In addition to condemning the right-to-work law and urging the state legislature to pass SB 95 and SB 96 – bills that would repeal the law – LaBarre’s resolution also “directs the county administrator and the director of human resources to engage in expedited negotiations, as requested by the unions, with the goal of reaching four (4) year agreements to protect and extend each bargaining unit’s union security provisions, as well as enter into a letter of understanding separate from the existing collective bargaining agreements for a period of ten (10) years.”

This is the same approach recently authorized by the Ann Arbor Transportation Authority’s board at its Jan. 17, 2013 meeting. [See Chronicle coverage: "AATA OK's Labor, Agency Fee Accords"]

LaBarre, who took office in early January, had previously indicated his interest in bringing forward a resolution opposing the right-to-work law. As chair of the board’s working sessions, he led a meeting on Jan. 3 with a lengthy discussion of that issue. [Chronicle coverage: "County Board Weighs Right-to-Work Response"]

The controversial right-to-work law was passed late last year by the Republican-controlled House and Senate, and signed by Republican Gov. Rick Snyder. The law, which takes effect in March, will make it illegal to require employees to support unions financially as a condition of their employment. It’s viewed by Democrats as a way to undercut support for labor organizations that have historically backed the Democratic Party. On the Washtenaw County board of commissioners, seven of the nine commissioners are Democrats, including LaBarre.

Unions represent 85% of the 1,321 employees in Washtenaw County government.

At the Feb. 6 meeting, Dan Smith attempted to ascertain the cost to the county of entering into these new union agreements, if they are challenged in court. Curtis Hedger, the county’s corporation counsel, said he didn’t want to speculate about possible costs. He indicated that costs could vary widely, depending on how a case plays out in court and whether it is appealed.

Smith characterized the language in the resolution as “over the top” and said it contained offensive rhetoric. He told commissioners that he had crafted two alternative versions of the resolution – one that eliminated the offensive rhetoric [.pdf of Dan Smith's alternative resolution #1], and another that removed language that was extraneous to county policy [.pdf of Dan Smith's alternative resolution #2]. However, he did not formally offer the resolutions for consideration.

Before the vote, LaBarre defended his own resolution, saying it was important to show support for the workforce and that some form of action is warranted in this situation.

The board later entered into a nearly three-hour closed session for the purpose of discussing labor negotiation strategy. The meeting adjourned at approximately 11:30 p.m.

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

In addition to formally condemning the right-to-work law and urging the state legislature to pass SB 95 and SB 96 – bills that would repeal the law – LaBarre’s resolution also “directs the County Administrator and the Director of Human Resources to engage in expedited negotiations, as requested by the Unions, with the goal of reaching four (4) year agreements to protect and extend each bargaining unit’s union security provisions, as well as enter into a Letter of Understanding separate from the existing collective bargaining agreements for a period of ten (10) years.”

This is the same approach recently authorized by the Ann Arbor Transportation Authority’s board at its Jan. 17, 2013 meeting. [See Chronicle coverage: "AATA OK's Labor, Agency Fee Accords"]

LaBarre – an Ann Arbor commissioner representing District 7, who took office in early January – had previously indicated his interest in bringing forward a resolution opposing the right-to-work law. As chair of the board’s working sessions, he led a meeting on Jan. 3 with a lengthy discussion of that issue. [Chronicle coverage: "County Board Weighs Right-to-Work Response"]

The controversial right-to-work law was passed late last year by the Republican-controlled House and Senate, and signed by Republican Gov. Rick Snyder. The law, which takes effect in March, will make it illegal to require employees to support unions financially as a condition of their employment. It’s viewed by Democrats as a way to undercut support for labor organizations that have historically backed the Democratic Party. On the Washtenaw County board of commissioners, seven of the nine commissioners – including LaBarre – are Democrats.

Unions represent 85% of the 1,321 employees in Washtenaw County government.

The county board’s Feb. 6 meeting begins at 6:30 p.m. in the county administration building at 220 N. Main in Ann Arbor.

AATA board member Roger Kerson argues against immediate action on Act 152, which limits the amount that public employers can contribute to employee health care. (Photos by the writer.)

That action meets the requirements of last year’s state Act 152, signed into law in September 2011, which limits employer contributions to a fixed dollar amount. But Act 152 also allows for the governing body of a public entity – in this case, the AATA board – to vote to cap the employer contribution at 80%, leaving 20% to be covered by employees. And that’s what the AATA board did at its June 21 meeting. Dissenting on the vote were Charles Griffith and Roger Kerson, who felt that the timing was perhaps too early – because the contract for AATA’s unionized workforce goes through the end of the year.

