April 23, 2014 meeting of the Ann Arbor taxicab board at city hall. (Photo by the writer.)

The action comes in response to Uber‘s entry into the Ann Arbor market. Uber is a service, based on a mobile app, that coordinates prospective passengers with drivers who are willing to make the trip. Currently the city’s taxicab ordinance covers only taxicab drivers – not limousine drivers or any other drivers for hire. The board wants to see a draft ordinance that would include all drivers for hire – so that Uber’s drivers would need to be registered in the city of Ann Arbor.

Stephen Kunselman, who serves as the city council’s representative to the taxicab board, put it this way at the meeting: “The number one issue of regulating drivers in the industry is for public safety, alright? I want to know who these drivers are who are driving around picking up people in our town, okay? Number one issue.”

A change to the city’s ordinance could come only after approval by the city council.

The action requesting the city attorney’s office to begin work on an ordinance amendment was not actually on the board’s meeting agenda. The one item for discussion had been to consider possible deregulation of taxicab fares in the city – a topic the board has been considering for about a year. As board chair Michael Benson put it, “It’s time to address it one way or the other.” Currently the maximum rate is $3 to get in, $2.50 per mile, and $0.40 a minute waiting time.

Those rates were last adjusted upwards on May 16, 2011, in response to gas prices that had nudged past $4 per gallon. With one exception, representatives of taxicab companies at the April 23 meeting were not looking for the kind of $0.25 adjustments that have been made in the past. Instead, they’re looking for a high maximum – along the lines of $5 to get in and $5 per mile – so that a competitive market could develop under that cap.

Benson and Tom Crawford – the city’s CFO and an ex officio member of the board – steered the conversation toward identifying ways to measure success of any change in the city’s approach to regulating fares: “What is it that you want to achieve? Let’s get some clarity on that so that we can identify whether we have succeeded or not. That’s the real point,” said Crawford.

What came out of that board discussion was that the measurement of success should include the number of taxicabs being operated in the city. At the meeting, Ann Arbor police officer Jamie Adkins told board members that for the three years from 2008 to 2010 there were 177, 193, and 179 taxicabs operating in the city, respectively. But when Yellow Car converted all but one vehicle to limousine, that number dropped to 111 in 2011. In 2012 there were 132 taxicabs, she said, and the current figure is 124.

The board’s past effort to regulate the entire livery industry – including limousines, which are supposed to take only pre-arranged, not hailed rides – has included recommendations to revise the city’s ordinance so that limousine companies cannot hold themselves out as taxicab companies. And the city council enacted those changes in 2011. But according to officer Adkins, AAPD has learned that those aspects of the ordinance can’t be the primary reason for a police traffic stop. [.pdf of Ann Arbor taxicab ordinance]

Public Commentary: Initial Opportunity

Rick Clark of Amazing Blue Taxi addressed the board at the start of the meeting during time allotted for public commentary. He contended that in essence, the transportation industry in Ann Arbor has been deregulated as far as fare structure goes. Uber is coming to town, he noted, and that is the market.

The ordinance that Ann Arbor has is a fine ordinance for 1984, but now it’s 2014, Clark pointed out. Technology has changed, but the city has not changed the regulations – to take into account how the market has changed. The city has to decide whether it wants to have a healthy taxicab business over which the city could have some control, he said, or if it would prefer just to have the wild, wild West.

Deregulation of Fares?

Board chair Michael Benson noted that the deregulation of fares has been on the taxicab board agenda for about a year now. “It’s time to address it one way or the other,” he said. He reported that he and Tom Crawford, along with financial services support staff Sarah Singleton, had met during the previous week and talked about key questions. One of them was: How do we quantify success?

Crawford, who serves on the board in an ex officio capacity as chief financial officer of the city, said that during his time on the board, what he’d seen is the board react to a things that happen – things don’t just stay the same. As the board thinks about either experimenting or moving to a deregulated restructure, he suggested board members think about ways to measure success. “What is it that you want to achieve? Let’s get some clarity on that so that we can identify whether we have succeeded or not. That’s the real point,” said Crawford.

The way Crawford understood fares to work is that the city sets the maximum rate – and drivers may charge less but they cannot charge more. Typically when you deregulate rates, the intent is that the rates become more competitive, and that competition would drive the rates down, Crawford said. He wasn’t sure he would see that happening here. The question he put to the board was: Why should we make any change? Just to say that technology is out there was not enough, he said. What is not working, and why should the city change fares? Crawford asked.

Board member Eric Sturgis said that Rick Clark of Amazing Blue Taxi had made a good point in a letter he’d written to the board: What else does the city set prices on and regulate what a business can and cannot charge? If the taxicab board let the taxis set their own rates, Sturgis thought it could drive prices higher or lower. He wondered if the city had ever tried deregulating fares.

Board member LuAnne Bullington ventured that the city of Ann Arbor already had a situation where fares were not regulated – with limousines. The city doesn’t regulate limousines, she said, so was that not already an experiment that the city was in the midst of?

Initial Discussion of Uber

After a few minutes, the fact that Uber has entered Ann Arbor’s market was mentioned.

Board member Stephen Kunselman agreed with Crawford’s framing of the question. Kunselman thought that limousines were pricing themselves based on taxicab rates. Taxicab fares are the benchmark used by limousine companies, Kunselman said. Everyone knew that Uber is already in Ann Arbor, Kunselman said. He’d received a call from the Detroit Free Press writer commenting on this, and the Free Press reporter had notified him that the city of Detroit has issued a cease-and-desist order against Uber.

Kunselman noted that assistant city attorney Kristen Larcom was in attendance at the meeting, so he expected that Ann Arbor would be following Detroit’s lead. “The number one issue of regulating drivers in the industry is for public safety, alright? I want to know who these drivers are who are driving around picking up people in our town, okay? Number one issue.” As far as setting rates, the other issue identified by Kunselman is that bartering should not happen: The city doesn’t want people getting in a car in and bartering, so that it costs someone $10 to get across town and the next person pays $30.

Back to Fares

Bartering would create a lot of issues, Kunselman thought, and the taxicab board would end up hearing complaints about why people are getting gouged. In terms of the deregulating fares, from all the discussions that he’d had with Rick Clark and what he’d been finding, Kunselman had not seen any other community that has no regulation of rates, or that does anything complicated. Kunselman was not sure he wanted Ann Arbor to be the guinea pig in that respect. At the same time, he said, he recognized that the technology and the industry are changing pretty dramatically. So he didn’t know what the next step is. But the most important issue is that the city should make sure it knows who the drivers are in town, Kunselman concluded.

Bullington said she’d been talking to people who use cabs, and she uses cabs herself. Right now, we have the best of both worlds, she said. Ann Arbor has limos that are deregulated and can set their own price, and also has taxicabs that are regulated. So if people want to call around to find out what the prices are to get from A to B, they can do that. The people she was talking to know what they will get charged by a taxicab, and they know that taxicabs are regulated and they’re very comfortable with that. But there’s another group who want to see who can get the best rate so they call the limo companies. Bullington concluded that Ann Arbor has the best of both worlds.

Benson responded to Sturgis’ question by saying that Ann Arbor had not ever tried deregulation. Crawford ventured there was a time that the ordinance had a provision such that if you don’t have a meter, then you must post your rates – but he was unsure of the details. He did not think it was completely deregulated. Larcom’s recollection of that version of the ordinance was also vague. She said there was a provision of the kind Crawford described, but she didn’t recall exactly what it said or how it worked. She didn’t recall anybody ever using the alternative of posting rates instead of using a meter.

Benson noted that it’s important to remember that the taxicab board could not itself deregulate rates: That would require an ordinance change, he said. Any decision the board eventually made would likely just be a recommendation. Benson also agreed with Kunselman’s point – that the principal goal is to ensure safety. At the same time, the board was doing its best to make sure that the taxicab industry can thrive and succeed. Benson was concerned that if the board does nothing, more and more of the taxi companies would become limos, which could upset the balance. Now, is that the city’s responsibility to try to keep the balance? Benson asked. How many cabs does the board actually want on the streets of Ann Arbor? What makes sense?

Sturgis agreed that the point about safety is a good one.

Uber Redux

Kunselman noted that a lot of the issues the board is trying to deal with are handled at the state level. He thought there has been some legislative movement on the state level. On the other hand, he also recalled hearing that the state would actually allow cities more flexibility, and the city just hasn’t tried taking action. Kunselman said he was open to pushing the envelope and passing an ordinance amendment that basically requires all drivers – taxicab drivers and limo drivers alike – and push that to see what happens. If the limo companies take the city to court, then maybe that’s something the city needs to do. “We need to push from the bottom up as well as the state pushing down,” Kunselman said.

About Uber’s position that it does not take responsibility for the transportation and that the company is just coordinating these drivers, Kunselman said: “I’m not buying that. They have direct involvement in using their technology and they’re doing it to make money. If they are making money, then they should be subjected to our regulations.”

“Uber is here and we’re going to counter it,” Kunselman said. “We have to counter it. We can’t just let them come into our community and dictate that they are basically going to wipe out the taxicab industry because they are only using limo drivers.” From what he’d read in the paper, Uber was using all licensed limo drivers. But if they’re not using limo drivers, and if they are not being regulated, then the city needs to regulate them. Any driver who is picking up passengers for a fare should be licensed by the city of Ann Arbor, whether they are a limo driver or a taxicab driver, Kunselman said.

At that point, it was apparent that the board’s conversation about fares had been transformed into a discussion of what to do about the entry of Uber into the Ann Arbor market.

Sturgis ventured that it would be possible to have an ordinance that requires all drivers to register with the city, but also to deregulate fares.

Kunselman felt that deregulating fares is a good concept but agreed with Crawford that the board doesn’t know what the impact of that would be. He thought that step might drive fares higher – because limos are benchmarking themselves to Ann Arbor taxicab rates. Kunselman then drew a comparison of the effect of increased housing supply in downtown Ann Arbor: Everyone thought that increased supply of housing downtown would cause prices to come down. What had actually happened is that the new units just filled the market for 5,000 additional students that have been enrolling at the University of Michigan in the last decade, he said.

The introduction of services like Uber into the market means that it’s a very dynamic market, Kunselman said. He continued by describing the Ann Arbor taxicab market as kind of boom-and-bust, with weekends getting heavy use. That’s why the board needs to stay very focused on the safety issue, he said.

Kunselman called the taxicab rate issue very delicate, and suggested that rates should be calibrated to gas prices. Fares haven’t been changed due to increases in gas prices since 2011, he pointed out. If fares need to be adjusted, Kunselman was open to that and he was willing to tweak the fares. But he didn’t want to try to create a new fare system that included zones or other complicated features.

Success Metric: Number of Taxicabs?

Benson tried to get board members to focus on the question posed at the start: How would the board measure success, if it decided to change the fare structure? Benson then asked: Are we succeeding now? Since 2011 have we been succeeding? Hypothetically, if the city council allowed the board to raise the maximum fare to $10 – in effect deregulating fares – how would the board define success? Is it the number of cars on the street? Is it the number of companies? The number of incidents? The number of complaints? What might make sense? Benson asked. He noted that these are the kind of questions that should be answered, whether rates are deregulated or not.

Distribution of taxicabs companies operating in Ann Arbor by the number of vehicles in operation. Only three companies have more than 18 cabs. Most companies have just one cab in operation.

Board member Robert Goeddel ventured that the main incentive for deregulating would be to encourage more taxicabs – because however the city of Ann Arbor filters drivers, the city at least knows who is on the street picking up passengers. He thought success should be tied to the number of taxicabs operating in town, as opposed to limos. One thing that prompted this call for deregulation of fares, Goeddel said, was that a lot of cabs were switching over to limos – which are under state control, not under city control.

Crawford then asked Adkins to share information about the number of taxicabs that are operating in the city of Ann Arbor. Currently there are 124 vehicles and 21 companies. Previously, there were significantly more – when Yellow Car was part of the taxicab industry. From 2008 to 2010 there were 177, 193, and 179 taxicabs operating in the city, respectively. But when Yellow Car converted all but one vehicle to limousines, that number dropped to 111 in 2011. In 2012 there were 132 taxicabs, she said, and the current figure is 124.

Kunselman summarized the numbers by saying that when Yellow Car converted to primarily limo service, that took a big chunk of the taxicabs out of service, and it’s been pretty steady since then.

Success Metric: Citations for Limo-as-Taxicab?

Benson again asked the board to focus on metrics for success – whether the board takes on fares or not. Kunselman said he did not know if it was a metric for success, but he’d like to know on a regular basis how many limos are being pulled over for operating as taxis.

Adkins responded to Kunselman by saying that part of the city’s taxicab ordinance is very difficult to enforce – especially once the limos caught on. Adkins explained that when a limo is pulled over, before an officer makes contact, the driver would tell the passenger to tell the officer that it was a prearranged fare and tell the officer that the passenger had called for the ride. Kunselman ventured that the limo driver would still need to show their licenses. Adkins told Kunselman she’d talked to the state police about whether Ann Arbor police officers could stop limos – to make sure they were properly licensed through the state and that they had their current driver record with them. Adkins explained that it could not be the primary reason to pull over a limo.

The state police had suggested that Ann Arbor look at enacting a local ordinance regulating limousines. Kunselman’s response: “Then let’s do it.”

Adkins said that East Lansing has done something like that already. Kunselman ventured that the state is realizing it’s not working to regulate limos at the state level. If the limo company wants to sue Ann Arbor over a local ordinance, that company will need to have something to point to at the state level saying the statute clearly prohibits cities from enacting ordinances regulating limousines. Kunselman understood the message from the state to be that it’s not that clear.

Sturgis said he did not know why the board did not simply place on a meeting agenda an ordinance amendment that requires all drivers to register with the city. “To me, that should be a no-brainer,” he said.

Registration of All Drivers for Hire

Crawford asked for clarification, saying he thought the limo drivers were licensed by the state and not licensed by local municipalities. Adkins explained that limo drivers have to have a chauffeur’s license, but it’s the vehicles that are registered by the state, not the drivers.

Sturgis said that the drivers should be registered locally if they’re not registered by the state.

Bullington noted that building trades contractors get a license from the state, but they have to be registered in the city. Sturgis again pushed for the board moving toward an ordinance amendment that would register all drivers – limo drivers and taxicab drivers alike. “I don’t understand why we can’t move that forward,” Sturgis said. Kunselman replied: “All right, let’s do it. I move that we ask the city attorney’s office to draft an amendment that would allow for the regulation of all drivers for hire in the city of Ann Arbor.”

Crawford ventured that the draft would come back for a broader discussion by the board. He got clarification from Kunselman that standards for taxicab drivers would be the same as for limo drivers as well.

Larcom, who will be doing the work to write the ordinance amendment, got clarification that the board wanted all drivers for hire – taxicab drivers and limo drivers – to get what is essentially right now is just a taxicab driver’s license. Kunselman indicated that he wanted all drivers for hire to be registered, because his understanding of how Uber works is that there is no cash transaction between the driver and the patron – but that’s still a driver for hire.

Benson raised the question of whether this issue falls under the purview of a taxicab board – or if the board should be named the taxicab/limo board? Kunselman ventured that changing the title of the ordinance itself might be an option. Benson got confirmation from Kunselman that he definitely wanted the taxicab board to be involved.

Crawford got additional clarification that the board’s intent was to require all drivers for hire to be registered, whether the rides were hailed (as with a taxicab) or pre-arranged (as with a limo).

Sturgis ventured that once the safety issue is figured out, the board could then talk about the fares.

Outcome: The board unanimously approved the motion to ask the city attorney’s office to draft an ordinance amendment that would require all drivers for hire to be registered with the city.

Later in the meeting, the board came back to the issue of the city’s ability to enforce ordinances on limo drivers holding themselves out as taxicab drivers, and on other ancillary issues.

Benson asked Adkins to what extent the city is trying to enforce the city’s ordinance now? Adkins told Benson that what can be done about it must be done through ordinance changes. In terms of current enforcement on limousines holding themselves out as taxicabs, there’s no enforcement because officers can’t make it the primary reason for a traffic stop. AAPD has tried, but it’s very difficult, she explained. There are officers who make sure that a limo or taxi has proper documentation, when the officers stop a limo or taxi for other reasons. But as far as enforcement of the prohibition against limos working as taxicabs, it is not happening, Adkins explained.

Kunselman ventured that if the city enacted an ordinance that requires all drivers for hire to be licensed, that would give the AAPD the responsibility to make traffic stops. Adkins was not sure that was automatic, saying “We have to make sure that that’s a primary offense that we can stop for. That’s something that I would defer to the city attorney’s office for.”

Adkins explained that this issue is something the police department is confronting now on the state regulations: They can’t stop somebody just to make sure the limo or taxi is properly licensed. That’s a secondary offense, and so an officer would need to stop them for a primary offense first. As an example of a primary offense, she gave a traffic violation.

Kunselman asked if stopping in the road to pick somebody up could count as a traffic violation. Adkins indicated that impeding traffic is one possible traffic violation. Adkins said she’d like to have something with more meat to it – so that officers on patrol would be able to enforce it instead of having to wait for some other traffic violation to occur.

More Discussion on Uber

During the final round of public commentary, the board returned to the subject of Uber.

A representative of Arbor Taxi ventured that Ann Arbor already has the highest taxicab fares in the whole country – the same rates as in New York City. Rates should go down, not up. But with Uber’s arrival in the market, he wanted to hear from board members: What you going to do to protect us?

Kunselman reiterated that with Uber, one issue is the drivers. The other issue is insurance. If you pull over a person who is impeding traffic to pick up a ride and is doing it for hire, can you ask for proof of insurance to drive for hire? Kunselman asked. The answer from Adkins was: Not until the city has done what the city of Detroit has done – by attempting to regulate Uber. Detroit has issued a cease-and-desist order and told Uber that the business needs to register with the city as a limo company. So until Ann Arbor has city ordinances in place and the business is required to register as a limo company, not much can be done.

Adkins reviewed how there are two kinds of services offered by Uber: UberX and UberBLACK. For UberBLACK, they’re contracting with limo companies, she said. It’s UberX that’s of more concern, she said. Anybody passes Uber’s vetting system if they have an operator’s license in a vehicle that accommodates four people and personal insurance.

Kunselman wanted to know if Ann Arbor could piggyback on what Detroit is doing and issue some sort of cease-and-desist order. “We need to send that message pretty clearly to Uber,” Kunselman said. If their app is allowing for drivers for hire without the proper credentials and insurance, then Kunselman thought “it behooves us as a city to make sure that they are notified that that’s not acceptable.”

Larcom responded to Kunselman by saying she couldn’t say right away if action could be taken now. If the business is violating a city ordinance, then just like an officer can write a ticket without going to the city council, the city can enforce its ordinances, Larcom said.

Kunselman asked what had caused Detroit to issue a cease-and-desist order. Adkins explained because Uber was registered as a limousine company. The city of Detroit has a limo ordinance in addition to a taxicab ordinance, she explained. Kunselman said his understanding is that once Detroit’s population dropped below 750,000 that Detroit no longer had the authority to have a limousine ordinance. But if Detroit issued a cease-and-desist, then the city was “pretending” it did have that authority, he said.

Adkins told Kunselman that there is currently some language within the state statue that she felt the state attorney general’s office and certainly the Michigan State Police have interpreted to mean that cities can regulate limousine companies. Adkins said she only knew what had been explained to her. At any rate, she reported that the previous evening she’d looked up on the state’s website to see if Uber was even registered as a limo entity within the state – and they are not. [Updated after initial publication: A query from The Chronicle about the ability of cities to regulate limousine companies was referred by the state attorney general's office to the Michigan Dept. of Transportation. Jeff Cranson, MDOT director of communications, emailed The Chronicle the following statement: "Public Act 271 does NOT prohibit local limo regulations."]

Adkins also reported that she’d been provided that morning with descriptions of eight different cars that were seen on the road the previous night that are providing transportation for Uber. Only one of them had a commercial plate; the other seven did not have commercial plates. She described how there’s a light that plugs into the cigarette lighter and sits on the dashboard, to identify that the vehicle is providing rides through Uber.

Kunselman said the bottom line is that the city needs to enact some ordinance amendments to reflect the change in business practices, and then start enforcing the ordinance. “We can’t wait for the state. I would like to follow the lead of the city of Detroit,” Kunselman said. So Kunselman told Larcom he was looking to the city attorney’s office to start that ball rolling.

Kunselman indicated that he would certainly bring it up at the next city council meeting and report that as a result of the taxicab board’s meeting, that process is getting started. He ventured that there are other, ancillary issues that need to be dealt with – and he would look to the city attorney’s office to somehow “draft that up.” Larcom indicated that she would rely on Adkins to learn what exactly Uber does.

Metrics for Success

The board continued with its discussion of metrics for success. Sturgis said that success should depend on safety – not having incidents come up with customers. He also felt that riders should feel like they’re getting a fair deal for the ride. Benson ventured that whatever the board does or doesn’t do affects the industry and affects the riding public. Ann Arbor loves transportation, Benson continued, so as the board proceeds in this discussion and its multiple facets, he would envision a good amount of public interest with “folks wanting to tell us things.” The traveling public wants cheap transportation and safe transportation, Benson said. At the same time, people who work in the industry need to be able to earn a living.

Benson summarized what he was hearing – that people would like to see the general case addressed to some extent before the board looks to deregulate fares, if the board were to do such a thing. As far as measures of success, he said it would be measured in terms of safety, in a variety ways. Success would also be measured by maintaining the number of companies operating vehicles in the city. Benson was concerned that if a critical mass of taxis is lost, the limos will be able to ignore the basic taxicab fare as a basis of comparison. Benson felt that fares would rise as a result.

Crawford wondered how the number of vehicles licensed in the city would be used as a metric. The number could go up or down – so would that be a reflection of success or a lack of success? Having more taxicabs in the city might make it more difficult for the industry to survive, he ventured.

Kunselman observed that the seasonal character of the Ann Arbor market – with football games, for example – would make it difficult to measure success. Kunselman indicated he was not interested in creating anything complicated.

Bullington noted that success would be difficult to measure in a college town where the population fluctuates. Crawford suggested that if the board does go through with setting a much higher maximum fare, under its existing authority, it might be done as a pilot – and that would have to be for a full year, because of the seasonality.

The conversation then moved to how rates are advertised, but again swung back to the issue of regulating drivers for hire. Larcom, who would be doing the drafting of the ordinance amendment, stated: “I just need to know what is being proposed.”

Kunselman ventured that at this point, Ann Arbor might be the city to push the envelope because the state is not able to. The state is essentially saying that the locals need to take care of it, he said.

Goeddel returned to the historical data about the number taxicabs operating in Ann Arbor. Adkins reviewed how it had remained pretty steady since about 2011, but there’d been a significant drop when Yellow Car converted all but one of its vehicles to limousines. Benson ventured that it would be interesting to know how long various companies have been registered in the city. Benson said that if the board knows how many limos are running in Ann Arbor, and also knows how many taxicabs are here, then the board will have a better idea of what’s going on in the city.

Crawford responded to Benson by saying he thought the board could get an idea of how many drivers are registered in the city but not necessarily how many are operating. The drivers might not be operating here. Kunselman pointed out that there might be four drivers per car.

Crawford indicated that to get a clearer picture, you’d have to start counting vehicles, drivers, and hours of operation. Adkins added that drivers migrate between companies, so initially the city might know who they’re working for, but that ebbs and flows over the year. The drivers could start out today with one limo company and then for whatever reason tomorrow go to a different one, she said.

Public Commentary

After the board discussion, toward the end of the meeting during public commentary, John Etter of Blue Cab told the board he was kind of impressed that board members had focused so heavily on customer safety. He’d thought he’d just been yelling into a void about the importance of safety. He felt that the primary purpose of the board was to ensure public safety in the industry. On the topic of fares, he thought the fact that almost all taxicab companies charge the maximum rate indicates a flaw. There should be variation in a competitive marketplace. He wanted the city to set a high maximum and then let people come in under it. That way you prevent absolute gouging, he noted – you can’t tell somebody it’s 10 bucks to get in and 20 bucks a mile.

But a high maximum of $5 to get in and $5 a mile – might be something to explore, he said. Etter indicated he would never charge anything as high as 5 bucks to get in and 5 bucks a mile – because he would lose most of his customers. But if you set it high, then the prices that companies would set, under that high maximum, would at least resemble a market. If he wanted to run 2013 Tauruses and someone else wanted to run 2004 Crown Victorias, then some people would take the Crown Vic because it’s cheaper, Etter said, and other people would take a ride in a 2013 Taurus because they’re willing to pay for it.

Etter then criticized the idea that taxicab rates should be regulated at all. The state regulates a lot of things about restaurants to ensure public safety, he said, but the state doesn’t regulate price. If you want to eat a McDonald’s burger, you do that. Or if you want to pay Zingerman’s 18 bucks for sandwich, he said, you can do that.

Etter also touched on the topic of insurance, saying there are only two or three companies that provide insurance for taxicabs in the state of Michigan. He reported a recent conversation with a colleague about his insurance, and the first quote he got was $2,000 higher than last year. If that happened to him, with his 50 cabs, he would convert his business to limos immediately, saying he would have no choice. With a $100,000 increase in operating costs, it would just be a no-brainer – because he could not pass that cost along to riders.

Benson asked Etter: If the city were to set a high maximum, what should that high maximum be? Etter told Benson that if the board didn’t want to keep revisiting it, he couldn’t imagine in the near future anybody wanting to charge $5 to get in and $5 a mile – but that kind of maximum would give companies potential for a lot of range, he said. He couldn’t see his company approaching that limit in 20 years – barring an explosion in insurance and gas prices.

During public commentary, Rick Clark with Amazing Blue Taxi told the board he was interested in seeing added features of a fare structure that would include the ability to charge different rates for groups of a certain size, for example.

Kunselman told Clark that just keeping track of the drivers is what he wanted to focus on. Managing the rates is a lower priority for him right now, Kunselman said. Clark told Kunselman that if he wanted taxicabs in Ann Arbor, they had to be allowed to be profitable. Kunselman indicated that there was openness to the idea of raising the allowable fare.

Clark told Kunselman that it’s not just gasoline that has increased in price. Insurance is up and the cost of tires is up, he pointed out. Kunselman said he was in favor of tweaking the rate, by increasing it by $0.25 or something like that. “That’s not going to do it,” Clark stated. Clark said it was an economic decision.

Kunselman told Clark that what he saw in the industry is cheating. The limo industry and Uber are cheating the public trust if they’re not holding the proper insurance, Kunselman said. They are cheating the public trust if their drivers don’t have proper licenses. Clark told Kunselman that it might be that the public trust is being violated with respect to insurance and registration, but “the public is not being screwed or shafted on price.” Clark indicated that he needed room under the maximum fare to be able to react to a rise in insurance rates.

Adkins told the board that based on her experience, the majority of the taxicab companies in Ann Arbor are really doing their best job to upgrade their fleet. There are a lot of vehicles that are only a couple of years old. The quality of the vehicles is high, she said, and there’s only one, maybe two, companies that she’d have to go after.

Mark LaSarge with SelectRide thanked Kunselman for his comments on public safety. He thought the biggest thing for Ann Arbor is driver safety. His company does both taxis and limousines, he said. He’d been licensed as a taxicab driver in the city of Ann Arbor, and he’s also a limousine chauffeur in the state of Michigan. So he’s operated on both sides. He called Ann Arbor a testbed.

He felt Ann Arbor is in a really neat position to deal with all the different issues: taxis versus limousines versus Uber. He felt that if the board focused on transportation for hire, that would actually be more accurate, because the reality is it’s the livery industry. He questioned why price was being regulated. Students show an ability to evaluate the price of milk at Plum Market versus Whole Foods versus Kroger – they know where to go for cheap milk. He reiterated that safety is the number one issue: We want to know who our drivers are, he concluded.

Present: Tom Crawford, Jamie Adkins, Eric Sturgis, Stephen Kunselman, LuAnne Bullington, Michael Benson, Robert Goeddel.

Next taxicab board meeting: May 22, 2014 at 8:30 a.m. in the city council workroom on the second floor of city hall at 301 E. Huron. [Check Chronicle event listings to confirm date]

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Action to give the ordinance initial approval came at the council’s April 7, 2014 meeting, after it had been postponed on March 3, 2014, and before that on Feb. 3, 2014. The initial approval came over dissent from Sumi Kailasapathy (Ward 1), Jane Lumm (Ward 2) and Jack Eaton (Ward 4).

