This animated .gif is purely the product of The Chronicle’s “art department” and is not intended to imply even indirectly a willingness by the University of Michigan athletic department to provide a slot in the marquee’s message rotation for city of Ann Arbor public service announcements.

The council will be considering a resolution that asks the University of Michigan to decommission the $2.8 million digital marquee recently constructed by the university’s athletic department. I don’t think the university is going to give that any thought.

In this unnecessary drama, Christopher Taylor (Ward 3) appears to be playing the role of Don Quixote, with four councilmembers auditioning for the role of Sancho – Marcia Higgins (Ward 4), Margie Teall (Ward 4), Sally Petersen (Ward 2) and Jane Lumm (Ward 2). Those five are co-sponsoring the resolution. [If the council really wants to tilt at windmills, the city could have a literal one soon enough.]

The council’s Nov. 7 resolution cites the city’s own recently enacted sign ordinance, which constrains the deployment of digital technology for outdoor signs. According to the resolution, the marquee inflicts the same harms on the community that the city’s newly amended ordinance sought to prevent. [Petersen and Higgins, however, voted against that ordinance.] Those harms are described in the resolution as “distract[ing] motorists and substantially degrad[ing] the community viewshed…”

As the text of the council’s Nov. 7 resolution itself concedes, the University of Michigan is “without any obligation to comply with the ordinances of the city of Ann Arbor” – so the fact that the UM’s marquee rather flagrantly flouts the city council’s sign ordinance is of no consequence.

What is semantically bizarre about the text of the resolution is its contention that by turning the marquee off, or by limiting its use, the Ann Arbor community would be delivered a “material benefit.” If the council’s position really is that the marquee is doing harm, then by no rational standard should the mere mitigation of that perceived harm be labeled a “benefit,” much less a material one.

By way of analogy, if a chemical company is dumping toxic sludge onto my property and jeopardizing my health, then it’s not really a “benefit” to me if the company were to stop doing that. But it could be considered a benefit if the company allowed me to take my own personal toxic sludge and add it to the company’s pile, which the company then removed from my property.

If the city councilmembers who crafted the resolution had taken the phrase “material benefit” seriously, it might have given them pause to ask: Hey, could city residents derive some actual benefit from this situation? And that might have led them to reflect on the reason the UM athletic department wanted to construct this marquee. I think it’s an attempt to meet a communications challenge.

And guess what: The city of Ann Arbor has its own communication challenges. Can you see where this is headed? Or are you too distracted by the constantly changing display in the dumb little animated .gif at the top of this column? 

Let’s say you’re an Ann Arbor city councilmember, and you’ve identified a piece of University of Michigan communications infrastructure as your focus. That’s an occasion to ask yourself if you’re familiar with the communications infrastructure of the city. What are the basic policies and strategies the city of Ann Arbor uses to communicate with residents?

For example, the questions you might have as a councilmember could include: What’s the communications budget for the city? Is there even such a thing as a “communications budget”? What role, if any, does social media play in the city’s strategy? Why is the Community Television Network facility located way down on South Industrial Highway? How much does the city pay to lease the CTN facility? How long is that lease? Is there any kind of leadership transition going on at CTN that might have an impact on the future of CTN? Would the city of Ann Arbor have the capacity with current staff levels and expertise to participate constructively with UM on any new communications initiatives? If the university were to agree to allow the city of Ann Arbor some small number of giant marquee message slots for public service announcements, would the city be able to provide content in a timely way?

Those are all reasonable questions a naturally curious person might have. But if you serve the community as a councilmember – which is supposed to be a part-time job (paying just under $16,000 a year) – your role is to help formulate and direct policy, not micromanage solutions to problems. In the case of all matters related to the University of Michigan, I think that basic city policy should be something like: Seek areas of common ground on which the city and UM can cooperate to benefit residents and the university’s mission.

So as a city councilmember, if you recognize a giant monster in that marquee, instead of trying to figure out “the solution,” your role is to remind the city administrator of the basic policy directive. And that’s it. I think “cooperation” in this particular instance might conceivably translate in some fashion to an effort on the part of the city administrator – or staff under his direction – to convince UM athletics that a couple of slots for city of Ann Arbor public service announcements on the marquee would be feasible and in everyone’s best interest.

In any case, that approach to this “issue” is one that could be handled with a 30-second remark from a councilmember at a council meeting during communications time: “Mr. Powers, in the context of our routine interactions with the University of Michigan, can you add to your to-do list a way of realizing some benefit to residents from the university’s new marquee?”

And maybe six months later we’d start seeing announcements on the marquee reminding residents that it’s Election Day or that our winter taxes are due, or that trash pickup has shifted one day due to the recent holiday. Or not. If Powers were to report back in six months that the issue had very little traction or, for heavens sake, he just had not made that a top priority and there was nothing to report – well, that wouldn’t be the end of the world, either.

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From left: 15th District Court judge Christopher Easthope – a former Ann Arbor city councilmember – and 15th District Court administrator Keith Zeisloft at the council’s June 17 meeting. (Photos by the writer.)

The main court-related item was part of an annual adjustment to the current fiscal year’s budget (FY 2013), which ends on June 30. The adjustment is made on a routine basis in order to bring the budget in line with actual expenditures. The general fund budget adjustment that was eventually approved by the council increased it by $567,000.

And of that amount, a significant part was attributable to the 15th District Court – including $112,000 in salary increases based on an interest in retaining employees, $203,000 due to a “catch up” payment to the law firm that provides indigent representation, and a back-bill for security from Washtenaw County for two fiscal years for $110,000. None of the salary increases went to judges, whose compensation is set through state statute.

The council was essentially being asked to approve the accounting adjustment for money that had already been spent this year.

The city’s budget for the next fiscal year – approved by the council last month, on May 20, 2013 – already incorporated the court workers’ salary increases going forward, and councilmembers had been apprised of the raises before their budget deliberations in May. The council’s deliberations on May 20 had not focused on those raises, but rather on the possibility of reducing the court’s budget in order to fund additional police officers for the city.

At the June 17 meeting, all three judges of the court plus the court administrator were on hand – as some councilmembers drew out a disagreement regarding how the wage increases should have been approached. At least some councilmembers felt the court should have asked the council before awarding wage increases to its workers.

Tom Crawford, the city’s chief financial officer, indicated at the meeting that if the council had not approved the budget adjustment for the court, it would likely have generated a note in next year’s audit.

Other court-related items on the council’s agenda included a new $240,000 annual flat-fee contract with Nassif and Reiser – the firm that provides indigent representation for the court. The council also approved a $160,000 contract with the Washtenaw County sheriff’s office for weapons screening at the Justice Center, the building next to city hall that houses the 15th District Court.

The council approved two items related to the court’s special Sobriety Court, one of which was a $65,000 grant program contract with the nonprofit Dawn Farm to provide in-patient and out-patient drug abuse counseling to 15th District Court defendants. It was approved over the dissent of Sabra Briere (Ward 1), who objected to the accompanying provision that waived a requirement that Dawn Farm adhere to the city’s living wage ordinance.

The wind generator item was originally on the consent agenda, but was pulled out for separate consideration. The council had previously voted unanimously at its Jan. 7, 2013 meeting to accept a roughly $950,000 U.S. Department of Energy grant for installation of the wind generator. The council was asked on June 17 to spend about $50,000 of the grant proceeds on an initial environmental assessment, required before the project can move forward. Three councilmembers balked at the request, but the resolution was ultimately approved.

In business related to revisions of local laws, the council gave final approval to an ordinance change that limits use of fireworks to between the hours of 8 a.m. and midnight. And the council gave final approval to the city’s outdoor sign ordinance that limits the incorporation of digital technology into outdoor signs – in a way that prohibits such use for billboards. However, the council again delayed taking an initial vote on an ordinance that would regulate how local law enforcement officials can use public surveillance cameras. The council did give initial approval to adopt the new fire code into the city’s ordinances.

In land use and development business, the council approved a revised development agreement for The Varsity. The agreement now incorporates a total of seven monthly parking permits that will be purchased at a premium cost under the city’s contribution in lieu (CIL) program. The council also gave approval to site plans for two projects: the State Street Center and 544 Detroit St. The 544 Detroit St. project included a brownfield plan, which was also approved. Another brownfield plan was on the council’s agenda – related to the Packard Square development on the site of the former Georgetown Mall. That plan had previously been approved, but an additional council vote was needed to change the set of activities that are eligible for reimbursement.

In connection with government-controlled land, the council approved $382,000 in additional operating support for the Ann Arbor Housing Commission. The council also passed a resolution committing up to $750,000 in general fund money to convert city-owned property at 721 N. Main to a greenway park. However, if the grants that the city expects to be awarded are actually received, none of that $750,000 would need to be spent on the project.

The council again heard public commentary about a homelessness outreach ministry in one of the city’s established parks – Liberty Plaza in downtown Ann Arbor, at Division and Liberty streets.

The council also approved revisions to collective bargaining agreements with the six unions in the police department, which gave members a 2% wage increase.

In a symbolic effort, the council voted to oppose expansion of I-94 in Detroit and I-75 in Oakland County – a proposal that’s part of SEMCOG’s 2040 Regional Transportation Plan with an estimated cost of $4 billion. SEMCOG subsequently adopted the plan.

The council put off voting on proposed changes to its internal rules, which could result in adding public commentary time at the council’s work sessions, but reducing the time allowed per turn from three minutes to two minutes. The council is expected to vote on the full set of rule changes at its July 1 meeting.

The proposed changes to the rules would move nominations and confirmation of appointments to a slot near the start of the meeting, instead of its current position near the end. For the June 17 meeting, the council’s confirmations came after midnight – and included reappointment of Bonnie Bona to the planning commission, and LuAnne Bullington to the taxicab board.

15th District Court

A number of items on the June 17 agenda related to the 15th District Court – either directly or indirectly.

15th District Court: City FY 2013 Budget Adjustment

The council was asked to make changes to the FY 2013 budget – which ends on June 30 – totaling $567,000 for the general fund. Much of that stemmed from additional expenses incurred by the 15th District Court. [.pdf of proposed amendments]

The 15th District Court’s portion of that adjustment stemmed from $112,000 in salary increases based on an interest in retaining employees, $203,000 due to a “catch up” payment to the law firm that provides indigent representation, and a back-bill for security from Washtenaw County for two fiscal years for $110,000.

General information about the court’s wage increases – authorized by chief judge Libby Hines in October 2012 and the focus of council inquiry at the council’s June 17 meeting – was known to the council before its May 20, 2013 meeting, when councilmembers voted to approve next year’s FY 2014 budget. [.pdf of May 13, 2013 memo on 15th District Court expenses] That FY 2014 budget incorporated the wage increases going forward.

As it related to the court, the council’s May 20, 2013 deliberations on the FY 2014 budget were in the context of reducing the court’s budget in order to fund three police officer positions – a proposal put forward by Jane Lumm (Ward 2). 15th District Court administrator Keith Zeisloft was present at that meeting and took questions about the salary increases at that time. However, Lumm’s FY 2014 budget amendment failed on a 5-6 vote.

15th District Court administrator Keith Zeisloft and Sumi Kailasapathy (Ward 1) before the June 17 meeting started.

Subsequently, Zeisloft provided a memo to the council in advance of its June 17 meeting, giving a more detailed explanation of the salary increases. The judges, magistrate and Zeisloft were excluded from the increases. The majority of other staff received a 0-3% increase. Administrative staff received an average 4.85% increase based on the conclusion that they were under-compensated compared to their peers in other courts.

The case management staff received an average of 4.22% raises based on increased supervisory responsibilities. Judicial staff averaged a 4.76% increase based on increased specialty court responsibilities. The highest increases, averaging 18.15%, were given to probation officers who were found to be significantly under-compensated compared to their peers, and who had increased multi-jurisdictional, specialty court responsibilities. [.pdf of responses from 15th District Court to councilmember inquiries]

The block of items related to the 15th District Court were moved up on the agenda at the start of the meeting, in deference to the fact that three judges and the court administrator were in attendance.

15th District Court: City FY 2013 Budget Adjustment – Deliberations

Sabra Briere (Ward 1) led off the discussion by proposing an amendment that eliminated the $112,000 budget adjustment for the 15th District Court salary increases – which had been approved by chief Judge Libby Hines in late 2012. Briere contended that the regular processes weren’t followed for the wage increases, venturing that the chief judge had overstepped her bounds. Briere was not satisfied with the mechanism by which the wage increases were approved, saying they were “not properly done.”

The overall tone of the ensuing interaction between the three judges and the council was consistent with the language Zeisloft had provided in his memo. Responding to a question about the ability of the city council to control the court’s spending decisions, the memo states:

Although City Council has authority to establish a total annual budget for the Court, and with all respect due to Council, the Court declines to accept that City Council has authority to direct, control, approve or disapprove specific expenditures, including but not limited to compensation of judicial employees. However, legalities aside, the Court has always sought a respectful and cordial relationship with Council and City Administration, and the Court’s budget history demonstrates that the Court has been a prudent and careful custodian of public funds, at times even to the disadvantage of the Court’s own interests.

At the meeting, Zeisloft generally deferred questions to the judges of the court, who were all in attendance: Judges Chris Easthope, Libby Hines and Joe Burke are all standing at the podium. However, Zeisloft also responded to particular items.

Jane Lumm (Ward 2) followed up on the salary increases – which were implemented in October 2012 – asking for a breakdown of the $112,000. Relying on figures from the city’s finance department, Zeisloft gave the breakdown as follows: compensation ($115,000), overtime ($10,000), temporary pay ($19,000) and vacancies (-$32,000) for a total of $112,000. The annual cost going forward was calculated at $193,000. Zeisloft had prefaced his remarks by saying that the information hadn’t been distributed to councilmembers because he didn’t have the information earlier. Lumm asked for the information to be provided in writing.

Hines told the council she respects the separation of powers, but she asserted the authority of the chief judge to increase salaries. The court has never asked the city for permission to do that in her 22 years on the bench. She pointed out the money that the court has managed to return to the city in past years when it has come in under budget. Zeisloft’s memo put the figures as follows: for FY 2002 through FY 2012, the council had budgeted a total of $41,865,240 from the general fund for court operations. Over that period, the court spent only $40,435,613, for a net return to the city budget of $1,429,627.

Hines put the salary increases in the context of retaining employees. She described past pay cuts and freezes. She also described a gross disparity in pay between the probation officers in the 15th District Court compared to other courts. And she added that while the court had worked with the city’s HR department, the court had not asked permission to implement the raises. The court is not overpaying its employees by any means, she said, concluding that she felt the pay raises were only reasonable.

Sumi Kailasapathy (Ward 1) disagreed with the narrative of the “honorable judges,” citing the decrease in cases handled by the court. The workload has come down, Kailasapathy contended. She was relying on the data that the court had provided to the council earlier in the year:

By way of background, Ann Arbor’s caseload downward trends are in line with the overall trend for other comparable courts [.pdf of caseload trends for 15th District Court]:

               Misdem       Civil Inf    Gen Civil
D15 Ann Arbor  3,109 ‐31%   13,894 ‐49%  1,742 ‐16%

-

Easthope said the 15th District Court was trying to be in the lead in reducing its costs. He allowed that the caseload had gone down, but the number of employees had also gone down, he contended.

The city’s comprehensive financial reports show 41 FTEs (full-time equivalents) for the court in 2007 compared to 36 in 2012:

15th District Court historical FTE count. (Data from city records, chart by The Chronicle)

Hines said that the kind of cases that had gone down – civil infractions – were not the kind that reduce judge and staff time. Hines returned to her earlier point about the basis for the salary increases – the challenge of retaining employees.

Briere said she’s not unsympathetic to the situation. But she felt the salary increases should have been considered as part of the standard budgeting process. The money should have been built into the FY 2013 budget, Briere contended. She agreed with the need to compensate the court staff – but a standard increase in salary should have been included in previous year’s budget.

Burke offered his perspective of the newest judge of the court, telling the council that when he became a judge, Hines and Easthope had sat him down and talked to him about the employees and the need for retention. He said that in making the salary increases, they had followed the normal procedures that anyone would in determining the amounts of the increases – gathering comparative data and the like. The one thing that they had not done was ask the city council. Responding to Briere’s point about budgeting, Burke said the court had calculated that the salary increases would come in within the court’s FY 2013 budget – but they had been wrong. It was a point to which Stephen Kunselman (Ward 3) returned later in the deliberations, telling Burke that he appreciated the fact the court had acknowledged that its math was off.

Kailasapathy then cited a Michigan Supreme Court administrative order. It appears to say that if the court uses a line item budget, there are restrictions on what the court can do.

From Administrative Order No. 1998-5, which applies to district courts, among others.

II. COURT BUDGETING If the local funding unit requests that a proposed court budget be submitted in line-item detail, the chief judge must comply with the request. If a court budget has been appropriated in line-item detail, without prior approval of the funding unit, a court may not transfer between line-item accounts to: (a) create new personnel positions or to supplement existing wage scales or benefits, except to implement across the board increases that were granted to employees of the funding unit after the adoption of the court’s budget at the same rate, or (b) reclassify an employee to a higher level of an existing category. A chief judge may not enter into a multiple-year commitment concerning any personnel economic issue unless: (1) the funding unit agrees, or (2) the agreement does not exceed the percentage increase or the duration of a multiple-year contract that the funding unit has negotiated for its employees. Courts must notify the funding unit or a local court management council of transfers between lines within 10 business days of the transfer. The requirements shall not be construed to restrict implementation of collective bargaining agreements.

Zeisloft responded to Kailasapathy by saying that the court submits a budget in a line item form only as a courtesy. It’s a function of the city’s financial software. Tom Crawford, the city’s CFO, followed up with the additional explanation that the city requires all the component units to submit line item budgets, but the city council authorizes the budgets by fund. Kailasapathy returned to her question about the administrative order.

Easthope, a former city councilmember, stated that the council has the authority to set a lump sum budget for the court. But the council doesn’t have the ability to change line items, he said. Easthope reiterated the description of the court as a separate branch of government. There was some unclarity expressed about where the comparative salary data had come from and who had gathered it. About the comparative salary data and its source, Easthope stated that the Supreme Court administrative office had provided all the comparative data. Hines had not simply said, “You get a raise and you get a raise …”

Considerable back-and-forth ensued between Kailasapathy and Zeisloft on the way the HR department of the city had been involved in the compensation adjustment amount. No formal report had been requested from HR, Zeisloft confirmed.

Chuck Warpehoski (Ward 5) asked for clarification of the administrative order on line item budgeting. and what happens if the council doesn’t approve the adjustment. That is, what happens if Briere’s amendment passes? Crawford indicated that the city would probably receive a formal note from the city’s auditor next year. The money has already been spent, Warpehoski ventured. Crawford indicated agreement that it would be difficult to stop the expenditures before the fiscal year ends on June 30.

Lumm then confirmed with Crawford that court employee checks are processed through the city. In describing the fact that the court had exceeded its budget this year (FY 2013), Lumm said that the court’s budget seems to be “optional.” But picking up on Warpehoski’s point – that the council essentially needs to approve the budget adjustment or accept a negative note on the audit of its financial statements next year – Lumm ventured that there doesn’t seem to be an option not to make the adjustment. Easthope contended that the court was actually under the budget by $99,000. Lumm wanted to follow up later on that, indicating that Easthope’s remarks weren’t consistent with the information the council had received.

Jane Lumm (Ward 2) and Stephen Kunselman (Ward 3).

Kunselman asked what Burke thought the consequence should be: Should the council just cover the amount of the salary increases? In the short term, Burke replied, yes. He said the court doesn’t spend money like drunken sailors. Burke indicated that there is a clear understanding on the court’s part that the council would not want to hear next year at this time that the court had the same issue.

Christopher Taylor (Ward 3) ventured that the council had engaged in a full conversation, but it’s a simple question. The court had diligently determined that their line workers’ wages were below market, Taylor concluded. And the council has already approved the increases going forward, he noted, when it approved the FY 2014 budget. So Taylor indicated he’d vote against Briere’s amendment. Mayor John Hieftje confirmed with Crawford that the budget resolution basically recognizes reality.

Briere indicated that her intent was not to force the court into a deficit. The court’s staff should not be penalized for the actions of their supervisors. So she’d withdraw her amendment. But she said the court should have done a better job of communicating, and she stated she would remember the situation without fondness. Kailasapathy, who seconded the amendment, hesitated for several seconds before agreeing with Briere to withdraw it.

With that amendment withdrawn, Sally Petersen (Ward 2) moved on to the indigent representation and the security services issue. Zeisloft characterized those as an unusual circumstance, that should not arise again in the future. Easthope noted that the special docket courts are operated at no cost to the city.

Marcia Higgins (Ward 4) returned to the issue of the salary increases, picking up on the historical pattern that Hines had cited of the court coming in under budget and returning money to the city. Why were salary increases not undertaken during the period when the court was returning money to the city? If the court had the ability to give raises without asking permission from the city, why didn’t the court give the raises at that time – when the court had the money?

As far as the idea that the court was trying to mirror the city organization’s approach of not giving raises during the period of the economic downturn, Higgins pointed out that the city had not given its employees the kind of raises the court had implemented over the last year. So she didn’t see the mirroring play out.

Burke ventured that unfortunately the court did not get the opportunity to come before the council to say that it was returning money to the city. It was only when more money was needed that court officials came to the council. Higgins complained that she felt blindsided, because the court did not come to the council and communicate that to the council about a major increase.

Marcia Higgins (Ward 4).

Briere ventured that it’s easier to ask forgiveness than permission. Burke responded by saying he felt Briere’s remark was “[holding his fingers apart to indicate an increment] this much of a cheap shot.” Briere told Burke it was OK that he felt that way, because she felt the other way – that in years past when the court knew it had outstanding debts to the county for security services, for example, but had returned money to the city, to her that was a problem. Briere also alluded to the issue with the court’s math, which Kunselman had also noted. Briere indicated that she had great respect for the court and the work that it did. But it was a “big chunk” to come to the council with at the last meeting in June.

Burke said that if his mathematical competence was being questioned, then he could live with that. But if Briere was saying that the court didn’t come to the council even though it knew that it should have, then “I’m sorry, but you’re just wrong about that. We are separate branches of government and what you’re talking about is an integrity issue.”

City administrator Steve Powers shared his perspective as a former county administrator working three different courts. Prior to his taking the city administrator position in September 2011, he felt there hadn’t been enough consultation and communication between the city and the 15th District Court. So he’d met with the chief judge and the court administrator. He accepted responsibility for not bringing the communication back from the court and not updating the council. Going forward, the consultation with the court would be important so that these issues don’t arise in the future, Powers said. He stressed the importance of the two branches of government doing things in consultation, not confrontation.

Outcome: The council voted to approve the FY 2013 budget adjustments, over the lone dissent of Sumi Kailasapathy (Ward 1).

15th District Court: Indigent Representation

Two agenda items related to the law firm that provides indigent representation for defendants in the 15th District Court.

Nader Nassif with Nassif and Reiser, P.L.L.C., which does business as Model Cities Legal Services. Nassif also serves on the board of the Ann Arbor Downtown Development Authority. In the foreground is 15th District Court judge Chris Easthope.

The 15th District Court is required to provide representation to those who cannot afford an attorney, if a conviction would result in jail time.

The council was asked to approve a $240,000 flat-fee contract for representation of indigent defendants – with Nassif and Reiser, P.L.L.C. (f/k/a Funkhouser and Nassif, P.L.L.C.), d/b/a Model Cities Legal Services (“MCLS”). The contract covers FY 2014, which begins July 1.

The reason the contract was structured as a flat fee is that MCLS had customarily delayed billing for services until a defendant’s case was completely closed or additional court action was deemed unlikely.

Even after a guilty verdict, defendants remain under court supervision and can be subject to other court orders.

Delayed billing resulted in another agenda item requesting that the council cover $203,000 of fees to “catch up” the billing.

15th District Court: Indigent Representation – Deliberations

Christopher Taylor (Ward 3) indicated that the contracting party is a client of his law firm. He asked the council to vote to excuse him from voting.

They did so, and Taylor took a seat in the audience.

Lumm asked Zeisloft if the court had considered issuing an RFP (request for proposals) for the service. Zeisloft described the negotiation between the court and the law firm. He indicated that the court had not considered issuing an RFP, but it would be possible. Model Cities, however, provides the service at a very competitive cost, he said.

Christopher Taylor (Ward 3) sat in the audience as the contracts for indigent representation were discussed.

Easthope explained that Model Cities doesn’t just stand in court – they provide far more than that. There’s a value that’s hard to represent, and it doesn’t have to do with just the lowest price. Model Cities has a personal connection to all the social services agencies, Easthope explained.

Outcome: The council voted to approve the two resolutions related to Model Cities for legal services.

15th District Court: Security Billing

In addition to an FY 2013 budget adjustment that included back-billing for security services, the council was asked to approve next year’s $160,000 contract with the Washtenaw County sheriff’s office for weapons screening at the Justice Center, which houses the 15th District Court. The estimated annual cost is based on $25.25 per hour per court security officer. The estimated maximum annual cost of $160,000 is $27,000 less than last year. The money comes from the 15th District Court’s budget.

During deliberations, Jane Lumm (Ward 2) got clarification on the way the cost of the contract was estimated. Zeisloft explained that it’s based on a wage rate of $25.25 per hour. The reduction from the $187,000 for the previous year was due to a reduction in the projected number of hours that would be worked, he said, not a reduction in the wage rate.

Outcome: The council voted to approve the weapons screening contract.

15th District Court: Specialized Courts

Two other items related to the 15th District Court appeared initially on the council’s consent agenda, a group of items considered routine and voted on as a group. The council was asked to approve $30,000 for a Sobriety Court grant program contract with the Washtenaw Community Health Organization (WCHO) to provide mental health treatment to 15th District Court defendants. And the council was asked to approve $65,000 for a Sobriety Court grant program contract with Dawn Farm for in-patient and out-patient drug abuse counseling to 15th District Court defendants.

At Sabra Briere’s (Ward 1) request, the Dawn Farm item was pulled out for separate consideration, because the item included a request for a waiver of the city’s living wage ordinance. According to the staff memo accompanying the resolution, Dawn Farm employs 70 people, including 15 employees who are paid less than $12.52 per hour with health care coverage, and 18 people who are compensated at rates less than $13.96 per hour without health care coverage. Those are the rates specified in the city’s living wage ordinance.

Last fall the council engaged in a vigorous discussion of a living wage ordinance waiver for Community Action Network (CAN), which ultimately resulted in the granting of a waiver for that nonprofit at the council’s Nov. 8, 2012 meeting.

From left: Sumi Kailasapathy (Ward 1) and Sabra Briere (Ward 1).

Briere led off the discussion saying she wasn’t satisfied with the answers she’s received to questions she had asked about the living wage ordinance exemption that had been requested by Dawn Farm. She wanted to know if the item could be postponed so that adequate answers could be given.

Judge Joe Burke, who runs the Sobriety Court, explained to Briere that the court’s application for a grant was due on Friday, June 21 – so postponement would be difficult. Burke indicated that he was the one who’d asked for the living wage ordinance exemption – and that was based on communication from Jim Balmer, executive director of Dawn Farm, who’d reported that Dawn Farm can’t comply with the living wage.

Burke said he couldn’t speak for Dawn Farm but could speak about Dawn Farm. Briere interrupted Burke, apologizing for doing so, but stressed that her concern was not with Dawn Farm but rather with the living wage compliance: “I just don’t want you to spend too much time telling us what we all agree are the virtues of Dawn Farm as an entity and the work they do for the Sobriety Court.” Burke stressed that Balmer agreed with the city’s living wage ordinance, but was not in a financial position to comply, and Balmer had wanted to be honest about that. Burke then went on to explain the importance of the work that Dawn Farm does in support of the Sobriety Court.

Briere indicated that she didn’t see a process in the application for the living wage exemption that would eventually lead to compliance. Just as working toward sobriety has steps, Briere said, working toward financial solvency also has steps. Her problem was with the exemption, not the contract.

By way of background, the point Briere was raising related to conditions on the exemption that the council can grant under the ordinance. The Ann Arbor’s living wage ordinance reads in relevant part [emphasis added]:

… provided further that the otherwise covered non-profit employer shall provide a written plan to fully comply with this Chapter within a reasonable period of time, not to exceed three years, and the City Council then agrees that granting a partial or complete exemption is necessary to ameliorate the harm and permit the non-profit organization sufficient time to reach full compliance with this Chapter.

Briere wanted that process to be included in the application for the exemption.

Outcome: The Dawn Farm contract, with the three-year exemption from the city’s living wage ordinance, was granted by the council over dissent from Sabra Briere (Ward 1). She did not insist on a roll call vote.

Wind Energy

The council had previously voted unanimously at its Jan. 7, 2013 meeting to approve the acceptance of a roughly $950,000 U.S. Department of Energy grant for installation of a wind generator project. On June 17, the council was asked to spend about $50,000 of the proceeds of that grant on the initial environmental assessment, required before the project can proceed. The specific item on which the council was asked to vote was a contract with CDM Smith to perform an environmental analysis (EA) under the National Environmental Policy Act (NEPA), which includes public engagement.

The wind generator item was on the consent agenda, but was pulled out for separate consideration.

Wind Energy: Council Deliberations

Jane Lumm (Ward 2) led off discussion by saying that she’d learned that day that the proposal is to place a wind turbine at Pioneer High School. She felt it was unfortunate that an initial decision had been made to place the generator on the high school property, without more community outreach – but she allowed that part of CDM Smith’s scope of work would include public engagement.

Sumi Kailasapathy (Ward 1) followed up on Lumm’s remarks by reporting that she’d received a letter from a University of Michigan physics professor – Gregory Tarlè – on the topic of the wind generator. She read aloud some concerns outlined by him in his message:

I am currently teaching a class “Energy for our Future” at the University of Michigan. One of the first things we learn when studying wind power is that the power you can get from a wind turbine goes as the cube of the wind velocity. Effective wind turbines must be sited in places where the wind velocity is high and steady or where there are frequent high velocity gusts. Attached is a map of US Wind Resources from the Department of Energy. As you can see, wind resources are marginal at best in Ann Arbor but are excellent offshore in the Great Lakes. Winds increase with altitude (because of wind shear) and that is why large towers are needed. It is not educational to site wind turbines at sites selected for non scientific reasons.

Kailasapathy summarized Tarlè’s remarks by saying that the only thing this turbine would teach students is that if you place a windmill where there’s no wind, then it won’t move. She didn’t think that’s worth $1 million. She regretted voting for the project earlier, but it’s not too late, she said. She allowed that it was federal dollars, but that’s still taxpayer money and it’s the council’s duty to be a good steward, she said.

City utilities engineer Brian Steglitz, who’s managing the wind generator project, and public services area administrator Craig Hupy were on hand to answer questions. Sabra Briere (Ward 1) asked Steglitz to explain why it’s a good project. He characterized it as a demonstration program for wind energy in an urban environment. The city went through a competitive process with the Department of Energy to obtain the grant, he said. The partnership the city is working on with Wind Products – the company that will install the wind generator – would include a guarantee that the turbine will produce a minimum amount of energy. Wind Products had also looked at wind maps, Steglitz said, and looked at the cut-in speeds for the turbines to evaluate how much of the time the windmills would actually be spinning. Based on that analysis, Wind Products was willing to guarantee a minimum amount of power. The project is also part of the city’s goal to generate alternative energy, Steglitz said.

Briere indicated she’d heard from others that there’s no way the wind generator could produce enough electricity to pay for itself. Steglitz noted that the data provided by Wind Products indicated that the 60kW turbine would not generate a tremendous amount of power, but it would offset some of the power needs of the high school. Wind Products would subsidize any possible shortfall in power generation. The power that the school would purchase from the developer will cost less than conventional power, Steglitz said, which is part of the school district’s incentive to participate in the program – to realize a few thousand dollars worth of electricity savings per year. The city’s role is more like a broker between Wind Products and the school district.

Later in the meeting, Kailasapathy asked if the estimates for energy production were independently verified by a third party. Hupy explained that they had not been verified, but that the estimates would be tied to a financial commitment from Wind Products – that it would subsidize any shortfall in power production.

