 2011. Christopher Taylor (Ward 3) called on Jayne Miller, community services director, to inquire what the impact on planning staff would be for eliminating that position a year earlier – in FY 2010. In what way was city staff poised to absorb the loss of the consultant’s services, Taylor asked. Miller described how the consultant [Kristine Kidorf] had worked with staff over the last three and a half years on the unification of guidelines across all the city’s various historic districts plus a project in one of the districts – the Old West Side – to identify contributing structures. That work, Miller said, was complete. The consultant had also worked to help train planning staff on historic district issues. Individual staff [Jill Thatcher] had furthered her professional training by taking courses at Eastern Michigan University.

LDFA

Stephen Rapundalo had questions for Tom Crawford about the LDFA’s budget. [There's useful backround on the LDFA board, on which Rapundalo serves, in a previous Chronicle article on the recent LDFA retreat.] Rapundalo elicted from Crawford that he had been unable to identify other SmartZones (of which the Ann Arbor LDFA is one) across the state that used LDFA monies to fund organizational costs for private angel investing groups. That’s what is proposed for Ann Arbor Angels, as a part of the LDFA’s budget.

Rapundalo also sought clarity on the question of LDFA microloans: When they get repaid, do they get repaid to the LDFA or to Ann Arbor SPARK, the region’s economic development agency which is funded in part by the LDFA? Crawford said that was still being worked out.

Rapundalo also wanted to know if he’d be provided with any additional clarity as to the specific duties and responsibilities of the LDFA’s proposed staff person. Crawford said he had nothing detailed to report, but responded in the affirmative to Rapundalo’s request to get that information from the LDFA’s president as well as the details of the microloan situation.

Also related to economic development was a brief discussion of the city’s economic development fund. The fund was created in order to pay for the parking spaces in DDA parking facilities, which were required by Google as a part of the deal that located one of the  internet company’s advertising divisions in Ann Arbor. Regarding the current fund balance of around $700,000 – the fund had budgeted for a faster hiring rate than Google has achieved  – Rapundalo acknowledged that it was an attractive amount of money  to be used for other purposes, but encouraged his colleagues to leave it in place to provide for the eventuality that another similar situation to Google might come along.

Project Grow and Civic Band

At Briere’s request, Jayne Miller gave some background on Project Grow and the Ann Arbor Civic Band, which are not slated to receive the $7,000 they’ve been allocated in previous years. In the case of the civic band, Miller said that the organization had not requested funds.  The city and the band, said Miller, were working together on an arrangement for the band to use equipment for their concerts (e.g., music stands). Miller said that the city had worked with the band on getting fundraising efforts started.

Project Grow, on the other hand, had requested funding, Miller reported. The main consideration the city was looking at was the organization’s fund balance, which is roughly equivalent to the operating budget for one year. Briere noted that Project Grow’s explanation of the current sizeable fund balance was that their income came all at one time [plot rental fees in the spring]. [Council had heard from Sheri Repucci, former staffer at Project Grow, on the previous Monday night during the proposed budget's public hearing. She had addressed the fund balance by saying that the reserve was necessary because it took an entire budget cycle to replenish it, given the one-time-a-year income stream.] Miller said that according to Project Grow’s IRS 990 forms, the balance had persisted for four years.

East Stadium Bridges

Kirk Profit, the city’s consultant in Lansing, gave a fairly grim picture on prospects that the state could provide the kind of funding required to replace the Stadium bridges over State Street. [Council approved an application for state funding at its last meeting.]  Said Profit, “There’s almost no state resource for that bridge.” But federal dollars might be available, he suggested, in the form of  the Discretionary Surface Transportation allocation, which provides $1.6 billion – for the whole country. Profit said that U.S. Reps. John Dingell and Mark Schauer were working diligently to obtain funds for this area. Profit characterized Terri Blackmore from the Washtenaw Area Transportation study (WATS) as “our quarterback” on DST issues.

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

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

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

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

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

Human Services Funding

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Outcome: The allocation was unanimously approved.

LDFA

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Downtown Plan: When Are We Going to Vote?

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

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

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

Outcome: Unanimous vote against adoption of the downtown plan.

Lanes, Bridges, and Speed Bumps

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

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

From the memo from city staff supporting the closure:

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

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

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

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

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

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

Outcome: Lane closure was unanimously approved.

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

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

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

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

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

Tios

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

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

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

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

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

Public Art

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

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

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

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

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

Budget: Senior Center

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

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

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

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

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

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

Budget: COPS Application

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

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

Budget: Early Retirements

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

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

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

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

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

Progressive Policies

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

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

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

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