To be enacted, the new law will need a second vote from the council at a future meeting.

Chuck Warpehoski (Ward 5), sponsor of the proposed new local law, appeared before the city’s park advisory commission on Feb. 25, 2014 to brief commissioners on the proposal and solicit feedback.

Made punishable under the proposed ordinance through a $50 civil fine would be smoking within 20 feet of: (1) bus stops; (2) entrances, windows and ventilation systems of the Blake Transit Center; and (3) entrances, windows and ventilation systems any city-owned building.

The ordinance would also authorize the city administrator to have signs posted designating certain parks or portions of parks as off limits for outdoor smoking, and to increase the distance from entrances to city buildings where outdoor smoking is prohibited.

Where no signs are posted noting the smoking prohibition, a citation could be issued only if someone doesn’t stop smoking immediately when asked to stop.

An existing Washtenaw County ordinance already prohibits smoking near entrances, windows and ventilation systems, according to the staff memo accompanying the resolution – but the county’s ordinance can be enforced only by the county health department. The memo further notes that the Michigan Clean Indoor Air Act does not regulate outdoor smoking.

Ellen Rabinowitz, interim health officer for Washtenaw County, attended the April 7 meeting and spoke to councilmembers about the county’s experience. She supported the city ordinance, as did Cliff Douglas, director of the University of Michigan’s Tobacco Research Network. Douglas addressed the council during public commentary and answered questions later in the meeting.

Council deliberations on this item are included in The Chronicle’s live updates filed during the April 7 meeting.

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

Back on the council’s March 3 agenda will be two resolutions – or possibly just one – that would make such a fund transfer. Also back on March 3 will be a resolution extending the part-time public art administrator’s contract for six months and appropriating $18,500 for that purpose.

The council’s actions on Feb. 18 began with final approval to an amendment to the city’s public art ordinance. That amendment allowed the council to transfer money accumulated through the now demised Percent for Art program back to the funds from which that money was drawn. Those funds include street millage funds, sanitary sewer funds, stormwater funds and the like. That ordinance amendment passed on a 10-0 vote. Christopher Taylor (Ward 3) was absent from the 11-member council. The council had given initial approval to the ordinance amendment at its Feb. 3, 2014 meeting.

Any actual transfer of funds, however, required separate council action, with support from an eight-vote majority. Two different resolutions had been placed on the agenda addressing a fund transfer of money out of the public art fund. The first was sponsored by Jane Lumm (Ward 2), joined by Sumi Kailasapathy (Ward 1), Jack Eaton (Ward 4), and Mike Anglin (Ward 5), and the second by Sabra Briere (Ward 1). The council ultimately postponed action on both resolutions.

The council flipped the order of the resolution at the start of the meeting, when the agenda was approved. So Briere’s resolution was considered first. A key difference between the two resolutions was the amount to be transferred: Lumm’s resolution specified a $819,005 transfer while Briere’s specified $957,140. The increased amount in Briere’s proposal was based on canceling a stalled public art project at Argo Cascades.

At the start of the council’s Feb. 18 meeting, the balance of unassigned funds accrued in the Percent for Art fund was $839,507. An additional $535,853 was earmarked for three projects that are underway: artwork at East Stadium bridges ($385,709), a rain garden at Kingsley and First ($7,009), and at Argo Cascades ($143,134). [.pdf of financial summary] A breakdown of the amounts that could be returned – and the funds of origin for the money – is covered here: [Art budget summary]

Another key element from Briere’s resolution was based on the council’s June 3, 2013 action to eliminate the Percent for Art funding mechanism, which also included a provision for a new approach to a public art program. The Percent for Art funding mechanism required 1% of all capital fund project budgets to be set aside for public art. The new approach enacted by the council last year can include city-funded art when it’s designed as an integral part of a capital project, as well as projects funded through a combination of private and public money.

So the resolution put forward by Briere included an instruction to the city administrator to direct city staff to develop a transition plan to be implemented by staff and the public art commission. It directed that plan to be presented to the council in about a year – before March 2, 2015. Briere’s resolution also directed the city administrator to establish a budget for public art administration for both the 2015 and 2016 fiscal years. [An initial list of requests from department heads for FY 2015, released by the city on Feb. 10, shows an $80,000 request for arts administration, which includes funds for a full-time art administrator, drawn from the general fund. FY 2015 runs from July 1, 2014 through June 30, 2015.]

Lumm and Kailasapathy felt the direction to establish a budget was too vague and they were not prepared to support the resolution on that basis.

When the roll call vote on postponement was taken,  Margie Teall (Ward 4) hesitated for several seconds before casting the final and deciding vote for postponement of Briere’s resolution to the council’s March 3 meeting. The other five votes for postponement were from Briere, Sally Petersen (Ward 1), Stephen Kunselman (Ward 3), Chuck Warpehoski (Ward 5), and mayor John Hieftje.  In Taylor’s absence neither resolution had a realistic chance of meeting the eight-vote requirement for approval.

Those in favor of postponing Briere’s resolution instead of seeing it be defeated were unwilling to support Lumm’s resolution because it did not provide a clear plan or a path for transition to the new public art program. As councilmembers recognized that Lumm’s resolution did not have adequate support to pass, they voted unanimously to postpone it until March 3. That ended the debate on a comparatively calm tone, after featuring some sharp exchanges between Briere and Lumm.

The two councilmembers had been at odds earlier in the meeting over an affordable housing resolution (which was ultimately postponed) – which Lumm had not wanted placed on the agenda until March 3. Indications were that a single public art resolution might be crafted for the March 3 meeting, instead of putting both forward again. That drew some interest from Kunselman, who had stated early in deliberations that he would be voting against both resolutions. He floated the idea that if a single resolution were brought forward, he might lend it his support. Kunselman’s view of the matter was that establishing a budget for a transition and transferring funds  was best addressed as part of the annual budget process. The council adopts the next year’s fiscal budget at its second meeting in May.

In its final public art-related action on Feb. 18, the council reconsidered a resolution defeated at its Feb. 3 meeting – to extend the contract for the part-time public art administrator by six months and to appropriate funds to cover that $18,500 contract. The result of that council vote on Feb. 3 was that public art administrator Aaron Seagraves could not be paid. The council’s unanimous vote on Feb. 18 was to postpone the question until March 3.

The reconsideration of the contract extension at the Feb. 18 meeting was the result of political bargaining. That reconsideration had originally been based on whether there would be a successful vote to transfer Percent for Art money back to its funds of origin. But based on the way the debate on the two resolutions evolved, Eaton made a motion for reconsideration near the end of the meeting – with the understanding that would be immediately postponed.

The art administrator’s contract was first considered at the council’s Jan. 21, 2014 meeting, but was postponed in the context of a political horse trade – support for the administrator’s contract being contingent on beginning a process to transfer money accumulated under Percent for Art in previous years, back to the money’s funds of origin.

The Feb. 18 meeting also featured public commentary in support of public art funding from several speakers, including Margaret Parker, former chair of the Ann Arbor public art commission, and Bob Miller, the commission’s current chair. Parker referred to “negative city councilmembers” who say no to everything. Directing her comments at some councilmembers who say they’re in favor of public art, Parker asked, “Who can believe you?” Miller told councilmembers that the commission represents the council’s goals and direction. Another speaker, Dave Olson, read aloud from a statement that has been circulated in the arts community and that was signed by about 25 people advocating for a  sustainable art program.

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

A cross-lot path that leads from Roon the Ben in the Turnberry neighborhood to the ballfields for Scarlett-Mitchell schools. A pending ordinance change could eventually place responsibility for capital repairs on the city, but give adjacent property owners the responsibility of shoveling snow. (Photos by the writer.)

First, councilmembers postponed a decision on a change to the definition of “sidewalk” in the city code – which would have implications for the adjacent property owners of “cross-lot paths.” While the definitional change would allow the city to take responsibility for capital repairs on such cross-lot paths – using sidewalk repair millage funds – it would place the burden of winter snow shoveling on adjacent property owners.

That division of responsibility for repair and maintenance is one that’s now familiar to owners of property adjacent to sidewalks that run next to a road or a street. Given the number of open questions about how logistics would actually work, and concerns expressed during the public hearing on July 1 as well as at a previous public meeting on the topic, the council decided to postpone a final vote until Oct. 7, 2013.

Second, the council postponed a vote on adding the South State Street corridor plan to the city’s master plan, which consists of several separate documents. The city planning commission has already voted to adopt the corridor plan as part of the master plan. It’s one of the few issues on which the planning commission does not act just as an advisory body that makes recommendations to the council. For the master plan, the council and the planning commission must adopt the same plan. The postponement came in deference to a request from Marcia Higgins (Ward 4). The area of the study lies in Ward 4, which she represents.

Despite the postponement, the South State Street corridor plan still had an impact on a decision made by the council – to deny a rezoning request for the parcel at 2271 S. State St. The change in zoning would have allowed the parcel to be used for car sales. That use isn’t consistent with the recommendations in the corridor plan, and the planning commission had recommended against rezoning on that basis. Even though it was just the initial vote on the rezoning – an occasion when councilmembers sometimes will advance an ordinance change to a second reading in order to allow a public hearing to take place – the rezoning request got no support on the council.

In contrast, the initial rezoning requested for the Kerrytown Place project – an 18-unit townhouse development at the location of the former Greek Orthodox church on North Main Street – received unanimous approval at the council’s July 1 meeting.

Also related to land use, the council reconstituted a 12-member citizens advisory committee to study the R4C zoning area. The re-establishment of the group, which was originally appointed in 2009, comes after the planning commission had voted at its April 16, 2013 meeting to send recommendations to the city council for revisions to the R4C zoning areas. The recommended revisions were not the actual ordinance language. That language would need to be written after councilmembers sign off on the general recommendations. No action is expected by the council until the committee has met two or three times.

Another committee reconstituted by the council on July 1 was a group to sort through some contentious issues between the council and the Ann Arbor Downtown Development Authority. The council has postponed until Sept. 3 a final decision on a change to Chapter 7 of the city code, which regulates the DDA’s tax increment finance (TIF) capture. The four councilmembers on the committee are: Christopher Taylor (Ward 3), Stephen Kunselman (Ward 3), Sally Petersen (Ward 2) and Jane Lumm (Ward 2). Two days later, at its regular monthly meeting, the DDA’s complement was appointed: Roger Hewitt, Bob Guenzel, Joan Lowenstein and Sandi Smith.

A proposed video privacy ordinance that was on the council’s July 1 agenda did not win sufficient support to advance to a second reading. The proposal would have regulated the way that public surveillance cameras could be used by local law enforcement officials. Although the vote was 5-4 in favor, that fell short of the six-vote majority it needed on the 11-member body. So the council voted down the video privacy ordinance on its initial consideration – having postponed the issue several times previously.

The council also decided to delay adoption of amendments to its own internal rules – out of deference to two councilmembers who were absent from the meeting: Sally Petersen (Ward 2) and Margie Teall (Ward 4). Highlights of the rule changes include the addition of a public commentary opportunity at council work sessions, and reduction in the time per turn for the public from three to two minutes. A change in councilmember speaking times equates to a reduction from eight minutes to five minutes total per item for each councilmember.

The council handled a number of other items during the meeting, including the adoption of the 2009 International Fire Code, a location change for the Ward 2 Precinct 8 polling place, approval of a special assessment to help pay for sidewalk and curb improvements along Miller Avenue, and confirmation of appointments to boards and commissions.

Sidewalk Definition Change

The council was asked to given final consideration to an ordinance amendment that would change the definition of “sidewalk.”

Sidewalk Definition: Background

The new definition of “sidewalk” would expand the existing definition to include non-motorized paths that are [emphasis added] “designed particularly for pedestrian, bicycle, or other nonmotorized travel and that is constructed (1) in the public right of way or (2) within or upon an easement or strip of land taken or accepted by the city or dedicated to and accepted by the city for public use by pedestrians, bicycles, or other nonmotorized travel, …”

The impetus behind the proposed change is several “cross-lot paths” that exist in the city, where it’s somewhat unclear who owns the land or who’s responsible for repair and winter snow clearing.

If the council changes the ordinance and it also accepts the “cross-lot” paths for public use – through a formal resolution – the impact of the “sidewalk” definition change would be twofold. First, it would make the paths eligible to be repaired by the city using sidewalk millage funds. But it would also make adjoining property owners responsible for winter snow clearing.

Also on the agenda was a resolution accepting 33 cross-lot paths for public use.

The staff summary of a meeting with owners of property adjoining the cross-lot paths included this: “There was a general consensus amongst attendees at the public meeting that city council should postpone voting on these items until further discussion can be had and more details can be worked out.” For many of the specific paths, there was a reluctance to accept the responsibility of snow removal during the winter. [.pdf of maps for all 33 cross-lot sidewalks]

The council had given initial approval to the definition change at its June 3, 2013 meeting.

Sidewalk Definition: Public Hearing

Sherif Afifi introduced himself as the owner of a parcel adjacent to one of the cross-lot paths. He summarized how he sees the issue: The paths are used by a limited number of people [not necessarily the property owners] to provide convenience for them. Transferring financial and legal responsibility to a limited number of people [property owners] for the benefit of others didn’t seem fair to him. An additional problem Afifi identified was the fact that the responsibility would be shared by at least two people [the properties on either side of the cross-lot path.] He asked the council to postpone a vote, to allow further study and input from the public, including people who use the paths. He’d sent a detailed memo to some councilmembers. He felt that if “we could get our minds together” it would be possible to come up with something that everyone would be happy with. He offered to provide as much help as he could.

John Ohanian approached the podium using a wheelchair. He wanted to talk about a letter from the city that says he’s responsible for maintenance of the walkway from Frederick and Middleton drives into Greenbrier Park.

This cross-lot path was described by John Ohanian as one that he’d become responsible for shoveling if the city adopted the change in the definition of sidewalk.

He’d talked to city engineer Deborah Gosselin about that property and stressed to her that he doesn’t own that property. Every year for 47 years the city has cut the grass on either side of the walkway and maintained it, he said. Now the city is asking him to take responsibility for the liability. He described how the property has a timber wall on the edge of it and the kids like to play on it, by walking across the top of it pretending they’re the “Wallendas.” He can’t stop them, he said, and if they ever fall, then he’d be responsible, which he didn’t think was right.

Ohanian also pointed out that the walkway is not for a general good, but for a specific purpose: the entrance to a parkway. It’s been maintained by the city of Ann Arbor for 47 years. And what the city is trying to do now is shift the liability to him by calling it a “sidewalk” when it’s not a sidewalk, he said. The city can’t impose an insurance liability on him for property he doesn’t own, he added.

He’d heard from the city staff that the city also doesn’t own the property. With respect to the ability of the city to use sidewalk millage funds for capital repair, he pointed out that the millage is for five years at a time. That meant that he’d have responsibility for the repair of the walkway depending on the passage or non-passage of the millage by voters. If the city was going to transfer the responsibility and liability to him, then the city should transfer the land to him in a favorable way.

Miranda Wellborn Eleazar introduced herself as the owner, with her husband, of a property adjacent to a pathway to Mitchell Elementary School and Scarlett Middle School.

This is the cross-lot path that the Eleazars would become responsible for shoveling, if the change to the definition of sidewalk is adopted.

She described the pathway as well-used by many people, at all hours. But she objected to the idea that she’ll be made liable for maintenance. There’s no reason for her and her husband to take over maintenance, given that the school district is currently maintaining it, she said. She understood that the current sidewalk repair millage would cover the capital repair of the pathway through 2017, but she wondered what would happen if the millage were not renewed. The ordinance amendment that changes the definition of a sidewalk is just the easy way to go, she said. She suggested that in situations where there is someone already maintaining and snowplowing the path, that person or entity should be made responsible. She would not be able to shovel all the snow, she said.

Jeff Hayner wondered how a request for a sidewalk ordinance change comes about. He pointed out that there are another 28 paths – beyond the 33 cross-lot paths – described in the staff memo. So the council would only be acting on half of the paths. He encouraged the council to postpone action.

Thomas Partridge advocated for fairness and rejected the use of Republican Tea Party tactics in determining fees. Many residents of the county and the state are being driven out of their homes due to the unfairness of flat-rate taxes and fees, he contended, including sidewalk repair assessments.

Sidewalk Definition: Council Deliberations

Stephen Kunselman (Ward 3) led off deliberations by saying that he’d vote against the change. It’s not a fair way to approach the topic, he contended. Picking up on the remarks of John Ohanian made during the public hearing, Kunselman said the city has been maintaining a path for 47 years, and he wondered why it would stop. If a school is currently maintaining a path, then arrangements should be made to continue that. So he’d vote against the change in the definition.

Sabra Briere (Ward 1), who sponsored the ordinance change, asked assistant city attorney Abigail Elias and public services area administrator Craig Hupy to the podium. Briere said that in her own research, she’d learned it wasn’t clear who owns the property. Elias indicated that the language is different in each of the plats. Responding to Briere, Elias didn’t answer the question of whether the ordinance change would give the city an easement or title to the land. Rather, Elias indicated the ordinance would give “access.” Elias said she had not looked at the issue of who owns the property.

Responding to a question from Briere, Hupy confirmed that if the ordinance doesn’t go forward with the change in the definition to “sidewalk,” then the city doesn’t believe it can use sidewalk millage money to repair the cross-lot paths.

Briere asked Hupy if the city thinks it’s appropriate to place the burden for winter maintenance on adjacent property owners. Hupy responded in part by saying the school district is not interested in making the capital improvements – so the city was attempting to find a way to pay for that. Later during the deliberations Hupy ventured that schools might be reluctant to undertake capital repairs because they’re barred by state law from making investments on property they don’t own. Some of the winter maintenance that the school district is doing, he said, is actually done out of convenience to the district staff – to find a good place to turn around, for example. The burden of winter maintenance, Hupy said, is the “collateral damage” associated with the city’s use of sidewalk millage funds for the capital repairs. Briere indicated that she had a problem with the redefinition of who’s responsible for the winter maintenance.

Marcia Higgins (Ward 4) ventured that these paths could somehow be defined as a subset of “sidewalks.” She floated the idea of postponing the ordinance change. Chuck Warpehoski (Ward 5) observed that many councilmembers have a desire to use the sidewalk millage to repair the paths. But he pointed out there’s another problem as well – that non-motorized connections have actually been lost because there’s not a mechanism for accepting them for public use. He was inclined to support the ordinance change, because it puts a mechanism in place to accept a path into public use. But that doesn’t mean that the council has to accept all 33 of the paths for public use. It might be a much smaller set, Warpehoski said.

Jane Lumm (Ward 2) noted that not all 33 paths were found to be in current need of repair. Hupy indicated that last year there were four paths in dire need of repair that were not repaired, because they were not accepted for public use. Lumm didn’t like the “no-man’s land” aspect of the situation. She saw it as a positive that the millage funds could be used. But the burden on property owners of winter maintenance is a problem, she said.

Mayor John Hieftje.

Lumm indicated agreement with John Ohanian, who spoke during the public hearing to argue that if there’s to be a transfer of responsibility for the maintenance, then the land transfer should be done in a way that’s “favorable” to the property owner. Lumm elicited from Elias the fact that under some circumstances, an owner of property adjoining a path could be required to mow grass in the summer too, as well as clear snow in the winter.

Mike Anglin (Ward 5) said that the 33 paths should be looked at individually and judged on an individual basis.

After summarizing the situation, Christopher Taylor (Ward 3) followed up on a possibility raised by Higgins: Can the city find a way to use the sidewalk millage without causing the burden of day-to-day upkeep to shift? Elias traced the issue to the definition of “sidewalk.” So Taylor floated the idea of tabling or delaying in some other way.

Lumm moved to postpone the vote until the first meeting in October, which is Oct. 7. Warpehoski asked how a postponement would affect the pathways that are in dire need of repair. Hupy indicated the postponement would mean they wouldn’t get repaired this year. Mayor John Hieftje ventured that if the city has muddled along all this time, three months wouldn’t hurt.

Kunselman mooted the idea of not using sidewalk millage funds to do the repair of those walkways in dire need of repair. He gave an example of a path that was repaired with park maintenance millage funds. Kunselman suggested that it might be necessary to research the history of the platting, saying that if the city asked for the public paths in the first place, then the city should maintain them.

Outcome: The council voted unanimously to postpone the change in the definition of sidewalks until Oct. 7. Later in the meeting, the council also voted to postpone the acceptance of the 33 sidewalks for public use until its first meeting in October.

South State Street Corridor Plan

The council was asked to consider the adoption of the South State Street corridor plan into Ann Arbor’s master plan.

The city planning commission had voted unanimously to adopt the plan at its May 21, 2013 meeting. More commonly when the planning commission votes on a matter, it’s to recommend action by the city council. For master plans, however, the planning commission is on equal footing with the council: both groups must adopt the same plan.

Planning commissioners and staff have been working on this project for more than two years. [For additional background, see Chronicle coverage: "State Street Corridor Study Planned," “Sustainability Goals Shape Corridor Study,” “Ideas Floated for South State Corridor.” and “South State Corridor Gets Closer Look.”]

Recommendations in the South State Street corridor plan are organized into categories of the city’s recently adopted sustainability framework: Land use and access, community, climate and energy, and resource management. Among the recommendations are: (1) Evaluate use of vacant parcels for alternative energy generation; (2) Evaluate integrating public art along the corridor; (3) Evaluate use of open land for community gardens; (4) Assess and improve high crash areas along the corridor; (5) create boulevard on State Street between Eisenhower and I‐94 to enable safer automobile, bicycle, and pedestrian movement; (6) Consider utilizing vacant parcels for athletic fields and recreation facilities; (7) Develop a pedestrian and bicycle path along the Ann Arbor railroad that will connect the planned Allen Creek bikeway to Pittsfield Township through the corridor; and (8) Resurface roads in the corridor.

Each recommendation includes several related action items. The plan also provides a section that organizes the recommendations into each of three distinct sections of the corridor: (1) from Stimson on the north to Eisenhower Parkway; (2) from Eisenhower south to the I-94 interchange; and (3) from I-94 to Ellsworth. In addition, there are nine site-specific recommendations for areas including Briarwood Mall, the complex of hotels near Victors Way and Broadway, and the research park development near the corridor’s south end.

From left: Ward 1 councilmembers Sumi Kailasapathy and Sabra Briere.

Sabra Briere (Ward 1), the council’s appointee to the planning commission, introduced the proposal. She said that the South State Street corridor plan was being treated as a model – because it links the recommendations to the sustainability framework that the council had adopted. She described it as very rigorous and helpful for understanding why the recommendations are what they are. The question for the council was whether to add the document to the city’s master plan. The planning commission had been impressed with the work, Briere said, as had been the environmental commission. The North Main Huron River corridor study task force had also positively reviewed the way the corridor plan had been done. So she encouraged councilmembers to include the South State Street corridor plan in the city’s master plan.

Marcia Higgins (Ward 4) said she was not supportive of including the plan in the city’s master plan. She still had some concerns in the southern part of the corridor, particularly in the Research Park area. As the economic development collaborative task force has begun its work, that area has come up in discussion, she reported. [The council had appointed the task force at its May 20, 2013 meeting.]

So Higgins asked for a postponement for two weeks.

Outcome: The council voted to postpone the South State Street corridor plan until July 15, 2013.

Rezoning for Car Dealership

On the July 1 agenda was a rezoning request for 2271 S. State St. that would have allowed the owner to sell cars on the parcel.

The council was asked to give initial approval to rezoning the parcel from M1 (limited industrial district) to M1A (limited light industrial district). The city planning commission vote on the recommendation was taken at its May 21, 2013 meeting. That vote came out 1-8, with only Eric Mahler supporting it. So the planning commission’s recommendation was for denial.

Rezoning for Car Dealership: Public Comment

Local attorney Scott Munzel addressed the council during the public hearing on the South State Street corridor plan – because the rezoning itself was only up for initial consideration and did not include a public hearing. Munzel was representing the property owner of 2271 S. State St. Munzel pointed out that the proposed rezoning was consistent with the master plan, before the South State Street corridor plan was put forward. He asked the council to remember that when the council considered the rezoning request.

Rezoning for Car Dealership: Council Deliberations

Sabra Briere (Ward 1) pointed out that the council in the past has put off rezoning decisions based on the pending work on the South State Street corridor plan.

Planning manager Wendy Rampson gave the example of the Biercamp property, for which rezoning was not approved because the South State Street corridor study was just getting started at that time. There was also a rezoning request across the street from Biercamp, she noted, so that a property could be used as a medical marijuana dispensary. [The Biercamp rezoning was denied at the council's Feb. 21, 2012 meeting. The rezoning request from Treecity Health Collective was denied at the council's Oct. 3, 2011 meeting.]

Marcia Higgins (Ward 4) ventured that the city council has the final say on the South State Street corridor plan – to which Rampson replied, “kinda sorta.” The planning commission and the city council have to concur, Rampson noted. Higgins felt like the property owner had been in the pipeline for a while before the South State Street corridor study was under way. Rampson and Higgins engaged in back-and-forth on timing of the citizen participation meetings for the corridor plan and the proposed project’s requiring rezoning.

Stephen Kunselman (Ward 3) drew out the fact that McKinley Inc. had written a letter of support for the corridor plan. Kunselman also noted that the adjoining school bus parking lot might not be a factor – as the school district might decide not to continue to offer transportation in the future.

Kunselman wondered if it’s good policy to get rid of manufacturing zoning. Rampson explained that the planning commission had also grappled with that question. She pointed to Area 1C in the plan that recommends maintaining the current uses, which include manufacturing. The area around the parcel that’s requested to be rezoned, Rampson said, has already seen some transition to office use.

Outcome: The council voted unanimously to deny initial approval to the rezoning of 2271 S. State Street.

Kerrytown Place

The council was asked to give initial approval to the rezoning that’s necessary to construct Kerrytown Place – a proposed development at 414 N. Main and 401 N. Fourth Ave.

Kerrytown Place is a project that Tom Fitzsimmons is planning to build on the site of the former Greek Orthodox church on Main Street. The rezoning would be from PUD (planned unit development district) to D2 (downtown interface base district). The 18-unit townhouse development that Fitzsimmons is planning to build is much smaller than The Gallery, for which the PUD zoning had originally been approved at the request of a different owner.

The city planning commission gave a unanimous recommendation of approval at its May 21, 2013 meeting. On the North Main Street side, the project would include a 16-unit townhouse building with an underground parking garage, 12 carport parking spaces and 24 surface parking spaces. On the North Fourth site – now a surface parking lot – the plan calls for constructing a duplex with a 2-car garage for each unit and a 21-space parking lot. Each unit of the duplex would face North Fourth.

Sabra Briere (Ward 1), the council’s appointee to the city planning commission, introduced the items and briefly recited the history of the previously proposed project by a different owner. Stephen Kunselman (Ward 3) indicated he was pleased to support the rezoning. He reminded his council colleagues that when the property was in the hands of the Washtenaw County treasurer, he’d proposed doing something similar – rezoning the property on the council’s initiative. [That proposal of Kunselman's had been voted down by the council at its Aug. 20, 2012 meeting.]

Outcome: The council voted unanimously to give initial approval to the rezoning changes necessary for the Kerrytown Place project. Rezoning requests require a second and final vote – at a meeting when the site plan is likely to be presented as well.

R4C Advisory Committee

The council considered a resolution to re-establish a citizens advisory committee to provide input on changes in the city’s R4C (multi-family) zoning category.

The idea for re-establishing the group comes after the planning commission had voted at its April 16, 2013 meeting to send recommendations to the city council for revisions to the R4C zoning areas – but without the actual wording of the ordinance changes.

