According to city of Ann Arbor CFO Tom Crawford, the city’s response to the letter would not require any city council action. The city staff would be explaining to the state how the city’s internal financial procedures mitigate against what Crawford characterized as a “minor issue.”

A note in the city’s own audit report called attention to the fact that:

An excess of expenditures over appropriation were reported in the local street nonmajor special revenue fund (final budget of $1,582,562 and actual of $1,623,495); this excess of $40,933 was absorbed by available fund balance. No other expenditures in excess of appropriations were reported.

The city’s local street fund receives Act 51 money from the state and is used primarily for street repair and maintenance.

If expenditures exceed the appropriations for any fund, it violates state statute, and thus triggers a letter from the Department of Treasury. The letter notes the violation and requires the city to file a corrective action plan (CAP) within 30 days. The CAP, according to Crawford, would not require any city council action, and would include an explanation of the city’s internal procedures. Crawford observed in an emailed answer to a Chronicle question that “They note expenses over by $40K but did not note transfers out that were under budget by $60K.”

Terry Stanton, with the state’s treasury department, responded to a Chronicle inquiry with an email that explained how common such letters are:

Letters, such as the one sent to the City of Ann Arbor, are not rare, with approximately 400 sent to local units in 2012 (there are about 1,800 cities, villages, townships and counties in Michigan).

Essentially, the letter acknowledges certain conditions which have been noted in a local unit’s audit report and informs a city (or village, township, county) that it needs to submit a corrective action plan. They are expected to indicate to the department how they plan to fix any deficiencies noted in the audit report.

To help ensure the local unit submits a corrective action plan in a timely fashion, there can be consequences if a plan isn’t submitted. Those consequences are outlined in the letter.

The audit of Ann Arbor’s FY 2013 financial statements was recently reviewed by the city council’s audit committee.

[.pdf of Nov. 22 state of Michigan Dept. of Treasury letter to city of Ann Arbor] [.pdf of final audit report released on Nov. 15, 2013]

The city had also planned to build a train station at the site. The university withdrew from the partnership earlier this year, on Feb. 10, 2012. The city of Ann Arbor has continued with its planning for the rail station portion of the project, accepting a $2.8 million grant from the Federal Rail Administration on June 4, 2012 for a site alternatives analysis. That $2.8 million grant had a $0.7 million local match requirement, which the city intends to meet with funds already expended by the university and the city. The amount billed by the city to the university was part of that local match component of the FRA grant.

In the agreement reached between the city and the university, UM does not owe the $271,446 – because the university has already met its 78% share of expenses as specified in the MOU. That means the city will use part of the $307,781 that had already been included in the FY 2013 budget to cover those costs, in the event it was determined that UM did not owe the money.

From left: Dan Ezekiel, chair of the Ann Arbor greenbelt advisory commission, points out other GAC members to Richard Andres, who gave a presentation on the Washtenaw Food Hub. (Photos by the writer.)

Located on 16 acres in Ann Arbor Township, the food hub is envisioned to provide support for farmers to distribute and sell their produce, and for residents to buy food, attend workshops and create meaningful relationships with those who are part of the local food network. The project is still in its formative stages, but has potential to develop a food economy based on a human scale, Andres said, not a Wall Street scale.

GAC chair Dan Ezekiel noted that the hub is an example of the next phase of this region’s local food movement, which he said has “grown like an heirloom tomato” since the greenbelt program launched nearly a decade ago.

Commissioners also got a mid-year financial update on the greenbelt program at this month’s meeting, and heard about potential deep cuts to a federal farmland preservation program that has supported the greenbelt with more than $6 million in grants. The city has recently applied for $1,037,198 in additional grants that would help preserve 519 acres. Ginny Trocchio, support staff for the greenbelt program, also reported that over the next month there will likely be several closings on property within the greenbelt totaling another 300 acres.

Also at the April 5 meeting, Peter Allen – a local developer and GAC commissioner – proposed forming a strategic planning subcommittee to evaluate the greenbelt program so far and to look at what they’d like to accomplish in the future. It’s likely that the commission will formally consider his proposal at their May 3 meeting.

As it typically does, the meeting included a closed session to discuss land acquisitions. When commissioners emerged, they voted on three items – recommending that the city council approve the purchase of development rights on two properties, and to partner with Washtenaw County on a third acquisition. Ezekiel noted that the third item extends an existing county preserve on land that would provide public access and recreational opportunities.

