More to Meeting than Downtown Planning

City council discusses budget, public art, Huron River, and more

Ann Arbor City Council Meeting (Nov. 16, 2009) Part II: The length of Monday’s city council meeting, which did not adjourn until nearly 1 a.m., might be blamed on the lengthy public commentary and deliberations on downtown zoning and design guidelines.

people standing taking the oath of office

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

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

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

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

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

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

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

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

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

Huron River and Impoundment Management Plan

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

HRIMP Public Comment

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

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

Argo Dam and Embankment Update

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

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

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

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

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

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

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

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

HRIMP Resolution

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

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

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

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

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

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

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

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

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

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

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

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

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

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

West Park Improvements: Percent for Art

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

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

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

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

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

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

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

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

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

man and woman sitting at table

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

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

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

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

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

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

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

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


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

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

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

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

Increased Budget to Local Development Finance Authority

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

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

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

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

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

Parking Meter Purchase

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

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

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

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

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

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

Outcome: The resolution to purchase parking meters was postponed.

Updates from the City Administrator

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

Sidewalk Slab Replacement

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

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

Emergency Response Time

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

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

Library Lot Request for Proposals

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

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

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

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

Stadium Bridges and Task Forces

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

Use of Council Communications

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

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

What the council rules actually specify:

Communications from Council

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

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

Public Commentary

Public commentary not already mentioned above included the following:

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

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

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

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

City Budget Retreat on Dec. 5

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

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

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


  1. November 20, 2009 at 11:45 am | permalink

    Dave, Kermit doesn’t have a “d” in his last name.

    I’m not sure what to call it, but the council discussion on the Percent for Art program doesn’t seem to have been about art, in the sense that art isn’t typically created to serve the purpose of informing the public. I wonder if the AAPAC members have a different understanding.

  2. November 20, 2009 at 11:52 am | permalink

    Also, I want to know how Sandi and Susan fit on Tony’s Harley.

  3. November 20, 2009 at 12:17 pm | permalink

    And for the hat trick…

    When I called 911 between 3:05 and 3:10 (I don’t know if mine was the 3:06 call mentioned) the flames were well above the roof line. That the fire occurred in the middle of the night seems to have been a greater factor in the response, simply due to the fact that most people in the neighborhood were sleeping, so the _calls_ were delayed. Please check your smoke detectors/batteries.

  4. November 20, 2009 at 1:29 pm | permalink

    Dave, thanks for sticking around for the entire Council marathon session. There are a couple of corrections/clarifications to your coverage of the City Council increased budget to the LDFA contract with SPARK. The approved funding coming from the LDFA reserve budget is for 1.5 employees (one full time SPARK Central incubator manager and 1/2 time consultant). The total budget increase is $205,000 with $80K for salaries and $125,000 for entrepreneur Phase III consulting services for companies. Sandi Smith asked how much of the LDFA funding goes to SPARK. Skip’s answer was “none”. The LDFA funds can only be used for the SPARK Business Accelerator — for the specified purpose of assisting innovation-based start-up companies in the city of Ann Arbor. SPARK, in addition to assisting entrepreneurs, is the sole economic development organization for Washtenaw County. We’re responsible for the attraction and retention of companies in the Ann Arbor area. The funding for SPARK comes from a combination of private and public sources and we’ve been able to leverage our core funding to acquire additional state and federal funding for projects and investments in our community. Our 2006-2008 annual reports (link) detail our funding and the companies and projects we’ve worked on since SPARK was formed in 2005.
    In a nutshell, our 2006-2008 ROI:
    •101 project successes – $925 million new investment commitments
    •7,054 new jobs and 5,740 jobs retained
    •155 innovation start-ups through SPARK Business Accelerator
    •Leveraged community investments to $32.5 million — through acquisition of Federal and State of Michigan funding and equipment donation to Michigan Innovation Equipment Depot
    •Assisted 350 regional companies with employee searches
    •Assisted 3000+ job seekers with employment searches

    Thanks. Elizabeth Parkinson, Ann Arbor SPARK

  5. By Dave Askins
    November 20, 2009 at 3:03 pm | permalink

    RE [4] Elizabeth, I have corrected the factual error concerning the budget amount and logged it appropriately.

    For the other material, in reporting “an additional .75 FTE of Phase II consultants, spread over two people” I relied on SPARK’s documentation that shows in addition to a new person to manage the incubator, there’s also .5 for a new person for Phase II consulting, plus an increase from .25 to .5 FTE for Phase II consulting for Scott Olson — for a total of .75 FTE increase in Phase II consulting.

