Stories indexed with the term ‘Chapter 7’

Alternate DDA TIF Revision Gets First OK

Two different versions of a revision to Ann Arbor’s ordinance regulating TIF capture were considered by the Ann Arbor city council at its Nov. 7, 2013 meeting. One was tabled, while the other will move forward for final consideration at the city council’s Nov. 18, 2013 meeting.

The version to be considered by the council on Nov. 18 would set a cap on TIF (tax increment financing) revenue for the Ann Arbor Downtown Development Authority that would not apply at all until FY 2017. It would result in roughly $6.1 million of TIF revenue to the DDA that year, with an estimated return of $300,000 total to the other taxing jurisdictions. The city’s portion of that would be about $180,000, distributed proportionally … [Full Story]

Column: DDA, City Council – No Politics Here

Back in the spring of 2011, the Ann Arbor city council and the Downtown Development Authority were arguing bitterly about money.

Guenzel Kunselman

(Left) Ward 3 city councilmember Stephen Kunselman. (Right) DDA board member Bob Guenzel.

Now two and a half years later, a solid working relationship between the two entities has evolved – unmarred by political machinations, based instead on a clearly understood shared past, and consensus interpretation of relevant statutes and local laws governing tax increment finance capture.

That has led to a joint working session between the entities scheduled for Sept. 9, 2013. The session will offer an opportunity for members of the organizations to exchange appreciation and praise for the positive turn the relationship has taken over the last 30 months.

Heh. That’s a joke, as is the headline – the only accurate part of the preceding two paragraphs is the fact that a Sept. 9 working session is scheduled.

And it’s fair to say that the working session between the two groups would probably not be taking place unless it were contractually obligated – under an agreement ratified in May of 2011. The DDA operates the city’s parking system under that contract. In addition to the convening of a joint working session every fall, the contract stipulates that 17% of the gross parking revenues are to be paid to the city.

Parking money is just one of the two revenue categories over which the city and the DDA have been bickering. The other is the DDA’s tax increment finance capture (TIF), which is regulated by Chapter 7 of the city code. With an initial approval of changes to Chapter 7 already approved by the council on April 1, 2013, a joint DDA-city council committee was tasked on July 1, 2013 with making a recommendation on Chapter 7 changes to the council.

DDA-council committee group

Aug. 26, 2013 meeting of the DDA-council committee, held in the basement of city hall.

Representing the council on the joint committee are Stephen Kunselman (Ward 3), Christopher Taylor (Ward 3), Jane Lumm (Ward 2) and Sally Petersen (Ward 2). Representing the DDA are Sandi Smith, Roger Hewitt, Bob Guenzel and Joan Lowenstein.

Despite being tasked by council on July 1 to begin meeting immediately, the committee did not meet until eight weeks later, on Aug. 26 – after the Aug. 6 city council primaries. Here’s the political calculus: If Kunselman had lost the Ward 3 Democratic primary to Julie Grand, the balance of votes on the council might have shifted to clarifying Chapter 7 in the DDA’s favor.

Grand ran a campaign that was generally supportive of the DDA. But Kunselman has led the council’s effort to clarify Chapter 7 in a way that favors the city as well as the other taxing jurisdictions whose taxes are captured by the DDA. However, Kunselman prevailed – as did Ward 4 challenger Jack Eaton, who campaigned in part on the idea of limiting the DDA’s TIF capture through clarification of Chapter 7.

Because the committee waited until after the Aug. 6 primary to meet, the DDA members had a clearer idea on Aug. 26 about who they’d be dealing with in the near future. The outcome of the Aug. 6 primary meant that Kunselman brought a certain amount of confidence to the committee meeting on Aug. 26. At one point he stated: “… I don’t really have a lot of trust out in my neighborhoods about what the DDA does downtown, ok? And that’s how I have been able to galvanize my base, so to speak, to stay here and to keep this effort alive, so that we can get this ordinance changed … Some of that money, yes, should be returned to the taxing authorities.”

Now the only question mark on the committee is the independent Lumm, who faces a challenge from Democrat Kirk Westphal in the November election. Lumm has made it clear she supports a Chapter 7 revision that respects the interests of the other taxing jurisdictions. But Lumm’s re-election is not a foregone conclusion.

