Police-Courts: Get Your Shovels Ready

Ann Arbor City Council (Feb. 2, 2009): “This is one of the most significant things we’ll do this year,” councilmember Leigh Greden said. But he wasn’t talking about the final budgetary approval of construction on the municipal center project (also known as the police-courts facility), which will likely see shovels hitting the ground in two months. Greden was talking about the commercial recycling program, which was passed on its first reading Monday – there’ll be a public hearing and second reading before it receives its final vote. In other business, council tabled indefinitely the resolution authorizing the budget for renovation of the Farmers Market, passed a raft of resolutions connected with the city airport renovation project, and gave approval to a planned project with smaller setbacks than current code allows.

Municipal Facility: Public Commentary

The majority of speakers signed up for public commentary at the start of the meeting were there to address the question of the police-courts facility. Council was considering the construction manager agreement for $35,874,422, representing the final step to approving construction on the facility, which will house the 15th District Court and the Ann Arbor Police Department.

Stewart Nelson: Nelson characterized the building as large and unnecessary. He acknowledged that the police department needs renovation,  so confined his remarks to the courts component of the project and the  $26 million in interest payments the project would require.  He said that the project meant that the city and county would duplicate services like security for the courts, and suggested that the city revisit the county’s offer to re-engineer  government in a collaborative way. Nelson was disappointed that the cost reductions sought in the new building were driving consideration of the possibility that the LEED Gold standard wouldn’t be met.

Harvey Kaplan: Kaplan said he was against moving forward with the police-courts building, citing sinking employment and decreasing general fund revenues. It was not the time to rush ahead with a new police-courts building, he said. Kaplan said that double-digit deficits in the years to come will  lead to cutbacks in services and layoffs in personnel. The current recession was not merely a bump in the road, he said, but rather had no end in sight. He said  we need public discussion on the state of our city economy and that it was a  time for dialogue between citizens and our government.

Virginia Simon: Simon said we can’t afford a project this big at this time, saying that a struggling economy had placed a burden on our citizens, and that the new building will place an additional burden. She characterized it as a luxury we really don’t need,  and that we really can’t afford.  She acknowledged that the current situation is not ideal, but said that it is working. If  it’s a good project, she said, and thoroughly thought out, it’ll go forward, eventually. But now is not the right time, she concluded.

Patricia Lesko: Lesko said that she grew up in Dearborn, where pools and other recreational facilities were free. But Ann Arbor was a municipality that didn’t even plow the snow downtown, she said, citing an Ann Arbor News editorial on the topic. She then quoted extensively from  the campaign literature of current councilmembers that reflected their commitment to basic services. A sampling here. Carsten Hohnke: “We have to get the basics right.” Tony Derezinski: “The fundamental responsibility of the city is municipal services.” Sandi Smith: “The key issue is maintaining the quality of services.” Christopher Taylor: “If you want a council representative who will think long term, vote Taylor. It’s simple – we must live within our means, we cannot spend what we do not have.”

Karen Sidney: Sidney said that the public had heard that the building would make government more efficient,  but she conveyed skepticism at the claim by asking if the city does a better job of plowing streets after construction of the new Wheeler Service Center. Sidney said that the city does not have the down payment on the building in hand, because the $3 million from the sale of the First & Washington parcel has not been transacted. She said that the repayment schedule required by the bonds does not equal the amount the city currently spends on leases. Based on her analysis, an additional $1.1 million  is needed, and when factoring in utilities, the shortfall rises to  $1.5 million. That would mean service reductions, said Sidney. She warned that if council thought a 5% budget reduction is hard right now, that in  2012 and 2013, the city’s projections show a 10% reduction, or 15% if a recommended additional pension fund contribution is made. At that point, if a new building is sitting on the lot, she wondered if the public would think that council had made a wise choice.

John Floyd: Floyd began his remarks by citing a headline in The Onion recently: “Black Man Given Worst Job in America.” He used that to segue to an Ann Arbor News report on collaboration and regionalism in government: “Thank you!” he said. He allowed that it could be that court functions aren’t amenable to consolidation, but that there must be a strong case to make, and asked council to  please make it. “No doubt you believe you’ve made the case, and God in heaven might agree with you,” Floyd said, but several thousand Ann Arbor voters [who signed the Ask Voters First petition] didn’t think they’d made the case. He asked council to sell the case to the public before proceeding.

