From left: DDA board members Bob Guenzel, Sandi Smith, John Mouat. Smith officiated her last meeting as chair on July 2, and Mouat was elected to serve as chair for fiscal 2015, which began on July 1. (Photos by the writer.)

The board approved a $390,000 grant related to an extended-stay hotel project on the downtown’s west side. The development is by First Martin Corp. at 116-120 W. Huron – the intersection of Huron and Ashley streets. The grant will be used to pay for a new 12-inch water main, sidewalk improvements along Ashley, and landscape maintenance in the public right-of-way.

This was the first grant awarded after the board adopted a grant policy earlier this year.

The board also gave a one-year extension to a previously-awarded $650,000 brownfield grant for the 618 S. Main apartment complex. It was originally awarded in 2012, but the project is not yet completed – in part because of the recent harsh winter. The funds would help pay for upsizing a water main to 12 inches, as well as streetscape improvements and a rain garden for stormwater management.

Also related to infrastructure, the board established a project budget of $100,000 for tree maintenance and sidewalk repairs in downtown Ann Arbor in fiscal 2015.

Related to personnel issues, the board held a closed session to evaluate Susan Pollay, the DDA’s executive director. After about 15 minutes, the board emerged and voted to give Pollay a 5% raise, increasing her salary from $109,119 to $114,570.

In describing the rationale for the raise, Roger Hewitt noted that Pollay had received “good raises” in the last two years, but for the six years before that she had not received a raise because of the difficult economy. Her position as a city employee is in the Level 2 category, which has a salary range from $95,000 to $157,000. Several board members indicated a desire to move Pollay toward the midpoint of that range over the next few years. Sandi Smith characterized it as “catch up” to compensate for the years when Pollay didn’t get a raise. Hewitt said the intent is to bring her up to that midpoint salary of $126,000 “within a fairly short time period.”

Casting the sole vote against the 5% increase was city administrator Steve Powers, who said he’d be more comfortable with a 3% raise, and hoped there would be a more robust evaluation process in the future.

Immediately after its regular monthly meeting, the board held its annual meeting to elect officers for the coming fiscal year. John Mouat was unanimously elected to serve as chair of the board. Other officers are Roger Hewitt (vice chair), Rishi Narayan (treasurer), and Keith Orr (secretary). Outgoing chair Sandi Smith was thanked for her service, and received a gift from staff – a small pin from the former Selo/Shevel Gallery, which Pollay indicated evoked a cityscape of tall buildings. Pollay said it was inspired by a trip that several DDA staff and board members took last year to New York City for the International Downtown Association conference.

Also at the July 2 meeting, the board dissolved its two existing committees and created four new committees: (1) marketing, (2) partnerships/economic development, (3) finance, and (4) operations (parking/transportation/construction).

In supporting the idea of a separate marketing committee, Narayan noted that if a staff member is hired to focus on marketing and communications, “this area might become more fleshed out very quickly.” Previously, a marketing subcommittee had been part of the partnerships committee. The new finance committee was created in part in anticipation of the DDA’s growing budget, and a desire for more financial oversight.

During updates, Hewitt reported that work continues on a possible north/south commuter rail between Ann Arbor and Howell known as WALLY – the Washtenaw and Livingston Line. A recommendation will be coming soon to locate a stop on the east side of the railroad tracks between Liberty and Washington streets, opposite of the former city maintenance yard. He stressed that this transportation service is probably a significant way off from being offered. If the project moves forward, the recommended stop wouldn’t be a full station – it would simply be a platform with canopies, and would be built entirely within the railroad right-of-way. Hewitt plans to make a short formal presentation about the recommendation at a future DDA board meeting.

Also related to transportation, Orr reported that the new Greyhound ticket office at the Fourth & William structure will be opening next week – ahead of schedule. Next week also will be the grand opening of the nearby Blake Transit Center, operated by the Ann Arbor Area Transportation Authority.

In other updates, Hewitt noted that members of the DDA’s operations committee continue to work on a downtown ambassadors program, and are likely to bring two potential service providers in for interviews by the end of this summer.

Grants

Grants for two projects appeared on the DDA board’s July 2 agenda: a one-year extension for a previous brownfield grant to the 618 S. Main Street project, and a new grant to the 116-120 W. Huron Street hotel project.

Grants: 618 S. Main

The 618 S. Main project is an apartment complex that Dan Ketelaar’s Urban Group Development Co. intends to market to young professionals. The 7-story building, between Mosley and Madison, would include 190 units for 231 bedrooms, plus two levels of parking for 121 vehicles.

The original $650,000 brownfield grant to the 618 S. Main project was approved by the DDA board at its June 6, 2012 meeting, a week before the city council gave its approval to the project on June 18, 2012.

The $650,000 total breaks down as follows:

 $85,000 Streetscape costs (sidewalk adjacent to project on Mosley/Main)
$384,500 Streetscape costs (sidewalk on west side of Main north of project)
$100,000 Rain garden to infiltrate stormwater, rather than detain and release
$ 80,500 Upsizing the water main under Ashley Street to a 12” pipe

$650,000 TOTAL

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That total is to be disbursed over four years in the following amounts: $100,000, $225,000, $225,000, and $175,000. None of the money is to be awarded before the taxes are paid each year. The DDA will use the tax increment finance capture from the project to make the grant payments.

In introducing the resolution on July 2, Joan Lowenstein noting that there’s sunsetting language in the DDA’s grant policy:

The DDA’s grant will automatically expire by June 30th at the end of the fiscal year following the fiscal year the grant was approved by the DDA if a developer has not requested and received all necessary City construction permits, and the project footings/foundations are not completely installed. The DDA grant will automatically expire by June 30th at the end of the third fiscal year following the fiscal year the grant was approved by the DDA if construction has not been completed and a CO issued for the project.

The project is underway, Lowenstein said, but it has been delayed by the harsh winter. Without an extension of the grant, it would expire automatically. The length of the extension, to receive all construction permits and to complete the project, is one year. The partnerships committee reviewed the extension and recommended that it be granted.

John Mouat said he’d read that the site next to 618 S. Main, where Happy’s Pizza had been located, is going to be redeveloped. The building where Happy’s Pizza was housed had been destroyed by fire earlier this year. The site is at the southwest corner of Main and Madison.

Mouat said that’s a great sign, because the DDA had hoped that the whole area along South Main “would start to rise.” He called the changes at the Happy’s Pizza site a “fortuitous happenstance, in some ways.”

Keith Orr joked that it was rising from its ashes.

There was no other discussion.

Outcome: The vote on the 618 S. Main grant one-year extension was unanimous.

Grants: First Martin Hotel Project

John Mouat brought forward a proposal for a $390,000 grant related to an extended-stay hotel project. The development is by First Martin Corp. at 116-120 W. Huron, at the intersection of Huron and Ashley streets.

Rendering of proposed hotel at the northeast corner of West Huron and Ashley. The One North Main building is visible to the east.

The new building will be an 88,570-square-foot structure with a ground-floor restaurant or retail space. The extended-stay hotel will occupy the upper five levels and will be operated by Marriott. The city council gave approval to the site plan at its June 16, 2014 meeting. The project also had been reviewed and recommended for approval by the city’s planning commission on May 20, 2014.

The grant was recommended by the DDA’s partnerships committee.

Mouat said that First Martin had been very patient while the partnerships committee developed its grant policy over the past few months. The First Martin project will be used as a kind of test for the new policy, he added.

The $390,000 breaks down like this:

$340,000 New 12” water main on Ashley Street, and related hardscape 
$ 10,000 Sidewalk enhancements on Ashley Street 
$ 40,000 Right-of-way landscape maintenance (20-year commitment) 

$390,000 TOTAL

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The $390,000 amount is to be distributed over three years – $100,000 (Year 1); $145,000 (Year 2); and $145,000 (Year 3).

The maximum amount that can be awarded to a project under the DDA grant policy – adopted by the DDA board at its June 2, 2014 meeting – is 25% of the tax increment capture due to the project that the DDA receives for the first 10 years after the project is built. That amount is about $390,000, according to First Martin Corp. based on an annual figure of $156,515. But the DDA’s resolution indicates the figure has not yet been verified by the city assessor. Grants are not awarded until after the taxes are paid.

Grants: First Martin Hotel Project – Board Discussion

Mouat reported that the partnerships committee had focused on two factors in considering the grant. The first was whether this was an area where the DDA would like to promote development. The committee felt that the area had been lacking, so the project met that criteria, he said. The second factor was whether the grant would result in benefits for the community, he said, such as opportunities for other sites to be developed, or for the street to be improved. It met that criteria, too, he said.

Mike Martin of First Martin Corp.

The public benefits are the new 12-inch water main on Ashley, sidewalk enhancements on Ashley, and right-of-way landscape maintenance for 20 years. Mouat said the bulk of the grant – $340,000 for the water main – isn’t very sexy, but it would help future development in that block.

Regarding the landscape maintenance contract, Mouat said that street trees in Ann Arbor suffer. They aren’t always cared for, and sometimes they die and are unsightly, he said. So the owners of the site will be responsible for those trees and landscape features. Mouat hoped it would serve as a nice precedent for projects in the future.

Board chair Sandi Smith invited First Martin’s Mike Martin and Darren McKinnon to the podium. Martin described the location where improvements are proposed along the street and alley. He highlighted the minimum amount of work that would have been required, compared to what First Martin is actually doing.

Roger Hewitt agreed that the water main and sidewalk improvements are clear public benefits. He expressed caution about the right-of-way landscape maintenance commitment. In this case, he said, he had no concern – because First Martin has a superb reputation for maintaining its properties. But for future grants, unless the DDA has a way to monitor and enforce the agreement, he would be less interested in doing it.

Martin replied that it’s his understanding that there would be an agreement to cover those details and allay Hewitt’s concerns. Hewitt again stressed that he wasn’t worried about First Martin, but “I just don’t know if other developers will be as conscientious.” Smith said she assumed there’d be a remedy for default, if the developer didn’t follow through on maintenance.

Steve Powers said it was a great example of the DDA being part of a public/private partnership that will help improve downtown. He assumed that the partnerships committee was satisfied that the grant meets the criteria that the DDA spent several months developing.

Smith passed out copies of the grant policy. It states that the project should address significant elements of these 12 criteria:

1. Addresses a documented gap in the marketplace or underserved markets of commerce within this sector of downtown.

2. Demonstrated that the project will act as a catalyst for additional revitalization of the area in which it is located which will trigger the creation of additional new tax revenue.

3. Is “connected” to the adjacent sidewalk with uses on the first floor that are showcased using large transparent windows and doorways to give pedestrians a point of interest to look at as they walk by the project.

4. Creates a large office floor plate.

5. Will facilitate the creation of a large number of new permanent jobs.

6. Is a mixed use development, that will encourage activity in the daytime, evening, and weekend, such as a development with a mix of commercial and residential.

7. Adds to downtown’s residential density.

8. Reuses vacant buildings, reuses historical buildings, and/or redevelops blighted property.

9. Number of affordable housing units created on site or funded by the project elsewhere in the community, which are beyond what is required by the City.

10. Environmental design is at or above a Gold LEED certification, or an equivalent environmental assessment.

11. Architecturally significant building or project design.

12. Strengthens Ann Arbor’s national visibility.

Smith said she wanted to review the grant process at the partnerships committee’s July 9 meeting, to make sure everyone is comfortable with it after this first grant has been awarded using the new policy. They wouldn’t change the grant itself, she noted, but they might recommend tweaks to the guidelines.

Bob Guenzel and Keith Orr also supported the grant, saying it benefited that area and the entire downtown. Orr said he was thrilled that the DDA is again awarding partnership grants, saying it’s what the DDA’s mission is about, especially related to infrastructure.

Mouat noted that the project meets all the elements outlined for eligible improvements in the grant policy. The policy states:

To be eligible, the public improvements should include elements that extend beyond the public ROW directly adjacent to the site; this may include streetscape enhancements (and on-going maintenance), street and crosswalk resurfacing, crosswalk and bike lane pavement marking upgrades, innovative public stormwater treatments, and upsizing water, storm or sewer mains. Inclusion of any of the above elements may then allow site adjacent public improvements to be eligible as well.

Mouat also highlighted the fact that the project met 8 out of the 12 elements mentioned in the policy, which he called “quite extraordinary.” Smith said there were two additional elements – adding to the downtown’s residential density, and strengthening Ann Arbor’s national visibility – that could have easily been considered as benefits that the project brought. The partnerships committee discussed whether having a national hotel chain located downtown raises the city’s visibility, she said. The hotel will be operated by Marriott.

Martin reported that a lot of people locally are excited about the project. Raising the site’s visibility within the community isn’t part of the DDA’s list, he said, but people locally are excited about having another hotel option for out-of-town guests.

Outcome: On a 9-0 vote, the board awarded the grant to First Martin’s hotel project. Al McWilliams abstained on the vote, but did not indicate why. Russ Collins and Cyndi Clark were absent.

Funds for Sidewalks, Trees

The July 2 agenda included a resolution to establish a project budget of $100,000 for tree maintenance and sidewalk repairs in downtown Ann Arbor in fiscal 2015. The item was introduced by Roger Hewitt, and had been recommended by the DDA’s operations committee.

This list of DDA board priorities is now posted on the boardroom wall.

The work will include repairs like displaced bricks and uneven sidewalk flags, as well as pruning of trees. The money to pay for the work will be drawn from tax increment finance (TIF) revenue, which the DDA is authorized to capture under state statue.

Hewitt noted that traditionally, the DDA has done sidewalk maintenance – things like repairing cracks and replacing slabs. There are numerous trip hazards and other minor maintenance issues for the sidewalks, especially after such a harsh winter, he said. Many of the thousand or so trees downtown are not in good shape, he added, and haven’t been pruned in many years. Some trees are dead and need to be replaced.

There’s money set aside in the DDA’s FY 2015 budget for sidewalk work, Hewitt noted. This $100,000 would be specifically designated for sidewalk repairs and tree maintenance or replacement.

Sandi Smith pointed out that a list of projects generated from DDA board retreats is posted on the boardroom wall, to remind them about their priorities. She said the resolution clearly aligns with some of the priorities that the DDA board has identified.

Al McWilliams stressed that by doing the work now, it will save money in the future – because the problems will only get worse if left unaddressed.

John Mouat asked whether the board could consider approving a budget for a three-year period – $100,000 for each year. Hewitt said the intention is that the DDA will spend at least this much every year. But since they haven’t approved the budgets beyond fiscal 2015, it’s better just to designate the amount for this year. He noted that in the somewhat distant past, the DDA budget had a separate fund for this kind of work, but eliminated it because it was cumbersome from a reporting standpoint, he said.

Mouat observed that one-year timeframes are tight, if the DDA is coordinating with the city for this kind of work. Hewitt again stated that it was the intent to spend money on this kind of thing in the future, and that the $100,000 for FY 2015 wouldn’t address all the problems, because maintenance has been deferred for years. “This will be a first step,” he said.

Outcome: The board vote was unanimous in support of the allocation.

Executive Director Raise

The July 2 agenda included a closed session for “a periodic personnel evaluation.” The agenda also included a resolution regarding compensation for the DDA executive director, Susan Pollay. The resolution for a salary adjustment was drafted prior to the closed session, and included this whereas clause: “Whereas, The DDA Executive Committee recommends that Ms. Pollay be provided with a salary adjustment beginning July 1, 2014 to increase her salary from $109,119 to $XXX,XXX; …”

The executive committee members are Sandi Smith (chair), John Mouat (vice chair), Keith Orr (secretary) and Roger Hewitt (treasurer). Pollay serves as a non-voting ex officio member.

Susan Pollay, Mike Martin, Darren McKinnon

Before going into closed session, board member Keith Orr noted that a closed session isn’t required unless the person being reviewed requests it. He said the review was being conducted in closed session at Pollay’s request. The closed session was held in Pollay’s office.

The board emerged after about 15 minutes and Roger Hewitt brought forward the resolution for her salary adjustment. Board chair Sandi Smith said the evaluation of Pollay was extremely positive, saying that Pollay worked well with board members, general community entities, and is “a wonderful ambassador for the city.”

Hewitt noted that Pollay’s current salary is $109,119. He said she had received “good raises” in each of the last two years. However, she did not take a raise during the six years before that, he added, and that had been at her request because of the difficult economy. Hewitt said her eight-year average raise comes out to about 1.9% annually, which he said is below the rate of inflation. “It’s actually a losing position versus the cost of living,” he said.

Pollay is a Level 2 in the city’s pay range, Hewitt reported, which has a salary range from $95,000 to $157,000. The midpoint is $126,000 annually, he noted. Given her evaluations, he added, Pollay should be receiving a salary that’s closer to the midpoint.

However, even though Ann Arbor is doing well, the state is still not doing very well, Hewitt said. So he suggested giving her a 5% raise, which would be about $5,456 – bringing her total salary to $114,570. About half of the raise would cover cost of living increases, he said, and the other half would be to move her more toward the midpoint of the Level 2 pay range.

Board chair Sandi Smith said she hoped that future executive committee members would keep that record in mind when they evaluate Pollay’s salary in the coming years, saying there’s some “make up” that needs to happen.

Bob Guenzel asked if there was any consideration given to doing a longer-term look at her salary, for the next two or three years. Hewitt replied that the executive committee didn’t discuss it, but “the intention is that there will be continued raises above the cost of living to bring her up to a level that is appropriate for her responsibilities.” Guenzel said it would be nice to see Pollay reach the midpoint. Hewitt replied that the intention is to bring her up to that midpoint salary of $126,000 “within a fairly short time period.”

From left: DDA board members Steve Powers and Rishi Narayan.

Steve Powers said he would not support a 5% raise. He understood the reasons given for it. He thought the movement of Pollay’s salary to a midpoint level, which is being tied to her performance, needs to be part of a more robust evaluation process. Also, according to a University of Michigan economic report, he noted, inflation has been between 1.7% to 1.9%. Powers said he was more comfortable with a 3% raise.

Smith replied that Pollay hadn’t received a raise in 8 of the past 10 years, “and I think there’s some opportunity for some catch-up.” She characterized a 5% raise as “extremely modest.”

Al McWilliams asked Powers if there were precedent for this raise compared to other positions within the city. Powers replied that the management employees of the city received a 3% increase this year. Last year they also got 3%. Prior to that there’d been a one-time adjustment, he said, and salary freezes during the recession.

The resolution regarding the increase states that “a number of important DDA projects were undertaken in FY 2014 under Ms. Pollay’s leadership, including opening the new First and Washington parking structure, creating a Street Framework planning initiative in partnership with the City, and working with the City Council to approve amendments to the DDA ordinance.”

The resolution also states that board members provided reviews of Pollay’s work in FY 2014, and the reviews “noted how effectively she works with the DDA Board to support board member involvement and effectiveness, how effectively DDA programs and projects are managed, and that Ms. Pollay serves as a vital resource for downtown stakeholders, and the community at large…”

Pollay has served as the DDA’s executive director since 1996.

Outcome: On a 9-1 vote, the board approved a 5% increase to Pollay’s salary, over dissent from Steve Powers. Russ Collins and Cyndi Clark were absent.

Annual Meeting

Immediately after its regular monthly meeting on July 2, the DDA board held its annual meeting to elect officers and form committees.

Annual Meeting: Election of Officers

John Mouat was nominated to serve as chair of the board for the coming fiscal year, which began on July 1, 2014. The nomination of Mouat as chair was made in accordance with the custom of the DDA board over the last several years – to elect the vice chair from the preceding year as chair. Mouat is a partner in the downtown firm of Mitchell & Mouat Architects.

Mouat’s term on the DDA board runs through Sept. 6, 2015. He was first appointed in 2007.

Other officers nominated by the board included Roger Hewitt as vice chair, Rishi Narayan as treasurer, and Keith Orr as secretary. Outgoing chair Sandi Smith was thanked for her service. She presided over the annual meeting until the end, as Mouat’s term began at the conclusion of the meeting.

There were no competing nominations.

Outcome: All officers were elected unanimously.

The executive committee consists of these four officers: chair, vice chair, treasurer and secretary. They serve in those positions for one-year terms. Given the custom of the board, Hewitt is now in a position to become the next chair. He has served on the DDA board since 2004 and his current term runs through Aug. 19, 2016. He owns two businesses in downtown Ann Arbor – Red Hawk restaurant, and Revive + Replenish shop.

Annual Meeting: Committee Structure

In other business at the annual meeting, the board discussed what committees it wanted to create or continue in the coming year.

The board’s bylaws state that committees can be created to advise the board. From the bylaws:

Committee members shall be members of the Board, any board member may serve on any committee of the Board. The Chair of the Board shall appoint the members and select the chair of the Board committees and will solicit volunteers to chair the standing committees. The committees may be terminated by vote of the Board. At the annual meeting, the committees will be evaluated and reappointed or dissolved.

Sandi Smith noted that for the last several years, all members of the board served on every committee. That way, she said, everyone got the meeting notices and packets. “I don’t know whether that’s a good practice or a bad practice, but it’s time that we bring that forward,” she said. Smith added that she believed she got the opportunity to appoint the committee chairs, as board chair.