Sally Petersen (Ward 2) asked for more information about the Ann Arbor Public Schools participation in the project. Once the generator is installed, who takes over from there? If AAPS cuts its budget, will it possibly cut support for the turbine? Steglitz indicated that the AAPS will lease the space for the turbine and purchase the power. That’s the extent of AAPS participation. Wind Products would maintain and operate the generator, he explained. Later in the council’s deliberations, information in the staff memo accompanying the resolution was drawn out – that the city would eventually own the generator:

It is anticipated that the wind turbine(s) will be located on AAPS property, that the wind turbine(s) will be owned or purchased by the City, that the developer will construct the wind turbine(s), and that the AAPS will purchase the power from the wind turbine(s) under a power purchase agreement. While the City, AAPS and Wind Products have been meeting and continue to work to come to terms on the several agreements so that they can be ready to be brought forward for review and approval once the NEPA EA and public engagement process are completed and accepted by the DOE.

Sally Petersen (Ward 2).

Petersen ventured that AAPS will have a financial upside, which Steglitz confirmed.

Hupy explained that the item the council was being asked to approve provided funding to look at the environmental impact of the turbine. In arguing against the approval, Lumm cited the same letter from Tarlè that Kailasapathy had mentioned.

Marcia Higgins (Ward 4) asked how the public would be notified about the public engagement process. Steglitz explained that the intent would be to broaden the scope beyond the standard requirement that residents within 500 feet be notified. He described how the process would include the city’s public engagement “toolbox.” The intent, Steglitz said, was to conduct public engagement and environmental review over the next six months, and to have the review and assessment finished by the end of the 2013 calendar year.

Higgins ventured that it’ll be a lively debate about whether a wind turbine should be placed at Pioneer High School. Responding to a question from Higgins about the city’s financial commitment, Steglitz described it as around $18,000 worth of staff time. Higgins said she was willing to let the debate unfold and not get in the way of it. She confirmed with Hupy that before any further city commitment is made, the council would have to approve it.

Stephen Kunselman (Ward 3) asked for a refresher on the height of the pole where the wind-turbine would be mounted. Steglitz explained that it’d be about 120 feet tall with a 60-foot diameter blade. Kunselman concluded it’s not really a “turbine” but rather just a “generator.” [Kunselman's day job at UM is as energy liaison with Planet Blue.] He felt that the generator will actually be generating a decent amount of electricity given its educational, demonstration purpose. Mike Anglin (Ward 5) also expressed his support for the project based on its educational impact.

Lumm allowed that she had voted to accept the federal grant back in January. But she’d learned a lot since that vote was taken, she said. She wouldn’t support taking the next step based on the idea that it would be sited in a location that doesn’t have much wind.

As a partial counter to Lumm’s complaint that there had not been community outreach on the siting of the generator, Sabra Briere (Ward 1) ventured that public outreach wouldn’t happen unless the city hired CDM Smith to do the public outreach, which the council was being asked to approve. That process would help determine whether this is an appropriate site, she ventured. Steglitz confirmed that’s correct. Briere wondered what the alternative locations are. Steglitz indicated that there aren’t really any alternative sites. Hupy confirmed that the city has looked extensively, even as far north as East Lansing – where it might be sited with a maize-and-blue pole, he quipped. City administrator Steve Powers subsequently assured the council that Hupy was not joking about the idea of trying to find a location in East Lansing.

Petersen wanted to know if anyone from AAPS was at the council meeting to talk about the educational component – no one was. Kailasapathy questioned the idea that there could be an educational benefit, if the generator were to be located in East Lansing. Hupy explained how utility regulations require that the power be consumed on the site where it’s generated. Transmission over lines to be used in other locations isn’t allowed except with permission of the electric utility.

Kailasapathy raised a question about noise created by the generator. Steglitz explained that the noise issue would be part of the environmental assessment.

From left: Christopher Taylor (Ward 3) and Stephen Kunselman (Ward 3).

In the course of the council’s discussion, the email from Tarlè had been sent to all councilmembers, and Kunselman took the opportunity to comment on it in more detail. He stressed that Tarlè seemed to be talking about wind-farm sized turbines – not the size of the generator that the city is considering. What the city is considering, he said, is a 60 kW wind generator that will be running about 30% of the time. And part of that time, students would have the opportunity to look at a data center that shows all the data. That’s the educational component of the project, he said. And the money is Dept. of Energy grant money, not city money, Kunselman added. He concluded that the city should move forward with the project.

Mayor John Hieftje weighed in for the resolution, saying it’s worth exploring the next stage of the project. Hieftje said he wants to follow the lead of the DoE. Lumm responded to Hieftje’s argument based on the DoE, by questioning whether the DoE is aware of the power generation estimates. Hieftje ventured that DoE is aware of the educational nature of the project.

Outcome: The contract with CDM Smith to conduct an environmental assessment for the wind generator project was approved over dissent from Sally Petersen (Ward 2), Jane Lumm (Ward 2) and Sumi Kailasapathy (Ward 1).

Video Privacy Ordinance

The council was asked to give initial approval to an ordinance regulating the use of public surveillance cameras in the city.

The council had previously postponed the item at its May 20, 2013 meeting. Before that, the council had postponed the item at its April 15 meeting – due to the length of that meeting – and again on May 6. [.pdf of ordinance as presented to the council on April 15, 2013]

The new ordinance would apply only to a limited range of cameras – those used by the city of Ann Arbor “to monitor human activity without the physical presence of an operator, including cameras on remotely operated aerial vehicles.”

The ordinance would not apply to a range of city of Ann Arbor cameras, for example: cameras used to improve traffic design, security cameras operating in jails, prisons, water treatment facilities, public housing facilities, or the Ann Arbor Airport and other governmental facilities.

The new ordinance would allow for public surveillance cameras to be installed for 15 days or less at the discretion of the city administrator if the purpose is to address a specific criminal problem.

The council’s consideration of the topic dates back a few years. Former Ward 1 councilmember Sandi Smith had announced at a council meeting on Aug. 4, 2011 that she’d be bringing a video surveillance ordinance for consideration at the council’s Sept. 6, 2011 meeting. And a year before that she’d indicated the city’s human rights commission would be working on the issue.

Video Privacy Ordinance: Council Deliberations

Chuck Warpehoski (Ward 5) introduced the ordinance. He noted that while Chief John Seto was out of town and not available to answer questions about the potential impact of the ordinance on law enforcement activity. Still, Warpehoski asked his colleagues to move the change forward to a second reading. He characterized the ordinance as striking a balance between the right to privacy and the interests of law enforcement. In light of the full agenda that night, Warpehoski suggested a more in-depth discussion when it came back for second and final reading.

Sally Petersen (Ward 2) asked for a clarification of some of the changes that had been made to the proposed ordinance. Sabra Briere (Ward 1) thanked Warpehoski for his work, but said that this ordinance was not her favorite idea.

Jane Lumm (Ward 2) indicated she was hoping it would be postponed, citing Seto’s absence. She also noted that new revisions had been given to the council only last night. She didn’t think the council should pass ordinances at the first reading just to get them to the second reading. So she said she wouldn’t be supporting it.

Stephen Kunselman (Ward 3) appreciated Warpehoski’s work to bring the ordinance forward. But he felt it’s a solution in search of a problem. He knew he wouldn’t support it when it came to the second reading – because he felt it tied the city administrator’s hands. Privacy is already protected, he contended. And surveillance cameras do work, he said, giving the West Willow neighborhood as an example. He asked: Where’s the budget for this? Asking the city administrator to run around getting permissions from residents didn’t seem sensible, Kunselman said.

Sumi Kailasapathy (Ward 1) indicated support for postponement and made a motion to postpone. Warpehoski seconded that motion. Christopher Taylor (Ward 3) indicated support for the postponement, but said he’d have probably been inclined to support it at first reading.

Outcome: The council voted to postpone the video privacy ordinance until July 1, when police chief John Seto will be available.

Fire Code

The council was asked to give initial approval to an amendment to Chapter 111 (Fire Prevention) of the city code so that it refers to the 2009 International Fire Code instead of the 2003 version.

Chuck Warpehoski (Ward 5) indicated that he’d support the ordinance at first reading, but he had some concerns about the inspection of certain areas. Jane Lumm (Ward 2) asked fire chief Chuck Hubbard about the frequency and cost of fire inspections. Hubbard contrasted inspections with re-inspections. If there are violations found, then an inspector will return to confirm that the violation has been corrected – and that’s a re-inspection. Hubbard allowed that inspections have been stepped up. It’s being done for the benefit to the property owners, he said.

Ann Arbor fire inspections: 2006-2012. (Data is from city financial records. Chart by The Chronicle.)

City administrator Steve Powers indicated that the performance of the fire inspection program is being reviewed. Stephen Kunselman (Ward 3) noted that the building department is already using the 2009 code, but the fire department is using the 2003 code. What are the differences? Kunselman got confirmation that the council’s approval is more or less a formality. It’s like “housekeeping.”

Mike Anglin (Ward 5) asked how many staff are allocated to fire inspections. Hubbard told Anglin it’s been increased from three people to seven. Anglin felt the overall safety of the community was being improved through that effort.

Christopher Taylor (Ward 3) said he’s delighted that the city is conducting more fire inspections.

Outcome: The council voted to give initial approval to the adoption of the 2009 fire code.

Billboard Ordinance

The council was asked to give final approval to an ordinance change that would restrict the way that digital technology could be incorporated into outdoor signs. It would also prevent any digital technology retrofitting of existing billboards, and prohibit billboards generally – although the 28 existing billboards citywide would be allowed to continue as non-conforming structures. The change had been given initial approval by the council and had been up for final action twice before – most recently, on May 6, 2013. Action on May 6 was to postpone a final decision – until the council’s June 17 meeting. [.pdf file of map showing billboard locations in the city]

Christopher Taylor (Ward 3) introduced the agenda item, describing it as enforcing the status quo. He described some changes that had been made to the proposed ordinance revisions, compared to those already given initial approval by the council. One is an exception for churches and schools. The definition of “changeable” copy had also been revised. Taylor said it’s important that billboards not expand beyond their current status.

Chuck Warpehoski (Ward 5) reported that he’s heard close to zero support for expanding billboards to use digital technology – other than from those in the outdoor sign industry. He’d heard no support for digital signs to the point where he felt there was a clear consensus for that point of view.

Sally Petersen (Ward 2) argued that if Ann Arbor wants to be a tech town, then preserving the status quo is too conservative. She cited the possible negative impact on economic development. The ordinance changes promote blight by not allowing existing billboards to be removed and replaced with new ones, she contended. So she’d oppose the ordinance change. She pointed out that the Michigan Dept. of Transportation (MDOT) relies on digital technology to convey messages along the highways. She called for a more comprehensive look at the ordinance. It’s way too conservative for a town that wants to move forward with technology, she said.

Sabra Briere (Ward 1) ventured that the Ann Arbor Public Schools district is unlikely to go ahead with a proposal to contract with Adams Outdoor Advertising on school property. She said that two of the digital signs proposed by Adams Outdoor Advertising were in Ward 1 – which she represents. The idea of having digital signs there didn’t make her happy, but she conceded she was perhaps an old fogey.

Jane Lumm (Ward 2) thanked the city staff for all their research and their work on the ordinance. She thought the proposed changes were reasonable, so she’d be supporting the ordinance change.

Mike Anglin (Ward 5) thanked the staff for their work. He said it’s clear that the community doesn’t want any more visual intrusion. He characterized the ordinance change as not an anti-business proposal, but rather a pro-community move.

Outcome: The council voted to give final approval to the billboard ordinance, over dissent from Sally Petersen (Ward 2) and Marcia Higgins (Ward 4).

Fireworks Ordinance

The council was asked to consider a revision to the city ordinance on fireworks. The impact on the upcoming July 4 holiday would be that fireworks use would be limited in Ann Arbor to the time between 8 a.m. and midnight. A necessary revision to state law, in order to make the city’s action legal, had already been passed by the Michigan House and Senate when the council met. It awaited only signature by the governor’s office, which it subsequently received two days later on June 19.

The revision to the city’s fireworks ordinance was given initial approval at the council’s June 3, 2013 meeting. The impact of the ordinance change is to restrict the use of fireworks on July 3-5 to the period between 8 a.m. and midnight on those days. The ordinance change applies to other national holidays as well. On New Year’s Day, however, the time extends to 1 a.m.

The local ordinance change is made possible by the change to state law, which previously did not allow local governments to regulate fireworks for a continuous 72-hour period – for the day preceding a national holiday, the national holiday, and the day following the national holiday. The statutory change makes it possible for a local government to regulate the time of fireworks use around the time of national holidays.

Fireworks Ordinance: Public Hearing

Two people spoke at the public hearing on the fireworks ordinance change. Thomas Partridge said that July 4 should be a celebration of civil rights and human rights. He objected to celebrating the holiday with fireworks. Michael Benson asked the council to consider allowing people to apply for a permit to use fireworks on other days. He wondered what other costs could be imposed by the ordinance language “plus costs” that are mentioned in connection to a $500 fine.

Outcome: After a brief introduction by Sabra Briere (Ward 1), the council voted to give final approval to the fireworks ordinance.

CIL Parking for The Varsity

The council was asked to approve a change to the development agreement between the city and The Varsity – a 13-story, 177,180-square-foot apartment building containing 181 dwelling units (415 bedrooms). The council’s requested action was essentially a confirmation of an Ann Arbor Downtown Development Authority decision to award the right to purchase a total of seven monthly permits, at a 20% premium cost.

The Varsity is located at 425 E. Washington St. in downtown Ann Arbor. Based on zoning requirements, 76 off-street parking spaces are required. Only 69 were provided on site. The others were provided through the contribution in lieu (CIL) program. The seven spaces were approved by the Ann Arbor DDA at its June 5, 2013 meeting. It falls to the DDA to make a decision on the CIL spaces, because the DDA administers the city’s public parking system under a contract with the city.

Outcome: After a recitation of the situation’s background by Sabra Briere (Ward 1), the council voted to approve the revision to the development agreement.

Site Plans, Brownfield Plans

At its June 17 meeting, the city council was asked to give approvals in connection with three developments.

Site Plan: State Street Center

One request was a site plan approval for the State Street Center, near the intersection of South State and Ellsworth. The project calls for demolishing a vacant 840-square-foot house on this site. In its place, the developer plans a one-story, 1,700-square-foot drive-thru Jimmy John’s restaurant facing South State Street. A one-story, 6,790-square-foot retail building will be built behind the restaurant. The rezoning of the parcel for this site plan was given final approval at the council’s June 3, 2013 meeting.

Outcome: The council voted without discussion to approve the State Street Center site plan.

Site Plan, Brownfield Plan: 544 Detroit St.

The council was also asked to approve the site plan for 544 Detroit St. – a three-story building with offices on the first floor and residences on the upper two floors. It’s a “planned project” to allow an additional 3.5 feet of building height for a “decorative parapet” on the building’s north end and a stair enclosure to access a roof deck.

A rendering that shows the proposed design for 544 Detroit St., at the corner of Detroit and North Division.

For the 544 Detroit St. project, the council was also asked to approve a brownfield plan. According to a staff memo, the brownfield component – which allows tax increment financing (TIF) to reimburse the developer for eligible costs – includes a total of $698,773 in eligible activities. Some of those eligible activities include soil remediation ($174,620), infrastructure improvements ($70,350), and vapor mitigation ($32,000).

The planning commission gave the 544 Detroit St. project a recommendation of approval at its Dec. 18, 2012 meeting.

Site Plan, Brownfield Plan: 544 Detroit St. – Public Hearing

Jeff Crockett spoke in favor of the 544 Detroit St. project. He called it a responsive development. The site plan demonstrates serious consideration of citizen input, he said – and he knew of no one who opposed this project. He called for zoning laws that are not driven just by statistics, but rather are value-driven. Thomas Partridge also spoke on the 544 Detroit St. project, criticizing the fact that there was no attached requirement that the site provide affordable housing or access to public transportation.

Site Plan, Brownfield Plan: 544 Detroit St. – Council Deliberations

Marcia Higgins (Ward 4) mentioned briefly that this was one of the better brownfield projects the committee had seen. She serves on the city’s brownfield committee.

Outcome: The council voted to approve both the site plan and the brownfield plan for 544 Detroit.

Brownfield Plan: Packard Square

Finally, the council was asked to approve an amendment to a previously-approved brownfield plan for Packard Square, at the former site of the Georgetown Mall. The amendment adds to the list of eligible activities – including underground parking and urban stormwater management. The total cost of eligible activities is not changed. Demolition at the site began a few weeks ago.

Marcia Higgins (Ward 4) asked about payment of back taxes – the project is located in Ward 4. Nathan Voght of the Washtenaw County office of community and economic development, which manages the county’s brownfield redevelopment program, fielded Higgins’ questions. The indication was that the back taxes would be paid.

Higgins noted that the demolition is in progress, so Voght gave an update. May 28 was the start of demolition. The Michigan Dept. of Environmental Quality (MDEQ) indicated that additional asbestos mitigation was needed. Soil excavation to remove contamination is ongoing and a vapor barrier will probably need to be installed, Voght said. He thought by mid-July the demolition will be done. The developer indicated that construction would begin as soon as possible after that.

Higgins said that residents are pleased to see the project going forward. Mayor John Hieftje thanked Higgins for her efforts.

Outcome: The council voted to approve the Packard Square brownfield amendment.

$382K for Housing Commission

The council was asked to provide $382,000 of operational support to the Ann Arbor Housing Commission.

The resolution was held over from the council’s June 3, 2013 meeting. That’s when the council took several steps to move the Ann Arbor Housing Commission forward along a path to converting the properties it manages to project-based vouchers. A similar operations funding resolution had appeared on that meeting’s agenda, but was withdrawn.

The additional funding, according to a staff memo accompanying the resolution, is needed to mitigate against the impact of federal sequestration. The memo puts that impact at about $300,000 less for public housing and $50,000-$75,000 less for capital funding.

Of the total amount, $159,000 is appropriated from the city of Ann Arbor’s affordable housing trust fund, and $223,000 would be appropriated from the general fund. The city’s housing and human services advisory board had voted to recommend the $159,000 be appropriated from the affordable housing trust fund.

$382K for Housing Commission: Council Deliberations

Sabra Briere (Ward 1) introduced the resolution, noting that it will empty the affordable housing trust fund – but that fund will receive $100,000 on July 1, because of the budget allocation the council passed as part of the FY 2014 budget. Stephen Kunselman (Ward 3) asked city CFO Tom Crawford if there were sufficient funds in the general fund reserve to cover the allocation. Crawford projected a fund balance of $13.9 million at the end of the fiscal year. That’s about 17% of operating expenses. But he did have some concerns, Crawford said. At the end of FY 2015, based on the council’s recent action, the fund balance would be around 13%. In general, he has some concerns about how the fund balance is being used.

City administrator Steve Powers noted that the current council policy is to maintain 8-12% of operating expenses in the fund balance.

Jane Lumm (Ward 2) thanked Jennifer Hall, executive director of the AAHC, for her work.

Outcome: The council voted to approve the AAHC allocation.

Commitment of $750,000 for 721 N. Main

The council was asked to make a commitment of up to $750,000 from the city’s general fund – to undertake planned improvements to the city-owned property at 721 N. Main. The commitment is a requirement for a grant application that the city is making to the Michigan Natural Resources Trust Fund for $300,000.

If the city’s plan unfolds as it expects, then none of the $750,000 in general fund money would be needed.

The improvements to 721 N. Main have resulted from work done by a North Main Huron River corridor task force that has been working at the direction of the city council since the summer of 2012 to make recommendations for the corridor.

Of the $1.2 million estimated cost for the planned trail and stormwater improvements to the site, the city plans to use $150,000 from the city’s stormwater fund. To cover part of the remaining $1.05 million, the city hopes to use $600,000 from a grant it has applied for from the Michigan Dept. of Transportation (MDOT) and the Southeast Michigan Council of Governments (SEMCOG) – through SEMCOG’s transportation alternatives program (TAP).

The council approved the application for the SEMCOG grant at its April 15, 2013 meeting. To cover the remaining $450,000, the city hopes to use $150,000 from a Washtenaw County Parks & Recreation Connecting Communities grant and $300,000 from the Michigan Natural Resources Trust Fund (MNRTF) grant. The council approved the application for those last two grants at its Dec. 17, 2012 meeting.

The council’s resolution considered on June 17 came in response to an MNRTF grant requirement that the council commit the city to funding the other grants itself – from general fund money – if those grants fail to materialize. The $750,000 figure comes from adding the $600,000 SEMCOG grant to the $150,000 Washtenaw County Parks & Recreation grant.

Commitment of $750,000 for 721 N. Main: Public Commentary

During public commentary time at the start of the meeting, Bob Galardi addressed the council on the MDNR grant application in connection with the city-owned property at 721 N. Main. He’s a member of the city’s park advisory commission, but spoke on behalf of the Allen Creek Greenway Conservancy. He’s president of the conservancy’s board. Galardi asked the council for their support of the resolution that commits the city to as much as $750,000 of general fund money for the project. The conservancy, he said, is confident that the grant funding for which the city has applied will materialize. [That would mean that the city wouldn't need to spend that money.]

Commitment of $750,000 for 721 N. Main: Council Deliberations

When she introduced the item, Sabra Briere (Ward 1) stressed that the commitment the council was being asked to make is not an expenditure.

Mike Anglin (Ward 5).

Jane Lumm (Ward 2) thanked Briere for her service on the North Main Huron River task force. Lumm indicated support for the resolution. Stephen Kunselman (Ward 3) wondered if any park millage dollars would be spent on this project. Briere noted that the property is not yet a park. When will it be a park? asked Kunselman. That’s a decision for the park advisory commission (PAC), not for her, Briere responded.

Christopher Taylor (Ward 3), who serves as an ex officio member of PAC, noted that park staff are sensitive to the funding requirements of maintaining existing parks. Mayor John Hieftje described the general context of two city-owned properties – 415 W. Washington and 721 N. Main – and how those properties fit into the context of greenway planning. Hieftje talked about the need to focus on the provision for long-term maintenance.

Mike Anglin (Ward 5) said it’s important that this resolution commits money. Anglin said a chain of parks through the city – like the greenway – would have a positive economic impact.

Outcome: The council voted to commit the funds for the 721 N. Main site.

Pizza in the Park

Several speakers addressed the council in connection with a petition they delivered to the city – a copy of which was attached to the council’s electronic agenda. The petition asked the council to take action to ensure that no fees are required to be paid by organizations that are providing humanitarian aid in the city’s parks.

The general petition stemmed from concerns about protecting a specific event – Pizza in the Park, a homelessness ministry of the Vineyard Church that includes distribution of food and other aid at Liberty Plaza, located at Liberty and Division streets in downtown Ann Arbor. A few months ago, the parking of a vehicle in a private driveway and the subsequent application of a park shelter rental fee by the city led to protests raised during public commentary at the council’s May 20, 2013 meeting. Assurance was given at that meeting that the Pizza in the Park event could continue. That was affirmed when speakers again addressed the issue at the council’s June 3, 2013 meeting.

Speakers on those occasions – many who are affiliated with Camp Take Notice, a self-governed homeless community – asked for a written assurance of the city’s commitment. During council communications time on June 17, Christopher Taylor (Ward 3), who serves as one of two city council ex officio representatives to the city’s park advisory commission (PAC), announced that PAC would be considering a related resolution at its meeting the next day. And on June 18, 2013 PAC considered and passed a resolution recommending the waiver of rental fees associated with Liberty Plaza – a waiver that would apply to any group. That recommendation will need the approval of the city council.

First to address the council on the topic during June 17 public commentary was Peggy Lynch, who took the podium to applause. She described an unmet and tragic humanitarian need in Ann Arbor. She thanked the council for the eliminating the fee that was being applied to Pizza in the Park at Liberty Plaza. But she was hopeful that the gentleman’s agreement could be replaced with something in writing. David Williams echoed the request for a written commitment.

Thomas Partridge assured the council that if he were elected mayor or councilmember, he would be giving voice to the concerns of the residents of Camp Take Notice. He called for the advancement of Dr. Martin Luther King’s civil rights agenda. He recalled King’s “I have a Dream” speech.

Jose Galofre addressed the council through a sign language interpreter, calling for the passage of an ordinance – put down in writing for the future to ensure that fees would not be applied to Pizza in the Park. Michael Ramirez told the council he has medical issues that require him to go to the University of Michigan health system, and he spoke in support of Pizza in the Park ministry. Christine Kern told the council she lives on the street with her boyfriend. They’d be sleeping outside that night. She recited a definition of basic human rights, and asked the council to enact an ordinance that protects the right to distribute humanitarian aid on public land.

At the end of the meeting during public commentary time, Seth Best and Peggy Lynch again addressed the council on the idea of the fee waiver for Liberty Plaza. They wanted something in writing – and they wanted it to be possible for humanitarian aid to be distributed in any park.

Caleb Poirer quipped that it felt wonderful staying up late with the council. [By that point, it was about 12:30 a.m.] It reminded him of staying up late as a kid, but with adults – just without “the blankets and the socks with the bottoms.” He allowed that there was a concern that someone could drive a semi-trailer truck through the loophole of the phrase “humanitarian aid.” But he asked the council to wrestle with the language that would make an ordinance work to allow humanitarian aid to be distributed. There are a lot of people who want to do kind things, he said, and urged the council not to let fees get in the way.

Outcome: This was not a voting item.

Millage Rate Correction

The council was asked to correct a .0031 error in the specification of the rate of the FY 2014 tax levy for the city’s park maintenance and capital improvements millage. The FY 2014 fiscal year begins on July 1.

The millage rate that was listed in the FY 2014 budget resolution – approved by the council at its May 20, 2013 meeting – was 1.0969 mills. The park maintenance and capital improvements millage should have been listed as 1.10 mills. The corresponding correction from the total millage rate was from 16.4470 to 16.4501 mills. Measured in dollars, the correction is estimated to bring in an additional $14,460 in revenue.

Outcome: After a brief introduction from Christopher Taylor (Ward 3), the council approved the correction to the millage rate.

Police Unions Wage Bump

The council was asked to approve contracts with city police unions that award 2% and 1% wage increases.

Re-openers for the final year of their contracts resulted in new contracts with six police department unions: Teamster Civilian Supervisors, Teamsters Local 214; Police Professional Assistants, Teamsters Local 214; Ann Arbor Police Officers Association – Police Service Specialists; Command Officers Association of Michigan; Ann Arbor Police Officers Association; and Deputy Chiefs, Teamsters Local 214.

Membership in these unions breaks down as follows: Deputy Chiefs (2); Teamster Civilian Supervisors (35); Teamster Police Professionals (5); AAPOA (90); COAM (22); and Police Service Specialists (5).

Common to all the contracts is a 2% wage increase starting July 1, 2013 and a 1% increase starting Jan. 1, 2014.

Also common to the contracts is the acceptance of the change in pension board composition, which was approved by voters on Nov. 8, 2011 with a 68% majority. The change retained the body as a nine-member group but distributed the membership differently, as follows: (1) the city controller; (2) five citizens; (3) one from the general city employees; and (4) one each from police and fire employees. Eliminated from the mix was the city administrator.

Marcia Higgins (Ward 4) thanked the staff for their work. It’s the first time since she’s been on council that all the contracts have been resolved before expiration, she said. Jane Lumm (Ward 2) thanked the staff and recited the nature of the agreements.

For the AAPOA an administrative correction was made to the phone allowance – $600, instead of $550.

The council voted to approve all the police department union contracts.

Resolution on SEMCOG Highway Plan

The council considered a resolution opposing the proposed expansion of I-94 in Detroit and I-75 in Oakland County.

Chuck Warpehoski (Ward 5).

The Washtenaw County board of commissioners had passed a similar resolution at its June 5, 2013 meeting. The interstate highway expansion is a part of SEMCOG’s 2040 Regional Transportation Plan with an estimated cost of $4 billion.

Chuck Warpehoski (Ward 5) stated that there are a lot of good elements in the SEMCOG plan. But there are not forecasts for additional traffic and population, so it didn’t make sense to expand the highways instead of maintaining them.

Warpehoski then quoted Picasso in explaining where the text for the resolution had come from: “Good artists copy, great artists steal.” He’d copied much of the resolution from resolutions that have been passed by other municipalities.

Outcome: The council voted to pass the resolution opposing SEMCOG’s 2040 plan. SEMCOG’s general assembly subsequently voted to adopt the plan.

Annual Contracts: SPARK, Lobbyist

As part of its consent agenda, the council was asked to approve two annual contracts for services at its June 17 meeting. One was a $48,000 contract with Governmental Consultant Services Inc. (GCSI) for lobbying services with the state legislature. The council also approved a $75,000 contract with Ann Arbor SPARK for business support services.

Items on the consent agenda are considered routine, and include contracts for less than $100,000. They’re voted on as a group.

The contact with the economic development agency Ann Arbor SPARK is one that has been renewed annually since the Washtenaw Development Council and Ann Arbor SPARK merged in 2006. Previously, Ann Arbor had contracted with the WDC for the business support services for which it now contracts with SPARK. On June 20, 2005, the city council authorized that one-year contract with WDC for $40,000. The resolution authorizing the $75,000 contract with SPARK again this year describes the organization’s focus as “building our innovation-focused community through continual proactive support of entrepreneurs, regional businesses, university tech transfer offices, and networking organizations.”

Ann Arbor SPARK is also the contractor hired by the city’s local development finance authority (LDFA) to operate a business accelerator for the city’s SmartZone, one of 11 such districts established in the early 2000s by the Michigan Economic Development Corp. (MEDC). The SmartZone is funded by a tax increment finance (TIF) mechanism, for a TIF district consisting of the union of the Ann Arbor and Ypsilanti Downtown Development Authority districts.

Revenue is generated only in Ann Arbor’s district, and the LDFA is a component unit of the city’s budget. In the FY 2014 budget, the LDFA is expected to receive $1,655,647 in revenue. The specific taxes on which the increment since 2002 is captured are the school operating and state education taxes, which would otherwise be sent to the state and then redistributed back to local school districts.

GCSI’s Kirk Profit, an Ann Arbor area resident and former member of the state House of Representatives, typically makes an annual presentation to the council with an update on state-level legislative issues relevant to the city’s budget situation. Written updates to councilmembers on legislative activity are sent on a weekly or daily basis.

Outcome: As part of the consent agenda, councilmembers approved contracts with GCSI and Ann Arbor SPARK.

Council Rule Changes

The June 17 agenda included an item related to changes in the council rules. Possible changes include adding a period of public commentary to the council’s work sessions, but reducing public speaking time per turn from three minutes to two minutes. [.pdf of draft rules changes]

The procedure for reserving one of the 10 reserved speaking slots at the start of the meeting is also proposed to be revised. Only people who did not address the council at its immediately previous meeting would be eligible to reserve a slot. And of the 10 slots, eight would be designated for people who want to address the council on agenda action items. Two slots would be provided for those who want to address the council on any topic.

Councilmember speaking time is also proposed to be reduced. Councilmembers are allowed two speaking turns per agenda item. Under the current rules, time limits for those speaking turns are five minutes for the first turn and three minutes for the second turn. Under the proposal, those times would be reduced to three minutes and two minutes, respectively.

The proposed addition of an opportunity for public commentary at council work sessions would ensure that councilmembers could freely deliberate toward public policy decisions at those sessions and still conform to Michigan’s Open Meetings Act.

The proposed rules changes would move mayoral communications from the end of the meeting to a spot closer to the start of the meeting. That would give nominations to boards and commissions – which are a part of those communications – somewhat greater prominence.

[For previous Chronicle coverage, see: "Council Mulls Speaking Rule Changes."]

Council Rules Changes – Frequent Speakers

A consequence of reducing the speaking time limit from three minutes to two minutes is that the total speaking time a single speaker could take at a meeting would be reduced by one-third. It’s not unusual for a meeting to include a half dozen or more formal public hearings, in addition to the public commentary slots on the agenda. The June 17 meeting, for example, featured seven public hearings. With a three-minute time limit, it’s not uncommon that one person could have a total of about a half hour available to address the council.

Thomas Partridge typically reserves one of the 10 slots at the start of the meeting and speaks at most of the public hearings at any given meeting of the council – generally connecting his remarks to the topic of the hearing with general themes of affordable housing, transportation and education, as well as calls for social justice. Occasionally mayor John Hieftje, who presides over the council’s meetings, will deem Partridge’s remarks to be insufficiently related to the topic of the public hearing and admonish Partridge to stay on topic. The June 17 meeting featured one occasion when Hieftje offered that admonishment to Partridge.