That’s why the opening gambit from the DDA’s side at the Aug. 26 meeting was to delay further, even though the council is scheduled to take a final vote on the Chapter 7 revisions at its Sept. 16 meeting. A future council that included Westphal, mayor John Hieftje, Chuck Warpehoski (Ward 5), Margie Teall (Ward 4), Christopher Taylor (Ward 3) and Sabra Briere (Ward 1) might have six votes that potentially could support the current approach to TIF calculations. But among those six, I think even Westphal, Warpehoski and Briere are capable of independent and rational thought on the question of TIF capture.

The delaying tactic on Aug. 26 emerges in a fairly obvious way if you read through the meeting transcript. [.pdf of 40-page transcript]. DDA members were more inclined to want to talk about general arguments for the existence of a DDA, professing uncertainty about why they’d even been invited to the table. Kunselman, Lumm and Petersen made it clear they were there to talk about clarifying the TIF calculations, not more general themes. It wasn’t clear whose interests Taylor was upholding, but he aligned himself policy-wise – as well as socio-linguistically – more with other DDA board members than with his city council colleagues.

The Aug. 26 meeting was highlighted by a number of misstatements or incomplete statements of historical fact – some serious enough that I worry about the ability of some of those at the table that day to effectuate good public policy.

Still, I think the meeting offered a glimmer of hope – from a guy whose history with the city of Ann Arbor is approaching an anniversary. On Sept. 15, city administrator Steve Powers will have been on the job exactly two years.

Powers, I think, offers a contrast with the previous city administrator Roger Fraser. On April 16, 2010 Fraser barred me from a meeting of a “working group” of councilmembers and DDA board members. Shielded from public view, the group was sorting out the terms of a new parking agreement. Powers, on the other hand, toward the end of the Aug. 26, 2013 committee meeting, had this to say: “If the committee is done commenting, you should provide for public comment, as it’s a public meeting.”

This column includes a brief outline of some factual points worth remembering – because they were misstated or incompletely stated at the Aug. 26 meeting. But first, a point about words.  [Full Story]

DDA-City Committee Established

The Ann Arbor city council has established a four-member committee to sort through issues between the city and the Ann Arbor Downtown Development Authority. The council action came at its July 1, 2013 meeting. The DDA board is expected to establish counterparts at its July 3 monthly meeting.

The council will be represented by Christopher Taylor (Ward 3), Sally Petersen (Ward 2),  Stephen Kunselman (Ward 3) and Jane Lumm (Ward 2). Lumm’s name was added to the mix during the council’s meeting.

The current source of friction between the DDA and the city concerns the interpretation of Chapter 7 of the city code, which regulates the DDA’s tax increment finance (TIF) capture. The DDA has chosen to interpret the Chapter 7 language … [Full Story]

Council Again Delays DDA Ordinance Vote

On a unanimous vote, the Ann Arbor city council has again delayed final enactment to changes in the city’s ordinance governing the Ann Arbor Downtown Development Authority. The postponement is until the council’s second first meeting in September – on Sept. 3, 2013.

Ann Arbor DDA TIF Revenue projections Ann Arbor DDA TIF revenue projections. The vertical line indicates the year when the clarified calculations would be implemented. The red line is the amount of TIF revenue assumed by the DDA in its FY 2014 and FY 2015 budgets, and in its 10-year planning document. The blue line is the estimated TIF … [Full Story]

Late-Night Bitter Politics Set Stage for May 6

The Ann Arbor city council meeting that started on Monday evening, April 15, 2013 did not end until after 3 a.m. the following day. This was due in part to a stream of about 100 citizens who took the podium for general public commentary and two significant public hearings. The three-minute allocation of time per speaker translated into about five hours of public speaking time.

Mayor John Hieftje

Mayor John Hieftje at the April 15 Ann Arbor city council meeting. (Photos by the writer.)

Conversation amongst audience members at the meeting – as well as subsequently in the community – described the effort as a “citizens filibuster.” The result of all the commentary: Two significant items on the agenda were postponed until the council’s May 6 meeting.