The two existing committees were (1) partnerships/economic development/communications, and (2) operations. The partnerships committee includes a subcommittee on marketing. The board first considered whether to dissolve these committees.

Annual Meeting: Committee Structure – Partnerships, Marketing

Keith Orr advocated for keeping the partnerships/economic development/communications committee as is, with its marketing subcommittee working as needed. He didn’t think there needed to be a separate marketing committee.

Al McWilliams said he tended to agree with Orr. While marketing and communications activity is “picking up steam,” he didn’t think it was mature enough yet to need its own full committee.

The Ann Arbor DDA board.

Rishi Narayan pointed out that the partnerships meetings are getting unwieldy, so it might be better to pull out marketing and communications. If it turns out that a separate marketing/communications committee eventually isn’t needed, the board could dissolve it, he noted. This would allow there to be two separate meetings, each one shorter than the current combined committee.

Orr advocated for keeping it unchanged, and noted that the board can create a separate marketing committee during the year, if they feel they need it.

Joan Lowenstein agreed with Orr, saying she didn’t think the partnerships meeting was unwieldy. She noted that the board members are volunteers, and creating new committees requires yet another block of time to devote to the work. She thought it worked better for people’s schedules to consolidate as much as possible.

McWilliams then suggested creating separate committees, but holding back-to-back meetings.

Narayan said that in the future, if there’s a staff member focused on marketing and communications, “this area might become more fleshed out very quickly.” He noted that there’s been talk about hiring another employee for that purpose in the future, although he characterized that possibility as a “fantasy” at this point.

Smith picked up on McWilliams’ suggestion – having the partnerships meeting run from 11 a.m. to 12:30 p.m., then a marketing committee could meet as needed at 12:30 p.m. People attending the partnerships meeting could stay for marketing if they’re interested, she said.

Mouat encouraged board members to arrive at committee meetings on time, saying it would help save time and make the meetings more efficient.

Steve Powers asked that the DDA board chair or executive director remind the partnerships committee members who represent other taxing jurisdictions about the purpose of the committee and the changes that are being made, “so that their expectations are in line with the DDA board’s expectations for that committee.”

Smith said it sounded like there was consensus for a new marketing committee. She asked that McWilliams serve as chair. She asked anyone who was interested in serving on the committee to raise their hand. She, McWilliams and Narayan raised their hands.

At this point, DDA executive director Susan Pollay asked whether the board was going to vote to dissolve the existing partnerships/economic development/communications committee, and vote to create the marketing committee.

Orr repeated his preference to keep the current committee structure.

Outcome: The board voted to dissolve the partnerships/economic development/communications committee.

Roger Hewitt then moved to create a partnerships committee and a marketing committee. As a friendly amendment, Keith Orr suggested that the partnerships committee be named partnerships/economic development.

Outcome: The board voted to create a partnerships/economic development committee and a marketing committee.

Sandi Smith asked Joan Lowenstein and Al McWilliams to serve as co-chairs of the partnerships/economic development committee. Other board members who volunteered to serve on the committee are Bob Guenzel, John Mouat, Rishi Narayan, Keith Orr, Sandi Smith, John Splitt.

Smith noted that “committee participants” of the partnerships/economic development committee are: Ken Clein (city planning commission); Jane Lumm and Margie Teall (Ann Arbor city council); Charles Griffith (Ann Arbor Area Transportation Authority); and Jason Morgan (Washtenaw Community College). Based on an emailed response to a Chronicle query to Pollay, the DDA’s position appears to be that historically, membership on the partnerships committee was always restricted to DDA board members – because it has been a “board committee” under the DDA bylaws.

By way of background, however, the DDA bylaws provide for a second committee type – “advisory committees” – that do not have a requirement that members be DDA board members. It’s been assumed by at least some city councilmembers that those who are now being described as “committee participants” have been actual “members” of the partnerships committee and that the partnerships committee has been an “advisory committee” under the bylaws. To the extent that the DDA board committees function without taking formal votes or observing rules on quorum, the issue of committee membership as compared to “participation” could be considered moot.

At the July 2 meeting, Smith added that there was an “ongoing invitation” for representatives from Washtenaw County government and the Ann Arbor District Library to participate. “They know that they’ve been invited to come and share during the update time” during the partnerships meetings, she said.

By way of background, the DDA captures taxes from the following jurisdictions that collect taxes in the DDA district: the city of Ann Arbor, Washtenaw County, Washtenaw Community College, the Ann Arbor Area Transportation Authority, and the Ann Arbor District Library. The partnerships committee includes representatives from each of those entities, with the exception of the AADL and Washtenaw County. Until last year, county commissioner Leah Gunn was a DDA board member and served on the partnerships committee. Former county administrator Bob Guenzel is on the DDA board and the partnerships committee.

When queried by The Chronicle via email, AADL director Josie Parker stated that she hadn’t been formally invited to join the committee. She said she did participate on the partnerships committee several years ago, but hasn’t been part of it at all in the last few years. That was her choice, she said.

Annual Meeting: Committee Structure – Operations, Finance

Roger Hewitt noted that the DDA has a budget of about $24 million. During the operations committee meetings, there’s a lot going on, he said, and the financial piece tends to not get the attention that it needs, given the size of the budget. Having a separate committee that focuses strictly on the financial aspects of the organization would be beneficial, he said.

DDA board members Roger Hewitt and John Splitt.

So Hewitt preferred two separate committees. He suggested that operations could continue to meet at 11 a.m., then would break for lunch and continue with a meeting of the finance committee. Anyone who’s on operations could attend the finance committee meeting, he said, but it would focus in more detail on the organization’s financial records and reports.

Keith Orr said he thought it made sense to have separate committees for operations and finance. Finance is an important enough subject to warrant its own committee, especially as the DDA’s budget continues to grow, he said. It’s important to develop people on the DDA board who are comfortable with the financial oversight role – especially since there are now term limits, he said. [The city council voted last year to impose a limit of three terms for DDA board members, which amount to 12 years.]

Hewitt then brought forward one resolution to: (1) dissolve the existing operations committee, and (2) form two new committees: the finance committee, and the operations (parking/transportation/construction) committee.

Outcome: The resolution passed unanimously.

Smith appointed the new board treasurer, Rishi Narayan, as chair of the finance committee. Other board members who volunteered for the committee were Bob Guenzel, Roger Hewitt, John Splitt and Keith Orr.

Smith then appointed John Splitt as chair of the operations committee. Other board members who volunteered to serve on the operations committee are Bob Guenzel, Roger Hewitt, Joan Lowenstein, Rishi Narayan, Keith Orr.

Annual Meeting: Committee Structure – Executive

Sandi Smith noted that the executive committee consists of the board officers: chair John Mouat, vice chair Roger Hewitt, secretary Keith Orr, and treasurer Rishi Narayan. Smith, as the most recent former board chair, is a non-voting member. The DDA’s executive director, Susan Pollay, is a non-voting ex officio member.

Annual Meeting: Committee Structure – Membership

Committee membership was determined by board members volunteering for the committees on which they wanted to serve. The committee chairs were appointed by outgoing DDA board chair Sandi Smith. The four new committees have the following membership:

• Marketing committee: Al McWilliams (chair), Rishi Narayan and Sandi Smith.
• Partnerships/economic development committee: Joan Lowenstein and Al McWilliams (co-chairs), Bob Guenzel, John Mouat, Rishi Narayan, Keith Orr, Sandi Smith, John Splitt. Listed as “committee participants” of the partnerships/economic development committee on the agenda are: Ken Clein (city planning commission); Jane Lumm and Margie Teall (Ann Arbor city council); Charles Griffith (Ann Arbor Area Transportation Authority); and Jason Morgan (Washtenaw Community College).
• Finance committee: Rishi Narayan (chair), Bob Guenzel, Roger Hewitt, John Splitt and Keith Orr.
• Operations (parking/transportation/construction) committee: John Splitt (chair), Bob Guenzel, Roger Hewitt, Joan Lowenstein, Rishi Narayan, Keith Orr.

Two board members – Cyndi Clark and Russ Collins – were absent, and will likely be joining one or more of the committees.

Steve Powers noted that he hadn’t volunteered for any of the committees, but he’d try to attend meetings if assistance is needed. He encouraged the committee members to make sure that the purpose of the committees is clearly understood by committee members, staff and the public. It’s important to be aligned regarding the role of the committees, he said, and to maintain the positive relationship between the DDA board, staff, and the other jurisdictions.

Smith agreed, saying that in September each committee should kick off their meeting with a re-introduction of members, and a discussion of purpose.

Powers said he appreciated that the board priorities were posted on the DDA boardroom wall, saying that it’s a powerful reminder about why the DDA is here and what they’re focusing on. He suggested doing something similar for the committees. Smith joked that “it’s easy to be swayed by shiny objects.”

Annual Meeting: Committee Structure – Coda, Future Meetings

The board discussed the possibility of canceling its committee meetings for July. Roger Hewitt indicated a possible need to meet to discuss renovations at the Fourth & William parking structure, but that might be handled by a subcommittee. Sandi Smith wanted to have a partnerships meeting in July but not August. She wanted to evaluate the partnerships grant policy, after awarding its first grant under the new policy. She thought the committee should review the policy while the action was still fresh, rather than waiting until August or September.

After further discussion, the board decided to leave the July committee meetings in place.

According to the DDA’s website, upcoming committee meetings will take place at the DDA offices, 150 S. Fifth, Suite 301:

• Partnerships & Economic Development: Wednesday, July 9 at 9 a.m.
• Marketing: Wednesday, July 9 at 10:30 a.m.
• Operations: Wednesday, July 9 at 1 p.m. and Wednesday, July 30 at 11 a.m.
• Finance: Wednesday, July 30 at 12:30 p.m.

In addition, the board has scheduled a meeting on Wednesday, July 9 at 11:30 a.m. to discuss the design of the Fourth & William stair tower & elevator tower. All committee meetings are open to the public.

Communications, Committee Reports

The board’s July 2 meeting included the usual range of reports from its standing committees and the downtown citizens advisory council, as well as public commentary. Here are some highlights.

Comm/Comm: Downtown Area Citizens Advisory Council

Reporting out from the downtown area citizens advisory council, Ray Detter said the group recently welcomed two potential new members who live and work downtown. He said the advisory council would welcome the participation of others who live or work in the downtown area and who are interested in shaping developments downtown. There are three more membership openings. The group meets on the first Tuesday of every month except August at 7 p.m. in city hall.

He noted that by next fall, new developments will open that bring hundreds of residential units to the downtown, and “amazingly, our group is in full support of most of them.” Those developments that avoid having a negative impact are being undertaken by local developers, he noted.

But most of the advisory council’s July 1 meeting had been focused on the future of the Library Lane site, Detter reported, where a current surface parking lot is located atop the underground parking structure there. He noted that the city council provided direction to the city administrator to hire a broker to explore selling the development rights for that site, while reserving a portion of the property for a downtown park.

Members of the advisory council strongly support a significantly sized public plaza on the Fifth Avenue side of that location, Detter said. They also support pedestrian walkways to Liberty Plaza, and believe that all future development should take into consideration the needs of the Ann Arbor District Library and possible connections to the Blake Transit Center as well as nearby historic properties, and businesses. They encourage the possibility of a new tax-generating private or public development on the major part of that Library Lane property, he said.

Detter noted that the issue of improving Liberty Plaza has apparently been moved to the city’s park advisory commission. He said most of the citizens advisory council believe that changes to Liberty Plaza should be part of a larger plan for the entire block. The city about a decade ago spent $250,000 on redesigning Liberty Plaza – with $50,000 from the city’s parks department, and the rest provided by the DDA, he said. It’s a beautiful park, Detter added, and he hoped it would be part of a larger plan for the block.

Comm/Comm: Streetscape Framework Project

John Mouat noted that there was no agenda item for an update on the DDA’s streetscape framework project. He asked Amber Miller, the DDA’s planning and research specialist, to provide an update.

Miller said the staff and consultants had done some on-the-ground outreach, getting feedback from people who were using the streets downtown. They heard from over 200 people and got a lot of good feedback. She said they’ve also pulled in an “economics team” that focuses on retail and ground-floor uses, to make sure that any streetscape improvements would benefit those active uses. That team made its visit on July 1 and July 2, she said, meeting with some DDA board members and walking around the downtown district. More information would be provided at the project’s next advisory committee meeting, Miller said.

The next advisory committee meeting is Tuesday, July 8 at 9 a.m. at the DDA’s office, 150 S. Fifth, Suite 301. The meeting is open to the public.

By way of background, at its Nov. 6, 2013 meeting, the DDA board authorized the consulting contract SmithGroupJJR and Nelson\Nygaard to manage the project. According to the project’s website, a “comprehensive set of design, construction, and maintenance standards can enhance and maintain the high quality experience provided by some streets and improve the identity and functionality of others. A framework plan will be a tool to ensure downtown streets provide a high quality of place for all users, while also meeting broader community goals.”

Feedback is also being collected via an online survey and a wiki mapping tool.

Comm/Comm: Connector Study

Roger Hewitt reported on the status of the connector study. [By way of background, an alternatives analysis is currently being conducted by the Ann Arbor Area Transportation Authority for the corridor running from US-23 and Plymouth southward along Plymouth to State Street, then further south to I-94. The alternatives analysis phase will result in a preferred choice of transit mode (e.g., bus rapid transit, light rail, etc.) and identification of stations and stops.]

The technical oversight committee met last week, Hewitt said, and are very close to wrapping up its preliminary conclusions. A public meeting is planned for Sept. 17, he reported. That will take place in the evening at the Ann Arbor District Library to bring the public up to date, with two sessions – at 4 p.m. and 6:30 p.m.

Hewitt described it as a long and arduous process, going through reams of data. They’re close to making recommendations, depending on public input, he said.

Comm/Comm: WALLY

Roger Hewitt also gave an update on the federally funded study regarding a railroad station for a north/south commuter rail running between Ann Arbor and Howell. [The project is known as WALLY – the Washtenaw and Livingston Line.]

View looking south toward Liberty along the railroad tracks between Washington and Liberty. If the commuter rail project known as WALLY moves forward, a proposed train stop might be located here, in the railroad right-of-way east of the tracks – on the left side of this photo.

Hewitt said this service is probably a significant way off from being offered, but there had been funding for a study to recommend station locations. The consultants evaluated “every possible location” between North Main Street south to where Fingerle Lumber is located, he said.

The final site recommendation for a stop is for the east side of the railroad tracks between Liberty and Washington streets, Hewitt reported – opposite of where the former city maintenance yard was located [at 415 W. Washington]. He said it wouldn’t be a full station – it would simply be a platform with canopies and a ramp to Washington Street to the north and a sidewalk connection to the south onto Liberty.

The stop would be built entirely within the railroad right-of-way, he explained – there would be no taking of public or private property.

Hewitt said he’d like to make a short formal presentation about the recommendation at a future DDA board meeting.

Comm/Comm: Communications & Marketing

Rishi Narayan reported that the marketing/communications subcommittee was still collecting data to determine what the DDA’s place might be in marketing the downtown. Traditionally, marketing hasn’t been part of the DDA’s role, he noted, so if they decide to do it, they need to make sure it’s efficient in time, money and staff energy.

Narayan said they’re working with a company, at no cost to the DDA, to develop a plan that would give the DDA some macro-economic data. They’ve also started talking with Republic Parking, which oversees the city’s parking system under contract with the DDA, to see if there’s a way to extract information from Republic’s data.

Because the art fairs are approaching, people don’t have a lot of time to talk about this, Narayan noted. He hoped to come back with recommendations in the coming months. It might mean partnering with the downtown area associations and the Ann Arbor Convention and Visitors Bureau to do more, such as grants for events.

Al McWilliams noted that the CVB is doing data collection during the art fairs, to show what the impact of those events are. The CVB will be sharing that data with the DDA.

Comm/Comm: Fourth & William Renovations

John Splitt reported that the subcommittee for renovations at the Fourth & William parking structure had met with the design team. Construction drawings for the elevator and stair tower are moving forward. By way of background, the board had approved the $5 million project budget at its May 2, 2014 meeting, with Carl Walker Inc. handling the design.

Image from preliminary drawings by the Carl Walker Inc. design team for renovated southwest elevator and stair tower for the Fourth & William parking structure.

The subcommittee is still fleshing out general concepts about the rest of the potential build-out along Fourth and Williams, Splitt said. They want to be as flexible as possible, and would like to see wheelchair access, awnings and ways to break up the horizontal surfaces. Architect Carl Luckenbach has come up with some different concepts that the subcommittee is considering.

They haven’t decided where bathrooms might be installed, and aren’t certain how much space they can build out without triggering city code issues for ventilation and fire suppression, Splitt reported. The subcommittee is meeting with the design team again in the next week, and might emerge with answers to some of these questions.

John Mouat said they’d be reaching out to “our realtor friends” to get advice about what the “white box” might be for this build-out, to make sure that it’s viable for potential tenants.

Roger Hewitt reported that the subcommittee already had one meeting with real estate professionals. The feedback was that there’s big demand for business incubator start-up space, he said.

Keith Orr told the board that construction of the Greyhound ticket office at the Fourth & William structure is underway, and the bus company will be relocating there next week – ahead of schedule. The office was previously located at the site on West Huron where First Martin is now constructing an extended-stay hotel.

Comm/Comm: Ambassadors

Reporting out from the operations committee, Roger Hewitt noted that a meeting had been held with several representatives of local social service agencies, as well as Ann Arbor police chief John Seto and Mary Kerr from the Ann Arbor Convention & Visitors Bureau. They discussed how an ambassador program might be integrated into existing efforts, and complement those efforts.

Now they’re trying to figure out how to frame an RFP (request for proposals), Hewitt said. They’d like to bring the two potential providers here for interviews, he added. A meeting is set for Wednesday, July 9 at 1 p.m. to discuss exactly how to structure the interview process.

Hewitt expected to set up interviews sometime before the end of this summer.

Comm/Comm: Parking Update

Roger Hewitt said there was nothing new to report, other than the monthly permit data that was provided in the board packet.

Comm/Comm: City Updates

City administrator Steve Powers gave a couple of updates that related to the DDA district. The city council, as part of its approval of the fiscal 2015 budget, has authorized hiring three new police officers. Two of the three positions will be community engagement officers who’ll be starting by the end of July, he said. Downtown will be a priority area for their work over the summer.

Sandi Smith asked Powers to elaborate on the nature of the community engagement work. Powers described it as an initiative that police chief John Seto has been advocating since he took that position. Currently there is one officer doing community engagement – Sgt. Tom Hickey. The additional officers will help Hickey engage with three areas of emphasis: downtown businesses, neighborhoods and public schools. Their work will contrast with patrol activity or calls for service, Powers said, in that they’ll be more pro-active.

Powers also noted that during this year’s art fairs, the city’s police, fire and emergency management staff will be using Liberty Plaza – on the southwest corner of Liberty and Division – as staging area and a cooling station for the public. There will be misting and water available, as well as shade, he said. Red Cross will be participating, as will the city’s volunteer community emergency response team (CERT).

Comm/Comm: Real-Time Parking Data

During public commentary, Ed Vielmetti noted that in 2009, he’d approached the board with ideas and a prototype of a system to monitor and provide real-time information about the city parking system. At the time, the DDA board was not interested in supporting it, he said, and the DDA removed access to the real-time information. He said he’s recently spoken to staff at Republic Parking, which manages the city’s parking system under contract with the DDA, and showed them some prototypes. They’d been receptive to some of the ideas, he said, but had made it clear that a good first step would be to talk with the DDA board.

Vielmetti said his system could provide real-time alerts when parking structures are full, for example, among other features. He said he’s built all of this on his own, mostly as a demonstration project. He’d be happy to share the results of the prototype with board members. He’s doing a similar project for a solar energy-monitoring system.

Sandi Smith suggested that Vielmetti talk with DDA executive director Susan Pollay, as well as the board’s operations committee.

Comm/Comm: TiniLite

Changmin Fan introduced himself as the owner of TiniLite World. He said the company is registered in Ann Arbor, and he has a factory in China that’s building a prototype. He’d like to manufacture the product here, however. He said all four mayoral candidates are great, but noted that Sally Petersen has pointed out the city’s economic development needs. The economic ecosystem isn’t very good for him, Fan said. Small businesses and people – not just the University of Michigan – are the engine for economic development in this city. Communications are also important, he added, and there needs to be smart signs on the street. The DDA can take a leadership position on this, he concluded.

Comm/Comm: BTC Open House

Nancy Shore, director of the getDowntown program, invited board members to the Blake Transit Center grand opening on Monday, July 7 at 10 a.m. There will be tours, food and “dignitaries aplenty,” she said. The getDowntown office is located on the second floor, and she urged them to drop by.

Shore also reported that there is a community space within that facility where meetings can take place. It might be a nice location for a retreat, she said.

The Blake Transit Center is the downtown hub for the Ann Arbor Area Transportation Authority. It’s located north of William Street between Fourth and Fifth avenues.