And at the conclusion of the meeting’s seventh public hearing – on the brownfield plan for Packard Square – after  Partridge had held forth several times at previous hearings, Ann Arbor resident Todd McWilliams addressed the council, but not on the topic of the brownfield plan for Packard Square. He told the council he’d attended several of the council’s meetings over the last six months and wanted to address Partridge. McWilliams told Partridge that Partridge was doing an injustice to the public hearings, and was abusing the council’s time. At that point, McWilliams earned an admonishment from Hieftje to speak to the topic of the hearing.

Partridge responded to McWilliams from the audience by accusing McWilliams of abusing Partridge’s civil rights. McWilliams said: “There’s got to be another way of doing this; because this isn’t the right way to do it.” Partridge’s rejoinder was: “See you in court.”

Council Rules Change: Public Comment

During public commentary time at the conclusion of the meeting, two people addressed the council on the topic of the rules changes.

Jane Lumm (Ward 2) and resident Michael Benson. Benson serves on the city’s taxicab board.

Michael Benson thanked the council for staying late. He commended the rules committee, saying that the proposed rules represent a step forward. He suggested that reducing the speaking time from three minutes to two minutes might not be so bad, given that when people hand over written remarks to the clerk, those documents can eventually be added to the agenda. He told the council they should consider constraining their own question time during the meeting – as that was where the council spent the majority of its time. He also suggested that reserved time at the start of the meeting be confined to true action items.

Jeff Hayner thought it’s great that someone talked about the rules. He agreed with Benson’s point about the ability to submit written remarks. He suggested, however, that some of the time saved through a reduction in speaking time be re-allocated to council discussion of items that sometimes didn’t receive much discussion – like the appointments to boards and commissions.

Council Rules Changes: Deliberations

Council conversation was scant. Marcia Higgins (Ward 4), chair of the council’s rules committee, said she’d like to see the item postponed. By way of background, the council’s current meta-rule on changing the rules requires that the council be notified of changes at the meeting prior to a vote on the changes – which had not happened yet. The proposed rules revisions include a change to that meta-rule.

Outcome: With no further discussion, the council voted to postpone the rules changes until July 1.

Appointments

The June 17 agenda included several items regarding appointments to city boards and commissions.

The council was asked to confirm the extension of Sabra Briere’s (Ward 1) appointment as the councilmember representative to the planning commission. She’s served in that capacity since November 2012. The council was asked to extend the term through Nov. 7, 2013. At that point the membership on the new, post-election city council will be settled. Briere is unopposed in the Democratic primary. An independent candidate, Jaclyn Vresics, has taken out petitions for that seat but has not yet filed them with the city clerk’s office. The deadline for independent candidates to submit petitions is Aug. 7.

Later, toward the end of the meeting, the council was asked to confirm Bonnie Bona’s reappointment to the planning commission.

Although Tony Derezinski had appeared on the list distributed to the council at its June 3 meeting as a nomination to the city planning commission – and was reported (mistakenly) by The Chronicle as having been nominated – Derezinski’s name was not actually read aloud that evening. The Chronicle learned that there was pushback on the council about Derezinski’s nomination for reappointment. He was filling out the remainder of Evan Pratt’s term – through June 30, 2013. Pratt was elected as Washtenaw County water resources commissioner in November 2012 and resigned from the planning commission at that time.

At the council’s Nov. 8, 2012 meeting, councilmembers had voted – over dissent from Jane Lumm (Ward 2) – to appoint Derezinski to that partial planning commission term. Up to that point, he’d served as the city council’s representative to the planning commission. However, he did not prevail in the August 2012 Democratic primary in his Ward 2 race against Sally Petersen.

On June 17, Jeremy Peters was nominated to replace Derezinski on the planning commission. Peters works in creative licensing and business affairs with Ghostly Songs. A council vote to confirm his appointment will occur on July 1.

Other appointments the council was asked to confirm on June 17 included members of the downtown area citizens advisory council: John Chamberlin, Ray Detter, Joan French, Jim Kern, Sue Kern, Kathleen Nolan, Herbert Kaufer and Hugh Sonk. They had been re-nominated at the council’s June 3 meeting, having first appeared on the council’s May 13 meeting agenda for reappointment. The names had not been presented to the council for confirmation on May 20. The terms of all the members had expired.

Also at its June 17 meeting, the council was asked to confirm LuAnne Bullington’s nomination to the taxicab board, having been nominated on June 3. Bullington had submitted an application to serve on the board of the Ann Arbor Transportation Authority earlier this year, which resulted in a divided vote by the council on the nomination that was put forward by mayor John Hieftje – Eric Mahler. Mahler was confirmed on a 7-4 vote as the AATA board appointment at the council’s May 13, 2013 meeting. He recently ended his service as a planning commissioner.

Other reappointments confirmed on June 17 were: Barbara Clark to the cable communications commission; Paul Fontaine and Chester Hill to the design review board; and Tom Stulberg to the historic district commission.

In the last few months, the council has taken an increased interest in mayoral appointments. That’s reflected in a change recommended by the council’s rules committee – to move the mayor’s communications time closer to the start of the meeting, instead of near the end. The mayor’s communications include nominations to boards and commissions and the council’s confirmation votes.

Outcome: The council voted unanimously to confirm all the appointments.

Communications and Comment

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

Comm/Comm: Public Safety

Jane Lumm (Ward 2) alerted her colleagues that a resolution regarding a public safety task force that she wants to form will be on the council’s July 1 agenda.

Comm/Comm: Stop Signs

Mike Anglin (Ward 5) called for a focus on safety as people move around the city during the summer. He called for the installation of stop signs to slow traffic on streets over which the city has control.

Comm/Comm: Affordable Housing

Thomas Partridge expressed disappointment with the council and the mayor for leaving the city without sufficient affordable housing. He said they lack the courage to stand up and bring the facts to the voters for support of tax increases to fund what’s needed.

Comm/Comm: AAHC Complaint

Diane Chapman introduced herself as a resident of Ann Arbor Housing Commission properties. She reported that she’s been physically attacked on the property and complained about the lack of response by AAHC staff.

Present: Jane Lumm, Mike Anglin, Margie Teall, Sabra Briere, Sumi Kailasapathy, Sally Petersen, Stephen Kunselman, Marcia Higgins, John Hieftje, Christopher Taylor, Chuck Warpehoski.

Next council meeting: Monday, July 1, 2013 at 7 p.m. in the second floor council chambers at city hall, 301 E. Huron. [Check Chronicle event listings to confirm date]

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Recess of the Ann Arbor city council’s May 6 meeting around 11:30 p.m.  – after eight public hearings and action on a few business items – paved the way for the council to resume the same meeting on May 13, with the 413 E. Huron project as the first item to be considered at that time. This photo shows Fourth Avenue between Huron and Washington streets, which will be repaired in the summer of 2013 as the result of a contract approved at the council’s May 6 session. (Photos by the writer.)

The council decided to suspend the proceedings around 11:30 p.m. – a different strategy than the one taken at the council’s April 15 meeting. On that occasion, councilmembers let the meeting continue until about 3 a.m. before deciding to end the session, postponing all remaining items until the next regular meeting on May 6.

At its May 6 meeting, the council voted unanimously to postpone until Sept. 3 one of the most controversial items on the agenda – revisions to the ordinance governing the Ann Arbor Downtown Development Authority. The most significant revision would clarify language from the original 1982 ordinance, which caps tax increment finance (TIF) revenue to the DDA. The clarifications would not allow for the kind of interpretation the DDA has given the ordinance for the last two years, which has resulted in no return of excess TIF to jurisdictions that have their taxes captured by the DDA.

Stephen Kunselman (Ward 3) led off communications time early in the meeting by describing some further changes he was prepared to make to the DDA ordinance – which would earmark money to support affordable housing. During the public hearing on the ordinance changes, the council heard from speakers on both sides, including five members of the DDA board. A highlight was the apparent initial indication of a slightly moderated position by some opponents of the ordinance changes. The council’s relatively brief deliberations on postponement revealed only grudging support from some councilmembers for putting off the vote for four months. Margie Teall (Ward 4) and Christopher Taylor (Ward 3) made clear they did not support the proposed changes to the ordinance.

The council also postponed action on a revision to the city’s sign ordinance, which would allow only certain types of digital signs. The ordinance amendments would cap the total number of billboards in the city at 28 and allow them to remain in place as non-conforming signs. It would not allow for retrofitting any existing billboards with digital technology. The council has already given the ordinance initial approval, and will take up the issue again on June 17.

Another item postponed by the council was consideration of a video privacy ordinance, which has not yet been given initial approval. That will come back to the council’s May 20 meeting.

Receiving approval from the council was the site plan for Summit Townhomes, located on Ellsworth Road. The project has been working through the city’s review and approval process for more than a year.

The downtown section of Fourth Avenue was somewhat of a geographic highlight for the May 6 meeting. The council approved a $741,900 contract with E.T. MacKenzie Co. to make improvements on Fourth Avenue between Huron and Liberty streets this summer. And the council formally withdrew its objection to renewal of the liquor license for The Arena, a bar located at Washington and Fourth. The Arena finally paid back taxes, which led to the council’s vote – but not without complaint from some councilmembers.

Another highlight of the meeting was the general topic of appointments to city boards and commissions. A brief discussion of how appointments work was prompted by the observation during public commentary that none of the appointments are current for members of the downtown citizens advisory council. The city council put off voting to confirm Stephanie Buttrey’s appointment to the greenbelt advisory commission. And not reached on the agenda were nominations to replace Jesse Bernstein on the board of the Ann Arbor Transportation Authority and Eric Mahler on the city planning commission – with Susan Baskett and Paras Parekh, respectively.

413 E. Huron Site Plan

The site plan for 413 E. Huron – a proposed 14-story, 216-apartment building at the northeast corner of Huron and Division streets – was a major item on the council’s May 6 agenda.

Images for the proposed 413 E. Huron project, at the northeast corner of Huron and Division. On the left is an early rendering provided by the developer. On the right is an updated version presented to the city council on March 18, 2013.

The apartment complex was presented to the council as a “by right” project, which means that in the judgment of the city planning staff, it met all the zoning requirements.

The council had previously postponed a site plan decision on April 15, 2013, April 1, 2013 and March 18, 2013.

The planning commission had considered the project at its Feb. 5, 2013 and Jan. 15, 2013 meetings. The Feb 5 vote of 5-3 on the planning commission – with one commissioner absent – left the project one vote short of the six-vote majority it needed for a recommendation of approval.

On May 6, the council heard from 31 people during a continuation of the project’s public hearing, as well as from others during regular public commentary. This report organizes the commentary thematically.

413 E. Huron Site Plan: Development Process

During communications time at the start of the meeting, Mike Anglin (Ward 5) mentioned a proposed project on Glendale as a good model for proceeding in the future. If a developer meets with staff continually, the surrounding community might not be heard if residents don’t have a lot of expertise, he said. The city should provide representation for the community, Anglin said. He stated that citizens should not be asked to do all the work. Staff and councilmembers should be helping neighborhoods – as allies, not in an adversarial relationship. Public hearings are fine but they’re always too late, Anglin said.

Christine Brummer described the site plan approval process in Ann Arbor in years past as a meeting between the developer’s budget, the planning department’s vision and citizen complaints in front of the city council. She described how that process had been fractured into a half-dozen different meetings, as elements have been added to the site plan approval process – such as citizen participation meetings and design guideline review board meetings. She encouraged reexamining each of these different process elements as the D1 zoning undergoes review.

413 E. Huron – Public Hearing Mechanics

The public hearing on the 413 E. Huron site plan was continued from the April 15 meeting. Because it was the same public hearing, mayor John Hieftje explained toward the start of it (after the first speaker had addressed the council) that anyone who had spoken on April 15 would not be allowed to speak again.

Thomas Partridge was the third person who attempted to speak during the public hearing on the 413 E. Huron site plan. But Hieftje refused to allow him to speak – because it would have been Partridge’s second time speaking, as he’d addressed the council during the same public hearing on April 15. Partridge was reluctant to yield, and asked for a citation of the rule preventing him from speaking again. Assistant city attorney Kevin McDonald advised Partridge that no amendments had been made to the site plan since the previous meeting and that Hieftje had indicated that Partridge did not have the right to speak. McDonald concluded: “We would ask you to sit down at this time.”

A recess was called while the issue was sorted out and Partridge was convinced he wouldn’t be allowed to speak.

When the meeting came back out of recess, John Floyd took the podium and observed that if the rule was that there was only a single opportunity to speak, then Partridge’s question – requesting to know what the statute number is – wasn’t unreasonable. Floyd continued by saying that calling in a policeman to stand as an intimidating presence was, he thought, “a little uncalled for.” [An officer from the Ann Arbor Police Department is often in attendance at council meetings, sometimes more visibly than others. On May 6, an officer was standing in the back of the council chambers.]

Floyd began his own remarks by stating: “The developers of 413 [E. Huron] are not evil people. They’re like the rest of us.” He continued with remarks on the site plan. As he reached the end of his turn, he perceived that not all councilmembers were paying attention to what he was saying, and he conveyed to them his thoughts on their inattention:

I see that several people have things to do other than to listen to the public speaking. I appreciate that it’s a hard and annoying thing – to pay attention to the people in front of you – but I think that’s what you get your pay for, among other things. If you don’t feel like you want to earn it, there’s a door over here – you might want to try walking through it!

[Floyd's blistering rebuke, which seemed directed toward Ward 4 council representatives Margie Teall and Marcia Higgins, elicited some gasps and a "Holy smokes!" from the audience.]

413 E. Huron – Legacy

The substance of Floyd’s remarks included one of the common threads that ran through several speakers’ comments – namely the legacy that the council would be creating for itself in its decision. Floyd’s remarks, before delivering a rebuke to those he didn’t think were listening, included the following:

[Developers have] got a way of making money, and they want to go where they can go and make money. They’re not any different than the rest of us this way. Nonetheless, the site plan approval requires adhering to things beyond the zoning … It’s entirely possible that I’ve missed something, because I haven’t been privy to your conversations over the last two weeks. But I have not yet heard of a substantive response to any of the points raised by the speakers who spoke two weeks ago, about the various ordinances they are required to meet. And I don’t think that the council or the developer gets to choose which ordinances they decide to obey or enforce. That doesn’t mean that they are evil people, it just means that there are ordinances that have not been met to approve a site plan. You know, every one of us is going to be remembered for something. One of the questions tonight – in addition to “Do the laws of Ann Arbor have any meaning?” – is “What is this council going to be remembered for?” Twenty years from now, will the Ann Arbor Observer be writing articles about you, and the way you decided not to follow the law, and destroyed, in consequence of that, one of the most important trees in town? … So what do you want to be remembered for? Following the law? Or not following the law and causing irreparable harm to one of the jewels of the city? Thank you for paying attention.

Reena Liberman cautioned the council that 10 years from now, if the building is constructed, it will be seen as a mark of poor city council management.

Cheri Alexander told the council that when she teaches, what she asks are simple questions: What result do you want to create? What will be your legacy? What will be the story that will be told about you?

David Olson told the council that a lot of people are concerned about the project. The implications go beyond this particular project, he said. Olson contended it would set a precedent for future downtown development. In particular, it would reflect how the letter and spirit of the A2D2 zoning would be adhered to. He characterized the proposal as disregarding the city’s design guidelines. He questioned whether it was worth it for him to participate in the community conversation, if there’s not follow-through on the vision that’s been agreed on.

413 E. Huron: Booklet

A nine-point booklet was distributed to councilmembers. Later in the week, on May 10, Ann Arbor city planning staff provided responses to the nine points. For an overview, see “413 E. Huron: 9-Point Booklet.”

Sumi Kailasapathy (Ward 1) receives her copy of a booklet listing out the nine points of objection to the 413 E. Huron project.

Hugh Sonk introduced the council to the booklet with nine topics. He noted that subsequent speakers would be citing specific points in the booklet.

Sonk highlighted sections in the city code that require a finding that the development complies with all federal, state and local standards and regulations. He also highlighted the natural features requirement that allows disturbance of such features only to the extent that it’s required for a reasonable, not maximal, use of the land. And finally he pointed out the requirement of a finding that there not be a detrimental effect on the public health, safety and welfare.

“Fact 1″ of the booklet was introduced by Liz Knibbe, who told the council that she’d worked for 35 years in architecture and urban planning. In her experience, the local jurisdictions work under the state’s enabling legislation. She quoted the definition of “site plan” from Michigan’s Zoning Enabling Act 110 of 2006:

“Site plan” includes the documents and drawings required by the zoning ordinance to ensure that a proposed land use or activity is in compliance with local ordinances and state and federal statutes.

She also quoted from Section 203 of the statute, which imposed requirements on the kind of local zoning laws that can be established:

A zoning ordinance shall be based upon a plan designed to promote the public health, safety, and general welfare, to encourage the use of lands in accordance with their character and adaptability, to limit the improper use of land, to conserve natural resources and energy, to meet the needs of the state’s residents for food, fiber, and other natural resources, places of residence, recreation, industry, trade, service, and other uses of land, to ensure that uses of the land shall be situated in appropriate locations and relationships, to avoid the overcrowding of population, to provide adequate light and air, to lessen congestion on the public roads and streets, to reduce hazards to life and property, to facilitate adequate provision for a system of transportation including, subject to subsection (5), public transportation, sewage disposal, safe and adequate water supply, education, recreation, and other public requirements, and to conserve the expenditure of funds for public improvements and services to conform with the most advantageous uses of land, resources, and properties. A zoning ordinance shall be made with reasonable consideration of the character of each district, its peculiar suitability for particular uses, the conservation of property values and natural resources, and the general and appropriate trend and character of land, building, and population development.

“Fact 2″ from the booklet was introduced by Tom Stulberg, a member of the city’s historic district commission, who stated that the site plan doesn’t comply with city codes and ordinances:

Chapter 57, Section 5:122(6):
Standards for site plan approval. A site plan shall be approved by the appropriate body after it determines that: (a) The contemplated development would comply with all applicable state, local and federal law, ordinances, standards and regulations; and (b) The development would limit the disturbance of natural features to the minimum necessary to allow a reasonable use of the land, applying criteria for reviewing a natural features statement of impact set forth in this Chapter; and (c) The development would not cause a public or private nuisance and would not have a detrimental effect on the public health, safety or welfare.

“Fact 4″ from the booklet was introduced by Susan Morrison, acting as legal counsel for Norm and Ilene Tyler, who own a property on North Division to the north of the proposed project. The issue identified by Morrison was the application of the special exception use. Morrison contended that the parking structure component of the building should be analyzed as a “special exception use” – for which the project had not sought review and approval from the city planning commission.

“Fact 5″ was addressed by both Gwen Nystuen and Ingrid Ault. Nystuen is a former member of the park advisory commission, and Ault is a current member of that group. Nystuen cited the natural features plan, and stated that the development would remove 50% of the critical root zone of one of the landmark trees. The project also would condemn trees in that area to perpetual shade. Her call for the council to “do the courageous thing” elicited applause. Ault told the council that it was the legacy tree that had brought her to the table. She reported the assessment of an arborist who’d predicted the death of the 250-year-old oak tree within five years, if the building were constructed.

“Fact 6″ was addressed by Richard Peshkin, Ben Hooper, Emily Bellock, Carolyn Fahey and Cathy Hufano. The code provision they cited was the requirement that a development not cause a public or private nuisance. Their contention of a nuisance and detrimental effect on health, safety and welfare was based on traffic safety issues related to the configuration of the service drive entrance off Division, as well as the driveway entrance on Huron Street. Issued cited in the booklet included:

• No off-street drop-off area on Huron Street.
• Lack of provision for move-in/move-out student drop off days.
• Acute 81 degree turn-in for auto entry is a traffic hazard.
• Traffic delays for cars entering underground parking.
• Cars leaving the underground ground will impede Huron Street’s 23,000 cars per day.
• Cars going east will cut through Ann Street residential area.

On a related note later in the hearing, Barbara Bach questioned whether the logistics of move-in had been adequately addressed.

“Fact 7″ was addressed by Andrea Van Houweling. The ordinance provision cited is the city’s noise ordinance. Her contention was that the allowable noise level for construction activity is a hazard to health.

“Fact 8″ was addressed by architect Jan Culbertson. While she supported increasing density in the urban core, she contended that there are details missing on the site plan to indicate height and manner of construction for the retaining wall on the east side of the property.

“Fact 9″ was introduced by another member of the historic district commission – John Beeson. The objection to the project was based on the requirement that zoning ordinances ensure that “adequate light and air” are provided. The solar study showed that the properties immediately to the north would have an unreasonable amount of shade, he said.

Betsy Price told the council that it’s not the high-density zoning that has gotten people riled up. What citizens are pushing back against is the lack of conformance with specific clauses of the zoning code.

The owner of the property immediately to the north of the project, Steve Bellock, stressed that the objections that had been raised were not to the appropriateness of the zoning, but rather to the specific elements of the site plan.

Herb Kaufer introduced himself as a downtown resident. He disagreed with the conclusion that the project would not cause a public or private nuisance.

413 E. Huron: Risk of Lawsuit, Tough Decision

Norman Hyman characterized the recent letters that had been sent to the council by attorneys for the 413 E. Huron project – Pat Lennon and Susan Friedlaender – as a one-two punch. Hyman, who represents Sloan Plaza residents, noted that he’d sent a short letter of his own to the council in response to them. Hyman characterized Lennon’s letter as saying that the site plan proposal had to be approved because it conformed with all the standards, but Hyman contended that Friedlaender had told the council in her letter that the council should not follow one of the standards.

Piotr Michalowski told the council he walked by the corner of Division and Huron almost every day. He couldn’t imagine that the project might be built. He described himself as “shaken” by the fact that the council doesn’t have any choice. He felt that it wasn’t true that the council had to vote to approve the project. The council had heard various arguments from lawyers and he understands that councilmembers had to be concerned about the legal risks and whether it was worth spending the money to defend the city. He observed that the city already spent money to defend itself in various ways – by fixing potholes and hiring firefighters, for example. He felt that in the case of 413 E. Huron, it was worth risking.

Harvey Falit alluded to a quote from Christopher Taylor (Ward 3) reported in AnnArbor.com to the effect that site plan review is an administrative process rather than a deliberative one, and did not allow for the council to exercise judgment as to whether the project was good for the neighborhood or Ann Arbor. Falit questioned whether that was true. Falit didn’t think anybody was encouraging anyone to go against the law, but he allowed that denying the project approval might lead to a lawsuit. He ventured that enough legal opinions had been offered to indicate that a lawsuit would be defensible.

Mark Koroi told the council that he thought only poor excuses had been offered as reasons for not being willing to defend a lawsuit. He pointed out the Ann Arbor Transportation Authority is willing to fight a lawsuit to keep an ad off a bus. He stated that if a lawsuit were filed, it would go to the Washtenaw County 22nd Circuit Court. Of the six judges for that court, he said, five are Ann Arbor residents. He told the council not to be afraid of a lawsuit.

Vivienne Armentrout wanted to respond to a comment quoted in the media – an apparent allusion to Taylor’s remark on the idea that site plan review is not a deliberative process but rather an administrative one. She invited the council to reflect on its function. Councilmembers don’t manage the city, collect the taxes or collect the garbage. Instead she said, “We depend on you for the heavy thinking.” She described city councilmembers as the “prefrontal lobes,” telling them that residents were depending on them to ensure that their answer to the dilemma is the best thing for the city and its residents.

Doug Kelbaugh, former dean of the University of Michigan college of architecture and urban planning, introduced himself as a nearby resident. [He lives at the old re-purposed armory building at Fifth Avenue and Ann Street.] He criticized the 413 E. Huron structure as crowding the “view corridors” from both the east and the west. The building “looms well above Sloan Plaza,” he said, and “hoards” the sunlight from the neighboring buildings to the north.

The revisions that had been made to the project by trimming off eight units at the top was, Kelbaugh said, “a haircut, not a redesign.” The issue is not a matter of architectural style or detail, he said, but rather a matter of urban design. He questioned the desirability of a “monocultural” building: Do we really want 500 of any one kind of resident – 500 empty nesters, 500 yuppies, or 500 architects? He challenged the council to make “a tough, hardball call.”

413 E. Huron: Quality of Neighborhoods

Trey Bailey told the council that he was opposed to “this slum in the sky.” But on the positive side, he quipped that the proposed building might displace city hall as the ugliest building in the city.

Marilyn Green told the council that when she’d seen recent University of Michigan graduates spilling out of the auditorium, she’d been reminded of what she likes about Ann Arbor. The city is charming, historic, cultural and cares for its students and its community. She asked councilmembers: Would you want to live next door to this building?

Kat Steih told the council she’d lived in Ann Arbor for seven years, and was now a student at the University of Michigan. She said she was speaking for students who’d chosen to live in the Kerrytown neighborhood because of the character of the neighborhood. She expressed the view that the proposed project would have a negative impact on that character.

413 E. Huron: Economics

Steve Beisheim told the council he’s 32 years old and has lived in a variety of cities and different places within Ann Arbor. He loves the walkable density of Ann Arbor, he said. What makes Ann Arbor attractive to students is what makes it attractive to professionals – walkability. He told the council that they were either supporting sprawl or they were supporting density. To regulate neighborhood character there are other options besides stopping the building, he said. He told the council they would be supporting affordable housing on the outskirts of the city where he lives, by allowing more units to be built downtown. That put downward pressure on rents in the periphery, he said. He allowed that the building is not going to be “the prettiest thing ever.” But he did not think that the building would have an impact on Kerrytown, as Steih had indicated in her remarks.

During public commentary reserved time, Peter Eckstein told the council that beyond the loss of Blimpy Burger, the new graduate student resident hall to be built at that location by the University of Michigan has other implications. The residence hall will offer 600 beds a short walk from the campus and will be subsidized by a $110 million gift, he noted. The student luxury housing market is already saturated – and will become more saturated even if 413 E. Huron is not added, he warned.

Peter Eckstein also addressed the council at a previous meeting, on April 15, when this photo was taken. At the time, he referred to an article on student housing published in The Ann Magazine, which he showed the council.

This suggested, Eckstein continued, that the council’s planned review of D1 zoning might not be enough. Whatever vote the council takes on 413 E. Huron – up or down – needs to be followed up by a moratorium on new downtown development in certain areas, he said. Any legal concerns surrounding a moratorium will become moot once 413 E. Huron is off the table, he said. A moratorium would ensure that no new proposal could come along and sneak a “camel’s nose under the tent” before new zoning can be enacted.

Speaking to the developer, Eckstein said it’s not too late to reconsider the risks of adding to a shrinking housing market. Undergrad enrollment at the university has been frozen, he contended, and other new buildings are coming on line. University dorms are being refurbished, and the new graduate student residence hall will offer more bang for the buck, he said. Ann Arbor has a lot of history a developer can learn from, Eckstein said, alluding to large real estate projects that have gone broke and been sold off for pennies on the dollar. He told the developer that the developer owed the financial backers an explanation of how risky the project really is. Eckstein cited mayor John Hieftje as someone with real estate experience, who’d said he’d have stopped investing in high-rise student housing about three buildings ago.

Outcome: The council recessed the meeting at 11:30 p.m. just as it reached the 413 E. Huron site plan review on its agenda. The item will be first on the agenda when the council resumes the May 6 meeting on May 13. That meeting will start at the usual time – 7 p.m.

DDA Ordinance

On May 6 the city council considered a final vote – for the second time – on changes to the ordinance regulating the Ann Arbor Downtown Development Authority.

Ann Arbor DDA TIF revenue projections. The vertical line indicates the year when the clarified calculations would be implemented. The red line is the amount of TIF revenue assumed by the DDA in its FY 2014 and FY 2015 budgets, and in its 10-year planning document. The blue line is the estimated TIF revenue under the proposed clarified ordinance calculations. The yellow line is the estimated TIF revenue the DDA would receive if the DDA continued to interpret the city’s ordinance in its own way. (Numbers from the city of Ann Arbor and DDA. Chart by The Chronicle.)

Several revisions to Chapter 7, the DDA-governing ordinance, had received an initial approval from the city council at its April 1, 2013 meeting. If the revisions are given final approval, the result would be roughly $490,000 in additional annual revenue for the city of Ann Arbor – compared to what the city would receive under the DDA’s current interpretation of the ordinance.

After voting around 3 a.m. to postpone the item at its April 15, 2013 meeting, the council voted again on May 6 to postpone final consideration.

The ordinance revisions considered by the council fell roughly into two categories: (1) those involving board composition and policies; and (2) calculation of tax increment finance (TIF) capture in the DDA district.

In the first category, the revisions to Chapter 7 that had received initial approval by the council included: a new prohibition against non-mayoral elected officials serving on the DDA board except by agreement with the other taxing jurisdictions; term limits on DDA board members; and a new requirement that the DDA submit its annual report to the city in early January.

More significantly are the revisions to Chapter 7 that would clarify how the DDA’s TIF capture is calculated. While the interpretation of the ordinance language is disputed, it’s mostly acknowledged that the ordinance doesn’t provide explicit and clear enough guidance on those TIF calculations.

The “increment” in a tax increment finance district refers to the difference between the initial value of a property and the value of a property after development. The Ann Arbor DDA captures the taxes – just on that initial increment – of some other taxing authorities in the district. Those are the city of Ann Arbor, Washtenaw County, Washtenaw Community College and the Ann Arbor District Library. For FY 2013, the DDA will capture roughly $3.9 million in taxes.

The ordinance revisions would clarify existing ordinance language, which includes a paragraph that appears to limit the amount of TIF that can be captured. The limit is defined relative to the projections for the valuation of the increment in the TIF plan, which is a foundational document for the DDA. The result of the clarification to the Chapter 7 language would mean about $360,000 less TIF revenue for the DDA in FY 2014 – compared to the $3.933 million shown in the DDA’s adopted budget for that year. But for FY 2015, the gap between the DDA’s budget and the projected TIF revenue – using the proposed clarifying change to Chapter 7 – is just $74,000.

However, an amendment to the ordinance changes – accepted as “friendly” at the council’s April 15 meeting – would apply the clarified calculations starting in FY 2015. That would result in minimal impact on TIF revenue to the DDA – compared with the DDA’s own recently adopted FY 2014-15 budgets and its 10-year planning document.

However, the total increment in the district on which TIF is computed has shown significant development growth. And under the proposed clarification of Chapter 7, that growth would result in a return of TIF money to other taxing jurisdictions (which would otherwise be captured by the DDA) totaling around $900,000 each year from FY 2015 through the next 10 years. The city of Ann Arbor’s share of that would be roughly $490,000.

These projections do not include the tax capture that would result in future years from completion of major downtown projects like City Apartments, 624 Church, 618 S. Main, or 413 E. Huron (assuming that it is approved).

The amount of TIF capture that’s returned to the other taxing jurisdictions is tied to growth in the valuation by the existing Chapter 7 language. Under Chapter 7, if the actual rate of growth outpaces the growth rate that’s anticipated in the TIF plan, then at least half the excess amount is supposed to be redistributed to the other taxing authorities in the DDA district.

In 2011, the DDA for the first time returned excess TIF capture to other authorities, when the existence of the Chapter 7 language was reportedly first noticed. At that time, the DDA made repayments of TIF monies to other authorities of around $400,000, which covered what was owed going back to 2003. When the DDA calculated the amounts owed in 2011, the city of Ann Arbor waived its roughly $700,000 share.

In 2011, the DDA used a year-to-year interpretation of the Chapter 7 language instead of computing rate of growth against the base year in a cumulative fashion. That is a point that the Chapter 7 revisions would clarify.

Before giving initial approval on April 1, 2013 – but then postponing the ordinance amendments on April 15 – the council had previously postponed voting at its March 18, 2013 and March 4, 2013 meetings.

DDA Ordinance Revisions: Public Hearing, Communications

During the April 15 public hearing on the DDA ordinance revisions, a number of speakers contended there was a connection between the ordinance revisions and support for affordable housing. During communications time at the start of the May 6 meeting, Stephen Kunselman (Ward 3) announced that he had several possible suggestions to make that would could establish an actual connection between the ordinance revisions and affordable housing.

Kunselman sketched out three possible proposals: (1) 10% of the DDA’s TIF capture would be earmarked for affordable housing; (2) the DDA’s housing fund would be reserved for affordable housing at 30% of the area’s average median income; (3) 50% of the city of Ann Arbor’s TIF “rebate” would be deposited into the city’s affordable housing trust fund; and (4) for the FY 2014 budget, $0.5 million of the DDA’s TIF would be transferred to the DDA’s housing fund.

The public hearing on May 6 was continued from April 15.

