The Ann Arbor Chronicle » safety services it's like being there Wed, 26 Nov 2014 18:59:03 +0000 en-US hourly 1 Ann Arbor Budget Marathon Ends Sun, 05 Jun 2011 19:30:17 +0000 Dave Askins Ann Arbor city council meeting (May 31 session of May 16, 2011 meeting): The Ann Arbor city council finally adopted its fiscal year 2012 budget near midnight on the last day of May. The meeting had begun on May 16, was then recessed until May 23, immediately recessed again, and finally ended on May 31.

Sandi Smith, Sabra Briere

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

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

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

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

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

City-DDA Parking Contract

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

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

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

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

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

City-DDA Parking Contract Deliberations

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

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

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

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

Joan Lowenstein, Roger Hewitt

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

City-DDA Parking Contract: Parking Rate-Setting Authority

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

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

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

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

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

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

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

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

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

Christopher Taylor, Stephen Kunselman

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Excess TIF Capture

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

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

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

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

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

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

Excess TIF Capture: Council Deliberations

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

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

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

Marcia Higgins

Ward 4 councilmember Marcia Higgins.

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

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

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

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

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

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

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

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

Water Main Study

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

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

Water Main Study: Council Deliberations

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

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

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

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

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

FY 2012 Fees

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

FY 2012 Fees: Council Deliberations – Trash Carts

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

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

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

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

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

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

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

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

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

FY 2012 Budget

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

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

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

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

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

FY 2012 Budget: Public Safety Discussion

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

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

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

John Hieftje, Sandi Smith

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

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

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

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

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

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

FY 2012 Budget: Public Safety Amendment

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

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

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

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

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

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

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

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

FY 2012 Budget: Human Services

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

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

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

Sabra Briere, Andrew Cluley

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

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

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

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

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

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

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

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

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

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

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

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

FY 2012 Budget: Parks Amendment

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

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

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

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

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

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

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

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

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

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

FY 2012 Budget: Primary Elections

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

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

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

FY 2012 Budget: Public Art

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

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

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

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

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

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

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

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

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

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

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

Carsten Hohnke, Tom Crawford

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

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

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

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

FY 2012 Budget: Priorities – Home Inspections

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

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

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

FY 2012 Budget: Priorities – Retail Recruitment

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

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

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

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

FY 2012 Budget: Concluding Discussion

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

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

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

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

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

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Tuesday Funnies: Totter Toons Tue, 11 May 2010 12:42:39 +0000 HD

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Pleas for Human, Safety Services at Council Wed, 05 May 2010 14:19:56 +0000 Dave Askins Ann Arbor City Council meeting (May 3, 2010): Several speakers addressed the city council at its Monday meeting asking for continued funding for human services and to avoid layoffs in the city’s police and fire departments.

Fire fighters informational picket

Firefighters held an informational demonstration Monday afternoon before the city council's meeting at Station 1, which is located across the street from city hall. Firefighters from Flint, Dearborn, Dearborn Heights, Ann Arbor Township, Ypsilanti, Battle Creek and Ann Arbor took part in the demonstration. (Photos by the writer.)

And Margie Teall (Ward 4), who faces two challengers in the August Democratic primary, announced a planned amendment to the city’s proposed budget that would maintain human services funding at FY 2010 levels. The amendment, which will be brought forward at the council’s May 17 meeting, would also avert as many layoffs in the police and fire departments as possible, she said.

The previous evening at the council’s Sunday night caucus, Mike Anglin (Ward 5) and Sabra Briere (Ward 1) had already indicated they would support using part of a possible $2 million payment from the Downtown Development Authority to avoid police and firefighter layoffs.

The council’s plan for funding the amendment, reported Teall, is to use a $2 million payment from the Downtown Development Authority that it hopes the DDA board will approve at its May 5 board meeting. Even if the DDA board approves the payment, which is very likely but not certain, not all safety services layoffs in the city administrator’s proposed budget could be covered. Averting the elimination of 35 positions across police and fire departments combined would require $3.6 million. The restoration of human services funding would require another $260,000. And that would still result in the city tapping its general fund reserves for $1.5 million.

In its business for the evening, the council passed a resolution added late Monday to the council agenda, which strikes an agreement between the city and the Michigan Dept. of Natural Resources and Environment for the future of the embankment along Argo Dam. It will allow the headrace to be re-opened by the end of this week.

The council also approved on first reading a revision to the city’s sidewalk occupancy permit system to include sandwich board signs. And the residential development now called Heritage Row – proposed along Fifth Avenue south of William Street – was approved at the council’s first reading with no discussion, but with dissent from Mike Anglin. Both of those measures will need to come back before the council for a second reading to gain approval.

The council also approved received the mayor’s nomination of the appointment of Anya Dale to the AATA board, replacing Paul Ajegba, whose term expired on May 1. Ajegba had been elected by his colleagues last fall to chair the board. Dale is a Washtenaw County planner. Her appointment will be presented for confirmation at the council’s May 17, 2010 meeting.

The council also approved some additional road closures for the June 6 Dexter-Ann Arbor Run.

FY 2011 Budget

The city council received a formal presentation of the proposed city budget from city administrator Roger Fraser on April 19, 2010. It will be formally adopted, with any amendments made by the city council, on May 17.

FY 2011 Budget: Council Discussion

Margie Teall (Ward 4) began the city council’s communications time by reading some prepared remarks on budget amendments:

Saturday was a great day for Ann Arbor and our nation’s democracy. At the beginning of his speech, President Obama spoke of the country being in the worst economic downturn since the Great Depression, something that all of us in Michigan are familiar with. Cities in Michigan have been hit especially hard by state revenue-sharing cuts and other declining revenues, while expenses continue to rise, especially for health care. To cope with a long downturn, many Michigan cities are facing cuts in core services. Several cities have initiatives on the ballot tomorrow in an effort to avoid closing city facilities along with layoffs in safety services and other areas of city government.

The residents of Ann Arbor should know that the mayor and members of city council and city staff have been working hard to ensure that core city services are not cut and that city facilities remain open. As my colleagues here know, I have been working with councilmember Taylor, Hohnke, and Smith on the city council-DDA working group that has been discussing mutually beneficial solutions. We presented a plan at the DDA operations meeting last week that will continue the $2 million transfer of parking revenues to the city for the 2010-2011 budget. I’ve also been working with the mayor and councilmember Higgins on the city budget.

While we still have some work to do, in refining the numbers between now and the next meeting on May 17, I want to let my city council colleagues know that we will be submitting an amendment to the administrator’s budget that will eliminate, or at least minimize, layoffs in the police and fire department. I want to keep our fire stations open and make sure that firefighters are prepared and ready to fight fires, and that response times are not compromised.

The mayor and I will also be bringing an amendment that will fully fund human services at the 2010 budget level. I know that other councilmembers feel the same way, and may want to co-sponsor this amendment. Councilmember Higgins and I have been working with neighbors in the Fourth Ward, and we will be bringing an amendment that will eliminate the need for football parking at Allmendinger and Frisinger parks. Of course, there is still a lot of work to do. Compromises and some sacrifices will be necessary, but I’m hopeful  councilmembers will support these amendments on May 17.

Mayor John Hieftje emphasized that he had been working together with Teall on the proposed budget amendment that would eliminate or at least minimize any layoffs in the safety services area. He said that some might wonder why the city administrator has even proposed so many layoffs in that area. He attributed that to the uncertainty of the outcome of the conversation that had been going on with the working group between the city council and the DDA, which has resulted in an additional $2 million for the city to work with. Hieftje noted that the DDA vote still needed to be taken.

In her communications time, Sandi Smith (Ward 1) said she was pleased to hear of the planned amendments to the budget. She reported that she and her Ward 1 colleague, Sabra Briere, had conducted a town hall meeting in their ward. What attendees were most interested in was the retention of safety services and human services. So she would be happy to be a cosponsor of the amendment.

Christopher Taylor (Ward 3) also indicated that he was pleased to hear of the planned amendments to the budget, in their general form. He said he had received a great number of e-mails about the smallest of the items in the amendment, namely the provision to eliminate a proposal for football Saturday parking in Frisinger and Allmendinger parks. He praised the city’s park advisory commission (PAC) for putting the proposal for football parking in the parks into their budget recommendation.

Taylor allowed that it seemed like a funny thing to praise them for putting that proposal in the budget. However, PAC had a responsibility, he said, and that was to deal with a very limited budget. They needed to figure out how to make that parks budget work, he said, with material and substantial reductions. The challenge was made more difficult, he added, by the fact that they were trying to make the budget work even while adding back in two items that had previously been slated for removal – the Ann Arbor Senior Center and Mack Pool. Taylor concluded by saying he thought that PAC had done an honorable and diligent job.

Stephen Kunselman (Ward 3) thanked Teall for bringing forward news of the budget amendments sooner than the meeting when the council would actually vote on the budget. He said that in years past, amendments were always kind of a surprise, with very little opportunity for review for councilmembers like himself. He described her action as a “shining moment” in governmental transparency.

FY 2011 Budget: Public Hearing, Commentary on Human Services

Thomas Partridge told the council that they need increased funding for the city, for the county, for southeastern Michigan and for the entire state. He called for tax reforms on all levels. He contrasted the size of the University of Michigan football program budget with that of the Ann Arbor city budget and questioned whether our priorities were in order.

Paul Lambert encouraged the council to maintain a basic commitment to human equality.

Caleb Poirier told the council he was grateful to them for doing a tough job. He thanked Margie Teall, Sabra Briere, and John Hieftje for preserving the human services funding in the budget amendment that’s coming up. He wanted to draw the council’s attention to a metaphor. He said he saw the world partly through a job that he used to hold as emergency room technician. When you have a whole bunch of folks who come into the ER, he said, and they get put on stretchers after their workup is done, the ER would get clogged, because they could not send them upstairs, because the upstairs was full.

We have a similar situation, Poirier said, with the homeless population. There’s a lot of folks, he told the council, whose “workup” is complete, and who are awaiting housing options. But the city doesn’t have those options and they are still in the system. He asked the council to consider the continued funding of the affordable housing trust fund.

Lily Au cited the Biblical passage from Isaiah 58:7, which calls on people to feed the hungry and house the homeless. She reported that a homeless camp, Camp Take Notice, had been forced to move last Wednesday before President Obama’s Saturday visit. She said she was not claiming that there was any connection.

But she noted that if Obama’s family visited the camp, they would have a new experience. She said that Michelle Obama would have to hold her kids tight, lest they be hit by a car, and that she would have to take off her high-heel shoes in order to navigate the steep path down to the camp. They would also need flashlights, she said, because it is really dark. Obama would have the experience of a “pain in his butt,” she said, because the campers had not yet set up their public bathrooms. She had peed there last week, but had not been able to stand back up because her butt was stuck on a thorn bush. It really hurt, she said.