Municipal Facility: Council Deliberations

Councilmember Marcia Higgins led off council discussion by expressing a desire that the expenditure of contingency funds in the project budget be brought back to the building committee before being spent, and asked city administrator Roger Fraser if council needed to pass a resolution or could just “give direction.” Fraser said he’d interpreted her remarks as such direction. In similar fashion, Higgins asked that the community meeting room option not be further pursued, with Fraser confirming that it was “not a part of the mix.”

Much of council’s deliberations were questions of staff meant to elicit information that was likely not new to councilmembers. Councilmember Stephen Rapundalo asked the city’s construction manager on the project, Bill Wheeler, about pricing for construction and labor. Wheeler said that costs are low now, but can be expected to go up when the federal stimulus package starts to generate many other projects and the labor market tightens up.

Rapundalo asked what would happen to the bonds if they elected not to build, given that they’d already been floated. Paul Stauder, the city’s bond advisor, said the bonds had been been issued at 4.77% and would be called in 2018. To defease them would cost something like $6 million, Stauder said. Defeasement would entail taking the $26 million from the bond issuance and putting the amount in interest-bearing Treasury securities, which currently yield between 2 and 3% – less than the 4.77% payments the city would need to make on the bonds. The difference between 4.77% and the lower percentage means, said Stauder to council, “you’d be under water,” to the tune of around $6 million.

At the conclusion of the meeting during public commentary, the suggestion was made to simply “buy back the bonds.” Reached by phone the day after the meeting, Stauder clarified that while this was technically a possibility that could be pursued, its outcome was unknown. The bonds are not callable until 2018, which means that they could almost certainly not be bought back from the bond holders at face value – the people who bought the bonds would expect a premium. So while the city could make an offer to buy back the bonds from those who purchased them, there is no way to force a bondholder to surrender their bonds at any price. If the city were to tender such an offer, some bond holders might accept while others might not, in which case the city could, as one option, choose to buy back those bonds from holders willing to sell, and defease the rest.

Rapundalo elicited from Crawford some discussion of the cost savings through collaboration with the county on a combined data center. Crawford said that the county would be paying around $35,000 a year in rent, and that the county’s IT services would be moved into the Larcom Building by the end of this month, then eventually re-locating to new police-courts building.

From city administrator Roger Fraser, Rapundalo elicited the lack of any communication from his counterpart at the county, Bob Guenzel, about the possibility of continuing to lease space for the 15th District Court on a long-term basis. Fraser said that in conversation, Guenzel had indicated that the county’s space needs hadn’t changed.

Councilmember Mike Anglin indicated that he’d been against the project all along. The council does a lot of talk about affordable housing and diversity, he said, but are pulling the bar higher and higher. He noted that the CFO of the city, Tom Crawford, had told council about the possibility of a 3% deficit by 2010, rising to 7% by 2011. It wasn’t the time to undertake a building project like this, Anglin said. He asked that the city continue to negotiate with the county, even in the 11th hour. Every argument that councilmembers present as a positive, Anglin said, was countered by citizens who had a different perspective on it. He said that he supported the need to renovate the police facilities. He noted that the library board had the wisdom to pull back from their planned building project and that council might do well to follow their example.

Mayor John Hieftje weighed in by noting that in the summer of 2008 the city’s bond rating had been improved, reflecting confidence of the market that the city was fiscally responsible, and that Moody’s (the bond rating agency) knew full well at that time the city was moving forward with this project. From Tom Crawford, Hieftje elicited a cost of not moving forward at $10 million: $6 million for the bond defeasment, plus $4 million in design costs already paid. Not moving forward would, said Hieftje, leave $10 million on the table.

Councilmember Margie Teall asked Wheeler to clarify whether the construction contract had been awarded as a no-bid contract. Wheeler said that they’d hired Clark Construction in a quality-based selection process. Clark would take bids on the subcontracting work, and those bids would be presented as if they were the city’s bids. Greden asked for clarification about the “quality-based selection process.” Wheeler said that they’d started with six firms, winnowed it down to three and determined that Clark was the most able of  the three. If someone were to claim that it was not a competitive bidding process, asked Greden, “That would be a false statement, isn’t that right?” Wheeler allowed it was a competitive process but it wasn’t a lowest bid process. At the conclusion of the council meeting during public commentary unreserved time, Karen Sidney would tell Greden that the bidding process would not meet the standard for competitive bidding required by the school system.

