Split DDA Board Agrees on Splitt

But who's the mayor?

Downtown Development Authority board meeting (July 1, 2009): The Ann Arbor DDA wound up its current fiscal year with a frank and transparent disagreement about its future governance as a body, both in terms of its officers and its appointments. The disagreement was also reflected in connection with the specific substantive issue of raising parking fees at the 415 W. Washington lot.

An expected controversy over variable parking fees elsewhere was avoided when a scheduled resolution to introduce new variable-rate on-street parking fees – which would have increased parking rates and generated around $250,000 in extra revenue – was postponed until September, the board’s next scheduled meeting.

September is also when the question of who will be the board’s treasurer will be decided, with the board unable to choose between Sandi Smith and Roger Hewitt for that position during board elections. The board did arrive at selections for its new chair (John Splitt), vice-chair (Joan Lowenstein) and secretary (Keith Orr).

In other business, the board granted nearly $400,000 to the getDowntown program for the go!pass, extended a $50,000 arts grant re-directing the money towards performing arts organizations, authorized $25,000 for additional recycling containers to be placed downtown, approved $16,000 in grants to merchant associations to encourage attractive window displays, and authorized sponsorship for travel to the International Downtown Association Conference.

In the course of the meeting, city councilmember Leigh Greden’s attendance and vote in place of Mayor John Hieftje, who is a member of the DDA board, generated discussion of interest to specialists in civics.

How Much Does Parking Cost, Mr. Mayor?

Deliberations on the question of raising parking rates at the 415 W. Washington lot led to the following question: Who has been appointed to the DDA board – John Hieftje – in virtue of his position as elected mayor – or “the mayor” – whoever might be acting in that capacity at a given time? Before considering that question, we consider the matter of the 415 W. Washington lot.

Parking at 415 W. Washington

The background of the proposed parking fee increase at the 415 W. Washington lot is the proposed installation of parking meters near downtown by the city of Ann Arbor, partly in order to generate up to $380,000 of revenue as a part of the FY 2010 budget adopted earlier this spring.

If parking meters aren’t installed in all the areas specified in the FY 2010 budget – there was resistance to putting them in residential areas, for example – then the revenue shortfall needs to be addressed. And part of the strategy for addressing that shortfall is to raise the parking rates on the 415 W. Washington surface lot and to adjust the agreement between the DDA and the city concerning revenues from that parking lot. That adjustment would entail that revenues in excess of capital and operational costs would go to the city instead of being split between the DDA and the city.

The proposal was worked out by Sandi Smith – who serves on the Ann Arbor city council as well as the DDA board – together with councilmembers Sabra Briere, Mike Anglin, and Carsten Hohnke. It was approved by the city council at its last meeting.

In order to be put into place, however, the plan requires the cooperation of the DDA. That was the proposal before the board on Wednesday.

The board considered a resolution mirroring the proposal passed by city council to change the parking rates at the 415 W. Washington lot. The proposal was to increase the monthly rate from $40 to $80 and to change the entrance fee from $2 to $3. The initial agreement struck between the city and the DDA on this particular lot had specified that the proceeds from the lot would be split – after the capital improvement costs and operating costs had been subtracted for the DDA. The proposal is essentially a mechanism to forestall the installation of parking meters in residential neighborhoods near to the downtown, instead providing replacement revenue for those meters.

Greff said she had problems with the proposal. Even though it represented a relatively small amount of money, she said, it goes against the DDA principle that proceeds from parking fees go back into the overall transportation program of the DDA. It sets a precedent, she said, that profit from parking should go to the city of Ann Arbor’s general fund, which had negative implications for how the parking agreement would be renegotiated with the city. [Deliberations on 415 W. Washington took place with the background of eventual negotiations between subcommittees of the DDA and the city council to possibly renegotiate the parking agreement between those two groups.]

Greff also noted that a revenue stream from a surface parking lot going to city coffers meant that there was a financial disincentive on the part of the city to close a surface lot. Board chair Jennifer Hall stated that it was not in the DDA’s interest to accept the rate change. She noted that it was a benefit for the neighborhoods, where parking meters would not be installed, but that it allowed the DDA parking system to become a funding mechanism for the city.

Sandi Smith, who had championed the proposal on city council, countered the objections of Greff and Hall by saying that she saw it as a temporary thing that fell outside the parking agreement between the DDA and the city. She said she thought it was a good way to solve a budget problem on very short notice and considered the plan to be very temporary.

Hall responded by saying that the DDA always talked about parking as a system and that the parking agreement talks about the parking system – the context of the discussion should still be the parking agreement between the city and the DDA, she contended. She reiterated that she completely sympathized with the situation of the neighbors in the areas where the city wanted to install parking meters.

Board member Russ Collins said he agreed with everything Greff said, and continued by saying that the board needed to internalize the principles she’d described. But for all the reasons that Greff said she was against adopting the rate increase, Collins said he was for it. He characterized the whole proposal as a compromise, saying that the hallmark of a compromise is when everyone is equally unhappy. He noted that the board was unhappy because of the reasons Greff had specified. Keith Orr echoed Collins’ sentiments that the proposal reflected a good compromise.

On the initial vote, the resolution appeared to pass with dissent from Hall, Greff and Gary Boren.

Who’s the Mayor?

With 10 members present and voting, the three dissenting votes meant that the motion had the minimum seven (out of 12) votes it needed for passage. So Greff raised the question of whether Leigh Greden’s vote as a “proxy” for the mayor should count. She noted that the enabling legislation in the state statutes specified that the chief executive officer of the municipality was designated as a member of the board. She noted that Leigh Greden was not, in fact, the mayor. Greden then clarified that in the order of succession specified by city council, he was in fact the acting mayor at the time.

