At a Wednesday, May 25, 2011 joint meeting of the “mutually beneficial” committees – one from the Ann Arbor city council and the other consisting of Ann Arbor Downtown Development Authority board members – committee members agreed on language that would serve to “underwrite” the DDA’s combined fund balances for the next five years. A special DDA board meeting has been set for Friday, May 27 to ratify the agreement.
The underwriting was a necessary condition of the DDA’s ratification of a new contract with the city, under which the DDA would continue to operate the city’s public parking system. At a special meeting last Friday, May 20, the full DDA board had approved a contract that would transfer 17% of gross parking revenues to the city.
The wordsmithing is not yet final, but key elements of the underwriting clause would include: (1) it’s applicable only through 2016; (2) it’s triggered if combined DDA fund balances fall below $1 million; (3) the trigger is evaluated based on the annual audit of DDA books in September or October of the previous fiscal year; (4) if underwriting were triggered, it would take the form of reducing existing payments that the DDA makes to the city; (5) the city’s liability is limited to $1 million annually and $2 million cumulatively; (6) any money the city is deprived of through this underwriting would be restored to the city, at whatever point the DDA’s cumulative fund balance reaches $4 million.
At the May 25 meeting, the committees also agreed on how the DDA board and city council will handle a contractually required consultation between the two groups, in conjunction with parking rate changes. That consultation will now be a required agenda item at annual joint working sessions between the DDA board and the city council. Currently, the DDA proposes rate changes, which are automatically enacted, unless the city council vetoes them. The new contract stipulates that the DDA would have sole authority to set rates.
The DDA board has scheduled a special meeting to ratify the work of the committee, at noon on Friday, May 27, 2011. That would allow the city council to ratify the parking contract on Monday, May 31, which would help settle part of the city’s revenue issues in its fiscal year 2012 budget, and allow the council to finalize its budget on that day. [For additional background, see Chronicle coverage: "Ann Arbor Council Defers Action Again"]