Councilmember Sandi Smith took up the question raised by Stew Nelson during public commentary about the LEED Gold status being in jeopardy. Wheeler said that one cost-saving option would be to make it a less green building. “We rejected that idea,” he said, because council gave the staff the direction to make it an environmentally-friendly building.

Anglin asked Wheeler to specify what areas of the construction would be the first targeted for cost cutting. Answer: They would talk to the mechanical and electrical contractors about “value engineering.” Anglin said he hoped that other improvements not included in the project might be procured through the existing contracts, like a new roof on Larcom, and a new power supply.

Concilmember Carsten Hohnke sought clarification about how much money the project budget was for new furniture. Wheeler said they’d be using existing furniture and equipment, and that there was no money in the budget for new furniture and fixtures.

Hohkne asked Crawford if the funding of the building would come from a reduction in services. Answer: Over the last five years, the city has become more efficient and the building’s funding comes from savings through efficiency, and through debt services with existing cash flow. Crawford said that over the last four years, the project has shrunk in size every year. In the initial vision, the Larcom building (city hall) was going to be knocked down, Crawford said.

In response to the question of what the city would do in December 2009 if they didn’t move forward with the building project, Fraser said, “I don’t have  a good answer to that.” Fraser said they’d spent over 2 years exploring alternatives inside and outside downtown. A task force had spent 10 months looking at 11 alternative sites downtown. The conclusion of that effort was the recommendation that they need to build something. Fraser noted that the city still needed to negotiate the lease with the county to get through the construction period, but that negotiating it into the indefinite future was not a real possibility.

Hieftje challenged those who opposed the building to look at where the city is today having already issued the bonds and spent money on design. If we back away, he said, that leaves $10 million left on the table with nothing to show for it. He compared the construction project with what the new president is asking the country to do: put money into the economy and put people to work. Hieftje said that the last he’d heard from Bob Guenzel was that the city needed to move the courts out of the leased space. Hieftje said he ran into county commissioners as a part of his job all the time and that not once had he heard that the county had changed its mind about where the courts are going to be. For his part, Hieftje said, “I think it’s clear cut.”

Councilmember Sabra Briere did not see it as clear cut. “A voice of dissent is never bad in a democracy, and it’s not irresponsible to be that voice of dissent.” [Editor's note: In council deliberations on the 42 North project, Hieftje had said that voting against it was "irresponsible." Briere voted against approval of 42 North.]

Briere said she wasn’t sitting at the council table when the project was first discussed, but rather at her dining room table and she’d read about it in the newspaper. She said she thought that repairing the existing city hall was more cost effective than constructing a new building. Investing in staff improves morale, she said, and improves services.

Briere noted that the city had submitted its wish list for the stimulus package, and she was startled to see that this project was among those proposed. We’ve been told we have sufficient funding, she said, from a mix of bonds, sale of property, and lease payments. Why, then, is this project included in the stimulus package wish list, she wondered. “Have we been misled?” she asked. She said the city should have specified that they needed $30 million to help improve the project instead of asking for $65 million as indicated on the wish list. She concluded by saying that she was not opposed to it because of the current economic circumstances, but rather that she’d opposed it consistently all along.

Councilmember Christopher Taylor focused his comments on addressing the issue of the current economic situation: How can we go forward on this? Why aren’t we spending it on snow removal or parks? Taylor sought to refute the natural (but incorrect) assumption that we’re dealing with a big pile of cash that can be used for anything. The analogy Taylor drew was to home ownership: “Our rented house is falling apart and our rents are rising.”

The money to pay for building something new, Taylor said, came from the bonds – comparing it to a homeowner’s mortgage. The down payment had come from savings. To raid that money for operating expenses would break faith with council’s predecessors, Taylor said, and saddle those who come after us with the problem. “The price is large, and is enough to make anyone reasonably blanch,” he said, but is commensurate with the value offered.