Last Friday, she reported, the Vineyard Church had donated five boxes of food. She said she had parked near the camp and that several police cars had arrived, along with a fire truck and one ambulance. One of the officers, she reported, had told the campers that if they did this again, the officers would drive them to Lansing or drive them up north. No matter where they go, she said, they cannot run away from the authorities. She praised the efforts of the city councilmembers, the county, and state officials to find a solution to the problem of just pushing the homeless from one place to another.

Au also was against any cuts in human services, noting that the level of civil society is judged by how well we treat those who are most in need.

Ned Staebler introduced himself as chair of the housing and human services advisory board. He said he’d been encouraged to hear that a budget amendment would be coming forward to restore human services funding and avert safety services layoffs. He noted, however, that he’d not heard anything about the affordable housing trust fund in the budget amendments that might be coming forward. So he reminded the council that in past years there had been a $100,000 contribution every year to the trust fund. This year that money had been used to increase the number of affordable housing units, to increase the number of beds in the shelter system, as well as to fund foreclosure prevention programs.

The proposed amount that was to be cut from human services, Staebler said, was $260,000, which represents more than a 20% cut – more than the 8% applied to the rest of the budget. That showed the wrong priorities, he said. One of the reasons he was proud to live in Ann Arbor was that the city made it a priority to take care of the least fortunate. He asked the council what good a social safety net was if you pull it out from under people when they need it most. He noted that human services agencies are also an economic engine in that they leverage other funds. More than $10 comes into our community, he said, for every dollar that we fund to one of these agencies.

Katie Doyle introduced herself as executive director of the Ozone House, telling council that Ozone House was celebrating its 41st anniversary, largely because of support from the city of Ann Arbor. Ozone House works with young people who are homeless and runaways, and tries to prevent them from entering costlier systems. She pointed to the leveraging effect of dollars allocated locally. For Ozone House, it’s even higher than the $10 that Ned Staebler mentioned, she said.

Lori Bush introduced herself as the director of family support programs for Child Care Network. She said she wanted to echo the comments of the many speakers who had come before her. The city had funded the child care network for over 25 years, she noted. The organization gives childcare scholarships to low-income families, so that they can continue to work in the community.

Michael Appel, executive director of Avalon Housing, a local nonprofit that provides affordable housing throughout the city, addressed the council on the topic of human services funding. He urged councilmembers to try to avoid thinking of the budget picture as completely either-or: We can fund human services, we can fund public safety, we can fund parks, but we can’t find everything. He urged them to resist that kind of thinking, even though it was a time when the budget choices tended to move a person in that direction. For example, the city council had given Avalon Housing support for starting a community center program. One of the effects of starting a community center, Appel said, was to reduce police calls to the area. It was a more appropriate use of public spending to put human service dollars towards a human services goal. It was a more appropriate use of police time, responding to police issues rather than what were essentially management and tenant problems that could be better resolved without the use of police time. He encouraged the council to apply that kind of logic to other areas of the budget.

Julie Steiner introduced herself as the executive director of the Interfaith Hospitality Network Alpha House, one of the community’s three homeless shelters for families. She thanked the council for all the support that they had given to the IHN and other human services agencies that they worked with. She thanked the council in particular for the emergency support that the council had approved for last winter.

Steiner said her daughter had in the past encouraged her to get on city council and that the reason she didn’t want to is that she could not imagine being in their position, with the choices that they had to make. She reminded the council that human services are their safety net for the entire community. Two years ago, she said, 50% of the people who came to the shelter had a job when they came. Now less than 1% have a job. She said they had the help of a full-time job developer, who works with all of the housing agencies, with the support of the Michigan Rehabilitation Services and the county’s Employment Training and Community Services (ETCS).

The job developer says she’s never before seen the kind of trouble people are having finding jobs, Steiner reported. Even people who come to the shelter with a job can’t make ends meet. She reported the case of a woman who had a full-time job at Arby’s but whose husband had lost his job at a construction site. They could no longer support their babies in housing.

If the council eliminates affordable housing in the budget, Steiner warned, the community is really going to be in bigger trouble. She reminded the council that there are three things that human services partners do for IHN: (i) they make it possible to bring in $32 million of other funding; (ii) they volunteer – at IHN 2,000 people volunteer every year; and (iii) they provide the shelter with $1.5 million worth of in-kind support.

Ellen Schulmeister introduced herself as the executive director of the Washtenaw Housing Alliance and of the Shelter Association of Washington County at the Delonis Center. She thanked the council for its past support on issues regarding housing and homelessness. She also thanked the council for the work on the budget during a very difficult time. There were 4,212 homeless people in the county in 2008. Of those, 1,494 were children, she said. That’s a 20% increase from 2007 levels. The increase came mostly in families and unaccompanied youth. There’s been a 138% increase in requests for food since 2006, she reported, which is one of the highest increases in the country. She noted that there is some stimulus money coming to the community that’s been allocated to prevent people from becoming homeless. They’ve interviewed over 600 families and given 232 of those families some help. They’ve spent over $.5 million. But she cautioned that the stimulus money will run out soon. When it does, she warned that some of those folks may end up homeless. She concluded by saying, “We can’t really take a cut at this time.”

Jim Mogensen began with his trademark, “So, here we are again!” He noted that as everyone knows, all cities are struggling. Ann Arbor has had a structural issue with its budget for a very long time, he said. So, Mogensen said, some of the issues faced by the city are “enhanced” by the financial crisis, but there are still some basic structural issues. One of the themes in the current budget cycle, said Mogensen, is: When in doubt, outsource everything.

Mogensen said that 20 years ago he worked in Washington D.C. as a consultant for the Occupational Safety and Health Administration (OSHA) working on regulatory analysis. They had a company that wanted them to conduct a mock inspection like OSHA would do it, and so they did. And he said he remembered the phone calls he got from the corporate legal department, asking him to please modify his report. He quipped, “I used to work in West Virginia doing mine inspections.” As they relate to planning, the conflicts of interests are like Goldman Sachs, he warned.

Looking at the two-year cycle for the budget, he asked: What will happen next year? The city has already outsourced its social safety net to local nonprofits. And the nonprofits, in turn, have to make contingency plans for what’s going to happen. He cited Michael Apple’s comments about how if you make cuts in human services, you end up spending those dollars on police instead. He warned that it would eventually cause a situation where they would not be able to respond. If all of a sudden there is a tipping point, there will be no mechanism to respond.

For example, Mogensen said, think about the affordable housing trust fund – you have the Avalon Housing and Washtenaw Affordable Housing Corporation issue, plus the Housing Commission. The city would need money in the housing trust fund if they wanted to do something with those areas. He asked that the affordable housing trust fund also be incorporated in possible budget amendment resolutions. Those are immediate issues that could have an impact next year, he cautioned.

David Blanchard, who also serves on the city’s housing and human services advisory board, said he wanted to echo a lot of the comments that had already been made. He noted that there are dozens of agencies that are funded in part with the city’s dollars. He asked the council to not pull the safety net out from under people when it is needed most. If the $100,000 cut to the affordable housing trust fund were included in the cut to human services, he said it would reflect a 30% cut. He pointed to the documented increase in need, with several agencies reporting their needs had become 30-50% greater. There is no way that need is going to be served, he warned, if there is a cut now when those services are needed most.

Budget FY 2011: Public Hearing, Commentary on Safety Services

Doug Warsinski, representing the Walden Hills Condominium Association, said that before 2007 there was virtually no problem with crime in his neighborhood. Then they were suddenly faced with a series of auto thefts and auto break-ins over the span of only a few months. There had also been isolated incidents, he said, of burglaries, attempted sexual assault, and robbery. He said that while the community had returned to a relatively normal, quiet state, the board of directors had taken some costly steps to improve their own security.

Ann Arbor Fire Station Map

Locations of Ann Arbor's five current fire stations. Colored shading correspond to wards. The circle with the slash is the location of former Station 2. (Image links to higher resolution file.)

Taxpayers have reasonable expectations of levels of service from their police department, Warsinski said. A national survey that he cited showed what citizens expect as reasonable response times: 5 minutes or less for a crime that’s in progress or if the suspected criminal is still at the scene; 15 minutes, in a case where a suspected criminal has left; 30 minutes for nuisance calls. A performance metric should be established for the city that is in line with these national expectations, he said.

With respect to fire safety,Warsinski reported that neighboring condominiums had had a serious fire with a trapped occupant, who was rescued by the Ann Arbor fire department. They themselves had experienced several small arson fires and a roof fire that had been caused by a contractor. As multi-family structures with a significant number of older residents, he said, the potential for catastrophic fire is great.

As one of 50 National Fire Protection Association (NFPA) certified fire protection specialists in the state of Michigan, Warsinski said, he wanted to point out that their condominiums, along with apartments, offices, mercantile, and industrial occupancies – and generally any other building except single family dwellings – are classified by the NFPA as “medium hazard occupancies.” Such structures had a recommended minimum initial response as follows: three pumpers, one ladder truck, staffed by 16 firefighters, a chief officer, plus a safety officer and a rapid intervention team. As far as regionalization went, he said, surrounding fire departments had too few personnel and equipment, and were too far away to effectively protect the residents of Ann Arbor.

John Maguire told the council that he was born and raised in this town and that his parents live in this town. Some of his reasons for choosing to raise his family in Ann Arbor, he said, included the things the town had to offer – parks, sporting events, art fairs, Top of the Park, museums, as well as other activities. But the most important reason he had decided to raise his family here, he said, was the ability to enjoy all those activities and also feel safe. He asked the council to not make any more cuts to public safety. He noted that the city had already closed a fire station and closed police substations. He contrasted nice-to-have items with need-to-have items. Parks, art, and a transit center are nice to have, while police and fire protection we need to have, he concluded.

Jamie Adkins introduced herself as a police officer with the city of Ann Arbor, speaking on behalf of the Ann Arbor Police Officers Association. She noted that the city council has a lot of hard decisions that are coming up and told them that she had attended all of the work sessions on the budget. She told mayor John Hieftje that he had been quoted in the local media as saying that Ann Arbor had never laid off a police officer.

While that might be true, Adkins allowed, what has not been discussed was the staggering reduction in personnel over the last nine years. In 2001, she said, the police department employed 191 sworn officers. Currently, that number is 124. One way services had been reduced, she said, was that patrol response times had increased. Other ways: the city has eliminated downtown beat officers; response to private property crashes has been eliminated; the animal control officer has been eliminated; public housing dedicated patrols have been eliminated; the domestic violence advocate has been eliminated; fingerprint services has been eliminated; detective bureau case follow-up has been reduced; and gun registration services have been reduced.