DDA Ordinance: Public Hearing – Board Members

Five members of the 12-member Ann Arbor DDA board addressed the council.

DDA board chair Leah Gunn commended the council for making affordable housing one of its priorities. The DDA had supported affordable housing for the last 20 years, she said, and she was afraid if the ordinance were enacted the DDA’s TIF would be “destroyed.”

Joan Lowenstein told councilmembers that they had not allocated any money for economic development – saying the only economic development arm the council has is the DDA. She criticized the idea of cutting economic development money right at the time when the economy is starting to come back. She told the council if they wanted to be mired in the “toxic sludge of the status quo,” then they should enact the ordinance amendments, and do it in the middle of the night.

Other supporters of the DDA were somewhat more moderate in tone.

Newcombe Clark listed off his credentials beyond his service on the DDA board, which included stints on the boards of the Main Street Area Association and the Michigan Theater. He described himself as a three-time graduate of the University of Michigan. Downtown Ann Arbor is where he’s made his money and where he’s met his girlfriends, he said. His frustration that the downtown is not perfect has caused him a lot of pain, he said. The DDA is also not perfect, he allowed. But it’s that imperfection that causes him to wake up every day wanting to try to make it perfect. And he was working with so many smart people on various boards, and with the city council, who were working to make the downtown perfect. He called that the “greatest luxury of my life.” Whether or not the proposed ordinance amendments are the right way to try to make the DDA a little closer to perfect, he thanked councilmembers for trying.

Clark felt that the ordinance changes are not about money, telling the council that the city had already taken all the DDA’s money. [This was an allusion to the contract under which the DDA manages the city's public parking system.] He told the council they had appointed DDA members to be “your eyes and your hands, in the soil of the downtown.” The DDA board is supposed to think about a small part of the city, which is the downtown, so that the council can think about the broader good. He invited councilmembers to ask him questions and to practice inquiry over advocacy. If it’s about politics, then be honest about it, he said – noting that’s not his area of expertise. [It was perhaps an oblique self-deprecating allusion to Clark's unsuccessful candidacy for a Ward 5 city council seat in the 2010 election.] Clark told the council: “I’m happy to give you everything I have.”

Sandi Smith introduced herself as former city councilmember, a member of the DDA board and a resident of Ward 1. She told the council she’d served on the board of the DDA for more than two terms, so one of the proposed amendments to the DDA ordinance – on term limits – would affect her. About that she said, “It doesn’t matter.” Some of the things the council was considering, she said, “They’re passable, it’s fine – I don’t have a problem with them.” But she did have a problem with picking out amendments and adding them – calling it a moving target. If the goal was to achieve clarity in the ordinance, she said, “Let’s sit down and talk about it.” She understood that it’s tough to find money in the budget, so it looks easy to grab it and move it around. But she encouraged the council to celebrate the success of the downtown and create some more successes.

Russ Collins, executive director of the Michigan Theater, said he appreciated the city council’s interest in improving the DDA and in improving the city. He reviewed some of the facts surrounding how the DDA works. Members of the board are appointed to four-year terms, and the appointments are voted on by the city council. Collins said he believed that the DDA had been a very good partner of the city. He reviewed some of the history of the contract under which the DDA manages the city’s public parking system.

In 2005, the city and the DDA agreed to a contract under which the city received $1 million a year for 10 years, Collins explained. But the contract allowed the city to request up to $2 million in any given year, so long as the total didn’t exceed $10 million for the 10-year period. The city requested $2 million in each of the first five years, at which point the city requested that the contract be renegotiated, Collins said. Now the city receives over $3 million per year. [The amount is based on 17% of gross parking revenues. Not all of the roughly $3 million goes to the general fund. About $800,000 goes to the city's street fund. Historically, that amount had been paid to the city outside the terms of the parking contract. The connection to the street fund is related to the fact that the city turned over management of the on-street parking spaces to the DDA in the early 2000s.]

DDA Ordinance: Public Hearing – Non-board Members

Rita Mitchell expressed thanks to the DDA for 30 years of improvements to the parking system. She ventured that perhaps the work of the DDA is done. Perhaps the city should contract directly with Republic Parking for day-to-day operation of the system, which is what the DDA currently does. She thanked Sumi Kailasapathy (Ward 1) and Stephen Kunselman (Ward 3) for their proposed amendments to the ordinance, saying that it would bring clarity. No “interpretation” of the ordinance should be required. She pointed out that the city is more than just a downtown.

John Floyd said that to him, the proposed revisions to the ordinance seemed like they were low-key, good-governance proposals. Instead of having TIF revenue grow at 4% for the DDA, it would perhaps grow at a 2% rate. He didn’t see that as the end of the world. While there are pros and cons about term limits or who should sit on the board, he didn’t think those provisions were the end of the world. While Floyd thought it was great that the DDA was involved in affordable housing, he saw no reason why other government entities could not fulfill that function – the entities from which the DDA captures taxes. Floyd told the council the unfounded assumption was that affordable housing wouldn’t be funded unless the DDA did it. On the whole, the ordinance revisions seemed like a reasonable thing for the council to approve, Floyd said. He added that many arguments against the revisions had been made by people who have not read what they’re speaking about.

Rich Bellas – owner of Van Boven Shoes, a downtown shop – told the council to look to the past at what the DDA had accomplished, with an eye to the future. He felt that cutting the DDA’s funding would handcuff the organization.

Ali Ramlawi, owner of Jerusalem Garden, said he was not there to thank the DDA for building the Library Lane underground parking garage, but he was glad the project was done. [Ramlawi, whose restaurant is located almost immediately adjacent to the new garage, was party to a lawsuit about the parking garage before it was built and addressed the council and the DDA on several occasions during the course of the construction.]

Ramlawi described how he’d met with mayor John Hieftje and learned why the DDA was formed back in the early 1980s – when the downtown area was suffering. Back in the 1970s and early 1980s, downtown Ann Arbor was not the kind of place to bring kids or start a business. But today it’s different. Ramlawi contended that the DDA’s purpose needs to be altered and the organization needs to be reformed. He said he was there to speak against the status quo, saying that the DDA should reflect 2013 not 1982. Ann Arbor no longer has a suffering downtown, he said.

Mark Koroi thanked Kailasapathy and Kunselman for putting forward the ordinance changes. As some evidence that the DDA needs more oversight than it currently has, he offered the recently discovered situation with the downtown citizens advisory council, which exists under the DDA statute. None of the members have appointments that are current – because their terms have all expired. He characterized this as resulting from a failure of members to renew their applications.

Odile Huguenot-Haber expressed skepticism of the DDA’s support for affordable housing. She said she’d look at the budget and couldn’t find any money allocated for it. [The DDA's budgets for FY 2014 and FY 2015, adopted earlier this spring, include a $100,000 transfer into its housing fund for each of those years. The DDA's 10-year planning document also includes a $100,000 transfer into the housing fund.] Huguenot-Haber said in any case she was not sure the DDA is the appropriate agency to address the issue of affordable housing. She supported the ordinance changes, and would like to see the DDA have more accountability and transparency.

Brian Kelly spoke on behalf of young professionals like himself. Curtailing the DDA’s budget and not allowing the DDA to grow as Ann Arbor grows would be dangerous, he cautioned, and would ultimately result in the loss of young professionals.

Gwen Nystuen appreciated the fact that Kunselman and Kailasapathy had worked on the clarification of the ordinance. She felt those who’d spoken at the public hearing on April 15 about the DDA ordinance [many of whom had been recruited from the homeless community to appear and speak in support of affordable housing] were missing the point. She ventured that some of the people hadn’t read the proposed ordinance changes. It was not some drastic thing that would cause great damage, she said. And everyone seems to agree there’s ambiguity and a lack of clarity.

Frances Todoro-Hargreaves spoke on behalf of the State Street Area Association. She told the council she was happy to hear and to see the dialogue. She admired the creative thinking that the council had shown at its previous meeting. [This was an allusion to the friendly amendment Sally Petersen had put forth, which delays enactment of the clarified calculations until FY 2015 and essentially eliminates any shortfall of TIF revenue to the DDA, compared to the revenue the DDA has planned for over the next 10 years.] She’d been looking forward to that open dialogue between the council and the DDA. She encouraged a longer dialogue before making a long-term decision.

Maggie Ladd spoke on behalf of the South University Area Association. She called it dangerous to try to fix something that isn’t broken. She called the DDA an organization that gets things done, and listed out a number of the DDA’s accomplishments. Ladd urged the council to exercise caution, even with the wise amendment that Sally Petersen had made to the proposal on April 15. She urged the council to take a measured approach.

DDA Ordinance Revisions: Council Deliberations

Marcia Higgins (Ward 4) said she was happy that Stephen Kunselman (Ward 3) had now taken steps to work collaboratively. She felt that additional time was needed to look at the issue. So she moved to postpone the question until the council’s first meeting in September, which falls on Sept. 3.

Stephen Kunselman (Ward 3).

Kunselman agreed that there’s a lot to be discussed. He said it was worth trying to make sure that the council got things right.

Responding to previous statements from Christopher Taylor (Ward 3) that “the DDA ain’t broke,” Kunselman stated that clearly there is something broken – otherwise the council wouldn’t be having this discussion today.

Sumi Kailasapathy (Ward 1) then read aloud from a 10-year old article published in the Ann Arbor News, which was still in publication at the time. [.pdf of Sept. 16, 2003 article retrieved from the Ann Arbor District Library online archives] The letter includes the following:

After holding the future of the Downtown Development Authority in limbo for 16 months, the Ann Arbor City Council on Monday approved a new 30-year deal for the DDA on the premise it will spend more of its money on affordable housing. With a 10-0 vote, the council extended what many hoped would be an olive branch to the DDA.

The city and the DDA have had a tense relationship that has been strained for years in arguments over parking structures, money and conflicting personal relationships. The City Council and the DDA both use tax money to keep Ann Arbor’s downtown chugging along in what both boast is one of the economic pearls of the state.

The nonprofit DDA captures a portion of property taxes from new development is built in its district, also known as tax increment financing (TIF). Just how to spend that nearly $3 million a year has been a source of friction between the city and DDA.

“There has been a history of cutting deals more than partnering,” said DDA board Chairwoman Rene Greff, who owns the Arbor Brewing Co.

Kailasapathy paraphrased Karl Marx by saying that history repeats itself – the first time as a tragedy and the second time as a farce. She highlighted Greff’s statement that the history had been more about cutting deals than partnering. Kailasapathy stressed the issue should be approached with sincerity. She asked that people not pretend the situation was created by her and Kunselman.

Margie Teall (Ward 4) said that the issue was difficult for her because she doesn’t think the DDA is broken. She felt that the DDA has bent over backboards backwards to partner with the city. She was not particularly interested in delving into the issue. She did feel that there is some clarification that needs to be made in the ordinance language – but she felt that could be handled by staff even sooner than September. She said she would support the postponement, but not enthusiastically.

Christopher Taylor (Ward 3).

Taylor said that as a matter of “comity” he’d support postponement. But he felt that what he’d learned about the DDA from its actions since the time he’d been familiar with the organization is that it is “not fixed.” He then paused to recover from the mis-statement, and made clear that he’d meant to say that the DDA is “not broken.”

Responding to Kailasapathy’s citation of the 2003 newspaper article, Taylor contended that whatever happened in 2003, Greff had appeared in front of the council much more recently – at a previous public hearing – to speak against the proposed ordinance changes. What the DDA does is good for the downtown, and that’s good for the other taxing authorities, Taylor said.

Taylor claimed that the ordinance amendment would pull millions of dollars out of the downtown. That didn’t make any sense to him. He objected in particular to removal of a provision that he construed as putting a rebate to other taxing jurisdictions ahead of payments toward debt. He would not mind seeing the wording of the existing ordinance clarified – but he wanted the clarification to be to the downtown’s benefit.

Jane Lumm (Ward 2) indicated she would support the postponement – although she had been prepared to vote in support of the ordinance revisions. She reiterated remarks she’d made previously to the effect that she did not think the proposal would harm the DDA and she would not support the proposal if it did that.

Outcome: On a unanimous vote, the Ann Arbor city council again delayed final enactment to changes in the city’s ordinance governing the Ann Arbor Downtown Development Authority. The postponement is until the council’s second first meeting in September – on Sept. 3, 2013.

Digital Sign Ordinance

The council considered final approval to changes in the city’s sign ordinance – to allow for only a limited type of digital signs. The council had given initial approval of the changes at its meeting on March 18, 2013. But at the council’s April 1, 2013 meeting, the council delayed action until May 6. [.pdf of proposed outdoor advertising ordinance]

A council-enacted moratorium on applications for digital signs was set to expire on April 11, 2013. At its April 1 meeting the council decided to extend that moratorium until July 1, 2013.

According to the resolution approved by the council on April 1, the purpose of postponing a decision on the ordinance amendment and extending the moratorium was to allow for additional time to review the proposed amendments and to “gather input from the public and interested parties, and to promote the public health, safety, and welfare of city residents.”

A town hall meeting on billboards, hosted by Ward 5 councilmembers Chuck Warpehoski and Mike Anglin at Downtown Home & Garden at Ashley and Liberty streets, took place on May 8. [.pdf of town hall flyer] Most of the existing billboards in the city are located in Ward 5.

If enacted, the changes would mean that a limited type of digital signs would be allowed in the city. But the effect of the proposed ordinance changes would be that no new billboards would be permitted – although the existing 28 billboards in the city would be allowed to remain as non-conforming signs. Existing billboards would not be allowed to be retrofitted for digital displays.

Under the proposed ordinance changes, new signs with an area greater than 200 square feet could not be constructed. And existing signs of that size could not have electronic features added to allow for changeable text or images.

The existing sign ordinance does not allow for any changeable text, except for “noncommercial information which requires periodic change” – like time and temperature. So the proposed changes to the ordinance would allow for changeable portions of a sign, subject to the limitation that the changeable portion of the sign not be more than half the area of any sign, and no more than 30 square feet per sign and 15 square feet per sign face. Additional limitations would prevent flashing and scrolling – by not allowing changes to content more often than 15 minutes. The proposed ordinance language states:

Changeable copy shall not and shall not appear to flash, undulate, pulse, blink, expand, contract, bounce, rotate, spin, twist, or otherwise move.

The proposed ordinance restrictions on dynamic elements of signs were motivated in part – based on remarks of city planning manager Wendy Rampson at the council’s March 18 meeting – by the perception that these elements are a distraction to motorists. That argument has been countered by Adams Outdoor Advertising in written communication to the city by citing studies that conclude any distraction does not cause a greater rate of traffic accidents.

The proposed ordinance changes would place a maximum brightness of any illuminated sign, including those that are digital/electronic: 5,000 nits during the day and 100 nits at night, and in no case greater than 0.1 foot-candles above the already existing amount of light at a residential property line. One nit is defined as one candela per square meter. A candela is about the amount of light produced by a common tallow candle.

By way of comparison, an iPhone 5 display is reported to have a brightness of about 500 nits.

The moratorium on digital signs was first enacted for 180 days at the council’s April 17, 2012 meeting. And the city council had extended the moratorium for an additional 180 days at its Oct. 1, 2012 meeting.

Falling under the moratorium are “billboards commonly referred to as ‘electronic message centers,’ ‘electronic message boards,’ ‘changeable electronic variable message signs,’ or any billboard containing LEDs, LCDs, plasma displays, or any similar technology to project an illuminated image that can be caused to move or change, or to appear to move or change, by a method other than physically removing and replacing the sign or its components, including by digital or electronic input.”

Sign Ordinance: Public Hearing

Thomas Partridge said the prohibition of digital signs reflected a lost opportunity to inform the public about public safety issues. He questioned whose signs and what messages might be limited? Was it messages from rival candidates for mayor or city council? Partridge contended that there hadn’t been adequate consideration of the proposed amendments and said the vote shouldn’t be taken at that meeting.

Ellen Ramsburgh, a member of the city’s historic district commission (HDC), began by saying that she was not familiar with the proposed amendments. Ann Arbor’s HDC had followed the leadership of Ypsilanti’s HDC, she said, by putting together a list of iconic signs in the city that should be preserved. She wasn’t sure where that list had gone, but the Beer Depot sign was an example of a sign that was on the list. The HDC had wanted to grandfather them in so they could be replaced if they fell down.

Christine Brummer told the council that she’d served on the sign board of appeals for at least a decade. During her time on that board, if a sign was iconic – like the sign for the Big 10 Party Store, which became that became Morgan & York, or the Beer Depot sign – the board had allowed them to be preserved as quasi-historic. She pointed out that the sign board of appeals had now been folded into the zoning board of appeals – so those kinds of sign issues would go before the zoning board of appeals.

Sign Ordinance: Council Deliberations

Chuck Warpehoski (Ward 5) indicated that he wanted to postpone the vote until June 17. He noted that a town hall meeting on billboards would take place on May 8 hosted by him and Mike Anglin (Ward 5) at Downtown Home & Garden at Ashley and Liberty streets. Most of the existing billboards in the city are located in Ward 5. Anglin noted that representatives from Adams Outdoor Advertising would be there.

Sally Petersen (Ward 2) and Mike Anglin (Ward 5) talk before the May 6 meeting started.

Sally Petersen (Ward 2) got some clarification about the date to which it would be postponed. There’d been a staff recommendation to postpone until May 20. City planning manager Wendy Rampson indicated that postponing until June 17 would provide some additional time for staff to prepare its report.

Jane Lumm (Ward 2) asked that the issue about iconic signs be addressed – which Ramsburgh and Brummer had raised during the public hearing. Christopher Taylor (Ward 3) – sponsor of the changes to the sign ordinance – said that the signs those two had talked about were not billboards, and were thus not in the scope of the ordinance changes.

Commenting on the fact that the majority of the billboards in the city are in Ward 5, Taylor quipped that the effect of the proposed ordinance changes would “for good or ill” allow Ward 5 to retain that honor.

Stephen Kunselman noted that there’s a billboard near Packard and US-23 in Ward 3 – which he represents – so he hoped that sign could be included in the discussion.

Outcome: The council again decided to postpone final action – this time until June 17.

Video Privacy Ordinance

The council was asked to give initial consideration of a new ordinance regulating the use of public surveillance cameras. The council had previously postponed the item at its April 15 meeting – due to the length of that meeting. [.pdf of ordinance as presented to the council on April 15, 2013]

The proposed video privacy ordinance would not apply to CTN cameras like this one mounted in the Ann Arbor city council chambers.

The new ordinance would apply only to a limited range of cameras – those used by the city of Ann Arbor “to monitor human activity without the physical presence of an operator, including cameras on remotely operated aerial vehicles.” The ordinance would not apply to a range of city of Ann Arbor cameras, for example: cameras used to improve traffic design, security cameras operating in jails, prisons, water treatment facilities, public housing facilities, or the Ann Arbor Airport and other governmental facilities.

The new ordinance would allow for public surveillance cameras to be installed for 15 days or less at the discretion of the city administrator if the purpose is to address a specific criminal problem.

A period of longer than 15 days would require two-thirds of nearby residents to give written permission. Regardless of the period of the installation, onsite notice of the camera’s presence would be required. If a private residence is in the public surveillance camera’s range, then the residents of that property would have to give written permission for the installation.

Public surveillance cameras could not be used for live-monitoring, except in emergencies, and audio recording would not be permitted. Access to the recorded images would be limited to “employees of the police department and attorneys involved in criminal proceedings.” After 90 days, surveillance recordings would be deleted unless they are part of an ongoing investigation. A report on the effectiveness of a camera would be published on a public website after its removal.

The council had been alerted to the forthcoming ordinance proposal nearly four months ago, when Chuck Warpehoski (Ward 5) told his colleagues at their Dec. 20, 2012 meeting that he and wardmate Mike Anglin would be bringing a proposal forward.

At that Dec. 20 meeting, Warpehoski said that the Ann Arbor police department doesn’t currently use that technique, but there’d been some concerns in other communities.

By way of additional background, the ordinance has been long in the works but has been delayed. Former Ward 1 councilmember Sandi Smith had announced at a council meeting over a year ago, on Aug. 4, 2011, that she’d be bringing a video surveillance ordinance for consideration at the council’s Sept. 6, 2011 meeting. And a year before that she’d indicated the city’s human rights commission would be working on the issue.

During the brief deliberations on the issue on May 6, Warpehoski indicated that after discussion with city administrator Steve Powers and chief of police John Seto, he’d be asking for a postponement.

Outcome: The council postponed action on the proposed video privacy ordinance until May 20.

Summit Townhomes Project

On the council’s agenda was the site plan approval for the Summit Townhomes project.

Both the site plan and the new zoning for the parcel, located at 2081 E. Ellsworth Road, had appeared on the council’s April 15 meeting agenda. The council approved the R3 (townhouse) zoning at that meeting. But as the hour grew late, at around 3 a.m. the council postponed all remaining items, including the Summit Townhomes site plan, until May 6.

Both the site plan and zoning request previously had been postponed by the council at its March 18, 2013 meeting.

The parcel for the Summit Townhomes development (shaded yellow). The blue line is the boundary between the Malletts Creek and the Swift Run watersheds.

The developer plans to build 24 attached residential units in four separate buildings, with each building between 80 to 160 feet in length. Each of the 24 units would have a floor area of about 1,300 square feet, and an attached one-car garage. The plan includes two surface parking areas on the east and west sides of the site, each with 12 spaces. To do this, the property needed to be zoned as R3.

March 18 had been the first time the site plan had been before the council. But the R3 zoning for the property, annexed from Pittsfield Township, had been previously considered by the council, and referred to the planning commission for re-review. The planning commission then confirmed its original recommendation for R3 zoning.

In more chronological detail, the zoning item had first appeared on the city council’s Jan. 7, 2013 agenda, when it received initial approval. However, at its Feb. 4, 2013 meeting, the council heard from about a half dozen people who spoke during the public hearing, in opposition to the zoning – citing concerns about congestion and overcrowding. So councilmembers voted unanimously to refer the zoning issue back to planning commissioners for another look. The council indicated interest in hearing more detail on drainage issues, and the level of recreational services offered in that general area of the city, as well as information about public safety issues.

At their Feb. 21, 2013 meeting, planning commissioners voted again to recommend that the site be zoned R3 – the same zoning they had previously recommended at their Nov. 20, 2012 meeting.

The project has been working its way through the city’s approval process for several months. The site plan had been postponed by planning commissioners in June of 2012 and again on Nov. 20, 2012, but was ultimately recommended for approval at the commission’s meeting on Jan. 3, 2013.

Before recommending the site plan, planning commissioners had previously recommended approval of annexation and zoning of the site in 2012. At their June 19, 2012 meeting, commissioners had approved annexing the 2.95-acre site, just east of Stone School Road, from Pittsfield Township into the city of Ann Arbor. The annexation was subsequently authorized by the city council.

Outcome: Without discussion at the May 6 meeting, councilmembers approved the site plan for Summit Townhomes.

Fourth Avenue Improvements

The council was asked to consider a $741,900 contract with E.T. MacKenzie Co., to make improvements on Fourth Avenue in downtown Ann Arbor between Huron and Liberty Streets.

The work is meant to deal with the poor pavement conditions as well as replace the existing 4-inch water main with about 320 feet of new 12-inch pipe. A stormwater management system will also be installed as part of the project, which will collect water in a stone reservoir under the street. Water in the reservoir will infiltrate into the ground from there. Besides construction of the street, the project includes replacement of the curb, curb ramps, and some sidewalk.

The work is to be paid from the water fund, the street resurfacing millage and the stormwater fund.

During the relatively brief deliberations by the council, Stephen Kunselman (Ward 3) inquired as to whether the Ann Arbor Downtown Development Authority was contributing to the project, and whether the DDA had been asked. City administrator Steve Powers indicated that the DDA had been asked and that the DDA was not contributing – because the Fourth Avenue project was not part of the DDA’s capital project budgeting.

Outcome: The council unanimously approved the contract for Fourth Avenue improvements.

The Arena: Liquor License

The council was asked to consider withdrawing a formal objection it had made at its March 18, 2013 meeting, to object to the renewal of the liquor license for The Arena – a bar located on the northeast corner of Washington and Fourth in downtown Ann Arbor.

According to the staff memo accompanying the resolution, The Arena paid all outstanding obligations to the city on April 30, 2013.

Those obligations had been the basis of the council’s objection to the renewal: The Arena’s failure to pay a combined $8,755 of 2011 taxes and an additional default judgment. The default judgment was made in the 15th District Court by then-judge Julie Creal in favor of the city for $1,659. It involved non-payment for police services.

The city’s objection had been forwarded to the Michigan Liquor Control Commission (MLCC) for final action. Because The Arena paid the taxes, the MLCC indicated a willingness to extend The Arena’s license, conditioned on the Ann Arbor city council’s withdrawal of the original objection by May 31, 2013.

During deliberations on the matter, several councilmembers expressed their concern about the amount of time and legal resources The Arena had consumed from the city by delaying its payment as long as it did.

Outcome: The council voted unanimously to withdraw objection to The Arena’s liquor license renewal.

FY 2014 Budget Hearing

Three public hearings related to the FY 2014 budget – on fees for the public services, community services and public safety services areas – did not draw any speakers. The main hearing on the budget, however, had more participation.

Thomas Partridge said better thinking was needed on issues of homelessness and those who are disadvantaged.

Former city councilmember Jean Carlberg urged the council to add to human services funding.

Carole McCabe, executive director of Avalon Housing, and Julie Steiner, executive director of the Washtenaw Housing Alliance, both highlighted the need for affordable and supportive housing, especially in light of reduced funding due to federal sequestration.

Jeff Hanyer Hayner drew a comparison between downtown Springfield, Illinois, and the possible future of downtown Ann Arbor. For all the money that had been spent on downtown Springfield, they couldn’t keep it from turning into a ghost town. He noted that Ann Arbor doesn’t have a great amount of affordable housing, so that’s something that needs to be considered when deciding what to do with money that might come back to the city from the DDA. What are we going to do differently in Ann Arbor so that it stays vibrant and doesn’t have a feeling of decay? he asked.

Rita Mitchell thanked the council for its decision to remove expenses for a train station from the capital budget. She’d followed that issue since 2009, she said. She remained concerned that there was a continued focus on parkland as a possible location for a new train station. She noted that Amtrak owns the current train station and provides a functional station. She wondered why the city would build a new station for Amtrak, at a cost of $44 million.

Alan Haber allowed he had not studied the budget, but said probably a lot of people hadn’t. He highlighted the need for housing of low income and very low income residents. He called on the council to dedicate the gross proceeds of the sale of the Fifth and William city-owned parcel (the former YMCA lot) to affordable housing, not just some of the net proceeds. [For an account of the city council's policy on proceeds of land sales, enacted in October 2012, see "Proceeds of Land Sales: Mostly Case-by-Case."]

Appointments

The topic of appointments to city boards and commissions arose in a few different ways at the May 6 meeting. During the public hearing on the Ann Arbor Downtown Development Authority ordinance revisions, Mark Koroi pointed out that none of the members of the downtown citizens advisory council had current appointments. That group exists, based on the state enabling legislation for downtown development authorities.

The meeting’s agenda included nominations for re-appointment of all those members.

Another nomination of interest on the agenda was Susan Baskett to replace Jesse Bernstein on the board of the Ann Arbor Transportation Authority. Baskett currently is a member of the Ann Arbor Public Schools board of education, an elected position. Her nomination was not surprising, given that her name had previously been put forward to serve on the board of the newly incorporated Act 196 transit authority last year – before that effort was discontinued.

During communications time, Mike Anglin (Ward 5) alerted people to vacancies on the community corrections advisory board. That group is supposed to “formulate a comprehensive plan for the development, implementation, and operation of the community correctional services in Washtenaw County/City of Ann Arbor and to develop a plan for the administration, monitoring, and control of the community correctional services under the comprehensive plan.”

The council postponed action on the appointment of Stephanie Buttrey as a member of the greenbelt advisory commission (GAC). This item also had been postponed from the April 15 meeting. The council considered its appearance on the agenda as a nomination. Action will take place on May 20. Appointments to GAC are somewhat different from those to other boards and commissions, in that the nominations are made by the council as a body, not by the mayor.

During communications time in response to Koroi’s point made at the DDA ordinance hearing, Sabra Briere (Ward 1) picked up on his phrasing, which implied that the members of the downtown citizens advisory council had failed to re-apply for appointment. She didn’t think that was an accurate way to describe the situation. When someone confronts the expiration of their appointment on any board or commission, they generally don’t know, she said. She asked mayor John Hieftje: “Is there a reapplication process that I’ve missed?” No, replied Hieftje. He said that sometimes he has a discussion with someone about whether they’d like to be reappointed.

For the more prominent boards and commissions like the park advisory commission or the planning commission, Hieftje continued, it’s generally known when appointments expire. But for other boards and commissions, he said, he depends on a staff person or the chair of the body to let him know. That doesn’t always happen in a timely way, he said. He also said some people continue to serve on boards through their expiration date until they’re re-appointed.

Jane Lumm (Ward 2) said this issue had been examined in the last couple of years to see whose responsibility it is to take action – in the case, for example, when board members aren’t attending regularly. There’s a committee she serves on where a member had been absent for a year. It’s hard for the mayor to fill the position, if he’s not aware the member isn’t attending, she said.

Communications and Comment

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

Comm/Comm: Regional Fire Protection

Mayor John Hieftje and Sabra Briere (Ward 1), who’d both attended a meeting earlier that morning of the Metro Alliance, reported out to the council about that meeting. The focus of the Metro Alliance meeting had been regional cooperation for fire protection. Briere described how the mutual aid system currently works: Firefighters arrive at the scene and they determine if they need additional support – if those arriving units needed a “box alarm,” they’d call it in at that point. A “box alarm” is a predetermined set of equipment and personnel that gets deployed from surrounding jurisdictions.

What’s being proposed, Briere continued, is to implement something more robust – a Mutual Aid Box Alarm System (MABAS). It would trigger automatically – at the point of the first dispatch – all the mutual aid response. If the first-arriving firefighters on the scene determined that the mutual aid was not necessary, then other units would be called off. But that means if it’s a serious fire, you get quick response, Briere said. She also pointed out that when there’s a “box alarm” summoning mutual aid from other jurisdictions, Ann Arbor’s off-duty firefighters are also called. But that’s time we can’t afford to wait, she said, and citizens shouldn’t be expected to wait. After hearing about how long it can take for off-duty firefighters to arrive, she’d concluded that first responders are welcome – whichever jurisdictions they come from.

Comm/Comm: Human Rights, Affordable Housing

Thomas Partridge introduced himself as a resident of Ward 5, the 53rd District of the Michigan house of representatives and the 18th District of the Michigan senate. He told councilmembers they should place greater attention on affordable housing and supportive services. He called for protection of disability rights, human rights and for tax reform and zoning reform. Alluding to John Hieftje’s long tenure as mayor, Partridge said that if he had been mayor for 10 years, those kinds of issues would have been given primary importance. [Partridge did not mention it, but he'd taken out petitions to run for city council representing Ward 5 earlier in the day.]

Comm/Comm: Washtenaw Area Transportation Study (WATS)

During communications time at the start of the meeting, Chuck Warpehoski (Ward 5), who is the city council’s representative to WATS, noted that comment is being sought on long-range planning and budgeting.

Comm/Comm: Palestine/Israel

Henry Herskovitz described recent events in and around Israel. Israeli forces had attacked Syria and the U.S. supported the move, he said. He also cited news reports about statements made by Carla Del Ponte, a member of a United Nations independent commission of inquiry on Syria, who’d said that they’d not seen evidence of government forces using chemical weapons, but there were suspicions that rebel forces had used sarin gas. And near the Church of the Holy Sepulchre, Christians had been prevented by Israeli security forces from worshiping on orthodox Easter, he said.

Herskovitz told the council that on April 17, 23 people had staged an anti-Israel protest outside the Michigan Theater, on the occasion of a performance by an Israeli singer. The protest had attempted to educate local residents to the idea that atrocities couldn’t be concealed by the beauty of a performer.

Present: Jane Lumm, Mike Anglin, Margie Teall, Sabra Briere, Sumi Kailasapathy, Sally Petersen, Stephen Kunselman, Marcia Higgins, John Hieftje, Christopher Taylor, Chuck Warpehoski.

Next council meeting: The May 6, 2013 meeting will continue on May 13 at 7 p.m. in the council chambers at 301 E. Huron. [Check Chronicle event listings to confirm date]

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And on May 6, the council again decided to postpone final action – this time until June 17.