In relevant part, the order of succession goes like this: Hieftje, Mayor Pro Tem Marcia Higgins, Margie Teal, Greden. Greff allowed that this was the order of succession, but said that based on her communication with the DDA’s legal counsel, the role of the mayor on the DDA board was separate and distinct from his role as mayor.

What the subsequent discussion among board members showed was that the issue boils down to this: Who is on the DDA board – John Hieftje, because he’s currently the elected mayor, or “the acting mayor,” whoever that might be at any given time?

In the end, Boren said that he personally did not want to push the issue at that point, saying the matter could simply be re-voted at the next meeting when Hieftje could be present. Smith argued against a delay, saying that if the resolution did not pass at that day’s board meeting, the city administrator would start ordering parking meters for installation into neighborhoods.

Collins noted that the vote had been taken and it was on the record. Under parliamentary rules, someone voting with the prevailing side on a particular motion has the option of moving to reconsider the vote. Having voted with the prevailing side, Roger Hewitt did exactly that. Subsequent deliberations consisted of Smith warning of the consequences for any delay.

Boren then switched his vote from before, saying that it was a lucky opportunity to be able to consider the important substantive question of what the statute actually required. He suggested that whatever interpretation the state statute was given, it might be appropriate for the city and the DDA to arrive at a legally binding agreement on the specific question of the mayor’s position on the DDA board.

Outcome: The resolution passed with eight votes in the affirmative, with Greff and Hall dissenting. If subsequently Greden’s vote were to be challenged, it would not reduce the number of affirmative votes below the seven needed for passage.

Appointments of People or Descriptions?

First, it’s worth noting that based on the minutes of the March 2, 2005 DDA board meeting, Greden has filled in as “acting mayor” at least once before.

The Downtown Development Authority Act 197 of 1975 reads in relevant part:

Sec. 4. (1) Except as provided in subsections (7), (8), and (9), an authority shall be under the supervision and control of a board consisting of the chief executive officer [emphasis added] of the municipality and not less than 8 or more than 12 members as determined by the governing body of the municipality. Members shall be appointed by the chief executive officer of the municipality, subject to approval by the governing body of the municipality.

In the definitions section, “chief executive officer” is specified as follows:

(g) “Chief executive officer” means the mayor or city manager of a city, the president or village manager of a village, or the supervisor of a township or, if designated by the township board for purposes of this act, the township superintendent or township manager of a township.

When specifying “the mayor” as a member of the DDA board, then, the question is whether the individual who’s been elected mayor is the board member, or whether it’s a definite description – “the mayor, or whoever is acting in that capacity” – that is a member.

Based on the Ann Arbor city council rules, the idea of “acting mayor” is a notion that is defined for two narrow purposes: (i) to preside at council meetings and perform other mayoral duties, and (ii) to fill the need for the Emergency Preparedness Plan:

RULE 2 – Acting Mayor

Council shall at the time the rules are adopted pass a resolution stating the order of succession of council members to be Acting Mayor in the event neither the Mayor nor Mayor Pro Tem are present for the convening of the scheduled meeting and to fill the need for the Emergency Preparedness Plan.

The Mayor Pro Tem shall perform the duties [emphasis added] and have the powers of the Mayor when, on account of a vacancy in the office, absence from the City, disability, or for any other reason, the Mayor is unable to perform the duties of office. If both the Mayor and Mayor Pro Tem are temporarily unable to perform the duties of the office of Mayor, the Council shall designate another of its members as Acting Mayor to perform such duties temporarily.

The question is thus whether membership on the DDA board is a “mayoral duty” or not. The Ann Arbor city charter specifies the mayor’s duties as follows:

The Mayor

SECTION 4.2. In addition to any powers and duties otherwise provided by law, the Mayor shall:

  1. be the presiding officer of the Council;
  2. have all the powers and duties of a Council Member, including the power and the duty to vote;
  3. have the veto powers as provided in Section 4.5 of this charter;
  4. give the Council information concerning the affairs of the City and recommend such measures as deemed expedient;
  5. in emergencies, have the powers conferred by law upon sheriffs to prevent disorder, preserve the public peace and health, and provide for the safety of persons and property;
  6. execute or authenticate by signature such instruments as the Council, this charter, or any State or federal law shall require;
  7. be the ceremonial head of the City;
  8. appoint all Council Committees and be a member thereof and make other appointments as provided in this charter or by the Council.

If membership on the DDA board is to be construed as a mayoral duty, then it would have to be by dint of the introductory phrase “any powers and duties otherwise provided by law,” where the law in question is the enabling legislation for DDAs cited above.

Officer Elections

Officer elections took place at the annual meeting just after the board meeting.

Hall began by taking nominations from the floor for the office of treasurer. Leah Gunn nominated Roger Hewitt, which was seconded by John Splitt. Sandi Smith was then nominated by Rene Greff and seconded by Orr. A moment’s hesitation by board chair Hall about how to conduct the vote was ended when Gunn suggested a simple roll call with the vote consisting of the name of the preferred candidate.

Three votes were taken for treasurer on the same slate of candidates. The first vote resulted in a 5-5 split:

Voting for Smith (5): Boren, Greff, Hall, Orr, Smith

Voting for Hewitt (5): Gunn, Hewitt, [Mayor], Splitt, Collins

The second vote was identical to the first with the exception of Collins’ vote, which changed to Smith:

Voting for Smith (6): Boren, Greff, Hall, Orr, Smith, Collins

Voting for Hewitt (4): Gunn, Hewitt, [Mayor], Splitt

The third vote was identical to the second with the 6-4 split still falling short of the seven-vote majority needed. The board then left the question of treasurer aside and continued to the offices of secretary and vice-chair.