At the end of the meeting, Ezekiel reported that a position on the commission will be opening up this summer. He urged anyone who’s interested to apply and “join the fun.”

Washtenaw Food Hub

Richard Andres, who operates Tantré Farm with Deb Lentz, was on hand to give a presentation about the Washtenaw Food Hub. He began by thanking commissioners for their work on the greenbelt, saying it was important to preserve land for agriculture. The greenbelt will be key in ensuring that local food is provided to the city, in bringing compost out to the farms, in building meaningful participation for Ann Arbor residents, and in providing a stronger local economy for small farmers.

Andres described himself as a farmer who’s lived in Chelsea for the last 18 years. Before that, he farmed for a couple of years with Robert MacKercher at Garden Works, an organic farm that was then located at the corner of Dhu Varren and Pontiac Trail on Ann Arbor’s north side. He said that site used a lot of leaves that were brought out from the city to fertilize the 3-acre parcel. After putting the leaves down, it was amazing the kind of lettuce they could grow, he said. They generated about 3,000 pounds of organic lettuce each week. They also grew strawberries and other produce.

The land was eventually sold for development – he noted that there was some discussion that the property should be part of a greenbelt, but it was sold in the late 1990s, several years before the city’s greenbelt program was created.

Today, a different kind of development is needed, Andres said – a planning or replanning of how we live, work, eat, socialize and create culture, education and connection in our nation. Looking at the big picture, he said it would be great if every city had a greenbelt, surrounded by small farms that provide food for the immediate vicinity. That kind of approach would not only recycle resources and provide good food, but it would also allow for meaningful relationships between people living in town and people in the country, he said.

As a kid, Andres said he lived in a small town where he could walk outside of town to pick pumpkins. But in the 1970s, he watched as the edges of town became suburban sprawl. The town was interested in increasing its tax base, while builders were interested in making money from the growth. Now, he hopes to see development based on agriculture, saying there’s good historic precedent for that. He said he thinks of sprawl as a “short delusionary psychosis we went through as a nation.”

The country is soaking up non-renewable resources, but Andres said he aspires to create an example of a different approach.

Tantré Farm is located about 20 miles west of Ann Arbor – it was the cheapest land he could find to farm in the early 1990s, Andres said. They’ve build up a CSA community and business where they bring in 350 shares to town each week, as well as produce to sell at the Ann Arbor farmers market. [CSA refers to community-supported agriculture, in which residents buy shares in a farm, in exchange for a weekly portion of the farm's seasonal produce.]

Some of the out buildings at the Washtenaw Food Hub. (Links to .pdf of photographs of the site provided by Richard Andres.)

Andres described his goal for the Washtenaw Food Hub, located on about 16 acres in Ann Arbor Township, north of Ann Arbor. He’d like to create an enhanced distribution point for his own CSA as well as for other farmers. The site historically served as a place to support farmers, he said, providing bins for grain and fertilizer, areas for mixing products, and loading docks.

The goal is to repurpose the site as a destination for local food, he said. There will be large coolers and freezers for storage, an area to wash and pack vegetables, and a building that’s warm for people to gather when they come to pick up their shares in the winter. There’s adequate parking. The idea is to create a retail space that’s open more than just one day a week during the winter, which will help with the year-round continuity of distributing leafy greens, root crops, eggs and meat. The hub would be a support network for farmers and a place to build community for residents.

Andres said he and other organizers have laid out some of their dreams, and are now talking with township officials and others who can help make it happen. They’ve had a few gatherings and potlucks so far, which have gone well, he said. They’re not eschewing consumer culture, he said, but they’re trying to supplant it with something that’s much more enhanced by creating community and meaning in people’s lives. People who pick up their shares can get to know others in the CSA. There will be workshops on food preparation, he said, hopefully inspiring people to relearn the traditional ways of healthy cooking and baking.

Andres said he hoped the hub would support the local food movement, especially on the north side of Ann Arbor where several other food-related entities are located, including the nonprofit Food Gatherers and the Tilian Farm Development Center.

Washtenaw Food Hub: Commission Discussion

Tom Bloomer asked for more details about where the food hub is located. It’s about two miles north of the Huron River, Andres replied, near the corner of Warren and Whitmore Lake roads. He said it’s within easy biking distance, though it’s mostly uphill on the way out of town. Currently, about 80 people drive out to Tantré Farm to pick up their CSA shares. The hope is that if they can go to the hub instead, which is significantly closer to Ann Arbor, then they’ll have more time to spend with other CSA members or to attend workshops, Andres explained. He also noted that about 3-4 acres on the site might be developed for U-picking.