Billboards on West Liberty Street at First, near the edge of downtown Ann Arbor, looking east. (Photo illustration by The Chronicle.)

A council-enacted moratorium on applications for digital signs was set to expire on April 11, 2013. But at its April 1 meeting the council decided to extend that moratorium until July 1, 2013.

According to the resolution approved by the council on April 1, the purpose of postponing a decision on the ordinance amendment and extending the moratorium was to allow for additional time to review the proposed amendments and to “gather input from the public and interested parties, and to promote the public health, safety, and welfare of city residents.”

A town hall meeting on billboards, hosted by Ward 5 councilmembers Chuck Warpehoski and Mike Anglin at Downtown Home & Garden at Ashley and Liberty streets, is scheduled to take place on May 8 starting at 7 p.m. [.pdf of town hall flyer] Most of the existing billboards in the city are located in Ward 5.

If enacted, the changes would mean that a limited type of digital signs would be allowed in the city. But the effect of the proposed ordinance changes would be that no billboards would be permitted – although the existing 28 billboards in the city would be allowed to remain as non-conforming signs. Existing billboards would not be allowed to be retrofitted for digital displays. The council had given initial approval of the changes at its March 18, 2013 meeting. [.pdf of proposed outdoor advertising ordinance]

Under the proposed ordinance changes, new billboards – signs with an area greater than 200 square feet – could not be constructed. And existing signs of that size could not have electronic features added to allow for changeable text or images.

The existing sign ordinance does not allow for any changeable text, except for “noncommercial information which requires periodic change” – like time and temperature. So the proposed changes to the ordinance would allow for changeable portions of a sign, subject to the limitation that the changeable portion of the sign not be more than half the area of any sign and no more than 30 square feet per sign and 15 square feet per sign face. Additional limitations would prevent flashing and scrolling – by not allowing changes to content more often than 15 minutes. The proposed ordinance language states:

Changeable copy shall not and shall not appear to flash, undulate, pulse, blink, expand, contract, bounce, rotate, spin, twist, or otherwise move.

The proposed ordinance restrictions on dynamic elements of signs were motivated in part – based on remarks of city planning manager Wendy Rampson at the council’s March 18 meeting – by the perception that these elements are a distraction to motorists. That argument has been countered by Adams Outdoor Advertising in written communication to the city by citing studies that conclude any distraction does not cause a greater rate of traffic accidents.

The proposed ordinance changes would place a maximum brightness of any illuminated sign, including those that are digital/electronic: 5,000 nits during the day and 100 nits at night, and in no case greater than 0.1 foot-candles above the already existing amount of light at a residential property line. One nit is defined as one candela per square meter. A candela is about the amount of light produced by a common tallow candle.

By way of comparison, an iPhone 5 display is reported to have a brightness of about 500 nits.

The moratorium on digital signs was first enacted for 180 days at the council’s April 17, 2012 meeting. And the city council had extended the moratorium for an additional 180 days at its Oct. 1, 2012 meeting.

Falling under the moratorium are “billboards commonly referred to as ‘electronic message centers,’ ‘electronic message boards,’ ‘changeable electronic variable message signs,’ or any billboard containing LEDs, LCDs, plasma displays, or any similar technology to project an illuminated image that can be caused to move or change, or to appear to move or change, by a method other than physically removing and replacing the sign or its components, including by digital or electronic input.”

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

From left: Jane Lumm (Ward 2), assistant city attorney Mary Fales and Stephen Kunselman (Ward 3). (Photos by the writer.)

After two postponements, the council gave initial approval to a set of changes to the ordinance that establishes the Ann Arbor Downtown Development Authority (DDA). The changes can be divided into those that affect board composition and those that relate to the computation of the DDA’s tax increment finance (TIF) capture.

The tax calculations have implications of roughly $1 million a year for the DDA and the taxing jurisdictions whose taxes are captured by the DDA. Those taxing jurisdictions include the city of Ann Arbor, Washtenaw County, Washtenaw Community College and the Ann Arbor District Library. The vote was 7-3, as mayor John Hieftje, Margie Teall (Ward 4) and Chuck Warpehoski (Ward 5) voted no. Christopher Taylor (Ward 3) was absent. The final vote will likely come at the council’s April 15 meeting. Councilmembers are not obligated to vote the same way the second time around.

The council also wrapped up an issue that has appeared on its agenda for several meetings. At its March 18 meeting, the council had finally decided not to enact a moratorium on site plan applications in D1 (downtown core) zoning districts. Instead, the council had directed the planning commission to conduct a review of D1 zoning. But councilmembers had left open the question of the exact scope of work and the timeframe for its completion by planning commissioners. At the April 1 meeting, the council allowed the commission six months, until Oct. 1, to review the following: the appropriateness of D1 zoning on the north side of Huron Street between Division and South State and the south side of William Street between South Main and Fourth Avenue; the residential premiums; the zoning for the University of Michigan Credit Union parking lot.

Other business was further delayed by the council. At the developer’s request, the council postponed for a second time the 413 E. Huron project, a proposed 14-story, 216-apartment building at the northeast corner of Huron and Division streets. That project will come back before the council at its April 15 meeting. A new public hearing on the 413 E. Huron site plan application was started on April 1 and will continue on April 15.

The council also postponed a second and final vote on changes to the city’s sign ordinance. The changes would prohibit any new billboards, and allow only a limited range of digital signs. That won’t come back before the council until May 6. Several people addressed the council during the public hearing. All of them worked for Adams Outdoor Advertising, and spoke in opposition to the changes. Because of the postponement, the council extended a moratorium on digital sign applications, which has now been in place for a year.

The council also extended a moratorium on spending of monies that have been set aside under the city’s Percent for Art ordinance. A revision to that ordinance, which would likely eliminate the public art set-aside but still allow for aesthetic elements to be built into a project, is expected to be brought forward in the next few weeks. The public art ordinance revisions are being crafted by a council committee that was tasked with that responsibility in December of 2012.

At its April 1 meeting, the council also approved contracts for renovations at the Gallup Park canoe livery, and the Argo and Geddes dams. In addition, the council approved a lease for additional parking in connection with the Argo Cascades.

Other business at the meeting included council approval of the notice to issue bonds for the city’s drinking water system. The council also authorized contracts in connection with street reconstruction and sidewalk repair work for the 2013 season.

DDA Ordinance

Several revisions to Chapter 7, a city ordinance governing the Ann Arbor Downtown Development Authority (DDA), were on the council’s agenda, having been postponed twice previously. The council had postponed voting at its March 18, 2013 and March 4, 2013 meetings. [.pdf of DDA ordinance given initial approval on April 1]

The revisions considered by the council fell roughly into two categories: (1) those involving board composition and policies; and (2) calculation of tax increment finance (TIF) capture in the DDA district.

In the first category are: a new prohibition against non-mayoral elected officials serving on the DDA board except by agreement with the other taxing jurisdictions; term limits on DDA board members; and a new requirement that the DDA submit its annual report to the city in early January.

An amendment to the ordinance changes offered by Jane Lumm (Ward 2) during the meeting was accepted as friendly. It was meant to assure a focus on the DDA’s support of housing. It stipulated that if tax increment financing is used as the financing method for an approved authority project, the project must meet one of the DDA’s adopted plan goals. Among those plan goals is support of housing. Lumm’s change provides the ability of the DDA to make investments in properties not just in the district, but also in neighborhoods near the district.

More significantly, among the proposed revisions to Chapter 7 are changes that are meant to clarify how the DDA’s TIF tax capture is calculated. The “increment” in a tax increment finance district refers to the difference between the initial value of a property and the value of a property after development. The Ann Arbor DDA captures the taxes – just on that initial increment – of some other taxing authorities in the district. Those are the city of Ann Arbor, Washtenaw County, Washtenaw Community College and the Ann Arbor District Library. For FY 2013, the DDA will capture roughly $3.9 million in taxes that would otherwise have gone to those other entities.

The proposed ordinance revision would clarify existing ordinance language, which includes a paragraph that appears to limit the amount of TIF that can be captured. The limit is defined relative to projections for the valuation of the increment in the TIF plan, which is a foundational document for the DDA. The result of the clarification to the Chapter 7 language would mean about $363,000 less TIF revenue for the DDA in FY 2014 – compared to the $3.933 million shown in the DDA’s adopted budget for that year. For FY 2015, the gap between the DDA’s budget and the projected TIF revenue – using the proposed clarifying change to Chapter 7 – is just $74,000.

However, the total increment in the district on which TIF is computed is expected to show significant growth. And under the proposed clarification of Chapter 7, that growth would result in a return of TIF money to other taxing jurisdictions – that would otherwise be captured by the DDA – totaling $931,000 each year for FY 2014-15. The city of Ann Arbor’s share of that would be roughly $559,000, of which $335,000 would go into the general fund. The city’s general fund includes the transit millage, so about $69,000 of that would be passed through to the Ann Arbor Transportation Authority.

In the Chapter 7 ordinance language, the amount of TIF capture that’s returned to the other taxing jurisdictions is tied to growth in the valuation in the district. Under Chapter 7, if the actual rate of growth outpaces the growth rate that’s anticipated in the TIF plan, then at least half the excess amount is supposed to be returned to the other taxing authorities in the DDA district. In 2011, the DDA for the first time returned excess TIF capture to other authorities, when the existence of the Chapter 7 language was reportedly first noticed. At that time, the DDA made repayments of TIF monies to other authorities of around $400,000, which covered what was owed going back to 2003. When the DDA calculated the amounts owed in 2011, the city of Ann Arbor waived its roughly $700,000 share. Subsequently, the DDA reversed its legal position, contending that it had not needed to return the money it had repaid.

In 2011, the DDA used a year-to-year interpretation of the Chapter 7 language instead of computing the rate of growth against the base year in a cumulative fashion. That is a point that the Chapter 7 revisions would clarify. At the two previous meetings when the council had considered but postponed voting on the ordinance amendments, that specific point had not been addressed. But the substitute ordinance revision offered on April 1 clarified the current language in favor of the cumulative methodology.

The figures below come from the city of Ann Arbor’s financial services staff. Labels are The Chronicle’s.

MOST RECENT PROJECTIONS FOR TIF CAPTURE (in millions)
 FY 13   FY 14  FY 15
========================== 
 3.957   3.933  3.756  DDA Adopted Budget TIF Revenue
 3.957   4.501  4.613  Projected TIF, DDA View 
 3.957   3.570  3.682  Projected TIF, Clarified Ch. 7
          .568   .857  Budgeted vs Projected, DDA View
         (.363) (.074) Budgeted vs Projected, Clarified Ch. 7
==========================

ADDITIONAL REVENUE FROM CLARIFIED CH. 7
 FY 13   FY 14  FY 15
========================== 
          .335   .335  City General Fund
          .223   .223  City Non-General Fund
          .559   .559  Total City

          .372   .372  Total AADL, WCC, WC
          .931   .931  Total

-

These projections do not include the additional tax capture that would result in future years from completion of City Apartments, 624 Church, 618 S. Main, or 413 E. Huron (assuming that it is approved).

DDA Ordinance: Task Force

During council communications time at the start of the meeting, Sally Petersen (Ward 2) reminded her colleagues that she’d announced at the previous meeting  – very late during the evening – that she would be bringing forward a resolution to establish a task force focused on the DDA. She had proposed the group’s specific assignment as conducting a strategic assessment of the priorities for economic development between the DDA and the city. After that, she’d had conversations with the DDA and had changed the scope of that initiative a bit. The focus would not just be the DDA but rather the idea of economic development – which would align the priorities of the city, the DDA and Ann Arbor SPARK. She was working with the city attorney’s office on the language of the resolution, she said, and is hoping to bring that resolution forward on April 15.

DDA Ordinance: Audit Committee Update

During council communications time at the start of the meeting, Sumi Kailasapathy (Ward 1) gave an update on the activities of the council’s audit committee. She said the committee did get answers to its questions via the city’s CFO. The auditor indicated that during the past year’s audit, the auditor did not review the DDA’s TIF capture for compliance with Chapter 7 of the city code. She found that “really troubling” because the DDA’s own 2003 renewal plan states that the TIF account has to be tested for compliance under the state of Michigan’s Downtown Development Authority Act. Secondly, Kailasapathy continued, the auditor’s own report on controls and compliance states that they tested the DDA’s financial statements for compliance – but when specifically asked if it was tested for Chapter 7 compliance, the answer was that it had not been. She indicated that she felt DDA deputy director Joe Morehouse, who handles the DDA’s finances, and city CFO Tom Crawford need to take up this issue. She stated that an audit has high standards, and if compliance with Chapter 7 has not been tested, then it needs to be tested. She ventured that it might be necessary to reissue the financial statements of the DDA.

Margie Teall (Ward 4), who chairs the audit committee, responded to comments made by Kailasapathy at the council’s March 18 meeting, when Kailasapathy noted that Teall had not been being willing to call a meeting. [A previous meeting of the audit committee was called by two of its members – Kailasapathy and Stephen Kunselman (Ward 3) – which is a possibility under Robert's Rules. The other possibility is for a meeting to be called by the chair.] Teall contended she had always been willing to meet. But she was waiting until all the DDA staff could attend. [DDA deputy director Joe Morehouse was on medical leave.] Teall noted that the audit committee would be meeting with the DDA staff the following day, and pointed out that DDA staff had acknowledged the shortcomings, and said they’d be addressing them. Teall indicated that the response from the DDA staff to the questions they been asked was that they’re “on top of that.”

DDA Ordinance: Council Deliberations

Stephen Kunselman (Ward 3) led off the deliberations by saying that the item had appeared a couple of times previously on the council’s agenda and he hoped that this evening the council could finally get some discussion going, and take the initial vote at the first reading.

What he had done in cooperation with Sumi Kailasapathy (Ward 1) – the co-sponsor on the proposed ordinance changes – was to put together a substitute version for the original. The substitute version reflects some changes that had been talked about “out in the community,” Kunselman explained. Some of those included the cumulative methodology for calculating the tax increment finance (TIF) capture.

In addition, the section on board composition is different in the substitute version. Rather than preventing any elected officials from serving on the DDA board, based on discussions with some of the members of the other taxing jurisdictions whose taxes the DDA captures, it had become apparent, Kunselman said, that anything the city was doing should be done in concert with the taxing jurisdictions. He then quoted from the revised substitute ordinance changes:

(1) Except for the Mayor as provided above or by mutual written agreement of the taxing jurisdictions levying taxes that are subject to capture by the authority, no public official of any taxing jurisdiction levying taxes that are subject to capture by the authority shall be eligible for appointment, whether in his or her official capacity or as an individual; and
(2) No member may serve more than 2 consecutive full terms.

Kunselman said he knew there had been a lot of information going around generated by the city staff and by the Ann Arbor DDA board members – talking to various groups to seek support for their position. His perspective on the issue, he said, was to focus on “keeping the DDA’s budget relatively whole, tightening up some of the administrative functions.” He felt it would become apparent that there are some elements of the state law which the Ann Arbor DDA’s financing plan doesn’t follow, but the proposed amendments would bring clarity to that. “We know that there is an issue with the clarity of the TIF methodology,” he said. He noted that the mayor had received a letter from one of the taxing jurisdictions [the Ann Arbor District Library] disagreeing with the method that had been used.

“If we allow these things to occur on our watch, then we are complicit to the fact that we’re ignoring what the law says,” Kunselman said. He then quoted from the state enabling legislation for DDAs:

The plan may provide for the use of part or all of the captured assessed value, but the portion intended to be used by the authority shall be clearly stated in the tax increment financing plan.

Kunselman ventured that everyone had seen the three columns that are included in the Ann Arbor DDAs financing plan – which show projections of growth labeled as pessimistic, realistic, and optimistic. For whatever reason, Kunselman said, the DDA board keeps approving a budget based on the optimistic version of the TIF financing plan. The realistic column is the one that is set in bold typeface, he noted. If it’s not clear, then Kunselman contended that it is not in compliance with the state law. That was his whole point in bringing the amendments forward. His point was to bring confidence back to the DDA. Responding to criticism about what Kunselman was actually trying to accomplish, he spoke directly to mayor John Hieftje: “Mayor, I have never asked for the dissolution of the DDA. And I’m certainly not about to now. I’m just trying to give our DDA institution some clarity, some confidence, and some trust in how it works on our behalf.”

Stephen Kunselman (Ward 3).

Sabra Briere (Ward 1) asked for clarification about Kunselman’s effort to put the substitute ordinance amendments before the council for consideration. Hieftje checked with Kailasapathy that it would be acceptable to consider the substitute version. And with that the substitute amendments were before the council.

Hieftje ventured that councilmembers would have several questions for staff. He invited executive director of the Ann Arbor DDA Susan Pollay to the podium. Hieftje noted that the council had only recently received some answers to questions that had been posed by email. He began by reading off some of them from his laptop screen: Will the DDA continue to be able to make grant payments to the city for the courts and police building? Hieftje noted that the Ann Arbor DDA had awarded the city a grant to support the construction of the new Justice Center [aka police/courts building] – and he had seen the paperwork on that. [As a member of the DDA board, Hieftje voted for the $8 million grant, which was to be paid in roughly $0.5 million installments.]

He explained that the amount of the grant worked out to $508,000 a year. Hieftje then recited the history of how Washtenaw County had decided that the city needed to move the 15th District Court out of the county courthouse space. And a new building with a police station had been completed by the city [called the police/courts building, the Justice Center or the municipal center]. Hieftje characterized the situation as “the DDA stepping up to the plate.” Hieftje alluded to the fact that under the state statute, a public building in the downtown area was an eligible DDA project.

About the DDA resolution pledging the $8 million grant to support the construction of the new Justice Center, Hieftje told Pollay: “As I read that, though, that is a grant. And if the DDA felt that they had other uses for those funds, it would be at the discretion of the DDA to move those?” Pollay’s answer: “It is.”

Hieftje moved on to the topic of the other activities: What other aspects of the DDA’s activities would be impacted by the ordinance change? He indicated that the DDA had identified various things. Margie Teall (Ward 4) asked about the impact on affordable housing grants.

Pollay indicated that whether such grants would continue would depend on the budget. She said the DDA was just finishing a period where a significant amount of construction had taken place, and fund balances are approaching their minimum, she said. The housing fund is now at zero, she reported. In the next two-year budget, recently adopted by the board, the DDA is anticipating transferring some additional money into the housing fund. But that depends on revenues, she said, which would determine whether there would be sufficient money to make those housing funds transfers. An upcoming grant is planned for the Village Green City Apartments project, which will have four units of affordable housing – with “affordable” defined as accessible to residents with incomes at 60% of the average median income or below. That grant would exhaust all of the housing fund balance, Pollay said.

Depending on whether the ordinance is enacted, she continued, the housing fund balance could be restored or not. At that point, Jane Lumm (Ward 2) indicated she had emailed everyone a note in the last 15 minutes related to Teall’s question. She was suggesting an amendment to the ordinance changes to address the concern that Teall had expressed. She had sent the amendment at 8:10 p.m., she said. Not all councilmembers had received Lumm’s message. So she sent the message again.

The amendment was eventually accepted later as friendly by Kunselman and Kailasapathy. With italics indicating additions and strike-through indicating deletions compared to the original version, Lumm’s amendment read as follows:

(4) Development Plan Projects: In identifying, approving, and financing possible projects to meet the goals of the plan, the authority shall comply with the following:

If tax increment financing is used as the financing method for an approved authority project, the project must be meet one of the adopted development plan goals specifically allowed under Act 197 and directly benefit properties within the downtown development district or near-downtown neighborhoods.

While Lumm sorted out the email issue, Hieftje followed up with more questions for Pollay.

He confirmed with Pollay that the Library Lane underground parking garage was the largest project that the DDA had ever undertaken. It was anticipated, Hieftje said, that the Library Lane project would have a significant impact on the TIF fund, and on the TIF fund balance as a consequence of that major construction project. But he ventured it was anticipated that in the future there would be additional revenues generated by new developments in the downtown, and that those additional TIF capture revenues would be used to replenish the DDA’s fund balances and prepare for future projects. Pollay confirmed for Hieftje: “That is all correct.” Hieftje added, “That’s the way I remembered it as well.”

Kunselman followed up with a question for the city attorney’s office: How much of the TIF can be kept in savings, if state law requires – and the city’s own Chapter 7 states – that surplus funds should be paid back to the taxing jurisdictions? We’ve heard that there is $2 million worth of TIF money sitting in the DDA’s account, Kunselman said, and we know that $4 million worth of TIF was transferred to the parking fund. It seemed to him that there was a lot of TIF money sitting in an account. He then quoted from the state statute:

The authority shall expend the tax increment revenues received for the development program only pursuant to the tax increment financing plan. Surplus funds shall revert proportionately to the respective taxing bodies.

And the city’s Chapter 7 indicates that if the rate of growth in the tax valuation within the DDA district exceeded a certain rate, then money has to be returned to the taxing jurisdictions, Kunselman said. He reiterated the Ann Arbor District Library’s disagreement with the DDA’s method of calculating the excess TIF capture. He returned to the issue of the three different columns of estimates in the TIF plan – and the DDA’s practice of using the optimistic column as opposed to the realistic column. “Where do we stand on the issue of state law on this issue of surplus?” Kunselman asked the city attorney.

Assistant city attorney Mary Fales indicated that her understanding of the DDA’s position is that there currently is not a surplus – that the funds are encumbered, either in reserves or for actual expenses. If there were a surplus, she continued, it would be applied based on Chapter 7, and distributed according to state law. She understood Kunselman’s intent to clarify the language of the ordinance, as involving the application of a specific element of Appendix C (the realistic approach) and the use of a cumulative method.

Sabra Briere (Ward 1). In the background is Sumi Kailasapathy (Ward 1).

Briere indicated she was not clear about what the word “surplus” means. When the city deals with its budget, she continued, they try to balance anticipated revenues against the anticipated expenditures. But in any given year the city might end up with money that’s transferred into the fund balance. That fund balance is then used perhaps in a subsequent year. When Kunselman talks about surplus dollars, does that refer to the same situation? she asked. Or is he talking about money that falls outside of the “interesting calculation” that is supposed to be done? What she thought of as fund balance had been described by Kunselman as surplus. “What does surplus mean?” she asked.

Fales noted that the state’s DDA statute does not define the word “surplus.” So you would apply normal principles to define it, which would be funds that are not required for immediate expenses or anticipated expenses – because that’s usually what surplus means, Fales told Briere. Briere asked if that meant for a given year or for a longer period – say if someone anticipated that they would be spending funds in three years. Fales said that the report the DDA is required to do is for specific information on an annual basis. On an annual basis, the DDA could identify encumbered funds, she said.

Kailasapathy indicated she felt there was some confusion, because what Kunselman was talking about is fund balance – which is a balance sheet item. But the TIF refund described in Chapter 7 actually has to do with the revenue income level, she explained. So if you take in revenue at a certain level, and if there is excess, then you have to refund some of it. She asked Fales if Fales agreed that this was a point of confusion. She asked Fales to confirm that the refund is actually based on revenue, not on the balance sheet. “I think that’s true,” Fales said.

Sally Petersen (Ward 2) indicated she had a question for DDA board treasurer Roger Hewitt. She recalled a conversation that the two of them had in September 2012 when they had first met. She wanted to make sure that she had the correct assumption in mind. She remembered expressing some concern to Hewitt about TIF being used to pay down the parking garage bonds. “I believe you assured me that at the end of fiscal year 2014-15, that TIF transfers for the parking garage bond payments would no longer happen.”

Hewitt indicated he thought that was correct, but thought it could be a year later than that. After some consultation with Susan Pollay and Joe Morehouse, Hewitt indicated that the TIF transfers to support the parking fund payments would continue past fiscal year 2015 for another year. Petersen asked if that was in the DDA’s three-year or five-year budget. Hewitt indicated that the budget for the DDA is adopted two years at a time. Beyond that, Hewitt said, the DDA uses a 10-year plan, which is a planning document, not a budget document.

Petersen got confirmation that the bonds in question are bonds the city has issued on behalf of the DDA. Hewitt took the opportunity to address the impact of the proposed ordinance change, which would strike one of the paragraphs that describes bond obligations. “The funds that we’re talking about being returned to the city, are only after the debt service has been satisfied,” Hewitt contended. He described the debt service of the DDA as being around $7 million a year. Petersen clarified with Hewitt that the bonds in question are not DDA bonds but rather city bonds. Hewitt allowed that they are city bonds, but the DDA has pledged its revenues to pay the debt service on the bonds.

Petersen indicated that she felt it was debt service on the DDA’s own bonds that is a “disqualifying condition” laid out in the ordinance, not debt service on the city’s bonds. She wanted to know if debt service on the city bonds would count as a disqualifying condition for the refund if the bonds are city bonds versus DDA bonds. City CFO Tom Crawford indicated that the city staff had spent a fair amount of time looking at that provision of the Chapter 7 ordinance: “It’s not very clear, it’s very confusing,” he said. The city’s interpretation is that it was not just restricted to DDA bonds but also included city bonds. Crawford indicated that there are still some DDA bonds that are being paid off and also some bonds that the city has issued on behalf of the DDA. “But it’s not real clear in the language,” he allowed.

Susan Pollay brought the DDA’s outside counsel, Jerry Lax, to the podium. Lax ventured that no one would say anything that provides crystal clarity, but as he understood the state-enabling legislation for DDAs, it specifically authorizes city bonds to be used for the kind of purposes that the DDA fulfills, and specifically authorizes the pledging of DDA funds for the repayment of those bonds. And the statute specifically allows for TIF funds for that purpose, he said. What Chapter 7 provides, Lax continued, is a provision that indicates money is not to be returned to the taxing authorities while there were debt obligations to be paid.

From left: Sabra Briere (Ward 1), Jane Lumm (Ward 2) and assistant city attorney Mary Fales.

Jane Lumm (Ward 2) admitted to being confused. She quoted out the paragraph about payment into bond reserve funds. It’s not clear exactly what that means, she said. She felt it might be interpreted as just a guide to say: Make sure you pay the debt service. Or it might mean that no refund should be made if the debt service is greater than the TIF capture. She noted that currently the amount paid by the DDA in debt service is far in excess of the TIF revenue, but she pointed out that parking revenues are also used for debt service.

Lumm also observed that the DDA has “flip-flopped” on the question. In 2011, the DDA had made refunds, she noted. But later in 2011, the DDA changed its position and said that it should not have made the refunds, and changed its interpretation of the ordinance.

Lax allowed that it’s understandable why Lumm would raise that point of the DDA changing its position on the ordinance. “Frankly, I think the answer might be a little more simple than it otherwise would appear, which is the initial repayment of monies to other taxing jurisdictions, I think, was simply made erroneously. And I think if you read the entire language of Chapter 7, it’s clear that those did not have to be made.” Lax allowed that there was some confusion about the ordinance language, but he felt there were some things that were moderately clear. One of the things that’s moderately clear is that the state statute does contemplate the use of city bonds to fund DDA projects. He returned to his point that the initial repayments were erroneous. Chapter 7 of the city ordinance is “a touch clearer than people might be suggesting,” Lax contended.

Kunselman asked Lax if the DDA has to put all TIF revenue toward debt. His understanding was that the DDA had put all of its 2012 TIF capture toward payment of parking bonds. Other grants have been paid out of parking revenues. In FY 2011, according to the DDA’s audit, Kunselman continued, the DDA had collected $3.4 million in TIF and the DDA’s expenditures had shown $3.3 million in grants. So almost no money went to pay parking structure debt in 2011, Kunselman said. But under Lax’s interpretation, Kunselman ventured, all TIF first goes toward debt.

Lax disputed Kunselman’s paraphrase of what Lax had said. Lax said he’d simply indicated that under the state statute, TIF funds are available for repayment of debt. Lax said the statute doesn’t say that repayment of debt must be the top priority, or that all of the TIF must be used in that way, or that a certain percentage of it must be used in that way. The state statute says only that the TIF funds are among the DDA assets that can be used for repayment of debt, Lax said. In any given year, if a budgetary decision is made to use TIF funds for specific statutorily-authorized purposes, Lax continued, he thought the statute contemplates that those kinds of decisions are within the judgment of the DDA.

Kunselman came back to the point that before a rebate is given to any of the taxing jurisdictions, on Lax’s interpretation, the DDA has to pay debt. Lax replied that the TIF funds are not being put away into some kind of lockbox, but rather they are being budgeted for authorized purposes.

Pollay added that the kind of projects the DDA undertakes are not annual projects. The projects that the DDA takes on are large capital improvement projects. The Fifth and Division streetscape improvement project took seven years, she said – to be fully planned, to get city council support, to fund, and finally to implement it. If the DDA takes on large projects like that, which was a $7 million capital improvement project, the DDA has to have the ability to have a fund balance sufficient to be able to make the minimum 15% down payment that’s required if a bond is issued – under the city’s own rules. So the DDA in its history has followed a pattern of increasing its fund balances and then depleting them when it takes on capital improvement projects. The DDA is about to begin that cycle again, she said. It takes several years to go through a cycle, she said.

Hieftje asked Pollay what DDA projects would have to be put aside and could not be completed if the ordinance changes were approved. It’s difficult to know, Pollay said. It’s her understanding that in fiscal year 2014, $373,000 would be removed from what the DDA had budgeted for that year. And the year after, there would be another roughly $80,000 less. That would likely impact the DDA’s ability to respond to projects that are “teed up” that the DDA had hoped to take on, she said. The most immediate one was to complete the curb ramp replacements downtown. The DDA and the city share an obligation to complete those repairs. The DDA has taken on the lion’s share of those in the downtown area, she said, but some remain to be done.

The other project the DDA feels is also pretty critical is replacing streetlights on Main Street, Pollay said – because they have reached the end of their useful life. Unfortunately, she added, it’s a very expensive project. The estimate includes replacing the globe lights – which are a signature design element for the Main Street area – and that will amount to around $650,000. The DDA had hoped it could begin to pledge some of their dollars to the city’s public services area to see that streetlight replacement project done this year, Pollay indicated. But that would have to be put off for this year, if the ordinance changes were enacted, Pollay said.

While those two projects were part of the short-term impact, Pollay said the long-term impact goes back to the fund balances. The DDA had just begun developing plans for its next big projects, Pollay said. With a TIF reduction, it would be many more years before the DDA could take on any really significant large project. “And I mean years,” she said, “We just would not have the funds available.” The parking rates have been raised, Pollay continued, and the DDA felt that they were currently at the upper end of where they should be. So there really are no other sources of revenue other than TIF revenues.

Hieftje asked Tom Crawford for confirmation that the ordinance change would put $277,000 back in the general fund. That’s after subtracting the amount that’s passed through to the Ann Arbor Transportation Authority. He asked what the impact would be if the DDA exercised its “discretion” to rescind the $508,000 grant for the police/courts building. Hieftje calculated that would have a negative impact of over $200,000 on the city’s general fund. Crawford confirmed that if the DDA were to not pay the installment of the $8 million grant that the DDA had previously approved, it would create a deficit in the city’s general fund. “I can understand why they might do that given that $559,000 was already coming to the city,” Hieftje said.

Lumm indicated that she figured this meant the city would need to pick up the expenses that the DDA had been covering. Briere noted that the calculations as done under the ordinance revisions would result in roughly an additional $70,000 being paid to the Ann Arbor Transportation Authority. But the DDA already provides a grant to the AATA to subsidize go!passes for $479,000, plus additional funds for transit service on Packard Road and Washtenaw Avenue. She asked Pollay if the ordinance revisions would affect the DDA’s funding of the AATA’s services. Pollay noted that the DDA board had recently approved the AATA grant for fiscal year 2014. So she did not feel that there would be an immediate impact. That would be subject to budgetary considerations in the future.

Briere then turned to the topic of where DDA TIF revenue could be invested. One of the ordinance amendments defines it to be strictly within the boundaries of the DDA district. She asked if that was in any way related to the Ann Arbor Transportation Authority and the amount of money that the AATA receives from the DDA. Susan Pollay explained that parking revenue had been used since the beginning of the DDA’s subsidy for transportation services – because the DDA believes that the parking structures and the bus system are all part of a transportation system. She did not believe that this would be impacted by the proposed ordinance amendments. What would be impacted are those projects that are paid for with TIF revenue. She referenced the state statute:

An authority shall be a public body corporate which may sue and be sued in any court of this state. An authority possesses all the powers necessary to carry out the purpose of its incorporation. The enumeration of a power in this act shall not be construed as a limitation upon the general powers of an authority.

