Council Tables Ann Arbor SPARK Contract

The $75,000 annual contract with Ann Arbor SPARK for economic development services has been tabled by the Ann Arbor city council. The 6-5 vote by the council at its June 16, 2014 meeting came after 10 minutes of deliberations, with support from Stephen Kunselman (Ward 3), Sumi Kailasapathy (Ward 1), Jack Eaton (Ward 4), Mike Anglin (Ward 5), Sabra Briere (Ward 1), and Jane Lumm (Ward 2).

The abbreviated discussion was the result of the fact that a motion to table – as contrasted to a motion to postpone to a date certain – is not debatable. So once the motion was made, the council immediately voted. The motion to table was made by Eaton, who said it could be taken up off the table at a future meeting when SPARK’s job retention, attraction and creation numbers could be reconciled.

Paul Krutko, CEO of Ann Arbor SPARK, stayed at the meeting until the rest of the council’s business was finished, which was around midnight. He was then invited to the podium to answer questions, and the ensuing debated by councilmembers lasted about 30 minutes. They did not reconsider their earlier vote to table the funding, however.

At its May 19, 2014 meeting, the council spent roughly five hours of deliberations on amendments to the FY 2015 budget, and just under 30% of that time was spent on two amendments involving SPARK – neither of which were approved by the council.

Ann Arbor City Council Budget Deliberations FY 2015: 4 Hrs 45 Min by Amendment Topic

Ann Arbor city council budget deliberations FY 2015: 4 hours 45 minutes by amendment topic.

SPARK is also the entity with which the local development finance authority (LDFA) contracts for business accelerator services. One of the proposed amendments to the FY 2015 budget would have decreased the amount of funding to SPARK from the LDFA, resulting in an increase to the amount the LDFA would have reserved for future infrastructure projects. The second budget amendment debated on May 19 would have eliminated $75,000 in the FY 2015 budget for the contract that the council was asked to approve on June 16.

Ann Arbor SPARK also receives money from other governmental units in Washtenaw County. In 2013, the $75,000 paid by the city of Ann Arbor to SPARK accounted for more than half of the $132,888 total contributed by all governmental units besides Washtenaw County. The county levies a tax under Act 88, and out of that levy, last year the county contributed $200,000, according to the information provided to the city by SPARK. [.pdf of 2013 "return on investment" from Ann Arbor SPARK] [.pdf of 2013 Ann Arbor SPARK projects] [Ann Arbor SPARK 2013 annual report] [21st Century Jobs Trust Fund 2013 Annual Report]

During public commentary on June 16, three people spoke about the SPARK contract. Kai Petainen read a statement about apparent discrepancies in two reports that provide jobs figures. [Petainen public comment] [Ann Arbor SPARK 2013 annual report] and [21st Century Jobs Trust Fund 2013 Annual Report] Jeff Hayner said that SPARK has misrepresented its results, and he suggested revising the resolution to reduce the $75,000 to just 10% of that figure. And Dave DeVarti, a former councilmember, asked the council to deny or table the funding. He pointed out that $75,000 could go a long way for a human services agency. He asked that the council hold Ann Arbor SPARK to the same kind of standards as it does the human services agencies it has contracts with.

This brief was filed from the city council’s chambers on the second floor of city hall, located at 301 E. Huron.