While addressing the city council during a public hearing on the budget, Jamie Adkins asked everyone on the police layoff list to stand. In the foreground is Tom Fegan, former planning director with Washtenaw County. (Image links to photo of Fegan when The Chronicle encountered him the previous Saturday when he was ushering at Michigan Stadium for Obama's commencement address.)

With the proposed layoffs currently in the budget, Adkins said, on July 1, 2010 the total number of sworn officers would be reduced to 111. That reflects a reduction of 42% over the last nine years, she said.

She told the council that many of the officers who were on the layoff list were not there at night, due to their lower seniority – they were out on patrol. She ran out of time to introduce each officer individually as she’d planned, but did note that the first person on the layoff list had been hired on Oct. 23, 2000. That’s 10 years, she said, that they had served the city. The least senior person on the layoff list, she reported, was hired on Jan. 30, 2006.

She finished her remarks with an invitation: “All those on the layoff list, please stand up!”

It earned them a round of applause, which was met with Hieftje’s standard admonishment that applause was not encouraged during public hearings.

Patrick Maguire introduced himself as one of the police officers who was due to be laid off, and asked the council to seriously reconsider the idea of laying off police and firefighters in Ann Arbor. He told the council that he been born and raised in Ann Arbor and gone on to earn a bachelor’s degree in criminal justice. When considering his career choices, he said, he considered federal law enforcement jobs, jobs in other states, and police jobs in cities around the state of Michigan.

But Maguire said he felt a special connection to the city of Ann Arbor and eventually decided that because he was from Ann Arbor, and knew Ann Arbor, he wanted to come back to Ann Arbor to work and give back to the community that had raised him. He was hired in 2000. He’s currently one of the city’s two K-9 handlers.

While people are attracted to Ann Arbor for a variety of reasons, Maguire said, one of the main things that makes Ann Arbor a great city is its overall relative safety. He attributed its safety to the hard-working dedication of those police officers who come to work every day to protect the citizens of Ann Arbor. He called the Ann Arbor police department one of the highest educated and best trained police departments of any city around.

Maguire described police officers in Ann Arbor as smart, compassionate and willing to invest themselves with those with whom they come into contact. He described the detectives as highly trained who are able to solve a high percentage of their cases. What it comes down to, he said, is that Ann Arbor has a great proactive police department that is able to address the specific needs of the city.

With the proposed cuts, Maguire warned, the city’s department would be transformed from a proactive department to a reactive one, providing levels of service that would be unlikely to satisfy anyone. In his 10 years as a police officer in Ann Arbor, he reported, someone had tried to run him over with a car, and he’d been hit, kicked, punched, sat on, attacked by pit bulls, and so on.

Keith Harr weighed in against the proposed police and fire cuts. He said his neighborhood was between two stations that were being considered for closure and that it would affect his neighborhood a great deal.

FY 2011 Budget: Public Hearing, Commentary on Other Fiscal Issues

During the public hearing on community services fee increases, Karen Sidney warned that the city kept raising prices, apparently thinking that the increased prices would have no effect on people’s behavior. She recalled that a few years ago the city staff had recommended that the parks fees all be raised, and in fact the fees were raised. The next year, she said, less revenue was actually generated, despite the higher rates. That was because people stopped using the parks. For example, people stopped going to Vets Ice Arena and started using The Cube. Once those customers are lost, she cautioned, you don’t get them back right away. “Use some business sense, for god’s sake!” she admonished the council.

Sidney also spoke during the public hearing on the budget. She told the council there were so many things wrong in the spending priorities for the proposed budget that it was hard to choose what to talk about: reducing police and fire positions to below the minimum levels recommended by former chief of police Dan Oates in a February 2005 press release; spending over $330,000 to redo the city’s development rules, while turning off 2,000 streetlights to help pay for it; water and sewer capital spending that meets the needs of new developments but ignores the needs of people who are living here.

The item that stood out for Sidney this year, she said, was over $1.3 million in the general fund budget for three items that should be covered by the $47.4 million police/courts building project budget. The general fund reserve, she warned, is already below the level recommended by the city’s outside auditor.

The public was told, Sidney said, that the police/courts project would cost $47.4 million and that that amount would cover all costs. Now, she contended, the city is redefining “all.” After it finished redefining “all,” she quipped, it could tell us what the meaning of “is” is. The items Sidney ticked through totaling the $1.3 million were: $165,000 to fix the sixth floor Larcom Building roof; $185,000 in moving costs; $975,000 for audiovisual and security equipment.

Sidney suggested that if the $47.4 million was not sufficient to cover the entire “wish list,” then the solution should be to cut costs out of the police/courts construction budget, not to use the general fund. A start, she said, would be to eliminate the conference center and the gym in the basement of the Larcom Building. She suggested that a security system could be achieved for less than $975,000 – the county had achieved that, she contended.

Sidney addressed mayor John Hieftje directly, saying that he had said the project was within budget. She asked the mayor to share with the rest of the community the data he’d used to reach that conclusion.

Libby Hunter again rendered her public commentary in the form of a song. This time the melody was from “Help Me, Rhonda” – the Beach Boys tune from the year 1965. Lyrical highlights included “Help us, Roger, help us get out of this mess.”

Lou Glorie, a candidate for a Ward 5 council seat in the Democratic primary, said she thought there were some things in the budget that could probably be trimmed a bit. She wondered about the $6.299 million in IT charges and figured that a couple million could be cut out of that part of the budget. In fleet services, she suggested that a couple of new garbage trucks could wait a bit. She also pointed to the Smart Zone and LDFA (Local Development Finance Authority), and wondered if the city was getting enough “bang for the buck” out of that. As for alternative transportation, she said, she wondered what kind of improvements they would get. She said she really hoped they were not going to be laying off police and firefighters.

Argo Earthen Embankment: Consent Agreement

During her communications, Sabra Briere (Ward 1) introduced the topic of the earthen embankment along Argo Dam by reporting on her activities the previous weekend – not the weekend of the University of Michigan commencement, but the one prior to that. She’d had the pleasure of helping clean up the Argo Dam earthen embankment, she said.

Briere described how she had worked with volunteers from the high school rowing teams and their adult mentors, helping to clear underbrush off the embankment. She noted that it was now possible to actually glimpse the river from the path that runs along the earthen berm. The volunteer efforts are part of the city’s strategy to put a woody vegetation management plan in place for the earthen berm in response to directives from the Michigan Department of Natural Resources and Environment (MDNRE).

Before the council on Monday was a resolution that charts out a plan resolving the up-to-now ongoing conflict between the city and MDNRE, which resulted in the closure of the headrace along the earthen embankment in the fall of 2009. The headrace is used by canoeists and kayakers to circumnavigate the Argo Dam, which requires a short portage at the end of the headrace. With canoeing season starting, the city would stand to lose a significant part of the revenue from the Argo canoe livery with the headrace closed.

Briere also led off deliberations on the resolution before the council by saying that she was really happy to see the resolution, even though it came too late to be published on the agenda. She said it’s the kind of item that is worth doing at the last minute and she was delighted to see it.

Marcia Higgins (Ward 4) also indicated that she was excited to see the item on the agenda. Sue McCormick, public services area administrator for the city, was asked to come to the podium. Mayor John Hieftje asked her about Section 10 of the agreement, which covers reconstruction and repair of the embankment. He asked for clarification on that section. McCormick said that as the city looked at its options, they have looked at primarily two approaches.

The first would be essentially a maintenance project whereby toe drains in the earthen embankment would be daylighted and extended so that they would be more efficient and meet the minimum standards. The city had previously gone out for bids on a similar kind of project, she said. The city have delayed moving forward with that project the last time.

The second approach involved the creation of a different kind of amenity, she said – that had come from the community and had evolved through the Huron River and Impoundment Management Plan (HRIMP) Committee  process. Instead of retaining the existing headrace, a different amenity would be created that might remove the need to portage at the bottom of the headrace. That might make it more amenable to canoeists.

The consent agreement allows the city to consider both kinds of options. Tony Derezinski (Ward 2) said he had had an opportunity to look at one of the proposals about a year ago, which involved a series of ponds. He thought it might work around some of the problems that the current headrace has, and expected that it could benefit a lot of people. He asked McCormick to outline the timetable in the consent agreement.

McCormick explicated the following milestones:

  • Oct. 1, 2010: Send out a request for proposals (RFP) for one of the two options.
  • Feb. 1, 2011: Select a construction option.
  • May 15, 2011: Obtain MDRNE permits for the construction.
  • June 1, 2011: Start construction of the selected option. But McCormick cautioned that it is contingent on receipt of the MDNRE permits.
  • Nov. 15, 2011: Construction will be complete

Between now and the request for proposals, she said, there would be a lot of community discussion about that process. The city would be requesting that the MDRNE also hold a public hearing in connection with the permitting process, McCormick indicated. That meant there would be plenty of opportunity for public input all along the way, she said.

As Briere had noted, the resolution had been added late the same day to the council’s agenda.

City administrator Roger Fraser reported that McCormick and Sumedh Bahl, who’s unit manager of the water treatment plant and interim community services area administrator, had met with the “folks in Lansing” on a conference call that morning. That had been a follow-up to a series of meetings that they’ve had trying to hammer out an agreement. He contended that it had been recognized early on that the original approach being taken by the regulatory offices was more extreme than the city of Ann Arbor thought was justified.

That morning, he said, when they got to a point where they had something they felt they could recommend, they recognized that the council would probably like to see it as soon as possible. So they parked in the office of Abigail Elias – who’s on the city attorney’s staff – and spent the better part of Monday working on the details. That was how they got the document to the council as early as they did, Fraser said.

Bascially, he said, it was all done that day. McCormick indicated that the city hopes to be able to remove the stop log that closes off the water to the headrace and to have the headrace restored to operation as soon as the end of the week. The consent agreement, however, specifies that the stop log must be re-installed on or before Oct. 15, 2010, but may be removed again after May 1, 2011.

After Fraser and McCormick had sketched out the main points of the consent agreement, Carsten Hohnke (Ward 5) asked for a short recess to evaluate the proposal, saying he had not had a chance to do so, because he’d received it so late in the afternoon.

In regard to the recess requested by Hohnke, the proceedings mirrored a previous council resolution brought on Oct. 19, 2009 that sought to effect the repairs that the MDNRE (then called the Michigan Dept. of Environmental Quality, or MDEQ) had required the city to undertake. Hohnke asked for a recess on that occasion as well, due to the late hour at which the resolution had been brought before the council.

The October 2009  resolution was tabled, with the council unable to reach an agreement amid confusion about the significance of the resolution regarding a commitment to keeping the dam or eventually remove it completely.