Pollay appealed to that passage as the justification for spending TIF revenue on investments that are physically located outside the geographic boundary of the DDA TIF district. She was not sure which projects the DDA was currently undertaking that would be excluded by the revised Chapter 7 language. “We have not been informed,” Pollay said. [The proposed ordinance amendments were revised through Lumm's friendly amendment to allow for investments in near-downtown neighborhoods.]

Kailasapathy referred to numbers that had been provided by the city’s financial staff. Those figures indicated that since the early 2000s, TIF revenues to the DDA have gone up 91%. She ventured it would be difficult to find another city fund where revenues had gone up by as much as 91%. Looking at the four years between 2010 and 2013, she noted that the parking fund debt service went from 5% to 45%, to 59%, and then a “staggering” 87% for fiscal year 2013. She felt there was a big mismatch. On the one hand, there is a doubling of revenues from TIF. But almost all of it is being spent on one objective – parking. “It almost looks like you could have been a parking authority,” she observed. She ventured that what had tilted the balance was the Library Lane underground parking garage.

Sumi Kailasapathy (Ward 1).

Kailasapathy alluded to the specter Hieftje had raised about the $508,000 police/courts building grant and Briere’s implied concerned that the DDA might cease funding of AATA services. Kailasapathy characterized them as “disaster scenarios,” but she noted that in the next fiscal year there would be a $300,000 reduction [actually estimated at $363,000] compared to what the DDA had budgeted, and the year after that it would actually start to grow, she continued. So the ordinance revisions would not actually reduce the TIF revenue to the DDA into the future. Instead it would simply cap the rate of growth of net TIF revenues, she pointed out. She ventured that when you grow too fast, or when revenue comes in too fast, development is not a thoughtful process. It becomes lopsided, she cautioned.

Kailasapathy asked Pollay to explain why the DDA’s percentage allocation to parking structure debt had increased so much, even while TIF revenue had increased. Pollay noted that the DDA had predicted, and it has come true, that the tax base for all of the taxing authorities had grown, even though the TIF capture by the DDA had also grown. The DDA receives only 17% of all taxes that are collected downtown, Pollay said. She noted that the city staff had indicated the city’s tax levy in the downtown district in the early 1980s was about $1.3 million. This year the city is receiving $4.1 million, Pollay said.

Pollay contended that all of the taxing authorities are seeing the benefit of their tax base growing. Pollay described how it had been a policy choice back in the 1960s that the downtown would not have zoning for parking, and that the parking system would be public. The DDA had inherited a very deteriorated public parking system, Pollay said, and it had replaced or rebuilt six of the current city parking structures. Parking is a fundamental part of how businesses are able to bring in customers and their employees to the city.

As an economic development strategy, the DDA had also invested money in other things. So while Kailasapathy had characterized the DDA as a “parking authority,” Pollay felt it was because the DDA did a very good job at that – and it’s a fundamental tool that the community of businesses relies on. She listed off some of the parking structures: Ann and Ashley, Liberty Square, First and Washington, Library Lane. Parking is something the DDA has supported since its inception. Pollay responded to a follow-up remark from Kailasapathy by listing through some of the non-parking activities that the DDA undertakes. She mentioned grants for affordable housing and for energy improvements, as well as transportation grants.

Pollay continued by saying you don’t think of the DDA as the agency responsible for it, but as you walk on downtown sidewalks, many of them have been improved by the DDA. Hundreds of trees have been installed, along with benches, bike racks, and alley improvements. The DDA has played a part in helping the city sell city-owned property – mentioning specifically the First and Washington sale [where City Apartments is being built]. She hoped the DDA would be able to support the city on the sale of the former Y lot. She characterized the activities of the DDA as fairly broad. Parking is certainly part of what the DDA does, but it’s not the only part, she concluded.

Chuck Warpehoski (Ward 5) mentioned that city CFO Tom Crawford had recollected that the original 1982 TIF plan had been based on an estimated 5% annual growth of taxable value. The current renewal plan is based on estimated growth of around 3%. Warpehoski asked Pollay if that matched her recollection. Pollay indicated that she did not think that the first plan had a cap. The second plan from 2003 was an attempt to reflect the actual growth that the district had seen to that point, she said.

Kunselman asked which projects were included in the city financial staff’s revised estimates. The answer the council had received from the city’s financial services staff was that the bulk of the increased TIF had come from The Landmark (601 S. Forest), The Varsity (on East Washington) and Zaragon West (at Thompson & William). Kunselman followed up by getting confirmation from Crawford that the TIF capture generated for Village Green’s City Apartments project at First and Washington had not been included in the city’s estimates. Crawford told Kunselman that the forecast that was before the council for fiscal year 2014 includes all newly constructed and complete buildings – plus buildings that were under construction. Crawford explained that at the end of each calendar year, the assessors require property owners to pay taxes on partially complete buildings – so that is included in the forecast of TIF revenue provided by the city’s financial staff.

However, Crawford continued, when projections had been made for fiscal year 2015, the financial staff did not attempt to figure out what developments were possibly coming on line. Crawford had done a more traditional forecast of 3% growth, which the DDA uses for planning, because that’s what it’s been over time. So the forecast provided to the council for FY 2015 did not include Village Green’s City Apartments project. There are so many factors that can come in, Crawford said, that “I’d hate to give you only the good news and not some of the offsetting bad news, so we were somewhat conservative in FY 2015.”

Crawford and Kunselman engaged in some additional back-and-forth over the City Apartment’s project. Crawford said he did not think there was a measurable material value of the new project at the end of the calendar year 2012 – as much of the work being done at that point was digging a hole, he said. But Kunselman ventured that now it has several floors that have been constructed. Crawford allowed that if it were to be assessed today, it would have a value.

Kunselman concluded that the numbers that had been provided by city staff – showing a forecast in FY 2015 with a slight deficit to the DDA’s adopted budget for that year – would need to be revised. Crawford allowed that if he were asked a year from now about what he thought of FY 2015, he would say that the DDA could be expecting some additional TIF revenue from the Village Green City Apartments project. Kunselman ventured that if this ordinance amendment were to pass, the DDA would only see a reduction in its TIF revenues just this year. Crawford characterized Kunselman’s conclusion as a “reasonable possibility.”

Petersen said she felt the ordinance amendments did a good job clarifying and improving accountability – for example, with respect to filing the annual TIF report and setting forth how the TIF is calculated.

Sally Petersen (Ward 2) and Stephen Kunselman (Ward 3).

Petersen indicated that her initial concern was the apparent nearly $1 million “hit” the DDA would be taking in the first year – because she did not want to pull the rug out from under the DDA. But the staff’s answer to the questions that councilmembers had asked was that compared to the DDA’s adopted budget, there would only be a reduction by about one-third as much [$363,000]. She’d contemplated the possibility that Year 1 of implementation of the clarified calculations could be delayed until FY 2015, but she didn’t think that would help much. Her point was that there’s not as much of a “hit” in Year 1 as they’d originally thought.

She was also trying to understand how the DDA was able to absorb a $3 million hit in FY 2012-2013 – when the DDA had doubled capital costs compared to its budget. To Petersen, the budget was “fungible” enough that it was able to absorb a $3 million hit, and the $363,000 shortfall was only 10% of that.

Pollay explained that the difference in the budget was attributable to the timing of completing the Library Lane underground garage and the Fifth and Division streetscape project. The budget is not fungible, Pollay said – it’s a matter of tapping the fund balances. Responding to a question from Petersen, Pollay said that the DDA’s TIF fund balance is anticipated to be $840,000 at the end of FY 2014. [Across all of its funds, the DDA has budgeted in a way that leaves nearly $5 million in fund balance – an amount that includes money set aside for parking structure maintenance – at the end of FY 2014.] Petersen observed that the figure is still more than $363,000.

Pollay offered that it’s confusing because the total amount “that would be taken from the DDA” would be more than $931,000. Compared to the revenue that the DDA had budgeted, Pollay allowed it was only $363,000 less – but that was because the DDA didn’t know there would be additional TIF capture beyond what they’d budgeted.

Warpehoski raised a question about whether the additional increment provided by new projects would actually result in more TIF revenue to the DDA – given the nature of the cap as defined in the clarified calculations. Some back-and-forth between Warpehoski and Crawford determined that Warpehoski had misunderstood one of the lines in the chart. The cap on the DDA’s TIF revenue would be roughly $4 million in FY 2015 and would increase 3% each year from that point – which is an amount that the DDA would likely receive, assuming that Village Green completes the construction of City Apartments and other projects that are expected to be built are, in fact, built.

Warpehoski then got clarification that under the substituted ordinance revisions, an elected official could serve on the DDA board only with the agreement of all, not just some, of the other taxing jurisdictions.

Briere said she tended only to be interested in policy. And one of the points of policy deals with term limits. There are already some time limits – that the terms are four years. She wondered why all boards and commissions don’t have uniform restrictions. She wondered why there needed to be a special policy for the DDA board.

Lumm ventured that the council seemed ready for a vote.

DDA Ordinance: Council Deliberations – Final Comments

Hieftje then began his final remarks on the topic. He said that over the last several years, the city had worked very well with the DDA and that’s worked out very well. In the past, when the city has had any issues with the DDA, Hieftje said, they’ve sat down and talked with the DDA, and that’s turned out very well. Since it was established, the DDA has made a tremendous contribution to affordable housing, Hieftje said. This time around, Hieftje continued, the issue should have been approached by starting a conversation with the DDA’s partnership’s committee. Instead, he said, the council had launched a fairly aggressive ordinance change “against” the DDA “without sitting down to talk to them.” He said that it could have been handled in a much better way.

Hieftje responded to the idea that the possibility of the DDA rescinding the $8 million grant for the police/courts building was only a threat. He contended that to him it was “perfectly logical” that if the DDA, which was anticipating an increase of $991,000 in TIF revenue, instead saw $559,000 being returned to the city, then it would be reasonable to say that the city did not need the $508,000 annual installment towards the $8 million grant. Hieftje claimed that if you start to look at the numbers, the revisions to the ordinance would mean there’s a $231,000 deficit to the general city’s general fund. [This would depend on the DDA breaching its obligation to pay the $508,000 annual installment on the police/courts grant.]

Hieftje also noted that $300,000 has been set aside in the DDA’s budget as a way possibly to pay for police in the downtown. That would increase the number of police officers in the city, which was an expressed goal of some councilmembers, he pointed out. Hieftje was also concerned that this would reduce revenue to the DDA at exactly the point when the DDA is trying to rebuild its fund balances.

Hieftje said he couldn’t figure out why the council had started down this road – except for political reasons. He reviewed his basic points, which were that the DDA had been excellent partners, and he didn’t see a good bottom line for the city. The city should have sat down and talked with the DDA about this issue, Hieftje said. [Representatives of the other taxing authorities met with the DDA as a group in the summer of 2011 to discuss the issue. But they did not pursue that conversation – which some in attendance expected would result in either an ordinance change or a memorandum of understanding among the taxing jurisdictions.]

Kunselman responded to Hieftje’s remarks by saying he appreciated Hieftje’s defense of the DDA, but it was not Kunselman’s intent to sit there and “bash” the DDA. Part of the issue, Kunselman said, is about bringing revenue to the city and the other taxing jurisdictions, who need those additional tax dollars. He said he didn’t think the DDA knows how to spend tax dollars better than Washtenaw County, Washtenaw Community College or the Ann Arbor District Library.

Responding to the idea that the DDA might provide a grant to fund police officers in the downtown, Kunselman dismissed the idea that the city would hire police officers based on a year-to-year grant. That was especially true, Kunselman said, if the DDA could simply exercise discretion to rescind its grants, as Hieftje had claimed was possible. Adopting the ordinance revisions is all about new tax dollars, Kunselman pointed out. All of the projections that the council had seen basically keep the DDA whole, for the most part. He allowed that in the next year, there could be a couple hundred thousand dollars less for the DDA compared to what the DDA had budgeted. But he pointed out that in years past the DDA had taken hits and been able to absorb them.

The DDA is the only agency that has not had a reduction in its budget, Kunselman said. When he hears about what wonderful work the DDA does, he questioned how well the DDA actually managed the parking system – given that debt associated with the system was substantially subsidized with TIF revenue. “Out the other end” of the public parking system, Kunselman said, comes $3.1 million of revenue to the city of Ann Arbor. Before the DDA existed, there was a big concern about the public parking system being a “cash cow” for the city – and at that time there was not even a TIF subsidy. He described the hourly cost for parking as including a “surcharge” of an extra 17%, due to the terms of the city’s contract with the DDA. He questioned whether that was consistent with the case law on the definition of taxes and fees – the Bolt decision.

Kunselman said he’d tried to approach the issue delicately, so that the DDA’s budget was left whole and so that the DDA wouldn’t take a hit to their funds. Other than the light pole and sidewalk ramp project, Kunselman said, there weren’t other projects that the DDA would not be able to complete, based on what the council had been told.

Kunselman said Hieftje was trying to make the issue into some sort of “Kunselman against the DDA,” but it’s not, he said. Instead, it’s about bringing trust and confidence back to the DDA as an institution.

Kunselman briefly addressed the question of term limits for DDA board members, which are part of the set of ordinance revisions. There are term limits for the park advisory commission, he said. The existing DDA board members had apparently not read the law about filing the annual TIF report. He concluded that the DDA board needed new blood and new eyes.

He returned then to the question of how the TIF capture is calculated, wondering why Hieftje had voted year after year to approve a budget using the optimistic projection in the TIF plan. “Why don’t you [Hieftje] answer that for all the citizens of Ann Arbor?”

Kunselman wound up his remarks by noting that the ordinance changes were being considered by the council at a first reading. He hoped councilmembers would support the changes at least to get them to the second reading. He told his council colleagues that if they wanted to give the DDA a $931,000 increase in revenue, they could do that. Or they could support some of those dollars coming back to city. It’s recurring revenue to the city, money that can be used to hire firefighters and police officers. He asked his council colleagues if they wanted to make public safety a priority or parking: “You make the choice.”

Responding to Kunselman’s characterization of his effort as delicate, Margie Teall (Ward 4) ventured that delicate is in the eyes of the beholder. She wished that Kunselman had chosen to bring the issue forward in a more collaborative way.

Teall felt like the DDA is being penalized for doing a really great job. The DDA is what’s responsible for making it possible to attract new tax dollars, she said. The DDA has been a good partner in maintaining infrastructure. She appealed to the notion that a “rising tide can lift all boats.” She wouldn’t support the ordinance changes, she said.

Petersen also wished the approach Kunselman had taken had been more collaborative, but she indicated she wanted to separate out the political from the pragmatic issues. In the long term, she felt that the DDA had done good work and expected that the DDA will continue to do good things, and would expect the TIF fund to grow even more. What the ordinance amendments do is provide clarity, she said. While she wished the approach had been more collaborative, she thought it would help strengthen the DDA in the long term.

Jane Lumm (Ward 2) literally rolled up her sleeves before the April 1 meeting started.

Lumm indicated she’d support the ordinance changes at first reading. She presented her support framed by her concept of what a DDA should be. She believed downtown vibrancy is important to any city’s health and she felt a strong, autonomous DDA is an important tool for achieving that. She did not agree with those who said the city should not have a DDA at all. She’d been around before the DDA had taken over the public parking system, and stated that the DDA had done a very good job on that. But she did believe the city needed a strong, independent DDA. Over the last decade it had evolved from an independent, autonomous body supporting the downtown to an extension of the city council. Lumm did not think that was or is in the city’s best interest. The DDA funds selected city projects and programs – outside the regular budget process. However, a decision about whether to use $0.5 million for the police/courts building or to hire police officers is the kind of decision that should be made inside the regular budget process, Lumm said.

In support of an independent DDA, she’s highly supportive of the ordinance changes related to board governance. She preferred the original set of amendments on elected officials. She supported those elements of the ordinance changes that define TIF capture. She was not wedded to enactment of the clarified calculations beginning for the current tax year, but felt it was important to implement the ordinance change fairly and expeditiously.

Responding in part to the criticism against Kunselman that his approach had been inappropriate, Mike Anglin (Ward 5) observed that Kunselman had talked about the issue for at least a year – starting by asking for a budget amendment last year. [That budget amendment failed.] Anglin acknowledged the partnership the city has with the DDA. He did not think that the ordinance amendments by any means crippled the DDA.

Warpehoski said he’d been wrestling over this issue. When he saw the Fiat dealership or other new projects were built outside the DDA district, he liked all that “TIF capture” it provided. [Warpehoski likely meant something more along the lines of "ordinary taxes not subject to TIF capture."] That was important for the city to be able to provide services to residents, he said. But when he looked at the numbers, he contended that 10 years ago, the city received roughly 17% of all the tax revenue in the DDA district, and even now the city receives about 17% of the revenue, even with the DDA’s TIF capture. He concluded that the city is coming out pretty well. There are all the other ways the city has come out ahead, he said – including the $8 million police/courts grant and the 17% of gross revenues from the public parking system. So if the “problem” is getting revenue, he was having trouble understanding that. The existing arrangement was working out fairly well, he thought.

As far as the optimistic, realistic and pessimistic projections in the TIF plan, Warpehoski felt this was similar to the way his organization [Interfaith Council for Peace and Justice] puts together its budget. So he understood why, from a budget planning perspective, the realistic numbers would be used, but he did not understand why that would be the basis for a cap. He raised the point that before the 2003 renewal plan, the projected growth in the TIF plan had been roughly 5% per year, whereas the 2003 renewal plan was roughly 3%. If the 5% had been brought forward with the 2003 renewal plan, then the cap under the cumulative methodology would be well above the amount of TIF received by the DDA.

Chuck Warpehoski (Ward 5).

On the question of term limits, Warpehoski did not feel that term limits have worked well in Lansing. He called term limits “mandatory inexperience.” Sitting next to one of the most veteran councilmembers, Marcia Higgins (Ward 4), he saw the value of experience. While he understood the desire to reach for the money, he could not support the ordinance amendments.

Hieftje returned to the point that it could have been handled in a much better way. He wouldn’t support it because of the bottom line. He again raised the specter of a $231,000 general fund deficit for the city. He wouldn’t say that sometime in the future, the DDA’s TIF couldn’t be reconsidered, and he felt it could be done in a collaborative way. Hieftje allowed that he’s long said that the DDA is an “arm of the city,” but that he felt he could see the DDA taking action to rescind the police/courts grant.

Briere said that as a person who didn’t do all that well in math, she struggled with the issue. She was always looking for the unintended consequence. Every time she looked at the issue more closely, it seemed to become less clear. She allowed that looking logically at the 2003 TIF plan, it’s the figures in the “realistic” column that should be considered. She indicated that she was interested in having more concrete projections 10 years into the future.

Briere said it’s difficult to separate the political from the financial changes. She wished there had been a more collaborative effort. She’d heard Kunselman say that the impact would only be for one year, but she did not understand that. Briere indicated that her vote that night would depend on watching the votes of those who voted before she did. [Based on the sequence of the roll call, Briere had a clear indication that it would pass at first reading before casting her own vote.]

Higgins called the discussion an extremely interesting conversation. She felt the DDA does a very good job. She felt the DDA had been very good stewards – and nothing she’d heard that night takes away from that. On the question of whether the ordinance amendments had been brought forward in a collaborative process, she allowed that the best route is not always the one that’s taken. She appreciated the fact that new councilmembers with new skill sets were looking at the issue, and it made her step back and look at this too. There were some aspects she agreed with and some aspects that give her pause. She said she’d vote yes on first reading. But she was not saying that she’d vote for it on second reading.

Outcome: The vote was 7-3, as Christopher Taylor (Ward 3) was absent. The initial approval was supported by Stephen Kunselman (Ward 3), Sumi Kailasapathy (Ward 1), Sally Petersen (Ward 2), Jane Lumm (Ward 2), Mike Anglin (Ward 5), Marcia Higgins (Ward 4) and Sabra Briere (Ward 1). Voting against it were mayor John Hieftje, Margie Teall (Ward 4) and Chuck Warpehoski (Ward 5).

In order to be enacted, the changes will need to receive approval from the council at a subsequent meeting, following a public hearing, now scheduled for April 15.

D1 Zoning Review

On the council’s agenda was a resolution setting the scope of work and a timeline for direction given at its March 18, 2013 meeting – that the city’s planning commission should review zoning in the D1 (downtown core) zoning district.

Here are the specific areas of inquiry the planning commission is supposed to address, as set forth in the resolved clause:

RESOLVED, That City Council requests the City Planning Commission to specifically address these issues:
(i) whether D1 zoning is appropriately located on the north side of Huron Street between Division and S. State and the south side of William Street between S. Main and Fourth Avenue;
(ii) whether the D1 residential FAR premiums effectively encourage a diverse downtown population; and
(iii) consider a parcel on the south side of Ann St. adjacent to north of city hall that is currently zoned D1 to be rezoned to the appropriate zoning for this neighborhood; and

RESOLVED, That City Council requests that Planning Commission complete its review and report to the City Council by October 1, 2013.

The three points of inquiry are similar in spirit, but different in their details, from those put forward by Christopher Taylor (Ward 3) at the council’s March 18 meeting. At that meeting, the council had deliberated on the question of whether to give the planning commission direction to conduct the D1 review and to impose a moratorium on the D1 site plans.

The orange-ish area denotes an area zoned as D2 (interface). Darker red areas, including the UM Credit Union parcel (pink arrow), are zoned D1 (downtown core). The red line denotes the boundary of the Ann Arbor Downtown Development Authority district.

At its March 18 session, the council decided to delete the mention of a moratorium from their resolution and to include a promise to define by April 1 the scope of the planning commission’s review and a timeframe for its work.

The first point of inquiry adopted by the council on April 1 differs from that offered on March 18 by omitting mention of historic districts – although the appropriateness of D1 zoning will almost certainly include the relation of D1-zoned areas to historic districts.

The second point of inquiry – about residential FAR (floor area ratio) premiums – had been proposed by Taylor on March 18.

The third point of inquiry is new. The parcel in question is the surface parking lot currently owned by the University of Michigan Credit Union, formerly owned by the now defunct Ann Arbor News.

D1 Zoning Review: Council Deliberations

Sabra Briere (Ward 1) indicated that she and Marcia Higgins (Ward 4) had talked about the content of the ordinance. Higgins had needed to leave the council meeting early, Briere said. The resolution provides additional guidance to the planning commission and sets a clear deadline, she said.

Chuck Warpehoski (Ward 5) expressed some desire that environmental incentives also be included in the review, but he’d concluded that keeping things focused in the resolution as it was written is an appropriate way to move forward.

Jane Lumm (Ward 2) wanted to know how the planning commission would view its responsibility: Would the planning commission feel it had the latitude to consider broader issues? City planning manager Wendy Rampson told Lumm she felt that the commission would initially consider just those issues in the written scope of the resolution and work toward making the Oct. 1 deadline. To the extent that there was time to do so, the planning commission might consider other issues. Responding to a specific question from Lumm about whether six months was enough time, Rampson indicated she thought it was doable. Rampson added that having targeted action is helpful.

Mike Anglin (Ward 5).

Mike Anglin (Ward 5) expressed some concern about the timeframe but said he was glad the planning commission meetings would be televised. Briere, who serves as the city council appointee to the planning commission, told Anglin that the matter would be referred by the commission to its ordinance revisions committee – which met in a way that was noticed to the public and open to the public, but not televised. That committee would make recommendations to the planning commission, and the planning commission would hold a public hearing and give a recommendation to the city council. But she indicated that there would not be a discussion of the topic at every planning commission meeting between now and Oct. 1.

Responding to a question from Anglin, Rampson indicated that the ordinance revisions committee provided an opportunity for public comment at the end of its meetings, usually in an informal way.

Mayor John Hieftje said he was surprised that people were continuing to invest in student-only housing projects, saying that those buildings with 4-5 bedrooms seemed targeted for the student market. He said that Village Green’s City Apartment project, now under construction at First and Washington, was reporting a lot of demand for its 1-2 bedroom units. So he was in favor of making an adjustment to the kind of residential premiums that are offered.

Stephen Kunselman (Ward 3) took the opportunity to ask about the lack of an update on the R4C zoning revisions that have been studied for a very long time now. Rampson indicated that the advisory committee had taken additional time. Some back-and-forth established that Oct. 1 was really a firm deadline. Briere pointed out that there’s significant difference between the resolution that the council was considering for D1 review and the R4C study – in that the council had appointed a group of citizens for the R4C work, which made recommendations to the ordinance revisions committee of the planning commission. Now, what the council is doing had the practical effect of forwarding the matter directly to the planning commission’s ordinance revisions committee. [The draft recommendations for R4C zoning changes will be on the planning commission's April 16 agenda. See recent Chronicle coverage: "R4C Draft Readied for Planning Commission."]

Lumm reiterated the fact that she wanted to make sure the council’s direction was not unnecessarily restrictive.

Outcome: The council voted unanimously to approve the resolution on D1 zoning review.

413 E. Huron

On April 1 the council’s agenda included a resolution on the site plan application for 413 E. Huron – a proposed 14-story, 216-apartment building at the northeast corner of Huron and Division streets.

A new public hearing on the project was started at the April 1 meeting, and held open so that it can resume on April 15. The council first considered the 413 E. Huron site plan at its March 18, 2013 meeting. The new public hearing was the subject of extended discussion by the council.

413 E. Huron: Public Hearing

The council’s vote on the approval of the minutes from previous meetings is typically perfunctory. However, the council’s interest in giving the public additional opportunities to weigh in on the 413 E. Huron site plan resulted in extended conversation about approving the minutes from the council’s March 18, 2013 meeting. On the public hearing, the draft of the minutes, which the council was asked to consider, read as follows:

There being no further comment, the Mayor declared the hearing closed.

Held and Closed

The minutes are based on the fact that mayor John Hieftje said the public hearing was closed, when no one else wanted to speak.

Marcia Higgins (Ward 4) observed that the minutes indicated the public hearing had been held and closed. However, at the point in the meeting when the council voted to postpone the site plan, Higgins said, “We should have then asked to make sure that the public hearing stayed open – as we’ve often done in the past. So I’d like to correct the minutes so that the public hearing would have remained open. It’s been the practice that we’ve had to do that.”

Sabra Briere (Ward 1) ventured that if the minutes are a reflection of what actually occurred at the meeting, she didn’t think it was possible to “correct” the minutes, but she allowed it was possible she might be mistaken about that. City attorney Stephen Postema stated it’s clear that the public hearing needs to go forward in some manner – whether it’s by re-opening it or by some other means. He indicated that one way to accomplish a re-opening would be to reconsider the decision to postpone. Higgins was right about the fact that in the past the re-opening of a hearing has been done at the time of the council’s vote on the item, Postema said. He felt the best way to approach it was to have a new public hearing.

Hieftje got confirmation that the city attorney’s recommendation was to have another public hearing.

Briere wanted to clarify that if it’s a new public hearing, those people who spoke previously can speak at the new public hearing. [If a public hearing is continued, from one council meeting to the next, the council does not typically allow for people who spoke at the first meeting to speak again at the second meeting – because it's the same public hearing that had merely been continued.]

Briere reiterated that the council should just accept the minutes as written. Sally Petersen (Ward 2) asked how the process should have happened. She ventured that the reason the council was in this “predicament” was that when the council voted to postpone consideration of the 413 E. Huron site plan, the public hearing was not re-opened so it could be held open for the next meeting. Hieftje confirmed that Petersen’s understanding was correct.

Higgins added that Hieftje would usually say so at the start of the public hearing if he thinks there was any chance the council would postpone a decision. Hieftje said he’d state something like that only if he thought a postponement was likely – and Hieftje contended he didn’t have any idea the council would postpone 413 E. Huron site plan on March 18.

Assistant city attorney Kevin McDonald talked with Marcia Higgins (Ward 4) before the April 1 meeting.

Higgins questioned whether the new public hearing meant that the council would be considering a brand new site plan. Postema stated that there’s a new public hearing only because the original public hearing hadn’t been held open in the same way it was done in the past. To the extent the site plan has been changed, Postema continued, assistant city attorney Kevin McDonald had recommended that it go back and be treated as a new public hearing at this time.

Higgins stated that she disagreed with the approach of a new public hearing. She felt a new process was being developed for this particular site plan. She said she wouldn’t push it, but felt the council needs to be cognizant of the issue. Hieftje asked Higgins if she was amenable to approving the March 18 minutes and accepting a motion to start a new public hearing later. Higgins said that’s what she thought they’d already decided to do.

When the council reached the public hearing on 413 E. Huron on its agenda, Hieftje indicated that he fully expected that it would be postponed, and that the public hearing would be continued on April 15 if it were to be postponed. No one spoke at the public hearing.

However, during public commentary reserved time at the start of the meeting, Kermit Schlansker commented on what he called a “furor over construction of an apartment complex on Huron Street.” The knowledge that houses will eventually have to be torn town and that people will have to learn to live in apartment buildings in order to save energy is an argument on the side of the apartments, he said. But the city could take a great step toward sustainability by specifying that all new buildings must use a heating system that is at least partially renewable. That could take the form of solar panels on the roof, a solar boiler, a cogeneration system, and an engine-driven heat pump. Eventually, Schlansker said, we will have to use both co-manufactured and solar boilers as heating systems. The easiest choice, he explained would be an engine-driven heat pump, with a cogeneration backup. We have to use every possible trick to ensure our future, he said.

413 E. Huron: Council Deliberations

During the scant deliberations, Jane Lumm (Ward 2) took the opportunity to tell representatives of the developer who were in the audience that she felt the changes that had been made so far – on 8,000 square feet out of 270,000 for the entire project – were about a 3% improvement. She wanted them to understand “what universe” she was coming from.

Outcome: The council unanimously approved the postponement of the 413 E. Huron site plan until its April 15 meeting.

Outdoor Sign Ordinance

On the council’s agenda was final approval of changes to the city’s sign ordinance – to allow for only a limited type of digital signs. Also considered was an extension of a council-enacted moratorium on applications for digital signs, which was set to expire on April 11, 2013.

Billboards on West Liberty Street at First, near the edge of downtown Ann Arbor, looking east. (Photo illustration by The Chronicle.)

If enacted, the changes would mean that a limited type of digital signs would be allowed in the city. But the effect of the proposed ordinance changes would be that no billboards would be permitted – although the existing 28 billboards in the city would be allowed to remain as non-conforming signs. Existing billboards would not be allowed to be retrofitted for digital displays. The council had given initial approval of the changes at its March 18, 2013 meeting. [.pdf of proposed outdoor advertising ordinance]

Under the proposed ordinance changes, new billboards – signs with an area greater than 200 square feet – could not be constructed. And existing signs of that size could not have electronic features added to allow for changeable text or images.

The existing sign ordinance does not allow for any changeable text, except for “noncommercial information which requires periodic change” – like time and temperature. So the proposed changes to the ordinance would allow for changeable portions of a sign, subject to the limitation that the changeable portion of the sign not be more than half the area of any sign and no more than 30 square feet per sign and 15 square feet per sign face. Additional limitations would prevent flashing and scrolling – by not allowing changes to content more often than 15 minutes. The proposed ordinance language states:

Changeable copy shall not and shall not appear to flash, undulate, pulse, blink, expand, contract, bounce, rotate, spin, twist, or otherwise move.

The proposed ordinance restrictions on dynamic elements of signs were motivated in part – based on remarks of city planning manager Wendy Rampson at the council’s March 18 meeting – by the perception that these elements are a distraction to motorists. That argument has been countered by Adams Outdoor Advertising in written communication to the city by citing studies that conclude any distraction does not cause a greater rate of traffic accidents.

The proposed ordinance changes would place a maximum brightness of any illuminated sign, including those that are digital/electronic: 5,000 nits during the day and 100 nits at night, and in no case greater than 0.1 foot-candles above the already existing amount of light at a residential property line. One nit is defined as one candela per square meter. A candela is about the amount of light produced by a common tallow candle.

By way of comparison, an iPhone 5 display is reported to have a brightness of about 500 nits.

The moratorium on digital signs was first enacted for 180 days at the council’s April 17, 2012 meeting. And the city council had extended the moratorium for an additional 180 days at its Oct. 1, 2012 meeting.

Falling under the moratorium are “billboards commonly referred to as ‘electronic message centers,’ ‘electronic message boards,’ ‘changeable electronic variable message signs,’ or any billboard containing LEDs, LCDs, plasma displays, or any similar technology to project an illuminated image that can be caused to move or change, or to appear to move or change, by a method other than physically removing and replacing the sign or its components, including by digital or electronic input.”