Keith Orr was elected secretary and Joan Lowenstein was elected vice-chair in unanimous votes with no other nominations. The vote for chair led to a similar outcome as for treasurer. Leah Gunn nominated Splitt, which was seconded by Hewitt. Orr then said, “Let’s keep things interesting,” and nominated Gary Boren as chair. Boren’s nomination was seconded by Greff. The vote for chair fell along similar but not identical lines to the vote for secretary treasurer. Twice the board votes as follows:

Voting for Boren (4): Boren, Greff, Hall, Orr

Voting for Splitt (6): Gunn, Hewitt, [Mayor], Splitt, Collins, Smith

In deliberations about what to do, Orr suggested that another vote could be taken – in light of the repeated votes that had been taken for treasurer. Why did Orr expect things to turn out differently? He changed his vote to Splitt, thus achieving a 7-vote majority:

Voting for Boren (3): Boren, Greff, Hall

Voting for Splitt (7): Gunn, Hewitt, [Mayor], Splitt, Collins, Smith, Orr

Greff pointed out, however, that the 7-vote majority included Greden’s vote in the mayor’s place, raising the same issue as before about whether the vote counted.

Outcome of board elections: Orr elected secretary; Lowenstein elected vice-chair; Splitt elected chair [with outstanding question about validity of vote]; treasurer vote postponed until September’s meeting [Greff will continue to serve in that capacity until July 31, when her term as a DDA board member ends].

Analysis: What the Vote Generally Reflected

The split votes on treasurer and chair of the board can be analyzed as reflecting a general philosophical difference about how much the DDA should accommodate the city of Ann Arbor’s fiscal hardships by renegotiating the parking agreement between the DDA and the city. The city has included in its FY 2011 budget an additional $2 million in payments from the DDA that the DDA is not currently contractually bound to make. The DDA has included a contingency in its own budget for that amount.

The two bodies will negotiate through their respective “mutually beneficial” committees.

Reporting from the DDA board’s mutually beneficial committee, Rene Greff said that the committee had not met since the last board meeting, but noted that there was an item that needed to be addressed, because this was in all likelihood her last board meeting [she's likely to be replaced by Newcombe Clark] and that her seat on the committee would need to be filled.

Board chair Jennifer Hall, before addressing the issue of who would fill Greff’s spot, noted that the Ann Arbor city council had seated its own committee. Leigh Greden, who attended the DDA board’s meeting representing John Hieftje, clarified that the council committee had merely been nominated but would not formally be seated until the next council meeting. The city council’s contingent will consist of Margie Teall (Ward 4), Leigh Greden (Ward 3) and Carsten Hohnke (Ward 5).

Hall asked Sandi Smith, who also serves on city council, to take Greff’s place on the committee. Later in the meeting Smith would ask for clarification as to whether Greff’s chairship of the committee would transfer to her, and Hall confirmed that it would.

Analysis: The Vote for Treasurer

The Chronicle phoned up Smith and Hewitt separately the day following the meeting to ask if they’d be campaigning for the treasurership of the board for September’s planned election. No, on both counts. Smith indicated that they had a good conversation afterwards, and that they’d agreed that they’d both bow out and let someone else have a shot at it.

Smith said that on reflection, it was a bit “silly” that it hadn’t occurred to either of them during the meeting to pursue exactly that solution. Unsolicited, Smith and Hewitt each expressed their respect for each other and the hard work they’d done to date and expected to do in the coming few years. They both allowed that they’d at times been at loggerheads over different issues.

A tentative analysis that The Chronicle floated to them was that Hewitt’s interest in being treasurer was motivated in part by his desire to remain on the board’s executive committee, which comprises the board’s officers plus the immediate past chair.

For his part, Hewitt acknowledged that he thought his understanding of finances and numbers would be a valuable asset for the executive committee. But he also said that the executive committee could and would function perfectly fine without him – so he was content to agree with Smith to just let someone else fill the position.

Smith allowed that part of her interest in being treasurer – and that of others on the board who supported her bid for that post – was to encourage Hewitt to rotate off the executive committee, having been on the committee this year (as immediate past chair) and last year (as chair). Smith said that she herself had rotated off the committee this year, after having served on it the two previous years, following same pattern as Hewitt – chair then immediate past chair.

What’s so special about the executive committee? We asked Susan Pollay, executive director of the DDA, what the practical role of the committee was from her point of view. She described it in the same way we’d heard Smith characterize it on the phone – her “touchstone” with the board. It meets just before the board meetings, but Pollay said that those meetings are noticed as open meetings and that any member of the board is welcome to attend. Pollay said that she makes a point to meet with other board members not on the executive committee on a regular basis, too – she wants to be accessible to all board members as executive director. That’s something Smith also described as her experience during the last year as a non-executive board member – she’d had breakfast with Pollay on something like a quarterly basis.

Does the executive committee have any actual special powers? According to the bylaws, the executive committee handles business for the board between regualar meetings:

Article V – Executive Committee

The officers of the Board, including Chair, Vice Chair, treasurer and recording secretary shall constitute the executive committee. The last former chair shall be a non-voting member. The executive committee shall have general supervision of the affairs of the Board of Directors of the Authority between its business meetings [emphasis added], fix the hours in place of meetings, make recommendations to the Board, and shall perform such other duties as specified in these By-Laws or as may be specified by the Board.