During Monday’s recess, Hohnke and Margie Teall, both of whom have advocated for a dam-out option for Argo, retreated to the council workroom to discuss the resolution. On returning from the recess, Hohnke said that the piece he had not had a chance to absorb was the question of whether the resolution opened the city up to significant costs. For example, if the city issued an RFP, did that mean they had to accept whatever came back. He’d satisfied himself, he reported, that this was not the case.

Outcome: The city council unanimously approved the resolution to accept the consent agreement on repair or reconstruction of the earthen berm at Argo.

Sandwich Board Sign Sidewalk Occupancy

The city council had considered a revision to its sign ordinance at its Feb. 16, 2010 meeting, that was ultimately defeated. The task force that had been established at the council’s Oct. 5, 2009 meeting and then appointed on Oct. 19 had brought that resolution forward.

The goal was to find a way to make legal the fairly common practice of using portable sandwich board signs. The revised strategy was to look at the city’s sidewalk occupancy permitting system as a mechanism to allow sandwich board signs – within the area of the city’s Downtown Development Authority. [Recent Chronicle coverage: "Ann Arbor, Give Me a Sign"]

Before the council was the first reading of a revision to the city’s sidewalk occupancy permitting system.

Sandwich Sign Boards: Public Commentary

James Agnew addressed the city council on the topic of sandwich signboards. He introduced himself as co-owner of Aunt Agatha’s mystery bookshop at 213 S. Fourth Ave. On Fourth Avenue, he said, very often on a Saturday night he would leave the store and there would be maybe two or three people. Walking up to Liberty Street, there’d be a stream of people, and up on Main Street there typically is a stream of people. That’s one argument, he said, for sandwich boards – increased visibility of places that are not among the spots most often thought of as retail.

People often think of the retail areas just as State Street, Main Street and Liberty, Agnew said. A sandwich sign board, he said, gives you some visibility to people who are passing by, who might not otherwise be aware that you are there. He reported that his bookstore used sandwich boards mostly for special occasions like book signings. It’s helpful for people who don’t know where the store is, who read about the event in the newspaper or online.

The larger context, Agnew said, is retail. It’s not a dirty word – rather, it’s very helpful to the city. People who come in on a Saturday night are not coming here for the university, but rather for the stores and the restaurants. These stores and restaurants are unique – Aunt Agatha’s is the only mystery bookstore in Michigan, he said.

Agnew said the store often sells books off of carts in front of the store and that they would be willing to pay the same amount for a sandwich sign as they do for the book carts. Small unique stores like his, he said, did not typically have the kind of advertising budget that would allow planes towing banners at football games, so they had to do what they could – a sandwich sign board.

Nina Juergens introduced herself as owner of Acme Mercantile at 111 W. Liberty and Salon Vertigo at 212 S. Fourth Ave. She said she felt a big part of the charm of the Main Street area was the eclectic variety of businesses that you don’t find in other places. Sandwich sign boards, she said, allow businesses to express their unique character. She noted that sidewalk permits can’t really be used most of the year due to the weather, so she relied on signboards to announce sales and highlight products, or whatever is happening in the store.

Juergens said that recently they had not been putting their signboard out, because right now it’s being refurbished. As a result, sales had been about half of what they normally are when the sign is out. That’s because no one can see the store, she said. At the salon, she said, it’s hard for staff to build a clientele when nobody knows that salon is there – it’s located in a hallway.

Dawn Nelson introduced herself as a salon owner in the Washington Building. She told the council that her salon is on the third floor, so without a sandwich signboard, no one would know that she was there. She had signed a five-year lease there, but probably would not have if she knew that she would not be allowed to advertise on the street. She said she believed in regulation, but sandwich boards were an option, whereas it was not an option to put signs on the building itself – it’s in an historic district.

Vicki Honeyman introduced herself as a 26-year tenant on East Ann Street, operating a small retail and haircutting business – Heavenly Metal and Vicki’s Wash-and-Wear Haircuts. It’s right across the street from the Hands-On Museum, she said. She described her situation as unique. Her operation is the only retail on the block, so there’s very little foot traffic on the street, except for people from city hall who are going to get lunch and come back to work. The building and entrance, she said, is set so far back from the street that there’s literally no visibility at the corner of Ann & Fourth.

Honeyman asked the council for a reasonable and local-business-friendly ordinance for signage, but also asked for consideration to be made to allow her to place her sandwich sign boards on her landlord’s private property next to her neighbor’s sign. She also asked to be able to place her Heavenly Metal sign at the end of her walk. When shoppers see the signboard at the corner of Fourth & Ann, she said shoppers would realize that there was actually a business down the block. She reported that 90% of her new customers tell her that it was the signs that drew them to her store. Without the signs, she feared, she really could not make it. She encouraged the council to allow for atypical situations.

After the council deliberations at the very end of the meeting during public commentary unreserved time, Jim Mogensen urged the council to get some input from the Center for Independent Living before the ordinance comes before them for its second reading. [At the council's February 2010 meeting, when an earlier ordinance had been voted down, speakers during public comment had addressed the issue of sandwich signs obstructing accessibility for handicapped people.]

Also addressing the council at the end of the meeting was Michael Slaughter, who weighed in for tasteful sandwich board signs, saying that they were allowed in other Big Ten college towns as well as in other Michigan cities. He also raised the issue of commercial-free speech in the context of the First Amendment.

Sandwich Sign Boards: Council Deliberations

Marcia Higgins (Ward 4) led off discussion of the sandwich signboard ordinance by asking why the resolution was coming back to the council outside of the context of the signboard review task force that had been assigned to take up the matter.

In February, Sabra Briere (Ward 1) said, they been assured that the referral to the task force would result in follow-up within four months. Since then, she reported, the task force had not met. To wait through the summer until the sandwich signboard task force meets or is reconstituted, she said, would be a burden to the council and also to the merchants involved.

Higgins said she had heard very compelling arguments during the public commentary for the sandwich boards, in particular for businesses that are not in the city’s most walked-about streets. She had some concerns, however, in locations where there was sidewalk dining, bicycle hoops, and also sandwich boards. Just how pedestrian friendly are we making that area, she wondered. She asked if that issue was addressed in the ordinance revision.

Briere noted that she had not designed the ordinance. But on reading it, she said there was a certain amount of sidewalk available in front of the business. There is only a certain amount of sidewalk available as a maximum amount. It’s limited because it’s part of the sidewalk occupancy ordinance.

Wendy Rampson, head of planning for the city, was called to the podium by Higgins. Rampson explained that the way the ordinance is drafted, if the sidewalk is reserved for dining, a sandwich board sign would have to be inside the dining occupancy area.

Businesses that front onto the sidewalk would have first priority. After that, Rampson said, other businesses would have the opportunity to bid and put in a permit request. The other piece includes a limit of two signs. There could be multiple businesses on those signs, but it would preclude five or six different signs being lined up on the sidewalk. The third piece that’s addressed, said Rampson, is that many of the signs get placed right next to the entrance of the building, which causes pedestrians to have to jog back and forth on the sidewalk. For that reason, that ordinance was drafted to require at least a 6-foot path from the “right-of-way edge,” which is essentially the building face.

Sandi Smith (Ward 1) asked if there was a process to allow a variance that would accommodate the kind of situation that Vicki Honeyman had explained for her business. Rampson clarified that as drafted, there’s no opportunity for a variance. However, there is a possibility for a variance under the sign ordinance, as opposed to the sidewalk occupancy ordinance – something that was drawn out also by mayor John Hieftje. Smith said she supported the ordinance and suggested that the council revisit the issue in November and evaluate how things are working.

Hieftje asked how the sign that Honeyman wanted to place on her landlord’s private property would be viewed in the meantime. Rampson explained that it would not be allowed.

Carsten Hohnke (Ward 5) drew out the fact from Rampson that the usual sidewalk occupancy season lasted from April to November, but for the sandwich board permits, it would be an annual system. It would run from July 1 through June 30. That offsets it from the application process for other sidewalk occupancy, which will allow the city staff to process both kinds of permits efficiently.

Rampson explained that in contrast to the regular sidewalk occupancy system, permission would be required for a sandwich board to be placed in front of a neighbor’s property, as opposed to a simple notification. Stephen Kunselman (Ward 3) asked if a business outside the DDA could ask permission from a business inside the DDA to place sign on a neighboring property. Rampson explained that the draft specified that it’s a business inside the DDA area that can seek such an occupancy permit.

Kunselman had questions for the city attorney about whether it was possible to have an adjacent property owner provide permission to use a public right of way – he was a little concerned about the legalities. City attorney Stephen Postema said that Kristen Larcom, a senior assistant city attorney, had looked at the issue but that he would discuss it further with her.

Focusing on the language “as is available,” Kunselman wanted know who would make the determination about what is available on the public right-of-way. Rampson clarified that the applicants are supposed to provide a diagram, which would allow the determination to take place. Based on observations of current usage, she said, when there are conflicts, they are worked out among co-tenants in the building.

As an example, Kunselman noted that he’d seen a sandwich board sign recently advertising for one of the businesses inside Nickels Arcade. He asked what would happen if all the businesses wanted to have a sign and they could not all fit on one board – who would pick and choose? The property owner? Would it be the person who processed the permits? Rampson indicated that the staff would not be mediating among tenants of a property.

Rampson clarified that the permits would be issued to business owners, but they provide a place on the application for the property owner to acknowledge the application. If there are two signs that can be issued at a given location and they are already taken, Rampson said, it was up to a business owner who did not have a sign to work it out with those who did. Kunselman concluded that “not everybody will be happy.” Rampson deadpanned back: “That’s rarely the case.”

Briere brought up the fact that the ordinance had been drafted in a way to require signs to be placed at least 18 inches from the curb, with the idea that this would help mitigate against blockage of car doors opening and wheelchair access to the curb.

Christopher Taylor (Ward 3) noted that the size of allowable signs is specified in the ordinance. He wanted to know how that compared with what’s currently used in actual practice. Rampson said that it would likely cover 80% of existing signs. Those that are larger, she said, were actually obstructions and probably should be ruled out.

Taylor also drew out from Rampson the clarification that permits are parcel-based, as opposed to street-frontage-based because it was specifically businesses located on upper stories who might be most interested in having sidewalk sign boards, but they have no street frontage.

Taylor said that he thought the ordinance should read “building-side edge” instead the “right-of-way edge,” because the right-of-way had two edges. Rampson replied that staff who dealt with it on a day-to-day basis understood that the edge of the right-of-way is the edge of the right-of-way, but assured Taylor that they would try to find some language that was more descriptive.

Mike Anglin (Ward 5) said he’d been receiving indications from people outside the downtown, who had been asked to take down their sandwich board signs. He asked if the city staff might not be a little bit more “negotiable” on the issue. Anglin was specifically concerned about Dragon’s Lair Futons.