Outdoor Sign Ordinance: Public Hearing

Mayor John Hieftje indicated he thought it was highly likely that the vote would be postponed. This led to considerable hesitation on the part of several people who had planned to speak. If they assumed the council would postpone, expecting to be able to speak at the continued public hearing when the council took up the matter again, but the council wound up voting that evening, they’d have forfeited their opportunity to be heard before the vote.

Karolina Shillenn introduced herself as the real estate representative for Adams Outdoor. She told the council that Adams had three objectives that night. First, she asked that the council postpone the vote so that an opportunity could be provided to convey relevant information to the council, saying “Billboards are our business.” Second, she asked that the council maintain the current ordinance requirements, which cap the total number of billboards at 30. There are currently 28 billboards within the city, she pointed out. In addition, she asked that the council maintain the current 350-square-foot size limit. She showed the council an example of a current billboard for the Y, pointing out that it features a city planner on it. The third request she made was for the council to regulate digital signs at the 350-square-foot size, instead of prohibiting digital signs at that size.

Dan Law introduced himself as sales manager at Adams Outdoor. The business of Adams is all about helping local businesses and helping the local economy, he said. It’s difficult to reach customers when there is not a daily newspaper and the airwaves are overcrowded, he said. Billboards offer a nonintrusive way to reach people, he told the council. He takes his responsibility for managing eight account representatives very seriously. Based on what those reps tell him, there is a high demand for billboards and a high demand for digital. The current ordinance allows only 30 billboards, he pointed out. He asked that the council include in the new ordinance an ability for businesses to have a voice, via digital technology. He showed the council examples of billboards for the University of Michigan Credit Union and other local businesses.

Shannon Flowerday introduced herself as the art director at Adams Outdoor. She described the process of creating a visually appealing and successful billboard, comparing the process of design to creating a painting. She described the “rectangle campaign,” which is a way for nonprofits to advertise at no cost.

Dan Martell introduced himself as operations manager at Adams Outdoor. He talked about the physical implementation of the billboards. He described how a design for one advertiser had been printed on vinyl and it had not stretched properly. So Adams Outdoor had gone out several times to re-stretch the vinyl, he said. They were out working in all kinds of weather and were always monitoring the structures to make sure the lights are working and that the overall appearance is aesthetically pleasing.

Mitchell Gasche introduced himself as real estate manager at Adams Outdoor. He routinely deals with federal, state and local regulation, he said. Adams Outdoor encourages regulation, but is against prohibition. The proposed ordinance changes take away their rights, he said. While the current ordinance has a limit of 30 sign faces, and the limit has not been reached since 1994, there’s no need to take away the two additional billboards that could be allowed in addition to the existing 28 billboards.

He noted that digital technology for signs is regulated at the federal, state and local levels as well. Use of digital technology has been allowed at the federal level since 1996, he said, and prohibited flash, scroll or animation. He noted that Adams had sent to the council three studies on the possible distractions to drivers posed by digital signs. They’re safety neutral, he concluded. He asked that Adams Outdoor be included as part of the process. Two weeks is not long enough to deal with the proposed ordinance changes, he said. [The two-week timeframe is the time between the council's initial approval and the final vote, which was before the council at the April 1 meeting.]

Hieftje stated that the public hearing would be continued if the ordinance revision were to be postponed.

Outdoor Sign Ordinance: Council Deliberations

The council took an initial voice vote on postponement that appeared to have succeeded unanimously. But then a question arose about the date of the postponement. And that re-opened the door to deliberations on the question.

Jane Lumm (Ward 2) stated that she was not a big fan of billboards – digital or otherwise. She understands that it impacts sign businesses and has an indirect impact on businesses that use them. She supported the postponement, saying that although the city has had a year to review the issue during the period of the postponement, those who are impacted by the ordinance change had to deal with the issue in the timeframe of just two weeks. She wanted to make sure they had time to raise concerns before the final vote. A postponement also gives time to consider suggestions and consider revisions. She noted that it would be necessary to extend the temporary moratorium on digital signs. Lumm reiterated that she’s generally supportive of the ordinance revisions, but those who are impacted should have an opportunity to be heard.

Sally Petersen (Ward 2) also indicated she was in favor of postponement. She felt there’s a real economic development issue. She also felt there was a certain irony to prohibiting digital sign technology at the same time the city is trying to promote the idea of a tech campus downtown.

Marcia Higgins (Ward 4) was concerned that a two-week postponement is not the right timeline. She asked if councilmembers would consider a different timeframe. Chuck Warpehoski (Ward 5) indicated he might support a different timeframe, but he wanted to know what the mechanism would be for people to provide their input. Higgins stated that she felt the input would be provided to city staff.

After some back and forth – in light of the fact that the moratorium appeared on the agenda later in the meeting with an extension until July 1 – the council settled on May 6 as the date it would take up the sign ordinance again. That came over the dissent of Higgins, who appeared to be in favor of a longer postponement.

Outcome: The council voted to postpone the second vote on the ordinance revisions until May 6, 2013, over the dissent of Marcia Higgins (Ward 4).

Later in the meeting, the council voted to extend that moratorium on digital sign applications until July 1, 2013. According to the resolution approved by the council, the purpose of postponing a decision on the ordinance amendment and extending the moratorium was to allow for additional time to review the proposed amendments and to “gather input from the public and interested parties, and to promote the public health, safety, and welfare of city residents.”

Outdoor Sign Ordinance: Coda

During council communications time at the conclusion of the meeting, Chuck Warpehoski (Ward 5) indicated most of the signs were located in Ward 5, the ward he represents. Given the timeframe, he would likely not be able to see the process through himself – because his wife is due to give birth at the end of May. He indicated an interest in seeing the issue continue to receive attention from staff and the council.

Public Art Spending Moratorium

On the council’s April 1 agenda was the extension of a temporary halt to spending money that’s set aside under the city’s Percent for Art ordinance.

The city’s public art ordinance requires that 1% of all capital project budgets be set aside for public art. Originally set to run through April 1, 2013, the temporary halt on spending – except on projects already in the works – is to be extended until May 31. The three projects currently in the works are installations for East Stadium Bridges, a rain garden on Kingsley Street, and Argo Cascades.

The council had originally enacted the moratorium on spending at its Dec. 3, 2012 meeting. The action came in the context of a failed millage proposal in November 2012, which was meant to provide an alternative funding mechanism to the Percent for Art approach. The millage proposal was put forward in part in response to objections that voters had not explicitly approved the Percent for Art mechanism, which taps all capital funds – even those deriving from fees and millages designated for other purposes.

At the Dec. 3 meeting, a committee consisting of Sally Petersen (Ward 2), Sabra Briere (Ward 1), Stephen Kunselman (Ward 3), Margie Teall (Ward 4) and Christopher Taylor (Ward 3) was appointed to recommend amendments to the city’s public art ordinance.

The committee has met several times and has made recommendations on revisions to the ordinance. However, the committee is not yet ready to convey its final recommendations to the full council.

Based on previous Chronicle coverage, the main recommendation would be to eliminate in the ordinance any reference to a specific percentage for art in a capital project budget. And art funds would not be pooled as they are now – which entails setting aside money from projects into which it would be difficult to incorporate public art. Under the approach likely to be recommended by the committee, city staff would work to determine whether a specific capital improvement project should have enhanced design features “baked in” to a project – either enhanced architectural work or specific public art. The funding for any of the enhanced features would be included in the project’s budget and incorporated into the RFP (request for proposals) process for the capital project.

Another likely recommendation is to encourage an outside organization to solicit funds for specific community‐generated public art projects. Such funds would go into a dedicated fund for public art.

The committee is likely to recommend an increase in the employment level of its public art administrator to more than half-time – whether that is a contract employee or a direct hire. The current public art administrator’s job, held by Aaron Seagraves, is a part-time position.

The committee is also likely to recommend evaluating the changes in the ordinance after three years.

The extension of the moratorium was introduced to the council by Sabra Briere, who’s been working on the council committee. She reported that the city attorney’s office had told her it would take another 30 days, and the extension until May 31 was meant to ensure that there would be sufficient time for the two votes the council would be required to take.

Outcome: The council voted unanimously to approve extending the suspension of public art spending.

Gallup Park Accessibility Work

The council was asked to approve a $512,180 contract with Construction Solutions Inc. for improvements at the Gallup Park canoe livery.

The Ann Arbor park advisory commission had recommended the contract award at its March 19, 2013 meeting. The project budget includes a 10% construction contingency, bringing the total cost to $563,398.

Schematic of the proposed Gallup Park canoe livery improvements.

Construction Solutions, based in Ann Arbor, was the lowest qualified bidder on the project. Other bids were submitted by Braun Construction Group ($534,600); Detroit Contracting Inc. ($554,620); The E&L Construction Group ($580,700); A.R. Brower Company ($607,160); and Terra Firma Landscape ($612,137).

The improvements include barrier-free paths to the docks; barrier-free docks and fishing facilities; an expanded patio area to create barrier-free outdoor seating and to separate these areas from the pedestrian circulation; sliding glass doors from the meeting room; and redesign of the park entry to create a separation between the service drive and the pedestrian pathway.

The project will be funded in part through a $300,000 grant from the Michigan Dept. of Natural Resources Trust Fund, with matching funds from the FY 2013 park maintenance and capital improvements millage.

The project’s first phase will begin on the docks and livery area, with work continuing until Memorial Day in late May. Work will resume after the summer season on Labor Day, focusing on paths and the park entry reconfiguration. The entire project is expected to be finished by mid-November.

During the scant council deliberations, Sally Petersen (Ward 2) noted that the work had been very well received by the city’s disability commission – on which she serves.

Outcome: The council unanimously approved the contract for Gallup Park improvements.

Dam Work at Argo, Geddes

On the council’s agenda was the award of a $295,530 contract to Gerace Construction Co. for repair work and repainting at Argo and Geddes dams, as well as site improvements around Argo Dam.

The contract had been recommended for approval by the city’s park advisory commission (PAC) at its March 19, 2013 meeting.

Gerace, based in Midland, submitted the lowest of four qualified bids for this work. Other bidders were Anlaan Corp. ($354,050); E&L Construction ($457,989); and Spence Brothers ($797,000). According to a staff memo, the work entails “repair and repainting of gear housings, lift equipment, tainter gate structural steel, miscellaneous concrete repair, and minor site improvements. Site improvements include addition of riprap and constructing a path to portage around Argo Dam.”

At PAC’s meeting, Brian Steglitz, an engineer with the city, indicated that the work is being done in response to feedback from state regulators. The two dams are inspected every three years by the Michigan Dept. of Environmental Quality (MDEQ).

The project will be funded from the city’s parks maintenance and capital improvements millage.

At the council’s April 1 meeting, Mike Anglin (Ward 5) and Stephen Kunselman (Ward 3) questioned the idea of paying for the repairs only out of the parks millage, but were content to leave the question open for future discussion.

Outcome: The council unanimously approved the contract for the dam repairs.

Longshore Parking for Argo Livery

Having been postponed from its previous meeting on March 18, 2013, the council was asked to approve a $3,000 lease to accommodate overflow parking for the Argo canoe livery.

Sabra Briere (Ward 1) had asked that the item be separated out from the consent agenda on March 18. Briere had heard concerns that the lot is not very well-graded and that there’s a lot of runoff. She had wondered if there was a way for the city to enforce maintenance of the lot through the lease.

The lease had been recommended for approval by the city’s park advisory commission at its Feb. 26, 2013 meeting. The lease of the parking lot at 416 Longshore Drive – with about 40 spaces – will cover Saturdays, Sundays and holidays from May 25 to Sept. 2, 2013, with an option to renew administratively for two successive one-year periods.

City parks staff reported that the overflow parking at this lot had been used during the 2012 season, and they recommended continuing the lease. According to city records, the land is owned by the Stewardship Network.

At the council’s April 1 meeting, Briere indicated that it was not feasible to enforce through the contract the kind of improvements that would be necessary to manage stormwater better.

Outcome: The council unanimously approved the lease for the parking lot.

Summer 2013 Street, Sidewalk Contracts

The council was asked to approve a contract for street resurfacing in Ann Arbor – with Barrett Paving Materials Inc. in the amount of $3,583,944. The council has also approved two contracts in connection with the city’s 2013 ramp and sidewalk repair project – a $748,576 contract with Doan Construction Company and a $207,350 contract with Precision Concrete Cutting.

The work will occur in the spring and summer of 2013.

2013 Ann Arbor street resurfacing program.

The city has a ramp and sidewalk repair program in place that is meant to repair deficient sidewalks (not install new sidewalks) throughout the city over a five-year period – which is the duration of a 1/8 mill tax approved by voters in 2011. Each year about 20% of the city is covered by the repair program.

The contract with Precision Concrete Cutting reflects the city’s interest – where feasible – in slicing off portions of sidewalks that have “vaulted,” to restore the surface to horizontal. Slicing is more cost effective than removing and re-pouring.

The streets to be resurfaced include the following.

• State Street: Oakbrook to Eisenhower (April – June)
• Barton: Pontiac to Plymouth (August – October)
• Sorrento: King George to end (April – May)
• Alley “Benjamin”: Sybil to Benjamin (May – June)
• Alley “Mary”: Benjamin to Hoover (May – June)
• Franklin: Stadium to Hutchins (June – July)
• Hiscock: Brooks to Spring (June – July)
• Arbana: Mark Hannah to Huron (July – August)
• Mark Hannah: Arbana to Arbana (July – August)
• Waldenwood: Earhart to Penberton (July – August)
• Birch Hollow: Tacoma to Stone School (August – September)
• Penberton & adjacent courts: Waldenwood to Waldenwood (TBD)
• Sulgrave Place: Barrister to end (TBD)

According to the staff memo accompanying the agenda item, Depot Street (Main to Carey) was included as part of the original bid package. However, the storm sewer within Depot Street – based on early indications from the Allen Creek Railroad berm opening feasibility study – could be impacted by possible solutions related to a railroad berm opening. So other local streets will be substituted for Depot Street this year.

During council deliberations, Chuck Warpehoski (Ward 5) noted that some of the curb ramps on the work schedule were upgrades to existing ramps, when some locations didn’t have ramps at all. He wanted to weigh the benefit of that in the future.

Mike Anglin (Ward 5) reported that a woman had fallen on a sidewalk and cracked her knee. If there’s a lawsuit, he said, the sidewalks should be repaired immediately, even if it’s not the city’s fault.

Stephen Kunselman (Ward 3) got an explanation from city staff on the areas of work to be covered with the sidewalk work.

Outcome: The council voted unanimously to approve the street resurfacing and sidewalk repair contracts.

Drinking Water Bond Notice

The council was asked to approve the publication of a notice of intent to issue water supply system revenue bonds totaling $18.5 million to pay for additions and improvements to the city’s water supply system.

According to the staff memo accompanying the agenda item, the first in the series of bonds is expected to be for around $3.8 million and will be sold directly to the Michigan Finance Authority as part of its Drinking Water Revolving Fund program. The bonds will be paid solely from revenues to Ann Arbor’s drinking water system.

During the brief council deliberations, Mike Anglin (Ward 5) got some clarification on the interest rates from city CFO Tom Crawford. Crawford indicated that for a question about some maximums, he would need to talk to the city’s bond counsel.

Outcome: The council voted unanimously to approve the publication of a notice of intent to issue revenue bonds.

Communications and Comment

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

Comm/Comm: Library Lane Ice-Skating Rink

Stewart Gordon gave the council an update on the status of an initiative to install a temporary ice-skating rink on the top of the Library Lane underground parking garage on South Fifth Avenue. The rink would use synthetic ice. He reported that he’d done a long interview with the woman who runs the ice rink at the Hancock Building in Chicago. He summarized the information he’d obtained from that interview for the council. The material is durable and skateable. The size of the rink is very important, he said. Children like it but it’s too small for adults, he said. At the Hancock Building a liability waiver is signed, but no accidents or claims had been made in the course of three seasons.

Shoe storage is provided as well as a place to change into skates, Gordon reported. Sharpening skates is important, he noted, and the Hancock Building staff have been trained to do skate blade sharpening during slower periods. Negative features include the fact that the specific product that had been chosen in Chicago requires that a lubricating gel be applied twice a week. He described it as a “nasty, messy, hands-and-knees” process. Other products don’t require that kind of maintenance, because the lubricant is impregnated in the plastic, he said. So that’s the kind of product that would be used in Ann Arbor.

A final point he made is that unless it’s large enough to skate on comfortably, the rink becomes a one-time novelty. At this point, the city of Chicago has installed two ice rinks downtown – so the clientele for the synthetic ice rink is gradually declining. Gordon told the council that his group was ready to work with the city’s park advisory commission and the Ann Arbor Downtown Development Authority. [Gordon and Alan Haber had made a presentation on this project at the park advisory commission's March 19, 2013 meeting.]

Comm/Comm: Park Advisory Commission Update

Mike Anglin (Ward 5) urged people to watch the March 19, 2013 meeting of the city’s park advisory commission (PAC). [Anglin serves as one of two ex officio, non-voting city council appointees to PAC. The other council representative to PAC is Christopher Taylor (Ward 3).] He highlighted two presentations from city staff that were worth hearing: one on the city’s golf courses, and the other on the canoe liveries. Anglin expressed praise for the parks staff.

Chuck Warpehoski (Ward 5) followed up on Anglin’s remarks, adding praise of his own. He’d noticed some illegal dumping in a neighborhood park and notified park staff. They’d been responsive, he said.

Comm/Comm: North Main Task Force

During communications time, Sabra Briere (Ward 1) gave a brief update on the activities of the North Main/Huron River task force. The group has been meeting every three weeks as a whole, and has formed four subcommittees, which have met in addition to the full task force. The draft recommendations were presented at a meeting of the full task force on the previous Wednesday [March 27], she reported. The recommendations will now be compiled and organized and looked at again before a meeting on April 17. A draft reported is expected by the beginning of May. The group expects to hold a public meeting on May 22 and again in June. The full report is due by the end of July. She was pleased with cooperation that had been displayed during the task force’s work. She hoped the final report would reflect short-term and long-term recommendations to the council.

Comm/Comm: Unwanted Newspapers/Circulars

During communications time at the start of the meeting, Chuck Warpehoski (Ward 5) noted that a lot of people seem to complain about unwanted advertising circulars being delivered to their premises – like the AnnArbor.com Express. He ventured that council veterans around the table had likely heard this before. He asked them to “indulge a newbie.” [Warpehoski was first elected in November 2012.] He described the various aspects of the issue – from environmental concerns to public safety. A stack of such circulars that accumulate while someone is away could send the message “rob this place, nobody’s paying attention,” he said. He knew that city attorney has looked at the issue before. He asked other councilmembers to let him know what they’d been hearing about the issue. [An attempt to revise the city ordinance on handbills and unwanted newspapers put forward by Christopher Taylor (Ward 3) in late 2011 got little traction on the council.]

Comm/Comm: Urban Core Transit

Stephen Kunselman (Ward 3) reported that on March 28 there’d been a robust discussion of governance and financing for improved or expanded transit in the “urban core” communities – attended by a number of elected officials from Ypsilanti, Ypsilanti Township, Pittsfield Township, as well as several other nearby jurisdictions. The meeting was hosted by the Ann Arbor Transportation Authority. Kunselman wanted to let everybody know they were making some headway. Attending the meeting besides Kunselman from the Ann Arbor city council included: mayor John Hieftje; Chuck Warpehoski (Ward 5); Sabra Briere (Ward 1); and Sally Petersen (Ward 2). [See: "Costs, Services Floated for Urban Core Transit"]

Comm/Comm: Affordable Services

At the start of the meeting during public commentary reserved time, Thomas Partridge called on the council to fund affordable housing and transportation for those who need it – the most vulnerable among us. As Partridge often does, he called on mayor John Hieftje to step aside and resign or face future recall. On the day after the annual celebration of the most significant holiday in Christendom, Partridge said, it was time for us to unite as Christian Democrats for progress on issues the city has long neglected.

Partridge also addressed the council at the conclusion of the meeting.

Present: Jane Lumm, Mike Anglin, Margie Teall, Sabra Briere, Sumi Kailasapathy, Sally Petersen, Stephen Kunselman, Marcia Higgins, John Hieftje, Chuck Warpehoski.

Absent: Christopher Taylor.

Next council meeting: Monday, April 15, 2013 at 7 p.m. in the second-floor council chambers at city hall, 301 E. Huron. [Check Chronicle event listings to confirm date]

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The March 18, 2013 city council meeting did not adjourn until nearly 2 a.m. From left: Sabra Briere (Ward 1), Margie Teall (Ward 4) and city administrator Steve Powers. (Photos by the writer.)

The council decided to conduct a review of D1 zoning, without imposing a moratorium. That cleared the way to consider the 413 E. Huron project, which the council eventually voted to postpone – at roughly 1:30 a.m. Because of the amount of time spent on just those items, they’ll be included in a separate Chronicle report.

Apart from those two items, the council’s agenda still included a planning and land use focus, as well as a downtown theme. An additional theme was the city council’s relationship to two other public bodies – the city planning commission and the board of the Ann Arbor Downtown Development Authority.

In the case of the planning commission, the council for a second time balked at the commission’s recommendation of R3 (townhouse) zoning for a recently annexed parcel on Ellsworth near Stone School Road – planned as the site of Summit Townhomes, which would be a 24-unit development. The council postponed consideration of the Summit Townhomes site plan and the zoning, having previously postponed the zoning. The council also had previously referred the zoning recommendation back to the planning commission for re-review. The council’s second postponement on March 18 came after the commission’s re-affirmation of its original recommended R3 zoning. The council sent no explicit communication to the planning commission requesting action, beyond the implicit message of postponing the vote.

In the case of the DDA board, the council is weighing changes to the city ordinance governing the composition of that body, but postponed those changes for a second time at its March 18 meeting. The more significant of the ordinance changes involves clarifying how the Ann Arbor DDA’s tax increment finance capture is calculated, which has implications for millions of dollars for the DDA, the city of Ann Arbor, Washtenaw County, Washtenaw Community College and the Ann Arbor District Library.

Also related to the DDA, early in the council’s meeting an oral report was given on a session of the council’s audit committee – held the previous week to review the DDA’s FY 2012 audit. In the middle portion of the council meeting, councilmembers postponed the ordinance changes. And in the early morning hours of March 19, after the voting agenda was concluded, a member of the audit committee – Sally Petersen (Ward 2) – announced her intention to propose a task force on the DDA.

Related to other boards and commissions, the council confirmed the appointment of a chair for the zoning board of appeals (ZBA): Alex Milshteyn. He replaces Carol Kuhnke, who resigned in December 2012 after being elected judge of the 22nd Circuit Court.

In other business, the council gave approval for the zoning and site plan of The Shoppes at 3600, a proposed retail development on Plymouth Road.

The council also voted to object to the renewal of a liquor license for The Arena, a downtown bar located at Division and Washington streets. The basis for the objection – which will be forwarded to the Michigan Liquor Control Commission for final action – was non-payment of taxes.

The council also gave initial approval to a revision to the city’s sign ordinance. It would essentially maintain current conditions, but provide for certain limited digital signs with a restricted range of changeable elements.

Council communications included a briefing on upcoming changes the council will be asked to consider for the city’s public art ordinance. In other communications, the council will be giving a fire station reconfiguration plan some additional explicit discussion at a future working session – although it appears that the idea has insufficient traction to move forward.

Public commentary at the meeting covered a range of topics, including a call for the council to waive privilege on legal advice that councilmembers had received on the D1 moratorium issue – because they’ve now voted not to enact the moratorium.

DDA-Related Issues

Items related to the Ann Arbor Downtown Development Authority came up at three points during the meeting. During council communications at the start of the meeting, Sumi Kailasapathy (Ward 1) – a member of the council’s audit committee – gave a report from the committee meeting held on March 14. Later, the council voted on DDA ordinance revisions that were on the agenda. And sometime around 1:30 a.m. the topic came up again, during the council communications at the end of the meeting.

This report begins with the agenda item.

DDA: Ordinance Revisions

Before the council for its consideration were several revisions to Chapter 7, a city ordinance governing the Ann Arbor Downtown Development Authority (DDA). The ordinance amendments had been postponed at the council’s March 4, 2013 meeting.

A chart by the city of Ann Arbor financial staff showing Ann Arbor DDA TIF (tax increment finance) revenue under various methods of calculation.

Among the revisions to Chapter 7 that are being considered by the council are: a new prohibition against elected officials serving on the DDA board; term limits on DDA board members; a new requirement that the DDA submit its annual report to the city in early January; and a requirement that all taxes captured by the DDA be spent on projects that directly benefit property in the DDA tax increment finance (TIF) district.

But most significant of the revisions would be those that clarify how the DDA’s TIF tax capture is calculated. The “increment” in a tax increment finance district refers to the difference between the initial value of a property and the value of a property after development. The Ann Arbor DDA captures the taxes – just on that initial increment – of some other taxing authorities in the district. Those are the city of Ann Arbor, Washtenaw County, Washtenaw Community College and the Ann Arbor District Library. For FY 2013, the DDA will capture roughly $3.9 million in taxes.

The proposed ordinance revision would clarify existing ordinance language, which includes a paragraph that appears to limit the amount of TIF that can be captured. The limit is defined relative to projections for the valuation of the increment in the TIF plan, which is a foundational document for the DDA.

If the actual rate of growth outpaces the growth rate that’s anticipated in the TIF plan, then at least half the excess amount is supposed to be redistributed to the other taxing authorities in the DDA district.

DDA board members at their March 6, 2013 meeting indicated that they did not think any reason had been given to amend the ordinance. At a meeting of the city council’s audit committee held on March 14, city CFO Tom Crawford indicated that it was the view of many people, including his own, that the ordinance language on TIF calculation was not clear. During that meeting of the audit committee, Crawford indicated that the FY 2012 audit of the DDA did not include a review of Chapter 7 compliance.

What the proposed ordinance revisions clarify is which estimates in the TIF plan are the standard of comparison – the “realistic” projections, not the “optimistic” or “pessimistic” estimates. However, the ordinance revisions as currently formulated do not clarify whether a “cumulative” method of performing the calculations should be used or if a year-to-year method should be used.

Use of the cumulative method has an impact on whether the redistribution of excess TIF is made on a one-time or recurring basis. Under the cumulative method, other taxing authorities in the Ann Arbor DDA TIF district would see a total on the order of $1 million in additional tax revenue, compared to the way the DDA currently calculates the TIF capture. The city of Ann Arbor’s annual share would be more than half of that amount, around $600,000.

Method: Year-to-Year                   
Refunds                                                         
       City       County      WCC       AADL      Total Ref    DDA TIF
FY14   $429,409   $149,392    $94,257   $40,163   $713,221     $3,964,457
FY15    $11,958     $4,160     $2,625    $1,118    $19,862     $4,774,758

===============================

Method: Cumulative                     
Refunds                                                      
       City       County     WCC        AADL      Total Ref    DDA TIF
FY14   $613,919   $213,583   $134,757   $57,421   $1,019,680   $3,657,998
FY15   $635,108   $211,673   $139,195   $58,539   $1,044,515   $3,773,043

-

The clarification of the ordinance crucially strikes two paragraphs related to bond and debt payments. One of the two paragraphs was key to the DDA’s current legal position – which is that no redistribution of TIF is required under the ordinance, given the DDA’s financial position. The DDA interprets the stricken paragraphs to mean that no redistribution to other taxing authorities needs to be made, until the total amount of the DDA’s debt payments falls below the amount of its TIF capture. At the DDA board’s March 6 meeting, board member Bob Guenzel alluded to this in the context of remarks on the TIF calculations when he observed that the DDA is “on the hook” for some bond payments.

In the FY 2014 budget, adopted by the DDA board at its Feb. 6, 2013 meeting, about $6.5 million is slated for bond payments and interest. That clearly exceeds the amount of anticipated TIF capture in the FY 2014 budget – about $3.9 million. The DDA is able to make those debt payments because about half of that $6.5 million is covered by revenues from the public parking system. The DDA administers the public parking system under contract with the city of Ann Arbor.

This issue first arose back in the spring of 2011. The context was the year-long hard negotiations between the DDA and the city over terms of a new contract under which the DDA would manage the city’s parking system. The Chapter 7 issue emerged just as the DDA board was set to vote on the parking system contract at its May 2, 2011 meeting.

When the issue was identified by the city’s financial staff, the DDA board postponed voting on the new contract. The period of the postponement was used to analyze whether the DDA’s Chapter 7 obligations could be met – at the same time the DDA was ratifying a new parking system contract, which required the DDA to pay the city of Ann Arbor 17% of gross parking revenues. The DDA manages the city’s parking system under contract with the city.

Initially, the DDA agreed that money was owed to other taxing authorities – not just for that year, but for previous years as well. And the DDA paid a combined roughly $473,000 to the Ann Arbor District Library, Washtenaw Community College and Washtenaw County in 2011. The city of Ann Arbor chose to waive its $712,000 share of the calculated excess.

The Chronicle recently learned that during this timeframe in 2011, the TIF calculation topic was the subject of a meeting attended by representatives of all the taxing authorities in the DDA district, as well as by representatives of the DDA. The outcome of the meeting was an expectation by some in attendance that the DDA would work with the other taxing authorities to arrive at a consensus interpretation of the ordinance. But subsequently, the DDA completely reversed its legal position, and contended that no money should have been returned at all. That decision came at a July 27, 2011 DDA board meeting.

The following spring, during the May 21, 2012 city council budget deliberations, Stephen Kunselman (Ward 3) proposed an amendment to the city’s FY 2013 budget that stipulated specific interpretations of Chapter 7, with a recurring positive impact to the city of Ann Arbor’s general fund of about $200,000 a year. Kunselman wanted to use that general fund money to pay for additional firefighters. That year the budget amendment got support from just two other councilmembers: Jane Lumm (Ward 2) and Mike Anglin (Ward 5).

For a Chronicle op-ed on this topic, see: “Column: Let’s Get DDA TIF Capture Right.”

DDA: Ordinance Revisions – Council Deliberations

On March 18, Stephen Kunselman began deliberations on the ordinance amendments by indicating he’d be asking for an additional postponement. [The ordinance changes are sponsored by Kunselman and Sumi Kailasapathy.] One reason for postponing, he said, is that answers to certain questions are still being sought from the DDA. He also noted that there would be a council work session on the DDA budget. [This is now scheduled for March 25.] There’s a lot of concern about how the amendments he’s proposing would affect the DDA budget and its debt obligations. He wanted to reiterate that his goal was to bring some stability, trust and confidence in the DDA as an institution. His intent is that the DDA budget would remain whole.

Based on figures from the city treasurer’s office, Kunselman noted that using the year-to-year method to calculate the excess TIF capture, the city would receive $429,409 in FY 2014. The DDA’s total TIF capture would be $3.9 million for that year. But for the following year, FY 2015, the DDA’s total capture was anticipated to jump to $4.7 million. That’s due to recently completed projects within the geographic areas of the TIF district, which will increase the tax base.

But in the proposed two-year budget the DDA passed recently [at its Feb. 6, 2013 meeting], the anticipated total TIF capture by the DDA was $3.7 million in FY 2015. What had caught his attention was the $1 million increase between the approved budget amount and the projection for actual TIF capture, Kunselman said. So he wanted to have a good discussion about the cumulative method of calculating the excess TIF. Sample language for a further revision to the TIF ordinance – which would stipulate the cumulative method of calculation – had been forwarded to councilmembers, Kunselman said. The following revision would have the effect of clarifying that a cumulative method of calculation should be used [deleted text indicated with strike-through, and added text in italics]:

If the captured assessed valuation derived from new construction, and increase in value of property newly constructed or existing property improved subsequent thereto, grows at a rate faster is greater than that anticipated in the tax increment plan, at least 50% of such additional amounts shall be divided among the taxing units in relation to their proportion of the current tax levies. If the captured assessed valuation derived from new construction grows at a rate of over is greater than twice that anticipated in the plan, all of such excess amounts over twice that anticipated shall be divided among the taxing units.

Kunselman pointed out that under the cumulative calculations, the approved DDA budget of $3.7 million for FY 2015 could be covered as adopted. So that wouldn’t “hamstring” the DDA in its ability to pay its bills, Kunselman concluded.

Regarding the other amendments to the DDA ordinance that he’s proposing – involving membership, term limits and a report filing requirement – he reminded people that for many years the DDA didn’t file its annual report as required by state law. He pointed out that the state-enabling statute for DDAs contemplated the possibility that the DDA could enter into an agreement with the taxing jurisdictions whose taxes are captured – to share a portion of TIF revenues with one of the jurisdictions. How can you do that if an elected official of one of the taxing authorities is on the DDA board? Kunselman asked. He saw this as an ethical conflict.