Peter Allen, a local developer and member of the Ann Arbor greenbelt advisory commission.

Peter Allen said it seemed like the food hub’s recent work party was successful. Will there be others? Yes, Andres said, it will be an ongoing effort to clean up the site and bring it back to a “human scale” rather than a Wall Street scale.

Allen also elicited that other small businesses might be involved. Andres said that Miyoko Honma of Café Japon has expressed interest in baking bread on site and holding workshops, as has David Klingenberger of The Brinery, who would like to make sauerkraut from Tantré cabbages and hold lacto fermentation workshops. Other farmers and food artisans have expressed interest too.

Dan Ezekiel clarified with Andres that the property formerly was the site for Braun Agriservice, and is completely surrounded by property that’s protected by land preservation programs. He asked whether there’s a commercial kitchen on the site. Not yet, Andres said, but there’s interest in building one. It would be good to support existing businesses – for example, a commercial kitchen could be used by Klingenberger to make sauerkraut. That’s a nice harmony, Andres said, and a vertical integration with other food businesses. He’s in the process of working on township zoning for that, he said.

Ezekiel wrapped up the discussion by saying he had started to describe the local food movement as having grown like a weed since the greenbelt started, but “grown like an heirloom tomato” might be more apt, he joked. He thanked Andres for coming, and wished him well with the venture.

Andres thanked the commission and said that the greenbelt was a big factor as to why he was interested in acquiring this property for the food hub. There’s precedence in Europe for similar efforts, preserving farmland and keeping farmers close to town. He said he’d like to see this idea move forward quickly everywhere, not just in the Ann Arbor area.

Mid-Year Financial Report

Reprising a similar presentation made at the March 20 meeting of the Ann Arbor park advisory commission, Ginny Trocchio presented the greenbelt program’s mid-year financial report for the period of July 1, 2011 through Jan. 31, 2012 – the first seven months of the current fiscal year. Trocchio is a staff member of The Conservation Fund who manages Ann Arbor’s greenbelt and parkland acquisition programs under contract with the city. [.pdf file of financial report]

By way of background, Ann Arbor voters passed a 30-year 0.5 mill tax in 2003 for land acquisition – the open space and parkland preservation millage. It appears on the summer tax bill as the line item CITY PARK ACQ. The city’s policy has been to allocate one-third of the millage for parks land acquisition and two-thirds for the city’s greenbelt program. The greenbelt advisory commission handles the portion for land preservation outside of the city limits, while the city’s park advisory commission oversees the funds for parkland acquisition.

To get money upfront for land acquisition, the city took out a $20 million bond in fiscal year 2006. That bond is being being paid back with revenue from the millage. Debt service on that bond so far in FY 2012 year has amounted to $837,088. [Two debt service payments are made during the fiscal year, totaling about $1.2 million.]

Net revenues from the millage were $2.244 million as of Jan. 31, Trocchio reported, with expenses of $1.768 million. In addition to debt service, expenses include $813,000 in greenbelt projects and about $82,000 for parkland acquisition. The main greenbelt acquisitions were for:

• the purchase of development rights on the Thomas/Lobato property ($103,472 plus $23,867 for an endowment) for 30 acres owned by Duane Thomas and his wife Judith Lobato in Scio Township. The property is located near the northwest corner Scio Church and Wagner roads.
• the purchase of development rights on the Lindemann/Weidmayer property ($657,112 plus $23,867 for an endowment) for 111 acres in Lodi Township, owned by Bill Lindemann and his sister Karen Weidmayer. The property is located along Pleasant Lake Road, about a half-mile from the former Girbach farm, which is also protected through the greenbelt program.

About $10.5 million remains in the fund balance, but some of that will be spent on deals that have already been approved but haven’t yet closed, Trocchio said. Of that fund balance, $4.5 million is designated for parks, while about $6 million is set aside for the greenbelt program.

In addition, there’s $445,000 in an endowment set up to cover legal costs related to monitoring and enforcing the conservation easements held by the city.

Trocchio also reported that administrative costs of $35,594 so far in fiscal 2012 equate to 2% of total revenues. Administrative costs over the life of the millage are limited by ordinance to be no greater than 6% of revenues.