So the executive committee can act on behalf of the board between meetings – but Pollay said that that had happened just once in the history of the Ann Arbor DDA, when the old YMCA lot was purchased by the city. The usual practice, instead of the committee acting on behalf of the board, said Pollay, was for the board to call for a special meeting 24 hours in advance of the meeting, with appropriate noticing in accordance with the Open Meetings Act and the board’s own bylaws.

Executive Committee in Action: A Resolution Not Brought

The executive committee actually played a role in removing some of the potential controversy from Wednesday’s meeting. Hewitt is chair of the operations committee and that committee had developed a proposal that would have begun a shift to variable rate parking as part of a “demand management” strategy. The proposal would have been brought as a resolution to put into practice the basic premise: Higher demand parking spaces are priced higher than lower demand parking spaces.

The DDA board had debated the question of demand management at its March meeting in connection with its message to the city council about its finances. At that time the issue was whether to convey to the city council the idea that additional revenue could be generated through demand management. At that meeting, Rene Greff had weighed in for the idea that demand management should be revenue neutral, not a mechanism by which to generate more revenue.

DDA staff had developed two different proposals in advance of Wednesday’s meeting – both increased on-street parking rates (higher demand spots). One lowered fees at lots and structures (lower demand spots), while the second plan left fees at lots and structures the same. Either plan would have increased on-street rates beyond the new rates that recently went into effect.

Based on emails copied to The Chronicle prior to the meeting, the issue had the potential to become a focus of heated debate and public commentary at the meeting.

As it turned out, only one one person addressed the board during public time.

Tony Lupo: Lupo is director of sales and marketing for SalonVox on Liberty Street. He spoke to the issue of parking rate increases that were on the board’s agenda for that day. He said that a few months ago when he heard the news that parking rates would be increased he’d been disappointed. With the more recent proposal to adjust rates again – in the context of the DDA’s parking demand management strategy – he stressed the importance of keeping parking fees on lots and structures low. He said that his salon provided parking validation for lots and structures. [After the meeting, Lupo told The Chronicle that as many as 90% of their clients parked in lots or structures.] He said that although he would prefer to see no parking fee increases at all, those increases for street parking were somewhat mitigated by the ease and convenience of the new E-Park payment stations.

The resolution, to which Tony Lupo had spoken, wound up being withdrawn. In announcing that the resolution would be withdrawn, Hewitt noted that it was the executive committee of the board (of which he is a member this year) that had determined it would be best to delay its implementation.

Hewitt explained that the resolution would have begun the transition to a market rate system whereby higher demand parking spaces would be priced higher and lower demand parking spaces would be priced lower. The intention had been to move forward with these variable rates with the resolution that had originally been on the agenda. The operations committee had developed two different options for such variable rates, Hewitt said.

However, the executive committee, in reviewing the operations committee proposal, noted that even though the work had been thoroughly considered within the committee, they wanted to get the word out more widely before implementing the plan. Further, the executive committee wanted a clearer idea of how they would proceed in the longer term. Hewitt noted that parking demand management is a relatively new concept and there was not a manual that tells you how to do it. The transition to variable rate parking would be delayed for a few months until probably around September, Hewitt concluded.

Rene Greff stated that she appreciated the effort of the operations committee on the subject of parking demand management and then went on to thank Hewitt specifically and personally for his effort. Greff noted that it was Hewitt – after seeing the idea presented at an International Downtown Association conference – who had adopted the initiative as his “baby” and had pulled the board along in that direction. [In our phone conversation with Hewitt, he noted that it was gratifying that Greff had made those remarks, because she didn't have to.]

Board chair Jennifer Hall also expressed her appreciation to the operations committee for pulling back from the proposed resolution to be passed at that meeting. Leah Gunn echoed Greff’s acknowledgment of the leadership Hewitt had displayed in the area of demand management. She said that it was important that the DDA continue to generate a great amount of data so that they could make factual and data-driven decisions based on it.

Part of the implementation of the parking demand management system has been the recent introduction over the last couple of weeks of E-Park payment stations. Hewitt reported out from the operations committee on a successful rollout of new stations. There are 25 stations in all, he said, and they’ve been in use for about a week and a half. He noted that there had been a few negative comments, but there had been a very strong positive response to the payment stations – especially among the younger demographic who were pleased to see that they could add time to the meter using their cell phones. Hewitt complimented Republic Parking and the DDA staff on the smooth installation. The eventual goal, provided that the initial 25 station pilot goes well – is to install 175 of the units.

Also related to parking demand management, Hewitt said that the planned suspension of the valet parking pilot had taken effect. He said that the program had not met the expectation of success. There had been 25 calls on the customer service line in the last month, Hewitt reported.

BAB: A Bond by Any Other Name

Tom Crawford, chief financial officer for the city of Ann Arbor, appeared at the board’s meeting to give advice on bond options to fund the underground parking structure planned for Fifth Avenue. Crawford reminded the board that it was something like $49-$50 million worth of bonds that were planned for issuance. He told the board that the federal stimulus plan provided the possibility of something called Build America Bonds, which he’d recommended using for the underground parking project.

The general obligation bonds that had been authorized for issuance at city council’s Feb. 17, 2009 meeting were tax-free. That is, for the purchaser of such a bond as an investment, the typically lower interest rate earned from a municipal bond is somewhat balanced by the fact that the earnings are tax-free. Build America Bonds, explained Crawford, were taxable and thus had a somewhat higher interest rate – on its face more expensive for the city. But what was special about Build America Bonds, Crawford told the board, was that they provided coverage of some of the debt service. The direct federal subsidy payment to local governments is equal to 35 percent of the total coupon interest paid to investors.