Comm/Comm: Bill’s Beer Garden

Board chair Sandi Smith noted that the DDA board would be gathering that night at Bill’s Beer Garden at 6 p.m. She joked that the purpose was “to have some very serious discussions about Original Gravity, IBUs and things like that.” She said it would be open to the public, and is a celebration of hard work by a lot of volunteers.

Comm/Comm: Staff Thank You to Board Members

At the end of the annual meeting, executive director Susan Pollay made a presentation to the board, saying it was the staff’s chance to thank the board. DDA board members are volunteers, she said. “I don’t know that that’s widely understood out in the community.” She thanked the board for their service.

Pollay also said that it’s a tradition for the staff to present a small gift to the outgoing board chair. This year, the gift was inspired by a trip to New York, she said. “It was a wonderful moment for many of us to actually be in one of the most fabulous cities in the world.” [The trip was for the International Downtown Association conference in October 2013.] The gift comes from Selo/Shevel Gallery on Main Street in Ann Arbor, which closed earlier this year. It’s a pin that evokes a cityscape of tall buildings, Pollay said.

Smith received a round of applause from staff and the board.

Present: Al McWilliams, Bob Guenzel, Roger Hewitt, Steve Powers, John Splitt, Sandi Smith, Rishi Narayan, Keith Orr, Joan Lowenstein, John Mouat.

Absent: Russ Collins, Cyndi Clark.

Next board meeting: The board does not meet in August. The next board meeting is at noon on Wednesday, Sept. 3, 2014, at the DDA offices, 150 S. Fifth Ave., Suite 301. [Check Chronicle event listings to confirm date.]

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The Huron Street project is receiving a $390,000 grant. It’s an extended-stay hotel, which will be built by First Martin Corp. at the intersection of Huron and Ashley streets. The new building will be an 88,570-square-foot structure with a ground-floor restaurant or retail space. The extended-stay hotel will occupy the upper five levels and will be be operated by Marriott. The city council gave approval to the site plan at its June 16, 2014 meeting.

The $390,000 breaks down like this:

$340,000 New 12” water main on Ashley Street, and related hardscape 
$ 10,000 Sidewalk enhancements on Ashley Street 
$ 40,000 Right-of-way landscape maintenance (20-year commitment) 

$390,000 TOTAL

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The $390,000 amount is to be distributed over three years – $100,000 (Year 1); $145,000 (Year 2); and $145,000 (Year 3).

The maximum amount that can be awarded to a project under the DDA grant policy – adopted by the DDA board at its June 2, 2014 meeting – is 25% of the tax increment capture due to the project that the DDA receives for the first 10 years after the project is built. That amount is about $390,000, according to First Martin Corp. based on an annual figure of $156,515. But the DDA’s resolution indicates the figure has not yet been verified by the city assessor. Grants are not awarded until after the taxes are paid.

Mike Martin and Darren McKinnon attended the meeting and gave a brief presentation about the project.

The 618 S. Main project is an apartment complex that Dan Ketelaar’s Urban Group Development Co. intends to market to young professionals. The 7-story building would include 190 units for 231 bedrooms, plus two levels of parking for 121 vehicles.

The original $650,000 grant to the 618 S. Main Street project was approved by the DDA board at its June 6, 2012 meeting, a week before the city council gave its approval to the project on June 18, 2012.

The $650,000 total breaks down as follows:

 $85,000 Streetscape costs (sidewalk adjacent to project on Mosley/Main)
$384,500 Streetscape costs (sidewalk on west side of Main north of project)
$100,000 Rain garden to infiltrate stormwater, rather than detain and release
$ 80,500 Upsizing the water main under Ashley Street to a 12” pipe

$650,000 TOTAL

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That total is to be disbursed over four years in the following amounts: $100,000, $225,000, $225,000, and $175,000. None of the money is to be awarded before the taxes are paid each year. The DDA will use the tax increment finance capture from the project to make the grant payments.

Without an extension of the grant, it would expire automatically. The length of the extension, to receive all construction permits and to complete the project, is one year. The project has been delayed by the harsh winter.

The vote on the 618 S. Main grant was unanimous. Al McWilliams abstained on the vote for the First Martin project, but did not indicate why.

This brief was filed from the DDA offices, 150 S. Fifth Ave., Suite 301, where the DDA board holds its meetings.

Sarah Pressprich Gryniewicz, left, talks with Washtenaw County commissioner Leah Gunn prior to the start of the Aug. 1, 2012 board of commissioners meeting. Gryniewicz is community outreach coordinator for the Ann Arbor Transportation Authority. (Photos by the writer.)

Because the articles were amended, they will need to be reconsidered by the other three parties in the agreement: the city councils of Ann Arbor and Ypsilanti, and the board of the Ann Arbor Transportation Authority, which is spearheading this effort. Those governing bodies are expected to take up the issue at meetings later this month. It will be on the Ann Arbor city council agenda for its Aug. 9 meeting.

Before the county board’s Aug. 1 vote, about a dozen people spoke during a public hearing on the issue, the majority of them in support of the agreement and of expanded public transit in general.

Although amendments had been considered and voted down at the board’s July 11 meeting, on Aug. 1 Rob Turner proposed a new amendment to the articles of incorporation. The original draft stipulated that a two-thirds majority of the new authority’s board would be required to amend the articles of incorporation. Turner’s amendment would have stipulated that a unanimous vote by the new authority’s board would be needed to make such changes. Leah Gunn offered a compromise – a four-fifths majority, or 12 of the new authority’s 15 board members. That amendment to Turner’s amendment passed on a 6-4 vote, with dissent from Turner, Conan Smith, Felicia Brabec and Wes Prater. The vote on the amended amendment itself – requiring the four-fifths majority – passed unanimously.

Turner felt his original amendment offered safeguards for smaller communities. It’s possible for communities to decide to join the new transit authority, only to have the articles of incorporation – the “rules of the game” – changed after they’ve joined, he said. If his amendment had been approved, Turner said he would have supported the four-party agreement and articles of incorporation. He said it no longer seemed like a countywide authority – it seemed like an Ann Arbor system that others could join. That saddened him, he said.

Joining Turner in his final vote against the overall agreement and articles of incorporation were Alicia Ping, Wes Prater and Dan Smith. Rolland Sizemore Jr. was absent.

A range of other items were on the Aug. 1 agenda. Commissioners suspended the county’s use of Construction Unity Board (CUB) agreements, responding to a change in state law. They also gave final approval to a change in the county’s accommodations ordinance, exempting bed & breakfasts, cottages and individuals who occasionally lease out rooms from the 5% accommodations tax. And addressing a need for veterans, the board authorized the county clerk to offer photo IDs that can be used to redeem discounts offered at local businesses.

On an 8-2 vote, commissioners also approved a brownfield financing plan for a $39 million residential development at 618 S. Main St. in Ann Arbor. Before the board’s vote, both Felicia Brabec and Yousef Rabhi praised the development, but said they were voting against it because of concerns about affordability. They did not feel that most young professionals would be able to afford living there, and stressed the importance of having more affordable housing in the downtown area.

The board also heard a report from the county treasurer, and got a second-quarter financial update from staff. Commissioners then approved a $1,263,994 mid-year adjustment to its 2012 general fund budget, bringing the 2012 general fund budget to $101,162,770.

In one of the least controversial items of the meeting, commissioners passed a resolution commending the Washtenaw Community Concert Band – formerly the Ypsilanti Community Band – on its 35th season. Dan Smith, who plays the trumpet, is a member of that group.

Countywide Transportation

Commissioners were asked to approve a four-party agreement and articles of incorporation for a new public transit entity tentatively called the Washtenaw Ride Transportation Authority.

The other parties in the agreement are the cities of Ann Arbor and Ypsilanti, which both would contribute existing millages to the new authority, and the Ann Arbor Transportation Authority, which would shift its assets to the new entity. The governing bodies of those three parties had previously approved the transit documents, after going through their own amendment process. [.pdf of pre-amended four-party agreement and articles of incorporation]

The county board had given initial approval at its July 11 meeting, after a lengthy debate and a split 7-4 vote with dissent by Alicia Ping, Wes Prater, Rob Turner and Dan Smith. At that meeting, several amendments proposed by commissioner Dan Smith were discussed, but none of the amendments secured enough votes to pass. Those amendments had been similar to proposed changes that Smith had put forward at a three hour working session on June 14.

The county would not be contributing assets or a millage to the new authority. Nor would the county board be asked to put a countywide millage request on the ballot. Rather, the county’s role would be for the county clerk to file articles of incorporation with the state – an action to create a transit authority under Michigan Act 196. When formed, the Act 196 board would have authority to put a funding proposal on the ballot for voters to consider. A financial advisory group that’s been working on this effort has suggested that revenues equivalent to a 0.5 mill tax would be needed to cover the cost of expanded services for the first five years. [.pdf of financial advisory group report]

For other general Chronicle coverage of transit issues, see: “AATA Board OKs Key Countywide Documents.”

Countywide Transportation: Public Commentary

Speakers addressed the board on the topic of countywide transit during general public commentary as well as during a public hearing specifically on the four-party agreement and articles of incorporation. Several other transit supporters attended the meeting but did not formally address the board. Joel Batterman of Partners for Transit, who had sent out an email urging people to attend the meeting, was on hand to pass out stickers that stated support for expanded public transportation.

Here’s a summary of remarks made during public commentary and the public hearing on Aug. 1.

Thomas Partridge told commissioners that he’s a Democratic candidate for state representative in District 53, and he supported the countywide transit agreement. The county’s most vulnerable residents, including senior citizens and the disabled, need better access to affordable public transit, he said.

Jim Mogensen reminded the board that although people talk about the Ann Arbor public transit system starting in the 1970s, in fact the first time a local public transit system was proposed happened in the late 1950s. At that time, however, voters didn’t support the formation of a system. An alternative approach was passed in the 1970s, including a millage to support the Ann Arbor Transportation Authority. He referred to the current effort at expansion as a Pandora’s box, and likened it to a previous effort to pass a millage for a county jail expansion. That was a very complicated process, but voters ultimately rejected the bond proposal for it, he said. The jail eventually did expand, but in a different way, he noted. Now, the same dynamics are happening with public transit. Mogensen urged commissioners to take a step back, listen to concerns, then take leadership to move the county forward in a constructive way.

Joel Levitt said he’s been a resident of Ann Arbor for 40 years, and now his daughter, her husband and one-year-old grandchild are also living here. The health of the county depends on the health of Ann Arbor, he said. The city is the center for industry, commerce, health services and culture. For that to continue, the city can’t have poor and overcrowded roads and inadequate parking. There must be a superior public transit system from the city to every corner of the county, and improved services within the city as well.

Charlie Nielsen told commissioners that he’s the former Scio Township supervisor. He remembers the day when his son used to take the bus – when AATA used to provide service to Scio Township. It was invaluable in helping his son attend classes at Washtenaw Community College, he said. But Scio Township later couldn’t pay for the service, so it stopped. Nielsen noted that he serves on the advisory committee for the current countywide transit effort, and supports serving the whole county. One of the reasons he’s proud to live in this county is because of the human services that are provided, and countywide transit is in that same spirit. He noted that he’s president of the homeowners association for Scio Farms Estates, where many of the residents are getting older and could benefit from a public transit system. He urged commissioners to support it.

Waleed Howrani said he’d been a resident of Ann Arbor for 37 years. He finds it hard to believe that people aren’t doing more to save the environment. Resources should be used wisely, not recklessly. The auto industry doesn’t care about how many natural resources are dug up to build their cars, or about emissions from those vehicles. Howrani said he’s proud of the AATA. He’s taken public transportation in over 30 states, and no other system as as clean, efficient, and friendly. Although he does use Amtrak, he feels helpless when he needs to travel to neighboring towns and states. He loves that he can read on the bus and leave the driving to others. He noted that every bus can eliminate 50 cars from the road, and saves many lives as well.

Tad Wysor said he’s passionate about community organizing and mass transit. He lives in Ypsilanti Township and works in Ann Arbor, and said he’s blessed to have dependable buses on both ends of his commute, with bike racks. But for most folks, it’s not that easy. With residents struggling because of the economy, now is a great time to pull together, focus on common values, he said, and greatly improve mass transit in the county and beyond. He said he’s involved in a new coalition on the east side of the county involving clergy, labor and other community leaders. They haven’t yet decided how they’ll focus their efforts, but expanding and improving mass transit is one possible area. It’s hard for him to imagine an issue that would be more effective in helping the economy, he said. It could help connect employers and employees, get people to medical appointments and places of worship, and keep senior citizens more engaged in the community. Now’s the time to pull together and make it happen.

David Sponseller said there’s probably no one in the room who did more to help launch AATA than he did. In 1969, he spoke up to urge government leaders to support the public transit system. He encouraged his son to help promote it and urge residents to vote in favor of the millage. But that was a huge mistake, he said. He had no idea that although the system would grow, it would fail to win people over to use it. Less than 5% of people in Ann Arbor ride the bus, he said. People still love the convenience of their cars. Public transit is successful in areas that have high density – places like Toronto, Chicago and New York. But that’s not the case in Ann Arbor. Sponseller wondered how they can expect people in less dense parts of the county to embrace public transit, when Ann Arbor residents haven’t been won over. He argued that more energy is spent on fueling buses that have only one or two riders, than on cars. For the sake of avoiding costs that his grandchildren would have to pay, he urged the board to not support the project.

Larry Krieg of Ypsilanti Township said he was there to speak in favor of the agreement. For anyone who thinks the buses are empty, he urged them to ride one – it’s not the case that they’re empty, he said. Krieg, a retired faculty member at Washtenaw Community College, said he observed that if a WCC student’s car fails, then that student is likely to fail. Education is important for the entire county, as well as for individuals. Reliance on auto transportation also locks people out of the economic system, because many jobs require that you have a car, he said.

Countywide public transit will give people who don’t live in Ann Arbor and Ypsilanti the chance to participate in the economic system, he continued. Krieg said he also supports expanded public transit because of his grandchildren. One of his children went to the east coast for a job, and another went to the west coast for the same reason, because the economy is more prosperous there. He’d prefer that his grandchildren wouldn’t have to make that choice, and could stay in Washtenaw County. The county needs a solid public transit system.

Nancy Kaplan talks with Joel Batterman of Partners in Transit before the start of the Aug. 1 county board of commissioners meeting. Kaplan, a member of the Ann Arbor District Library board, raised concerns about the proposed governance of a countywide transit authority.

Nancy Kaplan of Ann Arbor described expanded public transit as a great idea, but said she had several concerns about the proposed process. Some of those concerns relate to the board for the new authority. Board members aren’t required to be residents of the county, she noted, and there’s no real oversight of the board – it’s questionable representation without accountability, she said. Kaplan noted that several services outlined in the five-year transit plan have already been implemented by AATA, which shows that these services can be provided under the current system. The services include commuter bus from Ann Arbor to Chelsea and Canton, but she wondered why Ann Arbor pays for that, without contributions from the other two communities.

Why not test out interest in service levels by signing five-year point-of-service agreements with other communities? asked Kaplan. That would let people see if residents of those communities are willing to fund transit services, and if they’re satisfied with the service they get, she said. There are many other unknowns regarding process, scope and fare increases, Kaplan said. She asked commissioners to test it out for several years before committing to a new transit authority.

Jan Wright of Pittsfield Townshp supported the agreement. She lives two miles from the nearest bus line. She just turned 70 and is doing great, she said, but she knows that won’t always be the case. She’s not the only person in this situation. As the population ages, there are a lot of people who won’t want to be stuck in their homes or forced to move, she said. Wright also has strong concerns about climate change, especially after the strange weather we’ve been having over the past year. Public transit is a way to have sustainable transportation, she said. Gas prices will probably increase, and that’s another reason to support public transit.

Matthew Braman of Milan also supports expanded public transit. He grew up in this county, attended a state-funded public university here, but is continuing his professional career in New York City – in large part because he can’t continue to live in Milan and work in Ann Arbor. He described how his car broke down earlier this year, and he had to rent a car from a friend. He’s been working with the Michigan Prisoner ReEntry Initiative (MPRI), and noted that ex-prisoners on parole are trying to find work and the community needs to find ways to help them succeed. Public transit would open up job opportunities in other communities.

Sayan Bhattacharyya told the board that he’s a graduate student at the University of Michigan. No one in his family had ever owned a car, and coming to Ann Arbor was the first time he’d seen snow. He’s afraid to drive in the winter, and that’s one reason why public transit is important. There are a lot of people like him, he said. When he graduates next year, he’ll be looking for a job, and part of the decision will be based on transportation choices. Bhattacharyya also said that he loves Ann Arbor because of its cultural offerings, but it’s frustrating that he can’t go to cultural events in places like Chelsea or Dexter unless he rents a Zipcar. He noted that he’s not a U.S. citizen so he can’t vote for them – a comment that elicited laughter from commissioners. He said he’d never been to a public forum like this, and had previously only read about democracy in action.

Robert Klingler said that about 18 months ago, he slipped on black ice and tore the tendon off his knee. It’s been humiliating, and he’s had to depend on services offered by AATA, including RideConnect. He lives just outside the Ann Arbor city limits, and taking the bus to work can take 45 minutes one way. It would be nice to catch a bus to go downtown, to restaurants, to church. If public transit were expanded, more people would come to Ann Arbor, he said. Klingler concluded by noting that the city and county are praised as good places to retire, but we’re not ready to accommodate retirees.

Countywide Transportation: Board Discussion

Yousef Rabhi, a Democrat who represents District 11 in Ann Arbor, began by thanking everyone who spoke during public commentary. He’s very much in favor of countywide transit – it’s desperately needed, and should have been expanded a while ago. He wanted to respond to some of the comments made during the public hearing. The idea that just because people love cars means that the community should give up public transit is like saying that because people like nicotine, we should give up on trying to quit smoking. We shouldn’t give up on public transit, he said. We should work to make it better.

Regarding empty buses, Rabhi said he used to regularly ride the Route 2 bus and during the winter, buses would be so packed that they would have to pass by people who were waiting at bus stops. There was no room for additional passengers. That’s not the case on all lines, but it’s not true that buses are empty. He noted that ridership is up on Route 4, between Ann Arbor and Ypsilanti, after AATA increased the frequency of bus service.

This is not the perfect plan, Rabhi continued, but you can’t expect perfection. It’s the start of the process, and moves the county in the right direction. It will make an impact on greenhouse gas emissions. He noted that he shared some concerns raised by Nancy Kaplan – saying he agreed that the AATA shouldn’t be providing service to Chelsea and Canton unless those communities are willing to pay for it. This new transit proposal does give Chelsea residents the opportunity to pay, he said, and he’ll continue to lobby AATA and ask them not to serve areas that don’t pay. But that’s not what the four-party agreement and articles of incorporation are about.

Today, the board will be creating a new entity, he said, and that entity will choose whether to put a proposal on the ballot for voters to decide. “This is direct democracy, folks,” Rabhi said. If Ann Arbor voters reject a funding proposal, then the broader public transit won’t happen. He said he supported the resolution before the board, and thinks it should move forward.

Rob Turner also thanked the public speakers. He’s been hearing from people in his district who are both for and against the proposal. [Turner, a Republican, represents District 1, which covers a large portion of western Washtenaw County, including Chelsea and Dexter.] Public transportation is important – it will help the county grow and prosper, and help people who are struggling to find jobs, he said.

Countywide Transportation: Board Discussion – Amendment

But Turner said he did have a major concern, and that’s why he was proposing an amendment to the articles of incorporation. [A written text of the amendment had been circulated by Conan Smith before the meeting started.] The original draft stipulated that a two-thirds majority of the new authority’s board would be required to amend the articles of incorporation. Turner’s amendment struck the two-thirds majority, and stipulated that a unanimous vote by the new authority’s board would be needed to make such changes. The amendment was seconded by Alicia Ping (R-District 3).

Rob Turner, a Republican representing District 1 – covering the western part of Washtenaw County – was unable to convince a majority of his fellow commissioners to adopt an amendment he put forward for the articles of incorporation of a new transit authority.

Turner said that the directors of the new authority’s board could change the structure of the authority – so it could become something different than communities originally opted into, he said. His amendment would provide a safeguard against that, he said. Otherwise, he couldn’t support the articles of incorporation or four-party agreement.

Leah Gunn responded, saying the board has gone over and over these documents, and had given initial approval at their July meeting without amendments. The problem with amending it now is that it would then need to go back to the other three parties for re-approval, she said. Gunn also felt it was unfair to require unanimity. That’s a high bar, she noted, and it means that one jurisdiction could “destroy” everything. Ann Arbor is passing over a huge amount of assets to the new entity, she said, and Ann Arbor needs as much protection as other jurisdictions. [Gunn, a Democrat, represents District 9 in Ann Arbor.]

Gunn then proposed amending Turner’s amendment – striking “unanimous” and inserting “4/5 (12 out of 15) vote of the directors seated and serving.” Four-fifths is a very strong majority, she said. Her amendment was seconded by Rabhi.

Barbara Bergman said she agreed with Gunn. She also wondered if requiring unanimity was legal, and asked Curtis Hedger, the county’s corporation counsel, for his opinion. He said he hadn’t had the chance to look at the question, but in general, whatever the four parties agreed to would be legal – though unanimity might make it more cumbersome to get things done.