Mid-Year Financial Report: Commission Discussion

Carsten Hohnke asked whether the administrative costs would track at the same rate for the remainder of the year – that is, would there be about $70,000 in total annual administrative costs this year? It will likely be more than $70,000, Trocchio said, because The Conservation Fund bills quarterly, and there may be additional payments that haven’t yet shown up for the first half of the year. However, the total will likely be less than last year, she said. [Total FY 2011 administrative costs were $160,442 – 1.5% of revenues.]

From left: Greenbelt advisory commissioners Catherine Riseng, Liz Rother, Laura Rubin.

Laura Rubin noted that so far this year, no transaction expenses have been recorded. Those costs haven’t hit the books yet, Trocchio said. [In FY 2011, transaction expenses – which are part of total administrative costs – were $48,891.]

Dan Ezekiel noted that administrative costs have been on a downward trajectory since FY 2008 – when those costs totaled $197,621, or 3.4% or revenues – and he would expect that decrease to continue. In FY 2011, administrative costs were 1.5% of revenues. The staff and commission continue to exercise great frugality with regard to overhead, he said.

Ezekiel also commented on the endowment, explaining that each time the city buys development rights through the greenbelt program, money is set aside in an endowment to be used in monitoring or enforcing that landowners comply with terms of the deal. That’s key, he said. Without those funds, the conservation easements don’t have teeth, he said, and he’s glad the city had the foresight to set aside funds for this purpose. He asked whether the city invests these endowment funds along with its other investments. Trocchio didn’t know, but said she’d find out and report back.

Investment income so far in FY 2012 is $74,967 compared to $27,973 for the entire year of FY 2011. That’s a sharp drop from the $492,576 in FY 2010 investment income and from $815,261 in FY2009. The issue of investment income has arisen at previous GAC meetings, and prompted city treasurer Matt Horning to attend the commission’s November 2010 meeting and provide a detailed explanation of how the funds are invested and accounted for.

At GAC’s April 5 meeting, Peter Allen observed that grants from the U.S. Department of Agriculture’s Farm and Ranchland Protection Program (FRPP) have been significant over the years. Trocchio reported that the city has received about $6.5 million in FRPP funds since the greenbelt program began.

In response to a query from Ezekiel, Trocchio said that funding from partners – including FRPP and local government units – accounts for an average of 50% of all land preservation deals.

Greenbelt Staff Update

Ginny Trocchio said she’d start her staff update with the good news. The city has applied for grants through the U.S. Department of Agriculture’s Farm and Ranchland Protection Program (FRPP) for four properties located in the greenbelt’s boundaries. The properties total 519 acres for a total grant request of $1,037,198. She said she hoped to receive word about those grants in the next couple of months. There was $2.3 million available for FRPP grants in Michigan, and Trocchio said she knew of several other groups – including some local entities – that have also submitted FRPP applications. So there’s a lot more competition, she said, but with lower land values, the FRPP program can fund more projects than in previous years.

Responding to a query from Dan Ezekiel, Trocchio said that three of those four properties seeking FRPP grants are located within the recently expanded greenbelt boundary.

Over the next month there will likely be several closings on property within the greenbelt totaling about 300 acres, Trocchio said. One deal is in Superior Township, partnering with Washtenaw County and the Southeast Michigan Land Conservancy. [Trocchio did not identify the specific properties, but at their Jan. 9, 2012 meeting, Ann Arbor city council authorized $172,858 for about 99 acres owned by Frank Pellerito in Superior Township. Other recent council-authorized greenbelt purchases include $85,726 for the Newton farm in Ann Arbor Township, $126,867 for the Van Natter farm in Webster Township, and $502,307 for the Boike farm in Northfield Township.]

Trocchio highlighted several events coming up later in the year: the annual HomeGrown Festival on Sept. 8; a bus tour of greenbelt-protected property on Saturday, Sept. 22; and a panel discussion with landowners participating in the greenbelt program on Nov. 7 at the Ann Arbor District Library. Trocchio also mentioned that she had participated in the recent Local Food Summit, and was a panelist at a city forum on sustainability.

Later in the meeting Ezekiel mentioned two other events: the Ann Arbor Green Fair on June 8 on Main Street, and an April 24 talk by local food advocate Joel Salatin at the Michigan Theater.