Based on the way that some other transit agencies in Michigan had handled their Act 152 compliance, Griffith and Kerson felt it might be possible to delay action for its non-union staff until AATA was required to act on its union workers’ health care costs. That approach is based on the idea that all employees participate in the same health care plan. However, the advice of the AATA’s own legal counsel was that Act 152 doesn’t explicitly provide for that uniform treatment of employees, just because they participate in the same health care plan.

Kerson urged that the board consider taking the AATA’s “windfall” from its compliance with the state law and reinvesting in non-health care compensation. Just because the state had given public entities a hammer, Kerson said, did not mean that they had to use it against their employees.

In other board action, the expenditure of funds for planning a north-south commuter rail project – from Howell to Ann Arbor, known as WALLY – was authorized. The money had previously been included in the AATA’s approved budget for fiscal year 2012, which ends Sept. 30, 2012. But the board had passed a resolution that requires explicit board approval before the money in the budget could be expended. AATA’s portion of the $230,000 in planning costs is $45,000, with the remainder contributed by a range of other public entities – the federal government, the city of Howell, the Ann Arbor Downtown Development Authority, and Washtenaw County.

Another planning effort that’s moving forward did not appear as a voting item on the agenda, but was included in CEO Michael Ford’s written report to the board: continued study of a possible Ann Arbor transit connector for a corridor running from US-23 and Plymouth southward along Plymouth to State Street and further south to I-94.

The AATA received a $1.2 million federal grant for an alternatives analysis phase of the study – which will result in a preferred choice of technology (e.g., bus rapid transit, light rail, etc.) and identification of stations and stops. That federal grant comes with the requirement of a $300,000 local match, which now appears to have been secured in the form of $60,000 from the city of Ann Arbor; $150,000 from the University of Michigan; and $90,000 from the AATA itself. A feasibility study for the connector has already been completed.

In other action, the board authorized the purchase of five new lift-equipped vehicles for its paratransit service. The five vehicles will replace existing vehicles that have reached the end of their useful life.

Another non-voting item on the meeting agenda, but one that was included in the CEO’s written report, was news of a collaboration between AATA and the Ann Arbor Public Schools. Starting this fall, the AATA will provide transportation for three existing school bus routes – one for each of Ann Arbor’s comprehensive high schools – by extending existing AATA routes. AAPS will pay AATA $0.50 for each student who boards, which will be counted with a pass that can be swiped through the fare box.

80/20 Health Care

The board considered a resolution in order to comply with the Michigan legislature’s Act 152 for non-union employees, which was signed into law on Sept. 27, 2011.

The law limits the amount that a public employer like the AATA can make to its employee’s medical benefits plans – $5,500 for single-person coverage, $11,000 for two-person coverage, and $15,000 for family coverage. However, the act provides another option – under which a public employer can choose through a vote of its governing body (in this case, the AATA board) – to not apply the hard dollar cap. Instead, the employer can limit its contribution to 80% of the medical benefit, leaving the employee to cover the remaining 20%. It’s this 80/20 option that the AATA board exercised in its June 21 vote.

As part of its compliance with the 80/20 provision, AATA put together health plan options for non-union employees that would essentially make their health care costs roughly the same as current costs – if they choose to opt for higher co-pays.

The options outlined for the board by its legal counsel were as follows:

1. Ignore the statute, stand in violation of the law, and continue providing benefits to management employees on a status quo basis (AATA pays 90% of premium, employee pays 10% of premium). (This option is not recommended to the Board).

2. Take the “CATA” (Lansing) approach to the law which is to adopt an exemption for one year for both union and non-union employees based upon the fact that both groups utilize the same health insurance benefit. CATA’s health insurance plan is selfinsured. This benefit is mutually negotiated with the Union, and therefore is temporarily exempt from the effects of Act 152 until January 1, 2013 (this option effectively “kicks the can down the road”). (This option has not been tested, and is not recommended to the Board.)

3. Take “The Rapid” (Grand Rapids) approach to the law which is to go on record that AATA’s 13-C agreement with the Union and the US Department of Labor prevents it from unilaterally making any changes to its health benefits, and since both the union and non-union employees are covered by the same plan, changes cannot be made in it until a new contract is negotiated January 1, 2013. (This option “kicks the can down the road”). (This option has not been tested, and is not recommended to the Board). [Note: Subsequently, it was learned that Grand Rapids has costs that are low enough to meet the fixed-dollar amount cap in Act 152.]