One of those items was the site plan approval for 413 E. Huron. Postponement of a decision on that project was lumped in with the general motion to postpone all remaining action items on the agenda until May 6. It was not necessarily expected that the council would postpone the 413 E. Huron site plan that evening, even if it was hoped by opponents that councilmembers would put off the decision – for a third time.

But there was a reasonable expectation that another significant item would be postponed – the council’s final action on a proposed revision to the city ordinance governing the Ann Arbor Downtown Development Authority. It was during the often acrimonious debate on that decision that the council ultimately opted to postpone all of its remaining action items until May 6.

The acrimony stemmed in part from the fact that the stated intention of Stephen Kunselman (Ward 3) at the start of the meeting was to postpone a final decision – and that was the expected outcome. The fact that this expected outcome was called into question heightened the tension in an already emotional debate. The tension was heightened by the fact that deviation from the anticipated postponement was made possible mainly by the absence of two councilmembers – Marcia Higgins (Ward 4) and Sumi Kailasapathy (Ward 1).

By the time the council reached the DDA ordinance on its agenda, the hour was approaching 2 a.m. And by then Higgins and Kailasapathy had needed to leave the council meeting. Both of them had supported the ordinance changes in the 7-3 vote taken at the council’s April 1, 2013 meeting. But for the final reading on April 15, neither of them were at the table when the debate on the DDA ordinance began.

Kailasapathy described herself to The Chronicle as on the verge of physical exhaustion when she left – having had little sleep over the several days leading up to the meeting. She earns her livelihood as a certified public accountant, and tax season is a time of peak workload.

So apparently recognizing that the absence of Kailasapathy and Higgins would mean defeat for the ordinance change – if it were voted up or down, instead of being postponed – mayor John Hieftje led an effort to force an up-or-down vote on the issue. And councilmembers who were willing to put off the issue were not unified in their view about the parliamentary procedure to use to achieve that delay. So the council voted on two different options – postponing until a date certain (June 17) or tabling the issue. Sabra Briere (Ward 1) provided a crucial vote against postponement, but voted in favor of tabling.

Kunselman argued for the postponement by pointing out that because the sequence of the roll-call vote that evening allowed him to vote last, he could simply assess how the tally stood, and vote accordingly with the prevailing side. That would give him the right to bring back the vote for reconsideration at the council’s subsequent meeting. But Kunselman’s argument was not persuasive to a six-vote majority.

Without a six-vote majority in favor of either tabling or postponing, the council was left to deliberate on the actual ordinance amendments. As some attempted amendments failed – clearly due to the dynamic that had resulted from the absence of two councilmembers – Chuck Warpehoski (Ward 5) eventually proposed adjourning the meeting until the following Monday, when the meeting could continue. However, after a brief recess it was decided that the council would simply postpone all remaining voting items until its May 6 meeting, and put an end to the April 15 meeting.

After approving the motion to postpone the action items, councilmembers ticked through the remaining “housekeeping” items on the agenda, which largely included various reports and communications. Of those, one highlight worth noting was the nomination by Hieftje of Eric Mahler to replace David Nacht on the board of the Ann Arbor Transportation Authority.

The public commentary at the April 15 meeting exceeds The Chronicle’s capacity to report in its customary way. Still, some accounting of the meeting is important for the archives.

This report provides: (1) a summary of votes taken; and (2) a summary of actions that will now appear on the May 6 agenda as a result of the April 15 postponement. In addition, this report begins with details of the deliberations on the proposed DDA ordinance revisions. [Full Story]

Column: A TIF with A2Y Chamber

At its April 15, 2013 meeting, the Ann Arbor city council likely will take a final vote on changes to the local ordinance governing the Ann Arbor Downtown Development Authority. On April 1, by a 7-3 vote, the council gave initial approval to the changes.

A2Y Chamber Member Directory

Cover of the A2Y Chamber member directory. The Ann Arbor Chronicle is among the members listed.

In the interim, the city council has undoubtedly received communications lobbying for and against these changes. Among those communications was a letter sent on April 12 – with signatures from representatives of eight different entities that have significant specific interests in downtown Ann Arbor: “We write to oppose the proposed ordinance amendment … [P]aramount is the proposed change to the current ordinance procedure for calculating potential rebates of higher than anticipated TIF revenues back to taxing units …”

One of the eight signatories is unique – for two reasons.