Trocchio concluded her report with some bad news – Congress is considering a farm bill that includes up to 30% in cuts to the Farm and Ranchland Protection Program (FRPP). Other conservation programs are being considered for smaller cuts of 12%, she noted, so FRPP could be hit harder. As the bill now stands, the FRPP would also be consolidated with other grant programs, like the grassland reserve and other easement programs, she said, so there’s potential for even greater impact. She said she’d keep the commissioners updated on this issue.

Strategic Planning

During the meeting Peter Allen proposed forming a strategic planning subcommittee, to look at the greenbelt program’s progress so far, and what they hope to do in the future. Potential federal funding cuts could be a part of that discussion, he said. In response to a query from GAC chair Dan Ezekiel, Allen said he’d be happy to lead such a group.

Ezekiel asked if any other commissioners were “salivating like a wild dog” to participate. Shannon Brines ventured that he wasn’t exactly salivating, but he’d be interested in joining the subcommittee.

Ezekiel indicated that it could be an agenda item for GAC’s next meeting.

Closed Session: Land Acquisition

Commissioners spent about 30 minutes of their meeting in closed session to discuss possible land acquisitions. When they emerged from closed session, they took votes on three separate resolutions that recommended action by city council.

Before appearing on the city council’s agenda, details of proposed greenbelt acquisitions are not made public – parcels are identified only by their application number. The first two votes at GAC’s April 5 meeting related to parcels 2011-15 and 2011-14. Commissioners recommended that the city council purchase development rights to these properties if at least 50% of matching funds are secured. The purchase price was not mentioned in these resolutions.

The third resolution recommended that the city council approve partnering with Washtenaw County on application 2012-02, in the amount of $61,312.

GAC chair Dan Ezekiel commented on this final resolution before the vote. He noted that it related to a joint project on land that would provide public access and recreational opportunities, extending an existing county preserve. The commission sometimes has drawn heat for preserving land that the public can’t access, he said, but this is an example of a property that does provide access. The greenbelt program will also be closing on another property later this month that will have a recreational and public access component too, he said. That property, located in Superior Township, is another example of extending an existing preserve that’s open to the public, Ezekiel said.

Outcome: On separate unanimous votes, commissioners recommended approval of the three greenbelt deals.

Misc. Communications: Seeking New Members

At the end of the meeting, Dan Ezekiel pointed out there will be an opening on the commission this summer. He encouraged anyone who might be interested to apply “and join the fun.”

For most city commissions, members are nominated by the mayor and confirmed by the council. However, the nine greenbelt commissioners are both nominated and confirmed by the city council. The breakdown of GAC membership, as stipulated in Chapter 42 of the city code, is as follows: city council representative (1), agricultural landowner or someone who operates an agricultural business (1), real estate developer (1), representative of environmental/conservation groups (2), plant or animal biologist (1), and at-large community members (3).

According to a listing of GAC members and their term end-dates, posted on the city’s Legistar system, the terms for three members end on June 30, 2012: Peter Allen, Mike Garfield and Catherine Riseng. Responding to a follow-up query from The Chronicle, Ezekiel said that Mike Garfield will be term-limited. Allen and Riseng are expected to be reappointed to another three-year term. Garfield has been on the commission since its inception, serving as one of two positions to be filled by environment/conservation groups. He is director of the Ecology Center, a nonprofit based in Ann Arbor.f

Public Commentary

One person – Thomas Partridge – spoke during public commentary. He urged commissioners to integrate GAC’s work with efforts to develop affordable housing and affordable, accessible public transportation countywide. He said he understood the importance of land preservation, but there needs to be balance with other priorities. Partridge mentioned that he’d grown up in Genesee County and had raised a grand champion steer that helped pay for his college education, so he understands the needs of rural, suburban and urban areas. He asked commissioners to lead the way in passing resolutions to achieve these goals.

Present: Peter Allen, Tom Bloomer, Shannon Brines, Dan Ezekiel, Carsten Hohnke, Catherine Riseng, Liz Rother, Laura Rubin. Also: Ginny Trocchio.

Absent: Mike Garfield.

Next regular meeting: Thursday, May 3, 2012 at 4:30 p.m. in the second-floor council chambers at city hall, 301 E. Huron St., Ann Arbor. [confirm date]

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The online system allows users to look at expenses and revenues by service area, by fund and by expense type. The information is download-able in MS Excel format so that users can search for and manipulate data as desired. Information is available for expenses beginning July 1, 2010 through today – data is updated daily.

There’s a possibility that P-Card data might be added in a second phase of the project.

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]