Bergman said that one person could be easily swayed by a contractor, for example, and unanimity would make board members of the new authority extremely vulnerable to that kind of pressure. She said it scared her to think of the amount of capital that had been paid for with her tax dollars riding on the whim of one person.

Rabhi also supported Gunn’s amendment. As a practical matter, not every jurisdiction will opt in to the Act 7 districts that form the basis for the new authority, he said. So in some cases, it might be only one township that represents a district. If a unanimous vote of the authority’s board is required, that means that action could be blocked by just one small township, he said. Certainly the bar to change the articles of incorporation should be high, Rabhi said. Two-thirds is high, and four-fifths is even higher. He encouraged commissioners to support Gunn’s amendment.

Ping said she’d support Gunn’s amendment, but she wouldn’t be supporting the overall agreement. [Ping had voted against it at the July 11 meeting.] But she thought the agreement would pass, and a four-fifths majority would be the best option for the entire county.

Turner said he didn’t understand why Gunn could argue against his original amendment, saying that it would have to go back to the other three parties. Her amendment would also require that action, he noted. He shared the concern that Rabhi had mentioned – that one township could block a vote. But in his part of the county, one of the Act 7 districts comprises eight townships. That means that eight townships would be represented by only one director on the new authority’s board.

Any amendment to the articles of incorporation would change the structure of the new authority, Turner said. He added that this is the only instance in which he’s pushing for unanimity, because it’s an important safeguard. It’s a safeguard that might make the difference between a local entity joining the authority or not.

Wes Prater weighed in, saying these articles of incorporation should last a long time. Everyone should be on board, or it shouldn’t be done. The need for a unanimous vote might never come into play, he noted, or it might be very rare. He wanted to reject Gunn’s amendment and keep Turner’s.

Ronnie Peterson, a Democrat who represents District 6 in Ypsilanti and a portion of Ypsilanti Township, said he wanted to see the out-county jurisdictions participate in the new authority. But he found it difficult to see how unanimity could work effectively. On the other hand, he could see the difficulty of having rules change in midstream. Overall, he just hoped they could get this bus rolling.

Conan Smith said that the articles of incorporation only include five articles that state the board “shall do” certain things. The rest of the articles are characterized as “may do.” So the “shall do” items cause the greatest concern, he said. The first relates to jurisdictional boundaries and of the districts within the new authority, he said. Two other items have impact on the board makeup: Board qualifications that require a director to be a Washtenaw County resident, which the commissioners previously debated, and the board members’ terms and compensation.

Directors will serve without compensation, and people want to protect that, Smith said. [Smith did not mention this, but the articles of incorporation allow the residency requirement to be waived – that was an element of debate at the board's July 11 meeting.]

Conan Smith, chair of the Washtenaw County board of commissioners.

The fourth “shall” is the right of employees to collective bargaining, Smith said, and the fifth one provides pension protections to AATA employees who move to the new transit authority. On balance, the rest of the articles say “may do” or “may not do,” Smith contended. So the “shall” items are just those that would be impacted by a vote of the new authority’s board to change the articles of incorporation, he said. Setting the bar to require unanimity seems fair and reasonable, he added. Smith noted that he has served on boards that operate on a consensus basis. In cases like this new transit authority, it’s not too much to ask to make it as inclusive as possible and make sure everyone in the county has a fair say.

Gunn responded, saying she had no idea what Smith was talking about – his speech obfuscated the whole issue. The amendment being considered doesn’t apply to any specific article of incorporation. It would apply to all of them. She also noted that the idea of fairness works both ways. It’s important to be fair to the smaller communities, but also to larger communities that have “paid and paid and paid” – that’s the community she represents, Gunn said. A four-fifths majority should work.

Responding to Turner’s comment, Gunn said of course she was concerned that her amendment will also require that the documents be reconsidered by the other three parties. But she was trying to compromise, she said, because unanimity won’t work.

Directing his comments to Gunn, Prater said it’s true that Ann Arbor has paid and is contributing its assets, but it’s been Ann Arbor residents who have primarily used the AATA over these years. The AATA has also received a lot of state and federal grants, and that’s partly his tax dollars, Prater said. [Prater, a Democrat from York Township, represents District 4 covering the southeast side of the county.] He again urged support for Turner’s original amendment.

Bergman then called the question on Gunn’s amendment, a parliamentary move that forces a vote.

Outcome on Leah Gunn’s amendment to Rob Turner’s amendment: It passed on a 6-4 vote, with dissent by Turner, Conan Smith, Felicia Brabec and Wes Prater.

Countywide Transportation: Board Discussion – Amended Documents

Peterson asked for clarification – the new authority’s board can amend the articles of incorporation at any time? That’s right, Hedger said. So the authority’s board could change any of this in the future? he asked. Yes, Hedger replied.

Felicia Brabec clarified with Hedger that the vote before them was to accept the amendment requiring a four-fifths majority to alter the articles of incorporation, or to keep the original two-thirds majority requirement, which has already been approved by the other three parties. She said she appreciated Gunn’s attempt to compromise, but she was struggling with it. She generally likes to compromise, but would have preferred Turner’s original amendment. She’d support the four-fifths compromise, because she didn’t agree at all with requiring just a two-thirds majority.

Turner said he’d support the amendment, because it will provide additional safeguards for the articles of incorporation, which he felt the board would ultimately approve. But he said he’d now be voting against the four-party agreement and articles of incorporation, when it came for a vote later in the meeting.

Outcome on vote to amend the articles of incorporation: Commissioners unanimously passed the amendment requiring a four-fifths majority to change the articles of incorporation.

Later in the meeting, the board considered the resolution to approve the four-party agreement and the amended articles of incorporation. Dan Smith said he had applauded the AATA for taking a leadership role in this effort. He noted that he has no problem with the notion of public transit – he used it when he lived in the Netherlands and in Germany. The role that the county board is being asked to play puts them in the middle of this process, he noted, and it’s largely a ministerial role. They are being asked to adopt articles of incorporation that will last a very long time. He didn’t see the board’s role as saying public transit is good or bad, or as lobbying for or against it, or as determining the services that a new entity might provide. Commissioners’ role is to put a new authority in place so that the authority’s board can make those decisions.

Smith said he wasn’t satisfied about the articles of incorporation for reasons that he had elaborated on at the July 11 meeting and the previous working session. For those reasons, he said, he’d be voting no.

From left: County commissioner Wes Prater and Charlie Nielsen, former Scio Township supervisor.

Wes Prater read a one-page statement about the process. He stated that as of today, the AATA was not in compliance with the section of the four-party agreement that requires the AATA to publish details about the new entity’s service and funding plan in local newspapers. Until that happens, he said, the board shouldn’t approve the four-party agreement and articles of incorporation. “Without the details,” he said, “it’s like buying a pig in a poke.”

He noted that the articles of incorporation don’t state a date for the new authority to become operative and for the articles of incorporation to take effect. Not setting that date is a violation of state statute, he contended. This information is critical for local governments to know as they decide whether to opt out or participate in the new authority. He also argued that the sections in the articles of incorporation that provide ways to dissolve the authority should be removed, because these methods of dissolving the authority have no standing under Act 196. He cited a December 1998 opinion issued by former attorney general Frank Kelly to support that fact.

All of these issues should be resolved before the county board adopts the four-party agreement or articles of incorporation, Prater said.

Rob Turner described it as a difficult situation. All he hears from Leah Gunn is how much Ann Arbor has contributed and how much Ann Arbor would be sacrificing. It doesn’t sound like a countywide authority, he said. It sounds like an Ann Arbor authority that’s allowing other local governments to join. He said he’d be voting no, and that it breaks his heart. He hopes that the new authority will be more inclusive in the future. He’ll now have to go to the governing entities in his district and make sure they know the dangers. People in his district had told him that it would be an Ann Arbor authority, and he had told them it would be countywide. Now that will be thrown in his face, Turner said. He thought his amendment would pass, but he now believes it will be an Ann Arbor authority – he’s afraid those people were right.

Barbara Bergman said she was sorry for Turner’s sad heart, but she’s been paying taxes in Ann Arbor for the last 32 years, and that’s been a fairly substantial amount. She’ll be paying even more, if voters approve an additional transit tax. But everyone has skin in the game, she said – this isn’t just an Ann Arbor system.

Conan Smith observed that a different governance model would have guaranteed other things, but they would have to trust that directors of the new authority will do what’s best.

Felicia Brabec said she’d been reassured by AATA leadership about concerns she’d raised regarding her district of Pittsfield Township. People in her district were excited about expanded transit. She hoped Turner’s concerns would be laid to rest as the process unfolds.

Prater said he wanted to get another two cents in. It doesn’t matter what the county board does, he said – as soon as the new authority’s board is in place, that board can do whatever it wants. ”We can wail about it all we want to, but they can.”

At that point, Yousef Rabhi called the question.

Outcome: On a 6-4 vote, commissioners gave final approval to the four-party agreement and amended articles of incorporation that set the foundation to form a new transit authority. Voting against the resolution were Alicia Ping, Wes Prater, Rob Turner and Dan Smith. The documents will now need to be reconsidered by the other three parties – the city councils of Ann Arbor and Ypsilanti, and the AATA board.

2nd Quarter Financial Update

Tina Gavalier, Washtenaw County’s finance analyst, gave a second-quarter financial update that showed an improved outlook from her first-quarter presentation to the board in mid-May. The county’s fiscal year is based on a calendar year – the update covered the first six months of 2012, through June. [.pdf of chart showing general fund projections]

As she did for the first-quarter update, county administrator Verna McDaniel again introduced the presentation by saying that the main message is still “stay the course.”

Second-Quarter Budget Update: General Fund Revenues

Revenues for the general fund are now projected to be about $2.085 million more than budgeted – due primarily to about $2.5 million more in property tax revenues than originally anticipated. Total revenues for the 2012 general fund are expected to reach $100.83 million. [The board had received the news about the higher property tax revenues at its April 18, 2012 meeting, when the county equalization report was presented.]

Gavalier reviewed some of the revenue variances for specific units. Revenues for the sheriff’s office are projected to be about $835,116 less than budgeted. Much of that amount is caused primarily by delayed implementation of the county’s dispatch consolidation with the city of Ann Arbor. [At its Dec. 5, 2011 meeting, the Ann Arbor city council approved a $759,089 annual contract with the county, which was supposed to start in March of 2012. Hiring is underway, but the consolidation hasn't yet happened.] Other items that contributed to the shortfall include no revenue so far for towing contract administration fees (contract amendments are in progress) and lower-than-projected concessions revenue for the corrections service center lobby coffee shop and other food venues.

Projected revenues for the Washtenaw County Trial Court also are falling short of budgeted amounts by about $208,000, primarily because of lower-than-budgeted court equity funds that are disbursed by the state. A projected shortfall of about $114,000 in the 14A District Court is due to lower court fees and fines, attributed to a declining trend in case filings.

Second-Quarter Budget Update: General Fund Expenditures

Gavalier reminded commissioners of amendments they made to the budget in late 2011 and early 2012. At their Dec. 7, 2011 meeting, commissioners voted to reinstate $128,538 in funds for human services nonprofits – administered via the coordinated funding model – that had previously been cut from the budget. On Jan. 18, 2012, the board voted to approve the consolidated dispatch between the county and city of Ann Arbor, and authorized the creation of 15 full-time positions. That vote increased the budget – on both the revenue and expenditure sides – by about $1.4 million. Also, at their Feb. 15, 2012 meeting, commissioners approved a $165,000 expenditure increase as part of a new contract with the Humane Society of Huron Valley, for animal control services through 2012.

Chart showing Washtenaw County general fund projection as of June 30, 2012.

Regarding overall expenditures, Gavalier reported that expenses are $808,251 more than budgeted for the general fund. That’s due in part to higher-than-expected costs in the sheriff’s office from greater use of part‐time temporary workers and overtime, operating supplies, and jail medical/food contracts.

General fund expenditure projections include an assumption that there would be a lump sum expense reduction of $2.481 million for the year – an amount that’s not specific to any particular department, but that would be gained from across the organization. So far, $1 million in reductions have been identified, due to the high number of retirements last year (118) with 97 of those coming in the last quarter of 2011. The savings come from several unfilled positions following those retirements, as well as from lower salary and fringe benefit costs for new employees replacing the retirees.

However, some of those savings have been offset by increases in part‐time temporary costs and increased fringe benefit costs. A high number of medical claims were made over the last five months of 2011, Gavalier reported. Since there’s typically a six-month processing delay for those claims, most are being paid in 2012. Changes in the county’s employee medical plan are expected to contribute to the lump sum reductions later this year, she said. Overall, only about $282,000 in net lump sum reductions have been realized so far this year – about the same amount as was reported in the first-quarter update. More reductions are anticipated to be recorded in the third quarter, she said.

The 2012 budget had anticipated a surplus of $1.889 million, but the administration is projecting a surplus of $1,277,318 – a significant increase from the $272,238 that had been projected in the first quarter. That surplus is intended to carry over into the 2013 fund balance. The county faces a $612,065 shortfall in the amount it had budgeted for the fund balance contribution.

Second-Quarter Budget Update: Non-General Fund Items

Gavalier also reviewed several county operations that are not supported by general fund revenues. Units that are projected to show a surplus include child care, facilities management, Friend of the Court (due to trial court consolidation and cost containment efforts), public/environmental health, building inspection, and risk management units. Units that are on budget include the office of community & economic development, the prosecuting attorney’s office, and the office of veteran’s relief.

One unit – programs supported by the Act 88 millage, related to economic development – is projecting a shortfall, but had budgeted to use its fund balance in 2012 to cover the overage, Gavalier said.

Second-Quarter Budget Update: Issues to Watch

Gavalier listed out several areas that the administration is monitoring closely, including some that she had highlighted in her first-quarter update. Medical costs are difficult to project, because the trend of claims is evolving under the new medical plans for employees. The budget was developed based in part on projected costs provided by Blue Cross Blue Shield, Gavalier noted. But because the county is self‐insured, it pays the actual costs of its employees’ medical claims. July was the first month that the county started to see how claims have adjusted under the new medical plans, so the third quarter of this year – from July through September – will show a better reflection of actual savings.

Another area to watch relates to state revenue-sharing and the state’s new economic vitality incentive program, intended as a replacement to revenue sharing. Gavalier reminded commissioners that the county’s revenue-sharing reserve fund will be depleted in 2013. The state’s adopted budget includes a partial allocation to Washtenaw County in 2013 of $1,177,601, if the county meets three specific areas of compliance incentives: (1) accountability and transparency; (2) consolidation of services; and (3) employee compensation with defined eligibility requirements outlined for each area.

Personal property tax (PPT) reform legislation is another uncertainty, Gavalier said. There will be an impact, but the magnitude is uncertain. Currently, PPT revenue for the county is $5.6 million. Current versions of bills to repeal the PPT  include reductions in tax revenue starting in 2013 of about $390,000 for industrial and commercial properties, with additional reductions phased in each year through 2022.

Gavalier also reported that the county’s annual actuarial valuations for its retirement plan (the Washtenaw Employees Retirement System, or WERS) and retiree health benefits (the Voluntary Employees Beneficiary Association, or VEBA) will be completed this summer. With 118 retirements in 2011, there will certainly be a cost impact to those plans, she said. The valuations might also increase the cost of fringe benefits for active employees too.

In addition, the county expects to complete a cost allocation plan (CAP) by this summer, Gavalier said, outlining how much each department will be accessed. CAP is an amount charged to each county department for things like the county attorney and administration. CAP amounts have been waived or frozen in recent years, but will be adjusted for the 2012-2013 budget cycle.

2nd Quarter Financial Update: Board Discussion

Barbara Bergman referred back to the budget adjustments that had been made earlier this year, and pointed out that the adjustment of an additional $165,000 for animal control services was higher than the additional $128,538 for human services. She wanted other commissioners to think about that. She noted that most public employees choose their jobs not because of large salaries, but because of the satisfaction it gives them to be public servants. Bergman expressed concern that people might no longer be able to afford that choice, if they’re asked for more labor concessions. She indicated that’s the context in which the board should consider its allocation for animal control services. [For recent background on that issue, see Chronicle coverage: "Revenue Options Eyed for Animal Control."]

In response to a question from Conan Smith, Gavalier reported that individual budget item adjustments of less than $100,000 were not reflected in her presentation. For amounts less than $100,000, county administrator Verna McDaniel has the authority to approve those adjustments.

Rob Turner told Gavalier that after her first-quarter update, he had been concerned about the county’s ability to reach the surplus they needed to carry over into 2013. Now, the projection is much better and he feels more comfortable that they can attain that amount, he said. Gavalier indicated that the finance staff feels better about it, too.

Leah Gunn thanked Gavalier for the clarity of her presentation. The increase in property values is good news, she said.

Alicia Ping asked about the shortfall for Act 88 programs. Conan Smith explained that there had been a budgeting error when the county allocated $15,000 to the Food System Economic Partnership. That’s now being handled by tapping the Act 88 fund balance to cover the $15,000 allocation. Ping didn’t feel that was a great answer – because only the revenues coming from the Act 88 millage should be expended.

Wes Prater clarified with Gavalier that although there’s currently a general fund surplus, the amount of that surplus is less than the county had budgeted to carry over into 2013.

Outcome: This was a presentation only – no board action was required.

Mid-Year Budget Adjustment

Commissioners were asked to approve a $1,263,994 mid-year adjustment to its 2012 general fund budget, bringing the 2012 general fund budget to $101,162,770.

The adjustment includes equal increases in revenues and expenditures. The additional revenues come primarily from higher-than-projected property tax revenues of $2,417,690. The main increase in expenditures comes from an increase in personnel costs over the budgeted amount for 2012. The original budget had anticipated labor savings of $2,481,008 – but the bulk of those reductions have not yet materialized. The county did realize more than $1 million in reduced labor costs due to 118 retirements in 2011. However, that savings has been offset by increased part-time temporary costs and increased fringe benefits costs related to medical claims made during the last six months of 2011, which are being paid in 2012.

Outcome: Commissioners unanimously approved the recommended mid-year budget adjustments.

Treasurer’s Report

Catherine McClary, Washtenaw County treasurer, presented an annual foreclosure report as well as a mid-year investment update.

She told commissioners that her major goal is to protect and safeguard public funds. Through June 30, 2012, her office has brought in $5.268 million in revenues. Sources include investment earnings ($415,309), delinquent taxes and fees ($3,307,004), accommodation tax ($1,497,340), dog licenses ($33,872) and tax searches ($14,656). She’s projecting revenues of about $10.5 million for the full year.

McClary said she manages about $154 million for the county, diversified by investment type, institution and maturity date. Cash and investments are allocated in the following way: CDs, CDARs, money market accounts ($59.833 million); commercial paper ($3 million); treasuries and agencies ($16.5 million); Michigan municipal bonds ($52.7 million); and bank accounts ($22.172 million).

McClary noted that in previous years, investments were laddered out over five to seven years. But with investment rates lower, she’d now taking a “barbell” approach, with shorter-term and longer-term investments. Although the average weighted yield of the county’s investment is below 1% – at 0.526% – she noted that it is well above the three-month Treasury benchmark of 0.09%.

Last year, McClary recalled, she had told the board that she expected interest rates to remain low, and that her strategy would be to increase safety and flexibility while reducing expenses. She noted that Congress authorized unlimited FDIC insurance on certain bank accounts through the end of 2012, so the county is taking advantage of that. By maintaining cash reserves in an insured account, the county is foregoing interest earnings in favor of an “earnings credit” that covers all of the county’s bank fees. This approach has saved the county’s general fund more than $80,000 annually, she said.

Conan Smith asked if McClary benchmarked Washtenaw County’s investment performance to other counties. McClary said that the county board’s investment policy had prioritized safety, and she didn’t know if that was true for other counties.

Treasurer’s Report: Foreclosures

McClary also gave her annual report on foreclosures, as required by state law. She noted that her office has been able to prevent many foreclosures through its tax and mortgage foreclosure prevention programs. Her report focused on tax foreclosures, because the county treasurer’s office is the governmental entity tasked with administering the tax foreclosure process.

The report shows a lag – because it reflects properties with unpaid taxes from 2007 that were auctioned in 2010, with excess proceeds reported as of May 31, 2012. This process is required by state law, to allow time for complete closure on the properties, McClary said.

For unpaid 2007 taxes, the process generally worked like this (the process is the same for any given year):

• 2007 taxes in any local jurisdiction in Washtenaw County that were unpaid by March 1, 2008, were declared delinquent. The county treasurer was then responsible for those taxes. A 4% administrative fee was added to the taxes, and interest started to accrue at 12% per year (1% per month). On Oct. 1, 2008 a $15 fee was added.
• On Nov. 1, 2008 the property was added to a preliminary forfeiture list. If taxes were still unpaid by Feb. 1, 2009, then mortgage lenders and banks could be notified.
• On March 1, 2009, a minimum of $205 in fees could be added to each property, and the properties were forfeited to the county treasurer. The interest rate was increased to 18% per year, retroactive to March 1, 2008.
• In June 2009, the treasurer filed foreclosure petitions in the 22nd Circuit Court.
• Between June 1, 2009 and Jan. 31, 2010, title research was conducted to identify owners and lienholders. In some cases, a personal visit was made to the forfeited property. Mortgage lenders, banks and other lienholders were notified.
• In early 2010, a show cause hearing was held. That led to a court hearing in February 2010 when the circuit court judge signed foreclosure orders. By March 31, 2010, redemption rights expire if taxes aren’t paid, and the property ownership transfers to the county treasurer.
• Property was sold at action in July 2010. The prior owner doesn’t receive any proceeds.