Kunselman noted that last year, on Jan. 27, 2012, the Ann Arbor District Library sent a letter to the city, expressing the library’s disappointment that a method of TIF calculation was chosen that would return the smallest amount of TIF possible to the taxing jurisdictions whose taxes are captured by the DDA. Kunselman felt that if the method could be clearly specified in the ordinance, the concern of others can be relieved. Kunselman said he didn’t want to wind up in court with the other taxing authorities on the issue.

Kunselman indicated that he hoped councilmembers could take the initial vote on the proposed amendments at the council’s April 1 meeting.

Mayor John Hieftje expressed concern that the city’s general fund could see a negative impact as a result of the ordinance amendments.

Outcome: The council voted unanimously to postpone the question of revising the DDA ordinance until its April 1, 2013 meeting. Even if the council votes to approve any of the proposed amendments on April 1, a second and final vote would be required to enact the ordinance changes.

DDA: Council Communications – Audit Committee

Early in the meeting during council communications time, Sumi Kailasapathy (Ward 1) gave an update on the audit committee’s session held on March 14. She told the council that the meeting had to be called under Robert’s Rules by members of the committee – because the chair of the committee didn’t see a need for the meeting. By way of background, the chair of the committee is Margie Teall (Ward 4). Under Robert’s Rules – which govern all procedures of the council not otherwise addressed in the council’s own rules – a committee meeting can be called by the chair or by two of its members. In addition to Teall and Kailasapathy, other members of the committee include Stephen Kunselman (Ward 3), Chuck Warpehoski (Ward 5) and Sally Petersen (Ward 2).

Kailasapathy said that she and Kunselman had concerns about the TIF calculations and compliance by the DDA with Chapter 7 of the city’s ordinance. She quoted from the DDA TIF plan, which states that: “The DDA submits an annual audit to the City of Ann Arbor that includes the status of the (tax increment finance) TIF account in compliance with the requirements of Section 15(3) of the State of Michigan Downtown Development Authority Act.” Kailasapathy indicated that the result of the audit committee’s conversation was that compliance with TIF regulations was not tested during the FY 2012 audit. The question arose about why that compliance was not part of the audit’s scope, she said.

She went on to say that she and Kunselman had found mistakes in statements from the FY 2012 audit report, giving as an example what she called a “significant error”: a statement that parking bonds are serviced out of the DDA’s parking fund – when TIF funds are also used to service parking bonds.

Kailasapathy indicated a desire to meet with the auditors to discuss that and other statements – to determine if the report needs to be re-issued. She was also interested in understanding why Chapter 7 compliance is not tested as part of the audit procedure. She indicated she was “alarmed” at the delays in getting financial information from the DDA during the audit committee’s inquiry, which had been attributed to the fact that the DDA’s deputy director, Joe Morehouse – who is directly responsible for the DDA financial records – is on medical leave. Kailasapathy questioned why there was no succession plan to provide for his absence. She stated that the nature of her interest in the DDA was compliance with financial standards and was not about “us versus them.” Her remark about “us versus them” could be understood as an allusion to some of the discussion at the March 14 audit committee meeting.

On that occasion, Sally Petersen (Ward 2) had highlighted the portion of the FY 2012 that described the DDA’s relationship to the city: “The Authority is considered a component unit of the City of Ann Arbor, Michigan and is discretely presented in the City of Ann Arbor’s (the primary government) financial statements.” That had been a good reminder to Petersen that “them is us.”

Kailasapathy concluded her remarks during the early council communications by indicating that her interest is in compliance with legal requirements and fairness to the other taxing jurisdictions, whose taxes are captured through the DDA’s TIF.

DDA: Council Communications – TIF/Parking Fund

The FY 2012 audit report statement – which Kailasapathy referred to as inaccurate – was this:

The parking structure bonds are to be serviced with revenues from the parking fund. The City Hall bonds are to be serviced from future tax increment revenues of the general fund.

The use of not just parking revenue, but also TIF revenue, to pay for parking structure bonds also came up near the end of the meeting during council communications.

Christopher Taylor (Ward 3), alluding to the late hour, said he would like to make clear for that “one member of the public who’s still listening” that the TIF fund has been used for parking-related infrastructure for decades and that use of the TIF fund has been perfectly proper. He thought it was useful to state that fact going forward. The DDA is proud of what it does and, for his part, Taylor felt the DDA should be proud.

Kunselman took the opportunity to make clear that the actual issue at stake was not the use of TIF funds to service parking structure bonds per se, but rather the combination of that practice with a transfer of parking revenue to the city. Under the contract between the city and the DDA, the city receives 17% of public parking system gross revenues. Kunselman said that as he understood the state-enabling statute, a sharing of TIF revenues with one of the taxing jurisdictions required an agreement with the other jurisdictions. The part of Act 197 of 1975 to which Kunselman was referring reads as follows:

The authority may enter into agreements with the taxing jurisdictions and the governing body of the municipality in which the development area is located to share a portion of the captured assessed value of the district.

There’s no agreement among the city and the DDA or the other taxing authorities to share the DDA TIF, Kunselman pointed out. Yet through its parking fund, the DDA is providing money to the city – under the parking contract – and also to the Ann Arbor Transportation Authority, through grants to the getDowntown program. At the March 14 meeting of the council audit committee, Kunselman called this “TIF laundering.” This was “very questionable” in Kunselman’s mind. He noted that the way that DDAs operate is starting to catch the attention of the state legislature. [By way of background, HB 4459, if passed, would exclude from capture taxes levied under the state's enabling legislation on zoological authorities or art institute authorities.]

DDA: Background – TIF/Parking Fund

While Taylor’s characterization of the DDA’s historical use of TIF funds to invest in the city’s parking structures was accurate, much of that history predates the transfers of parking system revenues to the city, which began in earnest in 2005.

That’s the year the DDA agreed to transfer $1 million a year to the city for the next 10 years, with the possibility of transferring up to $2 million in any one year, so long as the total through 2015 did not exceed $10 million. With all $10 million paid in the first five years, the city sought to renegotiate the contract – resulting in an agreement ratified finally in May 2011, which now annually transfers 17% of gross public parking system revenues to the city of Ann Arbor.

The payments to the city from the parking system were made in the context of a consistent narrative, beginning at least around 2003 when the DDA’s TIF plan was renewed, around the notion of self-sufficiency for Ann Arbor’s public parking system. From the 2003 TIF plan:

In 2002, the DDA took over operation of the on-street parking meter system in order to meet the community’s goal of a self-sustaining downtown parking system. The DDA is now working to establish rates and policies that will ensure the long-term viability of the full system while serving the special needs of downtown stakeholders.

From the Nelson\Nygaard study of the Ann Arbor parking system completed in 2007:

The public parking system operations can and should be financially self-sustaining, with no need for tax subsidy.

From the DDA’s “Public Parking & Transportation Demand Management Strategies Plan,” written in April 2010:

The public parking system operations are now and should continue to be financially self-sustaining, with no need for tax subsidy. The users of the system should pay for the system, including operation, maintenance, repair, and eventual additions to the system.

And mayor John Hieftje campaigned for re-election in 2010 in part on a contention that the bonds to be issued for the new Library Lane underground parking garage would be serviced with parking system revenue, not with tax money. [See Chronicle coverage of candidate forums on July 10, 2010 and July 1, 2010.]

However, when the city council voted on Feb. 17, 2009, to approve issuance of the bonds for the new Library Lane underground parking structure, the staff memo had indicated that a combination of parking revenue and TIF capture would be used to pay the bonds:

Debt service on the bonds is expected to be paid from revenues of the City’s public parking system and tax increment revenues collected by the Downtown Development Authority.

From an accounting point of view, the DDA’s financial system was set up to reflect a commitment that all parking system expenses would be covered by parking system revenues. But that entailed allowing the parking fund to show a deficit – with the balance in the other DDA funds (including the TIF fund) keeping the DDA solvent in aggregate. However, deficit fund balances are counter to Michigan’s Uniform Budgeting and Accounting Act. And the result of the FY 2010 audit was that the DDA shifted away from that deficit-funding practice.

The required adjustment to the accounting, to show positive balances for all the funds, meant that the accounting showed clearly that TIF tax capture would be used to help pay for the Library Lane underground parking garage.

At the council’s audit committee meeting on March 14, 2013, the city’s chief financial officer, Tom Crawford, sketched out the general history of the DDA, when it used TIF funds at the beginning of its life to repair and construct parking structures. Then the DDA reached a point where the DDA had decided by policy, Crawford explained, that the TIF funds wouldn’t be used for parking, and that TIF revenue would only be used for economic development and other activities. But around 2008-09, Crawford said, when the underground structure was being planned, that approach “was just not going to work.” So the DDA had changed its policy – which is the DDA’s purview, Crawford said.

About the statement in the FY 2012 audit report, which indicated that only parking revenues are used to pay for parking structure debt, Crawford allowed that “the words could be improved.”

DDA: Council Communications – Task Force

During the council communications at the end of the meeting, audit committee member Sally Petersen (Ward 2) alerted her colleagues on the council that she’d be proposing a task force on the DDA, in order to get better alignment between the city and the DDA. She indicated that Stephen Kunselman (Ward 3) was aware of her desire to form a task force. She felt the task force could run in parallel with consideration of the changes to the DDA ordinance. She described the ordinance changes as tactical, implying that the task force would focus on strategic approaches. The task force proposal would likely come to the council on April 1, she said.

Mayor John Hieftje volunteered that every time the city had asked the DDA to do something, the DDA had helped.

Sumi Kailasapathy (Ward 1) responded to a remark made by Hieftje earlier in the meeting, during the brief deliberations on the ordinance amendments, about his concern that the city’s general fund might be put at risk by the kind of changes she and Kunselman were proposing. She said that for her, it was a matter of making sure that compliance with the state statute was ensured, and that the numbers were right. The first step, she indicated, was to make sure the calculations were correct and that there was compliance with the regulations. After that, the question could be opened about whether money comes back to the city. The city’s motivation should not be to turn the DDA into “a cash cow,” she concluded.

Hieftje told Kailasapathy that he didn’t disagree with what she was saying, but he’d just wanted to make the point that the DDA had been very cooperative.

Summit Townhomes Zoning and Site Plan

At the March 18 meeting, the council was asked to consider the site plan and necessary zoning for the Summit Townhomes project. The property is located at 2081 E. Ellsworth Road.

The parcel for the Summit Townhomes development (shaded yellow). The city council voted to postpone a final decision on zoning the parcel to R3 (townhouse dwelling district). The blue line is the boundary between the Malletts Creek and the Swift Run watersheds.

The developer plans to build 24 attached residential units in four separate buildings, with each building between 80 to 160 feet in length. Each of the 24 units would have a floor area of about 1,300 square feet, and an attached one-car garage. The plan includes two surface parking areas on the east and west sides of the site, each with 12 spaces. To do this, the property needs to be zoned as R3 (townhouse district).

March 18 was the first time the site plan had been before the council. But the R3 zoning for the property, annexed from Pittsfield Township, had been previously considered by the council, and referred to the planning commission for re-review. The planning commission then confirmed its original recommendation for R3 zoning.

In more chronological detail, the zoning item had first appeared on the city council’s Jan. 7, 2013 agenda, when it received initial approval. However, during a public hearing at the council’s Feb. 4, 2013 meeting, about a half dozen people spoke in opposition to the zoning – citing concerns about congestion and overcrowding. So councilmembers voted unanimously to refer the zoning issue back to planning commissioners for another look. The council indicated interest in hearing more detail on drainage issues, and the level of recreational services offered in that general area of the city, as well as information about public safety issues.

At their Feb. 21, 2013 meeting, planning commissioners voted again to recommend that the site be zoned R3 (townhouse district) – the same zoning they had previously recommended at their Nov. 20, 2012 meeting.

The project has been working its way through the city’s approval process for several months. The site plan had been postponed by planning commissioners in June of 2012 and again on Nov. 20, 2012, but was ultimately recommended for approval at the commission’s meeting on Jan. 3, 2013.

Before recommending the site plan, planning commissioners had previously recommended approval of annexation and zoning of the site in 2012. At their June 19, 2012 meeting, commissioners had approved annexing the 2.95-acre site, just east of Stone School Road, from Pittsfield Township into the city of Ann Arbor. The annexation was subsequently authorized by the city council.

Summit Townhomes Zoning, Site Plan: Public Hearings

Thomas Partridge wanted civil rights amendments attached to the rezoning request, as well as for all similar requests, that would ensure access to affordable housing.

Ethel Potts told the council that they’d “wisely” sent the question back to the planning commission for a second look. She said she wouldn’t characterize the commission’s “discussion or lack of discussion.” There are three or four townhouse developments in that area of town, she said, and she didn’t think that part of town needed more townhouses.

Summit Townhomes Zoning, Site Plan: Council Discussion

When the council reached the rezoning item, Marcia Higgins (Ward 4) indicated she wanted to have the city attorney look into a question before voting, so she moved to lay the question on the table. The council voted unanimously to lay the question on the table.

Later in the meeting, when the council reached the agenda item about the site plan, the council took the zoning back up off the table.

Christopher Taylor (Ward 3) led off deliberations by reciting the history of the council’s previous postponement, based on concerns about the already-existing density of the area. He mentioned the council’s decision to refer it back to the planning commission, and the commission’s re-affirmation of the recommended R3 (townhouse) zoning. Taylor stated that he was “unwilling to take that at this time.” So he wanted to postpone the question another 30 days to allow for additional time to reflect on the appropriate zoning for that area – in the context of the city’s master plan and the existing density.

Higgins indicated support for the postponement. She pointed out that it’s the first time the city is applying zoning to this parcel, because the city had just recently annexed the property from the township. There is no pre-existing city zoning. She wanted to see it “a little less dense.”

Sabra Briere (Ward 1), who is the city council’s representative to the planning commission, told the council she would carry the message to the planning commission at its next meeting.

Higgins noted that she didn’t know that there was a particular message to convey to the planning commission, but she encouraged Briere to inform the planning commission that the council had postponed the question and to relate the reason for the postponement.

Stephen Kunselman (Ward 3) said that just because there’s already R3 zoning in the area with several dense townhome developments doesn’t mean it warrants more. At some point, the infrastructure can’t handle it. The traffic on Ellsworth already gets backed up, especially now that Costco has opened, he said. He was looking forward to different zoning. He allowed that R1C might not fit, but said that the topography of the property had to be respected. Townhomes on a hill would require a significant amount of earthmoving – and that has consequences for everybody downhill. As downhill properties he noted Arbor Oaks and Forest Hills. There’s a need to think outside the box, when it goes back to the planning commission, Kunselman concluded. [This remark by Kunselman may have contributed to confusion about expectations for possible planning commission action. According to planning manager Wendy Rampson, who was contacted by The Chronicle later in the week, there has been no direction given to planning staff or the commission to consider the matter further.]

Outcome: The council voted unanimously to postpone the zoning until its April 15, 2013 meeting. The site plan was also similarly postponed, in a separate vote.

Zoning Board of Appeals Chair

On the March 18 agenda was a resolution to appoint a chair for the zoning board of appeals (ZBA): Alex Milshteyn, who already serves on the ZBA. He’s a replacement for Carol Kuhnke, who resigned in December 2012 after being elected judge of the 22nd Circuit Court. The ZBA is somewhat different from most other city boards and commissions, which elect their own chair from within the body. The council appoints the chair of the ZBA.

Sabra Briere (Ward 1), who previously served on the zoning board of appeals, introduced the item. She said she’d enjoyed having the leadership of Carol Kuhnke as chair. Briere was confident that Milshteyn would also be an effective and capable chair of the ZBA.

Outcome: The council voted unanimously to appoint Alex Milshteyn as chair of the ZBA.

The Shoppes at 3600

Before the council for its consideration was the site plan as well as the rezoning for a proposed retail development at 3600 Plymouth Road, just west of US-23 – called The Shoppes at 3600.

Aerial map of the location for The Shoppes at 3600, located off of Plymouth Road west of US-23.

The developer hopes to build a 9,490-square foot, one-story retail building, to be constructed in what’s now the parking lot and front yard for a hotel, at an estimated cost of $1 million. The building would have space for several businesses, including a restaurant with a one-lane drive-through window and outdoor seating. An existing shared driveway off of Plymouth Road would be used to access the site. The site plan calls for 33 parking spots and four covered bike parking spots near the entrance.

The March 18 agenda items on the site plan and the rezoning – from R5 (motel-hotel district) to C3 (fringe commercial district) – followed an initial vote of approval for the zoning at the council’s Feb. 19, 2013 meeting. Voting against the rezoning on the initial consideration was Stephen Kunselman (Ward 3).

The planning commission had recommended approval at its Jan. 15, 2013 meeting. The project had been postponed by the commission on Nov. 7, 2012.

The site is located in the same complex as the Holiday Inn North Campus. Responding to some planning commissioner concerns voiced at the November 2012 meeting, the developer had provided an alternative site plan that was reviewed on Jan. 15. But the developer sought approval for the original layout, which was ultimately recommended for approval by the planning commission. The owner is listed as Ann Arbor Farms Hotel Corp., with property being developed by Diverse Development in Holland, Ohio.

The Shoppes at 3600: Public Hearings

Thomas Partridge questioned the idea that the item could appear on the council’s agenda without the sponsorship of a councilmember or the mayor. He called for an amendment to zoning that would ensure access to the property for affordable transportation.

Warren Attarian addressed the council and objected to the site plan. He noted that it’s the first thing you see coming into the city, and there were five shops squeezed into a little more than an acre. The back of the buildings is up against the sidewalk, with no setback, while the front of the buildings is interior to the development. He noted that the planning commission had asked the developer to present an alternate layout, which the developer did. Although the planning staff had determined the alternate plan was feasible, the developer didn’t pursue it. He asked the council not to approve the site plan, venturing that the real problem was trying to squeeze five stores into one acre.

The Shoppes at 3600: Council Deliberations

Jane Lumm (Ward 2) asked city planning manager Wendy Rampson to explain the landscaping requirements. Rampson explained that the site has frontage on M-14, which requires right-of-way buffering. Some mitigation was also required for some landmark trees. There would be trees around the perimeter, Rampson said, as wells as some lilacs and shrubs on Plymouth. She thought that red oaks would be planted along the M-14 on-ramp.

Rampson explained that the back of the building is the north side.

Outcome: The council voted unanimously to approve the rezoning. Later in the meeting, the council voted to approve the site plan over the lone dissent of Stephen Kunselman (Ward 3).

Liquor Licenses

The Ann Arbor city council considered a resolution objecting to the renewal of the liquor license for The Arena – a bar located on the northeast corner of Washington and Fourth in downtown Ann Arbor.

Jane Lumm at the March 6, 2013 hearing on the non-renewal recommendation of The Arena’s liquor license. She served as hearing officer.

The basis of the objection to the renewal, which needs to be forwarded to the Michigan Liquor Control Commission for final action, was The Arena’s failure to pay a combined $8,755 of 2011 taxes and an additional default judgment. The default judgment was made in the 15th District Court by then-judge Julie Creal in favor of the city for $1,659. It involved non-payment for police services, in connection with outdoor tents for an Oktoberfest event.

A hearing on The Arena’s liquor license renewal was held on March 6, 2013 – presided over by hearing officer Jane Lumm, who represents Ward 2 on the city council. Based on evidence presented by assistant city attorney Bob West, who called city clerk Jackie Beaudry and city treasurer Matt Horning as witnesses, Lumm concluded that the recommendation of non-renewal should be placed on the March 18, 2013 city council agenda.

Also on March 6, a hearing was conducted on the non-renewal of the license for Banfield’s Bar & Grill. Lumm issued a similar verdict on that case, but in the meantime, Banfield’s paid the taxes owed. So Banfield’s was on the agenda with three other establishments that were recommended to have their licenses renewed. The three other establishments recommended for renewal by the council on March 18 – all of which had rectified any issues prior to the March 6 hearings – included Aut Bar, Bagger Dave’s Legendary Burgers & Fries, and Café Zola.

At the council’s March 18 meeting, Lumm introduced the item on objecting to renewal of The Arena’s license. She took the occasion to thank the staff in the city attorney’s office, the building department, fire department, police department, the city clerk’s office and the treasurer’s office. She also thanked her fellow liquor license review committee members, Mike Anglin (Ward 5) and Sumi Kailasapathy (Ward 1).

Outcome: On separate votes, the council recommended renewal of four liquor licenses, and objected to the renewal of The Arena’s license. Based on a subsequent Chronicle visit to The Arena, the owner’s intent is to pay the outstanding bills before the state liquor control commission rules on the license renewal.

Sign Ordinance Amendments

The council was asked to give initial approval to changes in the city’s sign ordinance. If the changes are ratified at a second and final vote, certain kinds of digital signs with specific limitations would be allowed in the city. [.pdf of proposed outdoor advertising ordinance]

Billboards on West Liberty Street at First, near the edge of downtown Ann Arbor, looking east. (Photo illustration by The Chronicle.)

But under the ordinance revisions, new billboards – signs with an area greater than 200 square feet – could not be constructed. And existing signs of that size could not have electronic features added to allow for changeable text or images.

The existing sign ordinance does not allow for any changeable text, except for “noncommercial information which requires periodic change” – like time and temperature. So the proposed changes to the ordinance would allow for changeable portions of a sign, subject to the limitation that the changeable portion of the sign not be more than half the area of any sign and no more than 30 square feet per sign and 15 square feet per sign face. Additional limitations would prevent flashing and scrolling – by not allowing changes to content more often than 15 minutes.

The proposed ordinance changes would place a maximum brightness of any illuminated sign, including those that are digital/electronic: 5,000 nits during the day and 100 nits at night, and in no case greater than 0.1 foot-candles above the already existing amount of light at a residential property line. One nit is defined as one candela per square meter. And a candela is about the amount of light produced by a common tallow candle.

By way of comparison, an iPhone 5 display is reported to have a brightness of about 500 nits.

The ordinance revisions come in the context of a moratorium on digital billboards that’s currently in place throughout the city, but is scheduled to expire on April 11, 2013. The city extended the moratorium for an additional 180 days at its Oct. 1, 2012 meeting, after the moratorium was first enacted for 180 days at the council’s April 17, 2012 meeting.

Falling under the moratorium are “billboards commonly referred to as ‘electronic message centers,’ ‘electronic message boards,’ ‘changeable electronic variable message signs,’ or any billboard containing LEDs, LCDs, plasma displays, or any similar technology to project an illuminated image that can be caused to move or change, or to appear to move or change, by a method other than physically removing and replacing the sign or its components, including by digital or electronic input.”

The moratorium resolution passed by the city council acknowledges that such signs are prohibited by the city’s current sign ordinance. From that ordinance, the list of prohibited signs include those that “… incorporate in any manner or are illuminated by any flashing or moving lights other than for conveyance of noncommercial information which requires periodic change.”

Sign Ordinance Amendments: Council Deliberations

Christopher Taylor (Ward 3) recited the history of the moratorium. The proposed revisions essentially preserve the status quo, he said, by allowing no new billboards. The current ordinance allows for up to 30 billboards citywide, and there are currently 28. That meant that the change eliminates the possibility of an additional two billboards. He stressed that existing billboards could continue to exist as nonconforming signs and continue to be repaired and maintained.

Gas station price signs are covered by the ordinance revisions, he said. There are also a number of changes intended to improve clarity.

He noted that the moratorium expires April 11. If the ordinance revision were given initial approval that evening, and final approval on April 1, then the ordinance changes would be enacted before the expiration of the moratorium.

Sally Petersen (Ward 2) asked for some clarification of the ordinance revisions. Are digital signs permitted as long as they’re not scrolling? How big can they be?

City planning manager Wendy Rampson explained that the ordinance revisions dealt with digital components, because it’s become a popular sign form in the industry. The ordinance would allow for a small amount of changeable copy both for on- and off-premise signs. But the amount of the changeable area could not be more than 50% and could not total more than 15 square feet per side. It would allow for different worship services to be displayed at a church, she explained, or gas station price changes. But she pointed out that the ordinance language specified the changeable part couldn’t change more frequently than once every 15 minutes and couldn’t “scroll, explode, dance” – because that’s perceived as a distraction to vehicular traffic.

The ordinance language states:

Changeable copy shall not and shall not appear to flash, undulate, pulse, blink, expand, contract, bounce, rotate, spin, twist, or otherwise move.

Mike Anglin (Ward 5) asked for some illustrations to make clear what the ordinance language meant, saying, “our imaginations aren’t that fertile” and “the words don’t help.” He felt it was entirely too complicated for someone not familiar with the industry.

Margie Teall (Ward 4) wanted to know if the Pioneer High School sign at Stadium and Main would be affected, venturing that the city did not have jurisdiction over the school. Rampson confirmed that was the case, just as the city had no jurisdiction over the signs at the University of Michigan football stadium.

Petersen wanted to know if Anglin was interested in postponing the vote. Anglin didn’t feel a need to postpone – as long as the staff provided the council with the information he’d requested by the time of the second vote. Anglin ventured that the corner of Madison and Main was “beginning to look like Coney Island.”

Chuck Warpehoski (Ward 5) and Jane Lumm (Ward 2) expressed tentative support for the changes – and were content to vote yes at first reading.

Petersen said she was “hard-pressed to support this at first reading.” She felt that the use of signs is an opportunity to impact economic development. She also pointed out the school district and the University of Michigan don’t have to comply and that would result in a lack of uniformity.

Outcome: The council voted to give initial approval of the revisions to the sign ordinance. Dissenting were
Marcia Higgins (Ward 4) and Sally Petersen (Ward 2).

Argo Parking Lease

A resolution on the council’s March 18 consent agenda related to a $3,000 lease to accommodate overflow parking for the Argo canoe livery. The lease had been recommended for approval by the city’s park advisory commission at its Feb. 26, 2013 meeting. The lease of a parking lot at 416 Longshore Drive – with about 40 spaces – will cover Saturdays, Sundays and holidays from May 25 to Sept. 2, 2013, with an option to renew administratively for two successive one-year periods.

City parks staff reported that the overflow parking at this lot had been used during the 2012 season, and they recommended continuing the lease. According to city records, the land is owned by the Stewardship Network.

Items on the consent agenda are voted on as a group by the council, but any of the items can be separated out for separate discussion. Sabra Briere (Ward 1) asked that the item be separated out.

Briere had heard concerns that the lot is not very well-graded and that there’s a lot of runoff. She wondered if there was a way for the city to enforce maintenance of the lot through the lease. Sumedh Bahl, the city’s community services area administrator, told Briere that would have to be negotiated, and had not been a part of the conversation that went into the lease that the council was being asked to approve.

Briere asked for postponement.

Outcome: The council voted unanimously to postpone the parking lot lease.

Communications and Comment

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

Comm/Comm: Fire Department Resource Deployment

At the request of Marcia Higgins (Ward 4) during communications time, city administrator Steve Powers summarized the feedback that had been heard on a proposal made about a year ago to reconfigure fire stations in the city. The proposal called for deploying a total of three out six existing fire stations – instead of five, which is the current deployment. Powers said what was heard at the seven public meetings and on the online A2 Open City Hall was a lot of divided opinion. He indicated that the significant policy question emerging from that discussion related to the responsibility of the fire department for emergency medical response.

Powers characterized the feedback that staff had received as consistent with the council’s discussion at its March 11, 2013 work session. At that session, there seemed to be a clear majority view that the 3-station plan would not go forward. Higgins indicated interest in exploring alternate ideas and wanted an opportunity to ask more questions. [At the work session, she'd mooted the idea of getting a cost analysis for restoring staffing to six stations.] The result of the back-and-forth between Higgins and Powers was an understanding that deployment of fire department resources might be part of the council’s work session on March 25.

Comm/Comm: Transparency

Between 1:30 a.m. and 2 a.m., two people weighed in on the topic of transparency. Mark Koroi recalled the issue that had arisen in 2009 in connection with emails sent between councilmembers during council meetings. Currently, he said the council has a problem with the way it conducts its closed sessions. He told the council more public commentary was needed – an allusion to the fact that the council does not allow public commentary at its work sessions.

[Under Michigan's Open Meetings Act, a gathering of more than a quorum of councilmembers does not necessarily constitute a "meeting" under the statute, which would require that members of the public are allowed to address the body. However, at work sessions, councilmembers engage in deliberations toward decisions, which makes their work sessions meetings under the statute.]

Koroi also mentioned an appeal that’s been filed on the Dream Night Club case. [The city objected to the renewal of the club's liquor license last year – alleging that the establishment was an ongoing nuisance – and the state liquor control commission followed that recommendation.]

John Floyd led off his comments on a lighthearted note, saying that in deciding his NCAA basketball tournament picks, he’d wanted to go with Michigan, but Wisconsin seems like they’re really starting to gel.

On the topic of transparency, he noted that people speak about how important transparency is. With respect to the legal advice that the council had received on the possible moratorium for D1 site plans, he allowed that it makes sense to receive the attorney’s advice in private. Councilmembers had indicated they’d based their vote on that advice. Now that the council had received the advice and voted, he suggested, the council could choose to release the written advice to the public. It’s not about what council is required to do, Floyd said, but rather about what the council may do. [The sentiment expressed by Floyd had been incorporated in The Chronicle's commentary and questions on the city's draft FOIA policy.]

Comm/Comm: Skating Rink

Alan Haber reminded the council of a continuing effort to have a public skating rink on top of the Library Lane underground parking garage, for people to have fun. [Recent Chronicle coverage of this topic includes the Feb. 26, 2013 park advisory commission meeting when public commentary was delivered advocating for a park atop Library Lane, and a more formal discussion at PAC's March 19, 2013 meeting.]

Present: Jane Lumm, Mike Anglin, Margie Teall, Sabra Briere, Sumi Kailasapathy, Sally Petersen, Stephen Kunselman, Marcia Higgins, John Hieftje, Christopher Taylor, Chuck Warpehoski.

Next council meeting: Monday, April 1, 2013 at 7 p.m. in the second-floor council chambers at city hall, 301 E. Huron. [Check Chronicle event listings to confirm date.]

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Billboards on West Liberty Street at First, near the edge of downtown Ann Arbor, looking east. (Photo illustration by The Chronicle.)

But under the ordinance revisions, new billboards – signs with an area greater than 200 square feet – could not be constructed. And existing signs of that size could not have electronic features added to allow for changeable text or images. Voting against the revisions were Marcia Higgins (Ward 4) and Sally Petersen (Ward 2).

The existing sign ordinance does not allow for any changeable text, except for “noncommercial information which requires periodic change” – like time and temperature. So the proposed changes to the ordinance would allow for changeable portions of a sign, subject to the limitation that the changeable portion of the sign not be more than half the area of any sign and no more than 30 square feet per sign and 15 square feet per sign face. Additional limitations would prevent flashing and scrolling – by not allowing changes to content more often than 15 minutes.

The proposed ordinance changes would place a maximum brightness of any illuminated sign, including those that are digital/electronic: 5,000 nits during the day and 100 nits at night, and in no case greater than 0.1 foot-candles above the already existing amount of light at a residential property line. One nit is defined as one candela per square meter. And a candela is about the amount of light produced by a common tallow candle.

By way of comparison, an iPhone 5 display is reported to have a brightness of about 500 nits.

The initial approval of the ordinance changes came at the council’s March 18, 2013 meeting. [.pdf of proposed outdoor advertising ordinance]

The ordinance revisions come in the context of a moratorium on digital billboards that’s currently in place throughout the city, but is scheduled to expire on April 11, 2013. The city extended the moratorium for 180 days at its Oct. 1, 2012 meeting after it was first enacted for 180 days at the council’s April 17, 2012 meeting.

Falling under the moratorium are “billboards commonly referred to as ‘electronic message centers,’ ‘electronic message boards,’ ‘changeable electronic variable message signs,’ or any billboard containing LEDs, LCDs, plasma displays, or any similar technology to project an illuminated image that can be caused to move or change, or to appear to move or change, by a method other than physically removing and replacing the sign or its components, including by digital or electronic input.”

The moratorium resolution passed by the city council acknowledges that such signs are prohibited by the city’s current sign ordinance. From that ordinance, the list of prohibited signs include those that “… incorporate in any manner or are illuminated by any flashing or moving lights other than for conveyance of noncommercial information which requires periodic change.”

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