The current interest rate for tax-free bonds is right around 5%, but with the federal subsidy received for taxable BAB, the effective rate from the city’s perspective works out to around 4.5%.

Crawford recommended the option of such bonds because over the term of the bonds, it represented around $1.5 million in savings, characterizing it as a “nice opportunity.” On July 20 the question would come before city council to pass the necessary resolution to allow the issuance of the taxable Build America Bonds, Crawford reported. Crawford said he anticipated selling the bonds on August 5 with delivery taken on August 19.

Hewitt asked for some clarification on all the options. Crawford said that there was an additional third option made possible by the recovery bill. He advised against that other option due to the one- to three-month delay due to additional actions required by the city council under such a plan.

Following up with Crawford later by email, he clarified that Build American Bonds were still general obligation bonds. That’s germane to a local initiative, GO Ask Voterswhich launched in the spring to put a charter amendment on the ballot that, if passed, would require a voter referendum on the issuance of general obligation bonds.

Were such a charter amendment currently in place, instead of the expected council action on July 20, a referendum would presumably be required.


Several resolutions passed without controversy at the board table.

getDowntown and go!pass

The board considered a resolution to support the getDowntown program and the go!pass in the amount of $393,868. Commenting on the resolution, Leah Gunn said that the go!pass is one of the best things that the DDA board does, and that it shows the board’s commitment to alternative transportation.

Recycling Containers

A resolution was considered to authorize $25,000 for the purchase of additional recycled containers for the downtown. Leah Gunn offered as a friendly amendment that the DDA logo be affixed to the containers. Russ Collins replied that the partnerships committee had actually discussed that specific question and had opted against it. Board chair Jennifer Hall explained that the rationale against displaying the DDA logo on the containers was based on the fact that the board had no control over the emptying of the containers and that if containers were overflowing it would reflect badly on the DDA if the logo appeared. In light of that explanation, Gunn allowed that it made sense, and withdrew her suggested amendment.

International Downtown Association

The DDA board also considered a resolution authorizing the funding of attendance at the International Downtown Associaton conference in Milwaukee, Wisc. by representatives from various merchant associations, DDA board members, city council members and planning commissioners. Hall said she was pleased to see that planning commissioners would be sent to the conference, noting that she had found the experience to be valuable when she had attended previously as a planning commissioner.

Window Displays

The DDA board considered a resolution authorizing $4,000 for each of four different merchant associations for a total of $16,000 to encourage attractive window displays.

Public Art: Performance

The board considered a resolution that affected a previously proposed public art project at the 4th & William parking structure. In connection with that project, a $50,000 grant for art had been awarded and it was due to expire. There had been a proposal to use the grant for a mural to be painted on the side of the structure. In Collins’ report out from the partnerships committee, he said that the committee had discussed the Percent for Art program within the DDA, saying that the DDA did not want to be in a position of having to choose art themselves, preferring to either work within the framework of the city’s Percent for Art program or else turn the decision over to the architect of a given project.

Sandi Smith, co-chair of the partnerships committee, explained that rather than have no art at all added to the downtown, it was a recommendation of the partnerships committee to allocate $50,000 for organizations supporting the performing arts. Funding from the Michigan Council for Arts and Cultural Affairs had recently been cut, Smith explained, and the money was intended to be allocated to downtown performing arts organizations who rented or owned buildings in the downtown – based on the relative percentage of grants previously received from the MCACA. Collins abstained from the deliberations and the vote on the resolution, noting that the Michigan Theater, of which he is the executive director, could potentially benefit from the resolution.

Miscellaneous Topics from Committee Reports


Fifth and Division Street Improvements

Reporting from the capital improvements committee, John Splitt said that they had received bids from five different contractors for the Fifth and Division streetscape improvement project. He reported that the lowest bid had come from Eastlund Concrete in Holt, Michigan. Because their bid was significantly lower than the others, they had been grilled until Adrian Iraola of Washtenaw Engineering Co., the project manager, was satisfied that it was a solid bid. Because it is a Michigan Department of Transportation project, there’s a requirement that the low bid be accepted unless there is a great reason not to. Splitt said that the consulting firm of Beckett & Raeder had estimated this part of the project cost at around $3.5 million and Eastlund’s bid reflected an amount around $1 million less.

Underground Parking Garage

Splitt also reported that an RFQ (request for qualifications) been issued for the first phase of the Fifth Avenue underground parking garage project. He said that 14 responses have been received and that they would be reviewed at the next capital improvements committee meeting. He advised the board that a special August meeting might be required in order to approve the award of contracts on the project. [The board does not have a regularly scheduled meeting in August.]

Wayfinding (Signs)

Splitt also reported that the wayfinding project was moving forward and that people could expect to see signs appearing soon.


Russ Collins said that the DDA’s partnerships committee had received a request from the city’s liquor committee to help with the award of liquor licenses, but that the partnerships committee did not see how they could be helpful. So Collins said that they didn’t plan to jump into the middle of that process.


Reporting on the A2D2 steering committee activities, Roger Hewitt reported that a conference call had taken place between the committee and the consultant on June 4. The idea was to focus on developing design guidelines that were concise and not subject to wide interpretation, Hewitt said.