The recommendations are described in two phases. The changes in the first phase are seen as somewhat less controversial, but still diverge in places from those of the advisory committee. For the first phase, the planning commission recommended:

• Parking requirements are less stringent: Recommendations adopted by the planning commission are to make parking requirements less stringent than either the existing requirement of 1.5 spaces per unit or the advisory committee recommendations (1.5 spaces per unit for 0-4 bedroom units, and 2 spaces per unit for 5-6 bedrooms). The planning commission recommendation is for 1 space per unit for 0-4 bedrooms, and 1.5 spaces per unit for 5-6 bedrooms.
• Lot combinations need approval: Planning commission approval would be required for lot combinations in R4C districts, as part of a project’s site plan review. Review standards would be developed, as well as standards for design and massing, to ensure that new development is compatible with the neighborhood. [The advisory committee had recommended instituting a maximum lot size of 6,525 square feet, equal to an allowable density of three units. The consensus on the ordinance revisions committee (ORC) of the planning commission was that this maximum lot size would be too restrictive.]
• Conflicting land use buffer for vehicle areas only: The only areas that would require screening would be those used for vehicles – such as areas used for parking. This recommendation essentially reverts to the requirements used prior to 2011, when the city instituted changes to its landscape ordinance. Those changes expanded the conflicting land use buffer requirement in R4C districts to apply to the screening of buildings, in addition to vehicular use areas. The change resulted in an increase in variance requests for redevelopment in R4C districts, given the small size of the lots. [The issue was not part of the advisory committee's recommendations.]
• Further study of R2A district: Further study is called for to determine if the R2A lot size should be reduced to 6,000 square feet, allowing opportunities for duplex conversions. This number is based on the lot size requirement that was in place prior to 1984, when the requirement was raised to 8,500 square feet. [The advisory committee did not recommend zoning changes in the R2A district.]

Based on discussions among staff and the ORC at several meetings attended by The Chronicle, these first-phase recommendations are seen as somewhat easier to implement, because it’s felt there’s general consensus on them.

A second phase would focus on creating a “group housing” zoning district, but that is recognized as controversial.

Any affirmative action by the council on the planning commission’s recommendations at this point would be to direct the planning commission to develop the ordinance language reflecting the recommendations. At that point, the planning commission would need to approve the proposed ordinance language, with final action still required by the council.

Membership on the reconstituted citizens advisory committee that the council was asked to consider included 12 people. Sabra Briere (Ward 1) will represent the planning commission. Chuck Carver will represent rental property owners. From the wards: Ilene Tyler and Ray Detter (Ward 1); Wendy Carman and Carl Luckenbach (Ward 2); Ellen Rambo and Michelle Derr (Ward 3); Julie Weatherbee and Nancy Leff (Ward 4); Eppie Potts and Anya Dale (Ward 5). Weatherbee was designated as chair of the group.

Marcia Higgins (Ward 4) introduced the resolution, alluding to a neighborhood meeting that had taken place the previous week – in Rose White Park. The issue of the recommendations that are coming to the council was discussed. Jane Lumm (Ward 2) thanked Higgins for her work. Lumm wondered when the council might be asked to act on the recommendations. Higgins indicated that the committee would meet only two or three times. But she said that before the council acts on the planning commission recommendations, the committee should be able to weigh in.

Outcome: The council voted unanimously to re-establish the R4C citizens advisory committee.

Video Privacy Law

The council was asked to give initial approval to a proposed new local law regulating the use of public surveillance cameras.

The new ordinance would apply only to a limited range of cameras – those used by the city of Ann Arbor “to monitor human activity without the physical presence of an operator, including cameras on remotely operated aerial vehicles.”

The ordinance would not apply to a range of other city of Ann Arbor cameras, for example: cameras used to improve traffic design, security cameras operating in jails, prisons, water treatment facilities, public housing facilities, or the Ann Arbor Airport and other governmental facilities.

The new ordinance would allow for public surveillance cameras to be installed for 15 days or less at the discretion of the city administrator if the purpose were to address a specific criminal problem. But a period of longer than 15 days would have required two-thirds of nearby residents to give written permission. Regardless of the period of the installation, onsite notice of the camera’s presence was to have been required.

The council had voted several times previously to postpone consideration of the ordinance. The most recent postponement had come at the council’s June 17, 2013 meeting. The council seemed willing to postpone a vote on that occasion based on the fact that police chief John Seto was not available to answer questions about the impact on law enforcement activities. Some councilmembers indicated at that meeting a reluctance even to give the ordinance an initial approval. Ordinances require an initial approval followed by a second vote taken at a subsequent meeting, after a public hearing.

Video Privacy: Public Commentary

During public commentary, several people addressed the council on the topic of the video privacy ordinance.

Will Leaf rejected the idea that the ordinance would tie the hands of the police. [His involvement with the topic dates back several years. He led Students Against Surveillance at the University of Michigan.] Leaf cited news media articles on the topic. They included a June 19, 2013 LA Times article about Muslims suing the New York City Police Department over surveillance of congregants at mosques that has included video surveillance.

Leaf also cited an Oct. 25, 2010 article in The Guardian about the dismantling of video surveillance cameras in Birmingham, England, and a Jan. 13, 2006 BBC News article about CCTV camera operators who pointed cameras into a woman’s apartment and observed her in a state of undress. Leaf said that if public surveillance cameras are installed, then they should be regulated. He pointed out that the ordinance wouldn’t affect any cameras currently in place. He got a round of applause from the roughly two dozen people attended the council meeting in support of the ordinance.

Leslie Stambaugh, who’s chair of the city’s human rights commission, agreed with Leaf. She pointed out that the ordinance originated with a citizens group. She posed the rhetorical question: Why can’t we just trust the police only to adopt this practice when they need it? It seems modern and effective, she allowed, but video surveillance hasn’t been shown to reduce or solve crime, she contended. For nuisance crimes, she allowed it might have some benefit. The city of Lansing had installed 11 cameras, which wound up costing $2.3 million , she said. The Ann Arbor human rights commission doesn’t like video surveillance, she said, and the ACLU doesn’t like it. If the city wants to use video cameras for surveillance, it needs to be regulated, she concluded.

Kent Weichmann weighed in to support the video privacy ordinance. Michael Benson weighed in briefly against it at the conclusion of his remarks during public commentary.

Video Privacy: Council Deliberations

Police chief John Seto addressed the council from the podium to start the discussion on the ordinance.

Ann Arbor chief of police John Seto marched in the 4th of July parade held three days after the council meeting. In the background of the photo is Washtenaw County sheriff Jerry Clayton.

He had reviewed many versions of the ordinance, and he thanked everyone for their work. He noted that the ordinance has been under discussion for several years. By way of additional background, the council had been alerted to the forthcoming ordinance proposal six months ago when Chuck Warpehoski (Ward 5) told his colleagues at their Dec. 17, 2012 meeting that he and wardmate Mike Anglin would be bringing a proposal forward.

And before that, former Ward 1 councilmember Sandi Smith had announced at a council meeting on Aug. 4, 2011 that she’d be bringing a video surveillance ordinance for consideration at the council’s Sept. 6, 2011 meeting. That draft ordinance never came forward for consideration. And a year before that, Smith had indicated the city’s human rights commission would be working on the issue.

Seto said he was sorry that he was not able to attend the previous council meeting, when the council had the item on its agenda. The council had postponed the item so that he could be available to answer questions. Seto said he’d start with a general statement. As chief, Seto said, his responsibility is to provide service and protection for all. He recognized that responsibility had to be balanced between what can be done and what should be done – specifically in the area of technology. He would not deploy technology or implement a policing practice that would have negative implications on community relations or community engagement. Determining that balance is a challenge.

Seto stressed that it’s difficult to determine the appropriate balance, when the kind of video surveillance that’s contemplated by the ordinance is not being done in the city. He could not predict the security concerns and policing needs of the future. Large crowds themselves create an added risk.

Annotation of draft ordinance, in which police chief John Seto notes that large crowds pose a possibly increase risk.

He gave some examples of some concerns he has about the ordinance in its current form. He believed that large crowds in themselves create a threat, or at the very least, a heightened security risk that the police must address. In light of the recent Boston marathon bombing, Seto said – and in light of the added security concerns that he’d considered subsequently in connection with the Ann Arbor marathon – he couldn’t support an ordinance that would potentially limit his ability to monitor large crowds like those associated with a marathon or University of Michigan football games, or street closures that result in large crowds.

He also felt that short-term use of cameras could be potentially useful for apprehending suspects involved in a specific crime, when there’s credible information. He appreciated the fact that the ordinance provided for the short-term use of cameras without requiring permission from neighbors. However, he felt that the requirement that a notice be posted to alert people to the presence of a camera could hinder an investigation. The ability to use live monitoring only when there’s an imminent risk would be limiting, he said.

His main concern, Seto said, is that he does not know what kind of unknown impacts such an ordinance might have. Because he can’t know the policing needs of the future, there could be unintended consequences, he said. His main two concerns were about large crowds and specific short-term criminal investigations, he said.

He also highlighted a concern with the definition of the cameras that would fall under the ordinance.

There are currently many privately-owned camera surveillance systems that the police might seek to gain access to in connection with a criminal investigation, he said. There were many examples of crimes being solved by using such information, he said. So he wondered if the ordinance would prevent AAPD officers from using information from a privately-owned camera system in its investigations. [.pdf of draft ordinance annotated with comments from various staff]

Mike Anglin (Ward 5) asked Seto if he saw the ordinance as limiting compared to what’s been done in the past. Seto couldn’t recall a case where an unmanned camera had been used and simply been mounted on a pole. One exception was a case when AAPD had worked in cooperation with a property owner, Seto said, and the camera was installed on the property. The possibility of using cameras had been discussed, but Seto did not believe cameras had been used in such a manner since he had assumed a leadership role in the department.

Stephen Kunselman (Ward 3) asked if Seto was familiar with the West Willow neighborhood in Ypsilanti Township. Kunselman ventured that his own impression from media accounts was that the neighborhood had requested installation of cameras and that crime had been deterred through the use of cameras. Seto wasn’t able to confirm Kunselman’s impression in any detail.

Chuck Warpehoski (Ward 5).

Chuck Warpehoski (Ward 5) ventured that former police chief Barnett Jones felt that video surveillance installations would never be accepted in Ann Arbor by the community. He asked if Seto felt that the ordinance would give Seto the regulatory framework that would allow those community concerns to be addressed. Seto said he couldn’t speak to Jones’ concerns. He reviewed the main concerns he had about the ordinance potentially inhibiting effective law enforcement. He also ventured that it’s possible that times have somewhat changed, in the few years that the ordinance has been under discussion.

Sabra Briere (Ward 1) indicated that one of her concerns about crowd surveillance was that almost all of the footage that was useful in the Boston marathon bombing had been from private cameras. It wasn’t police surveillance. As a general statement, “police surveillance” gave her pause. She appreciated that the human rights commission, Warpehoski and Anglin had tried to find a balance – between not giving police general permission, but allowing the police to pursue a discrete goal. But she wondered if the balance had actually been found. Seto responded to Briere by saying that he’s not advocating the use of cameras, but felt that if the need does arise, he wants to make sure that he has flexibility.

Kunselman referred to the comments made during the public commentary about the possibility of police misconduct by personnel in the use of cameras. Seto responded to Kunselman by indicating that the in-car video cameras already used by officers are subject to departmental policies.

Mayor John Hieftje cited a memo written by Susan Pollay, executive director of the Ann Arbor Downtown Development Authority, about the use of cameras in parking structures. Her memo reads in part: “The parking structures are unique, in that they are psychologically viewed by many as very scary places. Because downtown relies on people feeling safe, the parking structures must be included as one of the city-owned sites where security cameras are permitted.”

Hieftje also cited the issue of the perception of safety – saying that some people say they’d feel more comfortable in an underground parking garage if there were video surveillance.

Hieftje noted that in 2001-02 there had been problems in Liberty Plaza, and the city had filmed from the building overlooking the park. Those cameras were hand-held, Hieftje allowed. But he wanted to know if Seto felt that the ordinance would inhibit the police department’s ability to undertake necessary operations.

City administrator Steve Powers and Sumi Kailasapathy (Ward 1).

Sumi Kailasapathy (Ward 1) wondered if the required sign stating the presence of a camera would undermine the point of the surveillance. For short-term use, Seto said, the sign could potentially have a negative impact. Jane Lumm (Ward 2) discussed with Seto the requirements for installing cameras. She recounted how all the windows of her car had been smashed in the Fourth & Washington parking structure, but there were no cameras in place to capture any footage.

Christopher Taylor (Ward 3) described the ordinance as possibly “a regulation too far.” But he noted that the police chief’s job description was similar to the council’s job: Law enforcement should be consistent with community values. So Taylor felt it should be voted forward to a second reading, which would provide an opportunity for a public hearing.

Kailasapathy ventured that the FBI would not have to adhere to the local ordinance, if the FBI wanted to conduct surveillance. Seto indicated that he thought this observation was correct. Marcia Higgins (Ward 4) brought up the issue of University of Michigan football games, saying she thought that crowds are currently monitored for football games. Seto indicated that on a liberal interpretation, the ordinance might have an impact on his ability to use cameras for football crowd monitoring. But UM would be able to use cameras independently of the city ordinance, Seto said.

Kunselman inquired what the law is when a camera catches someone doing something illegal on their own property. He wondered if someone has a reasonable expectation of privacy. City attorney Stephen Postema responded to Kunselman by saying he had not researched the issue. Higgins ventured that if the city has been working on the ordinance for a long time, then surely the city has an understanding of what privacy in a home means.

Kailasapathy followed up on the privacy issue by asking if it’s OK for a camera to be trained on a front door to monitor who is entering and leaving a residence. Postema responded by saying it depends on what is done with the footage. Briere adduced the example of Google Street View and how it blurs images of people’s faces. Briere agreed with Taylor that she was willing to support the ordinance so there should be a further discussion in the community. Passive surveillance can be used well or not well, Briere said, adding that she wished it weren’t used at all.

Warpehoski described placing a camera on a pole and pointing it into a neighborhood as an affront to privacy. The ordinance would prevent that affront, he said. The ordinance tries to find a balance between privacy, property owner rights and law enforcement needs, Warpehoski contended. He didn’t want cameras to be deployed over neighborhood opposition. Warpehoski says he put forward the best ordinance he knew how to put forward – but allowed that there were still things that could be worked on. He asked for support of the ordinance at first reading, but told his council colleagues not to vote for it on first reading just to please him – if they were definitely not going to vote for it on second reading.

Anglin described the ordinance as “preemptive,” so that the questions surrounding the use of cameras could be answered before they are used. The ordinance allows cameras to be installed as useful tools, he said. He gave destruction of property in parks as a use case for the cameras. He did not think it’s a solution looking for a problem – a response to remarks from Kunselman at an earlier meeting.

Kunselman responded to the idea of a “regulatory framework” and wondered why the council was not simply providing guidance on policy to the administration. Ordinances are passed to regulate behavior, and there are punishments for violating them. He wondered if Seto violated the ordinance, would he be fired? Kunselman said he would support giving policy direction. In any case, the city could do what it needs to do, Kunselman said. If Seto needs to use a camera to catch a suspect, Kunselman said, then, “By golly, let him do it!”

Kunselman described how the relationship between the police and young people has changed from the time when he was young. He returned to his idea of giving guidance through policy, instead of through enactment of an ordinance.

Jane Lumm (Ward 2) is waving hello on arrival at the meeting.

Lumm stated that the ordinance is overly regulatory. The balanced approach that Seto would take would not result in the application of technology that would harm the community, Lumm contended. She said she wouldn’t support such an ordinance unless it had Seto’s unequivocal support. So Lumm wouldn’t support it at first reading.

Briere said generally she’s inclined to advance an ordinance to a second reading. But she didn’t like the ordinance, because she saw it as giving permission for surveillance. She distinguished between speculative surveillance versus a situation where there’s a targeted deployment. But she was still inclined to hear from the public. That would help the council make a better decision on the issue, she concluded.

Hieftje said he likes the idea of policy guidance – alluding to Kunselman’s proposal that policy guidance would be better than an ordinance. Hieftje noted that Ann Arbor is host to events that have the spotlight of the nation on the city. He couldn’t say he’d support the ordinance at second reading, but he was willing to support it at first reading.

Outcome: The council voted 5-4 to give the video privacy ordinance initial approval, so it failed. Voting against it were Sumi Kailasapathy (Ward 1), Jane Lumm (Ward 2), Stephen Kunselman (Ward 3) and Marcia Higgins (Ward 4).

DDA-City Committee

The council was asked to establish a committee to sort through issues between the city and the Ann Arbor Downtown Development Authority.

Named in the original resolution to represent the council were: Christopher Taylor (Ward 3), Sally Petersen (Ward 2), and Stephen Kunselman (Ward 3). Jane Lumm (Ward 2) was added to the group 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 in a way that does not recognize the cap on TIF revenues that is set forth in Chapter 7. That led to a proposal by some councilmembers earlier this year to revise the ordinance so that the DDA’s alternate interpretation is clearly ruled out. The council gave the ordinance change initial approval on April 1, 2013. But later, on May 6, 2013, the council chose to postpone the vote until Sept. 3, the council’s first meeting that month.

In the memo accompanying the council’s July 1 resolution, the group – which was described as a “mutually beneficial” committee – is tasked with coming up with a recommendation for Chapter 7 revised language with a deadline of Sept. 2. During the meeting, the name of the committee was changed from “mutually beneficial” to simply a “joint DDA-council committee.”

The phrase “mutually beneficial” in connection with the sorting out of issues between the city of Ann Arbor and the Ann Arbor DDA was first mooted in a Jan. 20, 2009 city council resolution. The main issue at that time was the contract under which the DDA administers the city’s public parking system. Subsequently, committees for both organizations were appointed, but they did not achieve any results. The following year, new “mutually beneficial” committees were appointed and those committees met over the course of several months, culminating in a new parking agreement ratified in May 2011. The council formally disbanded its “mutually beneficial” committee at the end of 2011.

Sabra Briere (Ward 1) introduced the item on July 1 by saying that in May, several people had indicated that the city staff and the DDA staff should be working on the issue. But whatever changes might be made to Chapter 7, she felt councilmembers should have a voice. The mechanism for that was proposed to be to “reinvigorate” the “mutual beneficial” committee. Stephen Kunselman (Ward 3) said that when the council approved the ordinance at first reading, he and Sally Petersen (Ward 2) had begun having conversations with DDA board members and staff. He saw the resolution that as solidifying a process that was already underway.

However, Kunselman didn’t like the label “mutually beneficial.” So it was changed by mutual assent to the “joint DDA-council committee.”

Marcia Higgins (Ward 4) wanted to add a member – for a total of four councilmembers. Higgins wanted Jane Lumm (Ward 2) to be on the committee, saying that Lumm has put a lot of work into the issue. That proposal was accepted as friendly.

Sumi Kailasapathy (Ward 1) briefly floated the idea that the existing DDA partnerships committee might be involved.

Outcome: The council voted unanimously to appoint a joint DDA-council committee, with members Lumm, Taylor, Kunselman and Petersen. Two days later the DDA appointed its members: Roger Hewitt, Sandi Smith, Bob Guenzel, and Joan Lowenstein.

New City Council Rules

The council considered a revision to rules on speaking times and agenda setting for city council meetings.

Highlights of the proposed rules changes include adding public commentary to council work sessions. But public speaking time would be reduced from three minutes to two minutes across all types of public speaking – general commentary, public hearings, and reserved time. A “frequent flyer” rule would prevent people from signing up for reserved time at the start of a meeting two meetings in a row.

Marcia Higgins (Ward 4). The proposed new council rules include a provision against councilmembers using their personal electronic communications devices during the meetings while at the table. This photo was taken before the meeting started.

The total time that each councilmember could speak on an item of debate would be reduced from eight minutes to five minutes. In more detail, the two turns they get per item would be reduced from five to three minutes and from three to two minutes.

Another change would put nominations and appointments to boards and commissions at the start of the agenda, before the council’s voting business, instead of after all the items. For Chronicle coverage on these proposed changes, see “Council Mulls Speaking Rule Changes.”

New City Council Rules: Public Commentary

James D’Amour told the council that some of the changes to the rules are pretty good. [As former city planning commissioner, D'Amour has some experience with public commentary from the other side of the microphone.] The addition of a public commentary period during work sessions is a good step, he said. But the time reductions are a step backward, he contended. If hundreds of people show up to speak, then the council has done something wrong, he said. The game that councilmembers need to play is to be more accessible, not less accessible.

Thomas Partridge reminded the council that he has run for election to the state legislature in the past. He accused mayor John Hieftje of seeking to suppress public access to the council. Instead of diminishing public participation time, it should be increased, Partridge said.

Michael Benson pointed out that if he had a handout for the clerk, that would be attached to the minutes. So he encouraged the council to advertise that fact as a way to mitigate against reduced speaking time. Benson also suggested that the council pay attention to their own question time that they use during their deliberations. [Hieftje does not count time that councilmembers spend questioning staff as speaking time for councilmembers.] Benson cited a possible problem for organizing the public speaking reserved time at the start of a meeting: A single agenda item could dominate all the slots.

New City Council Rules: Council Deliberations

Marcia Higgins (Ward 4) said she wanted to postpone the issue, in light of the absence of Sally Petersen (Ward 2) and Margie Teall (Ward 4), who wanted to be part of the conversation. Higgins chairs the council’s rules committee, which brought the amendments forward.

Outcome: The council voted unanimously to postpone the rule amendments until the July 15 meeting.

2009 International Fire Code

The council was asked to take final action on the adoption of the 2009 International Fire Code, as an amendment to Chapter 111 (Fire Prevention) of the city code. The council had given the ordinance change initial approval at its June 17, 2013 meeting.

While the change is essentially administrative – changing the version of the International Fire Code adopted in the ordinance from 2003 to a more recent 2009 – some councilmembers on June 17 indicated an interest in exploring the question of frequency of fire inspections. They’ve heard complaints that fire inspections are being conducted too frequently – as a way to generate revenue.

On June 17, fire chief Chuck Hubbard indicated that some of the confusion could be attributed to re-inspections, which are done when a deficiency is found. But Hubbard indicated on June 17 that fire inspections have increased. He’s increased the number of personnel assigned to fire inspections from three to seven.

Ann Arbor fire inspections: 2006-2012. (Data is from city financial records. Chart by The Chronicle.)

During the public hearing on the issue, Thomas Partridge said that councilmembers and the mayor are out of touch. He says that the councilmembers who sponsored the ordinance change should explain it in their own words. He contended that the city looks for ways to impose costs on those who can least afford it.

Earlier in the meeting during communications time, city administrator Steve Powers had indicated that staff were available to answer questions about why the ordinance change adopting the 2009 International Fire Code was necessary. It was portrayed as a separate question from the inspection issue that councilmembers had previously expressed concern about. Powers described how there would be a meeting for property owners and the public about fire safety inspections – on July 16, at 1 p.m. in city council chambers.

Deliberations by the council were scant. Jane Lumm (Ward 2) thanked staff for their work in responding to questions.

Outcome: The council voted unanimously to adopt the 2009 International Fire Code.

Miller Avenue Special Assessment

The council was asked to take the final step in approving a special assessment on property owners to finance sidewalk and gutter improvements along Miller Avenue.

The assessment would apply to 18 private property owners, who would pay an average of $365 apiece. The total construction cost of the project is stated in the table of assessment as $42,860 – with about 75% of that to be paid for with federal funds. The resolution approved by the council was the fourth and final one in the process. A public hearing had been held at the council’s previous meeting.

Outcome: The council voted to approve the special assessment for Miller Avenue improvements.

Precinct 2-8 Polling Place

The council considered a resolution that changed location of the polling place in Ann Arbor’s Ward 2 Precinct 8 (2-8) to the First United Methodist Church at 1001 Green Road. The location for several years has been St. Paul Lutheran School.

According to a letter sent to the city earlier this year by school principal Brad Massey, the decision to stop offering St. Paul Lutheran Church and School as a polling place to the city was based on “recent events affecting the safety of school children.” [.pdf of April 16, 2013 letter]

During the brief deliberations, Jane Lumm (Ward 2) thanked St. Paul for allowing the city to use the facility as a polling location for many years.

Outcome: The council voted unanimously to change the Precinct 2-8 polling location to the First United Methodist Church.

Appointments, Nominations

The council was asked to confirm the appointment of Jeremy Peters to the city planning commission. Peters works in creative licensing and business affairs with Ghostly Songs. Peters had been nominated at the council’s June 17 meeting. Tony Derezinski had originally been slated at the June 3 meeting to be nominated for re-appointment, but his name was never put forward by mayor John Hieftje.

The council was also asked to confirm the appointments of Eric Jacobson to the local development finance authority (LDFA) board and Jan Davies McDermott to the economic development corporation board.

Outcome: The council voted to confirm all the appointments.

Also at the council’s July 1 meeting, Hieftje nominated Russ Collins for re-appointment to the board of the Ann Arbor Downtown Development Authority. In response to an emailed query from The Chronicle, Hieftje indicated that he would not yet be nominating replacements for Newcombe Clark or Leah Gunn, as he felt there was “no rush.” The terms of Clark and Gunn expire on July 31, 2013.

Also at the council’s meeting, Jean Cares was nominated by the council as a whole to the greenbelt advisory commission as the agriculture landowner representative. Christopher Taylor, who serves on GAC as the council representative, introduced the resolution, mentioning that Cares owns the Dexter Mill. Hieftje noted that the agriculture landowner representative slot is difficult to fill.

Outcome: The council voted to postpone a vote on Cares’ appointment. This is a standard procedure, as the initial consideration is considered the nomination by the council. GAC is one of the few boards and commissions for which the council, not the mayor, makes the nominations.

Communications and Comment

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

Comm/Comm: Safe Streets

Mike Anglin (Ward 5) told the council he wanted the dialogue on safe streets to continue. People who live on all kinds of streets should be listened to, he said. He wanted traffic directed away from residential streets that are not designed for that kind of traffic.

Comm/Comm: D1 Zoning Review

The council had directed the city planning commission on April 1, 2013 to undertake a review of areas of the city zoned D1 (downtown core).

Sabra Briere (Ward 1), who’s the council appointee to the planning commission, indicated during communications time that the D1 zoning review would begin the next day as the executive committee of the planning commission would be meeting to hire a consultant.

Jane Lumm (Ward 2) asked Briere if a schedule has been established for the review and how it will be implemented. The executive committee of the planning commission will be interviewing potential consultants, Briere explained. That’s because staff and commission members were felt to be too close to the process to lead a public meeting. So someone with an outside view would be used, Briere said. There’ll be A2 Open City Hall surveys or perhaps also Survey Monkey surveys. The consultant will look at those issues and move to have a public meeting in August. Briere noted that the timeline requires the work to be done at the end of September. In response to a question from Lumm, Briere said she’s not sure how it relates to the old Y lot, at Fifth and William streets. [Later in the week, councilmembers were informed that Colliers International and local broker Jim Chaconas have been selected to handle the possible sale of the former YMCA lot.]

Comm/Comm: Website Down

During communications time, city administrator Steve Powers asked CFO Tom Crawford to explain what happened with the city’s website, which was down that day, except for a limited set of links.

Crawford explained it was a software/hardware failure. He believed all the data was still there, and would be back up by 8 a.m. on July 2, the following day. [It was back up by that time.]

Comm/Comm: Pizza in the Park

At the May 20, 2013 city council meeting, several people spoke to oppose the fee that was apparently charged to the Vineyard Church of Ann Arbor as part of its Friday evening homelessness ministry. That ministry is called Pizza in the Park, which the church conducts at Liberty Plaza. While oral assurances had been given, at the council’s June 3 meeting there was some follow-up during public commentary that included an interest in getting some kind of written commitment from the city that the fee would not be charged to the church.

Christopher Taylor (Ward 3).

So during communications time on July 1, Christopher Taylor (Ward 3) updated the council on the park advisory commission’s action at its June 18, 2013 meeting to recommend a waiver of fees for Liberty Plaza – in response to a request from Camp Take Notice to make sure that Pizza in the Park can continue at that location.

During public commentary at the end of the July 1 meeting, Seth Best addressed the council on the topic, beginning by thanking everyone. He spoke on behalf of Camp Take Notice’s advocacy for humanitarian aid generally, not just for Liberty Plaza. He was concerned that humanitarian aid is being excluded because of concern for music, bands and art. He told his story of becoming homeless in Texas, eventually making his way to Ann Arbor. Pizza in the Park had allowed him to be human again, he said – at least for an hour.

Greg Pratt introduced himself as an Eastern Michigan University faculty member and vice president of MISSION. He spoke in support of the Camp Take Notice advocacy for Pizza in the Park. He provided some context for the situation. As the weather turned warmer, the Delonis Shelter ended the warming shelter, and that happened around the same time as Pizza in the Park was having a fee applied. He noted that MISSION had been working with councilmembers and he would prefer to approach it that way.