Rampson noted that Dragon’s Lair had no frontage on Liberty Street. She also noted that the staff can’t negotiate what the code says. A directional sign in the case of Dragon’s Lair was okay, Rampson said. But for portable signs throughout the entire Liberty Street corridor, the city has been asking others to take them down and not use them. They had to be fair to everyone.

Outcome: The sidewalk occupancy ordinance designed to accommodate sandwich board signs passed unanimously on first reading.

Fuller Road Station

The topic of Fuller Road Station arose during council communications as well as during the budget hearing and general public commentary time.

Fuller Road Station: Council Communications

During her communications time, Sabra Briere (Ward 1) acknowledged that the Ann Arbor planning commission would be considering an amendment to the city’s zoning code that would revise the definition of public land (PL). The proposal was to broaden a use currently specified as a “municipal airport,” changing it to a “transportation facility.” The change would rule in the Fuller Road Station as a possible use for public land. [At its May 4 meeting, the planning commission voted unanimously to recommend the change. The topic was also discussed at the council's Sunday night caucus.]

Mike Anglin (Ward 5), during his communications time, said he wanted to give some updates on the Fuller Road Station project. He reminded the council that the University of Michigan board of regents had been presented with a plan in January 2010 totaling $46,000,550. Of that, he continued, the university had agreed to pay $36,000,309.

That meant, said Anglin, that the city would be putting up around $10 million. He said when he first voted in agreement with the intermodal transportation center, it was after it had first been presented to him at the city’s park advisory commission (PAC) meeting. [Anglin serves as an ex-officio member of PAC, along with councilmember Christopher Taylor (Ward 3).]

The PAC discussion, Anglin said, went on and on and included the potential of having things like a bar where people could go after they had played soccer. The whole thing had become a “tremendously glorified project,” Anglin said. There was a long-range plan, Anglin stressed, even though it appeared right at this moment that it was simply a parking deck. He stressed that the meeting on Thursday, May 6 on the Fuller Road Station should be a public hearing and that the public should be heard from.

Anglin said he did not believe that there had been a public hearing on the topic, yet. He said he did not want the city staff to come and explain what was going on, because people already know what is going on. What the staff should do, Anglin said, was listen to the public’s concerns. There’s a lot of disappointment, Anglin cautioned, that the city had moved so quickly ahead with something involving the parks, that could perhaps set something in motion that they don’t really fully understand yet. And for that reason, he said, it was important to have that discussion.

At first, Anglin said PAC thought it was a great idea. But now, he said, PAC is wondering if Ann Arbor is giving up a park.

During the budget hearing, Ann Arbor resident Rita Mitchell told the council that at a time when all of these budget cuts are proposed for essential services – police and fire and human services – she was concerned. She asked the council to direct its attention to funding those kinds of things and not undertake something like a parking structure on Fuller Road.

It’s been proposed that the city would contribute $10 million to the project, Mitchell said, which would primarily benefit the University of Michigan to address its parking needs for its commuters. But it would not provide a benefit to citizen taxpayers, who would be providing that funding, she contended. She asked the council to consider dropping that project. The project also represented a giving away of parkland to the university, she said.

John Satarino led off his comments during general public commentary by saying that he was a bit depressed. He had not thought of coming to address the council that night, but he’d been reading up on municipal immunity. He said he was a supporter of Fuller Park, and that he was against an eight-story, 1,600-car parking structure that was planned to be built there by the University of Michigan, with the city’s help.

Satarino noted that the next evening, on May 4, there would be a meeting of the planning commission where they would change a few words to make it possible to build a transportation center there. He told the council that he did not think that was a good way to go. He contended that there was a deed with a restriction on it, and that the parcel was designated in the master plan for the area as a park. [City staff have stated that a title search did not show any deed restrictions on the property.]

DDA Bylaws Revisions

Before the city council was a resolution that approved changes to the bylaws of the Downtown Development Authority, which the DDA board had itself approved back in February 2010.

Marcia Higgins (Ward 4) asked Susan Pollay, executive director of the DDA, to the podium to clarify what was meant by “financial systems.” Pollay explained that the DDA runs its checkbook out of her office, and that the financial systems consisted of a method for separating out the three main funds of the DDA – the TIF (tax increment financing) fund, the parking fund, and housing fund. Higgins also asked about the preparation of the annual financial report by the “treasurer or their designee.” She wanted to know who the designee could be.

Pollay indicated that what the phrasing was meant to suggest is that the staff does the work and the board treasurer ensures that it gets done. Higgins confirmed with Pollay that the revised bylaws reflect what the practice already is. Hearing Pollay’s confirmation of that resulted in Higgins’ conclusion: “Perfect, thank you.” Sandi Smith (Ward 1) – who also serves on the DDA board in addition to the city council – said that in general, all of the changes to the bylaws reflected the practice that had been in place for several years.

Stephen Kunselman (Ward 3) asked Pollay what the current bylaws required of her. Pollay explained that in the previous bylaws, her role as executive director is not designated. The executive committee of the DDA board, she said, had brought to the full board the idea that it probably made sense to actually state what the role of the executive director is.

Kunselman inquired whether the issue was addressed in the enabling legislation. Pollay said that the executive director is certainly mentioned in that legislation in the context of the DDA hiring for itself an executive director and explaining what retirement and benefits director might be entitled to. But she said it’s not specific about what the person does.

Kunselman asked Pollay if she was a city of Ann Arbor employee. Pollay allowed that it was an interesting question but said she did not believe so. She indicated that she was an employee of the DDA, but all of the DDA staff follow all of the city rules and the paychecks come through the city finance office. She said they actually did not take a lot of time reflecting on the question. They function as if they were a part of one whole organization.

Pollay indicated, however, that she worked at the pleasure of the DDA board. Her job, then, was to make sure that she met their expectations and goals, as expressed in their resolutions. Mayor John Hieftje added that the board of the DDA in a very real way serves at the pleasure of the city council – given that the city council appoints DDA board members. “So you can feel better about that,” he told Kunselman. Quipped Pollay, “I’m not sure I do!”

Outcome: The revised bylaws of the DDA were unanimously approved.

Dexter-Ann Arbor Run Road Closures

At the previous city council meeting, Hal Wolfe, race director of the Dexter-Ann Arbor Run, had appeared to ask for the street closures necessary for the race, which will be held on June 6, 2010. At Monday’s meeting, he reminded councilmembers of that previous appearance before them. He was there this week, he said, to discuss additional requested road closures.

He quipped that he was not going to stop until he achieved the closure of every road in the county. Returning to a more serious demeanor, he told the council that the road closure in question involved the exit ramp from M-14 to Main Street. He reported that they had been working on a plan to get the ramp closed for the race for the last six months. He noted that it is a hospital exit as well as a major interchange, so they were taking it very seriously.

The stretch along Main Street, he explained, is about 1.1 miles of the race course. Along 0.9 of those 1.1 Main Street miles, he said, there are runners, cones and cars. In particular, where the off-ramp comes off of Huron River Drive there’s a lane of runners and a lane of cars going at close-to-freeway speeds getting bottlenecked before they can get over to the other side of Main Street.

Wolfe reported that he had been working with the Michigan Dept. of Transportation (MDOT) and the Ann Arbor police department over the last six months to develop a successful plan to get the closure accomplished properly. The difference between two weeks ago and tonight, he said, was that the University of Michigan Hospital had given their consent to allow the approval, based on the plans they been shown.

MDOT had provided the requirements for the closure sign designs, and there would be a police officer stationed at the off-ramp, he said. The approval that night, he said, would be an authorization to go back to MDOT to finalize plans to make sure that everything was done properly. He thanked Christopher Taylor (Ward 3) for helping him get the item onto the council’s agenda. He told the council that he would stay until the vote in order to answer any questions they might have.

Later towards the end of the meeting, councilmembers had several clarificational questions, but ultimately approved the road closures.

Outcome: The council unanimously approved the M-14 exit ramp closure for the Dexter-Ann Arbor Run.

Delinquent Charges Added to Tax Rolls

Before the council was a resolution to move a total of $204,821 in delinquent fees to the July 2010 tax rolls. Residents with charges on the list for water utility, alarm, board up, clean up, vacant property inspection and housing inspection fees would have 30 days to pay the delinquent fees or face having the charges added to their tax bills with a 10% penalty fee. With the penalty, that translates to a total of $225,303.

City treasurer Matthew Horning explained that a letter would be sent out the following day to everyone who has a “receivable” with the city, and from that point they will have 30 days until it goes onto the tax rolls with a 10% penalty.

Mike Anglin (Ward 5) asked what the vacant property inspection meant. He noted that there were more buildings in town that seemed vacant, and it could become a concern. Horning allowed that it was a concern – it’s part of the planning and development services area. On a monthly basis, vacant property is inspected to make sure there are no fire hazards and that everything is still safe. There is an inspection fee associated with that service, he explained.

Anglin asked if there was any consequence to the inspection. Horning explained that the “consequence” was the fee, which ranged from $40-$50. Anglin described a particular building that he found to be an eyesore. Horning indicated that once the building became categorized as a nuisance, then it became the city attorney’s responsibility.

Anglin said he felt that the $40 fee was perhaps not adequate to convey that the city took the issue seriously. At a time when more houses are becoming vacant, he said, it was not appropriate to relay a message that it was okay to simply walk away from a property and that the city would look after it for a $40 fee per month. He said he was not satisfied with the situation and would be willing to increase the fees quite dramatically.

Horning clarified that the inspection fee was exactly that, namely, an inspection fee. If there’s something about any property or a structure that is lacking, then the owner of the property is given a time frame in which to rectify the situation. If the property owner does not do so, continued Horning, the city has the right to cause improvements to be made.

Sandi Smith (Ward 1) noted that with many people struggling with foreclosure situations, she would not want to have the city be the one to tip the balance by applying these fees. She advised to proceed with caution.

Marcia Higgins (Ward 4) clarified with Horning that water utility delinquencies were quarterly water bills that were not paid as of Jan. 1 of this year. Higgins asked if water had been shut off. Horning said that the shut-off process is one method to get payment. He deferred the specifics of the water shut-off program to the public services department. He said that shared meters for multiple dwellings in many buildings in the city made it impossible to shut off water, because it would mean shutting off water to a large number of dwelling units.

Sue McCormick, the public services area administrative for the city, came to the podium to explain that the addresses on the delinquency list were probably a result of a variety of different circumstances. Some could be residential or small commercial, she said. Nothing goes to the tax roll if it is not aged over six months, she explained. Addresses on the list are past due and owing for more than six months.

Outcome: The resolution to move delinquent charges to the tax rolls passed unanimously.