Downtown Citizens Advisory Council

Ray Detter: Detter reported that the Downtown Citizens Advisory Council had received a presentation on the proposed new Business Improvement Zone. [See Chronicle coverage of a similar presentation here.] At the council’s regular meeting subsequent to the presentation, Detter reported, they had focused on three topics: (i) Parking meter installation in neighborhoods near to the downtown, (ii) low-income housing, and (iii) A2D2 planning process.

Detter congratulated Sandi Smith for leading the city council out of the “unwise” decision to install parking meters in residential areas near to the downtown – they were at least moving in the right direction, he said. What the DCAC wanted was an accelerated implementation of residential parking permit programs. He said that the city’s downtown plan sought to integrate all downtown parking within the DDA parking system and that it should operate precisely as that – a system.

With respect to supportive housing at either of the downtown locations, Detter said that in previously proposed locations there was little support for those locations. He said that as a first step it would be worth reflecting on where low-income housing is currently located, citing samples of Dawn Farms, Baker Commons, Avalon Housing units, and the homeless shelter. Detter noted that if Courthouse Square failed, this would represent another 100+ units requiring some kind of replacement.

On the subject of the A2D2 rezoning initiative, Detter reminded the board that the city council would be considering the zoning package for an additional first reading on July 6, with the second and final reading plus vote on August 6.

Present: Gary Boren, Rene Greff, Jennifer Hall, Roger Hewitt, Leigh Greden (as a proxy for John Hieftje), John Splitt, Sandi Smith, Leah Gunn, Russ Collins, Keith Orr

Absent: Joan Lowenstein, John Mouat, John Hieftje

Next board meeting: Noon on Wednesday, September 2, at the DDA offices, 150 S. Fifth Ave., Suite 301. [confirm date]


  1. July 3, 2009 at 8:09 pm | permalink

    I feel as though I was at this meeting from this very through article. This kind of reporting is important to the citizens understanding what is happening in town. Thanks for keeping the community up to date with what is happening at the AADDA.

  2. July 3, 2009 at 10:46 pm | permalink

    In Ann Arbor’s case, the question is not “who is the mayor?” but rather, “who is the CEO of the city?”. I think that the answer would be Roger Fraser, the city administrator. That’ll be a fun discussion.

    “She [Smith] said she thought it was a good way to solve a budget problem on very short notice and considered the plan to be very temporary.”

    That sounds like deliberating as a council member, not as a DDA board member–i.e., the DDA doesn’t have a budget problem, the city does. The question of conflicts of interest for a council member to sit on the board has been raised before. Is this evidence of that being a pertinent question?

    “Boren then switched his vote from before, saying that it was a lucky opportunity to be able to consider the important substantive question of what the statute actually required.”

    Did he also say that he had changed his vote because Smith’s argument (or something else) had impacted his thinking, or was it because of the question about the statute?

    “Leigh Greden, who attended the DDA board’s meeting representing John Hieftje…” or the mayor. :-)

    A couple of board members have asked me about my attendance at their meetings. Isn’t it obvious? For someone interested in public policy, their meetings are the most interesting in town.

  3. By Judith
    July 4, 2009 at 9:40 am | permalink

    Attending my first A2D2 meeting, I was put in mind of attending my first pro ball game at Fenway eons ago. I knew the game, knew the players were very good – but it wasn’t until my brother showed me how to score the plays that I really began to to ‘get’ the game. Thanks for this coverage, Dave. Enlightening, respectful and, like baseball, took as long as it needed to! I really appreciate all the context & links to further context you provide.

  4. By UMGrad1234
    July 5, 2009 at 7:38 am | permalink

    Of COURSE it’s a conflict for a City Council member to sit on the DDA Board. Sandi Smith introduced the resolution at the DDA meeting to recommend to Council that metered parking rates be doubled. She then went right over the City Hall and sat next to Sabra Briere and (shock) proceeded to screw her First Ward constituents by (yes) voting on the DDA resolution she introduced to double metered parking rates without any discussion. There was no pretense of First Ward ever having Sandi speak to doubling of parking rates in an unbiased or objective way.

    Ditto on the underground parking garage. EXACT same scenario with Smith, just change the resolution.

    Then again, Carsten’s wife stands to benefit financially if a development project scheduled to come before Council gets approved. Thanks to Marcia Higgins and her sterling leadership of the Council rules committee, the Council members themselves decide whether there are conflicts of interest serious enough to require their Council drinking buddies/email homies to refrain from voting.

    After reading hundreds of the emails they sent to each other during Council meetings, I am convinced our Council and Mayor have the collective moral compass of a graham cracker, and the ethical standards of a bunch of pit vipers. So, yes, there are big problems with conflicts of interest both on the DDA (Sandi Smith/Hieftje) and on Council. Ann Arbor taxpayers are, literally, paying tens of millions of dollars each year because of these conflicts.

  5. By Dave Askins
    July 5, 2009 at 9:50 am | permalink

    Re: [2] “In Ann Arbor’s case, the question is not “who is the mayor?” but rather, “who is the CEO of the city?”. I think that the answer would be Roger Fraser, the city administrator. That’ll be a fun discussion.”

    From the Home Rule City Act of 1909:

    “Sec. 3. Each city charter shall provide for all of the following:
    (a) The election of a mayor, who shall be the chief executive officer of the city, and of a body vested with legislative power, and for the election or appointment of a clerk, a treasurer, an assessor or board of assessors, a board of review, and other officers considered necessary.”

    Without the definition clause of the DDA enabling legislation cited in the article, I think there would be no choice at all whether to appoint the city administrator or the mayor to the DDA.

    No question, though, that the discussion to clarify this situation should be interesting.