Caleb Poirer began his remarks by quipping that this was too early to end a council meeting and that he felt cheated. [Compared to recent council meetings, the time was relatively early – around 11 p.m. ] He characterized the PAC resolution as an attempt to address the concerns that Camp Take Notice had raised, but said that it doesn’t actually address their concerns. That’s why they’re continuing to push for a more general ordinance. He allowed that the homeless are not natural constituents of any politician. So he was grateful that the council had been willing to give them “the time of day.”

Comm/Comm: Saying Something Nice

Sabra Briere (Ward 1) said she’d attended an event recently where people were asked to say something nice about others, and that she had been present at another meeting when people were expected to say something nice about departing members of a commission. So she was going to say something nice about everyone. Briere read aloud remarks that she posted later on her blog.

Jane Lumm (Ward 2) thanked Briere for making her remarks.

Present: Jane Lumm, Mike Anglin, Sabra Briere, Sumi Kailasapathy, Stephen Kunselman, Marcia Higgins, John Hieftje, Christopher Taylor, Chuck Warpehoski.

Absent: Margie Teall, Sally Petersen.

Next council meeting: Monday, July 15, 2013 at 7 p.m. in the council chambers at 301 E. Huron. [Check Chronicle event listings to confirm date]

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Door to the Ann Arbor city council chamber.

The council will be giving final consideration to an ordinance change that expands the definition of “sidewalk” – to include any sidewalks the city has formally accepted for public use. The change has implications for owners of property adjacent to several “cross-lot paths” in the city – which are on the meeting agenda for acceptance for public use.

One consequence of the definition change is that those property owners will not be responsible for the repair of those paths – because the paths will be eligible for sidewalk millage repair funds. But the adjacent property owners would become responsible for clearing snow from the paths.

Also related to land use on the meeting agenda are rezoning requests associated with two proposed developments. Up for an initial vote is the rezoning from PUD (planned unit development) to D2 (downtown interface) for the parcels on North Main and Fourth Avenue where Kerrytown Place is planned. The 18-unit townhouse development is much smaller than The Gallery, for which the PUD zoning had originally been approved.

Also up for initial consideration is a rezoning request for 2271 S. State St., where the owner would like to be able to sell automobiles. The planning commission recommended denial of that request, in part because that land use was not felt to be consistent with the draft South State Street corridor plan. At its July 1 meeting, the council will also be asked to adopt that corridor plan.

The re-establishment of a citizens advisory committee on changes to R4C zoning in the city also appears on the meeting agenda. The origins of that committee date back to 2009. The reconstitution of the 12-member committee comes as the planning commission has recommended changes to R4C zoning that the council will be weighing – to decide if ordinance language should be drafted to reflect those changes.

Another committee with its origins in 2009 is set to be reconstituted at the council’s July 1 meeting, but it’s not related to land use. The council will be asked to re-establish a “mutually beneficial” committee to work through recommendations to changes in the city ordinance that regulates the Ann Arbor Downtown Development Authority’s tax increment finance (TIF) capture. The council has already given initial approval to some ordinance changes. Committee members will be working with their DDA counterparts with a two-month window of time – because the council has postponed final action on DDA ordinance changes until Sept. 3.

The council will also be asked to take an initial vote on a video privacy ordinance, having postponed that initial vote several times previously.

And finally, Ward 2 will not have a city council primary election a month from now, but it appears on the agenda in connection with polling places. The Precinct 2-8 polling location will be changed for all future elections to the First United Methodist Church on Green Road.

Details of other meeting agenda items are available on the city’s Legistar system. Readers can also follow the live meeting proceedings on Channel 16, streamed online by Community Television Network.

The Chronicle will be filing live updates from city council chambers during the meeting, published in this article “below the fold.” The meeting is scheduled to start at 7 p.m.

6:55 p.m. Pre-meeting activity. The scheduled meeting start is 7 p.m. Most evenings the actual starting time is between 7:10 p.m. and 7:15 p.m. Currently in chambers are mayor John Hieftje, city administrator Steve Powers, city attorney Stephen Postema. Marcia Higgins (Ward 4) has just arrived. Audience is a bit sparse so far. Less than a dozen people are here.

7:06 p.m. Margie Teall (Ward 4) and Sally Petersen (Ward 2) are the only councilmembers not yet here. Petersen will definitely not be here. Advocates for the video privacy ordinance have arrived. About a dozen or so. They barely outnumber the large box of Washtenaw Dairy donuts they’ve brought to share. “This is not going to be good for my beach body this summer, but it’s delightful for my tastebuds.”

7:07 p.m. Pledge of allegiance, moment of silence and the roll call of council. Petersen and Teall are absent. We’re under way.

7:07 p.m. Public commentary. This portion of the meeting offers 10 three-minute slots that can be reserved in advance. Preference is given to speakers who want to address the council on an agenda item. [Public commentary general time, with no sign-up required in advance, is offered at the end of the meeting.]

A pending rule change to be considered at tonight’s meeting would limit speaking time to two minutes. Another pending rule change would address “frequent flyers,” by only allowing people to reserve time at the start of the meeting, if they did not speak during reserved time at the previous council meeting. Only six of the 10 slots have been reserved tonight.

Three people are signed up to talk about the council rules changes on the agenda tonight: James D’Amour, Michael Benson and Thomas Partridge. Partridge is also signed up to talk about the video privacy ordinance, as are three other people: Will Leaf, Leslie Stambaugh and Kent Weichmann. Stambaugh is chair of the city’s human rights commission. The video privacy ordinance is up for its initial consideration after having been postponed several times. The ordinance would restrict the ability of local law enforcement officials set up un-staffed cameras for public surveillance.

7:11 p.m. James D’Amour is up first. [As former city planning commissioner, D'Amour has some experience with public commentary from the other side of the microphone.] Some of the changes, he says, are pretty good. The addition of a public commentary period during work sessions is a good step, he says. But the time reductions are a step backward, he says. If hundreds of people show up to speak, then the council has done something wrong. The game they need to play is to be more accessible, not less accessible, he says. There’s been a change in the dynamic of local politics, and it’s less collegial, he says.

7:14 p.m. Thomas Partridge reminds the council that he has run for election to the state legislature in the past. He accuses Hieftje of seeking to suppress public access to the council. Instead of diminishing public participation time, it should be increased, he says.

7:17 p.m. Will Leaf is now addressing the council on the video privacy ordinance. [His involvement with the topic dates back several years. He led Students Against Surveillance at the University of Michigan.] He rejects the idea that the ordinance would tie the hands of the police. Leaf is citing news media articles on the topic. They include a June 19, 2013 LA Times article about Muslims suing the New York City Police Department over surveillance of congregants at mosques that has included video surveillance.

Leaf is also citing a Oct. 25, 2010 article in The Guardian about the dismantling of video surveillance cameras in Birmingham, England, and a Jan. 13, 2006 BBC News article about CCTV camera operators who pointed cameras into a woman’s apartment and observed her in a state of undress. Leaf says that if public surveillance cameras are installed, then they should be regulated. He points out that the ordinance wouldn’t affect any cameras currently in place. He gets a round of applause from the now roughly two dozen people who are here in support of the ordinance.

7:20 p.m. Leslie Stambaugh agrees with Leaf. She points out that the ordinance originated with a citizens group. Why can’t we just trust the police to adopt this practice when they need it? she asks. It seems modern and effective. But video surveillance hasn’t been shown to reduce or solve crime, she contends. For nuisance crimes, she allows it might have some benefit. Lansing installed 11 cameras, which wound up costing $2.3 million. The human rights commission didn’t like the ordinance surveillance she said, and the ACLU doesn’t like it. If the city wants to use video cameras for surveillance, it needs to be regulated, she says.

7:24 p.m. Michael Benson is now addressing the council on the topic of council rules. He points out that if he had a handout for the clerk, that would be attached to the minutes. He encourages the council to advertise that fact. He suggests that the council pay attention to their own question time as well. He suggests a way of addressing the problem of an agenda item clogging up the reserved commentary time.

7:25 p.m. Kent Weichmann weighs in for the video privacy ordinance. Benson had weighed in against it at the conclusion of his remarks.

7:25 p.m. Council communications. This is the first of three slots on the agenda for council communications. It’s a time when councilmembers can report out from boards, commissions and task forces on which they serve. They can also alert their colleagues to proposals they might be bringing forward in the near future.

7:31 p.m. Mike Anglin (Ward 5) says he wants the dialogue on safe streets to continue. People who live on all kinds of streets should be listened to, he says. He wants traffic directed away from residential streets that are not designed for that kind of traffic.

Marcia Higgins (Ward 4) reminds the public about the July 2 public art forum on the East Stadium bridges project.

Sabra Briere (Ward 1) indicates that the D1 zoning review will begin tomorrow. There will be two larger public meetings as well as smaller meetings. Jane Lumm (Ward 2) asks if a schedule has been established for the review and how it will be implemented. The executive committee of the planning commission will be interviewing potential consultants, Briere explains. Staff and commission members are felt to be too close to the process to lead a public meeting. So someone with an outside view will be used, Briere says. There’ll be A2 Open City Hall surveys or perhaps also Survey Monkey surveys. The consultant will look at those issues and move to have a public meeting in August. Briere notes that the timeline requires the work to be done at the end of September. How it relates to the Y lot, she says, she’s not sure – in response to a question from Lumm.

7:33 p.m. City administrator Steve Powers asks CFO Tom Crawford to explain what happened with the city’s website. Crawford says it was a software/hardware failure. He believes all the data is there, and will be back up by 8 a.m. on July 2. Powers gives the usual updates associated with national holidays with respect to trash pickup and the like.

7:34 p.m. Public hearings. All the public hearings are grouped together during this section of the meeting. Action on the related items comes later in the meeting. Three public hearings are on the agenda. The first hearing is on an ordinance change that will change the definition of sidewalk in the city. The second would adopt the 2009 International Fire Code as part of the city’s ordinances. And the third public hearing is on the South State Street corridor plan, which is proposed to be adopted into the city’s master plan.

7:39 p.m. PH: Sidewalks. A resident who lives next to one of the cross-lot paths addresses the council. He says they’re used by a limited number of people. He doesn’t think it’s fair to assign the responsibility for winter maintenance to those who live next to the paths. He urges the council to postpone the resolution accepting the cross-lot paths for public use.

A resident who uses a wheelchair is the next speaker. He wants to talk about a letter from the city that says he’s responsible for maintenance of a path. He says he doesn’t own that property. Every year for 47 years the city has cut the grass and maintained it. His property has a timber wall on the edge of it. The sidewalk is not for a general good, but for the entrance to a park. What the city is trying to do is shift the liability to him by calling it a sidewalk when it’s not a sidewalk. The city can’t impose an insurance liability on him for property he doesn’t own, he says. He doesn’t want to make his responsibility dependent on the passage of a millage every five years.

7:44 p.m. A resident who lives next to the walkway near Scarlett-Mitchell public schools objects to the idea that she’ll be made liable for maintenance. There’s no reason for her and her husband to take over maintenance, given that the school district is currently maintaining it. The ordinance is the easy way to go. She suggests that where there is someone already maintaining and snowplowing the path, that person or entity should be made responsible. She would not be able to shovel all the snow, she says.

A fourth resident wonders how a request for a sidewalk ordinance change comes about. There are another 28 paths beyond the 33 cross-lot paths, described in the staff memo, he points out. So the council would only be acting on half of the paths.

7:47 p.m. Thomas Partridge advocates for fairness and rejects the use of Republican Tea Party tactics in determining fees. Many residents of the county and the state are being driven out of their homes due to the unfairness of flat-rate taxes and fees, he contends, including sidewalk repair assessments.

7:51 p.m. PH: Fire Code. Thomas Partridge rises to speak to this issue. He says that councilmembers and the mayor are out of touch. He says that the councilmembers who sponsored the ordinance change should explain it in their own words. He contends that the city looks for ways to impose costs on those who can least afford it. No one else speaks at this public hearing.

7:54 p.m. PH: State Street Corridor. Local attorney Scott Munzel addresses the council on the topic of the hearing. He’s representing the property owner of 2271 S. State St., which is seeking a rezoning of the parcel to allow for automobile sales. [At its May 21, 2013 meeting, the city's planning commission had voted against a recommendation of rezoning.] Munzel points out that the proposed rezoning was consistent with the master plan, before the South State Street corridor plan was put forward. He asks the council to remember this when the council hears the rezoning request.

7:55 p.m. Council communications. Chuck Warpehoski (Ward 5) clarifies where Pilar’s Tamales is located – in Ward 5. [The business is located at 2261 W. Liberty St.] Munzel had mentioned Pilar’s in the context of the 2271 S. State St. property. Pilar’s was formerly located there.

7:59 p.m. Sabra Briere (Ward 1) says she’s going to say something nice about everyone, without there being any reason. Mike Anglin is praised for his ability to mobilize people. Jane Lumm, Christopher Taylor, and Stephen Kunselman are praised in turn. Chuck Warpehoski listens to people in a way that improves council discussion, Briere says. Marcia Higgins is described as deceptively quiet. Mayor John Hieftje is also deceptive, she says – in the way that leaders can be. His knowledge provides balance. Sally Petersen is practical and pragmatic. Margie Teall’s commitment to social justice affects everything she does, Briere says.

8:00 p.m. Lumm is thanking Briere for her remarks.

8:02 p.m. Police chief John Seto is explaining how a July 16 meeting for property owners on fire inspections will work.

8:02 p.m. Minutes and consent agenda. This is a group of items that are deemed to be routine and are voted on “all in one go.” Contracts for less than $100,000 can be placed on the consent agenda. This meeting’s consent agenda includes a contract with Tanner Industries Inc. for purchase of anhydrous ammonia, which is used in the city’s drinking water treatment process. About 25 tons of anhydrous ammonia is used per year and Tanner will provide it at $1,540 per ton for a total cost next year of $38,500.

The consent agenda also includes an item to amend the payment in lieu of taxes (PILOT) exemption for the proposed Burton Commons affordable housing development. Instead of taxes, the developer would pay the city $1. The number of units would stay the same at 80. But the council’s action would approve a new development partner, Highridge Costa Housing Partners (HCHP), and change the mix of units. Previously some units had been set aside for supportive housing services, but now they will all be targeted for people with incomes at 30-60% of the area median income (AMI).

8:02 p.m. Councilmembers can opt to select out any items for separate consideration. Kunselman pulls out the PILOT for Burton Commons for separate discussion.

8:06 p.m. Kunselman wonders what the status of the project is. Brett Lenart comes to the podium. He’s with the Washtenaw County office of community and economic development development. He describes how the project was originally conceived as a 120-unit project with permanent supportive housing. But it was reconceived at a smaller scale – 80 units. And now there is no supportive housing component. Planning manager Wendy Rampson clarifies that building permits need to be pulled before the end of the extension of a site plan, at the end of the year. But there’s no limit to the number of administrative extensions that can be granted, Rampson explains.

8:07 p.m. Outcome: The council has now approved the consent agenda.

8:07 p.m. Ordinance: Sidewalk definition. The council gave initial approval to this definition change at its June 3, 2013 meeting. The new definition of “sidewalk” would expand the existing definition to include non-motorized paths that are [emphasis added] “designed particularly for pedestrian, bicycle, or other nonmotorized travel and that is constructed (1) in the public right of way or (2) within or upon an easement or strip of land taken or accepted by the city or dedicated to and accepted by the city for public use by pedestrians, bicycles, or other nonmotorized travel, …”

A resolution later on the agenda would accept 33 cross-lot pathways for public use. The impact of the definition change would make the paths eligible to be repaired by the city using sidewalk millage funds. However, adjoining property owners would be responsible for winter snow clearing. Here’s some examples of cross-lot sidewalks near Dicken Elementary School:

Example of cross-lot sidewalk in Ann Arbor.

[.pdf of maps for all 33 cross-lot sidewalks]

8:13 p.m. Kunselman leads off by saying that he’ll vote against it. It’s not a fair way to approach the topic. If the city has been maintaining a path for 47 years, he wondered why it would stop. If a school is currently maintaining a path, then arrangements should be made to continue that. He’s voting against it.

8:14 p.m. Briere, who sponsored the ordinance change, asks assistant city attorney Abigail Elias and public services area administrator Craig Hupy to the podium. Briere says that in her own research she’d learned it wasn’t clear who owns the property. Elias says the language is different in each of the plats. Responding to Briere, Elias doesn’t answer the question of whether the ordinance change would give the city an easement or title to the land. Elias says the ordinance would give “access.” Elias hasn’t looked at the issue of who the property belongs to.

Responding to Briere, Hupy says that if the ordinance doesn’t go forward, then the city doesn’t believe it can use sidewalk millage money to repair these cross-lot paths.

8:17 p.m. Briere asks Hupy if the city thinks it’s appropriate to place the burden for winter maintenance on adjacent property owners. Hupy says the schools were not interested in making the capital improvements. Some of the winter maintenance that the schools are doing, he says, is actually done out of convenience to the school – to find a good place to turn around, for example. The burden of winter maintenance, Hupy says, is the collateral damage associated with the city’s use of sidewalk millage funds for the capital repairs. Briere says her problem is with the redefinition of who’s responsible for the winter maintenance.

8:21 p.m. Higgins ventures that these paths could be defined as a subset of “sidewalks.” She floats the idea of postponing the ordinance. Warpehoski notes that many councilmembers have a desire to use the sidewalk millage to repair the paths. But he says there’s another problem in that non-motorized connections have been lost because there’s not a mechanism for accepting them for public use. He’s inclined to support the ordinance change, because it puts a mechanism in place to accept a path into public use. But that doesn’t mean that the council has to accept all 33 of the paths for public use. It might be a much smaller set, he says.

8:24 p.m. Lumm notes that not all 33 paths were found to be in current need of repair. Hupy indicates that last year there were four paths in dire need of repair that were not done, because they were not accepted for public use. Lumm doesn’t like the “no-man’s land” aspect of the situation. She sees it as a positive that the millage funds could be used. But the winter maintenance is a problem.

8:32 p.m. Lumm says that she agrees with one of the public hearing speakers, who said that if there’s to be a transfer of responsibility for the maintenance, then the land transfer should be done in a way that is “favorable” to the property owner. Lumm elicits from Elias the fact that under some circumstances, an owner of property adjoining a path could be required to mow grass in the summer, as well as clear snow in the winter.

Anglin says that the 33 paths should be looked at individually and judged on an individual basis. Hupy ventures that schools might be reluctant to participate – because they’re barred by state law from making investments in property off of land that they own.

8:41 p.m. Taylor summarizes the situation. He follows up on a possibility raised by Higgins: Can we find a way to use the sidewalk millage without causing the burden of day-to-day upkeep to shift? Elias traces the issue to the definition of “sidewalk.” Taylor floats the idea of tabling or delaying in some other way.

Lumm moves to postpone until the first meeting in October. Warpehoski asks how a postponement would affect the sidewalks that are in dire need of repair. Hupy says they wouldn’t get repaired this year. Hieftje ventures that if the city has muddled along all this time, three months wouldn’t hurt. Kunselman moots the idea of not using sidewalk millage funds to do the repair. He gives an example of a path that was repaired with park maintenance millage funds. He says if the city asked for the public paths in the first place, then the city should maintain them. Kunselman ventures that it might be necessary to research the history of the platting.

8:42 p.m. The council has voted unanimously to postpone the change in the definition of sidewalks until its first meeting in October.

8:42 p.m. Ordinance: International Fire Code Adoption. The council gave this ordinance change initial approval at its June 17, 2013 meeting. While the change is essentially administrative – changing the version of the International Fire Code adopted in the ordinance from 2003 to a more recent 2009 – some councilmembers on June 17 indicated an interest in exploring the question of frequency of fire inspections. They’ve heard complaints that fire inspections are being conducted too frequently – as a way to generate revenue.

On June 17, fire chief Chuck Hubbard indicated that some of the confusion could be attributed to re-inspections, which are done when a deficiency is found. Hubbard indicated on June 17 that fire inspections have increased. He’s increased the number of personnel assigned to fire inspections from three to seven.

Ann Arbor fire inspections: 2006-2012. (Data is from city financial records. Chart by The Chronicle.)

8:42 p.m. Lumm thanks staff for their work in responding to questions.

8:42 p.m. The council has voted unanimously to adopt the 2009 International Fire Code.

8:43 p.m. Recess. The council is now in recess.

8:55 p.m. The council is back from recess.

8:56 p.m. Ordinance: Video Privacy. This ordinance still hasn’t received an initial approval, as the council has delayed voting several times. It sets forth various conditions for the placement of public surveillance cameras. The most recent postponement came at the council’s June 17, 2013 meeting. The council seemed willing to postpone a vote on that occasion based on the fact that police chief John Seto was not available to answer questions about the impact on law enforcement activities. Some councilmembers indicated at that meeting a reluctance even to give the ordinance an initial approval.

9:01 p.m. Police chief John Seto is addressing the council from the podium. He’s reviewed many versions of the ordinance. He thanks everyone for their work. As chief, his responsibility is to provide service and protection for all. He says he wouldn’t apply technology that has negative implications for communications. He can’t predict the security concerns and policing needs of the future. Large crowds themselves create an added risk. He can’t support an ordinance that would limit his ability to monitor large crowds like those associated with the Ann Arbor marathon. To be able to use live monitoring only when there’s an imminent risk would be limiting, he says. Because he can’t know the policing needs of the future, there could be unintended consequences.

9:08 p.m. Anglin asks Seto if he sees the ordinance as limiting what’s been done in the past. Seto said that he can’t recall a case where that’s been done. Kunselman asks if Seto is familiar with the West Willow neighborhood. Seto wasn’t able to provide definitive information.

Warpehoski ventured that former police chief Barnett Jones felt that video surveillance would never be accepted in this community. He asks if Seto felt that the ordinance would give him the regulatory framework that would allow the community concerns to be addressed. Briere says one of her concerns about crowd surveillance was that almost all of the footage that was useful in the Boston marathon bombing was from private cameras. She appreciated that the human rights commission, Warpehoski and Anglin had tried to find a balance. But she wondered if the balance had actually been found. Seto said he’s not advocating the use of cameras, but felt that if the need does arise, he wants to make sure that there’s flexibility.

9:11 p.m. Kunselman refers to the comments made during the public commentary about the possibilty of police misconduct in the use of cameras. Seto says that the in-car video cameras already used by officers are subject to departmental policies. Hieftje cites a memo written by Susan Pollay, executive director of the Ann Arbor Downtown Development Authority, about the use of cameras in parking structures. Hieftje cites the issue of the perception of safety – saying that some people say they’d feel more comfortable in an underground parking garage if there was video surveillance.

9:19 p.m. Hieftje said that back in 2001-02 there were problems in Liberty Plaza, and the city had filmed from the building overlooking the park. Those cameras were hand-held, Hieftje said. Hieftje wanted to know if Seto felt that the ordinance would inhibit his ability to undertake necessary operations.

Kailasapathy wondered if the required sign stating the presence of a camera would undermine the point of the surveillance. For short-term use, Seto said, the sign would have an impact. Lumm discusses with Seto the requirements for installation of cameras. Lumm recounts how all the windows of her car were smashed in the Fourth & Washington parking structure, but there were no cameras in place to capture any footage.

Taylor says that this ordinance might be “a regulation too far.” But he notes that the chief’s job description was similar to the council’s job: Law enforcement should be consistent with community values. So he felt it should be voted forward to a second reading, which would provide an opportunity for a public hearing.

9:24 p.m. Kailasapathy ventures that the FBI would not have to adhere to the local ordinance, if the FBI wanted to conduct surveillance. Higgins brings up University of Michigan football games. She says that crowds are monitored for football games. Seto says that on a liberal interpretation, it might have an impact on his ability to use cameras for football crowd monitoring. But UM would be able to continue to do that, Seto says.

Kunselman inquires what the law is when a camera catches someone doing something illegal on their own property – if they have a reasonable expectation of privacy. City attorney Stephen Postema says he has not researched the issue. Higgins ventures that if the city has been working on the ordinance for a long time, then surely the city has an understanding of what privacy in a home means.

9:28 p.m. Kailasapathy asks if it’s OK for a camera to be trained on a front door to monitor who is entering and leaving a residence. Postema says it depends on what is done with the footage. Briere brings up Google Street View cameras and how it blurs images of people’s faces. Briere agrees with Taylor that there should be a discussion in the community. Passive surveillance can be used well or not well, Briere says, adding that she wished it weren’t used at all.

9:36 p.m. Warpehoski says that placing a camera on a pole and pointing it into a neighborhood is an affront to privacy and the ordinance would prevent that affront. The ordinance tries to find a balance between privacy, property owner rights and law enforcement needs. He doesn’t want cameras to be put in over neighborhood opposition. Warpehoski says he put forward the best ordinance he knew how to put forward, but allowed that there were still things that could be worked on. He asks for support at first reading, but tells his colleagues not to vote for it on first reading just to please him – if they were definitely not going to vote for it on second reading.

Anglin says the ordinance is preemptive, and that the ordinance allows cameras to be installed as useful tools. He gives destruction of property in parks as a use case for the cameras. He doesn’t think it’s a solution looking for a problem, he says – a response to remarks from Kunselman at an earlier meeting.

Kunselman responds to the idea of a “regulatory framework” and wonders why the council is not providing guidance on policy to the administration. Ordinances are passed to regulate behavior, and there are punishments for violating them. He wondered if Seto violated the ordinance, would he be fired? Kunselman said he would support giving policy direction. In any case, the city can do what it needs to do, he says. If Seto needs to use a camera to catch a suspect, Kunselman says, then, “By golly, let him do it!”

9:47 p.m. Kunselman describes how the relationship between the police and young people has changed from the time when he was young. He returns to his idea of giving guidance through policy. Lumm says that it’s overly regulatory. The balanced approach that Seto would take would not result in the application of technology that would harm the community, Lumm says. She says she wouldn’t support such an ordinance unless it had Seto’s unequivocal support. So Lumm won’t support it at first reading.

Briere said generally she’s inclined to advance an ordinance to a second reading. She doesn’t like the ordinance, because she sees it as giving permission for surveillance. She distinguishes between speculative surveillance versus a situation where there’s a targeted deployment. But she’s still inclined to hear from the public. That will help the council make better decisions.

Hieftje says he likes the idea of a policy – alluding to Kunselman’s proposal that policy guidance would be better than an ordinance. Hieftje noted that Ann Arbor is host to events that have the spotlight of the nation on the city. He couldn’t say he’d support it at second reading, but he was willing to support it at first reading.

9:49 p.m. Outcome: The council has voted 5-4 to give the video privacy ordinance initial approval, so it failed. Voting against it were Kailasapathy, Kunselman, Lumm and Higgins.

9:49 p.m. Ordinance: Rezoning for car dealership. The council is being asked to give initial approval to a rezoning of 2271 South State Street from M1 (limited industrial district) to M1A (limited light industrial district). The owner would like to be able to sell automobiles on the site. The city planning commission’s vote on the recommendation was taken at its May 21, 2013 meeting. The vote was 1-8, with only Eric Mahler supporting it. So the planning commission’s recommendation was for denial.

9:58 p.m. Briere points out that the council in the past has put off rezoning decisions based on the pending work on the South State Street corridor plan. Planning manager Wendy Rampson responds to Higgins by giving the example of the Biercamp property, which was not approved because the South State Street corrdidor study was just getting started at that time. There was also a request across the street from Biercamp, so that a property could be used as a medical marijuana dispensary.

Higgins ventures that the city council has the final say on the South State Street corridor plan – to which Rampson says, “kinda sorta.” The planning commission and the city council have to concur, Rampson says. Higgins felt like the property owner had been in the pipeline for a while before the South State Street corridor study was under way. Rampson and Higgins engage in back-and-forth on timing of the citizen participation meetings for the corridor plan and the proposed project requiring rezoning.

Kunselman draws out a letter of support from McKinley for the corridor plan. Kunselman notes that the adjoining bus parking lot might no longer be a factor – as the school district may not continue to offer transportation.

10:01 p.m. Kunselman wonders if it’s good policy to get rid of manufacturing zoning. Rampson explains that the planning commission had also grappled with that. She points to Areas 1C in the plan that recommends maintaining the current uses, which include manufacturing. The area around the parcel that’s requested to be rezoned, Rampson says, has already seen some transition to office use.