4. Take “The Metro” (Kalamazoo) approach and comply with the law by allowing the “cap” to become effective. This would limit AATA’s annual contributions to employee benefits to $5,500 for single, $11,000 for two persons, and $15,000 for family. (This option would do great economic harm to employees and is not recommended to the Board)

5. Comply with the law, elect the percentage alternative by a majority vote of the Board, and provide the 80% contribution to the employees’ health benefit plan offered by the Authority. Under Act 152, the employee will be responsible for the balance. (This option is recommended to the Board).

Before the board reached the item on its meeting agenda, Charles Griffith had reported from the performance monitoring and external relations committee that the committee had had a long discussion about revisions to health benefits offered to salaried staff. He noted that as a result of Act 152, there’s a cap on the amount that public employers can contribute to employee health care. But there’s an option in Act 152, Griffith explained, to waive the fixed-dollar amount cap and make a 20% contribution to employee health plan coverage.

AATA board member Charles Griffith.

The committee had looked to some of its “sister agencies” for guidance. Because – like AATA – both union and non-union employees are part of the same plan, some “sister” agencies had delayed implementation, Griffith said. Based on that idea, it was felt they could delay until the unionized workforce adopted a new contract. For AATA, that would translate to Jan. 1, 2013 instead of Aug. 1, 2012.

Griffith also reported that the committee had looked at other public bodies in the Ann Arbor area. They’d concluded that the AATA board, as an appointed board, did not have the ability to waive Act 152 altogether under the statute – which could be done on a 2/3 majority vote. [There was some confusion on the board as to how the city of Ann Arbor had handled Act 152 compliance, but city CFO Tom Crawford confirmed via an email to The Chronicle sent subsequent to the meeting that the city's benefits plan met the hard-dollar cap requirements of Act 152. The city council did not act to waive the requirements of Act 152.]

Griffith indicated that he uncomfortable jumping to the conclusion that the AATA needed to implement the requirements of Act 152 – which reduced non-union employee health benefits by half – as early as Aug. 1.

When the board reached the item on its agenda, Ed Robertson, AATA’s human resources manager, was asked to read the entire resolution into the record, which essentially followed option (5) – the 80/20 option. An alternative resolution, which was not considered by the board, would have delayed compliance with Act 152 until Jan. 1, 2013.

Griffith thanked Robertson and the rest of the staff for helping to find a solution to a problem that the state legislature had imposed on the AATA. The solution put a limit on the disruption of benefits that AATA employees receive. “It’s going to be a hit,” Griffith said. If you took the same health plan they have today, it would mean a doubling of the premiums, he said. Right now, employees pay about 10% of coverage – and this action would raise it to 20%. So what Robertson had worked out was a health care plan that increases co-pays and provides a plan option that’s similar to what they pay today, Griffith explained [Essentially, it's a way for employees to continue to pay the same amount for their health care coverage plan, with the caveat that the coverage plan isn't as good – due in part to the increased co-pays.]

Griffith explained that if the automatic fixed-dollar cap were implemented, that would reflect a four-fold increase in the amount that AATA employees would have to pay. So it’s incumbent upon the board to prevent the automatic fixed, hard-dollar cap from applying, Griffith said. That could be done by implementing the 80/20 option.

The only question, Griffith said was whether to delay the implementation of the Act 152 requirement, until all employees are affected – including the union employees. He based that approach on the way that some “sister transit agencies” have handled the issue. The legal opinion of the AATA’s counsel, Griffith said, is that there’s nothing in Act 152 that would explicitly allow that approach. However, Griffith indicated they’d also heard there’s little evidence that there would be any compliance action taken in the near term. By not taking action that night, it would buy employees another several months of coverage under their current plan, before the board had to take action at the end of the year.

“We’re reluctant to force this on the employees any sooner than we have to,” Griffith concluded.

Roger Kerson noted that the resolution had come from the AATA’s governance committee. The alternative resolution, Kerson said, would have followed the example of the transit agencies in Grand Rapids and Lansing by waiting to implement action until all employees were affected. The thinking was, said Kerson, “If it’s good enough for those guys, why not good enough for us?” In the Grand Rapids case, Kerson allowed, it turned out that the hard cap on dollar amounts was already met. He wasn’t sure why Lansing had taken the action it did.