  6. By Tom Whitaker
    July 5, 2009 at 10:21 am | permalink

    With far more police officers opting for early retirement than budgeted, it would appear that there are now sufficient funds to not only keep the community standards staff on board, but also avoid parking meters in residential neighborhoods. I hope Council doesn’t wait until October to make this call and find other things to spend the money on in the meantime.

  7. By Dave Askins
    July 5, 2009 at 10:51 am | permalink

    Re: [4] and the “doubling” of metered parking rates. In February, the proposed increase for metered rates was from $1.00 to $1.40 per hour, with the increase staggered over a couple years ending in FY $1.40.

    Part of the resolution that was originally expected to be brought at this most recent meeting would have increased the rate at the highest-demand meters (those generating more than $2000 per year) to $1.50 per hour — but to drop the rates for lowest demand meters (those generating less than $500 per year) to $.80 per hour.

    Re: [4] “Of COURSE it’s a conflict for a City Council member to sit on the DDA Board.”

    I think it’s worth distinguishing between (i) possibly conflicting responsibilities to two different bodies and (ii) possible conflict between one’s responsibility to a body and one’s own interest.

    In the case of Smith’s dual role on the city council and the DDA board, it’s (i). To my mind, the question of breadth of expertise and interest represented on the two bodies (city council and DDA) is a more useful framework to think about the issue than “conflict.”

    In the case of Carsten Hohnke’s possible connection to the City Place project — to which I assume [4] alludes — it’s a case of (ii).

    To clarify the remark in [4] further, council rules specify as a condition of recusal that the interest on which there’s a conflict
    be financial. That is, it’s not the case that any connection at all to the issue is supposed to be adequate grounds for recusal. For example, a councilmember might be best friends with the developer, attend his private parties, etc. but if there’s no direct financial benefit to the councilmember, that’s not adequate grounds for recusal from voting on the developer’s project when it comes before council.

    Also, it’s worth reiterating the note in [4] that council rules specify a duty by councilmembers to vote, unless a councilmember’s colleagues vote to ask for recusal.

    That, I think, actually makes some kind of sense — one could imagine someone citing “conflicts of interest” just to avoid having to vote on a controversial issue. You can’t just willy nilly abstain from voting. So the intent of that mechanism is on target, I think.

    In the case of City Place, at the most recent council meeting, Hohnke declared at the table that he’d conveyed the facts of a possible conflict to his colleagues and the city attorney. His colleagues did not then ask him to recuse himself, and that was that.

    I think it’s unfortunate that Hohnke did not see fit to declare at the table in some kind of summary form the set of facts that led him to call his colleagues’ attention to the possible conflict. What that conveys is that the council in its wisdom will decide the matter — without serving up the decision to public second-guessing. The public consensus could well be that Hohnke has a conflict that should reasonably prevent him from voting on the project.

    That’s not to say that the public should have a say in whether someone is recused or not — just that facts underlying the decision should be open and subject to the consequences of public opinion on the matter. And that includes the possible consequence of a public consensus view that the city council made a well-reasoned and wise choice on Hohnke’s (non-)recusal.

  8. July 5, 2009 at 11:32 am | permalink

    Nice analysis, Dave. There is value in sorting out the different types of motivation and influence that might lead a person serving on a board or committee to make decisions in a particular direction. Many of them are expected and even planned for (slots on the DDA are designated for someone who owns or operates a downtown business, for example). When the motivation is personal financial benefit, that is clearly unacceptable. But there are many other motivations, such as improved access to potential clients or political support for future electoral ambitions, that don’t reflect the public interest but are not illegal or perhaps even unethical. (I am speaking in generalities, not about any specific situation.)

    There is a legal issue with people serving on two different boards where their actual duties are in conflict. I don’t have a copy of the opinion now, but there has been case law at the state level regarding “incompatibility” of office or service. This is where the actions of the individual on the one board can overrule the action of the other board, or where the interests of one board might not be the same as the other, so a consistent recusal might be necessary. When I was on the county planning commission, all the township officials who were then serving on both the planning commission and the Board of Public Works were forced to either resign their township position or relinquish their planning commission appointment. It was before some current changes in the state planning law, but the point was that as township officials they might advance one decision and the county planning commission would then have to take action, possibly contrary. Some made one decision, some another. It made a big difference in the representation on the planning commission.

    I believe that it is an incompatible office for a city staff person to occupy a position on an independent board such as the AATA. As to the DDA, it could be argued that since city council can overrule DDA decisions, it is incompatible for a councilmember to serve on that board. That would be for the lawyers to argue.

  9. July 5, 2009 at 11:35 am | permalink

    Thanks for the additional info, Dave.

    Looking back at the DDA Act definition for CEO, I’d say that the “or” between “mayor” and “city manager” (assuming that a city manager is the same as our city administrator), could be interpreted to mean that we have a choice (and also that that act isn’t in conflict with the Home Rule Act.) Then maybe the question is, “who decides which of the two gets the DDA seat?”

    But then, maybe there’s yet another piece of legislation (the city charter?) that indicates which of the two our community considers to be the CEO. I’m still guessing that it’s the administrator, which I also think would be more appropriate (though I’d like to hear other opinions.) And if that were the case, we’d still have the question of whether that’s Roger Fraser or his designee.

  10. By Dave Askins
    July 5, 2009 at 12:03 pm | permalink

    Re: [9] “But then, maybe there’s yet another piece of legislation (the city charter?) that indicates which of the two our community considers to be the CEO.”

    The council rules regarding the mayor’s responsibilities cited in the article are identical to the city charter language.