Greenbelt Advisory Commission Re-Appointments

Before the council was a resolution to re-appoint four members of the greenbelt advisory commission (GAC). Carsten Hohnke (Ward 5), who serves as the city council’s representative to GAC, noted that the city was fortunate that all four had agreed to devote their time and specific domain knowledge on the commission.

Marcia Higgins (Ward 4) asked if anyone else had expressed interest in the positions, noting that these are city council appointments. That contrasts with most other appointments, which are nominated by the mayor and then confirmed by the council. Hohnke said that the openings on the commission had been communicated at the last city council meeting during his communications time. The terms are posted on the city website and the application materials are available on city website.

Higgins asked if any other applications had been received. The city clerk, Jackie Beaudry, confirmed that no others had been received. With that, Higgins was content.

By ordinance, Hohnke said the positions are specified to be a real estate development professional (Peter Allen), an environmental organization representative (Laura Rubin of the Huron River Watershed Council), an agriculture landowner representative (Tom Bloomer), and a public-at-large representative (Dan Ezekiel).

Outcome: The council unanimously approved all four GAC re-appointments.

Other Public Commentary

Kathy Griswold reported that a site visit had been made to the crosswalk at King Elementary School, which is at a mid-block location. Griswold has addressed the council on the following previous occasions, encouraging the city to move the crosswalk to an intersection in the interest of safety:

  • 2009 Aug. 16 city council caucus [link]
  • 2009 Nov. 5 city council meeting [link]
  • 2009 Dec. 21 city council meeting [link]
  • 2010 Jan. 4 city council meeting [link]
  • 2010 Feb. 1 city council meeting [link]
  • 2010 Feb. 16 city council meeting [link]
  • 2010 March 15 city council meeting [link]
  • 2010 April 5 city council meeting [link]
  • 2010 April 18 city council caucus [link]
  • 2010 April 19 city council meeting [link]

Present at the site visit on April 23, 2010, reported Griswold, were the mayor, as well as Ward 2 councilmembers Stephen Rapundalo and Tony Derezinski, plus six parents of King School students, the principal, as well as local media.

It was her understanding, based on communication with Rapundalo, Griswold said, that more background was needed. She offered that the transportation safety committee, which had recommended moving the crosswalk to the intersection from its mid-block location, had been created in the 1960s and she’d served on it since 1994. She’d been hired by the Ann Arbor Public Schools system in 2000 as a safety consultant. She told the council that she hoped they would respect the process established by the committee.

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

Absent: Stephen Rapundalo.

Next council meeting: May 17, 2010 at 7 p.m. in council chambers, 2nd floor of the Guy C. Larcom, Jr. Municipal Building, 100 N. Fifth Ave. [confirm date]

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Budget Round 2: What’s the Big Idea? Thu, 11 Feb 2010 23:30:46 +0000 Dave Askins On Monday night, the Ann Arbor City Council continued with the second in a series of extra meetings devoted exclusively to budget issues. Much of the discussion was a review of information that councilmembers had deliberated at their Jan. 25 meeting, when the focus was specifically on the community services area.

Tom Crawford and Roger Fraser

At left is Tom Crawford, the city's CFO. To the right is Roger Fraser, city administrator. (Photos by the writer.)

The community services area comprises the Ann Arbor Housing Commission, planning and development, human services, and parks/recreation. The council had chosen to focus on that area first, because of the community service area administrator’s imminent departure – Jayne Miller’s last day working for the city is Feb. 12, 2010.

But Miller’s new post as director of the Huron Clinton Metro Authority (HCMA) factored into some of the conversation on Monday, ranging from HCMA’s canoe rental fee structure, to the (remote) possibility that HCMA might take over some of the city of Ann Arbor’s parks. It was those larger scope issues the council was meant to address on Monday.

So at Monday’s meeting, city administrator Roger Fraser labeled the occasion as a time to talk about the “big ideas” the council had been presented at their December 2009 budget retreat. And councilmembers did eventually come around to start grinding through the list of ideas.

Rather than organize our account of the meeting based on that list, we’ve identified some themes that might provide an alternate framing of some of the budget challenges. We’ve formulated them as questions: (i) What are the basic philosophies? (ii) Should anything be held harmless? (iii) What do we do with our land? (iv) Is increasing revenue an option?

Basic Philosophy

Speaking from the podium, instead of from his usual spot at the head of the table next to the mayor, Roger Fraser reminded councilmembers of the materials they’d been provided.

[The city is accumulating all of these materials on the Our Town section of its website. From the scanned PDF of the budget impact sheet summary, The Chronicle has created a live spreadsheet.]

Fraser then addressed a variety of issues and responded to questions raised by councilmembers through the course of the meeting, which we categorize as basic philosophy issues.

Philosophy: Does Everyone Share the Pain?

Fraser said that he’d been asked what the impact would be of a 3% wage reduction across all city employees. He told councilmembers that the savings to the general fund would be $1.275 million. Savings in other funds would total $970,000. He cautioned that 75% of the city’s workers belong to unions and many of those are subject to Act 312 arbitration. He was therefore not terribly optimistic about progress with those units.

[The city's recent history with Act 312 arbitration is not good – at its May 4, 2009 meeting, the city council approved the 2006-2009 Ann Arbor Police Officers Association (AAPOA) collective bargaining agreement – the result of a binding arbitration settlement that cost the city $1.6 million.]

Fraser said that the city continued to work on a plan for possible implementation of a wage reduction among city workers not represented by a bargaining unit.

Philosophy: A History of Incremental Staff Reductions

Included in the materials provided to councilmembers is a graph showing the cost savings that had accumulated since 2001 as a result of eliminating 239 positions within the city over time.

Mayor John Hieftje noted that the total impact of savings due to the incremental elimination of full-time positions over the last 10 years was $25 million. He asked that the city’s CFO, Tom Crawford, provide the math used to generate that figure.

Sandi Smith (Ward 1) asked about the contrast between one-time savings versus longer-term savings indicated in the budget impact sheets. Referring to his staff’s general focus on long-term savings, Fraser said, “My generic answer is: That’s what we do.”

Fraser observed that without creative collaboration, it would not have been possible to reduce the number of city employees by 25% over the course of eight years with little impact on services. The ongoing mission, he said, was to figure out different ways of doing things and doing them cheaper. He noted that the filling of any position anywhere in the city now requires his personal authorization.

Philosophy: Becoming More Efficient

Sandi Smith (Ward 1) inquired of Fraser what kind of systematic approach was taken to look at cost savings across service units. Fraser told her that this was an effort undertaken on a recurring basis.

As an example, Fraser cited the city’s customer service unit – in the past it dealt primarily just with water and sewer bills, but now has aggregated all of the city’s customer service functions, dealing with all calls from finance to parking tickets. He said that it was part of the weekly meeting that he had with all the area administrators – Sue McCormick, Jayne Miller and Barnett Jones – to always consider the issue of systematic ways to improve efficiency.

As another example, Fraser pointed to the fact that the fire department now works with public services on training for getting people out of holes – city staff now digs holes used for the training. Fraser allowed that it seemed like a completely obvious thing to do, yet in the past it hadn’t been done that way – instead, the fire department had contracted out to have holes dug. The fire department, Fraser said, is also now a part of a more collaborative site plan review process for new developments. He concluded by saying that identifying systematic efficiencies is really an “ongoing exercise.”

Philosophy: Chipping Away versus Complete Cutting

Sabra Briere (Ward 1) asked Fraser if his philosophy going into this budget process was to continue doing what we’re doing, but do it less expensively. Fraser’s answer: No.

He allowed that the city would continue to focus on improved efficiency but that there were two main categories of issues: (i) things that they can do without, and (ii) things they have no choice about. As an example of something he felt they had no choice but to eliminate were training budgets.

Briere then asked Fraser what he thought should be the city council’s guiding philosophy in approaching the budget. Fraser said that city council should focus on the big ideas. The relevant questions, he said, were: (i) Should we continue to do things the same way? and (ii) Which things can we do less of?

There are areas that cannot sustain a 7.5% cut, Fraser said, without having a negative impact on the quality of service. Some things, Fraser said, they will have to stop doing, period. “Tonight,” Fraser said, “I’m asking you to begin a conversation about which of the things we do should we not continue to do. We’re at a danger point, a tipping point. Incremental change is no longer healthy.”

He continued, saying, “My general rule is: we should do things the best way possible. If we can’t do that, we shouldn’t do it at all.”

Carsten Hohnke (Ward 5) noted that the budget impact sheets with which the city council had been provided built to the total dollar amounts, but it is less clear what the subjective impact on a service would be due to the savings indicated in the sheets. Hohnke asked where, in the city staff’s opinion, the service areas were that would fall below the line of providing the service well, if an additional 7.5% were cut.

Fraser replied that he did not have a complete evaluation present that evening. The data was raw right now for a reason – it was to get a first-blush reaction from the city council, he said. Which ideas have traction and which don’t have traction?

Purely as a hypothetical example, Fraser said, if $200,000 were taken out of the parks program, that is money that can be put towards other priorities. If the city council says that the community cannot tolerate a safety services reduction, then by taking $200,000 out of the parks program, they would be giving him some ability to address a concern for safety services.

Philosophy: Long-Range Planning

Mike Anglin (Ward 5) said he thought part of the difficulty was having only a two-year budget planning cycle. He said that longer-term planning was needed and pointed to the Stadium Boulevard bridges as an example of something that might have been addressed with better long-term planning.

Fraser told Anglin that he didn’t agree with that perspective on the city bridges, noting that the project had been in the city’s capital improvement plan (CIP) since the last decade. The city had planned in advance for that, but it was a matter of reductions in federal and state support for those kinds of capital projects, he said. That lowered support had been driven in part by the Bush administration, which had continued a philosophy of reduced government that had started in the Reagan era. Fraser also pointed to the state fuel tax as problematic, because it is calculated on a cents-per-gallon basis, not a percentage. We’re selling less fuel, he said, which means there’s less Act 51 money.

Mayor John Hieftje, responding to the idea of better long-range forecasting and planning, asked who would have predicted five years ago that the state would have the kind of current economic conditions that it does. Fraser then appealed to the 2006 forecast, which saw the city reaching an equilibrium between its expenses and property tax revenues, with no additional reductions required. Now, however, projections were that property tax revenues will not reach their 2007 levels again until the year 2015. The decisions that are made today, Fraser said, the city will have to live with for another five years at least.

Holding Harmless

The budget impact sheets include preliminary reports from service units, breaking down what effect various decisions would have on the budget. Included in those sheets are breakdowns of the savings that would come from laying off an additional six firefighters beyond the 14 positions already slated for elimination as a part of the FY 2011 budget plan: $653,080. [The city adopts budgets one year at a time, but plans in a two-year cycle.] The recent agreement between the city and the firefighters union prevented the early layoff of those 14 positions.