    In reporting

    a few questions from councilmembers, including one from Sandi Smith (Ward 1) about how much of SPARK’s business accelerator is funded by the city of Ann Arbor. Simms clarified that the business accelerator is funded solely by the LDFA.

    I relied on my notes — and have reviewed the video of the meeting which confirm their accuracy.

    The notes/video demonstrate that Sandi Smith asked: “What percentage of SPARK’s funding comes from the city of Ann Arbor?” She did not ask, as you suggest, how much of the LDFA funding goes to SPARK. As Mayor Hieftje later drew out, the basis of the line of inquiry was really to determine the original source of the funds — namely, the LDFA is funded through tax increment financing, that is, tax capture.

    Skip Simms answer was not “none,” as you suggest, but rather to state that the funding for the business accelerator comes from the LDFA — which is accurate as far as it went, but did not really respond to Smith’s question. Granted, “the city of Ann Arbor” is somewhat ambiguous — it could mean “the city of Ann Arbor general fund” as well as “Ann Arbor property taxes.” But if you understand the question as being about the general fund, then the most helpful answer is this: Ann Arbor SPARK has received a total of $125,000 over the last two years from the city of Ann Arbor general fund. And if you understand “the city of Ann Arbor” to mean Ann Arbor taxpayers, then the most helpful answer to give would have been: SPARK’s business accelerator is funded solely by Ann Arbor property taxes via tax increment financing administered by the LDFA.

  6. November 20, 2009 at 4:32 pm | permalink

    Dave, perfect summary. You clearly are more awake at 12:15 a.m. then me!

  7. By John Floyd
    November 26, 2009 at 12:45 am | permalink

    Ms. Parkinson,

    Did I read this correctly, does Spark take credit for creating over 7,000 jobs in three years? If true, this is an astounding figure – it seems like more jobs than a new auto factory would have added. Did Spark really create 7,000 jobs that would have not otherwise existed in Washtenaw County? What are some of the companies (say, 5 or six), and how many jobs did these companies create? How does Spark determine that the jobs would not have been created without its help?


    The engineer seemed to be asking about funding (e.g. Venture Capital) support, not, say, business plan and accounting support. Did I miss something? Please correct me if I did.

  8. By Dave Askins
    November 26, 2009 at 11:36 am | permalink

    Re: [7] During public commentary, Kermit Schlansker (the engineer) noted a number of roadblocks for individual inventors: patent applications, company formation, venture capital, a place to work. It’s also worth pointing out that Schlansker specifically referenced energy-savings and sustainability as his area of particular interest. It’s in that context that he called specifically for the city’s energy commission to invite engineers to gather and work on specific products it had identified that could be developed.

    So I don’t think he was limiting his call for support to just one (funding) or the other (business plan and accounting support) — although, based on his remarks, I don’t think it’s fair to say that he was calling on the city government to actually provide the venture capital.

    It was not surprising that Rapundalo took the opportunity to point out the similarity to what Schlansker called for and the activities that SPARK’s business accelerator is designed to support. But one rather large difference between SPARK’s activities and one of Schlansker’s ideas is that Schlansker seemed to be calling on the government itself (the energy commission) to help identify the specific products in need of design — thus involving a government entity at a fairly early stage. An interesting question is whether that kind of early-stage involvement could be arranged to allow the city government to have part ownership of patents that might be awarded.

    And that gets to one of the challenges SPARK faces in convincing taxpayers that the investment of their property taxes in the business accelerator is giving an adequate return. Those property taxes are originally paid to support schools, and which would have otherwise been sent to the State of Michigan for partial redistribution back to Ann Arbor Public Schools, if they weren’t captured by the LDFA, which then funds SPARK’s business accelerator. If they’d gone to the schools, then if someone asks, “Where’d your tax money go?” then we’d point to some physical building like Bach Elementary and say, “Look at that collection of bricks-and-mortar right there — my taxes supported that.” And physical bricks and mortar are hard to pry loose from a community.

    Many (probably not all) of the Downtown Development Authority’s projects also have this “bricks-and-mortar” permanence, e.g., ADA compliant sidewalk ramps at intersections, Fifth & Division streetscape improvements, alley improvements. Like the LDFA, the DDA is funded though capture of property taxes that would otherwise go someplace else. So while one might take the view that the DDA should not exist and that those taxes should go through the regular budget process — with downtown alleys competing for funding with repaving neighborhood side streets, for example — those projects have a bricks-and-mortar quality that allows someone to point to some tangible thing that we got for our property tax dollars. Maybe someone might wish we hadn’t bought that particular thing — but the identity of the thing we bought is not in dispute.