    Regarding the city administrator, the city charter specifies:

    “SECTION 5.1.
    (a) The City Administrator shall be the administrative agent of the Council, shall perform the duties of office under its authority, and shall be accountable to the Council for the performance of those duties. The City Administrator shall be chosen on the basis of executive and administrative qualifications.”

    It’d be hard to make the case based on charter or council rules that the chief executive officer of the city is the city administrator. I think it comes from the fact that we have particular flavor of the mayor-council form of government, which designates most of the responsibility for execution to the administrator.

    At the DDA mid-year retreat, Hieftje indicated that the reason he wanted to serve on the DDA board — as contrasted with his immediate predecessors as mayor, during which tenure the city administrator served on the DDA — was that he was interested in downtown issues.

    How the break was achieved with the historical pattern of the city administrator serving on the Ann Arbor DDA board might have been connected chronologically to the retirement of Fraser’s predecessor, Berlin, and Fraser’s hire — I haven’t gone back to check.

    On the point in [8], a question for Vivienne: Do you see a difference between the incompatibility of office you describe in [8] and the service of city councilmembers on various boards and commissions? For example, on planning commission, there is a designated slot for a city councilmember, which seems to meet the criteria for incompatibility of office you describe — or does the fact that it’s all under the umbrella of city of Ann Arbor make it different from the DDA board?

    An interesting twist: the LDFA board, which is a close parallel to the DDA board (both oversee a TIF), specifies a slot for a city councilmember — currently held by Stephen Rapundalo.

    Additional context for discussion is Hieftje’s view expressed at a Sunday night caucus that the DDA board is no different from the city’s planning commission with the only difference being that the DDA had a revenue stream.

  11. By Dave Askins
    July 5, 2009 at 12:10 pm | permalink

    In the comment [7] “staggered over a couple years ending in FY $1.40″ omits the name of the year: 2011. That is, the rates were to climb to $1.40 by FY 2011. The idea behind “demand management” is that some spaces could be made considerably more expensive than the average rate, depending on the demand for those spaces.

  12. July 5, 2009 at 12:53 pm | permalink

    Most city commissions and boards are in essence arms of the City Council, and councilmembers who are appointed to them are really serving as councilmembers, rather than as committee members. It is a rather confusing situation but I don’t think falls under the incompatibility of office concept because it is a designed dual responsibility.

    Independent authorities like the DDA and AATA are supposed to have some degree of autonomy and serve a specific mission. I don’t agree with the mayor’s view. You could argue that for the LDFA, the councilmember designated slot is similar to that designated for the city’s CEO on the DDA – a person specifically there to represent the interests of the city government organization (as apart from those of the authority). In the case of the two TIFA authorities, their revenue stream comes from other taxing entities besides the city, so they have a responsibility to their mission beyond the narrow interests of the people running the city government at a particular moment in time.

    I’m sorry that I don’t know the state statute that was cited in the county planning commission case. Also, I may not have explained it very clearly, since I don’t have the wording of the ruling.

  13. By Tom Whitaker
    July 5, 2009 at 12:56 pm | permalink

    Re: Carsten Hohnke’s conflict of interest regarding the City Place development:
    I think Carsten owes the property owners of Germantown a better explanation. We have invited Carsten in to our homes on several occasions to, along with Mike Anglin, discuss City Place and to meet with us and Alex de Parry to negotiate a compromise solution that would be acceptable to all parties. We are dumbfounded to find out that during the course of all these meetings, phone calls and emails, that Carsten never saw fit to raise the issue of a possible conflict of interest. In fact, we had a small meeting with him just a day before he made this pronouncement at the Council table, but no mention was made of the potential conflict or his pending announcement at Council.
    One of the primary reasons our negotiations over an alternative PUD with de Parry ceased, was the fact that he submitted this latest “by right” proposal smack in the middle of our discussions. It felt like having a gun put to our heads. After meeting with de Parry a couple more times, we sensed less and less willingness for him to make concessions. With the “by right” working its way through the process, we felt we had no choice but to drop out of the PUD discussions and fight the “by right.” What if the PUD discussions were just a ploy to divert us from fighting the “by right” proposal?
    To our dismay, Mr. Hohnke was recently quoted after a caucus meeting as saying something to the effect that perhaps once the “by right” was approved, there would be a more serious attempt by the neighbors to negotiate with de Parry. Now we find out he has a mysterious conflict of interest. Something stinks.
    Perhaps this is all just a series of poor judgments and inadvertent omissions on the part of a rookie councilmember, but given all the recent revelations about what is really going on around the council table, I can’t help but feel like the fix is in and Germantown, as we know it, is doomed.
    It’s too bad, because if the gun was taken away from our heads, we’d be right back at the table to talk about alternatives to this hideous monstrosity that even de Parry admits he doesn’t want to build.

  14. By Alan Goldsmith
    July 6, 2009 at 8:24 am | permalink

    “To our dismay, Mr. Hohnke was recently quoted after a caucus meeting as saying something to the effect that perhaps once the “by right” was approved, there would be a more serious attempt by the neighbors to negotiate with de Parry. Now we find out he has a mysterious conflict of interest. Something stinks.”

    Mr. Whitaker is right. Something does stink here. It is completely wrong to allow council to decide if there is a ‘conflict of interest’. Self policing isn’t working. Perhaps anyone elected to council should publicly list ALL of their financial dealings and holdings, list clients if they are an attorney, list property and investments of themselves and spouses/partners.

    What other potential conflicts are there for City Place? Did anything turn up in the just released emails?