Roger Fraser Pie Chart

Roger Fraser shows the council a pie chart giving the breakdown of safety services expenditures versus other categories.

Also included in the budget impact sheets are the savings that would result from eliminating 17 positions in the police department – three of which are vacant: $1,608,317.

As the conversation turned to safety services, Fraser held up a pie chart, showing the breakdown of safety services as a part of the city’s budget: police, fire, and the district court make up about 61% of the budget. If police and fire services were held harmless, Fraser said, the impact on the rest of the budget would require an 18% reduction.

The theme of what, if anything, should be held harmless in the budgeting process ties together the topics in this section.

Holding Harmless: Fire

Mayor John Hieftje began by saying that he wanted to set up parameters. They needed to staff the fire department adequately to ensure that three people were on the scene as quickly as possible, so that they met the safety criteria for entering a burning building– that was his position, he said. They should take that and work backwards to determine adequate staffing levels.

A bit later it was clarified that, in fact, four people are required on scene in order to enter a burning structure – two to enter the building, and two to remain outside. However, acting fire chief Greg Hollingsworth made the point that “it takes more than four people to fight a fire, so that’s not the biggest concern.”

Fraser indicated that when a new fire chief is hired, he or she might bring some interesting ideas about how to provide adequate fire services. With respect to the hiring of a new fire chief, Fraser said that two finalists had been identified and that a hire would be imminent.

[Among the interesting ideas could be the idea of cross training police officers as firefighters – which would make them public safety officers of some stripe, along the model used in Kalamazoo. However, the International Association of Firefighters has generated several white papers outlining problems with the public safety officer approach.]

Fraser Hollingsworth

City administrator Roger Fraser, left, with acting fire chief Greg Hollingsworth.

Carsten Hohnke (Ward 5) expressed interest in seeing what kind of metrics for response time were used and how that stacked up against other communities. He asked for information about number of firefighters per square mile or the number of fire stations per thousand residents or whatever the relevant metrics might be. Sabra Briere (Ward 1) said she was interested in seeing how the joint dispatch system was working as that got off the ground.

Christopher Taylor (Ward 3) asked for clarification of the statement in the budget impact sheet concerning high-rise fires. Hollingsworth explained that present staff levels did not address fires in high-rises. The budget impact sheets indicate that the proposed reduction of an additional six firefighters would drop levels below national models to effectively staff for and safely fight an average-sized home fire.

Mike Anglin (Ward 5) asked Hollingsworth to explain what the impact on insurance rates would be from the kind of reductions the city was contemplating. Hollingsworth said the impact would most likely be seen on commercial property. The ratings depended not just on the quality of the fire department but also on other factors, like the water system, he explained. But he allowed that, yes, there was a potential for the reductions to have an effect on insurance rates. Marcia Higgins (Ward 4) wanted to know what the impact would be on response times in her ward on football Saturdays if a fire station were closed. “How will you get to us?” She asked for best estimates.

Holding Harmless: Parks Millage and Parks General Fund

A couple of related “big ideas” involve the parks maintenance and capital improvements millage and its relation to the city’s general fund. First a bit of background on that millage.

Before November 2006, the city levied two separate millages at 0.5 mill each – one for parks maintenance and the other for capital improvements. Within the combined millage, taxes are collected at a rate of 1.0 mill, but money is allocated to maintenance or capital improvements on a more flexible basis than the previous 50-50 split that was legally enforced by the specialized purpose of each millage.

However, there’s not complete flexibility to allocate money to maintenance or capital improvements within the unified millage. Percentage allocation is guided by a city council resolution passed in October 2006. The resolution specifies a range of 60% to 80% for maintenance, with the remainder going to capital improvements.

But there are some “hold harmless” clauses in the resolution as well. The resolution also calls for any reduction in the overall general fund to be reflected no more severely in parks programs supported by the general fund than in other general fund activities. For example, if the general fund were to suffer a 7.5% reduction, then parks programs supported by the general fund would suffer no greater a reduction than 7.5%.

Subsequent to the passage of the millage, in preparation of the FY 2007 budget, the city initially calculated the baseline for general fund parks activity without the Leslie Science and Nature Center – which had been spun off by the city as an independent nonprofit. The reasoning was that the item itself was no longer in the general fund, so it was not a matter of the general fund being reduced. However, in response to public criticism, funding was put back into parks programs to bring funding to the level it would have been with the Leslie Science and Nature Center as a part of the calculation.

Another “hold harmless” clause in the resolution on the administration of the parks maintenance and capital improvements millage affects the city’s natural area preservation program (NAP).

3. The Natural Area Preservation Program budget be established at a minimum of $700,000 for first year of the millage budget and that it receive a minimum 3% annual increase for each of the subsequent five years of the millage to enhance the stewardship of increased acreage of natural park areas;

It’s likely that the clause was intended to ensure that funding for NAP kept pace with funding increases to other areas, as millage revenues increased due to increased property values. But the effect of the clause now, as millage revenues decline, is to hold NAP harmless – and even to increase NAP’s budget.

The distribution of funds to various park-related tasks – which is specified in Attachment A accompanying the resolution – includes the stipulation that mowing and snow removal for parks be funded exclusively out of the general fund. The millage fund, then, is “held harmless” against mowing and snow removal costs.

Related to the idea of reducing general fund support for park maintenance is an increase use of volunteers for that activity.

On Monday night, Marcia Higgins (Ward 4) stated that a mechanism was needed in order to expand the volunteer program. Mayor John Hieftje pointed to the Adopt-a-Park program as that mechanism. Higgins, though, said she was thinking more of a ongoing, every day eyes-on-the-park mechanism. Roger Fraser noted that they would need to do marketing, education, and recruitment, and that meant staff resources.

In response to a suggestion from Sandi Smith (Ward 1), Jayne Miller said that the idea of having an organization like Project Grow put in gardens and be responsible for maintenance of the surrounding area in some parks would likely be met with strong opposition. In trying to do that over the last few years, there had been extreme negative feedback from neighbors next to parks, she reported, noting “I was shocked by that.” Neither Smith nor Miller were able to offer an explanation for the negative reaction. However, Margie Teall (Ward 4) suggested that one of the objections is that people use parks and they want to be able to continue to use them the way they are.

Holding Harmless: Partial Reallocation of the Greenbelt Millage

The open space land acquisition millage, authorized by voters in November 2003 to be levied from 2004 through 2034 at a rate of 0.5 mill, is also commonly known as the greenbelt millage. Its expenditures are guided by the city’s greenbelt advisory commission.

Rather than wait for millage proceeds to accumulate, the city issued a bond in order to have a substantial amount of cash on hand for potentially large or numerous land acquisitions. In August 2005, a bond was issued for roughly $20 million, with debt service on those bonds – around $1.2 million annually – to be paid by the greenbelt millage proceeds. The millage currently generates around $2 million in revenue.

Of the bonded amount, around $8 million has been obligated through purchase of development rights or land acquisition deals, leaving around $12 million in an unobligated fund balance. Also available per year is around $800,000 from millage proceeds not required for coverage of the debt service on the bond. [This does not factor in the investment income from the fund balance.]

The “big idea,” then, is to ask if any of that $800,000 per year should be reallocated to the maintenance of parks inside the city. Such a reallocation would require voter approval.

The connection between the greenbelt millage and possible use of those funds towards maintenance of city parks isn’t based just on thematic similarity. A recent greenbelt millage acquisition of a rental house on Chapin Street will result in an incremental addition to West Park when the house is demolished. And a greenbelt acquisition of a parcel on Sunset Road – on the city council’s agenda for Feb. 16 – will add to Bluffs Park.

Hieftje led off the discussion on Monday night by noting that there was a need to pay off the bonds that had already been sold. Hieftje said that the greenbelt program would benefit the community in the long-term and that it would be a mistake not to take the opportunity, especially in the current market with land values depressed. Carsten Hohnke (Ward 5) stated that he shared the mayor’s view. He added that the dollars being used are also being leveraged. Jayne Miller confirmed that the average match received for greenbelt initiatives was 35-50%.

Marcia Higgins (Ward 4) noted that the millage was passed on 2003 – she said she supported it then and she still supports it. However, she said she would not be opposed to asking voters to look at it. She pointed out that the current 0.47 mill rate could then be reset to bring it back up to its original 0.5 mill rate. [The rate has been rolled back because of the Headlee Amendment.] She concluded, “I think it should stay in the mix.”

Concerning the greenbelt millage, Sabra Briere (Ward 1) noted that concerns have been raised about the number of parks in the city. She asked for a clarification: What percentage of greenbelt money could be spent within city limits – was it 30%?

Miller clarified that there was no requirement about where the greenbelt money could be spent. It could range from zero to 100% spent in the city. With respect to greenbelt dollars that had been spent inside the city, therefore taking land off the tax rolls, Briere said she would like to think that it had been non-developable land.

Briere asked about the continuing maintenance issue for such properties. Miller clarified that for land acquired outside the city, there is money set aside for monitoring property, as part of the acquisition of development rights. When parkland is added to the city by the greenbelt millage, she allowed, maintenance costs did increase. Briere noted that those costs are paid out of the parks maintenance millage. Miller allowed that being able to maintain what the city owns now is a challenge. When parkland is added, she said, people typically want at least some trails and other amenities installed.

Hohnke clarified that for greenbelt money spent on land outside of the city, there is no maintenance cost. That’s because the deal is typically a purchase of development rights, not an outright purchase of property.

Real Estate

While the greenbelt millage is all about acquiring development rights and land, councilmembers on Monday night also talked about what to do with land already owned by the city.

Huron Clinton Metro Authority

Stephen Kunselman (Ward 3) took the opportunity to ask Jayne Miller a question related to her future position as director of the Huron Clinton Metro Authority (HCMA). Had there been any discussions about the HCMA taking over some city parks? Miller said that one of the challenges is philosophical. The HCMA is more interested in dealing with large parcels of land at 3,000 to 4,000 acres apiece, she said. Most of the city parks are much smaller than that.

First & Washington

Sandi Smith (Ward 1) asked what the proceeds from the still-pending sale of the First & Washington parcel – to be developed by Village Green as the City Apartments project – would be used for. Fraser’s answer: As a down payment on the municipal center currently under construction next door to the Larcom Building.

Old YMCA Lot

Stephen Kunselman (Ward 3) raised the question of the old YMCA lot: Why doesn’t the city put it up for sale? Fraser’s initial reply was that it’s currently generating revenue. Fraser clarified that the agreement recently struck between the city and the Ann Arbor Downtown Development Authority sends either the net revenue from the surface parking lot on that location or else $100,000 per year – whichever is greater – to the city’s general fund.