After two years of being unable to recover costs at tax foreclosure auctions, McClary reported net positive proceeds from 2010 of $102,746. That amount is available this year for transfer to the county’s general fund.

Interest on these properties goes into the county’s delinquent tax revolving fund. After delinquent tax notes are matured and paid off, any leftover funds are transferred to the county’s capital projects fund and used to pay the debt service of other bonds committed by the board of commissioners. In 2010 and 2011, a total of $11.2 million was transferred from the delinquent tax revolving funds to the capital projects fund. These amounts are counter-cyclical, McClary noted – they are higher when the economy is bad, and lower when the economy improves and fewer properties go into tax foreclosure.

McClary said the county is seeing better times, and appears to be pulling out of its economic trough. A leading indicator of that is delinquent taxes, which are down 20% this year, she said.

McClary also reported that the first tax foreclosure auction of 2012 went well, with 45% of the properties sold. About 80% of the buyers listed zip codes in Washtenaw County, she said, noting that it’s a positive for our neighborhoods when the buyers are local.

Treasurer’s Report: Foreclosures – Board Discussion

Dan Smith observed that the nearly $103,000 in net proceeds is a mixed bag. While it’s good for the county’s general fund, it still reflects the fact that some people lost their properties through foreclosure. McClary said that’s why she’s proud of her office’s tax foreclosure prevention program, which helps people avoid that end result.

Ronnie Peterson said he knew that McClary had prevented a lot of tax foreclosures in his district, but activity was still very high there. Over the past few years, hundreds of homes had been lost to foreclosure. [Peterson represents District 6, which covers primarily the city of Ypsilanti.] Houses sold at auction were extremely reasonable for the market, he said – some selling as low as a few thousand dollars. He wondered how the county might partner with another agency to secure some of these properties for housing families in need.

McClary said she’d like to pursue the idea of a revolving loan fund. She’d be willing to sit down with her staff and do an analysis of properties that have been sold at auction over the last few years. The city of Ypsilanti had approached her office and partnered to have open houses of the properties before auction, she reported. This year there were 10 open houses – it’s a way of encouraging local people to buy, she said. McClary noted that the county and city recently received an award for the project from the National Association of Counties.

Peterson observed that some of his business colleagues get concerned when the government gets involved in the housing market. But he noted that the government already is involved – by funding the homeless shelter. If families can be put in housing, it would help stabilize neighborhoods and bring prosperity to the community, he said.

CUB Agreements Suspended

For the second time in the past 12 months, commissioners were asked to suspend the county’s use of Construction Unity Board (CUB) agreements.

CUB agreements are a type of project labor agreements (PLA), negotiated between local trade unions and contractors. CUB agreements require that contractors who sign the agreement abide by terms of collective bargaining agreements for the duration of the construction project. In return, the trade unions agree that they will not strike, engage in work slow-downs, set up separate work entrances at the job site or take any other adverse action against the contractor.

The county board first suspended its CUB policy in September 2011, pending the outcome of litigation that’s challenging the validity of the state’s Public Act 98 of 2011. That law, which took effect on July 19, 2011, prohibited municipalities from including as a requirement in a construction contract anything that would either require or prohibit contractors from entering into agreements with collective bargaining organizations. The act also prohibited discrimination against contractors based on willingness or non-willingness to enter into such agreements.

The law was challenged in federal court by the Michigan Building and Construction Trades Council, AFL-CIO and the Genesee, Lapeer, Shiawassee Building and Construction Trades Council, AFL-CIO. They sought to rule the law invalid, contending that it was pre-empted by the supremacy clause of the U.S. Constitution and the National Labor Relations Act.

The county board’s September 2011 resolution suspending its CUB also also stated that if the state law was overturned by a state or federal Court, the county would automatically reinstate its CUB agreement policy. That happened in March of 2012, when the judge for the Federal District Court for the Eastern District of Michigan ruled that the state law was unenforceable. At that time, the county’s CUB immediately was reinstated, without additional action by the county board.

Instead of appealing that decision, the state legislature made revisions to the law, which took effect on June 29, 2012 as Public Act 238 of 2012. The new law revised several aspects of the previous version, but generally prohibits the use of CUB agreements.

According to a staff memo, the unions that filed the initial lawsuit seeking to invalidate the original version of the law are expected to file suit again to have the revised version invalidated. Meanwhile, the new law led the county board again to suspend its CUB agreement. The resolution on the Aug. 1 agenda was nearly identical to the one passed by the board in September of 2011. It suspends the county’s CUB requirement pending the outcome of any litigation challenging the validity of the new state law.

The city of Ann Arbor has taken similar action related to CUB agreements, most recently at the city council’s July 16, 2012 meeting.

CUB Agreements Suspended: Board Discussion

Dan Smith said he would reluctantly support the resolution. There were a couple of the resolved clauses that he didn’t like – Smith didn’t specify which ones – but based on the advice of the county’s corporation counsel [Curtis Hedger], he’d support it.

Rob Turner confirmed with Hedger that this resolution suspending the CUB agreements is similar to the previous one that the board discussed and passed in September 2011. Yes, Hedger replied, it’s almost identical – a temporary suspension until state or federal courts find the new law invalid.

Turner noted that suspending the agreements temporarily will prevent the county from legal entanglements. The building trades were planning to take the government to court on this, he said. Turner added that he liked the section of the board’s resolution that stated the county supports these labor agreements and will reinstate them if possible.

Yousef Rabhi agreed, saying he very much supported CUB agreements and he doesn’t agree with the state law. The only reason he could support this resolution was because it included a resolved clause similar to the one that he had proposed through an amendment at the September 2011 meeting. [That resolved clause states that "upon such time as it is permitted under State and/or Federal law or otherwise ruled legal by a State and/or Federal Court, it is understood that the County will immediately reinstate its CUB Agreement policy."]

Felicia Brabec said she echoed Rabhi’s sentiments. She asked Hedger what’s to stop the legislature from repeating this cycle? Hedger replied that the current legislature is determined to remove this type of agreement. He assumed the unions would sue again. It’s difficult for the county, Hedger said, because many projects are in the process of soliciting bids. The county must follow the law. “I don’t know if there’s an easy answer,” he said.

Wes Prater said he also believed the building trades would be challenging this law in court – as the new law is very similar to the one that was struck down in court, he noted. Probably the same process will happen again and again, until Gov. Rick Snyder gets tired of signing legislation that the courts rule is unconstitutional and “stops this silliness.”

Outcome: On an 8-2 vote, commissioners voted to suspend the county’s use of CUB agreements, with dissent from Alicia Ping and Ronnie Peterson. Neither stated their objection to the resolution. Rolland Sizemore Jr. was absent.

Change to Accommodations Ordinance

Commissioners were asked to give final approval to a change in the county’s accommodations ordinance, exempting bed & breakfasts and cottages from the 5% accommodations tax. In addition to exempting cottages and bed & breakfasts with less than 14 rooms, the change also exempts individuals who occasionally lease out rooms. These types of establishments account for less than 1% of the total tax collected in Washtenaw County, according to a staff memo accompanying the resolution.

According to the county treasurer’s report to the Washtenaw County accommodation ordinance commission, in 2011 the county collected $3.99 million in accommodation taxes. The money is primarily distributed to the county’s two convention & visitors bureaus (CVBs) – in Ann Arbor ($2.69 million in 2011) and Ypsilanti ($898,563). The county treasurer retains 10% of the tax to cover collection and enforcement expenses.

The ordinance changes received initial approval by the county board at their July 11, 2012 meeting, and several B&B owners spoke in support of the proposal.

The changes had been recommended for approval by the accommodation ordinance commission (AOC) in June. A staff memo states that the AOC had recently reviewed enforcement and administrative costs, and did not believe it was cost effective to enforce the ordinance with these smaller establishments. The staff memo also states that the local CVBs support this change, in part because the CVBs do not actively market these establishments.

No one spoke at a public hearing on the ordinance change. Mary Kerr, president of the Ann Arbor Convention & Visitors Bureau, attended the meeting but did not formally address to the board.

Outcome: Without discussion, commissioners unanimously gave final approval to the accommodations ordinance change. 

Photo IDs for Veterans

The county board was asked to approve a proposal from county clerk Larry Kestenbaum that allows the clerk’s office to issue veteran photo ID cards for a $10 fee.

County commissioner Barbara Bergman.

According to a staff memo, county clerks in Michigan are permitted to record military discharge certificates for veterans. Those certificates – called DD-214s – are bulky and can’t be carried around easily. A veteran’s ID card would serve the same purpose, allowing veterans to show more easily a proof of service – to take advantage of discounts for veterans offered by businesses. The memo notes that $10 photo IDs are currently offered in Livingston, Oakland and Macomb counties.

The $10 fee would cover the cost of printing the card, which would be handled by the clerk’s vital records division. Start-up costs are estimated at $100. The county clerk/register of deeds office is located at 200 N. Main in downtown Ann Arbor.

Photo IDs for Veterans: Board Discussion

Barbara Bergman recalled that in the past, the clerk’s office offered ID cards at little or no cost to people who needed the cards to get certain government benefits. She wondered if that program was extant – if it wasn’t, she hoped it could be re-instituted. County administrator Verna McDaniel said she’d check with the county clerk and report back to the board.

Yousef Rabhi asked whether veterans could use the photo IDs as voter identification. Michael Smith, director of veteran services for the county, replied that this ID primarily could be used for discounts at private businesses, but not as a voter ID. Companies like Lowe’s, Home Depot and restaurants often offered discounts to veterans, but require proof of service, he said. The U.S. Dept. of Veteran Affairs doesn’t offer an ID card of this type – discharge papers are used in order to obtain government benefits, but there’s nothing that can be used conveniently to show proof of service for other reasons.

There’s a need, Smith said, and this service fills that need, while also bringing in a little revenue to the county. He thanked the clerk’s office for taking the initiative on this.

Smith also said the board had been very brave in authorizing an 0.025-mill tax to pay for services for indigent veterans. If veterans were unable to afford the $10 fee for the photo ID, Smith said his office would be happy to cover that cost. He offered to work with the clerk to come up with a waiver, if needed.

Outcome: The board unanimously voted to allow the county clerk’s office to issue veteran photo ID cards.

618 S. Main Brownfield Plan

Commissioners were asked to approve a brownfield financing plan for a $39 million residential development at 618 S. Main St. in Ann Arbor. [.pdf of brownfield plan]

Previously approved by the Ann Arbor city council on June 18, the project’s brownfield tax increment finance (TIF) plan works in conjunction with a $650,000 TIF grant (paid over a period of four years) awarded by the Ann Arbor Downtown Development Authority board at its June 6, 2012.

Dan Ketelaar, developer of 618 S. Main, a proposed 7-story apartment complex in downtown Ann Arbor.

Both the brownfield TIF and the DDA grant work in a similar way – in that the developer must build the project and pay the new taxes on the project, in order to receive the financial benefit. The brownfield plan includes developer reimbursements of $3.7 million over 26 years. Also during that period, the plan includes $462,864 of tax capture for administrative fees to support the operation of the Washtenaw County Brownfield Redevelopment Authority. An additional $457,741 of tax increment proceeds will be contributed to the Local Site Remediation Revolving Fund.

Work covered by the brownfield plan includes: site investigations for characterization of soils and dewatering if water is encountered during excavation; disposal of soils; demolition of buildings and removal of existing site improvements; lead and asbestos abatement; infrastructure improvements like water, storm sewer and sanitary sewer upgrades, street repair and improvements to streets; and site preparation like staking, geotechnical engineering, clearing and grubbing.

According to a staff memo, the project will create 80-100 temporary construction jobs, and 4-5 full-time, and 6 or more part-time, permanent jobs. Taxes from the Washtenaw County annual millage will increase from about $2,028 to $69,614 after the tax increment financing period is completed.

The 7-story building will include 190 units – which will be marketed to young professionals – plus two levels of parking for 121 vehicles.

618 S. Main Brownfield Plan: Public Hearing

The only speaker at the public hearing was the project’s developer, Dan Ketelaar. He described various aspects of the project, noting that his team has been working on it since November of 2010. The Ann Arbor planning commission had approved the development in January of 2012, followed by city council approval in June. The market niche for young professionals isn’t being addressed in downtown Ann Arbor, Ketelaar said, and this project will satisfy that need. He described it as a gateway project, close to a highway yet walkable to downtown and the University of Michigan campus.

When the three minutes for his speaking turn ended, board chair Conan Smith asked if there were any objections to allowing Ketelaar to continue. There weren’t any, and Ketelaar spoke for a few more minutes.

Ketelaar told commissioners that he had met with several local groups, including the Old West Side Association and the city’s design review board. In response to neighbors’ concerns about parking, the project doubled the number of parking space on site, he said. The project and related streetscape improvements will improve the pedestrian experience in that part of town, Ketelaar said, and encourage redevelopment of other property. He urged the board to support the plan.

618 S. Main Brownfield Plan: Board Discussion

Felicia Brabec asked whether the development included any affordable housing. Brett Lenart, housing and infrastructure manager at the office of community & economic development, replied that there would be no subsidized or public housing – most of the units would be priced around the range that’s considered affordable for the area median income. [Median income for one person in metro Ann Arbor – a region covering all of Washtenaw County – is $60,500. For a two-person household, the area median income is $69,100.] Lenart noted that the city of Ann Arbor’s site plan approval for this project did not have an affordable housing requirement.

Brabec called it an amazing project, but was concerned that young professionals couldn’t live there because the rent would be too high. When she moved to this area 10 years ago, she would have loved to live in a development like this, but with student loans, it would not have been possible. She said she’s not alone in that.

Dan Smith said he’d support the plan, but he still had the same concerns that the board had discussed at previous meetings and working sessions regarding brownfields and downtown development authorities. [For background, see Chronicle coverage: "Packard Square Brownfield Project Debated."] He noted that county taxes would be diverted because of the brownfield TIF financing. And although the plan requires approval by the Ann Arbor city council and county board, Smith pointed out that other taxing entities – including the Washtenaw Community College, Ann Arbor District Library and Washtenaw Intermediate School District – would also see a portion of their taxes diverted, yet their governing bodies have no say in the matter. The same is true of public school districts, indirectly.

Yousef Rabhi thanked Ketelaar for his work, and praised the project’s outreach efforts, green amenities, and the fact that it was adding needed housing to the downtown area. He also thanked the Ann Arbor DDA, for contributing to public upgrades related to the project. He wished Ketelaar good luck and success, and he hoped the project would bring energy to the downtown. But his concern comes from his heart, Rabhi said – the issue of accessible, affordable housing. The issue “should have been thrown into the batter before the cake was in the oven,” he said. At this point, all he could do is voice his opinion in the form of a no vote.

Rabhi said he’d be working proactively with county staff on this type of project to ensure that the downtown is accessible to all income levels. He concluded by saying that his vote isn’t a no-confidence vote against the process, but rather a vote that reflected his other concerns.

Outcome: On an 8-2 vote, the board approved the brownfield plan for 618 S. Main in Ann Arbor, with dissent from Felicia Brabec and Yousef Rabhi. Rolland Sizemore Jr. was absent.

Weatherization Grant

On the Aug. 1 agenda was a resolution to accept $289,800 in additional federal funds for the county’s weatherization program. The funds will allow the county to weatherized 26 housing units for low-income residents.

The money is available through the 2009 American Recovery and Reinvestment Act (ARRA), also known as the federal stimulus program. It’s a redistribution of funding that had previously been awarded to other communities but was not used. In total since 2009, Washtenaw County has received $5,053,338 in ARRA funding for its weatherization program, and has served 721 housing units. The program is administered through the office of community and economic development, a joint county/city of Ann Arbor department.

According to a staff memo, weatherization services include “outreach and intake, pre-inspection of homes, air leakage testing, health and safety evaluations, furnace assessments, refrigerator efficiency testing, post-inspection of the completed work and consumer education on how to keep one’s home weatherized and energy efficient. Licensed and approved contractors provide procurement and installation of weatherization materials including attic and wall insulation, air sealing, window repairs, furnace tune-ups and high efficiency furnace installations.”

To be eligible for the program, residents must have an income at or below 200% of the federal poverty level, or 60% of the state median income (whichever is lower). That translates to annual incomes less than $22,911 for a single person or $44,700 for a family of four. Residents who receive federal Supplemental Security Income, state disability assistance or who are part of the Family Independence Program are automatically eligible for the weatherization program.

Weatherization Grant: Board Discussion

Felicia Brabec asked about indirect costs – the staff memo indicated that indirect costs for this grant were not included in the budget. Brett Lenart, housing and infrastructure manager at the office of community & economic development, told Brabec that because it will be part of a program that the county already runs, there would be no indirect costs to increase the program’s budget.

Wes Prater said he hoped the grant would fund weatherization in owner-occupied homes, rather than rental properties. Lenart indicated that the “vast majority” of the projects would occur in owner-occupied homes.

Outcome: The resolution related to weatherization funding passed unanimously.

Public Commentary

In addition to the public commentary and public hearings reported above, Joel Levitt of Ann Arbor spoke during general public commentary about the need for a graduated, progressive income tax that would replace excise taxes in Michigan. He noted that last year, the state Democratic convention adopted a resolution to work to change the state constitution so that such a tax could be instituted. Property taxes made sense long ago, when property was the basis for wealth, he said. But that’s not the case today. Excise taxes on products like gasoline make it even more difficult for struggling families. He urged commissioners to pass a resolution supporting an improved financing system for the state, and said he planned to ask the Ann Arbor city council to do the same.

Responding to his commentary, Barbara Bergman said she agreed with his premise, but that the county board isn’t the forum for this kind of resolution. They generally don’t take up “political” resolutions, she said, but that didn’t mean his comments had fallen on deaf ears. She said she personally supported it.

Present: Barbara Bergman, Felicia Brabec, Leah Gunn, Alicia Ping, Ronnie Peterson, Wes Prater, Yousef Rabhi, Rolland Sizemore Jr., Conan Smith, Dan Smith, Rob Turner.

Next regular board meeting: Wednesday, Sept. 5, 2012 at 6:30 p.m. at the county administration building, 220 N. Main St. in Ann Arbor. The ways & means committee meets first, followed immediately by the regular board meeting. [Check Chronicle event listings to confirm date] (Though the agenda states that the regular board meeting begins at 6:45 p.m., it usually starts much later – times vary depending on what’s on the agenda.) Public commentary is held at the beginning of each meeting, and no advance sign-up is required.

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Previously approved by the Ann Arbor city council on June 18, the project’s brownfield tax increment finance (TIF) plan works in conjunction with a $650,000 TIF grant (paid over a period of four years) awarded by the Ann Arbor Downtown Development Authority board at its June 6, 2012.

Both the brownfield TIF and the DDA grant work in a similar way – in that the developer must build the project and pay the new taxes on the project, in order to receive the financial benefit. The brownfield plan includes developer reimbursements of $3.7 million over 26 years. Also during that period, the plan includes $462,864 of tax capture for administrative fees to support the operation of the Washtenaw County Brownfield Redevelopment Authority. An additional $457,741 of tax increment proceeds will be contributed to the Local Site Remediation Revolving Fund.

Work covered by the brownfield plan includes: site investigations for characterization of soils and dewatering if water is encountered during excavation; disposal of soils; demolition of buildings and removal of existing site improvements; lead and asbestos abatement; infrastructure improvements like water, storm sewer and sanitary sewer upgrades, street repair and improvements to streets; and site preparation like staking, geotechnical engineering, clearing and grubbing.

According to a staff memo, the project will create 80-100 temporary construction jobs, and 4-5 full-time, and 6 or more part-time, permanent jobs. Taxes from the Washtenaw County annual millage will increase from about $2,028 to $69,614 after the tax increment financing period is completed.

The only speaker at the Aug. 1 public hearing was the project’s developer, Dan Ketelaar. The 7-story building will include 190 units – which will be marketed to young professionals – plus two levels of parking for 121 vehicles.

Before the board’s vote, both Brabec and Rabhi praised the development, but said they were voting against it because of concerns about affordability. They did not feel that most young professionals would be able to afford living there, and stressed the importance of having more affordable housing in the downtown area.

This brief was filed from the boardroom of the county administration building at 220 N. Main in Ann Arbor. A more detailed report will follow: [link]

Previously approved by the Ann Arbor city council on June 18, the project’s brownfield tax increment finance (TIF) plan works in conjunction with a $650,000 TIF grant (paid over a period of four years) awarded by the Ann Arbor Downtown Development Authority board at its June 6, 2012. Both the brownfield TIF and the DDA TIF work in a similar way. The developer must build the project and pay the new taxes on the project, then receive reimbursement for eligible expenses. The brownfield plan includes developer reimbursements of $3.7 million over 21 years.