Councilmember Leigh Greden echoed Taylor’s sentiments. He also acknowledged Briere’s question about the project’s inclusion in the the stimulus package as fair. He clarified that the $65 million figure specified in the “wish list” included both Phase I and Phase II, noting that the current construction project would only be for Phase I. Phase II included a re-skinning of the exterior of the Larcom building.

Saying that Briere’s comments had been reasoned, Greden explicitly declined to assign the same description to some comments from the public voiced that evening or via e-mail. He ticked through some of them. The claim that the contract had been awarded in a no-bid process was false, he said, pointing to information elicited earlier in the deliberations. The idea that we can’t afford it at this time, said Greden, was countered by the fact that labor is cheap right now, and that soon the effect of the stimulus package will be to increase the cost of labor and supplies. As for more collaboration with the county, Greden said, they have their own plans for the space. Alluding to Anglin’s earlier comment about the library board having the wisdom to pull back from their project, Greden said they’d held back because they needed to raise taxes to execute their project, plus they had no credit. Greden concluded by saying that to delay would result in reduction of general fund services, but taking action would not.

For his part, Rapundalo echoed Greden, saying that “as usual” Greden had been extremely thorough. Rapundalo stressed the financial implications, which he felt were not understood by those who were opposed to the project. The city is obligated for the bonds, he said, and would take a penalty there by defeasing them. He noted that we’d also incur extra construction costs by any delays and pointed to the economic opportunities for local trades people. There are no definitive alternatives, Rapundalo concluded.

Briere, for her second speaking turn, reiterated the theme of the importance of respect for dissent. “I want to just remind my colleagues that a voice of dissent is to be respected,” she stated, because a “no” vote represented people in Ann Arbor who wished her to vote “no.” As for the jobs creation benefit, she noted that it would provide employment for construction workers for a year or so, and noted, somewhat dryly, that the city had already employed some architects for $4 million. She noted that one detriment to the building was its design: “It’s a big forbidding building. It would not be a pleasure to enter.”

The critique of the building’s aesthetics caught Teall’s ear. She said that while she respected Briere’s decision to vote against the building, she took issue with her assessment of the building’s aesthetics. She said it would be a beautiful, welcoming space for thousands of people, that it had been designed thoughtfully, and that the public art is going to be amazing.

Councilmember Smith concluded deliberations by responding to Briere’s question about why the project wound upon the stimulus package wish list. She attributed it in part to the shovel-readiness required by the stimulus package. There’s not a project 90 days away from being shovel-ready that isn’t fully funded – it’s in the nature of the request.

Outcome: Passed, with Anglin and Briere dissenting.

Commercial Recycling Program

After Margie Teall proposed some amendments adjusting the time frame for exemptions from the new recycling program – which were quickly passed – councilmember Leigh Greden invited Bryan Weinert, solid waste program coordinator for the city, to step forward. Weinert was asked to give a brief overview of what’s being proposed with the creation of the commercial recycling program and to describe the public process for what Greden characterized as “one of the most significant things we’ll do this year.”

Weinert reported that it had been a two-and-a-half year process, which included business interests plus the city’s environmental commission. It was spurred in part by the lagging recovery rate in the commercial sector compared to residential: Ann Arbor recovers 50% of residential waste as recycled material verus only 20% of commerical waste. Weinert described a variety of public forums as opportunity for feedback. And when queried by councilmember Mike Anglin, Weinert described in more detail that there had been breakfast forums, presentations to business associations, information sent out via the Ann Arbor Area Chamber of Commerce, as well as peer-to-peer strategies. He said they’d been very pleased with the willingness of the commercial sector to work with the city.

So what does the new commercial recycling program do? Weinert said it created a structure for building recycling services in the community, offered through the city or through other private haulers. The key feature is the creation of franchise authorities for collection of waste in the commercial sector. Franchises are designed to provide lower cost, and a cost structure that incentivizes recycling. The way Weinert described the predominant current model, once a contract is in place, you’ve got an 8-yard container, say, and you have to pay for it anyway, so that encourages waste. The new program allows for reductions in container sizes, hence reduction in costs, as businesses reduce the amount of waste and increase their recycling.