Basically, Kerson said, the state legislature has imposed a cut in compensation for every public employee in the state of Michigan. What the AATA was doing is offering employees at least a choice of continuing to receive the same health benefit and to pay more for it, or pay the same for the plan, but pay higher deductibles. That’s an approach that is based on the idea that public entities are in trouble because public employees get paid too much, Kerson said, which he characterized as a “blissfully fact-free analysis that’s especially absurd in the context of [the AATA] …”

Kerson noted that AATA had addressed pension liabilities by creating a situation where employees contribute, if the pension fund performs under market. Retiree health care has also been addressed, he said. He said he’s asked the AATA’s auditor if there is some kind of unfunded liability that is being overlooked and the answer has been no, Kerson said. So the state’s “cookie-cutter” imposition of cutting costs is, for the AATA, a solution in search of a problem, Kerson concluded.

What’s on the table, Kerson stated, is whether the “solution” is imposed in August or in January. In any case, Kerson wanted to put on the record that AATA will have a “windfall” as a result of implementing Act 152. There’s no law about what the AATA does with the money, he said. The AATA could put more bells and whistles on the website or more benches in the Blake Transit Center – or the AATA could put that extra money back into compensation for employees. If the AATA did not put the extra money back into compensation, he’d want to know why, said Kerson. He’s more conformable with implementing in January, Kerson said, because that’s more consistent with treating all AATA employees as a team in a fair manner.

Ed Robertson, AATA's head of human resources.

CEO Michael Ford and Robertson confirmed that Grand Rapids was initially planning to exempt the non-union contract from Act 152 until the union contract came up for renewal. But after further analysis, Robertson said, it turned out that Grand Rapids was under the dollar amount cap in Act 152.

Sue Gott wanted clarification about the advice of the AATA’s legal counsel. Is there a clear preference between the resolution on the table and the alternative?

Robertson indicated that the AATA’s legal counsel has not seen the alternative resolution, and has given advice based only on the interpretation of Act 152 itself. The AATA’s labor attorney, David Kempner, was out of town that week, but the AATA’s counsel for general issues, Jerry Lax, had gone through Act 152. Robertson reported that Lax felt there’s no legal interpretation that allows the non-union employees to be grouped together so that Act 152 applies to non-union health care benefits only at the point when it applies to union health care benefits.

Kerson returned to his earlier point – that while the AATA’s legal counsel had reached one conclusion, it was not clear why the transit agency in Lansing had reached a different conclusion.

Robertson noted that more information had been obtained from Lansing – that CATA (the Capital Area Transportation Authority) has a self-insured health plan. That meant it’d be difficult to determine if the state’s mandate had been exceeded until the end of the year – because the agency would have to wait until the year’s end, and then charge back to the employees.

Griffith indicated that he was uncomfortable “rushing” to action. He did not have as much information as he’d like about what other public employees in the community are doing.

The other piece of information that the committee had picked up in its discussion, Griffith said, is that there’s no enforcement action that the state has been taking on Act 152. So even though there’s not a special provision that allows AATA to lump all employees together, there’s not clear evidence that any action will be taken. It’d be a matter of accepting some risk to take the step.

Griffith contemplated a friendly amendment to the resolution: If there’s a determination that the AATA cannot consider a change to all employees at the same time, then this change will be imposed when and if that determination is made. Griffith wanted to be on record as supporting the 80/20 approach – when it’s required to do so.

Eli Cooper, an AATA board member and the city of Ann Arbor transportation program manager, asked for clarification about whose opinion it was that had been given to the board – not on letterhead, but entitled, “Compliance with Act 152.” [It included the five points presented above.] He felt that it speaks to options that are not recommended to the board. Robertson indicated to Cooper that he had actually authored the memo, but that he’d written it after consultation with legal counsel. Cooper concluded that he could interpret the memo as AATA staff’s “best understanding of what the authority’s attorney has recommended” – which Robertson said he could.

Gott picked up on Kerson’s idea that the board could take the approach of returning the “windfall” to employees in other compensation, if the board wanted to pursue that. Board chair Jesse Bernstein liked the idea of Griffith’s amendment because it eliminated the risk of being out of compliance resulting in some kind of punishment. He also liked the notion of making employees whole. He suggested that an amendment to the AATA’s resolution be made to use the 80/20 option but also to state that if an employee’s net compensation decreases due to that decreased heath care payment, the AATA would make that up to them.