10:01 p.m. The council has voted unanimously to deny initial approval to the rezoning of 2271 S. State Street.

10:01 p.m. Ordinance: Kerrytown Place rezoning. There are two items on the agenda related to the zoning that would be necessary for Kerrytown Place – the project that Tom Fitzsimmons is planning to build instead of The Gallery, on the site of the former Greek Orthodox church on Main Street. The rezoning would be from PUD (planned unit development district) to D2 (downtown interface base district).

The first rezoning item affects the parcels with Main Street frontage. The second rezoning item affects the parcels on Fourth Avenue. The city planning commission gave a unanimous recommendation of approval at its May 21, 2013 meeting. On the North Main Street side, the project would include a 16-unit townhouse building with an underground parking garage, 12 carport parking spaces and 24 surface parking spaces. On the North Fourth site – now a surface parking lot – the plan calls for constructing a duplex with a 2-car garage for each unit and a 21-space parking lot. Each unit of the duplex would face North Fourth. The council is just being asked to consider an initial vote on the rezoning tonight, not the site plan. Rezoning requires a second and final vote – at a meeting when the site plan is likely to be presented as well.

10:03 p.m. Briere introduces the items and briefly recites the history of the previously proposed project by a different owner. Kunselman says he’s pleased to support it. He reminds his colleagues that when the property was in the hands of the Washtenaw County treasurer, he’d proposed doing something similar – rezoning the property on the council’s initiation.

10:03 p.m. The council has voted unanimously to give initial approval to the rezoning changes necessary for the Kerrytown Place project.

10:03 p.m. Bond Re-Funding: Sewage. This item refinances $21,500,000 worth of sewage disposal system revenue bonds, which were issued in 2004. The expected savings, according to the staff memo accompanying the resolution, is more than $2 million over an 11-year term.

10:04 p.m. Lumm commends staff for staying on top of these issues. She notes the savings of $2 million.

10:04 p.m. The council has voted to approve the sewage disposal bond re-funding.

10:04 p.m. 2013 City Council Rules. For Chronicle coverage on these changes, see “Council Mulls Speaking Rule Changes.” Highlights include adding public commentary to council work sessions, but reducing public speaking time to two-minute turns. A “frequent flyer” rule would prevent people from signing up for reserved time at the start of a meeting two meetings in a row. The total time that each councilmember could speak on an item of debate would be reduced from eight minutes to five minutes. The council postponed a vote from its previous meeting on these changes.

10:05 p.m. Higgins says she wants to postpone the issue, in light of the absence of Petersen and Teall, who wanted to be a part of the conversation.

10:06 p.m. The council has voted unanimously to postpone the rule amendments until the July 15 meeting.

10:06 p.m. Resolution: Re-establish the mutually beneficial committee. The phrase “mutually beneficial” in connection with the sorting out of issues between the city of Ann Arbor and the Ann Arbor Downtown Development Authority was first mooted in a Jan. 20, 2009 resolution. The main issue at that time was the contract under which the DDA administers the city’s public parking system. Subsequently, committees for both organizations were appointed, but they did not achieve any results. The following year, new committees were appointed and those committees met over the course of several months, culminating in a new parking agreement ratified in May 2011. The council formally disbanded its “mutually beneficial” committee at the end of 2011.

10:06 p.m. 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 in a way that does not recognize the cap on TIF revenues that is set forth in Chapter 7. That led to a proposal by some councilmembers earlier this year to revise the ordinance so that the DDA’s alternate interpretation is clearly ruled out. The council gave the ordinance change initial approval on April 1, 2013. But later, on May 6, 2013, the council chose to postpone the vote until Sept. 3, the council’s first meeting that month.

In this resolution, the mutual beneficial committee is tasked with coming up with a recommendation for Chapter 7 revised language with a deadline of Sept. 2. The council will be represented by Christopher Taylor (Ward 3), Sally Petersen (Ward 2) and Stephen Kunselman (Ward 3). The DDA’s July 3 meeting agenda also includes its appointments to a mutually beneficial committee.

10:10 p.m. Briere introduces the item by saying that back in May, several people had said that the staff should be working on the issue. Whatever changes might come to Chapter 7, she felt councilmembers should have a voice. The mechanism for that was proposed to be to “reinvigorate” the mutual beneficial committee. Kunselman says that when the council approved the ordinance at first reading, he and Petersen had begun having conversations with DDA board members and staff. He sees the resolution tonight as solidifying a process that’s already underway.

However, Kunselman doesn’t like the label “mutually beneficial.” It’s now changed to the “joint DDA-council committee.” Higgins wants to add a member – for a total of four councilmembers. Higgins wants Lumm to be on the committee, saying that Lumm has put a lot of work into the issue. That proposal is accepted as friendly.

10:11 p.m. Kailsaspathy brings up the existing DDA partnership committee.

10:12 p.m. The council has voted unanimously to appoint a joint DDA-council committee.

10:12 p.m. R4C Committee. The planning commission had voted at its April 16, 2013 meeting to send recommendations to the city council for revisions to the R4C zoning areas – but without the actual wording of the ordinance changes. Any affirmative action by the council at this point would be to direct the planning commission to develop ordinance language that would reflect the recommendations. At that point, the planning commission would need to approve the proposed ordinance language, with final action still required by the council.

The zoning change recommendations resulted from work done by a citizens advisory committee that was established in the summer of 2009. Due to dissatisfaction about how the recommendations were handled, the council is reconstituting the citizens advisory committee. On the committee, Sabra Briere (Ward 1) will represent the planning commission. Chuck Carver will represent rental property owners. From the wards: Ilene Tyler and Ray Detter (Ward 1); Wendy Carman and Carl Luckenbach (Ward 2); Ellen Rambo and Michelle Derr (Ward 3); Julie Weatherbee and Nancy Leff (Ward 4); Eppie Potts and Anya Dale (Ward 5). Weatherbee will chair the group.

10:14 p.m. Higgins introduces the resolution, alluding to a neighborhood meeting that had taken place the previous week. Lumm thanks Higgins for her work. She wonders when the council might be asked to act on the recommendations. Higgins said that the committee would meet only two or three times. She said that before the council acts on the planning commission recommendations, the committee should be able to weigh in.

10:14 p.m. The council has voted to re-establish the R4C citizens advisory committee.

10:16 p.m. Appointment of Jean Cares to the greenbelt advisory commission as the agriculture landowner representative. Taylor, who also serves on GAC, introduces the resolution. He mentions that Cares owns the Dexter Mill. Hieftje says that it’s a difficult slot to fill.

10:16 p.m. The council has voted to postpone the appointment. This is a standard procedure, as this initial consideration is considered the nomination by the council. GAC is one of the few boards and commissions for which the council, not the mayor, makes the nominations.

10:16 p.m. South State Street Corridor Plan. This resolution would adopt the South State Street corridor plan into the city’s master plan. The city planning commission voted unanimously to adopt the plan at its May 21, 2013 meeting.

10:19 p.m. Higgins says she has concerns about adding the corridor plan to the city’s master plan. She asks for postponement.

10:20 p.m. The council has voted to postpone the South State Street corridor plan for two weeks.

10:21 p.m. The council has voted to go into a closed session to discuss pending litigation, which is one of the reasons allowed by the Michigan Open Meetings Act.

10:40 p.m. The council has emerged from closed session.

10:41 p.m. Box hangar bonds for airport. This is a notice of intent to issue up to $900,000 of bonds to fund construction of a new box hangar at the Ann Arbor municipal airport.

10:41 p.m. The council has voted to give notice of intent to issue the bonds for the box hangar construction.

10:41 p.m. Miller Avenue assessment for sidewalk curb and gutter. The special assessment would apply to 18 private property owners, who would pay an average of $365 apiece. The total construction cost of the project is stated in the table of assessment as $42,860 – with about 75% of that to be paid for with federal funds. This resolution is the fourth and final one in the process. A public hearing was held at the council’s previous meeting.

10:41 p.m. The council has voted to approve the special assessment for Miller Avenue improvements.

10:41 p.m. Arbor Oaks Rain Gardens. This item would award a $149,925 contract to Erie Construction LLC for construction of rain gardens.

10:41 p.m. The council has voted unanimously to award the rain garden construction contract.

10:41 p.m. Accept 33 sidewalks for public use. Under the city charter, a land transaction requires an eight-vote majority, and this qualifies as a land transaction. The item relates to the ordinance change that was postponed earlier in the meeting, which would have changed the definition of “sidewalk” in the city code. The staff summary of the result of a meeting with adjoining property owners includes this: “There was a general consensus amongst attendees at the public meeting that City Council should postpone voting on these items until further discussion can be had and more details can be worked out.” For many of the specific paths, there was a reluctance to accept the responsibility of snow removal during the winter.

10:42 p.m. The council has voted to postpone the acceptance of the sidewalks for public use until its first meeting in October.

10:42 p.m. Fair Food Network grant to Ann Arbor farmers market. This item accepts $36,000 in funding from the Fair Food Network to administer the Double Up Food Bucks program at the Ann Arbor farmers market. The program provides a match of up to $20 per person per day to people using BSNAP (Bridge Cards/EBT/Food Stamps) to purchase produce at Michigan farmers markets.

10:42 p.m. The council has voted to accept the $36,000 grant.

10:43 p.m. Precinct 2-8 polling place relocation. This would change the polling place for Precinct 2-8 from St. Paul Lutheran School, 495 Earhart Road, to First United Methodist Church, 1001 Green Road. According to a letter sent earlier this year by school principal Brad Massey to the city, the decision to stop offering St. Paul Lutheran Church and School as a polling place to the city was based on “recent events affecting the safety of school children.” [.pdf of April 16, 2013 letter]

10:43 p.m. Lumm thanks St. Paul for allowing the city to use the facility as a polling location for many years.

10:43 p.m. The council has voted unanimously to change the Precinct 2-8 polling location to the First United Methodist Church.

10:44 p.m. Appointments. The council is being asked to confirm tonight the nominations put forward at the council’s June 17, 2013 meeting. Among them is Jeremy Peters to the planning commission. Also on the agenda for confirmation are Eric Jacobson to the local development finance authority (LDFA) board and Jan Davies McDermott to the economic development corporation board.

10:46 p.m. Outcome: The council has voted to confirm all the appointments.

10:46 p.m. Nominations. Russ Collins was nominated for a re-appointment to the board of the DDA. The nomination actually came chronologically before the confirmation votes.

10:47 p.m. Council communications. Taylor updates the council on the park advisory commission’s action at its June 18, 2013 meeting to recommend a waiver of fees for Liberty Plaza – in response to a request from Camp Take Notice to make sure that Pizza in the Park can continue at that location.

10:48 p.m. Public Commentary. There’s no requirement to sign up in advance for this slot for public commentary.

10:54 p.m. Seth Best addresses the council, beginning by thanking everyone. He’s speaking on behalf of Camp Take Notice’s advocacy for humanitarian aid generally, not just for Liberty Plaza. He was concerned that humanitarian aid was being excluded because of concern for music, bands and art. He tells his story of becoming homeless in Texas, eventually making his way to Ann Arbor. Pizza in the Park had allowed him to be human again, he said – at least for an hour.

10:57 p.m. An EMU faculty member and MISSION board member is now addressing the council in support of the Camp Take Notice advocacy for Pizza in the Park. Caleb Poirer speaks next, and quips that this is too early to end a council meeting. He characterizes the PAC resolution as an attempt to address the concerns that Camp Take Notice had raised, but says that it doesn’t actually address their concerns. That’s why they’re continuing to push for a more general ordinance. He allows that the homeless are not natural constituents of any politician. So he was grateful that the council had been willing to give them “the time of day.”

10:57 p.m. Adjournment. We are now adjourned. That’s all from the hard benches.

A sign on the door to the Ann Arbor city council chambers gives instructions for post-meeting clean-up.

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From left: 15th District Court judge Christopher Easthope – a former Ann Arbor city councilmember – and 15th District Court administrator Keith Zeisloft at the council’s June 17 meeting. (Photos by the writer.)

The main court-related item was part of an annual adjustment to the current fiscal year’s budget (FY 2013), which ends on June 30. The adjustment is made on a routine basis in order to bring the budget in line with actual expenditures. The general fund budget adjustment that was eventually approved by the council increased it by $567,000.

And of that amount, a significant part was attributable to the 15th District Court – including $112,000 in salary increases based on an interest in retaining employees, $203,000 due to a “catch up” payment to the law firm that provides indigent representation, and a back-bill for security from Washtenaw County for two fiscal years for $110,000. None of the salary increases went to judges, whose compensation is set through state statute.

The council was essentially being asked to approve the accounting adjustment for money that had already been spent this year.

The city’s budget for the next fiscal year – approved by the council last month, on May 20, 2013 – already incorporated the court workers’ salary increases going forward, and councilmembers had been apprised of the raises before their budget deliberations in May. The council’s deliberations on May 20 had not focused on those raises, but rather on the possibility of reducing the court’s budget in order to fund additional police officers for the city.

At the June 17 meeting, all three judges of the court plus the court administrator were on hand – as some councilmembers drew out a disagreement regarding how the wage increases should have been approached. At least some councilmembers felt the court should have asked the council before awarding wage increases to its workers.

Tom Crawford, the city’s chief financial officer, indicated at the meeting that if the council had not approved the budget adjustment for the court, it would likely have generated a note in next year’s audit.

Other court-related items on the council’s agenda included a new $240,000 annual flat-fee contract with Nassif and Reiser – the firm that provides indigent representation for the court. The council also approved a $160,000 contract with the Washtenaw County sheriff’s office for weapons screening at the Justice Center, the building next to city hall that houses the 15th District Court.

The council approved two items related to the court’s special Sobriety Court, one of which was a $65,000 grant program contract with the nonprofit Dawn Farm to provide in-patient and out-patient drug abuse counseling to 15th District Court defendants. It was approved over the dissent of Sabra Briere (Ward 1), who objected to the accompanying provision that waived a requirement that Dawn Farm adhere to the city’s living wage ordinance.

The wind generator item was originally on the consent agenda, but was pulled out for separate consideration. The council had previously voted unanimously at its Jan. 7, 2013 meeting to accept a roughly $950,000 U.S. Department of Energy grant for installation of the wind generator. The council was asked on June 17 to spend about $50,000 of the grant proceeds on an initial environmental assessment, required before the project can move forward. Three councilmembers balked at the request, but the resolution was ultimately approved.

In business related to revisions of local laws, the council gave final approval to an ordinance change that limits use of fireworks to between the hours of 8 a.m. and midnight. And the council gave final approval to the city’s outdoor sign ordinance that limits the incorporation of digital technology into outdoor signs – in a way that prohibits such use for billboards. However, the council again delayed taking an initial vote on an ordinance that would regulate how local law enforcement officials can use public surveillance cameras. The council did give initial approval to adopt the new fire code into the city’s ordinances.

In land use and development business, the council approved a revised development agreement for The Varsity. The agreement now incorporates a total of seven monthly parking permits that will be purchased at a premium cost under the city’s contribution in lieu (CIL) program. The council also gave approval to site plans for two projects: the State Street Center and 544 Detroit St. The 544 Detroit St. project included a brownfield plan, which was also approved. Another brownfield plan was on the council’s agenda – related to the Packard Square development on the site of the former Georgetown Mall. That plan had previously been approved, but an additional council vote was needed to change the set of activities that are eligible for reimbursement.

In connection with government-controlled land, the council approved $382,000 in additional operating support for the Ann Arbor Housing Commission. The council also passed a resolution committing up to $750,000 in general fund money to convert city-owned property at 721 N. Main to a greenway park. However, if the grants that the city expects to be awarded are actually received, none of that $750,000 would need to be spent on the project.

The council again heard public commentary about a homelessness outreach ministry in one of the city’s established parks – Liberty Plaza in downtown Ann Arbor, at Division and Liberty streets.

The council also approved revisions to collective bargaining agreements with the six unions in the police department, which gave members a 2% wage increase.

In a symbolic effort, the council voted to oppose expansion of I-94 in Detroit and I-75 in Oakland County – a proposal that’s part of SEMCOG’s 2040 Regional Transportation Plan with an estimated cost of $4 billion. SEMCOG subsequently adopted the plan.

The council put off voting on proposed changes to its internal rules, which could result in adding public commentary time at the council’s work sessions, but reducing the time allowed per turn from three minutes to two minutes. The council is expected to vote on the full set of rule changes at its July 1 meeting.

The proposed changes to the rules would move nominations and confirmation of appointments to a slot near the start of the meeting, instead of its current position near the end. For the June 17 meeting, the council’s confirmations came after midnight – and included reappointment of Bonnie Bona to the planning commission, and LuAnne Bullington to the taxicab board.

15th District Court

A number of items on the June 17 agenda related to the 15th District Court – either directly or indirectly.

15th District Court: City FY 2013 Budget Adjustment

The council was asked to make changes to the FY 2013 budget – which ends on June 30 – totaling $567,000 for the general fund. Much of that stemmed from additional expenses incurred by the 15th District Court. [.pdf of proposed amendments]

The 15th District Court’s portion of that adjustment stemmed from $112,000 in salary increases based on an interest in retaining employees, $203,000 due to a “catch up” payment to the law firm that provides indigent representation, and a back-bill for security from Washtenaw County for two fiscal years for $110,000.

General information about the court’s wage increases – authorized by chief judge Libby Hines in October 2012 and the focus of council inquiry at the council’s June 17 meeting – was known to the council before its May 20, 2013 meeting, when councilmembers voted to approve next year’s FY 2014 budget. [.pdf of May 13, 2013 memo on 15th District Court expenses] That FY 2014 budget incorporated the wage increases going forward.

As it related to the court, the council’s May 20, 2013 deliberations on the FY 2014 budget were in the context of reducing the court’s budget in order to fund three police officer positions – a proposal put forward by Jane Lumm (Ward 2). 15th District Court administrator Keith Zeisloft was present at that meeting and took questions about the salary increases at that time. However, Lumm’s FY 2014 budget amendment failed on a 5-6 vote.

15th District Court administrator Keith Zeisloft and Sumi Kailasapathy (Ward 1) before the June 17 meeting started.

Subsequently, Zeisloft provided a memo to the council in advance of its June 17 meeting, giving a more detailed explanation of the salary increases. The judges, magistrate and Zeisloft were excluded from the increases. The majority of other staff received a 0-3% increase. Administrative staff received an average 4.85% increase based on the conclusion that they were under-compensated compared to their peers in other courts.

The case management staff received an average of 4.22% raises based on increased supervisory responsibilities. Judicial staff averaged a 4.76% increase based on increased specialty court responsibilities. The highest increases, averaging 18.15%, were given to probation officers who were found to be significantly under-compensated compared to their peers, and who had increased multi-jurisdictional, specialty court responsibilities. [.pdf of responses from 15th District Court to councilmember inquiries]

The block of items related to the 15th District Court were moved up on the agenda at the start of the meeting, in deference to the fact that three judges and the court administrator were in attendance.

15th District Court: City FY 2013 Budget Adjustment – Deliberations

Sabra Briere (Ward 1) led off the discussion by proposing an amendment that eliminated the $112,000 budget adjustment for the 15th District Court salary increases – which had been approved by chief Judge Libby Hines in late 2012. Briere contended that the regular processes weren’t followed for the wage increases, venturing that the chief judge had overstepped her bounds. Briere was not satisfied with the mechanism by which the wage increases were approved, saying they were “not properly done.”

The overall tone of the ensuing interaction between the three judges and the council was consistent with the language Zeisloft had provided in his memo. Responding to a question about the ability of the city council to control the court’s spending decisions, the memo states:

Although City Council has authority to establish a total annual budget for the Court, and with all respect due to Council, the Court declines to accept that City Council has authority to direct, control, approve or disapprove specific expenditures, including but not limited to compensation of judicial employees. However, legalities aside, the Court has always sought a respectful and cordial relationship with Council and City Administration, and the Court’s budget history demonstrates that the Court has been a prudent and careful custodian of public funds, at times even to the disadvantage of the Court’s own interests.

At the meeting, Zeisloft generally deferred questions to the judges of the court, who were all in attendance: Judges Chris Easthope, Libby Hines and Joe Burke are all standing at the podium. However, Zeisloft also responded to particular items.

Jane Lumm (Ward 2) followed up on the salary increases – which were implemented in October 2012 – asking for a breakdown of the $112,000. Relying on figures from the city’s finance department, Zeisloft gave the breakdown as follows: compensation ($115,000), overtime ($10,000), temporary pay ($19,000) and vacancies (-$32,000) for a total of $112,000. The annual cost going forward was calculated at $193,000. Zeisloft had prefaced his remarks by saying that the information hadn’t been distributed to councilmembers because he didn’t have the information earlier. Lumm asked for the information to be provided in writing.

Hines told the council she respects the separation of powers, but she asserted the authority of the chief judge to increase salaries. The court has never asked the city for permission to do that in her 22 years on the bench. She pointed out the money that the court has managed to return to the city in past years when it has come in under budget. Zeisloft’s memo put the figures as follows: for FY 2002 through FY 2012, the council had budgeted a total of $41,865,240 from the general fund for court operations. Over that period, the court spent only $40,435,613, for a net return to the city budget of $1,429,627.

Hines put the salary increases in the context of retaining employees. She described past pay cuts and freezes. She also described a gross disparity in pay between the probation officers in the 15th District Court compared to other courts. And she added that while the court had worked with the city’s HR department, the court had not asked permission to implement the raises. The court is not overpaying its employees by any means, she said, concluding that she felt the pay raises were only reasonable.

Sumi Kailasapathy (Ward 1) disagreed with the narrative of the “honorable judges,” citing the decrease in cases handled by the court. The workload has come down, Kailasapathy contended. She was relying on the data that the court had provided to the council earlier in the year:

By way of background, Ann Arbor’s caseload downward trends are in line with the overall trend for other comparable courts [.pdf of caseload trends for 15th District Court]:

               Misdem       Civil Inf    Gen Civil
D15 Ann Arbor  3,109 ‐31%   13,894 ‐49%  1,742 ‐16%

-

Easthope said the 15th District Court was trying to be in the lead in reducing its costs. He allowed that the caseload had gone down, but the number of employees had also gone down, he contended.

The city’s comprehensive financial reports show 41 FTEs (full-time equivalents) for the court in 2007 compared to 36 in 2012:

15th District Court historical FTE count. (Data from city records, chart by The Chronicle)

Hines said that the kind of cases that had gone down – civil infractions – were not the kind that reduce judge and staff time. Hines returned to her earlier point about the basis for the salary increases – the challenge of retaining employees.

Briere said she’s not unsympathetic to the situation. But she felt the salary increases should have been considered as part of the standard budgeting process. The money should have been built into the FY 2013 budget, Briere contended. She agreed with the need to compensate the court staff – but a standard increase in salary should have been included in previous year’s budget.

Burke offered his perspective of the newest judge of the court, telling the council that when he became a judge, Hines and Easthope had sat him down and talked to him about the employees and the need for retention. He said that in making the salary increases, they had followed the normal procedures that anyone would in determining the amounts of the increases – gathering comparative data and the like. The one thing that they had not done was ask the city council. Responding to Briere’s point about budgeting, Burke said the court had calculated that the salary increases would come in within the court’s FY 2013 budget – but they had been wrong. It was a point to which Stephen Kunselman (Ward 3) returned later in the deliberations, telling Burke that he appreciated the fact the court had acknowledged that its math was off.

Kailasapathy then cited a Michigan Supreme Court administrative order. It appears to say that if the court uses a line item budget, there are restrictions on what the court can do.

From Administrative Order No. 1998-5, which applies to district courts, among others.

II. COURT BUDGETING If the local funding unit requests that a proposed court budget be submitted in line-item detail, the chief judge must comply with the request. If a court budget has been appropriated in line-item detail, without prior approval of the funding unit, a court may not transfer between line-item accounts to: (a) create new personnel positions or to supplement existing wage scales or benefits, except to implement across the board increases that were granted to employees of the funding unit after the adoption of the court’s budget at the same rate, or (b) reclassify an employee to a higher level of an existing category. A chief judge may not enter into a multiple-year commitment concerning any personnel economic issue unless: (1) the funding unit agrees, or (2) the agreement does not exceed the percentage increase or the duration of a multiple-year contract that the funding unit has negotiated for its employees. Courts must notify the funding unit or a local court management council of transfers between lines within 10 business days of the transfer. The requirements shall not be construed to restrict implementation of collective bargaining agreements.

Zeisloft responded to Kailasapathy by saying that the court submits a budget in a line item form only as a courtesy. It’s a function of the city’s financial software. Tom Crawford, the city’s CFO, followed up with the additional explanation that the city requires all the component units to submit line item budgets, but the city council authorizes the budgets by fund. Kailasapathy returned to her question about the administrative order.

Easthope, a former city councilmember, stated that the council has the authority to set a lump sum budget for the court. But the council doesn’t have the ability to change line items, he said. Easthope reiterated the description of the court as a separate branch of government. There was some unclarity expressed about where the comparative salary data had come from and who had gathered it. About the comparative salary data and its source, Easthope stated that the Supreme Court administrative office had provided all the comparative data. Hines had not simply said, “You get a raise and you get a raise …”

Considerable back-and-forth ensued between Kailasapathy and Zeisloft on the way the HR department of the city had been involved in the compensation adjustment amount. No formal report had been requested from HR, Zeisloft confirmed.

Chuck Warpehoski (Ward 5) asked for clarification of the administrative order on line item budgeting. and what happens if the council doesn’t approve the adjustment. That is, what happens if Briere’s amendment passes? Crawford indicated that the city would probably receive a formal note from the city’s auditor next year. The money has already been spent, Warpehoski ventured. Crawford indicated agreement that it would be difficult to stop the expenditures before the fiscal year ends on June 30.

Lumm then confirmed with Crawford that court employee checks are processed through the city. In describing the fact that the court had exceeded its budget this year (FY 2013), Lumm said that the court’s budget seems to be “optional.” But picking up on Warpehoski’s point – that the council essentially needs to approve the budget adjustment or accept a negative note on the audit of its financial statements next year – Lumm ventured that there doesn’t seem to be an option not to make the adjustment. Easthope contended that the court was actually under the budget by $99,000. Lumm wanted to follow up later on that, indicating that Easthope’s remarks weren’t consistent with the information the council had received.

Jane Lumm (Ward 2) and Stephen Kunselman (Ward 3).

Kunselman asked what Burke thought the consequence should be: Should the council just cover the amount of the salary increases? In the short term, Burke replied, yes. He said the court doesn’t spend money like drunken sailors. Burke indicated that there is a clear understanding on the court’s part that the council would not want to hear next year at this time that the court had the same issue.

Christopher Taylor (Ward 3) ventured that the council had engaged in a full conversation, but it’s a simple question. The court had diligently determined that their line workers’ wages were below market, Taylor concluded. And the council has already approved the increases going forward, he noted, when it approved the FY 2014 budget. So Taylor indicated he’d vote against Briere’s amendment. Mayor John Hieftje confirmed with Crawford that the budget resolution basically recognizes reality.

Briere indicated that her intent was not to force the court into a deficit. The court’s staff should not be penalized for the actions of their supervisors. So she’d withdraw her amendment. But she said the court should have done a better job of communicating, and she stated she would remember the situation without fondness. Kailasapathy, who seconded the amendment, hesitated for several seconds before agreeing with Briere to withdraw it.

With that amendment withdrawn, Sally Petersen (Ward 2) moved on to the indigent representation and the security services issue. Zeisloft characterized those as an unusual circumstance, that should not arise again in the future. Easthope noted that the special docket courts are operated at no cost to the city.

Marcia Higgins (Ward 4) returned to the issue of the salary increases, picking up on the historical pattern that Hines had cited of the court coming in under budget and returning money to the city. Why were salary increases not undertaken during the period when the court was returning money to the city? If the court had the ability to give raises without asking permission from the city, why didn’t the court give the raises at that time – when the court had the money?

As far as the idea that the court was trying to mirror the city organization’s approach of not giving raises during the period of the economic downturn, Higgins pointed out that the city had not given its employees the kind of raises the court had implemented over the last year. So she didn’t see the mirroring play out.

Burke ventured that unfortunately the court did not get the opportunity to come before the council to say that it was returning money to the city. It was only when more money was needed that court officials came to the council. Higgins complained that she felt blindsided, because the court did not come to the council and communicate that to the council about a major increase.