Carsten Hohnke agreed with Greden’s assessment of the significance of the program, saying: “I think this is going to be one of the more important things we do this year.” Hohnke gave it as an example of how a smart green policy can be the best economic policy. He cited the 60% recovery goal as both environmentally sound, plus leading to better revenues from the recycled material. He said the new program would be strengthening a key asset: the materials recovery facility.

Teall had thanks all around for everyone who’d worked on the program, from Weinert to Steve Bean, who chairs the city’s environmental commission. She noted that it had been a long haul with her first emails on the topic dating back three years.

Mayor John Hieftje took a cue from Teall’s reference to the history of the work on the new commercial recycling program to cite his own recycling credentials which date back nearly more than a decade to the time when he served as board chair at Recycle Ann Arbor. He said that one of the goals back then was to cut down on the amount of material going into the landfill and he characterized the new program as the next big step.

Related to the recycling theme, though not restricted to the commercial sector, were the remarks during public commentary of UM student Alex Levine, who gave council an update from last council meeting on his vision to see No. 6 plastics recycled. He said that he’d talked to some councilmembers, heard that it’d been investigated, but that it was problematic because the companies identified that might process the material wound up shipping the material overseas. Levine said that he would be doing further research and that he hoped council would take another look at the matter when he presented what he’d found.

Outcome: Passed unanimously on first reading. (There’ll be a future public hearing and second reading.)

[Editorial aside: At the beginning of the meeting, Christopher Taylor took some gentle teasing from fellow councilmember Sandi Smith as he returned the council chamber's trash container to its place: "Taking out the garbage?" To which Taylor replied, "I do what I can," but with no apparent winking emphasis on the word "can." A missed opportunity that the Ward 3 representative might well regret, when it comes time to count the best council quips for the year.]

Farmers Market Renovation

The Farmers Market renovation had been postponed from last council meeting, and it had been indicated at caucus the previous evening that the project, which had grown to include a storm water treatment component (possibly in the form of a fountain), would be tabled. That’s in fact what happened, with the motion to table coming from Sabra Briere, getting a second from Stephen Rapundalo. Marcia Higgins got clarification that the tabling would be indefinite. Hieftje alluded to a memo that everyone had received from staff on the subject. Council voted without further discussion.

During public commentary reserve time, Chris Hildebrand addressed the issue of the renovation by alluding to the adage: If all you’ve got is a hammer, everything looks like a nail. When the administration of the Farmers Market transferred to the city’s parks department, she said, it looked to them like a park. “It’s not a park,” she said. The function of the market is to provide access to fresh food and as a part of that access, parking places are inherently necessary, as contrasted with a park. She said that we should be discouraging birds and rodents from the Farmers Market, not encouraging them to appear. “I simply beg you to keep it a Farmers Market,” she concluded.

Outcome: Motion to table indefinitely passed unanimously.

Wintermeyer Office Building Planned Project

This agenda item attracted the attention of Tom Partridge, who spoke against it during the public hearing, saying that the proposal would demolish two houses, with no provision that affordable housing be built in its place.

It had already drawn scrutiny the previous evening at caucus from councilmember Sabra Briere, who was concerned that the requested smaller setback in the front of the building reflected a desire to build to a new standard for area, height, and placement that had not yet been approved by council.

At the council meeting, Briere asked Mark Lloyd, head of planning for the city of Ann Arbor, to clarify. Lloyd said that the project does conform to the proposed (but as yet not approved) standards for the front setbacks, but that on the other sides, the project conforms to existing code.

Lloyd said that what might be overlooked in reflecting on this issue is that the direction from planning commission and from council to the planning staff has been to make sure that they adhere to sustainable development strategies, and that pedestrian access, reflected in smaller front setbacks, is one example.

Lloyd said that designs with a parking lot in the front are a standard suburban design technique and are consistent with current code, which has a more suburban character. Even though the new standards are not in place, the project is in line with what has been proposed, and the reasons for wanting to create the smaller setbacks go beyond the fact that it’s contained in a proposed document.

Briere also took up Partridge’s issue about the demolition of the houses on the site, and asked Lloyd to clarify for the public whether their current use was residential. Lloyd said that they were not currently, and that it wasn’t clear when the last time the structures had been used in that way.

Outcome: Approved unanimously with 7 members at the table (councilmembers sometimes filter away and back).