Bernstein asked Robertson if that made sense from an operational point of view. Robertson called it an “unusual proposition” to be put forth. Robertson also called it possibly a slippery slope. He wondered when the provision about making employees whole would end – because benefits are renewed every year. Robertson ventured that Act 152 is not going away. How you calculate making an employee whole would depend on the level of coverage that an employee chose, he continued. If someone chose the “buy down” option, Robertson said, he wondered if the employee would be reimbursed for the co-pays.

Bernstein called those good questions that Robertson had raised. He suggested that the board should either have an amendment to ask staff to figure out a plan, or have that money set aside. Either way, the AATA needs to protect itself from the liability. He suggested an amendment with the direction to staff to come up with a plan to return the extra money to the employees. Gott called that “a reasonable amendment to put forward.”

Cooper said he found himself falling on the other side of issue. Legal counsel has said the law takes effect upon expiration of a plan, he noted. The law is effective and the legislature has acted, he said. Speaking to the commentary of the city of Ann Arbor’s health care program, he said the city’s program includes a “low” and a “high” benefit that’s similar to the new approach that the AATA is now taking.

As a public employee for over 30 years, Cooper said, the cost of his health care that he pays out of pocket and the amount of coverage he receives has changed annually. At this point, he said, he wanted to separate what the board had to do to be in compliance with the law, and what it chooses to do if there is a “windfall.” Cooper stated, “I want to first and foremost comply with the law.”

He said he’d be voting to support the recommendations that were written in consultation with the AATA’s attorney. The financial implication of the decision should be subject to staff doing the thinking they need to do to bring a bona fide recommendation back. He did not want to do both things at the same time. He’d oppose any amendment to the resolution that contemplates the work of the staff [in coming up with a way to distribute the extra money] in advance of that work having been done.

Bernstein got clarification that Act 152 is already in effect. It affects the AATA on Aug. 1, because that’s when the non-union employees’ health plan gets renewed. For union workers, the contract runs through the end of the year.

Bernstein asked Cooper if he’d be opposed to including an amendment that asks the staff to present the board with a plan to make some kind of compensation to employees with the excess.

Cooper said that the action taken by the board needs to be “clear and crisp” about compliance with the law. The decision that’s made on a budget issue is a separate issue and needs to be treated separately. So yes, he would oppose such an amendment, Cooper said.

Bernstein asked Cooper if he’d be willing to sponsor a separate resolution that directed staff to find a way to compensate staff between now and the end of the year. Cooper responded with a question of his own: Is that the normal process for making amendments to the budget? Cooper felt it’s not the purview of a board member at the table. Bernstein felt that it was within a board member’s purview. Funding has been adjusted periodically by the board, when asked to do so by staff, Bernstein said. Instructing staff to bring the board a plan doesn’t mean the board has to act on it. It just means that it’s a direction the board would like to take.

Kerson ameliorated the disagreement between Bernstein and Cooper by saying that the discussion he’d heard by the board had addressed some of the long-range concerns he had about the issue. He heard clearly amongst board members that “just because the state gave us a hammer to use against our employees, we don’t have to use it.” Kerson said he also appreciated Cooper’s point of view – that compensation is a complex issue and has budget implications. Just as the board should not rush a resolution about compliance, he said, the board should not rush a resolution about compensation – because it could be misunderstood. The sense of the board, Kerson felt, was that if there’s a “windfall” then the AATA ought to think creatively about how to treat employees fairly as a team.

Kerson said he was still not comfortable with the attorney’s recommendation. However, he said he did not mind delaying the direction to staff about how to restore the compensation. He said he appreciated Bernstein’s efforts to tie the two issues together. Kerson felt it was okay if the two things were on separate tracks. He felt it’s clear that, “We don’t want to hammer our employees unless we have to.” Kerson felt like that issue could be put into the committee process and that would be okay. When Kerson indicated he’d vote against the resolution, even with the kind of amendment that Bernstein had described, Bernstein moved the issue to a vote.

Outcome: The board voted 4-2 to pass the resolution adopting the 80/20 approach to Act 152 compliance. Dissenting were Charles Griffith and Roger Kerson. David Nacht was absent.

WALLY: North-South Rail

The board considered authorization of the funds for north-south commuter rail planning that were already part of its approved fiscal year 2012 budget, which runs through Sept. 30, 2012. The total in the line item for the WALLY (Washtenaw and Livingston Railway) is $230,000, of which $45,000 are AATA funds.

Other entities that have contributed money to the WALLY project include: the Ann Arbor Downtown Development Authority ($50,000); Washtenaw County ($50,000); city of Howell DDA ($37,000); and a federal grant ($48,000). The planned expenditures are for station design work and for other consulting work on railroad operations and liability issues.