Marcia Higgins (Ward 4).

Briere ventured that it’s easier to ask forgiveness than permission. Burke responded by saying he felt Briere’s remark was “[holding his fingers apart to indicate an increment] this much of a cheap shot.” Briere told Burke it was OK that he felt that way, because she felt the other way – that in years past when the court knew it had outstanding debts to the county for security services, for example, but had returned money to the city, to her that was a problem. Briere also alluded to the issue with the court’s math, which Kunselman had also noted. Briere indicated that she had great respect for the court and the work that it did. But it was a “big chunk” to come to the council with at the last meeting in June.

Burke said that if his mathematical competence was being questioned, then he could live with that. But if Briere was saying that the court didn’t come to the council even though it knew that it should have, then “I’m sorry, but you’re just wrong about that. We are separate branches of government and what you’re talking about is an integrity issue.”

City administrator Steve Powers shared his perspective as a former county administrator working three different courts. Prior to his taking the city administrator position in September 2011, he felt there hadn’t been enough consultation and communication between the city and the 15th District Court. So he’d met with the chief judge and the court administrator. He accepted responsibility for not bringing the communication back from the court and not updating the council. Going forward, the consultation with the court would be important so that these issues don’t arise in the future, Powers said. He stressed the importance of the two branches of government doing things in consultation, not confrontation.

Outcome: The council voted to approve the FY 2013 budget adjustments, over the lone dissent of Sumi Kailasapathy (Ward 1).

15th District Court: Indigent Representation

Two agenda items related to the law firm that provides indigent representation for defendants in the 15th District Court.

Nader Nassif with Nassif and Reiser, P.L.L.C., which does business as Model Cities Legal Services. Nassif also serves on the board of the Ann Arbor Downtown Development Authority. In the foreground is 15th District Court judge Chris Easthope.

The 15th District Court is required to provide representation to those who cannot afford an attorney, if a conviction would result in jail time.

The council was asked to approve a $240,000 flat-fee contract for representation of indigent defendants – with Nassif and Reiser, P.L.L.C. (f/k/a Funkhouser and Nassif, P.L.L.C.), d/b/a Model Cities Legal Services (“MCLS”). The contract covers FY 2014, which begins July 1.

The reason the contract was structured as a flat fee is that MCLS had customarily delayed billing for services until a defendant’s case was completely closed or additional court action was deemed unlikely.

Even after a guilty verdict, defendants remain under court supervision and can be subject to other court orders.

Delayed billing resulted in another agenda item requesting that the council cover $203,000 of fees to “catch up” the billing.

15th District Court: Indigent Representation – Deliberations

Christopher Taylor (Ward 3) indicated that the contracting party is a client of his law firm. He asked the council to vote to excuse him from voting.

They did so, and Taylor took a seat in the audience.

Lumm asked Zeisloft if the court had considered issuing an RFP (request for proposals) for the service. Zeisloft described the negotiation between the court and the law firm. He indicated that the court had not considered issuing an RFP, but it would be possible. Model Cities, however, provides the service at a very competitive cost, he said.

Christopher Taylor (Ward 3) sat in the audience as the contracts for indigent representation were discussed.

Easthope explained that Model Cities doesn’t just stand in court – they provide far more than that. There’s a value that’s hard to represent, and it doesn’t have to do with just the lowest price. Model Cities has a personal connection to all the social services agencies, Easthope explained.

Outcome: The council voted to approve the two resolutions related to Model Cities for legal services.

15th District Court: Security Billing

In addition to an FY 2013 budget adjustment that included back-billing for security services, the council was asked to approve next year’s $160,000 contract with the Washtenaw County sheriff’s office for weapons screening at the Justice Center, which houses the 15th District Court. The estimated annual cost is based on $25.25 per hour per court security officer. The estimated maximum annual cost of $160,000 is $27,000 less than last year. The money comes from the 15th District Court’s budget.

During deliberations, Jane Lumm (Ward 2) got clarification on the way the cost of the contract was estimated. Zeisloft explained that it’s based on a wage rate of $25.25 per hour. The reduction from the $187,000 for the previous year was due to a reduction in the projected number of hours that would be worked, he said, not a reduction in the wage rate.

Outcome: The council voted to approve the weapons screening contract.

15th District Court: Specialized Courts

Two other items related to the 15th District Court appeared initially on the council’s consent agenda, a group of items considered routine and voted on as a group. The council was asked to approve $30,000 for a Sobriety Court grant program contract with the Washtenaw Community Health Organization (WCHO) to provide mental health treatment to 15th District Court defendants. And the council was asked to approve $65,000 for a Sobriety Court grant program contract with Dawn Farm for in-patient and out-patient drug abuse counseling to 15th District Court defendants.

At Sabra Briere’s (Ward 1) request, the Dawn Farm item was pulled out for separate consideration, because the item included a request for a waiver of the city’s living wage ordinance. According to the staff memo accompanying the resolution, Dawn Farm employs 70 people, including 15 employees who are paid less than $12.52 per hour with health care coverage, and 18 people who are compensated at rates less than $13.96 per hour without health care coverage. Those are the rates specified in the city’s living wage ordinance.

Last fall the council engaged in a vigorous discussion of a living wage ordinance waiver for Community Action Network (CAN), which ultimately resulted in the granting of a waiver for that nonprofit at the council’s Nov. 8, 2012 meeting.

From left: Sumi Kailasapathy (Ward 1) and Sabra Briere (Ward 1).

Briere led off the discussion saying she wasn’t satisfied with the answers she’s received to questions she had asked about the living wage ordinance exemption that had been requested by Dawn Farm. She wanted to know if the item could be postponed so that adequate answers could be given.

Judge Joe Burke, who runs the Sobriety Court, explained to Briere that the court’s application for a grant was due on Friday, June 21 – so postponement would be difficult. Burke indicated that he was the one who’d asked for the living wage ordinance exemption – and that was based on communication from Jim Balmer, executive director of Dawn Farm, who’d reported that Dawn Farm can’t comply with the living wage.

Burke said he couldn’t speak for Dawn Farm but could speak about Dawn Farm. Briere interrupted Burke, apologizing for doing so, but stressed that her concern was not with Dawn Farm but rather with the living wage compliance: “I just don’t want you to spend too much time telling us what we all agree are the virtues of Dawn Farm as an entity and the work they do for the Sobriety Court.” Burke stressed that Balmer agreed with the city’s living wage ordinance, but was not in a financial position to comply, and Balmer had wanted to be honest about that. Burke then went on to explain the importance of the work that Dawn Farm does in support of the Sobriety Court.

Briere indicated that she didn’t see a process in the application for the living wage exemption that would eventually lead to compliance. Just as working toward sobriety has steps, Briere said, working toward financial solvency also has steps. Her problem was with the exemption, not the contract.

By way of background, the point Briere was raising related to conditions on the exemption that the council can grant under the ordinance. The Ann Arbor’s living wage ordinance reads in relevant part [emphasis added]:

… provided further that the otherwise covered non-profit employer shall provide a written plan to fully comply with this Chapter within a reasonable period of time, not to exceed three years, and the City Council then agrees that granting a partial or complete exemption is necessary to ameliorate the harm and permit the non-profit organization sufficient time to reach full compliance with this Chapter.

Briere wanted that process to be included in the application for the exemption.

Outcome: The Dawn Farm contract, with the three-year exemption from the city’s living wage ordinance, was granted by the council over dissent from Sabra Briere (Ward 1). She did not insist on a roll call vote.

Wind Energy

The council had previously voted unanimously at its Jan. 7, 2013 meeting to approve the acceptance of a roughly $950,000 U.S. Department of Energy grant for installation of a wind generator project. On June 17, the council was asked to spend about $50,000 of the proceeds of that grant on the initial environmental assessment, required before the project can proceed. The specific item on which the council was asked to vote was a contract with CDM Smith to perform an environmental analysis (EA) under the National Environmental Policy Act (NEPA), which includes public engagement.

The wind generator item was on the consent agenda, but was pulled out for separate consideration.

Wind Energy: Council Deliberations

Jane Lumm (Ward 2) led off discussion by saying that she’d learned that day that the proposal is to place a wind turbine at Pioneer High School. She felt it was unfortunate that an initial decision had been made to place the generator on the high school property, without more community outreach – but she allowed that part of CDM Smith’s scope of work would include public engagement.

Sumi Kailasapathy (Ward 1) followed up on Lumm’s remarks by reporting that she’d received a letter from a University of Michigan physics professor – Gregory Tarlè – on the topic of the wind generator. She read aloud some concerns outlined by him in his message:

I am currently teaching a class “Energy for our Future” at the University of Michigan. One of the first things we learn when studying wind power is that the power you can get from a wind turbine goes as the cube of the wind velocity. Effective wind turbines must be sited in places where the wind velocity is high and steady or where there are frequent high velocity gusts. Attached is a map of US Wind Resources from the Department of Energy. As you can see, wind resources are marginal at best in Ann Arbor but are excellent offshore in the Great Lakes. Winds increase with altitude (because of wind shear) and that is why large towers are needed. It is not educational to site wind turbines at sites selected for non scientific reasons.

Kailasapathy summarized Tarlè’s remarks by saying that the only thing this turbine would teach students is that if you place a windmill where there’s no wind, then it won’t move. She didn’t think that’s worth $1 million. She regretted voting for the project earlier, but it’s not too late, she said. She allowed that it was federal dollars, but that’s still taxpayer money and it’s the council’s duty to be a good steward, she said.

City utilities engineer Brian Steglitz, who’s managing the wind generator project, and public services area administrator Craig Hupy were on hand to answer questions. Sabra Briere (Ward 1) asked Steglitz to explain why it’s a good project. He characterized it as a demonstration program for wind energy in an urban environment. The city went through a competitive process with the Department of Energy to obtain the grant, he said. The partnership the city is working on with Wind Products – the company that will install the wind generator – would include a guarantee that the turbine will produce a minimum amount of energy. Wind Products had also looked at wind maps, Steglitz said, and looked at the cut-in speeds for the turbines to evaluate how much of the time the windmills would actually be spinning. Based on that analysis, Wind Products was willing to guarantee a minimum amount of power. The project is also part of the city’s goal to generate alternative energy, Steglitz said.

Briere indicated she’d heard from others that there’s no way the wind generator could produce enough electricity to pay for itself. Steglitz noted that the data provided by Wind Products indicated that the 60kW turbine would not generate a tremendous amount of power, but it would offset some of the power needs of the high school. Wind Products would subsidize any possible shortfall in power generation. The power that the school would purchase from the developer will cost less than conventional power, Steglitz said, which is part of the school district’s incentive to participate in the program – to realize a few thousand dollars worth of electricity savings per year. The city’s role is more like a broker between Wind Products and the school district.

Later in the meeting, Kailasapathy asked if the estimates for energy production were independently verified by a third party. Hupy explained that they had not been verified, but that the estimates would be tied to a financial commitment from Wind Products – that it would subsidize any shortfall in power production.

Sally Petersen (Ward 2) asked for more information about the Ann Arbor Public Schools participation in the project. Once the generator is installed, who takes over from there? If AAPS cuts its budget, will it possibly cut support for the turbine? Steglitz indicated that the AAPS will lease the space for the turbine and purchase the power. That’s the extent of AAPS participation. Wind Products would maintain and operate the generator, he explained. Later in the council’s deliberations, information in the staff memo accompanying the resolution was drawn out – that the city would eventually own the generator:

It is anticipated that the wind turbine(s) will be located on AAPS property, that the wind turbine(s) will be owned or purchased by the City, that the developer will construct the wind turbine(s), and that the AAPS will purchase the power from the wind turbine(s) under a power purchase agreement. While the City, AAPS and Wind Products have been meeting and continue to work to come to terms on the several agreements so that they can be ready to be brought forward for review and approval once the NEPA EA and public engagement process are completed and accepted by the DOE.

Sally Petersen (Ward 2).

Petersen ventured that AAPS will have a financial upside, which Steglitz confirmed.

Hupy explained that the item the council was being asked to approve provided funding to look at the environmental impact of the turbine. In arguing against the approval, Lumm cited the same letter from Tarlè that Kailasapathy had mentioned.

Marcia Higgins (Ward 4) asked how the public would be notified about the public engagement process. Steglitz explained that the intent would be to broaden the scope beyond the standard requirement that residents within 500 feet be notified. He described how the process would include the city’s public engagement “toolbox.” The intent, Steglitz said, was to conduct public engagement and environmental review over the next six months, and to have the review and assessment finished by the end of the 2013 calendar year.

Higgins ventured that it’ll be a lively debate about whether a wind turbine should be placed at Pioneer High School. Responding to a question from Higgins about the city’s financial commitment, Steglitz described it as around $18,000 worth of staff time. Higgins said she was willing to let the debate unfold and not get in the way of it. She confirmed with Hupy that before any further city commitment is made, the council would have to approve it.

Stephen Kunselman (Ward 3) asked for a refresher on the height of the pole where the wind-turbine would be mounted. Steglitz explained that it’d be about 120 feet tall with a 60-foot diameter blade. Kunselman concluded it’s not really a “turbine” but rather just a “generator.” [Kunselman's day job at UM is as energy liaison with Planet Blue.] He felt that the generator will actually be generating a decent amount of electricity given its educational, demonstration purpose. Mike Anglin (Ward 5) also expressed his support for the project based on its educational impact.

Lumm allowed that she had voted to accept the federal grant back in January. But she’d learned a lot since that vote was taken, she said. She wouldn’t support taking the next step based on the idea that it would be sited in a location that doesn’t have much wind.

As a partial counter to Lumm’s complaint that there had not been community outreach on the siting of the generator, Sabra Briere (Ward 1) ventured that public outreach wouldn’t happen unless the city hired CDM Smith to do the public outreach, which the council was being asked to approve. That process would help determine whether this is an appropriate site, she ventured. Steglitz confirmed that’s correct. Briere wondered what the alternative locations are. Steglitz indicated that there aren’t really any alternative sites. Hupy confirmed that the city has looked extensively, even as far north as East Lansing – where it might be sited with a maize-and-blue pole, he quipped. City administrator Steve Powers subsequently assured the council that Hupy was not joking about the idea of trying to find a location in East Lansing.

Petersen wanted to know if anyone from AAPS was at the council meeting to talk about the educational component – no one was. Kailasapathy questioned the idea that there could be an educational benefit, if the generator were to be located in East Lansing. Hupy explained how utility regulations require that the power be consumed on the site where it’s generated. Transmission over lines to be used in other locations isn’t allowed except with permission of the electric utility.

Kailasapathy raised a question about noise created by the generator. Steglitz explained that the noise issue would be part of the environmental assessment.

From left: Christopher Taylor (Ward 3) and Stephen Kunselman (Ward 3).

In the course of the council’s discussion, the email from Tarlè had been sent to all councilmembers, and Kunselman took the opportunity to comment on it in more detail. He stressed that Tarlè seemed to be talking about wind-farm sized turbines – not the size of the generator that the city is considering. What the city is considering, he said, is a 60 kW wind generator that will be running about 30% of the time. And part of that time, students would have the opportunity to look at a data center that shows all the data. That’s the educational component of the project, he said. And the money is Dept. of Energy grant money, not city money, Kunselman added. He concluded that the city should move forward with the project.

Mayor John Hieftje weighed in for the resolution, saying it’s worth exploring the next stage of the project. Hieftje said he wants to follow the lead of the DoE. Lumm responded to Hieftje’s argument based on the DoE, by questioning whether the DoE is aware of the power generation estimates. Hieftje ventured that DoE is aware of the educational nature of the project.

Outcome: The contract with CDM Smith to conduct an environmental assessment for the wind generator project was approved over dissent from Sally Petersen (Ward 2), Jane Lumm (Ward 2) and Sumi Kailasapathy (Ward 1).

Video Privacy Ordinance

The council was asked to give initial approval to an ordinance regulating the use of public surveillance cameras in the city.

The council had previously postponed the item at its May 20, 2013 meeting. Before that, the council had postponed the item at its April 15 meeting – due to the length of that meeting – and again on May 6. [.pdf of ordinance as presented to the council on April 15, 2013]

The new ordinance would apply only to a limited range of cameras – those used by the city of Ann Arbor “to monitor human activity without the physical presence of an operator, including cameras on remotely operated aerial vehicles.”

The ordinance would not apply to a range of city of Ann Arbor cameras, for example: cameras used to improve traffic design, security cameras operating in jails, prisons, water treatment facilities, public housing facilities, or the Ann Arbor Airport and other governmental facilities.

The new ordinance would allow for public surveillance cameras to be installed for 15 days or less at the discretion of the city administrator if the purpose is to address a specific criminal problem.

The council’s consideration of the topic dates back a few years. Former Ward 1 councilmember Sandi Smith had announced at a council meeting on Aug. 4, 2011 that she’d be bringing a video surveillance ordinance for consideration at the council’s Sept. 6, 2011 meeting. And a year before that she’d indicated the city’s human rights commission would be working on the issue.

Video Privacy Ordinance: Council Deliberations

Chuck Warpehoski (Ward 5) introduced the ordinance. He noted that while Chief John Seto was out of town and not available to answer questions about the potential impact of the ordinance on law enforcement activity. Still, Warpehoski asked his colleagues to move the change forward to a second reading. He characterized the ordinance as striking a balance between the right to privacy and the interests of law enforcement. In light of the full agenda that night, Warpehoski suggested a more in-depth discussion when it came back for second and final reading.

Sally Petersen (Ward 2) asked for a clarification of some of the changes that had been made to the proposed ordinance. Sabra Briere (Ward 1) thanked Warpehoski for his work, but said that this ordinance was not her favorite idea.

Jane Lumm (Ward 2) indicated she was hoping it would be postponed, citing Seto’s absence. She also noted that new revisions had been given to the council only last night. She didn’t think the council should pass ordinances at the first reading just to get them to the second reading. So she said she wouldn’t be supporting it.

Stephen Kunselman (Ward 3) appreciated Warpehoski’s work to bring the ordinance forward. But he felt it’s a solution in search of a problem. He knew he wouldn’t support it when it came to the second reading – because he felt it tied the city administrator’s hands. Privacy is already protected, he contended. And surveillance cameras do work, he said, giving the West Willow neighborhood as an example. He asked: Where’s the budget for this? Asking the city administrator to run around getting permissions from residents didn’t seem sensible, Kunselman said.

Sumi Kailasapathy (Ward 1) indicated support for postponement and made a motion to postpone. Warpehoski seconded that motion. Christopher Taylor (Ward 3) indicated support for the postponement, but said he’d have probably been inclined to support it at first reading.

Outcome: The council voted to postpone the video privacy ordinance until July 1, when police chief John Seto will be available.

Fire Code

The council was asked to give initial approval to an amendment to Chapter 111 (Fire Prevention) of the city code so that it refers to the 2009 International Fire Code instead of the 2003 version.

Chuck Warpehoski (Ward 5) indicated that he’d support the ordinance at first reading, but he had some concerns about the inspection of certain areas. Jane Lumm (Ward 2) asked fire chief Chuck Hubbard about the frequency and cost of fire inspections. Hubbard contrasted inspections with re-inspections. If there are violations found, then an inspector will return to confirm that the violation has been corrected – and that’s a re-inspection. Hubbard allowed that inspections have been stepped up. It’s being done for the benefit to the property owners, he said.

Ann Arbor fire inspections: 2006-2012. (Data is from city financial records. Chart by The Chronicle.)

City administrator Steve Powers indicated that the performance of the fire inspection program is being reviewed. Stephen Kunselman (Ward 3) noted that the building department is already using the 2009 code, but the fire department is using the 2003 code. What are the differences? Kunselman got confirmation that the council’s approval is more or less a formality. It’s like “housekeeping.”

Mike Anglin (Ward 5) asked how many staff are allocated to fire inspections. Hubbard told Anglin it’s been increased from three people to seven. Anglin felt the overall safety of the community was being improved through that effort.

Christopher Taylor (Ward 3) said he’s delighted that the city is conducting more fire inspections.

Outcome: The council voted to give initial approval to the adoption of the 2009 fire code.

Billboard Ordinance

The council was asked to give final approval to an ordinance change that would restrict the way that digital technology could be incorporated into outdoor signs. It would also prevent any digital technology retrofitting of existing billboards, and prohibit billboards generally – although the 28 existing billboards citywide would be allowed to continue as non-conforming structures. The change had been given initial approval by the council and had been up for final action twice before – most recently, on May 6, 2013. Action on May 6 was to postpone a final decision – until the council’s June 17 meeting. [.pdf file of map showing billboard locations in the city]

Christopher Taylor (Ward 3) introduced the agenda item, describing it as enforcing the status quo. He described some changes that had been made to the proposed ordinance revisions, compared to those already given initial approval by the council. One is an exception for churches and schools. The definition of “changeable” copy had also been revised. Taylor said it’s important that billboards not expand beyond their current status.

Chuck Warpehoski (Ward 5) reported that he’s heard close to zero support for expanding billboards to use digital technology – other than from those in the outdoor sign industry. He’d heard no support for digital signs to the point where he felt there was a clear consensus for that point of view.

Sally Petersen (Ward 2) argued that if Ann Arbor wants to be a tech town, then preserving the status quo is too conservative. She cited the possible negative impact on economic development. The ordinance changes promote blight by not allowing existing billboards to be removed and replaced with new ones, she contended. So she’d oppose the ordinance change. She pointed out that the Michigan Dept. of Transportation (MDOT) relies on digital technology to convey messages along the highways. She called for a more comprehensive look at the ordinance. It’s way too conservative for a town that wants to move forward with technology, she said.

Sabra Briere (Ward 1) ventured that the Ann Arbor Public Schools district is unlikely to go ahead with a proposal to contract with Adams Outdoor Advertising on school property. She said that two of the digital signs proposed by Adams Outdoor Advertising were in Ward 1 – which she represents. The idea of having digital signs there didn’t make her happy, but she conceded she was perhaps an old fogey.

Jane Lumm (Ward 2) thanked the city staff for all their research and their work on the ordinance. She thought the proposed changes were reasonable, so she’d be supporting the ordinance change.

Mike Anglin (Ward 5) thanked the staff for their work. He said it’s clear that the community doesn’t want any more visual intrusion. He characterized the ordinance change as not an anti-business proposal, but rather a pro-community move.

Outcome: The council voted to give final approval to the billboard ordinance, over dissent from Sally Petersen (Ward 2) and Marcia Higgins (Ward 4).

Fireworks Ordinance

The council was asked to consider a revision to the city ordinance on fireworks. The impact on the upcoming July 4 holiday would be that fireworks use would be limited in Ann Arbor to the time between 8 a.m. and midnight. A necessary revision to state law, in order to make the city’s action legal, had already been passed by the Michigan House and Senate when the council met. It awaited only signature by the governor’s office, which it subsequently received two days later on June 19.

The revision to the city’s fireworks ordinance was given initial approval at the council’s June 3, 2013 meeting. The impact of the ordinance change is to restrict the use of fireworks on July 3-5 to the period between 8 a.m. and midnight on those days. The ordinance change applies to other national holidays as well. On New Year’s Day, however, the time extends to 1 a.m.

The local ordinance change is made possible by the change to state law, which previously did not allow local governments to regulate fireworks for a continuous 72-hour period – for the day preceding a national holiday, the national holiday, and the day following the national holiday. The statutory change makes it possible for a local government to regulate the time of fireworks use around the time of national holidays.

Fireworks Ordinance: Public Hearing

Two people spoke at the public hearing on the fireworks ordinance change. Thomas Partridge said that July 4 should be a celebration of civil rights and human rights. He objected to celebrating the holiday with fireworks. Michael Benson asked the council to consider allowing people to apply for a permit to use fireworks on other days. He wondered what other costs could be imposed by the ordinance language “plus costs” that are mentioned in connection to a $500 fine.

Outcome: After a brief introduction by Sabra Briere (Ward 1), the council voted to give final approval to the fireworks ordinance.

CIL Parking for The Varsity

The council was asked to approve a change to the development agreement between the city and The Varsity – a 13-story, 177,180-square-foot apartment building containing 181 dwelling units (415 bedrooms). The council’s requested action was essentially a confirmation of an Ann Arbor Downtown Development Authority decision to award the right to purchase a total of seven monthly permits, at a 20% premium cost.

The Varsity is located at 425 E. Washington St. in downtown Ann Arbor. Based on zoning requirements, 76 off-street parking spaces are required. Only 69 were provided on site. The others were provided through the contribution in lieu (CIL) program. The seven spaces were approved by the Ann Arbor DDA at its June 5, 2013 meeting. It falls to the DDA to make a decision on the CIL spaces, because the DDA administers the city’s public parking system under a contract with the city.

Outcome: After a recitation of the situation’s background by Sabra Briere (Ward 1), the council voted to approve the revision to the development agreement.

Site Plans, Brownfield Plans

At its June 17 meeting, the city council was asked to give approvals in connection with three developments.

Site Plan: State Street Center

One request was a site plan approval for the State Street Center, near the intersection of South State and Ellsworth. The project calls for demolishing a vacant 840-square-foot house on this site. In its place, the developer plans a one-story, 1,700-square-foot drive-thru Jimmy John’s restaurant facing South State Street. A one-story, 6,790-square-foot retail building will be built behind the restaurant. The rezoning of the parcel for this site plan was given final approval at the council’s June 3, 2013 meeting.

Outcome: The council voted without discussion to approve the State Street Center site plan.

Site Plan, Brownfield Plan: 544 Detroit St.

The council was also asked to approve the site plan for 544 Detroit St. – a three-story building with offices on the first floor and residences on the upper two floors. It’s a “planned project” to allow an additional 3.5 feet of building height for a “decorative parapet” on the building’s north end and a stair enclosure to access a roof deck.

A rendering that shows the proposed design for 544 Detroit St., at the corner of Detroit and North Division.

For the 544 Detroit St. project, the council was also asked to approve a brownfield plan. According to a staff memo, the brownfield component – which allows tax increment financing (TIF) to reimburse the developer for eligible costs – includes a total of $698,773 in eligible activities. Some of those eligible activities include soil remediation ($174,620), infrastructure improvements ($70,350), and vapor mitigation ($32,000).

The planning commission gave the 544 Detroit St. project a recommendation of approval at its Dec. 18, 2012 meeting.

Site Plan, Brownfield Plan: 544 Detroit St. – Public Hearing

Jeff Crockett spoke in favor of the 544 Detroit St. project. He called it a responsive development. The site plan demonstrates serious consideration of citizen input, he said – and he knew of no one who opposed this project. He called for zoning laws that are not driven just by statistics, but rather are value-driven. Thomas Partridge also spoke on the 544 Detroit St. project, criticizing the fact that there was no attached requirement that the site provide affordable housing or access to public transportation.

Site Plan, Brownfield Plan: 544 Detroit St. – Council Deliberations

Marcia Higgins (Ward 4) mentioned briefly that this was one of the better brownfield projects the committee had seen. She serves on the city’s brownfield committee.

Outcome: The council voted to approve both the site plan and the brownfield plan for 544 Detroit.

Brownfield Plan: Packard Square

Finally, the council was asked to approve an amendment to a previously-approved brownfield plan for Packard Square, at the former site of the Georgetown Mall. The amendment adds to the list of eligible activities – including underground parking and urban stormwater management. The total cost of eligible activities is not changed. Demolition at the site began a few weeks ago.

Marcia Higgins (Ward 4) asked about payment of back taxes – the project is located in Ward 4. Nathan Voght of the Washtenaw County office of community and economic development, which manages the county’s brownfield redevelopment program, fielded Higgins’ questions. The indication was that the back taxes would be paid.

Higgins noted that the demolition is in progress, so Voght gave an update. May 28 was the start of demolition. The Michigan Dept. of Environmental Quality (MDEQ) indicated that additional asbestos mitigation was needed. Soil excavation to remove contamination is ongoing and a vapor barrier will probably need to be installed, Voght said. He thought by mid-July the demolition will be done. The developer indicated that construction would begin as soon as possible after that.

Higgins said that residents are pleased to see the project going forward. Mayor John Hieftje thanked Higgins for her efforts.

Outcome: The council voted to approve the Packard Square brownfield amendment.

$382K for Housing Commission

The council was asked to provide $382,000 of operational support to the Ann Arbor Housing Commission.