Kunselman pointed out that the city is making interest-only payments on the parcel – then ticked through the costs associated with the lot: its purchase, demolition of the building, rent for displaced residents, interest-only payments since its purchase in 2003, insurance deductible for a pending lawsuit, cost of the construction of a parking lot. Kunselman calculated that the city had invested some $5-$6 million in the parcel and that it was perhaps time to “cut our losses.”

Kunselman continued by saying that he thought it was time to give up the idea that “we, as politicians, can create affordable housing.” He suggested that the existing fund balance in the housing trust fund be transferred to the Ann Arbor Housing Commission.

Mayor John Hieftje allowed that Kunselman was making a good point, but that it was really a matter of timing – the parking provided by the old YMCA lot is currently needed, especially since the surface parking at the city-owned Library Lot was now unavailable while an underground parking garage is under construction. Once the parking structure is finished, said Hieftje, the YMCA parcel would be more valuable.

Fraser concurred that the old YMCA lot would become more marketable when the underground parking garage is completed. Kunselman expressed some skepticism that the parcel would bring in all that much more in the future, noting that the old Ann Arbor News building was currently for sale for around $9 million.

It’s not the first time a councilmember has weighed in for unloading the lot. From Chronicle coverage of the Dec. 1, 2008 council meeting:

The item on the agenda was to approve a continued financing of the property on the corner of Fifth and William through interest-only payments. The Bank of Ann Arbor, which will provide the financing, was one of two out of seven institutions that responded to the request for bids. The other one was Chase Equipment Leasing, whose bid of a 6.14% interest rate did not compare favorably with the 3.89% offered by the Bank of Ann Arbor.

In deliberations, councilmember Sandi Smith said that she would support the continued financing of the property, because they had no other choice, but that she urged her colleagues to begin thinking of master planning the area so that the city could divest itself of the property as soon as possible. Smith noted that given the $5,000 cost of supporting a homeless person, the interest-only payments could be used to support 27 people. The math goes like this: ($3,500,000)*(.0389)/5,000.

Main & William

Stephen Rapundalo (Ward 2) suggested that the old YMCA lot merited a community discussion. An additional land parcel downtown that Rapundalo thought warranted some focus was the parking lot at Main & William, next to Palios restaurant. He noted that there were just 21 parking spaces at the lot, but it was possibly ripe for investment. He wanted to know if  it was on the list somewhere. Fraser told him it was on a list, but not near the top.

Sale of Parkland

Sandi Smith (Ward 1) cautioned that they should not be patching operations holes with capital dollars. Sabra Briere (Ward 1) noted that there was the same issue with the idea of selling parkland – patching operations with capital dollars.

Fraser responded to Briere’s point by clarifying that it was the maintenance expenses and limited use of specific parks that had resulted in their inclusion on the list provided to council. Fraser said he was not asking council to consider the capital value of parkland, but rather the ongoing maintenance cost that the parcels represented. Marcia Higgins (Ward 4) and mayor John Hiefje asked for additional information about maintenance costs for the parks that had been identified as those it made the most sense to sell, if the city were to sell any of its parks.

More Revenue?

While it’s related to how the city uses its land, and while the possible sale of the land upon which Huron Hills Golf Course sits has a controversial history, we still slot Monday’s discussion of golf courses into the section on revenue generation. One of the “big ideas” considered by the council is the idea of a public-private partnership for operation of Huron Hills Golf Course.

Revenue: Do You Golf?

Stephen Rapundalo (Ward 2) said he wanted to learn more about cost savings that could be achieved through private partnerships connected to public golf courses. He asked if the next step would be to issue an request for proposals (RFP) for Huron Hills Golf Course. Jayne Miller said she would recommend issuing an RFP – even though a private golf initiative would not be operational in time to have an impact on FY 2011, the council would get information needed to plan for FY 2012, she said. Margie Teall (Ward 4) stated that she wanted to see that happen.

Mike Anglin Colin Smith

Mike Anglin (Ward 5) chats with Colin Smith before the Feb. 8 meeting. Smith is manager of the city's parks and recreation programs.

Sabre Briere (Ward 1) wanted to know why Leslie Park Golf Course was not also being considered for a public-private partnership. Miller noted that Leslie represented a fairly decent chance of becoming self-sustaining and that allowing a private enterprise to take it over would essentially take money out of the city’s pocket.

Christopher Taylor (Ward 3) then introduced an analogy that flummoxed his colleagues sitting on the other side of the table: “We have the wolf by the ears with golf,” he said. Marcia Higgins (Ward 4) later asked him to clarify what he meant by that. Taylor then referenced the Jeffersonian analogy to slavery in America, which compared the U.S. relationship to slavery as having a wolf by the ears.

On the question of entering a private-public partnership on the Leslie Park Golf Course, Miller explained that a consultant [Golf Convergence] – who had been hired to look at the courses in conjunction with the creation of the city’s golf task force – found that there was little interest by anyone in either of the two golf courses. Now that the Leslie course has started to show some improvement in its finances [and now enjoys a liquor license], there had been some interest in it. Rapundalo, however, said that entering a public-private partnership on Leslie would be like “giving away our crown jewel.”

The result of the discussion – which Hieftje and Fraser took care to not label as a “decision,” but rather as giving direction to the city administrator – was that city staff will start preparing an RFP for a public-private partnership on the Huron Hills Golf Course.

Revenue: Compost as Merchant Operation

The subject of converting the city’s composting facilities to a merchant operation – that is, operated by a business – arose out of one of the “big ideas” on the list, which was to analyze the possible benefits of discontinuing the city’s leaf collection program in favor of requiring citizens to “containerize” leaves – through bagging or placing them in carts.

Responding to a question from Margie Teall (Ward 4), Sue McCormick, public services area administrator, said that while the leaf collection program was not a general fund program, costs in the solid waste fund needed to be addressed as well. [The reduction in property values affects millage revenues across the board.]

McCormick reported that they’d looked at the economic side of the equation, and that the estimated net savings using conservative estimates (not factoring in behavior changes that would reduce the number of leaves set out by residents) was $100,000. In conversation with Marcia Higgins (Ward 4), McCormick stated that the situation would be helped by additional deployment of compost carts, which can be emptied through an automatic arm.

Mayor John Hieftje noted that in his neighborhood [Burns Park] people put a few leaves each week and that this had eliminated the need to sweep the leaves into the street. McCormick cautioned against compacting too many leaves into the containers, as it sometimes made emptying them difficult. [The automated arms tilt the carts upside down – whereupon the contents are liberated from the confines of the cart through a physical attractive force, a so-called "gravity."] McCormick pointed to the benefit of bagging as (i) providing more control, and (ii) limiting the amount of disruption in the community.

Stephen Kunselman (Ward 3) quizzed McCormick on the proposed conversion of the compost operation to a merchant operation. Given the reduction in volume that would be anticipated as a result of required bagging of leaves, how would that make money? It had to be due to expanded operations to process non-resident yard waste, he concluded. McCormick deferred answering the question, saying that she’d like to take that on as a topic unto itself and provide a full analysis. [The city issued an RFP for the contract last year.]

Revenue: City Income Tax

On the question of possible sale of parkland, Christopher Taylor (Ward 3) stated that he would rather go to voters with something direct on revenue – an apparent reference to the idea of putting a referendum on a possible city income tax before voters. [The city of Ann Arbor's charter specifies that it can levy a property tax for general operating expenses or a city income tax, but not both.]

At a recent meeting of the city council’s budget committee, city administrator Roger Fraser had recommended to the council that they at least invest in the gathering of information about voter attitudes related to an income tax – in the same way that the Ann Arbor Transportation Authority recently did with respect to a possible countywide transportation millage. [The AATA's survey of 1,100 Washtenaw County voters cost $40,918, according to AATA spokeswoman Mary Stasiak.]

Revenue: Recreation Fees

On the subject of charging an additional rental fee for a third person in a canoe at the city’s canoe liveries, Margie Teall (Ward 4) asked if that was standard practice in other communities. Jayne Miller confirmed that it was an industry standard – Huron Clinton Metro Authority charges per person, for example.

Teall then ask about other users of the water besides canoes – on the analogy that the water was like a playing field. Miller noted that part of the difficulty in assessing a fee was that there were multiple places to enter and exit the water, as it was a public waterway. Teall allowed that yes, walking across a park should not result in a fee being assessed, but she was talking about organized use that might prevent other people from using the water. Miller then said, “The thing that comes to mind is rowing.”

Miller then put the question in the larger context of the Argo Dam. Its maintenance funding is currently in the city’s water fund, but needs to be moved out of that fund. [Roger Fraser has previously indicated that this is something that will be undertaken in the current budget cycle.]

Fees at recreational facilities, of course, generate revenue for those facilities. Miller referred the council to a spreadsheet that listed out each recreational facility with expenses, revenues and visitors. Asked what facilities should be closed, Miller said she had no simple answer.

She noted that it’s not a matter of how much the facility costs to operate. Once revenues are added in, the cost savings that the city gets from closing the facility are much less than the number in the cost column. An important question to ask in evaluating a recreational facility, she said, was this: Is this service being offered elsewhere? So the question was whether it was possible to close a facility but not eliminate the service.

Jayne Miller Roger Fraser

At the conclusion of the meeting, city administrator Roger Fraser said, "I think it's appropriate to thank Jayne (Miller). She's done an extraordinary job." Councilmembers gave Miller, who's leaving the city to head the Huron Clinton Metro Authority, a round of applause.

If the city had three pools, for example, and one of them were to be closed, the service would still be available elsewhere. But, she cautioned, that could have a negative impact on the other two pools, due to capacity limitations. Based purely on the numbers, she said, the two facilities she would recommend closing were the two that she had in fact already recommended closing: Mack Pool, and the Ann Arbor Senior Center.

With respect to the senior center and the available-services-elsewhere metric, Miller said that there were, in fact, other places that people could get those services. However, she said, it was clear that it was not simply a matter of services, but rather the fact that people who visited the senior center use that as their social network.

That’s the dilemma, she said. Miller also said that the two task forces dedicated to looking at those two facilities had identified cost savings and revenue enhancements that also needed to be considered in any decision.

Tony Derezinski (Ward 2) asked about increasing fees for facility use and whether there was an elasticity of demand. Miller clarified that through the 1990s, fees had been consistently raised, but in the early 2000s they had been reduced because the city realized that they were losing customers. Miller also clarified that some of the revenue potential had to do with constraints resulting from the location of facilities in neighborhoods. Buhr Ice Rink, for example, has restricted hours of operation due to the noise from pucks and people crashing into the boards. Margie Teall (Ward 4) said she would like to see some information on the impact of raising rates.

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