Ordinarily, the expenditure of funds from the budget would not necessarily need an explicit board authorization. However, in the case of the WALLY project, the board stipulated in a Sept. 15, 2011 resolution that the money designated for WALLY in the FY 2012 budget would not be expended without the explicit consent of the board. [See Chronicle coverage: "AATA on WALLY Rail: Forward with Caution"]

At its April 19, 2012 meeting, the AATA board had already received a written report in its board packet with an eight-page update on the status of WALLY, which is envisioned to provide north-south commuter rail service between Howell and Ann Arbor.

The conclusion of the report was a staff recommendation to expend funds already included in the FY 2012 budget that are designated for the WALLY project.

One of the challenges for WALLY is the cooperation of the Ann Arbor Railroad in the use of the tracks south of roughly Barton and Plymouth roads on the north side of Ann Arbor. Ideally, the commuter service would extend farther south into Ann Arbor. The report contains a description of an Oct. 12, 2011 meeting between Ann Arbor Railroad president Jim Erickson and AATA CEO Michael Ford, when Ann Arbor Railroad expressed continued general opposition to passenger service on its property. However, the meeting offered some possibility that Ann Arbor Railroad would at least work with the AATA on the issue of railcar storage immediately south of a WALLY station. And the report describes Ann Arbor Railroad as willing to entertain a “business proposition.” [.pdf of April 2012 WALLY update]

The resolution considered by the AATA board at its June 21 meeting indicates that the expenditure of the funds for station design should not be analyzed as a commitment to future capital expenses or funding for operations:

AATA makes no commitment to providing either capital or operating funding at this time, and AATA currently takes no position regarding the start date of service due to the uncertainty with respect to funding. AATA will continue to work with MDOT and the local communities to seek and apply for federal funding of the project. Once funding issues are fully resolved, AATA will commit to a service start‐up date.

At the June 21 meeting, board chair Jesse Bernstein asked AATA strategic planner Michael Benham to provide an overview of the board’s previous position on WALLY funds and why the board was voting – so that if people see the vote on the Community Television Network, they’ll know what’s going on.

Benham reviewed the background of the resolution. He said as a result of the Sept. 15, 2011 resolution on the expenditure of WALLY funds, AATA staff had checked with other communities and other organizations to confirm the project’s viability. Benham reported that the Michigan Dept. of Transportation is 100% behind the project. Ann Arbor Railroad, he allowed, is opposed to passenger service on their track, but left the door open to a business proposition that would respond to concerns about liability and passenger safety. Benham said that the AATA considered that positive compared to what they’d been hearing previously. [AARR owns the track from around Barton Road southward into Ann Arbor, so AARR's opposition is significant.]

Of the other communities along the route, Benham told the board, Howell is the most supportive – and has contributed money to the project. Others are less supportive, he allowed – like Genoa Township, which has not taken a position for or against. The AATA is working with Howell to get a presentation before the Livingston County board of commissioners. The funding for the WALLY planning effort is current a mixture of funds granted to the AATA by different bodies: the city of Howell, the Ann Arbor DDA and Washtenaw County. There’s also $48,000 from a federal grant that’s coming through the state of Michigan for station design work. What’s being proposed to expend from the FY 2012 budget, Benham said, is station design work and miscellaneous consulting. [.pdf of June 2012 WALLY update]

Bernstein asked for confirmation that the funds contributed from other organizations were “in hand.” Yes, answered Benham. Roger Kerson got confirmation that the funds “in hand” are not fungible, that is, could not be used for some other purpose by the AATA – a purpose besides WALLY.

Outcome: The board voted unanimously to approve the expenditure of the previously budgeted WALLY funds.

AATA Connector Study

Pending the signing of a memorandum of understanding with the city of Ann Arbor and the University of Michigan, the AATA will be moving ahead with an alternatives analysis of a connector study – for the corridor running from US-23 and Plymouth southward along Plymouth to State Street and further south to I-94. The alternatives analysis phase will result in a preferred choice of technology for the corridor (e.g., bus rapid transit, light rail, etc.) and identification of stations and stops.

That study will move forward, based on a total of $300,000 of local funding that has been identified to provide the required match for a $1.2 million federal grant awarded last year for the alternatives analysis phase. The breakdown of local support is: $60,000 from the city of Ann Arbor; $150,000 from the University of Michigan; and $90,000 from the AATA.