Work covered by the brownfield plan includes: site investigations for characterization of soils and dewatering if water is encountered during excavation; disposal of soils; demolition of buildings and removal of existing site improvements; lead and asbestos abatement; infrastructure improvements like water, storm sewer and sanitary sewer upgrades, street repair and improvements to streets; and site preparation like staking, geotechnical engineering, clearing and grubbing.

This brief was filed from the boardroom of the county administration building at 220 N. Main in Ann Arbor. A more detailed report will follow: [link]

From left: Councilmember Tony Derezinski (Ward 2) and 618 S. Main developer Dan Ketelaar at the June 18, 2012 Ann Arbor city council meeting. (Photos by the writer.)

The council debated but ultimately approved both the site plan and the brownfield plan for the 618 S. Main project – an apartment complex that Dan Ketelaar’s Urban Group Development Co. intends to market to young professionals. The 7-story building would include 190 units for 231 bedrooms, plus two levels of parking for 121 vehicles. The project had received a recommendation for approval from the city planning commission on Jan. 19, 2012.

The project’s approval meant that the council granted a variance in the height allowed in the D2 (downtown interface) zoning district – 85 feet, which is 25 feet taller than the 60-foot limit allowed in D2. The majority of councilmembers felt that the project reflected a months-long positive collaboration by the developer with neighbors and with the Ann Arbor Downtown Development Authority, which approved a $650,000 grant to complement the $3.7 million brownfield plan.

The project was opposed by Stephen Kunselman (Ward 3), who essentially indicated he did not trust Ketelaar and other “speculators.” Kunselman also seemed unconvinced of the environmental benefits of the project. Mike Anglin (Ward 5) joined Kunselman in voting against the site plan and the brownfield plan. Both votes were 8-2 – Sandi Smith (Ward 1) was absent from the 11-member council.

In other business, the council made an adjustment to the current fiscal 2012 budget just before the fiscal year ends on June 30, to ensure that the city conforms with the state statute on uniform budgeting and accounting. The adjustment to the city’s general fund allowed for $1.3 million in additional expenses. Despite that, CFO Tom Crawford said he felt the city would end the year around “break even.”

The council also took action to allocate $1,244,629 to different nonprofits that provide human services. The amount was set as part of the FY 2013 budget, which the city council approved on May 22, 2012.

The council also authorized around $1.5 million for new dump trucks – with stainless steel parts to ensure a longer life than the vehicles they are replacing. And councilmembers approved a roughly $800,000 contract for a five-phase study to analyze stormwater in the city.

Other expenses authorized by the council included a $48,000 annual contract renewal with Governmental Consultant Services Inc., the city’s lobbyist in Lansing, and a $75,000 contract with Ann Arbor SPARK, the area’s economic development agency.

Also at the council’s meeting, nominations for three commissions were floated, to be voted on at the next meeting: Ken Clein for the planning commission; John German for the environmental commission; and Archer Christian for the greenbelt advisory commission.

618 S. Main

In separate items, the city council considered a site plan and the brownfield development financing for the 618 S. Main project.

618 S. Main: Background

The 618 S. Main project is an apartment complex that developer Dan Ketelaar intends to market to young professionals. The 7-story building would include 190 units for 231 bedrooms, plus two levels of parking for 121 vehicles. The project had received approval from the city planning commission on Jan. 19, 2012.

At 85-feet tall, the project is 25 feet higher than permitted in the D2 (downtown interface) zoning district where the site is located. So it was submitted as a “planned project” – a provision in the zoning code that allows some flexibility in height or setbacks, in exchange for public benefits.

A planned project is not the same thing as a planned unit development (PUD), which allows for significant variance from the existing zoning by actually changing the zoning on a parcel. Among the public benefits cited for 618 S. Main is a rain garden system for stormwater infiltration, which is expected to reduce stormwater volume in the city’s piped system (as required by code), but would also result in cleaner flow.

The project borders the Old West Side historic district – and the board of the Old West Side Association submitted a letter of support for the development.

The proposed brownfield tax increment finance (TIF) plan works in concert with a $650,000 TIF grant (paid over a period of four years) awarded by the Ann Arbor Downtown Development Authority board at its June 6, 2012 meeting. Both the brownfield TIF and the DDA TIF grant work in a similar way: The developer must build the project and pay the new taxes on the project. After that, the developer receives reimbursement for eligible expenses.

The DDA’s grant covers work in the following categories: streetscape improvement costs; a rain garden to infiltrate stormwater, as opposed to detention-and-release; and upsizing a water main. Work covered by the brownfield plan includes: site investigations for characterization of soils and dewatering if water is encountered during excavation; disposal of soils; demolition of buildings and removal of existing site improvements; lead and asbestos abatement; infrastructure improvements like water, storm sewer and sanitary sewer upgrades, street repair and improvements to streets; and site preparation like staking, geotechnical engineering, clearing and grubbing.

The brownfield plan includes reimbursements to the developer of $3.7 million over 21 years. The city’s financial analysis puts the rate of return to the developer on his investment at between 5.81% and 6.13%. The city’s analysis concludes that the rates of return are below previously-approved brownfield plans. A risk identified in the city’s analysis is the fact that, based on the financial pro forma submitted by the developer, the return to the developer is low. [.pdf of the TIF analysis]

The city council’s brownfield review committee – Sandi Smith (Ward 1), Stephen Kunselman (Ward 3) and Marcia Higgins (Ward 4) – had given the 618 S. Main project a 3-0 vote recommending the city council’s approval of the plan.

618 S. Main: Public Hearing

Several people spoke at the public hearing on the site plan.

Barbara Hall introduced herself as representing the board of the Old West Side Association. Members of the OWS board are pleased to have participated in several months of productive discussion about the 618 S. Main project, she said. All aspects of the final design reflect input made during that process. The project gives the Main Street side an industrial facade, but uses a rain garden to buffer the impact on the other side, abutting the neighborhood.

An alliance of groups – from downtown neighborhoods, to the Ann Arbor Downtown Development Authority, the city’s design review board and the planning commission – have agreed that 618 S. Main is worth their support, Hall said. For the OWS board, the project as now presented offers a number benefits as compared to the strict D2 zoning. The benefits don’t completely offset the loss of locations for three long-standing businesses, she said. But she hoped that a large residential presence will re-invigorate existing retail business and spur additional businesses – like a grocery store. The OSW board sees the building as a gateway and urges approval of this opportunity for housing near the center of the city, Hall concluded.

Thomas Partridge expressed opposition to the project. As he understood the project, Partridge said, it includes no connection to a commitment to affordable housing – not even a single apartment. He urged reconsideration of the project as an affordable housing project.

Rita Mitchell introduced herself as a Fifth Street resident. She said she appreciates living in the Old West Side historic district – which is a great place to live, she said. She also appreciates the work of the OWS board, which has done a lot of work in connection with the 618 S. Main project. However, she was not sure the OWS board’s work represents all the people in the area – so she would speak for herself, Mitchell said. As presented, she noted, the 618 S. Main project requests a variance from the newly established D2 zoning – two stories taller than what the D2 zoning would allow. Immediately next to the building are one- and two-story buildings, Mitchell said. A 7-story building would create an out-of-character wall towering over the other buildings. Why would the council spend the time that had been invested to complete the A2D2 downtown rezoning process, only to approve a non-conforming project? she asked.

Mitchell said the developer appeared to have made a threat to build a worse alternative that could comply with the D2 zoning – the kind of approach that had led to City Place. [City Place is a controversial apartment project being built on South Fifth Avenue.] It’s an approach where a developer drives the agenda, she said. People feel compelled to agree, for fear of a worse outcome. Mitchell also questioned the value of the brownfield financial plan. She asked the council to vote no on the site plan and to return to the A2D2 process, to review and revise the downtown zoning again, so that effective step-downs are provided between downtown and neighborhoods.

Mike Siegel, associate principal of VOA Associates, a Chicago architecture firm, introduced himself as the project architect. He told the council that the project team had explored several schemes that were “by right” zoning. The distribution of the “building program” was lot-line-to-lot-line, from Ashley Street to Main Street down to Mosley Street, with a small courtyard in the middle. The building was 60 feet tall [the maximum height for D2 zoning] with some articulation architecturally along the streetwall.

Siegel said the project team was not really sure that “by right” approach was the right solution for the surrounding context. It’s a dynamic site from one side to the other, and it’s a transitional site, he said. So the team approached the city’s planning staff and had some conversations about how to deal with the issue. Planning staff suggested that with the “planned project” approach, there would be more flexibility for distributing the massing of the building – but there would need to be public benefits. In response to that suggestion, Siegel said three design schemes had been developed. To guide which of the three schemes would be pursued, the team had invited the community to a series of meetings, including local businesses. [For Chronicle coverage of one of those meetings held in November of 2011, see: "Public Gets View of 618 S. Main Project."]

A dialogue had been started, Siegel said. The community guided the shifting of the massing from Ashley Street to Main Street. Additional parking was requested, so an additional story of parking was added. The community asked that parking entries be divided on both side of the site, and that had been done, he said. The community wanted an enhanced pedestrian experience on Main Street, he said, so the building had been set back five feet to accommodate that. As the project went along, the team had appeared before the city’s design review board (DRB). The DRB was interested in the articulation of the streetwall. Out of that DRB conversation a tower element had been developed on the corner of Main and Mosley.

Shannan Gibb-Randall introduced herself as the project’s landscape architect. She’s with Insite Design Studio, an Ann Arbor firm. Gibb-Randall explained the concept of the rain garden, which she said could have been surface parking. But the team felt it had the potential to be something better. So the courtyard was created as an amenity for the people who will live in the building. But it’s also a great way to handle stormwater on the site in a sustainable way. She described it as the “back yard” for future residents of the building. Currently the site where the project is planned is 100% impervious, which means that every drop of rain runs into the Allen Creek and on into the Huron River.

Gibb-Randall explained that the rain garden will act as a sponge, with three feet of special soils and native plantings that are good at absorbing water. Anything that doesn’t get absorbed is connected to the sand seam layer, which is about nine feet down. So the stormwater will not travel through the city’s piped stormwater system. The site will be connected “just in case,” but a 100-year storm will infiltrate, she assured the council. The project would remove an acre of impervious surface that leads to Allen Creek, she said. She indicated that the project team hopes this approach will be a catalyst for other projects in downtown to do the same, which is possible because the downtown “sits on a pile of sand.”

Gibb-Randall also commented on the Main Street side of the building. The building has been pushed back, she said, which increases the 9-foot-wide sidewalk to a 14-foot-wide sidewalk. She also pointed to the densely planted area on the Mosley side of the building.

Dan Ketelaar, president of Urban Group Development Co., described the process as “surprisingly enjoyable.” He described the review process of the city’s design review board as working perfectly. The result shows how when people work together, you get something better than what you start with, he said.

The D2 is intended as a buffer between the downtown and the neighborhoods, he said. How do you do that, when one side is residential and one side is the downtown community? The project strives to do that in the best way it can, he said, and he felt like it had been successful. He described the process as difficult, but felt the community had enjoyed the process too.

Ketelaar stressed that 618 S. Main is not a student housing project, but rather it’s designed for young professionals. Of the units, 37% are studios, and 37% are one-bedroom units. The remainder are two-bedroom units. The amenities are meant to appeal to a young professional group – features like meeting rooms and lounge areas. The apartments are small, but with large common areas, so that residents can get together and spend time together, he said. It’s within walking distance to downtown, he said, and includes 120 parking spaces, which is twice the number required.

Ketelaar said the project team has tried to be as responsible as they know how to be. He felt that the project meets the requirement for a “planned project” outlined in the city code.

John Byl, an attorney with Warner Norcross & Judd LLP, told the council he was a brownfield specialist, and has been working on that aspect of the project. He was there and available to answer any questions about that aspect of the project, he said.

Ray Detter spoke on behalf of the downtown citizens advisory council. He said that CAC strongly supports the position of the Old West Side Association. He noted that 618 S. Main was unanimously approved by the planning commission. He pointed to the additional housing units. He allowed that the project exceeds the D2 height limit, but noted that as a “planned project” it provides commensurate benefit.

Dick Carlisle of Carlisle/Wortman Associates introduced himself as an owner and tenant of the South Main Market, located across Main Street from the proposed 618 S. Main project. He said he was very supportive of the project. He said that he and the other partners of South Main Market had achieved 100% occupancy of the market, but that’s because they’d invested a lot and worked hard at it. With any project as dense as 618 S. Main, there’ll be issues, he said, but he’s satisfied that they can work with this project. As one of the closest neighbors of the project, he said, they’re very supportive and hope it will get the city council’s support, too.

618 S. Main Site Plan: Council Deliberations–Bona fides

The council’s deliberations included a range of claims to connections to the neighborhood, which are extracted from this report’s summary of deliberations.

Mayor John Hieftje stated that he grew up in that neighborhood and that friends of the Fox family [owners of the former Fox Tent and Awning, which had been located on the 618 S. Main site] were friends of his family.

Sabra Briere (Ward 1) said she used to live next to the Washtenaw Dairy. [The popular shop is located less than a block away from the proposed project, at Madison and Ashley.] The Old West Side was her home for over a decade, Briere said. She bought Christmas trees at the lot where Fox Tent and Awning was located – because it was easy for her and her little boy to carry them home.

Stephen Kunselman (Ward 3) said he’d live in the Old West Side for half of his adult life, so he had a strong affinity for the neighborhood.

Carsten Hohnke (Ward 5) stated that as long as others had put their bona fides on the table, he wanted to mention that he used to work at Washtenaw Dairy: “So I see your living in the neighborhood, and [raise you a worked-at-the-dairy] …” The remark elicited laughs around the table.

618 S. Main Site Plan: Council Deliberations

Carsten Hohnke (Ward 5) led off deliberations by picking up on one of the comments made by Rita Mitchell during public commentary. He asked planning manager Wendy Rampson for the city staff’s perspective on the idea that the accommodation for the extra height – 85 feet compared to 60 feet – is a reflection that the A2D2 downtown rezoning process did not get the specific regulations for D2 exactly right.

Rampson responded to Hohnke by describing D2 as a wide-ranging district that interacts with neighborhoods in a variety of ways. She noted that on the other side of Ashley from the project site is a historic district (Old West Side) and the buildings in the historic district aren’t likely to expand in the same way as 618 S. Main. But she pointed out that those properties [including the Washtenaw Dairy] are zoned C2B (commercial).

Rampson also pointed out that originally there was no height limit for the proposed downtown districts, but the city council had felt it was important to include height limits. She noted that the 618 S. Main project is not using the full premium available in the D2 district – which would allow up to 400% FAR (floor-area ratio). The 618 S. Main project has a FAR of 355%. It was envisioned, Rampson said, that in some places it would be desirable to push a building to one side or another, and that would result in pushing the building taller.

Hohnke confirmed with Rampson that the site of the project itself was not in a historic district.

Hohnke then asked Rampson to summarize the public benefits of the project. Rampson mentioned that by increasing the height along Main Street, the setback on Ashley is increased. Hohnke also asked about streetscape improvements. Rampson indicated that she couldn’t speak to that, because that had been added after the project had been voted on by the planning commission. Hohnke indicated that he was content to leave that issue aside until the discussion of the brownfield plan.

View from the southeast of the 618 S. Main parcel.

Mayor John Hieftje indicated that the site had looked the same way for decades – but right now, it’s a parking lot encircled by a fence. Normally, he said, he’s not in favor of planned projects. But he appreciated the way the developer has worked with the community and with the design review board. Hieftje said he was moved by the fact that the project has met with approval at every stage. There seems to be a great deal of support for it, he said. The project deviates from the height limitation of D2 zoning, he noted, but provides public benefits.

Hieftje said he’s not troubled by the lack of retail in the project, because there’s plenty of retail across the street. He joked that building the 618 S. Main project might mean that people have to wait a little longer for an ice cream cone at Washtenaw Dairy [which is located at the southwest corner of Madison and Ashley, down the street from the 618 S. Main site].

Mike Anglin (Ward 5) noted that D2 was established for areas close to residential neighborhoods. The height limit of 60 feet seemed appropriate to provide a kind of transition from downtown to residential he said. But the proposed 618 S. Main project is 40% higher than the D2 zoning’s 60-foot height limit. He contended that it’s the first projected presented in a D2-zoned area, since the A2D2 zoning was approved. [As Sabra Briere (Ward 1) would point out later in the meeting, the Zingerman's Deli expansion, approved by the city council at its July 19, 2010 meeting, was also located in a D2-zoned area.]

Anglin mentioned that it’s the block where Washtenaw Dairy is located. The site is a prime area to develop, he said. During the public engagement process, he said, a lot was achieved, but not much was ever said about the 60-foot height limit. Anglin expressed an objection to the presentation of a building design at one of the early public meetings that was 60-feet tall, conforming to the zoning – with the subsequent conversation focused on the idea that the design was not very good, but could be made better, by making it taller. Anglin characterized that approach as a game of changing rules for each new player.

The D2 zoning district is supposed to be a transition into neighborhoods, Anglin said. The 60-foot height limit was determined by looking at what was currently close to neighborhoods and found that it averaged 60 feet, which fit in quite nicely, he said. He gave Liberty Lofts, a former factory at Liberty and First that was converted into condominiums, as an example.

Councilmember Mike Anglin (Ward 5).

As for community input, Anglin said, he characterized it as “organizational input,” but when someone at a public meeting raised the issue of height, Anglin contended, that was put aside very quickly. Anglin reported receiving a note from someone who attended a meeting – someone that Anglin characterized as an intelligent person who owns his own business. The gist of the note was that the ability to make the building taller and the support through brownfield financing reflected “double-dipping.” Anglin indicated that people are confused by the process of inviting development and paying for it. He did commend the architect and the developer for their work on the project.

Sabra Briere (Ward 1) said it was not often that she found herself in opposition to statements Anglin made about development.

At a recent meeting of the Ann Arbor DDA, Briere had run into an old neighbor from the time when she lived in the area of the 618 S. Main project. And she asked her former neighbor on Mosley how she felt about the project. When it was first proposed, Briere reported, her former neighbor said she was not happy. But now she said it’s really amazing and she thinks it’ll be good for the neighborhood.

Because her former neighborhood is not the most liberal or conservative person in town, Briere had listened carefully to what she’d said. Briere also pointed out that 618 S. Main is the second project to be proposed in a D2 zone, not the first, as Anglin had said. The first had been the Zingerman’s Deli expansion, which Briere said was easy to forget – because the Zingerman’s project was not residential and not very controversial.

Briere said she’d met with Ketelaar the previous week and had reflected on her own reservations about the project. The benefit of a “planned project” is that the accommodations that can be made can’t result in a greater number of units – that is, it can’t be denser.

By way of background, the relevant section of the city code on “planned projects” to which Briere was alluding reads as follows:

A planned project shall maintain the permitted uses and requirements for maximum density, maximum floor area and minimum usable open space specified in this Chapter for the zoning district(s) in which the proposed planned project is located.

Briere noted that in the course of the several public meetings and the city’s approval process, the project was amended over and over. She concluded that she supported the project.

Tony Derezinski (Ward 2) said he watched the project as it was considered by a number of bodies that he sits on – the planning commission as well at the DDA partnerships committee. He allowed that the D2 zoning “was on our minds.” He described the project as an “incredible piece of work” and said it was gratifying to see the very collaborative process. He characterized the 618 S. Main project as tall only on one side – and on the residential side, it’s short, he said.

Margie Teall (Ward 4) called the “planned project” approach a tool that should be used cautiously – but concluded that in the case of 618 S. Main, it had been used beautifully.

Marcia Higgins (Ward 4) ventured that the outcome of the A2D2 downtown rezoning process was that “we got D2 right.” The result of the D2 zoning, the design review board, and the planned project status allowed it to come together as an extraordinary project, she said.

Councilmembers Jane Lumm (Ward 2) and Christopher Taylor (Ward 3).

Jane Lumm (Ward 2) expressed her appreciation for all the work than had gone into developing the A2D2 zoning, which happened before she won a seat on the council in 2011. Her perspective on the project was from the point of view of the DDA partnerships committee on which she serves. The focus of that committee’s work was on the TIF grant from the DDA. The policy guidelines that were created by the DDA, as well as the A2D2 zoning, all helped to create a great project, she said. The fact that the project adds to the diversity of the housing stock is important, Lumm said, as is the environmental cleanup of the site. She noted that the planning commission’s support had been unanimous. She concluded by indicating she supported the project.

Christopher Taylor (Ward 3) said he’d support the project, which he believes was the result of a process that is well-designed and works. It begins with the benchmark of D2 zoning, the citizen participation ordinance, the work of the city’s planning staff, input from the design review board, and the opportunity to deviate from the more rigid aspects of the zoning.