First, the Ann Arbor/Ypsilanti Regional Chamber is the only one of which The Ann Arbor Chronicle is a member.

Second, the chamber is unique among the eight because it’s the one that has the legal and public policy resources to arrive at a position based on the legal and public policy merits of the issue. But in this case, the chamber has chosen a view that seems only half-informed by legal and public policy analysis.

With access to legal talent like Doug McClure, a recent candidate for 22nd Circuit Court judge who is chair of the chamber’s public policy committee, I’d expect this regional chamber to support the kind of clear, solid, forward-looking legal foundation that the proposed ordinance amendments would provide for us as a regional community. That’s especially true given that so many people – for and against the ordinance changes – agree that the current ordinance language lacks clarity.

And the idea that the chamber would support whatever interpretation the DDA chooses to give the ordinance – in the DDA’s sole judgment, with millions of regional tax dollars at stake – is bizarre from a public policy point of view. It’s especially bizarre given that this purportedly regional chamber has access to regional public policy talent like Andy LaBarre. He’s the chamber’s vice president of government relations who’s a former staffer for Congressman John Dingell. LaBarre is also an elected representative serving on a regional governing body that has tax dollars at stake in this debate – the Washtenaw County board of commissioners.

But the chamber chose to glance past the legal and public policy issues, opting instead to allow personal, petty mayoral politics to cloud its collective thinking.

What’s even more incredible is that the chamber has chosen wording for its letter – which it then recruited the other entities to sign – that would actually point an alert reader to the relevant legal and public policy issues. If the chamber itself had taken the words in its own letter more seriously, perhaps that would have guided the organization to take a position in favor of the ordinance changes.

In this column, I’ll lay out an analysis of the wording that the chamber has chosen – “… which the DDA calculates using its judgment within the standards set by the ordinance” – and explain why those words point the way to supporting the ordinance changes. [Full Story]

Column: Math Is Hard, But This Ain’t Math

Even in a smaller-sized city like Ann Arbor, governmental issues can be fairly complex. Still, our local issues are typically simple enough that they can be mastered even by an ordinary citizen who can read words on a page.

Bezonki is terrible at math, which could explain why stuff is always exploding.

This panel is from The Chronicle’s monthly comic, Bezonki, which is drawn by local artist Alvey Jones, a partner at the WSG Gallery. Bezonki is really terrible at math, which could explain why stuff is always exploding during his adventures. (This image links to a listing of all of the Bezonki panels.)

However, over the last several weeks, a significant issue has been brought forward for debate that’s been portrayed by some local officials as far more complex than that.

For now, let’s not even think about what the issue might be. It could be zoning. Or dog parks. Or parking rates. Or police staffing levels. Or public art. Or express bus service. Or outdoor signs. Or none of those. Call it Issue X.

As I’ve chronicled the workings of Ann Arbor’s local governance recently, I’ve watched as two local representatives – one elected and one appointed – have seemed to portray Issue X as too mathematically challenging to grasp. I chalk that up to politics: If the math can be set aside, then the conversation can more easily move to pure politics – the strong suit of elected and appointed officials.

To be clear, Issue X is fraught with politics. But I don’t think that focusing on the politics of Issue X serves the interests of Ann Arbor residents.

Issue X is also fraught with mathematical calculations. But not everyone is comfortable with equations.

So in this column I’ll sketch out an analogy that I think, on a purely conceptual level, accurately captures the essence of Issue X – in non-mathematical, non-political terms. [Full Story]

Deliberations on DDA Pave Way for Final Vote

Ann Arbor city council meeting (April 1, 2013): The council’s first meeting in April featured some progress on items that have appeared repeatedly on its agenda in the last several weeks.

From left: Jane Lumm (Ward 2), assistant city attorney Mary Fales and Stephen Kunselman (Ward 3).

From left: Jane Lumm (Ward 2), assistant city attorney Mary Fales and Stephen Kunselman (Ward 3). (Photos by the writer.)