A feasibility study costing $640,000 has already been completed. That study was also funded through a partnership with the city of Ann Arbor, the Ann Arbor Downtown Development Authority, UM and the AATA. Chronicle coverage of that feasibility study includes: “Transit Connector Study: Initial Analysis“; “AATA: Transit Study, Planning Updates“; and “Washtenaw Transit Talks in Flux.”

A total of $1.5 million for the connector alternatives analysis study – of which $1.2 million is a federal grant – is included in the AATA’s capital and categorical grant program, on which the AATA held a public hearing at its June 21 meeting. In November 2011, AATA CEO Michael Ford had updated the board on the possible timeline for the alternatives analysis, saying that phase would take around 16 months.

Outcome: The information was provided in the written report to the board from Michael Ford, which was included in the board’s June 21 meeting information packet. However, it was not an agenda voting item and received no board discussion.

New Lift-Equipped Buses

The board considered the purchase of five new wheelchair lift‐equipped paratransit vehicles for $390,000 from Mobility Transportation Services. These vehicles are to be purchased using federal formula funds with matching funds from the state of Michigan. The vehicles are to be used for the AATA’s paratransit service, which is marketed under the name A-Ride.

After the meeting, AATA manager of maintenance Terry Black told The Chronicle that these are the same vehicles mentioned in the AATA’s capital and categorical grant program. The program, on which a public hearing was held at the June 21 meeting, includes “5 Small Replacement Buses for Paratransit Service” with a federal share of $600,000.

The reduced cost, compared to what had been specified in the grant program, was attributed to the ability of the AATA to purchase the vehicles through the state of Michigan’s MiDEAL program.

At the meeting, Black clarified that the vehicles are replacement vehicles – and those vehicles to be replaced will be sold at auction. They were purchased in 2005, which is consistent with a seven-year useful life. The AATA has looked at options for replacement over the course of the last year, Black said. Those that they’d selected for purchase have a Chevrolet chassis with a 2010 “clean diesel” engine. The body is made by Champion, which is produced in Imlay City, Mich., he said. They will be “lift style” vehicles instead of “low-floor ramp” style, which is what the AATA has currently in service. There’s not a suitable manufacturer that builds a good low-floor model in that smaller-size vehicle. Black reported that the AATA’s local advisory council (LAC) is comfortable with the selection.

Among the options the AATA had explored was alternative fuel vehicles. One manufacturer produced a vehicle that is a hybrid, but that manufacturer went out of business. A natural-gas fueled vehicle was also considered, but that could become a fueling challenge for Select Ride, which is the AATA’s current contractor for its paratransit service.

Sue Gott expressed her thanks to staff for the effort to explore clean-fuel vehicles.

Outcome: The board unanimously approved the purchase of the five lift-equipped buses for paratransit service.

Capital and Categorical Grant Program

On the agenda was a public hearing on the AATA’s capital and categorical grant program – the set of projects and expenditures for which the AATA is applying for federal funding.

Chris White, AATA manager of service development, introduced the hearing, describing it as a required public hearing on a series of applications. He also described it as a culmination of a public involvement process by the AATA that includes the Washtenaw Area Transportation Study (WATS), which conducts a hearing in connection with its transportation improvement program for Washtenaw County. AATA participates in that process, White said. White suggested that WATS is really the place where you can have an effect on transportation, because that’s when planning is being done on projects.

For AATA, the five-year program of capital and categorical projects is developed over several months, from November to January, by the board’s planning and development committee, and all of those meetings are open to the public, he said. [The staff memo accompanying the board packet also notes that the PDC meeting summaries are transmitted to the board as part of the written material provided to the entire AATA board for its monthly meetings, and that material is available on the AATA website.]

That night’s hearing, White said, is the current fiscal year’s component of the five-year program for capital and categorical grants. He characterized it as a very complex program this year – much larger than usual. One of the elements of the program that is published, White noted, is the amount of available funds. White noted that the Section 5307 funds are an estimate, because Congress hasn’t finished the appropriations yet. But he felt it would be pretty close to $6 million. In addition, he said about $4.6 million in funding is carried forward from the previous year.

Saving money from previous years is something AATA does regularly, White explained, so that it can, for example, take care of major bus replacement needs. The categorical funds include about $2 million in clean fuel funds and $2.6 million of a “livability fund” – which covers the five new buses to be used for additional service on Washtenaw Avenue. The “flex funds” from the Federal Highway Administration – about $1 million – will be used for the Blake Transit Center reconstruction. The $1.2 million for “alternatives analysis” is for the connector study, White said. [The area of study runs from US-23 and Plymouth, down Plymouth to State and further southward along State to I-94.]