Taylor also mentioned the indicated market for the residents of the project – “workforce housing.” Taylor noted that councilmembers often hear references to that kind of housing. But when a developer says the project is intended for workforce housing, Taylor said it’s rare for him to sit at the council table and say to himself, “Yeah, that’s right!” In this case, however, he felt that considering the design of the units and their size and the type of amenities that are being provided, it was, in fact, a workforce housing project. He said he looked forward to seeing construction.

Councilmember Stephen Kunselman (Ward 3).

Stephen Kunselman (Ward 3) noted that there’d been reviews of D2 zoning mentioned – the Zingerman’s Deli expansion. He reminded his council colleagues of the denial of a request to rezone a D2 parcel (conditionally to D1) on South University. [That denial by the council came at its April 16, 2012 meeting]. It was denied unanimously, he said, because of what that would have meant in terms of setting a precedent. Kunselman allowed that the 618 S. Main project as a “planned project” had a different standard. But he felt that the additional 25 feet allowed for the 618 S. Main project could be analyzed as “capricious and arbitrary.” And he felt the council could be setting itself up for something – in terms of “how we play with our local speculators” compared to other developers from outside Ann Arbor.

Kunselman also said he saw the evolution of the project very differently from the “Kumbaya of how … this speculator worked with the community.” Kunselman characterized it as no different from “a speculator with a big smile on his face and a knife in your back.” The strategy used by the developer, he said, was essentially, “You give me what I want, or I’ll give you what you don’t want.” Kunselman contended that the “by right” alternative that had been shown was not feasible and not marketable – so that scenario could not be used as a baseline against which to compare the “planned project.” Even the project that was being proposed was “on a string” financially, Kunselman said – which the brownfield financing analysis showed.

Kunselman said he didn’t share the impression others had of Ketelaar’s approach. Kunselman contended that Ketelaar did the same thing with the 601 S. Forest project. [Ketelaar was involved early on with that apartment project, now called the Landmark Building]. It started with a shorter building, was then proposed to be taller, and then everyone worked together to reduce the height. That was a building, Kunselman contended, that started the discussion about height limits. Now the height limits were to be adjusted for one particular “speculator,” Kunselman said.

Kunselman said he’d attended one of the citizens meetings and he mentioned that he’d be opposing the project. He said that the fear people expressed was astounding – that the developer would build something else that was worse. He repeated the phrase: “a knife to the back and smile on the face.” Development should start from a fresh slate of honesty and integrity, working with the community in a truly cooperative fashion, Kunselman said. He reiterated his concern that the city would be setting itself up to need to defend height limits in other situations. He concluded that he’d be opposing the project.

Hohnke noted that the 618 S. Main project is in Ward 5, which he and Anglin represent. It’s in a sensitive location, across from a historic district that has a significant amount of character, Hohnke said. But it’s also in the DDA district, which is the “official downtown,” he noted, where the community has said we want denser development. Hohnke was impressed with the collaborative process. He felt that in all his conversations, he never heard anything like a threat to build something worse, if this project was not approved. Hohnke noted that the extra height had resulted in a 60-100 foot setback on the Ashley Street side of the project, which he called an “enormous improvement.” He’d heard from a number of residents, who said they had a lot of concerns but were impressed by how input was incorporated by the development team – from a family that has lived near the project site for over 40 years.

Hohnke felt that the right balance had been achieved. He couldn’t imagine how a project could have been managed better than 618 S. Main.

Outcome: The council voted to approve the 618 S. Main site plan, with dissent from Stephen Kunselman (Ward 3) and Mike Anglin (Ward 5).

618 S. Main Brownfield Plan: Council Deliberations

Marcia Higgins (Ward 4) led off by summarizing the work that the Ann Arbor DDA’s $650,000 grant would pay for: Main Street streetscape improvement costs (including the stretch from Mosley to Ashley Mews, which is well north of the 618 S. Main site); a rain garden to infiltrate stormwater, as opposed to detention-and-release; and upsizing a water main.

Andrew Cluley of WEMU interviews councilmember Marcia Higgins (Ward 4) after the June 18 meeting.

Higgins described the work on the streetscape improvements as an important part of transitioning from the proper downtown into the rest of the city, and described how the project would help establish a gateway to the city.

Higgins – who serves on the city council’s brownfield committee with Sandi Smith (Ward 1) and Stephen Kunselman (Ward 3) – reported that the committee had met twice to go over the project.

Higgins described the process for approval of the brownfield plan, which would need to go before the Washtenaw County brownfield redevelopment authority and the county board of commissioners before being forwarded to the state of Michigan. She ventured that within the next month or so, a decision would be made on the project by the state.

Higgins said that many brownfield projects would not go forward, if the brownfield financing were not available – because of the increased costs to the developer for cleanup of contamination. This isn’t the only project that needs this brownfield financing, Higgins said. She recalled that for the Zingerman’s Deli expansion, the owners of Zingerman’s had said that if they had not received approval of the brownfield plan, they would have needed to move out of the city of Ann Arbor – something she could not imagine.

The 618 S. Main project had met all the requirements. She asked the city’s environmental coordinator, Matt Naud, and the city’s chief financial officer, Tom Crawford, to step to the podium and explain the project.

Crawford explained that the site is in the DDA tax capture district. The tax capture in the plan totals $3.7 million. Of that, Crawford said, about $400,000 is related to the city of Ann Arbor – and the rest is taxes from other jurisdictions.

In a previous brownfield project, Crawford said, the city had approved interest as a cost to be covered – during the period when the developer had not yet completed the project, and was borrowing money until the point when the project was completed and was generating the TIF that reimbursed the developer for eligible costs. However, the state decided not to approve the interest, which mean that the city of Ann Arbor had to cover the interest. So for the 618 S. Main project, Crawford explained, the city is only approving interest as an expense, if the state agrees that it’s eligible. If the state does not agree to cover the interest, Crawford said, then Ann Arbor is held harmless.

One of the criteria used to evaluate the project, Crawford said, is whether the return to the developer on his investment is reasonable, or if public dollars are being used to generate an excessive return to the developer. In this case, the return was estimated at around 6%, which is lower than the city had seen for other projects, Crawford said.

Responding to a question from Higgins, Crawford explained that the tax capture on the increment goes to the DDA, which would be used by the DDA as part of the grant it had made to the project. The city receives taxes on the additional property value over time that’s attributed to inflation, Crawford said.

Naud added that there also is economic development associated with the construction of the project. After the fourth year of the DDA grant, Naud continued, the DDA would be capturing the full increment and would have that money available to make further reinvestments in the downtown area. Naud characterized the brownfield plan as leveraging a relatively small local investment to get a larger investment from the state.

Mayor John Hieftje stressed that the local contribution being made by the DDA does not use funds that exist now, but rather uses the new taxes that the developer pays on the additional value of the property. Hieftje also wanted to stress that the DDA’s $650,000 TIF grant had been initially proposed to be $725,000. He had asked at the June 6, 2012 meeting of the DDA board [on which he sits] that money be removed that would have paid for elements required of the developer by city code. Hieftje pointed to enthusiasm for the streetscape improvements that Mike Anglin (Ward 5) had expressed early on.

Jane Lumm (Ward 2) noted that the topic had been discussed since March by the DDA partnerships committee, on which she serves. A policy and a set of guidelines had been developed in the context of the history of DDA grants. There was a consensus, Lumm said, that the DDA doesn’t finance projects that don’t need it. The initial request had been for $1.3 million, she noted. A lot of effort had gone into ensuring that support was being given for public benefits, not private developer costs. She felt that the only way the project would work is with the brownfield financing, and she supported the brownfield plan.

Stephen Kunselman (Ward 3) indicated he would not support the brownfield plan. Later in the meeting, Carsten Hohnke (Ward 5) asked Kunselman if something had changed since the time that Kunselman had voted for the brownfield plan as a member of the city council’s brownfield committee. Kunselman indicated that he viewed his committee vote as parallel to the way that city councilmembers will sometimes vote for an ordinance change on initial consideration – in order to move it forward for additional public discussion – but will vote against it on final consideration by the council.

Kunselman characterized the brownfield plan as “highly speculative.” He stated that the DDA grant in support of off-site improvements – the streetscape on Main Street northward to Ashley Mews – is breaking new ground when it comes to financing public infrastructure. He expressed concern that there’d be no local control over low bids for that work if the developer was undertaking it.

Kunselman also expressed concern about the use of federal HUD [U.S. Dept. of Housing & Urban Development] financing. Kunselman noted that there’s another project in town that is hoping for HUD financing – on the site of the former Georgetown Mall. Given that there are other developments moving forward in downtown Ann Arbor with market-rate financing, Kunselman wondered why HUD financing was being used.

Kunselman also noted that Crawford had described how the rate of return for the developer is low – which Kunselman concluded meant that the project is speculative.

Kunselman also expressed concern about the Armen Cleaners site – at the northwest corner of Mosley and Ashley – which is contaminated. Once a hole is dug for underground parking, Kunselman contended, it changes the hydrology underground. The 618 S. Main project is not intended to clean up the Armen Cleaners site. Groundwater is 15 feet below grade, Kunselman said, based on Village Green’s City Apartments site at First and Washington. A number of changes had to be made to the City Apartments project, in order to accommodate the groundwater, he said. He said he wouldn’t be surprised if Ketelaar later asks for additional height to lift the building out of the groundwater.

Kunselman also ventured that the pollution from Armen Cleaners might be induced to spread after the hole is dug for 618 S. Main – because water follows the path of least resistance. He allowed that “smart people” will tell us that this has been analyzed and that this scenario won’t happen, but Kunselman insisted that “we don’t know.”

Kunselman dismissed the reduction of the DDA’s TIF grant from $725,000 to $650,000 as “a pittance” compared to the amount of money that will be going into the project.

He also expressed concern that the 618 S. Main project would be competing with Georgetown Mall for brownfield and HUD money. [Later during deliberations, Higgins got clarification from Matt Naud, the city's environmental coordinator, that the two projects were not in competition – because the brownfield plan for the Georgetown Mall site has already been approved by the state.] He called the brownfield plan “padding” for the developer.

Sabra Briere (Ward 1) noted that she’d attended several DDA partnerships meetings. At those meetings, she reported, Kunselman’s question about modeling the hydrology for the impact of 618 S. Main on the contamination at Armen Cleaners had been raised, and answered. John Byl, attorney with Warner Norcross & Judd LLP who’s worked for the development team on the brownfield aspects of the project, told Kunselman it’s an excellent question and it had been raised. Hydro-geologists had been retained and a report had been submitted to the DDA – the conclusion was that it wouldn’t have an impact on the Armen Cleaners site.

Anglin asked about the wells that were used to monitor the site. He expressed skepticism that there was significant contamination at the site that would warrant brownfield status.

Kunselman came back to the question of the impact of groundwater on the 618 S. Main construction. He wanted to know if the model that concluded there’d be no impact on the Armen Cleaners site included any pumping of groundwater associated with dewatering of the site. Byl indicated that not a lot of dewatering was expected, but Kunselman expressed skepticism that would be the case. Bob Wanty of Washtenaw Engineering told Kunselman that the amount of dewatering was expected to be nominal. The footings are about two feet above the high water elevation, so there’d be minimal dewatering for footings. “And if you’re wrong?” asked Kunselman. “That’s what the tests show,” Wanty replied.

Kunselman wanted to know if additional dewatering was needed, if that changed the model for the impact on the Armen Cleaners site. Wanty explained that a trimming seal would be put down so that not a lot of dewatering would be necessary. Kunselman asked additional questions that confirmed there would be a connection to the city’s stormwater system to provide for the possibility that the rain garden’s capacity for infiltration was exceeded.

City of Ann Arbor chief financial officer Tom Crawford (back to camera) returns to the podium after conferring with the 618 S. Main development team to get an answer to a question from Mike Anglin (Ward 5).

Responding to questions from Carsten Hohnke (Ward 5), Naud clarified that not all of the eligible expenses that a brownfield plan can cover are just environmental cleanup. A brownfield plan can also cover the additional costs associated with infill development. He also clarified that the burden is on the developer – because you have to actually build something, achieve an increment in value on the property, and then the taxes paid by the developer on that increment are what drive the financing in the brownfield plan. Only the actual expenses incurred by the developer are reimbursed. The taxes the city is already receiving would continue to be received, Naud said. Compared to other communities, Naud said, Ann Arbor does a lot of review for these proposals.

Responding to a question from Hohnke, Naud indicated that there would be full remediation of contaminated soils on a “dig and haul” basis.

Lumm commended the DDA for the development of their brownfield policy, which took two months to craft. She stressed that the brownfield money is not paid upfront. It can’t be used to cover the developer’s land cost, for example.

Anglin asked Crawford how much of the project was hoped to be financed through HUD. After conferring with Ketelaar, Crawford told Anglin about 75-80%.

Outcome: The council voted to approve the 618 S. Main brownfield plan, with dissent from Stephen Kunselman (Ward 3) and Mike Anglin (Ward 5).

Medical Marijuana Licensing Ordinance

On the city council’s June 18 agenda were revisions to Ann Arbor’s medical marijuana licensing ordinance – which the council enacted a year ago on June 20, 2011.

The proposed ordinance revisions, recommended by the city’s medical marijuana licensing board at its Jan. 31, 2012 meeting, had already been considered and postponed once before, at the council’s April 2, 2012 meeting. The licenses that the board recommended be granted to 10 dispensaries citywide – recommendations also made at the board’s Jan. 31 meeting – have not yet come before the city council for final action.

The board-recommended revisions to the medical marijuana licensing ordinance are laid out in detail in The Chronicle’s coverage of the medical marijuana licensing board’s Jan. 31, 2012 meeting. [.pdf of recommended licensing ordinance revisions] Representative of the revisions is a change that strikes the role of city staff in evaluating the completeness of a license application. The following phrase, for example, would be struck: “Following official confirmation by staff that the applicant has submitted a complete application …” The changes also establish a cap of 20 licenses, and grant the city council the ability to waive certain requirements.

Mayor John Hieftje and councilmember Sabra Briere (Ward 1).

Council deliberations were brief. A move to postpone the medical marijuana ordinance revisions came at the start of deliberations, and was made by Sabra Briere (Ward 1), who serves as the city council’s representative to the medical marijuana licensing board. In arguing for postponement, she cited pending state legislation for regulating medical marijuana that could result in a need to further amend the city’s ordinance. Pending legislation includes House Bill 5681 (which would amend the public health code and create a “pharmaceutical-grade cannabis program”) and House Bill 5580 (which would give local authorities the option to allow dispensaries and testing facilities).

Briere invited city attorney Stephen Postema to comment on the pending legislation. He described the local option as allowing municipalities to regulate dispensaries in a manner similar to the way that Ann Arbor does. He expressed uncertainty about the likelihood that some of the legislation would pass – given that an amendment to a voter-initiated piece of legislation, like the 2008 Michigan Medical Marijuana Act, requires a 75% majority vote in the Michigan legislature.

Briere moved for postponement.

Outcome: The council voted unanimously to postpone action on revisions to the medical marijuana licensing ordinance until Oct. 1.

FY 2012 Budget Adjustments

The council was asked to amend the budget for its current fiscal year to bring actual expenditures in line with budgeted amounts – so that the city’s various funds do not show an excess in expenditures over budgeted amounts for the year. The amendments are necessary in order to conform with Act 621 of 1978 (Uniform Budgeting and Accounting Act).

The council’s action bumped the general fund expense budget from $79,642,485 to $80,993,946 – an increase of $1,351,461. According to a staff memo accompanying the budget resolution, city staff are still projecting that a little less than $0.5 million of fund balance will need to be used for the year, due to other offsetting expenses.

For the general fund, some of the larger adjustments included: tax refunds higher than budgeted ($444,700); police services severances greater than budgeted ($250,000); two unbudgeted elections ($165,000) and a golf fund subsidy that was higher than budgeted ($131,761). [.pdf of all adjustments]

The bulk of the adjustment outside the city’s general fund was for bond refinancing at a lower interest rate ($2,758,100).

Council deliberations were brief. Jane Lumm (Ward 2) indicated she did not have a problem with the adjustments. But she indicated to city chief financial officer Tom Crawford that in a prior communication to the council, Crawford had been more confident that the city would end the year by essentially breaking even. She asked if the projected deficit [of $0.5 million] reflected Crawford being conservative or if things had actually deteriorated a bit.

Crawford told Lumm that he still felt the city would be close to breaking even. The reason the amendment is necessary, Crawford said, is that expenditures are approved by fund and by agency – and favorable news in one area can’t automatically offset negative news in another area, due to the way that expenses are approved. He believed the city would come close to breaking even, despite that evening’s necessary amendments to the budget.

Outcome: The council voted unanimously to approve the FY 2012 budget adjustments.

Human Services Allocations

The council was asked to authorize allocations totaling $1,244,629 to different nonprofits that provide human services. The amount was set as part of the FY 2013 budget, which the city council approved on May 22, 2012. That amount reflected a $46,899 increase to the amount in the proposed budget – an increase that was approved with the budget on May 22.

The process of making allocations followed a “coordinated funding” approach, as the city worked in concert with the Ann Arbor Area Community Foundation, the United Way of Washtenaw County, Washtenaw County, and the Washtenaw Urban County to make the allocations. That approach was approved by the city council on Nov. 4, 2010.

The total amount allocated through the coordinated funding process is expected to be $4,285,089, from the following sources: Ann Arbor ($1,244,629); United Way of Washtenaw County ($1,677,000); Washtenaw County ($1,015,000); and Washtenaw Urban County ($348,460).

Proposals from nonprofits for funding exceeded the amount allocated by $2,295,428. The five priority areas used to evaluate proposals were aging, early childhood, housing & homelessness, safety-net health, and school-aged youth. A sixth priority area (hunger relief) was identified as a “sole-source activity” that’s provided by Food Gatherers, and wasn’t included in the evaluation process.

The largest awards made to 73 different programs included: $276,766 from the United Way to The Corner Health Center’s patient assistance and care management program; $204,892 from the United Way Safety Net Health Services to Catholic Social Services of Washtenaw’s program for maintaining the independence of older adults; $207,551 from the city of Ann Arbor to the Shelter Association of Washtenaw County’s residential program. [Google Spreadsheet of all awards compiled by The Chronicle]

Deliberations were brief. Jane Lumm (Ward 2) said it was a pleasure to serve on the city’s housing and human services advisory board with Sandi Smith (Ward 1). Lumm said she was pleased that the budget was amended to increase the allocation. She described the allocation process as “robust” and said it ensured that the dollars are used wisely and leveraged as much as possible. She said the coordinated funding approach works well and that the amounts allocated to the different nonprofits were “reasonable and studied.”

Outcome: The council voted unanimously to make the $1,244,629 in human services allocations.

Trucks and Plows

The council considered the purchase of 11 dump trucks and four front plows from Wolverine Truck Sales. The total cost of the vehicles and equipment was $1,548,376.

The 11 trucks to be replaced with the new vehicles are described in a staff memo accompanying the resolution as averaging $14,000 in repairs each for the last five years. Most of them date from 1999-2001. The dump bodies for some of the trucks are described as rusted out to the point that they would need to be replaced – at a cost of $30,000.

The plows to be replaced date from 1979–1981, and have a fixed angle. The new plows will have an angle that’s adjustable by the driver from inside the cab.

The money for the trucks and plows will be taken from the approved FY 2012 budget for fleet and facilities.

Jane Lumm (Ward 2) noted that the expenditure is not insignificant. She said she had inquired about the city’s vehicle inventory and felt the size of the fleet is not unreasonable for a community Ann Arbor’s size.

Sabra Briere (Ward 1) noted the possible $30,000 per truck cost for some of the repairs and the ongoing repair costs for the vehicles. She also highlighted the fact that the city is anticipating that the trucks the city is purchasing will last longer because they have stainless steel bodies. The best part, Briere said, is the replacement of the snowplows – because instead of a fixed angle, they’ll be adjustable. Drivers will have a lot more control to tackle whatever snow we have, she concluded. Mayor John Hieftje said he appreciated the point Briere had made about the stainless steel.

Outcome: The council unanimously approved the purchase of the 11 trucks and 4 snowplows.

Stormwater Study

The council was asked to approve a $822,700 contract with CDM Michigan Inc. for a stormwater analysis project. The project has five phases: (1) collect stormwater GIS data; (2) integrate the GIS with the model information and gather general monitoring data; (3) engage the public and perform preliminary model calibration; (4) gather comprehensive monitoring data and finalize model calibration; and (5) analyze modeling results and engage creekshed groups/neighborhoods.

In 2007, CDM was hired to complete the first two phases of the project. The contract considered by the council on June 18 is supposed to allow completion of the project.

Outcome: The council approved the stormwater study without discussion.

Ann Arbor SPARK Contract

The council considered a $75,000 contract with the economic development agency Ann Arbor SPARK.

The contract has been renewed annually since the Washtenaw Development Council and Ann Arbor SPARK merged in 2006. Previously, Ann Arbor had contracted with the WDC for business support services for which it now contracts with SPARK. On June 20, 2005, the city council authorized that one-year contract with WDC for $40,000. This year’s $75,000 contract with SPARK describes the organization’s focus the same way it did last year, as “building our innovation-focused community through continual proactive support of entrepreneurs, regional businesses, university tech transfer offices, and networking organizations.”