    So when it comes time to ask, “What did the LDFA do with our property tax money?” the “thing we bought” is currently measured in jobs. One challenge is that there’ll be arguments about which jobs SPARK should receive credit for and which they shouldn’t — you don’t buy jobs the same way you buy sidewalk ramps. And even if SPARK can convince people that yes, these N jobs would not have otherwise existed were it not for the investment made with our tax dollars, the “thing we bought,” namely jobs, can still be pried loose from the community. And it’s more likely that someone will want to pry loose jobs than to pry loose concrete. As far as I know, nobody wants to pry up the sidewalk ramp at the corner of Fourth and Liberty and take it to North Carolina.

  9. November 26, 2009 at 1:01 pm | permalink

    Great essay, Dave (#8). Or should I say…column?

    You bring up the debate about how well tax incentives truly work to make and keep local businesses – vs. other types of community investment. This relates directly to some of the points Michael Shuman makes (see the recent story on We Want to Change the World).

  10. By John Floyd
    December 1, 2009 at 4:23 am | permalink


    The school millage on the November ballot was, we were told, to fund operations, not to build (or repair) things. The school district proposes not to stop its “building” program (funded by separately-voted construction & repair millages that are not available for operations), but to lay off teachers, the ultimate purveyors of the intangible. The battle to spend public education funds is not between the intangible (economic development agencies) and the concrete (public school buildings), but whether we will spend public education dollars on the intangible of, well, public education, or the intangible of an economic development agency.

    Some may suggest that “people” (but not your readers) are too conceptually challenged to understand that in life there exist many intangibles that are vital, and that intangibles “exist” that might be more important than particular physical structures. I know that you are not among the “some”.

    The idea that it is OK to fund economic development agencies (not necessarily identical with actual economic development, by the way) by de-funding public education requires, I suggest, examination. The idea that we will fund economic development agencies by de-funding k-12 public education, and then claim that we need to pass new taxes to support k-12 public education, suggests that our current political class is not impressed with the savvy of the local populace.

    There are those who suspect that in this day and age, an educated population -not an economic development agency – is the key to economic development, the single greatest economic development tool in anyone’s arsenal. Some wonder if diverting k-12 public education funds away from k-12 public education is but a way to eat our seed corn. Some even believe that diverting taxes voted for a specific use by a specific government unit, to an unrelated use by an unrelated government unit, without the approval of those who agreed to tax themselves in the first place, constitutes a breach of faith with voters and taxpayers, no matter how “legal” Solons in Lansing have made it.

    The “somewhere else” that would get taxes captured by the DDA is the City of Ann Arbor, The Ann Arbor Transportation Authority, The Ann Arbor District Library, Washtenaw Community College, and The County of Washtenaw. It is possible that some people prefer the concrete of the city court building or a new underground parking garage to intangibles like police services, public health initiatives, or service to the homeless, but I would not want to have to support that position in a debate.

    This state came to the collective decision to fund k-12 public education more equally per student across the entire state than had been done in the past. That is, po’ kids should have their educations funded at an amount closer to the funding of rich kids educations than has been the case in the past. Of necessity, this means that not ever dollar of state public education tax will come back to above-average-income school districts like ours. The “somewhere else” that will get the school dollars captured by the LDFA (besides Ann Arbor Public Schools, which would receive some of the otherwise-captured taxes) are k-12 districts with a lot less money than ours has. I, for one, think that widely-improved public education is our seed corn, and that the existence of an underclass (of any race) with no way out is the single greatest threat threat to our economic prosperity, and our national security.

    The argument that it’s OK to divert school taxes to our LDFA because this way we get to keep more of them here for non- k-12 uses, instead of somewhere else for k-12 uses, is just a way of saying that it’s OK to de-fund k-12 education for kids in The Thumb, or the UP, or Benton Harbor, Detroit, Flint, (and Ann Arbor) etc. so that already highly-educated adults here don’t have to read up, or network, or ask volunteers like Stew Nelson, about how to run a business. Maybe this argument is offered sincerely – I hope so. Still, as much as I would prefer to be wrong, this argument seems at least consistent with a cynical defense of crony capitalism.