City Airport Environmental Impact Study

Council got a description of how the environmental impact of the planned reconfiguration of the city’s airport runway will be studied. Matt Kulhanek, the manager of the airport, introduced Molly Lamroeux, of the Michigan Department of Transportation (MDOT), who described how the project would conform to the National Environmental Policy Act (NEPA), and would include the formation of a citizen advisory group. There would be a noise impact analysis study as well as other impact studies. There would be no less than a 30-day public comment period after the conclusion of the study, which would take 6-9 months. The anticipated date of the public hearing would be fall 2009, she said, with the design work completed in early 2010.

Kulhanek also introduced Amy Eckland of the consulting firm JJR, who described in more detail what the public process would be like. Key would be the formation of the citizen advisory committee (CAC). The CAC would consist of 12-14 people, who would meet throughout the project, providing the team with feedback. The CAC would include a wide array of people, Eckland said, with the requisite expertise so that they can provide feedback: adjacent property owners, business owners, pilots and homeowners, from Pittsfield Township as well as from Ann Arbor. There would be three meetings by the project team with CAC: (i) beginning, (ii) middle, and (iii) end. The final meeting in the fall would be a preview of the public hearing, Eckland said.

Council considered a host of separate resolutions authorizing funding for the project.

Councilmember Leigh Greden sought clarification on the funding sources. Answer: 80% federal dollars,  17.5%  state, and 2.5% from the city’s airport enterprise fund.

Outcome: Passed unanimously.

Golf Fee Modification for 2009 Season

In this case “modification” is not a euphemism for “increase.” A scanned PDF of the Golf Fee Modification Schedule 2009 shows that many of the changes from the 2008 fee schedule reflect decreases designed to make the city’s two golf courses more competitive with other facilities in the market.

However, the increase in the senior citizen qualification age from 56 to 57, with a planned increase each year until it reaches 62, drew the criticism of Tom Partridge during the public hearing on the matter. Partridge characterized the change as discriminatory on its face, and said that it had been brought to the public without any explanation as to why it’s on the agenda, let alone why it should be passed. Partridge characterized the resolution blatantly discriminatory based on age, and asked that the proposed increase be struck down.

Outcome: Passed unanimously with no council discussion.

Tom Partridge

In addition to the public hearings mentioned above, Tom Partridge weighed in, as he often does, at public commentary reserved time, as well as during the unreserved time at the end of the meeting. He called on the mayor, the city council, and all other levels of government to end discrimination in all facets of services in the city, the county and the state – starting with the Ann Arbor Transportation Authority. “I am a victim,” he said, of being cut off from AATA group ride services to the 148-apartment affordable housing development where he lives, off of Jackson Road. Since the AATA stopped serving the area west of Wagner and Jackson, he had no access to service.

At the conclusion of the meeting, he used his time  to talk about regionalization of services countywide and throughout southeast Michigan. Regionalization should focus on transportation, housing the homeless, and extending healthcare that is now unavailable to the most vulnerable. He said it was gratifying to find out that an Ann Arbor News reporter had witnessed his calls for regionalization. But, he said, the AATA board, which had been appointed by Mayor Hieftje, with the consent of city council, continued to provide service on a discriminatory basis. When Partridge talked through the 3-minute time clock beep, Hieftje admonished Partridge: “Sir, your time is up.” At this, Partridge gave his standard call for the time limits on public speaking to be waived for senior citizens [Partridge is a senior]. Hieftje tried again with, “Your time is up, would you please stop!”

Partridge finished and council went into closed session to discuss land acquisition.

Misc. Communications

Councilmember Christopher Taylor advised that the Burns Park Players production of “Annie Get Your Gun” would begin on Friday, Feb. 6, continuing with performances the following weekend as well. Taylor, who has performed in past productions but not this one, said that Eva Rosenwald, his wife, had been selected to play Annie.

Councilmember Margie Teall announced that the Dicken Woods annual candlelight walk would be held on Tuesday, Feb. 3.

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

Absent: Tony Derezinski

Next Council Meeting: Tuesday, Feb. 17, 2009 at 7 p.m. in council chambers, 2nd floor of the Guy C. Larcom, Jr. Municipal Building, 100 N. Fifth Ave. [confirm date]