The resolution was held over from the council’s June 3, 2013 meeting. That’s when the council took several steps to move the Ann Arbor Housing Commission forward along a path to converting the properties it manages to project-based vouchers. A similar operations funding resolution had appeared on that meeting’s agenda, but was withdrawn.

The additional funding, according to a staff memo accompanying the resolution, is needed to mitigate against the impact of federal sequestration. The memo puts that impact at about $300,000 less for public housing and $50,000-$75,000 less for capital funding.

Of the total amount, $159,000 is appropriated from the city of Ann Arbor’s affordable housing trust fund, and $223,000 would be appropriated from the general fund. The city’s housing and human services advisory board had voted to recommend the $159,000 be appropriated from the affordable housing trust fund.

$382K for Housing Commission: Council Deliberations

Sabra Briere (Ward 1) introduced the resolution, noting that it will empty the affordable housing trust fund – but that fund will receive $100,000 on July 1, because of the budget allocation the council passed as part of the FY 2014 budget. Stephen Kunselman (Ward 3) asked city CFO Tom Crawford if there were sufficient funds in the general fund reserve to cover the allocation. Crawford projected a fund balance of $13.9 million at the end of the fiscal year. That’s about 17% of operating expenses. But he did have some concerns, Crawford said. At the end of FY 2015, based on the council’s recent action, the fund balance would be around 13%. In general, he has some concerns about how the fund balance is being used.

City administrator Steve Powers noted that the current council policy is to maintain 8-12% of operating expenses in the fund balance.

Jane Lumm (Ward 2) thanked Jennifer Hall, executive director of the AAHC, for her work.

Outcome: The council voted to approve the AAHC allocation.

Commitment of $750,000 for 721 N. Main

The council was asked to make a commitment of up to $750,000 from the city’s general fund – to undertake planned improvements to the city-owned property at 721 N. Main. The commitment is a requirement for a grant application that the city is making to the Michigan Natural Resources Trust Fund for $300,000.

If the city’s plan unfolds as it expects, then none of the $750,000 in general fund money would be needed.

The improvements to 721 N. Main have resulted from work done by a North Main Huron River corridor task force that has been working at the direction of the city council since the summer of 2012 to make recommendations for the corridor.

Of the $1.2 million estimated cost for the planned trail and stormwater improvements to the site, the city plans to use $150,000 from the city’s stormwater fund. To cover part of the remaining $1.05 million, the city hopes to use $600,000 from a grant it has applied for from the Michigan Dept. of Transportation (MDOT) and the Southeast Michigan Council of Governments (SEMCOG) – through SEMCOG’s transportation alternatives program (TAP).

The council approved the application for the SEMCOG grant at its April 15, 2013 meeting. To cover the remaining $450,000, the city hopes to use $150,000 from a Washtenaw County Parks & Recreation Connecting Communities grant and $300,000 from the Michigan Natural Resources Trust Fund (MNRTF) grant. The council approved the application for those last two grants at its Dec. 17, 2012 meeting.

The council’s resolution considered on June 17 came in response to an MNRTF grant requirement that the council commit the city to funding the other grants itself – from general fund money – if those grants fail to materialize. The $750,000 figure comes from adding the $600,000 SEMCOG grant to the $150,000 Washtenaw County Parks & Recreation grant.

Commitment of $750,000 for 721 N. Main: Public Commentary

During public commentary time at the start of the meeting, Bob Galardi addressed the council on the MDNR grant application in connection with the city-owned property at 721 N. Main. He’s a member of the city’s park advisory commission, but spoke on behalf of the Allen Creek Greenway Conservancy. He’s president of the conservancy’s board. Galardi asked the council for their support of the resolution that commits the city to as much as $750,000 of general fund money for the project. The conservancy, he said, is confident that the grant funding for which the city has applied will materialize. [That would mean that the city wouldn't need to spend that money.]

Commitment of $750,000 for 721 N. Main: Council Deliberations

When she introduced the item, Sabra Briere (Ward 1) stressed that the commitment the council was being asked to make is not an expenditure.

Mike Anglin (Ward 5).

Jane Lumm (Ward 2) thanked Briere for her service on the North Main Huron River task force. Lumm indicated support for the resolution. Stephen Kunselman (Ward 3) wondered if any park millage dollars would be spent on this project. Briere noted that the property is not yet a park. When will it be a park? asked Kunselman. That’s a decision for the park advisory commission (PAC), not for her, Briere responded.

Christopher Taylor (Ward 3), who serves as an ex officio member of PAC, noted that park staff are sensitive to the funding requirements of maintaining existing parks. Mayor John Hieftje described the general context of two city-owned properties – 415 W. Washington and 721 N. Main – and how those properties fit into the context of greenway planning. Hieftje talked about the need to focus on the provision for long-term maintenance.

Mike Anglin (Ward 5) said it’s important that this resolution commits money. Anglin said a chain of parks through the city – like the greenway – would have a positive economic impact.

Outcome: The council voted to commit the funds for the 721 N. Main site.

Pizza in the Park

Several speakers addressed the council in connection with a petition they delivered to the city – a copy of which was attached to the council’s electronic agenda. The petition asked the council to take action to ensure that no fees are required to be paid by organizations that are providing humanitarian aid in the city’s parks.

The general petition stemmed from concerns about protecting a specific event – Pizza in the Park, a homelessness ministry of the Vineyard Church that includes distribution of food and other aid at Liberty Plaza, located at Liberty and Division streets in downtown Ann Arbor. A few months ago, the parking of a vehicle in a private driveway and the subsequent application of a park shelter rental fee by the city led to protests raised during public commentary at the council’s May 20, 2013 meeting. Assurance was given at that meeting that the Pizza in the Park event could continue. That was affirmed when speakers again addressed the issue at the council’s June 3, 2013 meeting.

Speakers on those occasions – many who are affiliated with Camp Take Notice, a self-governed homeless community – asked for a written assurance of the city’s commitment. During council communications time on June 17, Christopher Taylor (Ward 3), who serves as one of two city council ex officio representatives to the city’s park advisory commission (PAC), announced that PAC would be considering a related resolution at its meeting the next day. And on June 18, 2013 PAC considered and passed a resolution recommending the waiver of rental fees associated with Liberty Plaza – a waiver that would apply to any group. That recommendation will need the approval of the city council.

First to address the council on the topic during June 17 public commentary was Peggy Lynch, who took the podium to applause. She described an unmet and tragic humanitarian need in Ann Arbor. She thanked the council for the eliminating the fee that was being applied to Pizza in the Park at Liberty Plaza. But she was hopeful that the gentleman’s agreement could be replaced with something in writing. David Williams echoed the request for a written commitment.

Thomas Partridge assured the council that if he were elected mayor or councilmember, he would be giving voice to the concerns of the residents of Camp Take Notice. He called for the advancement of Dr. Martin Luther King’s civil rights agenda. He recalled King’s “I have a Dream” speech.

Jose Galofre addressed the council through a sign language interpreter, calling for the passage of an ordinance – put down in writing for the future to ensure that fees would not be applied to Pizza in the Park. Michael Ramirez told the council he has medical issues that require him to go to the University of Michigan health system, and he spoke in support of Pizza in the Park ministry. Christine Kern told the council she lives on the street with her boyfriend. They’d be sleeping outside that night. She recited a definition of basic human rights, and asked the council to enact an ordinance that protects the right to distribute humanitarian aid on public land.

At the end of the meeting during public commentary time, Seth Best and Peggy Lynch again addressed the council on the idea of the fee waiver for Liberty Plaza. They wanted something in writing – and they wanted it to be possible for humanitarian aid to be distributed in any park.

Caleb Poirer quipped that it felt wonderful staying up late with the council. [By that point, it was about 12:30 a.m.] It reminded him of staying up late as a kid, but with adults – just without “the blankets and the socks with the bottoms.” He allowed that there was a concern that someone could drive a semi-trailer truck through the loophole of the phrase “humanitarian aid.” But he asked the council to wrestle with the language that would make an ordinance work to allow humanitarian aid to be distributed. There are a lot of people who want to do kind things, he said, and urged the council not to let fees get in the way.

Outcome: This was not a voting item.

Millage Rate Correction

The council was asked to correct a .0031 error in the specification of the rate of the FY 2014 tax levy for the city’s park maintenance and capital improvements millage. The FY 2014 fiscal year begins on July 1.

The millage rate that was listed in the FY 2014 budget resolution – approved by the council at its May 20, 2013 meeting – was 1.0969 mills. The park maintenance and capital improvements millage should have been listed as 1.10 mills. The corresponding correction from the total millage rate was from 16.4470 to 16.4501 mills. Measured in dollars, the correction is estimated to bring in an additional $14,460 in revenue.

Outcome: After a brief introduction from Christopher Taylor (Ward 3), the council approved the correction to the millage rate.

Police Unions Wage Bump

The council was asked to approve contracts with city police unions that award 2% and 1% wage increases.

Re-openers for the final year of their contracts resulted in new contracts with six police department unions: Teamster Civilian Supervisors, Teamsters Local 214; Police Professional Assistants, Teamsters Local 214; Ann Arbor Police Officers Association – Police Service Specialists; Command Officers Association of Michigan; Ann Arbor Police Officers Association; and Deputy Chiefs, Teamsters Local 214.

Membership in these unions breaks down as follows: Deputy Chiefs (2); Teamster Civilian Supervisors (35); Teamster Police Professionals (5); AAPOA (90); COAM (22); and Police Service Specialists (5).

Common to all the contracts is a 2% wage increase starting July 1, 2013 and a 1% increase starting Jan. 1, 2014.

Also common to the contracts is the acceptance of the change in pension board composition, which was approved by voters on Nov. 8, 2011 with a 68% majority. The change retained the body as a nine-member group but distributed the membership differently, as follows: (1) the city controller; (2) five citizens; (3) one from the general city employees; and (4) one each from police and fire employees. Eliminated from the mix was the city administrator.

Marcia Higgins (Ward 4) thanked the staff for their work. It’s the first time since she’s been on council that all the contracts have been resolved before expiration, she said. Jane Lumm (Ward 2) thanked the staff and recited the nature of the agreements.

For the AAPOA an administrative correction was made to the phone allowance – $600, instead of $550.

The council voted to approve all the police department union contracts.

Resolution on SEMCOG Highway Plan

The council considered a resolution opposing the proposed expansion of I-94 in Detroit and I-75 in Oakland County.

Chuck Warpehoski (Ward 5).

The Washtenaw County board of commissioners had passed a similar resolution at its June 5, 2013 meeting. The interstate highway expansion is a part of SEMCOG’s 2040 Regional Transportation Plan with an estimated cost of $4 billion.

Chuck Warpehoski (Ward 5) stated that there are a lot of good elements in the SEMCOG plan. But there are not forecasts for additional traffic and population, so it didn’t make sense to expand the highways instead of maintaining them.

Warpehoski then quoted Picasso in explaining where the text for the resolution had come from: “Good artists copy, great artists steal.” He’d copied much of the resolution from resolutions that have been passed by other municipalities.

Outcome: The council voted to pass the resolution opposing SEMCOG’s 2040 plan. SEMCOG’s general assembly subsequently voted to adopt the plan.

Annual Contracts: SPARK, Lobbyist

As part of its consent agenda, the council was asked to approve two annual contracts for services at its June 17 meeting. One was a $48,000 contract with Governmental Consultant Services Inc. (GCSI) for lobbying services with the state legislature. The council also approved a $75,000 contract with Ann Arbor SPARK for business support services.

Items on the consent agenda are considered routine, and include contracts for less than $100,000. They’re voted on as a group.

The contact with the economic development agency Ann Arbor SPARK is one that 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 the 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. The resolution authorizing the $75,000 contract with SPARK again this year describes the organization’s focus 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, for a TIF district consisting of the union of the Ann Arbor and Ypsilanti Downtown Development Authority districts.

Revenue is generated only in Ann Arbor’s district, and the LDFA is a component unit of the city’s budget. In the FY 2014 budget, the LDFA is expected to receive $1,655,647 in revenue. 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.

GCSI’s Kirk Profit, an Ann Arbor area resident and former member of the state House of Representatives, 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.

Outcome: As part of the consent agenda, councilmembers approved contracts with GCSI and Ann Arbor SPARK.

Council Rule Changes

The June 17 agenda included an item related to changes in the council rules. Possible changes include adding a period of public commentary to the council’s work sessions, but reducing public speaking time per turn from three minutes to two minutes. [.pdf of draft rules changes]

The procedure for reserving one of the 10 reserved speaking slots at the start of the meeting is also proposed to be revised. Only people who did not address the council at its immediately previous meeting would be eligible to reserve a slot. And of the 10 slots, eight would be designated for people who want to address the council on agenda action items. Two slots would be provided for those who want to address the council on any topic.

Councilmember speaking time is also proposed to be reduced. Councilmembers are allowed two speaking turns per agenda item. Under the current rules, time limits for those speaking turns are five minutes for the first turn and three minutes for the second turn. Under the proposal, those times would be reduced to three minutes and two minutes, respectively.

The proposed addition of an opportunity for public commentary at council work sessions would ensure that councilmembers could freely deliberate toward public policy decisions at those sessions and still conform to Michigan’s Open Meetings Act.

The proposed rules changes would move mayoral communications from the end of the meeting to a spot closer to the start of the meeting. That would give nominations to boards and commissions – which are a part of those communications – somewhat greater prominence.

[For previous Chronicle coverage, see: "Council Mulls Speaking Rule Changes."]

Council Rules Changes – Frequent Speakers

A consequence of reducing the speaking time limit from three minutes to two minutes is that the total speaking time a single speaker could take at a meeting would be reduced by one-third. It’s not unusual for a meeting to include a half dozen or more formal public hearings, in addition to the public commentary slots on the agenda. The June 17 meeting, for example, featured seven public hearings. With a three-minute time limit, it’s not uncommon that one person could have a total of about a half hour available to address the council.

Thomas Partridge typically reserves one of the 10 slots at the start of the meeting and speaks at most of the public hearings at any given meeting of the council – generally connecting his remarks to the topic of the hearing with general themes of affordable housing, transportation and education, as well as calls for social justice. Occasionally mayor John Hieftje, who presides over the council’s meetings, will deem Partridge’s remarks to be insufficiently related to the topic of the public hearing and admonish Partridge to stay on topic. The June 17 meeting featured one occasion when Hieftje offered that admonishment to Partridge.

And at the conclusion of the meeting’s seventh public hearing – on the brownfield plan for Packard Square – after  Partridge had held forth several times at previous hearings, Ann Arbor resident Todd McWilliams addressed the council, but not on the topic of the brownfield plan for Packard Square. He told the council he’d attended several of the council’s meetings over the last six months and wanted to address Partridge. McWilliams told Partridge that Partridge was doing an injustice to the public hearings, and was abusing the council’s time. At that point, McWilliams earned an admonishment from Hieftje to speak to the topic of the hearing.

Partridge responded to McWilliams from the audience by accusing McWilliams of abusing Partridge’s civil rights. McWilliams said: “There’s got to be another way of doing this; because this isn’t the right way to do it.” Partridge’s rejoinder was: “See you in court.”

Council Rules Change: Public Comment

During public commentary time at the conclusion of the meeting, two people addressed the council on the topic of the rules changes.

Jane Lumm (Ward 2) and resident Michael Benson. Benson serves on the city’s taxicab board.

Michael Benson thanked the council for staying late. He commended the rules committee, saying that the proposed rules represent a step forward. He suggested that reducing the speaking time from three minutes to two minutes might not be so bad, given that when people hand over written remarks to the clerk, those documents can eventually be added to the agenda. He told the council they should consider constraining their own question time during the meeting – as that was where the council spent the majority of its time. He also suggested that reserved time at the start of the meeting be confined to true action items.

Jeff Hayner thought it’s great that someone talked about the rules. He agreed with Benson’s point about the ability to submit written remarks. He suggested, however, that some of the time saved through a reduction in speaking time be re-allocated to council discussion of items that sometimes didn’t receive much discussion – like the appointments to boards and commissions.

Council Rules Changes: Deliberations

Council conversation was scant. Marcia Higgins (Ward 4), chair of the council’s rules committee, said she’d like to see the item postponed. By way of background, the council’s current meta-rule on changing the rules requires that the council be notified of changes at the meeting prior to a vote on the changes – which had not happened yet. The proposed rules revisions include a change to that meta-rule.

Outcome: With no further discussion, the council voted to postpone the rules changes until July 1.

Appointments

The June 17 agenda included several items regarding appointments to city boards and commissions.

The council was asked to confirm the extension of Sabra Briere’s (Ward 1) appointment as the councilmember representative to the planning commission. She’s served in that capacity since November 2012. The council was asked to extend the term through Nov. 7, 2013. At that point the membership on the new, post-election city council will be settled. Briere is unopposed in the Democratic primary. An independent candidate, Jaclyn Vresics, has taken out petitions for that seat but has not yet filed them with the city clerk’s office. The deadline for independent candidates to submit petitions is Aug. 7.

Later, toward the end of the meeting, the council was asked to confirm Bonnie Bona’s reappointment to the planning commission.

Although Tony Derezinski had appeared on the list distributed to the council at its June 3 meeting as a nomination to the city planning commission – and was reported (mistakenly) by The Chronicle as having been nominated – Derezinski’s name was not actually read aloud that evening. The Chronicle learned that there was pushback on the council about Derezinski’s nomination for reappointment. He was filling out the remainder of Evan Pratt’s term – through June 30, 2013. Pratt was elected as Washtenaw County water resources commissioner in November 2012 and resigned from the planning commission at that time.

At the council’s Nov. 8, 2012 meeting, councilmembers had voted – over dissent from Jane Lumm (Ward 2) – to appoint Derezinski to that partial planning commission term. Up to that point, he’d served as the city council’s representative to the planning commission. However, he did not prevail in the August 2012 Democratic primary in his Ward 2 race against Sally Petersen.

On June 17, Jeremy Peters was nominated to replace Derezinski on the planning commission. Peters works in creative licensing and business affairs with Ghostly Songs. A council vote to confirm his appointment will occur on July 1.

Other appointments the council was asked to confirm on June 17 included members of the downtown area citizens advisory council: John Chamberlin, Ray Detter, Joan French, Jim Kern, Sue Kern, Kathleen Nolan, Herbert Kaufer and Hugh Sonk. They had been re-nominated at the council’s June 3 meeting, having first appeared on the council’s May 13 meeting agenda for reappointment. The names had not been presented to the council for confirmation on May 20. The terms of all the members had expired.

Also at its June 17 meeting, the council was asked to confirm LuAnne Bullington’s nomination to the taxicab board, having been nominated on June 3. Bullington had submitted an application to serve on the board of the Ann Arbor Transportation Authority earlier this year, which resulted in a divided vote by the council on the nomination that was put forward by mayor John Hieftje – Eric Mahler. Mahler was confirmed on a 7-4 vote as the AATA board appointment at the council’s May 13, 2013 meeting. He recently ended his service as a planning commissioner.

Other reappointments confirmed on June 17 were: Barbara Clark to the cable communications commission; Paul Fontaine and Chester Hill to the design review board; and Tom Stulberg to the historic district commission.

In the last few months, the council has taken an increased interest in mayoral appointments. That’s reflected in a change recommended by the council’s rules committee – to move the mayor’s communications time closer to the start of the meeting, instead of near the end. The mayor’s communications include nominations to boards and commissions and the council’s confirmation votes.

Outcome: The council voted unanimously to confirm all the appointments.

Communications and Comment

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

Comm/Comm: Public Safety

Jane Lumm (Ward 2) alerted her colleagues that a resolution regarding a public safety task force that she wants to form will be on the council’s July 1 agenda.

Comm/Comm: Stop Signs

Mike Anglin (Ward 5) called for a focus on safety as people move around the city during the summer. He called for the installation of stop signs to slow traffic on streets over which the city has control.

Comm/Comm: Affordable Housing

Thomas Partridge expressed disappointment with the council and the mayor for leaving the city without sufficient affordable housing. He said they lack the courage to stand up and bring the facts to the voters for support of tax increases to fund what’s needed.

Comm/Comm: AAHC Complaint

Diane Chapman introduced herself as a resident of Ann Arbor Housing Commission properties. She reported that she’s been physically attacked on the property and complained about the lack of response by AAHC staff.

Present: Jane Lumm, Mike Anglin, Margie Teall, Sabra Briere, Sumi Kailasapathy, Sally Petersen, Stephen Kunselman, Marcia Higgins, John Hieftje, Christopher Taylor, Chuck Warpehoski.

Next council meeting: Monday, July 1, 2013 at 7 p.m. in the second floor council chambers at city hall, 301 E. Huron. [Check Chronicle event listings to confirm date]

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DDA board chair Leah Gunn at the April 3, 2013 board meeting. (Photos by the writer.)

The proposed amendments to Chapter 7 of the city code, given initial approval at the council’s April 1, 2013 meeting, would reduce the DDA’s TIF capture by roughly $931,000 for FY 2014 – compared to the amount the DDA would receive based on the DDA’s current interpretation of the ordinance. But in adopting its two-year budget recently, DDA did not factor in recent building projects in the downtown – which add to the increment on which the DDA can capture taxes, starting in FY 2014.

So compared to the amount of TIF revenue in the DDA’s adopted FY 2014 budget, the clarified calculations would result in only about $363,000 less TIF revenue for the DDA. And compared to the DDA’s adopted FY 2015 budget, the clarified calculations would result in about $74,000 less revenue than budgeted. The clarified calculations would result in TIF revenue to the DDA in FY 2014 and FY 2015 of $3.570 and $3.682 million, respectively.

A dispute on the clarity of the existing Chapter 7 language had emerged in May 2011 just as the DDA and the city were poised to sign a newly renegotiated agreement under which the DDA manages the public parking system. At that time, the city’s financial staff reportedly first noticed the implications of an existing Chapter 7 paragraph that appears to place a cap on the DDA’s TIF capture – a cap that’s calibrated to projections in the DDA’s TIF plan. The TIF cap rises each year based on forecast growth in the DDA’s TIF capture district.

Several board members weighed in on the issue during the April 3 meeting. The idea of any kind of cap – let alone one that’s based on estimates contained in the appendix of the DDA’s TIF plan – was sharply criticized by Joan Lowenstein, who characterized the approach as based on “a fallacy.” She also called the idea of a cap poor public policy. However, both the cap and its basis are already in the existing ordinance language that the city council’s ordinance amendment seeks to clarify.

Roger Hewitt took the board’s meeting as an opportunity to question whether the ordinance amendments actually clarify how the calculations are to be done, contending that he’d come up with different results than the city treasurer, starting from the same ordinance language. He cautioned that the DDA’s financial planning and the DDA’s budget would need to be re-evaluated – allowing for no “sacred cows” – if the council gave final approval to the ordinance changes.

Russ Collins contrasted the amount of net revenue received by the city from the geographic area of the DDA district before the DDA was established back in 1982, compared to today. The net proceeds from taxes and the public parking system (which lost about $250,000 a year during that era) came to about $1.25 million 30 years ago, according to Collins. Today, the city receives nearly $8 million annually – around $4 million in taxes, $3 million in parking revenue, and a grant to the city of roughly $0.5 million a year toward debt on the city’s new Justice Center building.

Bob Guenzel focused his remarks less on the financial side and more on the aspects of the ordinance change that would restrict future board membership. He saw no benefit to the proposed DDA term limits, noting that the city council has an opportunity to end a DDA board member’s service by deciding not to re-appoint someone to the board. John Mouat was critical of the proposed ordinance changes that would prevent elected officials of taxing jurisdictions from serving on the board, saying he’d found the participation of politically-connected people to be beneficial to the board.

The extended remarks by board members on the topic came in the context of a 7-3 vote by the city council on April 1, giving initial approval of the ordinance changes. [Christopher Taylor (Ward 3) was absent from the meeting of the 11-member council.] A second vote, expected at the council’s April 15 meeting, would be required to enact the changes. Based on their remarks made at the council table, two of the seven votes in support of the changes – by Marcia Higgins (Ward 4) and Sabra Briere (Ward 1) – were widely read as likely to change at the second vote. Ordinance changes require a six-vote majority.

In addition to discussion of the possible ordinance changes, the DDA heard its usual range of committee reports, including the monthly parking update. Public commentary related to a possible artificial ice-skating rink atop the Library Lane underground parking garage.

Chapter 7 Ordinance Amendments

On April 1, the Ann Arbor city council gave initial approval to a set of changes to Chapter 7 of the city code, which governs the Ann Arbor Downtown Development Authority.

Chapter 7 Amendments: Background

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 DDA district.

In the first category, the revisions to Chapter 7 that were given initial approval by the council included: a new prohibition against non-mayoral elected officials serving on the DDA board except by agreement with the other taxing jurisdictions; term limits on DDA board members; and a new requirement that the DDA submit its annual report to the city in early January.

Another amendment stipulates that if tax increment financing is used as the financing method for an approved authority project, the project must meet one of the DDA’s adopted plan goals. Among those plan goals is support of housing. The amendment provides the ability of the DDA to make investments in properties not strictly in the district, but also in neighborhoods near the district.

More significantly, the council gave initial approval to proposed revisions to Chapter 7 that would clarify how the DDA’s TIF tax capture is calculated. The “increment” in a tax increment finance district refers to the difference between the initial value of a property and the value of a property after development. The Ann Arbor DDA captures the taxes – just on that initial increment – of some other taxing authorities in the district. Those are the city of Ann Arbor, Washtenaw County, Washtenaw Community College and the Ann Arbor District Library. For FY 2013, the DDA will capture roughly $3.9 million in taxes.

The proposed ordinance revision would clarify existing ordinance language, which includes a paragraph that appears to limit the amount of TIF that can be captured. The limit is defined relative to the projections for the valuation of the increment in the TIF plan, which is a foundational document for the DDA. The result of the clarification to the Chapter 7 language would mean about $363,000 less TIF revenue for the DDA in FY 2014 – compared to the $3.933 million shown in the DDA’s adopted budget for that year. For FY 2015, the gap between the DDA’s budget and the projected TIF revenue – using the proposed clarifying change to Chapter 7 – is just $74,000.

However, the total increment in the district on which TIF is computed would show significant growth. And under the proposed clarification of Chapter 7, that growth would result in a return of TIF money to other taxing jurisdictions – that would otherwise be captured by the DDA – totaling $931,000 each year for FY 2014-15. The city of Ann Arbor’s share of that would be roughly $559,000, of which $335,000 would go into the general fund. The city’s general fund includes the transit millage, so about $69,000 of that would be passed through to the Ann Arbor Transportation Authority.

The amount of TIF capture that’s returned to the other taxing jurisdictions is tied to growth in the valuation by the Chapter 7 language. Under Chapter 7, if the actual rate of growth outpaces the growth rate that’s anticipated in the TIF plan, then at least half the excess amount is supposed to be returned to the other taxing authorities in the DDA district. In 2011, the DDA for the first time returned excess TIF capture to other authorities, when the existence of the Chapter 7 language was reportedly first noticed. At that time, the DDA made repayments of TIF monies to other authorities of around $400,000, which covered what was owed going back to 2003. When the DDA calculated the amounts owed in 2011, the city of Ann Arbor waived its roughly $700,000 share.

In 2011, the DDA used a year-to-year interpretation of the Chapter 7 language instead of computing rate of growth against the base year in a cumulative fashion. That is a point that the Chapter 7 revisions would clarify. At the two previous meetings when the council had considered but postponed voting on the ordinance amendments, that specific point had not been addressed. But the substitute ordinance revision offered on April 1 clarified the current language in favor of the cumulative methodology. Previously, the council had postponed voting at its March 18, 2013 and March 4, 2013 meetings.

The figures below come from the city of Ann Arbor’s financial services staff. Labels are The Chronicle’s.

MOST RECENT PROJECTIONS FOR TIF CAPTURE (in millions)
 FY 13   FY 14  FY 15
========================== 
 3.957   3.933  3.756  DDA Adopted Budget TIF Revenue
 3.957   4.501  4.613  Projected TIF, DDA View 
 3.957   3.570  3.682  Projected TIF, Clarified Ch. 7
          .568   .857  Budgeted vs Projected, DDA View
         (.363) (.074) Budgeted vs Projected, Clarified Ch. 7
==========================

ADDITIONAL REVENUE FROM CLARIFIED CH. 7
 FY 13   FY 14  FY 15
========================== 
          .335   .335  City General Fund
          .223   .223  City Non-General Fund
          .559   .559  Total City

          .372   .372  Total AADL, WCC, WC
          .931   .931  Total

-

These projections do not include the capture that would result in future years from completion of City Apartments, 624 Church, 618 S. Main, or 413 E. Huron (assuming that it is approved).