After two postponements, the council gave initial approval to a set of changes to the ordinance that establishes the Ann Arbor Downtown Development Authority (DDA). The changes can be divided into those that affect board composition and those that relate to the computation of the DDA’s tax increment finance (TIF) capture.

The tax calculations have implications of roughly $1 million a year for the DDA and the taxing jurisdictions whose taxes are captured by the DDA. Those taxing jurisdictions include the city of Ann Arbor, Washtenaw County, Washtenaw Community College and the Ann Arbor District Library. The vote was 7-3, as mayor John Hieftje, Margie Teall (Ward 4) and Chuck Warpehoski (Ward 5) voted no. Christopher Taylor (Ward 3) was absent. The final vote will likely come at the council’s April 15 meeting. Councilmembers are not obligated to vote the same way the second time around.

The council also wrapped up an issue that has appeared on its agenda for several meetings. At its March 18 meeting, the council had finally decided not to enact a moratorium on site plan applications in D1 (downtown core) zoning districts. Instead, the council had directed the planning commission to conduct a review of D1 zoning. But councilmembers had left open the question of the exact scope of work and the timeframe for its completion by planning commissioners. At the April 1 meeting, the council allowed the commission six months, until Oct. 1, to review the following: the appropriateness of D1 zoning on the north side of Huron Street between Division and South State and the south side of William Street between South Main and Fourth Avenue; the residential premiums; the zoning for the University of Michigan Credit Union parking lot.

Other business was further delayed by the council. At the developer’s request, the council postponed for a second time the 413 E. Huron project, a proposed 14-story, 216-apartment building at the northeast corner of Huron and Division streets. That project will come back before the council at its April 15 meeting. A new public hearing on the 413 E. Huron site plan application was started on April 1 and will continue on April 15.

The council also postponed a second and final vote on changes to the city’s sign ordinance. The changes would prohibit any new billboards, and allow only a limited range of digital signs. That won’t come back before the council until May 6. Several people addressed the council during the public hearing. All of them worked for Adams Outdoor Advertising, and spoke in opposition to the changes. Because of the postponement, the council extended a moratorium on digital sign applications, which has now been in place for a year.

The council also extended a moratorium on spending of monies that have been set aside under the city’s Percent for Art ordinance. A revision to that ordinance, which would likely eliminate the public art set-aside but still allow for aesthetic elements to be built into a project, is expected to be brought forward in the next few weeks. The public art ordinance revisions are being crafted by a council committee that was tasked with that responsibility in December of 2012.

At its April 1 meeting, the council also approved contracts for renovations at the Gallup Park canoe livery, and the Argo and Geddes dams. In addition, the council approved a lease for additional parking in connection with the Argo Cascades.

Other business at the meeting included council approval of the notice to issue bonds for the city’s drinking water system. The council also authorized contracts in connection with street reconstruction and sidewalk repair work for the 2013 season. [Full Story]

DDA Tax Capture Change Gets Initial OK

Several revisions to Chapter 7, a city ordinance governing the Ann Arbor Downtown Development Authority (DDA), have received an initial approval by the city council. One of the revisions could result in roughly $559,000 in additional annual revenue for the city of Ann Arbor – compared to what it would receive under the DDA’s current interpretation of the ordinance.

The 7-3 vote came at the council’s April 1, 2013 meeting. In order to be enacted, the changes will need to receive approval from the council at a subsequent meeting, following a public hearing.

The revisions considered by the council fell roughly into two categories: (1) those involving board composition and policies; and (2) calculation of tax increment finance (TIF) capture in the … [Full Story]

DDA: No TIF Recalculation

At a special meeting held on July 27, 2011, the Ann Arbor Downtown Development Authority board passed a resolution stating that it was accepting the general guidance of its legal counsel, Jerry Lax: The DDA will not be changing the calculations on which it based the return (earlier this year) of excess taxes captured through its tax increment finance (TIF) district. The decision came after a closed session with Lax that lasted nearly an hour. The language of the resolution is somewhat vague, stating that “no redistribution to relevant taxing authorities is required.”

Some background: At its May 2, 2011 meeting, as it was poised to ratify a new contract with the city of Ann Arbor, under which it … [Full Story]