Ann Arbor SPARK is also the contractor hired by the city’s local development finance authority (LDFA) to operate a business accelerator for the city’s SmartZone, one of 11 such districts established in the early 2000s by the Michigan Economic Development Corp. (MEDC). The SmartZone is funded by a tax increment finance (TIF) mechanism, which in the current fiscal year captured around $1.5 million in taxes from a TIF district (the union of the Ann Arbor and Ypsilanti Downtown Development Authority districts, though revenue is generated only in Ann Arbor’s district.) The specific taxes on which the increment since 2002 is captured are the school operating and state education taxes, which would otherwise be sent to the state and then redistributed back to local school districts.

For recent Chronicle reporting on the LDFA and its relationship with SPARK, see: “SmartZone Group OKs SPARK Contract.”

SPARK’s contract was included on the city council’s consent agenda, which consists of items involving less than $100,000. Consent agenda items are considered routine, and are voted on as a set. Any councilmember can pull out an individual item for separate discussion, which Sabra Briere (Ward 1) chose to do for the SPARK contract.

She had posed some questions about the contract before the meeting, which Skip Simms, SPARK’s vice president for entrepreneurial business development, had answered. So at the meeting, Briere asked Simms to the podium to provide the answers publicly. Simms did not have the written material in front of him, and Briere ended up essentially reporting on the information she’d received.

In summary strokes, she’d been told that in 2011 SPARK specifically recruited 20 companies to locate in Ann Arbor, and of those 20, 12 had moved into the city of Ann Arbor. Of those 12, according to SPARK, five had no knowledge, relationships or inclination to locate in Ann Arbor before 2011.

The companies that moved to Ann Arbor employ a total of 143 people.

Briere asked what kind of companies these are that moved to Ann Arbor. Simms explained that they are primarily technology and IT-based – software developers, for example. Simms indicated that the reason such companies relocated to Ann Arbor is that Ann Arbor has that kind of talent. In most cases, Simms continued, the companies are expanding. That expansion is sometimes accomplished by transferring an executive to Ann Arbor, who then starts up a new location for the company in Ann Arbor.

Marcia Higgins (Ward 4) noted that the city has had this line item to contract with SPARK for several years, and noted that it had been increased a few years ago to $75,000 per year. She indicated she was happy to support the contract – because SPARK was able to entice companies to relocate to Ann Arbor with only a minimal amount of money. Simms contended that with $405,000 of city of Ann Arbor support over the last five years, SPARK had aided companies that had committed to $177 million worth of build-out, investments in projects and new equipment, and those companies have created 3,886 jobs, he said.

Jane Lumm (Ward 2) thanked Simms for responding to the questions and told Simms that SPARK is great at what it does. She also noted that SPARK is partnering with the Pure Michigan campaign. Simms described a video that SPARK has produced that will promote the whole area. Lumm said the work that SPARK does – to help start-up companies and incubate new companies – is important. She allowed that it’s difficult to measure, but contended that SPARK is bringing added value. Lumm indicated she’d seen the video, which she praised as looking like something straight out of Madison Avenue.

Outcome: The council unanimously approved the $75,000 SPARK allocation.

Ann Arbor Contract with Lobbyist

At its June 18 meeting, the city council was asked to approve a $48,000 contract with Governmental Consultant Services Inc., a Lansing-based lobbying firm. It’s a one-year contract for fiscal year 2013, which starts July 1, 2012. The funds were part of the city administrator’s office budget, in the FY 2013 budget approved by council on May 22, 2012. The contract is the same amount as last year.

According to a staff memo accompanying the resolution, “GCSI has provided excellent work in the areas of legislation monitoring along with advocating fire protection grants and comprehensive corridor planning.”

GCSI’s Kirk Profit, a former member of the state House of Representatives representing the eastern part of Washtenaw County, typically makes an annual presentation to the council with an update on state-level legislative issues relevant to the city’s budget situation. Written updates to councilmembers on legislative activity are sent on a weekly or daily basis.

GCSI also has a contract with Washtenaw County and several other local units of government.

The GCSI contract was included on the city council’s consent agenda, which are items involving less than $100,000. Consent agenda items are considered routine, and are voted on as a set. No one pulled out this item for separate discussion.

Outcome: The council unanimously approved the GCSI lobbying contract as part of its consent agenda.

Nominations: Boards and Commissions

Four nominations were made at the council meeting – to the planning commission, the greenbelt advisory commission and the environmental commission. Nominations to the planning commission are made by the mayor, with confirmation by a vote of the city council at the meeting following the nomination. Most of the other boards and commissions of the city follow that pattern.

However, nominations to the environmental commission and the greenbelt advisory commission are made by the council as a body and then also voted on by the council. The council will vote on all four nominations at its July 2, 2012 meeting.

Planning Commission: Ken Clein, Kirk Westphal

Mayor John Hieftje announced his nomination to replace Erica Briggs on the city planning commission: Ken Clein, a principal with Quinn Evans Architects. Briggs did not seek re-appointment.

Among the architectural projects Clein has worked on locally are the University of Michigan’s Hill Auditorium renovation, the new Ann Arbor municipal center, and the Zingerman’s Deli expansion.

Hieftje also announced that he was nominating Kirk Westphal for re-appointment to the planning commission.

The city council will vote on the appointments of Clein and Westphal at its July 2 meeting. City planning commissioners serve three-year terms.

Environmental Commission: John German

The council’s nomination to re-appoint John German to the city’s environmental commission was made by Sabra Briere (Ward 1). She is the city council’s appointee to that commission. German’s term expired in August 2011, but he has continued to serve. The council will be asked at its next meeting to re-appoint him retroactively for a three-year term ending on Aug. 7, 2014.

German’s background includes work with Chrysler, the U.S. Environmental Protection Agency, Honda, and the International Council for Clean Transportation.

Ann Arbor’s environmental commission was established 12 years ago through a city ordinance, with the charge to “advise and make recommendations to the city council and city administrator on environmental policy, environmental issues and environmental implications of all city programs and proposals on the air, water, land and public health.”

Greenbelt Advisory Commission: Archer Christian

Carsten Hohnke (Ward 5), the city council appointee to the greenbelt advisory commission, announced Archer Christian as the council’s nomination to replace Mike Garfield on the city’s greenbelt advisory commission. Garfield is director of the Ecology Center, a nonprofit based in Ann Arbor, and Ms. Christian is the center’s development director. The council will vote on the nomination at its July 2 meeting.

The greenbelt advisory commission oversees the proceeds generated by two-thirds of the city’s open space and parkland preservation millage, which is levied at a rate of 0.5 mills.

Garfield is term-limited as a GAC member, having served two consecutive three-year terms. The spot vacated by Garfield is not designated for a representative of the Ecology Center. However, the 109-member commission includes two slots for representatives of environmental and/or conservation groups.

In his remarks at the June 18 council meeting, Hohnke highlighted Christian’s masters degree in crop and soil science. Hohnke also praised Garfield’s service on land preservation from the very beginning of the greenbelt initiative and thanked Garfield for his many years of leadership.

At GAC’s June 7 meeting, Christian briefly had addressed the commission, saying that as long as she can remember, she has wanted to be a farmer. Being able to translate that passion into helping preserve land in the greenbelt would be an honor, she told them. She gave a brief overview of her background, including the fact that she started at the Ecology Center four years ago as grants director, and became development director in January of 2012.

Christian told commissioners that she’s lived in Ann Arbor for eight and a half years, and it feels like home. Being in a forward-thinking community is a delight beyond measure, she said. [.pdf of Christian's résumé]

Communications and Comment

Every city council agenda contains multiple slots for city councilmembers and the city administrator to give updates or make announcements about issues that are coming before the city council. And every meeting typically includes public commentary on subjects not necessarily on the agenda.

Comm/Comm: Ann Arbor Marathon

As a part of his city administrator’s report, Steve Powers noted the running of the Ann Arbor marathon, which had taken place the previous day.

Ann Arbor city administrator Steve Powers.

A number of complaints had been received about disruption caused by the race. Powers asked councilmembers to forward complaints from constituents to him. The city staff is reviewing the event and would appreciate hearing from councilmembers’ constituents, Powers said.

Comm/Comm: Green Streets

During public commentary at the start of the meeting, Valerie Strassberg introduced herself as chair of the city’s water committee, a subset of the environmental commission. She called the city council’s attention to a communications item on the agenda. That item includes the environmental commission’s resolution in support of a green streets policy. She hoped Sabra Briere (Ward 1), who serves as the city council’s representative to the environmental commission, will bring that resolution forward to the council for the July 2 meeting. The idea of the green streets initiative is for city staff to look at green streets as a formal process. Right now, when the city reconstruct roads, the project includes a look at what can be done to integrate green infrastructure – planting vegetation, bioswales, curbs, bump-outs and other devices to control runoff.

From the communications item Strassberg mentioned:

The terms Green Streets or Green Infrastructure are adaptable terms used to describe an array of products, technologies, and practices that use natural systems – or engineered systems that mimic natural processes – to enhance overall environmental quality and provide utility services. Green Streets usually treat and/or infiltrate storm water which improves water quality and reduces the volume and rate at which stormwater leaves the street.

Currently, those features are considered when the city undertakes a project, she said, but it’s not the norm. Sylvan Avenue [which was reconstructed using permeable pavement] is an example, as is the city hall’s rain garden. But those are the exceptions, she said, not the norm. The resolution would allow staff to explore opportunities to make those kind of features “the norm,” Strassberg said. She asked councilmembers to give the resolution consideration when it comes across their desks.

The environmental commission’s resolution includes the “resolved” clause that asks the city council to give direction to the city staff:

RESOLVED, that the Ann Arbor Environmental Commission is fully supportive of the Green Streets Initiative of the Environmental Commission Water Committee, and hereby recommends Ann Arbor City Council directs City Staff (from the Systems Planning, Project Management, and Field Operations Units of Public Services; Parks and Recreation, and Planning from Community Services) to work with the Environmental Commission in the development of a Green Streets policy.

Later in the meeting, Briere indicated she intended to bring forward a green streets resolution to the council’s July 2 meeting.

Comm/Comm: Countywide Transit

Sabra Briere (Ward 1) reported to her colleagues on the result of a committee meeting held earlier that day on possible amendments to the 4-party agreement and articles of incorporation that are associated with a possible expansion of governance and service area of the Ann Arbor Transportation Authority. The four parties to the agreement are the cities of Ann Arbor and Ypsilanti, Washtenaw County and the AATA.

The cities and the AATA have approved the documents. But now the Washtenaw County board of commissioners has begun to focus on the document details. Briere noted that a June 14 working session of the county board, which had included AATA staff and legal counsel, had resulted in the airing of specific concerns by commissioners, who had suggested amendments to the documents. [Chronicle coverage: "Differences on Countywide Transit Debated"]

A committee with representation from each of the parties met the afternoon of June 18, Briere reported. [Members of the committee are: Sabra Briere and Christopher Taylor (Ann Arbor city council); Paul Schreiber and Pete Murdock (Ypsilanti mayor/city council); Conan Smith and Alicia Ping (Washtenaw County board); Jesse Bernstein and Charles Griffith (AATA board); David Read and David Phillips (U196 board).]

The committee’s consensus was that the possible amendments would not be brought before the city councils of Ann Arbor and Ypsilanti or the board of the AATA at this time, and that the original language would be allowed to stand. The choice of phrasing by Briere resulted in some confusion.

Later in the Ann Arbor city council meeting, Jane Lumm (Ward 2) clarified that there will still be a formal vote by the Washtenaw County board of commissioners. Taylor stressed that it’s a matter of the other three parties declining to bring the county board’s amendments to their respective bodies.

Comm/Comm: Local Action on Energy Conservation

During public commentary, Kermit Schlansker told the council that the real argument about global warming is whether we should try to save energy or not. The Ann Arbor city council has shown almost no interest in saving the planet for our children, he said. Unless there’s a decided shift in local government goals, we’ll gradually become poorer and poorer as national resources become more scarce. Europe uses about half the energy per capita that U.S. residents do, he said. That’s because there are more apartment houses in Europe and more compact cities, more public transportation and smaller cars, he said.

An apartment house is an energy conservation device that “costs nothing and can live for 1,000 years,” Schlansker said. The whole cost of the building can be charged to habitation, which means the energy costs nothing, he said. An apartment building saves energy by using about 25% of the heating energy as a house, he said. More compact cities reduce the need for travel, and there is ready access to farmland, so that people can grow food.

The city needs to start a project consisting of an apartment house on farmland – because that’s the only way we can care for poor people in the coming time of universal poverty, Schlansker said. He called for planting trees as the best way to store carbon. Fruit and nut trees can be planted to provide cheap food for future generations. Local generation of food by the local population is a must, he said. Sewage needs to go back into farmland, not into the rivers, he said. Engineering research groups need to be formed to create energy-saving devices.

Schlansker concluded by saying that the problems of the future are just as much the responsibility of local governments as they are for the federal government. All the steps necessary for energy sustainability – aside from nuclear power – are a “part of local living,” Schlansker said. He suggested that the role of governments is to create models of ideal systems that could be implemented by private enterprise. If local governments do some of the right things, he said, President Barack Obama will follow – but “he needs our help.”

Comm/Comm: Crosswalks, Sight Distance

Kathy Griswold told the council she wanted to provide them with an update on two topics she’s commented on in the past. The first was a sidewalk construction project near King Elementary School that would allow moving the crosswalk from a midblock point to an intersection where there’s a four-way stop. [The new sidewalk would extend from the northeast corner the Waldenwood and Penberton intersection to a path that continues to the school building.] Griswold described the project as funded and at one point staked out, but then was stopped. She told the council that the city staff had determined the crossing was unsafe, and had thus deployed a crossing guard at that location, which she described as requiring recurring dollars. If crossing guards were to be provided, she said, then all locations should be considered and prioritized based on those that are the most dangerous.

Griswold also objected to the continued mowing by the city of private property near streets. Griswold told the council that former public services area administrator Sue McCormick had told Griswold that it bothered her, too. When visibility is obstructed, she said, private property owners need to be notified so that the private property owners can take care of it. She highlighted Glacier Way and Huron Parkway as areas that need attention.

Comm/Comm: Camp Take Notice

Thomas Partridge told the council he was there as a resident of city of Ann Arbor and of the county, as a grandfather, and as a Democratic candidate for 53rd District of the Michigan house of representatives. He called for expansion of integrated human services, including affordable housing – in the context of what he described as the housing crisis of Camp Take Notice, an encampment off of Wagner Road [on state-owned land in Scio Township]. He called for emergency housing shelter as well as transitional housing. He called for an expansion of affordable transportation – countywide and regionwide. He told councilmembers they should set special interests like medical marijuana aside.

Partridge said it was important to work to re-elect President Barack Obama, to advance the goals of Ann Arbor, the state and the nation. Returning to the topic of Camp Take Notice, he said that now is a time of crisis for the people who live there, living in a tent city without protection from the environment. They’re under a brutal eviction order from the Michigan Dept. of Transportation, he said. [The camp is on MDOT land.] Partridge called on Gov. Rick Snyder to revoke the eviction order.

Later in the meeting, Sabra Briere (Ward 1) asked mayor John Hieftje to give an update on Camp Take Notice. Hieftje indicated that MDOT is working with all human services providers in the community at the city, county, and state levels. Housing vouchers will be provided, he said. The Delonis Center will provide some help for people in transition. And all-out effort is being made to make sure a place is found for everyone. Hieftje said he expected conditions will be better than at camp itself. [As an example, at its June 6, 2012 meeting, the Washtenaw County board of commissioners authorized a grant agreement for up to $60,000 in emergency housing assistance for residents facing eviction from Camp Take Notice.]

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

Absent: Sandi Smith.

Next council meeting: Monday, July 2, 2012 at 7 p.m. in the council chambers at 301 E. Huron. [Check Chronicle event listings to confirm date]

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The 618 S. Main project is an apartment complex that developer Dan Ketelaar intends to market to young professionals. The 7-story building would include 190 units for 231 bedrooms, plus two levels of parking for 121 vehicles. The project had received approval from the city planning commission on Jan. 19, 2012.

At 85-feet tall, the project is 25 feet higher than permitted in the D2 (downtown interface) zoning district where the site is located. So it was submitted as a “planned project” – a provision in the zoning code that allows some flexibility in height or setbacks, in exchange for public benefits.

A planned project is not the same thing as a planned unit development (PUD), which allows for significant variance from the existing zoning by actually changing the zoning on a parcel. Among the public benefits cited for 618 S. Main is a rain garden system for stormwater infiltration, which is expected to reduce stormwater volume in the city’s piped system (which is required by code), but would also result in cleaner flow.

The project borders the Old West Side historic district – and the board of the Old West Side Association submitted a letter of support for the development. The vote on the site plan for the project was 8-2, with Stephen Kunselman (Ward 3) and Mike Anglin (Ward 5) voting against it. [Sandi Smith (Ward 1) was absent, leaving 10 councilmembers in attendance.] In arguing against the project, Kunselman delivered some of the harshest rhetoric the council chambers has heard in some time, describing developers as “speculators” who would put a knife in your back with a smile on their face.

On a separate vote, the council also approved a brownfield financing plan for 618 S. Main. The brownfield tax increment finance (TIF) plan works in concert with a $650,000 TIF grant (paid over a period of four years) awarded by the Ann Arbor Downtown Development Authority board at its June 6, 2012 meeting. Both the brownfield TIF and the DDA TIF support work in a similar way: The developer must build the project and pay the new taxes on the project. After that, the developer receives reimbursement for eligible expenses.

The DDA’s grant covers work in the following categories: streetscape improvement costs; a rain garden to infiltrate storm water, as opposed to detention-and-release; and upsizing a water main. Work covered by the brownfield plan includes: site investigations for characterization of soils and dewatering if water is encountered during excavation; disposal of soils; demolition of buildings and removal of existing site improvements; lead and asbestos abatement; infrastructure improvements like water, storm sewer and sanitary sewer upgrades, street repair and improvements to streets; and site preparation like staking, geotechnical engineering, clearing and grubbing.

The brownfield plan includes developer reimbursements of $3.7 million over 21 years. The city’s financial analysis puts the rate of return on the investment between 5.81% and 6.13%. The city’s analysis concludes that the rates of return are below previously-approved brownfield plans. A risk identified in the city’s analysis is the fact that, based on the financial pro forma submitted by the developer, the return to the developer is low. [.pdf of the TIF analysis]

The city council’s brownfield review committee – Sandi Smith (Ward 1), Stephen Kunselman (Ward 3) and Marcia Higgins (Ward 4) – had given the 618 S. Main project a 3-0 vote recommending the city council’s approval of the plan.

The council’s vote on the brownfield plan was 8-2 with Kunselman and Anglin dissenting. At the meeting, Kunselman characterized his vote in favor of the brownfield plan as a part of the brownfield review committee as similar to the way that councilmemers will vote for an ordinance revision at first reading but vote against it at the second and final reading.

The 618 S. Main project brownfield plan still requires final review and approval by the Washtenaw County Brownfield Redevelopment Authority (WCBRA) and the Washtenaw County board of commissioners.

This brief was filed from the city council’s chambers on the second floor of city hall, located at 301 E. Huron. A more detailed report will follow: [link]

The grant assumes that the amount of additional tax increment finance (TIF) revenue that the DDA would capture as a result of completed construction of the project would be $250,000 a year. The money is granted to pay for streetscape improvements on Main  and Mosley streets, and the upsizing of the water main under Ashley Street to a 12-inch main. The originally-proposed grant totaled $725,000, but that amount was reduced through amendments made at the board meeting, which eliminated bank carrying costs as an expense to be covered. Another amendment reduced the amount allowed for sidewalk improvements.

The rationale provided by the DDA’s resolution for making the grant includes the DDA’s conclusion that: (1) The project addresses an underserved gap in the marketplace; (2) The project may act as a catalyst for additional revitalization of the South Main Street area; (3) The project will add to the downtown’s residential density; and (4) The environmental design of the project appears to exceed city requirements.

The project’s developer, Dan Ketelaar, had requested that the DDA pledge 80% of its TIF capture money for six years – around $1.3 million – to support certain aspects of the project in connection with the state’s Community Revitalization Program. So the amount of the grant works out to be about half of what Ketelaar had asked for.

The grant was authorized under a new brownfield policy the DDA board adopted, also at the same June 6, 2012 meeting. An earlier draft of the policy had included a cap on the amount of grants, based on a percentage of the tax increment finance (TIF) capture. The final version adopted by the board does not include a percentage cap, but does stipulate that “the amount released will at no point be greater than the amount of new TIF paid by the developer of the new project.” [.pdf of brownfield policy]

The 618 S. Main project includes a 7-story building, which would include 190 units for 231 bedrooms, plus two levels of parking for 121 vehicles. It received a unanimously positive recommendation from the Ann Arbor planning commission on Jan. 19, 2012. The project will next be considered by the Ann Arbor city council.

This brief was filed from the DDA offices at 150 S. Fifth Ave., Suite 301, where the board holds its meetings. A detailed report of the meeting will follow: [link]