Chapter 7 Amendments: DDA Director Summary

Susan Pollay, executive director of the Ann Arbor DDA, gave the board an update on the city council’s action on April 1. She reported to the board that a fair number of questions had been asked and answered – via e-mail preceding the meeting and also during the meeting that evening. She characterized the ordinance changes as involving three main points. The first relates to the definition of the DDA’s tax increment finance (TIF) capture – which would reduce the amount received by the DDA by imposing what Pollay called a “permanent cap.” [The cap induced by the ordinance is keyed to the estimates in the TIF plan, which increase each year. That is, the cap Pollay described is not a fixed amount, but rather increases each year.]

Pollay explained that there are some confusions about the interpretation of the current ordinance – saying that if the annual (year-to-year) method is used, that would have some impact but not as dramatic an impact on the TIF capture as the cumulative method. So there have been questions about why that particular interpretation has been used.

The second point Pollay characterized as an elimination of the DDA’s obligation for its bond issuances. She noted that the DDA has responsibility for $67 million worth of projects – including the parking deck component of the City Apartments project, Fifth and Division streetscape improvements, and the Library Lane parking garage project.

Pollay described the ordinance revision as eliminating the language now in the ordinance that relates to bond obligations. She then quoted out the relevant section. She characterized it as a pretty significant policy change, with respect to the DDA’s obligation to its debt service. [The DDA interprets the language to mean that it's entitled to full TIF capture as long as its total debt service requirements exceed the amount of TIF captured. However, on a different interpretation, the language simply means: Of the TIF that is received, first to be paid is debt service, followed by other distributions in support of the development plan for the purpose of the DDA's existence, followed by possible return of surplus TIF to the taxing jurisdictions.]

The final issue, Pollay said, has to do with governance. She observed that there are relatively few boards and commissions that have term limits – and other than the park advisory commission, she wasn’t aware of any. [The greenbelt advisory commission (GAC) also has term limits, a point highlighted at the commission's April 4, 2013 meeting.] The proposed ordinance revisions would impose term limits for the DDA board and would eliminate elected officials from future participation on the board, Pollay said. The ordinance revisions would also potentially allow the mayor to serve on the DDA board, she noted, but that would be on a year-to-year basis.

She summarized the changes by saying that: the TIF capture would be affected pretty dramatically; there would be no further connection between the DDA and debt service for the DDA’s projects; and term limits would be imposed on the board members. She noted that the council had approved the ordinance revisions at first reading, and the second reading would be coming at the council’s April 15 meeting. At that meeting there would be a public hearing as well, Pollay noted.

Chapter 7 Amendments: Board Remarks – Financial

Bob Guenzel asked if the Ann Arbor DDA and the city were clear with “the rest of the world” about how TIF capture is to be calculated. Pollay replied by saying that the DDA had received charts from the city staff. The text of the ordinance itself as put forward, she said, is from her perspective not any more clear. She felt that five years from now if the city or the DDA were to look at it, she’s not sure that it would be clear.

Pollay reported that she and Roger Hewitt had met with city staff for the better part of a week. And using the same language as in the ordinance revision, Hewitt had arrived at different numbers from the city staff. According to the city staff calculations, the revised ordinance would reduce the TIF revenue to the DDA by $931,000 for FY 2014 [compared to the amount the DDA would receive based on its interpretation of the current ordinance language.] Compared to what the DDA has budgeted for FY 2014, the TIF revenue would be $363,000 compared to what the DDA had budgeted. And going forward, there would be a cap, she said.

DDA board member John Mouat. In the background is board member John Splitt.

John Mouat ventured that there are several downtown development authorities in the state, so it might be possible to seek guidance on interpretation based on how other DDAs compute TIF. Pollay noted that each downtown development authority is created by its own community – so it’s not one-size-fits-all. “Our own TIF has been around for quite a while,” Pollay said. She said that the Ann Arbor DDA had been operating under a shared understanding – but now has learned that not everybody in the present agrees with what was done in the past.

Hewitt said that as treasurer, he felt he had a fiduciary responsibility at least to talk about what the impacts of the ordinance changes are. The first thing he found disturbing and disappointing is that in his time on the DDA board, it’s the first time that the council has decided to take action without any prior consultation with the DDA on the impact.

By way of background, the council has actually taken action previously that has affected the DDA budget – without consulting the DDA. In 2007 the council reached into the DDA’s already adopted budget and changed an item on the same night it approved the city’s budget as a whole. From the May 21, 2007 city council minutes [Fund 0003 is the TIF fund]:

[FY 2008 budget] Amendment 11

Resolved, that the Downtown Development Authority fund (0003) expenditure budget be decreased by $1,600,000 to reduce the appropriated reserves for future capital construction projects.

On a voice vote, the Mayor [John Hieftje] declared the motion carried with one dissenting vote made by Councilmember [Joan] Lowenstein.

At the April 4, 2013 meeting, Hewitt continued, calling the council’s action this time “unprecedented,” saying “We have essentially been out of the loop.” It’s difficult to understand exactly what the goal is of the ordinance changes, he contended.

The two things Hewitt found most troubling about the ordinance changes were: (1) the change in the financial basis on which the DDA did its planning; and (2) remaining unclarity in the ordinance, despite the changes.

Hewitt said over the last few years the DDA has undertaken $67 million worth of infrastructure improvements to the downtown. A very detailed financial plan had been put forth, he said, the basis of which he said is in the ordinance – that debt service will be paid off before there was any rebate of TIF back to the taxing authorities. [This is an interpretation of the ordinance language that relies crucially on a specific reading of the phrase "as set forth above." In context, the phrase has an interpretation that is arguably different from the one on which the DDA is relying.] By changing that language, Hewitt contended, the city had changed the financial basis on which the DDA had put that plan forward. He likened the situation to changing the rules after the money was spent.

The second part, he said, is the confusion about how the TIF should actually be calculated – based on the annual method or the cumulative method. Hewitt contended that he had taken the language in the proposed ordinance change and come up with some calculations, and had met with city treasurer Matt Horning and the city’s chief financial officer Tom Crawford. The two city staff members had taken the same language and come up with an entirely different way of calculating it. Russ Collins interjected to confirm that it was the city’s numbers that were presented to the council. Hewitt confirmed that was the case, and said that he was not trying to say who was right and who was wrong. He noted that there is no formula in the revised ordinance language to guide the calculation. If the ordinance is supposed to bring clarity to how that is done, it certainly falls far short of it, Hewitt contended. It’s still open to interpretation, he said.

If the ordinance is enacted, the DDA needs to reevaluate its 10-year budget and its 10-year plan, based on the revised ordinance. But without some clarity about how the calculation is done, Hewitt said, the DDA cannot make projections about how to adjust its long-range plan. Assuming the clarity can be achieved on how the calculations are done, Hewitt said he felt the DDA needs to reevaluate its budgets and its 10-year plan – based on a new reality. He felt that all the commitments in the DDA budget need to be examined. Everything would need to be put on the table. He felt there should be no “sacred cows” about what gets saved and what doesn’t.

What could be a small impact in the first two years could multiply to a larger impact in subsequent years, Hewitt contended. He felt the board’s operations committee needs to sit down and try to achieve some clarity, assuming that the ordinance is approved. And then the committee needs to reevaluate the DDA’s current budget and the 10-year plan, focusing on the DDA’s core mission: Infrastructure improvement to encourage economic development of the downtown. He said the DDA would be remiss in its financial responsibilities if it did not take up that challenge.

Chapter 7 Amendments: Board Remarks – Policy Issues

Joan Lowenstein said she’d noticed some things in watching the city council deliberations the other night. She indicated that she identified with councilmember Sabra Briere with respect to the math part, which is also not Lowenstein’s strong point, Lowenstein said. Then Lowenstein sought to clarify what she was trying to say about Briere – not that math is not Briere’s strong point, but rather that this is what Briere herself had said. The remark drew a laugh from board members. DDA board chair Leah Gunn noted that Briere was in the audience. [Briere did not appear to take any offense at Lowenstein's comments.]

DDA board member Joan Lowenstein. Next to her is board member Keith Orr.

It’s really the public policy part of the question that bears examining, Lowenstein said. She identified two public policy issues.

First, when she previously served on the city council, whenever an ordinance change was being considered, it was considered important to look at it much more strictly than you would if it were simply a resolution. That’s because ordinances are in a sense “written in stone” – or at least the digital equivalent of that, Lowenstein said. So when you’re making an ordinance change, she said, you’d better make awfully sure that this is something you really want to be there for a very long time.

And this ordinance change is based on calculations that nobody agrees on, Lowenstein said. Those calculations stem from the downtown development plan, which has an appendix, and the numbers in that appendix are estimates of what the growth will be in the downtown. So if the estimate for the first year is incorrect, she contended, then all the other estimates are also incorrect. So this ordinance is based on a “fallacy,” she concluded. And the calculations are based on fallacies. And that doesn’t make sense for an ordinance change.

On the second public policy issue, Lowenstein said, she felt that the original ordinance language that puts a kind of cap on the TIF capture was “misguided.” She had researched the history of the formation of the DDA. She contended that the only people who objected to the TIF capture were people who said: We really shouldn’t be taking money out of the schools. It was only the idea of taking school money that really got people stirred up, she contended. “Well, we don’t take school money anymore,” Lowenstein said. So the whole question about the DDA TIF capturing money that could be used for education is moot, she concluded.

As a matter of principle, if you’re looking at investment, whether it’s your own personal investment, or business investment, or in this case the city, Lowenstein continued, you don’t stop the investment at the point when you are doing well. After so much belt-tightening, she said, “we are now getting to the point where we can see that we are really doing well.” So this is not the time to stop investment, she said. The idea of a cap on something that continually increases your economy just doesn’t make sense, she contended.

Aside from all of the arcane mathematical questions about how you calculate things, Lowenstein felt fundamentally it’s a question of whether a cap is good public policy, and it’s clearly not, she contended.

Chapter 7 Amendments: Board Remarks – Positive DDA Impact

Roger Hewitt then offered a personal perspective on the history of downtown Ann Arbor. He has started working downtown shortly after the DDA was formed, he said. He’s been working downtown for nearly 30 years and has owned a business downtown for about 20 years. He felt there’s a tendency to look at the downtown now and think that it wasn’t that different 30 years ago – and that it won’t be that different 30 years from now. Having been here, he said, he could tell you that is simply not true. Thirty years ago the downtown was a rapidly declining retail area. It was in trouble. And it has now evolved into one of the most vibrant downtown areas – with dining and entertainment areas – that you can find in the country, or certainly in the Midwest.

Downtown Ann Arbor didn’t “just happen to” evolve, Hewitt said. If the DDA had not been there to build six new parking structures, to rebuild the sidewalks, and to reconstruct the two remaining parking structures, the downtown would not look the way it does now. The “city fathers and the city council” 30 years ago had the wisdom to recognize that there would need to be major infrastructure improvements, if the downtown was going to prosper in the long-term, Hewitt said. They had the wisdom to set money aside, knowing that there would always be a political demand to be able to use now what money you have now. But by putting that money aside, the DDA was able to invest in those infrastructure improvements that allow the transformation of the downtown.

Without parking to support people in stores and restaurants, Ann Arbor could not have evolved to what we have now, Hewitt said. He hoped that the current city government can look forward and say that we need to set money aside to be able to do those infrastructure improvements in the future – whatever they might be – so that “our children and grandchildren” can enjoy the kind of vibrant downtown that we have now. It doesn’t just happen, Hewitt said. You need to put money aside, to be able to do those sorts of improvements – whatever they look like in the future. You have to keep reinvesting, or you’re not going to have economic development, which seems to be everyone’s goal, he said.

So as soon as there is clarity from the city council, Hewitt said, the operations committee needs to focus on the budgetary changes that need to be made and what projects need to be removed or adjusted. The full board also needs to engage in a discussion on that.

Later in the conversation, Russ Collins adopted the framing of the issue that Roger Hewitt had used – comparing the time when the DDA was established in 1982 to now. Some back-and-forth between Hewitt and Collins established that in the early 1980s the city levied about $1.5 million worth of taxes in what is now the DDA district. And the parking system lost about $250,000 a year. So Collins put the net proceeds to the city of the DDA district in that era at about $1.25 million. According to Hewitt, the city today levies about $4.1 million worth of taxes a year in the DDA district, and receives about $3.1 million a year from gross parking revenues, not to mention the $508,000 for the police courts building. Collins called it a tenfold increase in revenue to the city compared to the time when there was no downtown development authority. That would not have happened, Hewitt said, if there had been no reinvestment in infrastructure.

During his remarks to the board, Ray Detter reported that some members of the downtown citizens advisory council (CAC) were bewildered by what he characterized as the negative attack on the DDA, because it seemed to some of the members to be irrational. The downtown requires special attention, he said. And the downtown development authority is especially equipped with a creative focus and the economic tools for strategic planning that allows for long-term community goals, Detter said.

Chapter 7 Amendments: Board Remarks – City-DDA Partners?

Mayor John Hieftje added that he shared Hewitt’s concerns about the budget, both long- and short-term. He said that one of the problems is that there is a “deficit in education” about what the DDA does. He felt that some of that lack of education had played out during the discussion by the city council and some of it has played out in the community. He also attributed part of the problem to the fact that there are some new councilmembers.

As the recession took place, and city governments across the state really found themselves in great difficulty, the city of Ann Arbor had made it through the recession with essentially the same millage rate as it had before, Hieftje said. Many cities across the state cannot say the same, he noted. He pointed out that in Grand Rapids, the income tax had been raised. [Ann Arbor does not have an income tax.]

But there was also a time during that period when the city needed some help, he noted, and the city had reached out the DDA. One of those times was when Washtenaw County had told the city that the 15th District Court had to move out of the county courthouse. So the city had embarked on a project to build a new police/courts building – and the DDA had “stepped up to the plate,” he said, and committed to that [in the form of an $8 million grant paid in roughly $508,000 million installments]. Implicit in that was an understanding, he felt, that the city would not turn around and change the DDA’s funding and its ability to uphold that commitment.

And then, he said, the city had reached out to the DDA and renegotiated the contract under which the DDA operates the public parking system – something that Hieftje said was not always an easy conversation. Implicit in that is the fact that the city and the DDA are partners, he said. Even though a lot was said on Monday night at the city council meeting, the partnership between the city and the DDA is something that hasn’t been explored enough, he said. The DDA has been an excellent partner for the city, Hieftje maintained – and the police/courts building, and the renegotiation of the parking agreement showed that. These were not actions that the DDA had to take, he contended. But implicit in all of that was the idea that the city would not then come back and pull the rug out from under the DDA.

Hieftje noted that he had a fiduciary obligation to both the DDA and the city – but he said he felt his greater priority was to the city budget. “We appreciate the help that the DDA has offered,” he said. Hieftje felt that more communication was needed to make sure that people are aware of the partnership between the city and the DDA. The commitments were made in good faith, Hieftje said. He hoped that the city would be able to uphold its side of the good-faith agreement.

Later in the conversation, Keith Orr picked up on Hieftje’s remarks, saying that the ordinance change had been a surprise to him. Although the relationship between the city and the DDA had included difficult discussions over the years, it’s been a relationship that has worked very well, he said. “Why are we fixing something that does not appear to be broken?”

Chapter 7 Amendments: Board Remarks – Board Composition

Bob Guenzel stressed how important the long-term fiscal stability had been for the DDA, and he did not think it was a good idea to change it. But he focused his remarks on the governance issues and the term limits. Guenzel noted that he had been involved with county government “for a while.” [An understatement – Guenzel worked at for the county for 37 years, including 15 years as county administrator.] He had observed that most boards and commissions do not have term limits. They have limits in the sense that every two or four years the appointing body can reappoint members. He noted that all the DDA board members were appointed with the approval of the city council. So the city council can limit a DDA term whenever they want to. It’s important also, he pointed out, to have a mix of people who are “seasoned,” and who can see the long-term, because they have been there from the beginning. He felt that there’s been a disadvantage of not having that seasoning in the state legislature, which now has term limits.

For a body such as the DDA, which is very focused on a specific mission, Guenzel thought it was very important to have folks who been a part of the mission, and who can carry that mission forward. He saw no reason to impose term limits on DDA board members.

Later in the conversation, John Mouat added that as a non-politically-connected sort of person, he wanted to express his gratitude, saying that he saw value in having people on the DDA board who know how things work at the city and county, and the machinations of it all. For those people who are not involved politically, he said, it’s difficult to understand how all the moving pieces work together. So he appreciated the elected officials being on the board. He also said he’d never had an experience where any of them had tried to coerce, or direct him in any way.

Monthly Parking Report

Roger Hewitt delivered the monthly parking report. The most recent monthly figures were for February 2012. He said that the operations committee is still working on getting more detailed reports on actual hours used. That will allow the DDA to get better insight into how the system is actually working.

Revenue for February 2013 was $1,532,504 compared to $1,362,989 last year – a 12.4% increase. That amount includes revenues from parking meters and from monthly permits. The number of hourly patrons in February 2013 was 172,385 compared to 174,492, or a drop of 1.2%.

The comparison was impacted by the fact that February 2012 was a leap year, with 29 days – something that Russ Collins highlighted. He contended that the reduced usage was almost entirely explained by a month with one less day. John Splitt also pointed out that it was colder this year.

Ann Arbor Public Parking System: Revenue

Ann Arbor Public Parking System: Hourly Patrons

Ann Arbor Public Parking System: Revenue per Space – System

Ann Arbor Public Parking System: Revenue Per Space – Surface Lots

Ann Arbor Public Parking System: Revenue per Space – Structures

Communications, Committee Reports

The board’s meeting included the usual range of reports from its standing committees and the downtown citizens advisory council.

Comm/Comm: Rail Station

Roger Hewitt told the board he’s part of a study committee that’s looking at station locations for north-south commuter rail service (WALLY). The committee had its first meeting, and a broad swath of the city is under consideration for a possible location – from Hill Street to Summit Street. [Initial reports from the Ann Arbor Transportation Authority indicate that a station stop along the track somewhere between Washington and Liberty streets is one strong possibility.] He noted that it’s an alternatives analysis, funded by money granted to the AATA from the federal government and the Michigan Dept. of Transportation. The study is in the preliminary information-gathering stage.

Comm/Comm: Bike House

John Mouat gave an update on the Bike House under construction in the Maynard parking structure. There’s a possibility that a soft launch to the facility will take place during bike-to-work week, which is May 13-19 this year.

Comm/Comm: Review of D1 Zoning

During his regular report from the downtown citizens advisory council (CAC), Ray Detter told the board that CAC supports the long-promised review of A2D2 zoning to make recommendations on revising the current D1 zoning district.

Comm/Comm: Ice-Skating Rink

During public commentary at the start of the meeting, Alan Haber noted that his group – which is advocating for an ice-skating rink to be installed on top of the Library Lane underground parking garage – had met with the DDA’s partnerships committee in the previous month. He reminded the board of the continuing effort to consider the space as a civic space – for community use, whether it is a commons or a park. Whatever the ultimate name of it is, he said, the idea is that the centrally located space should be developed for citizen use, for all the people, so that Ann Arbor has a central place, however you want to name it – a place that invites all the citizens as a whole.

While longer-term planning is going on – like the Connecting William Street project and the work being done by the park advisory commission’s subcommittee – Haber felt now is the opportunity for the Ann Arbor Downtown Development Authority to experiment with short-term uses that might draw the public to that space. The efforts to generate activity on top of the Library Lane parking structure should be integrated with programming efforts for Liberty Plaza, he said.

The concept for a temporary ice-skating rink took form last November, he told the board – as his group had found out about the possibility of using synthetic ice. Synthetic ice has been used in places where temperatures are not as cold as they used to be, or in the South, for recreational skating. So his group had developed a proposal based on that. And they are now dealing with a range of questions that their proposal has generated. How effective is the synthetic ice? How large a rink could be established?

Haber told the board that he expected his group would return to the next meeting of the partnerships committee with answers to several of those questions. He wanted to convey to the board that many people desire a central place in Ann Arbor that could begin to be called the heart of town.

Comm/Comm: Expand DDA Area, Sunday Parking Charges

Introducing himself as a recent candidate for representative of the 53rd District of the Michigan House, Thomas Partridge accused the DDA board of conducting its meetings as “shadow meetings” of the city council. He called on the city to reorganize the DDA’s charter to expand the downtown fiscal area – to include every important housing development within the city. The DDA should be given a new charter and a new purpose to provide adequate housing. He called Ann Arbor a segregated city that is not well-served by mayor John Hieftje and the Ann Arbor city council.

Partridge criticized the free parking that is provided on Sundays, saying that was giving away 1/7 of each week’s revenue, on the theory that people wouldn’t want to park on Sundays. A parking fee should be charged on Sundays, he said, even if it’s a reduced rate.

Present: Nader Nassif,  Bob Guenzel, Roger Hewitt, John Hieftje, John Splitt, Leah Gunn, Russ Collins, Keith Orr, Joan Lowenstein, John Mouat.

Absent: Sandi Smith, Newcombe Clark.

Next board meeting: Noon on Wednesday, May 1, 2013, at the DDA offices, 150 S. Fifth Ave., Suite 301, Ann Arbor. [Check Chronicle event listings to confirm date]

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The city’s public art ordinance requires that 1% of all capital project budgets be set aside for public art. Originally set to run through April 1, 2013, the temporary halt on spending – except on projects already in the works – will now be extended until May 31. The extension was approved by the council at its April 1 meeting. The three projects currently in the works are installations for East Stadium Bridges, a rain garden on Kingsley Street, and Argo Cascades.

The council had originally enacted the moratorium on spending at its Dec. 3, 2012 meeting. The action came in the context of a failed millage proposal in November 2012, which was meant to provide an alternative funding mechanism to the Percent for Art approach. The millage proposal was put forward in part in response to objections that voters had not explicitly approved the Percent for Art mechanism, which taps all capital funds – even those deriving from fees and millages designated for other purposes.

At the Dec. 3 meeting, a committee consisting of Sally Petersen (Ward 2), Sabra Briere (Ward 1), Stephen Kunselman (Ward 3), Margie Teall (Ward 4) and Christopher Taylor (Ward 3) was appointed to recommend amendments to the city’s public art program.

The committee has met several times and has made recommendations on revisions to the ordinance. However, the committee is not yet ready to convey its final recommendations to the full council.

Based on previous Chronicle coverage, the main recommendation would be to eliminate in the ordinance any reference to a specific percentage for art in a capital project budget. And art funds would not be pooled as they are now – which entails setting aside money from projects into which it would be difficult to incorporate public art. Under the approach likely to be recommended by the committee, city staff would work to determine whether a specific capital improvement project should have enhanced design features baked in to a project – either enhanced architectural work or specific public art. The funding for any of the enhanced features would be included in the project’s budget and incorporated into the RFP (request for proposals) process for the capital project.

Another likely recommendation is to encourage an outside organization to solicit funds for specific community‐generated public art projects. Such funds would go into a dedicated fund for public art.

The committee is likely to recommend an increase in the employment level of its public art administrator to more than half-time – whether that is a contract employee or a direct hire. The current public art administrator’s job, held by Aaron Seagraves, is a part-time position.

The committee is also likely to recommend evaluating the changes in the ordinance after three years.

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 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 DDA district.

In the first category, the revisions to Chapter 7 that were given initial approval by the council included: a new prohibition against non-mayoral elected officials serving on the DDA board except by agreement with the other taxing jurisdictions; term limits on DDA board members; and a new requirement that the DDA submit its annual report to the city in early January.

An amendment to the ordinance changes offered by Jane Lumm (Ward 2) was accepted as friendly. It was meant to assure a focus on the DDA’s support of housing. It stipulated that if tax increment financing is used as the financing  method for an approved authority project, the project must meet one of the DDA’s adopted plan goals. Among those plan goals is support of housing. Lumm’s change provides the ability of the DDA to make investments in properties not just in the district, but also in neighborhoods near the district.

More significantly, the council gave initial approval to proposed revisions to Chapter 7 that would clarify how the DDA’s TIF tax capture is calculated. The “increment” in a tax increment finance district refers to the difference between the initial value of a property and the value of a property after development. The Ann Arbor DDA captures the taxes – just on that initial increment – of some other taxing authorities in the district. Those are the city of Ann Arbor, Washtenaw County, Washtenaw Community College and the Ann Arbor District Library. For FY 2013, the DDA will capture roughly $3.9 million in taxes.

The proposed ordinance revision would clarify existing ordinance language, which includes a paragraph that appears to limit the amount of TIF that can be captured. The limit is defined relative to the projections for the valuation of the increment in the TIF plan, which is a foundational document for the DDA. The result of the clarification to the Chapter 7 language would mean about $363,000 less TIF revenue for the DDA in FY 2014 – compared to the $3.933 million shown in the DDA’s adopted budget for that year. For FY 2015, the gap between the DDA’s budget and the projected TIF revenue – using the proposed clarifying change to Chapter 7 – is just $74,000.

However, the total increment in the district on which TIF is computed would show significant growth. And under the proposed clarification of Chapter 7, that growth would result in a return of TIF money to other taxing jurisdictions – that would otherwise be captured by the DDA – totaling $931,000 each year for FY 2014-15. The city of Ann Arbor’s share of that would be roughly $559,000, of which $335,000 would go into the general fund. The city’s general fund includes the transit millage, so about $69,000 of that would be passed through to the Ann Arbor Transportation Authority.

The amount of TIF capture that’s returned to the other taxing jurisdictions is tied to growth in the valuation by the Chapter 7 language. Under Chapter 7, if the actual rate of growth outpaces the growth rate that’s anticipated in the TIF plan, then at least half the excess amount is supposed to be redistributed to the other taxing authorities in the DDA district. In 2011, the DDA for the first time returned excess TIF capture to other authorities, when the existence of the Chapter 7 language was reportedly first noticed. At that time, the DDA made repayments of TIF monies to other authorities of around $400,000, which covered what was owed going back to 2003. When the DDA calculated the amounts owed in 2011, the city of Ann Arbor waived its roughly $700,000 share.

In 2011, the DDA used a year-to-year interpretation of the Chapter 7 language instead of computing rate of growth against the base year in a cumulative fashion. That is a point that the Chapter 7 revisions would clarify. At the two previous meetings when the council had considered but postponed voting on the ordinance amendments, that specific point had not been addressed. But the substitute ordinance revision offered on April 1 clarified the current language in favor of the cumulative methodology. Previously, the council had postponed voting at its March 18, 2013 and March 4, 2013 meetings.

The figures below come from the city of Ann Arbor’s financial services staff. Labels are The Chronicle’s.

MOST RECENT PROJECTIONS FOR TIF CAPTURE (in millions)
 FY 13   FY 14  FY 15
========================== 
 3.957   3.933  3.756  DDA Adopted Budget TIF Revenue
 3.957   4.501  4.613  Projected TIF, DDA View 
 3.957   3.570  3.682  Projected TIF, Clarified Ch. 7
          .568   .857  Budgeted vs Projected, DDA View
         (.363) (.074) Budgeted vs Projected, Clarified Ch. 7
==========================

ADDITIONAL REVENUE FROM CLARIFIED CH. 7
 FY 13   FY 14  FY 15
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          .335   .335  City General Fund
          .223   .223  City Non-General Fund
          .559   .559  Total City

          .372   .372  Total AADL, WCC, WC
          .931   .931  Total

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These projections do not include the capture that would result in future years from completion of City Apartments, 624 Church, 618 S. Main, or 413 E. Huron (assuming that it is approved).

The initial approval was supported by Stephen Kunselman (Ward 3), Sumi Kailasapathy (Ward 1), Sally Petersen (Ward 2), Jane Lumm (Ward 2), Mike Anglin (Ward 5), Marcia Higgins (Ward 4) and Sabra Briere (Ward 1). Voting against it were mayor John Hieftje, Margie Teall (Ward 4) and Chuck Warpehoski (Ward 5). Christopher Taylor (Ward 3) was absent.

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]