I do think that the land swap and other such negotiable arrangements should be attempted when there is a specific benefit from the City that is sought by the UM. Krause Street is a terrible intrusion on the neighborhood. It is a noisy parking lot square in the middle of a residential area and I’ve been told lights burn there late at night and people not associated with the UM park there for partying, etc.

Jane Lumm: you go, girl!

@20

PILOT (Payment in lieu of taxes) seems like a more reasonable trade-off for privatization of a city street – if the PILOT payment is adequate. Strikes me as likely more useful than a land swap – unless the U is willing to give up the Diag for a public green space…

Thank you for your excellent analysis.

The statute you cite is correct, but the problem is that the 1968 law was designed to protect inter-governmental relationships in contractual contexts (such as DDA and City of Ann Arbor). This because of the public policy interests of the DDA and City of Ann Arbor are co-extensive with the interest of Ann Arbor taxpayers, at least theretically.

The unintended consequences of that state law is that university towns, such as Ann Arbor, who are largely financed via federal grant monies and non-resident student tuition payments, have a constituent base that does not coincide with City of Ann Arbor taxpayers. The City of Ann Arbor has elected officials that either work at U-M or may retain a law firm that employs a City Council member. This where the conflict of interest occurs.

Mike Anglin has been one City Council member that has been very outspoken to constituents about the Fuller Road property. My belief is that it is a perfect example of a situation where City of Ann Arbor taxpayers are given the shaft and will be given a bigger shaft if this proposed project that certain city leaders have been proposing is passed. Mr. Baird’s comment above is very well-taken.

Since the state 1aw passed in 1968 appears not to address these situations, the City of Ann Arbor needs to pass an ordinance to disqualify City Council members from deliberating and voting on matters involving the Universty of Michigan where the City Council member may have an employment relationship with either the University directly or a law firm that provides services for U-M. This supplemental and remedial legislative protection would benefit Ann Arbor taxpayers.

Three years ago the DDA board was deliberating on the possibility of voluntarily paying the city of Ann Arbor $2 million outside the requirements of the then-existing contract under which the DDA managed the city’s public parking system. At the time, two DDA board members were being paid by the city of Ann Arbor as elected officials – Sandi Smith and John Hieftje. Then-member of the DDA board Jennifer S. Hall raised the question about whether Smith and Hieftje’s participation was appropriate, given their relationship to the benefactor of the potential $2 million decision by the DDA board – which was the city of Ann Arbor. [To be clear that's not the same Jennifer Hall who's executive director of the Ann Arbor Housing Commission, who is Jennifer L. Hall.]

The DDA’s legal counsel, Jerry Lax, opined that the controlling state statute would be Act 317 of 1968 “Contracts of Public Servants with Public Entities.”

The statute prohibits the public servants from soliciting contracts with entities by whom they are employed:

(2) Except as provided in section 3, a public servant shall not directly or indirectly solicit any contract between the public entity of which he or she is an officer or employee and any of the following: (a) Him or herself. (b) Any firm, meaning a co-partnership or other unincorporated association, of which he or she is a partner, member, or employee. [...]

However, Lax pointed out that there was a specific exemption for contracts between two public entities [emphasis added]:

15.324 Public servants; contracts excepted; violation as felony. Sec. 4. (1) The prohibitions of section 2 shall not apply to any of the following: (a) Contracts between public entities.

Under that statute, Lax concluded, there was not a problem with the participation of Hieftje and Smith in the deliberations and vote.

But that depended on construal of the DDA’s board decision as a “contract.” Later in the meeting the DDA board considered an amendment to their resolution that essentially made the $2 million a “grant” and not a “contract.” At that point, Lax opined that Smith and Hieftje should sit out, which they did – Smith somewhat cheerfully, and Hieftje only reluctantly.

Back to city council. To the extent that Act 317 of 1968 gives relevant guidance, then I think an employee of the University of Michigan who is also an Ann Arbor city councilmember could – all other things being equal – participate in a vote on a contract between the city and the university.

I think the issue raised by Baird’s contention – that the city is leasing parking spaces to UM at below market rates – is at its core not about conflicts of interest on the part of councilmembers, but rather about the city of Ann Arbor’s basic strategy of engagement with UM. I don’t think the city actually has such a strategy. We deal with things on an ad hoc basis, as they come up.

To illustrate, some day I think there’ll be a more serious gambit by the UM to gain control of the public right-of-way on Monroe Street to make the UM Law School campus more geographically coherent. And UM will frame that discussion as one of cost – in terms of the lost parking revenue for the on-street spaces, and perhaps throw in some amount based on what it costs to rent the public-right-of-way for construction. And the city could wind up negotiating that deal based on just on cost. And that’s because we don’t have a strategy that involves something more creative, like land swaps with the UM. What pieces of UM land would the city be willing to trade for Monroe Street, for example?

For my part, I’d entertain the possibility of trading Monroe Street for the Krause parking lot near Second and Liberty. The city could then just tear up the impervious pavement, and leave it as open space – maybe even installing some underground stormwater detention – and get the improved flood control and stormwater quality improvement would result. [The lot is in the Allen Creek watershed. It's also about 100 yards away from where I live.]

My point is not to argue that the city should push for this land swap, and in particular it’s not that I think it’s good public policy for the UM to have control of that block of Monroe Street. It’s simply that generally I don’t perceive that the city of Ann Arbor has any particular overarching strategy generally for engaging the UM. So we end up dealing with issues on an ad hoc basis.

Over the years many City Council members had employment relationships with the University of Michigan. These have included, at one time or another, John Hieftje, Marcia Higins, Steve Kunselman, and Tony Derezinski. Leigh Greden’s former law firm employer had an attorney-client relationship with U-M.

A number of service agreements and leases run between U-M and the City of Ann Arbor. Should these City Council members with U-M ties be voting and deliberating on matters involving the University?

What about the Fuller Road project? Provides huge benefits to U-M at the expense of taxpayers. Should City Council members recuse themselves on matters involving their employer?

I also agree with you that a conflict of interest is reason for a Council member to refrain from participating in the Council deliberations on the matter raising the potential conflict.

Lastly, I agree with you that Mr. Warpehoski showed leadership when he raised the issue of adjourning what could have been an endless meeting. It is those glimpses of thinking differently that make me believe that he is the right person to begin the discussion of potential conflicts of interests.

There is a gray area here that is difficult to parse. To what extent is affiliation to be scrutinized in the context of council votes? I recall that Wendy Woods simply stepped away from the table when a development proposal for the Second Baptist Church (she was and probably still is in a leadership position with the church) was being discussed. Obviously she had no personal financial interest there, but a strong personal interest. But if I am a member of the Sierra Club and the local chapter takes a position for or against a specific measure, must I step away? Every council member has affiliations and past experiences that color their values and decisions.

Council needs to re-examine their ethics policy to ease this sort of decision. It seems to be burdensome. Of course it is embarrassing to raise such a question against your colleague. It is understandable that other councilmembers would be reluctant to do so.

But I’m glad Chuck stopped the discussion when he did!