Designated Recipient: AATA FY 2012
$ 6,000,000  (estimate) Section 5307 Apportionment
$ 4,638,981  Section 5307 Carryover Funds
$ 2,079,000  Section 5309 Clean Fuels Funds
$ 2,625,000  Section 5309 Livability Funds
$ 1,200,000  Section 5316 Alternatives Analysis
$   993,500  Section 330 Flex Funds from FHWA
$17,536,481  (estimate) Total Funds Available

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The total program of AATA projects comes to $15.7 million, White said. That program includes: 11 large replacement buses; 5 additional buses for expansion of service; 25 vans for the vanpool program; 5 small replacement buses for paratransit service; computer hardware and software. There are some funds for the bus storage facility and bus hoist project, which the AATA is completing, he said. Money also is included for the downtown Ann Arbor Blake Transit Center.

There’s a small amount of money for constructing and improving pedestrian walkways, White said. It’s a new category for the AAATA, he explained, because the eligibility has been expanded for these types of projects by the Federal Transit Administration. If there’s money left over after buying buses, the amount for pedestrian improvements could be increased, he said. [.pdf of the FY 2012 capital and categorical grant program]

No one spoke at the public hearing.

AATA/AAPS Bus Service

Starting in the fall of 2012, the AATA will provide bus service for three public school routes – one for each of the comprehensive high schools in the Ann Arbor Public Schools system. The AATA service will be provided in lieu of services currently provided for those three school bus routes, for which the AAPS contracts with the Washtenaw Intermediate School District.

The information packet for the AATA board’s monthly meeting on June 21 includes as part of CEO Michael Ford’s written report to the AATA board: “… we have agreed to replace three school bus routes – one from each comprehensive high school – with AATA service. These high school students will use regular AATA service with their fare paid by AAPS.”

AAPS director of communications Liz Margolis confirmed in a telephone interview with The Chronicle that three school bus routes will be replaced with AATA service by extending existing AATA routes: #18 to serve Skyline High School students; #16 to serve Pioneer High School; and #22 to serve Huron High School. The fare, said Margolis, will be paid by AAPS at a rate of $0.50 per ride. The rides will be counted and regulated by issuing swipeable cards to those students who are entitled to use the bus service. The cards can be swiped through the bus fare box when students board.

The regular fare for students on an AATA bus is $0.75. After the June 21 board meeting, AATA manager of service development Chris White explained the lower cost charged to AAPS, compared with the standard fare. For AAPS, a transfer will count as two rides – because of the card swipes that will determine the amount of the payments.

The pending agreement between the AATA and AAPS was noted in The Chronicle’s April 19, 2012 AATA board meeting report. Context for the agreement includes this year’s AAPS budget discussions, which included the possibility of eliminating all busing service provided by AAPS. In the budget finally approved by the AAPS board on June 13, 2012, most of the basic school bus service was preserved. However, some specific transportation services were eliminated, including the midday shuttles for Community High School and some bus stops for Ann Arbor Open.

The AAPS board decided to preserve most transportation services for the coming 2012-13 school year – in part by tapping the district’s fund reserves. The reasoning for that decision was based in part on the concern that the timing of a decision, in May, to eliminate school bus service for the fall would not leave sufficient time for families to plan for contingencies. At its May 23, 2012 meeting, the AAPS board directed the district’s staff to form an ad hoc transportation committee that is supposed to bring forward a recommendation on school transportation in early 2013. AATA’s Ford and other community members will be part of that committee.

Outcome: This was an item of information only, and there was no board discussion of the issue.

Communications, Committees, CEO, Commentary

The board entertained various communications at its June 21 meeting, including its usual reports from the performance monitoring and external relations committee, the planning and development committee, as well as from CEO Michael Ford. The board also heard commentary from the public. Here are some highlights.

Comm/Comm: Special Meeting – July 16

CEO Michael Ford reported that he was requesting a special board meeting on July 16, 2012 to cover a few items: the five-year service program associated with the possible transition to a countywide authority; bus advertising; the relocation of a fire hydrant; and the 2013 work plan. [The board does not typically schedule a monthly meeting in July, hence the need to call a special meeting. The July 16 special meeting is tentatively scheduled for 4 p.m. at the AATA headquarters at 2700 S. Industrial Hwy. ]

Comm/Comm: Countywide Transit – Four-Party Agreement

As part of his verbal report to the board at the June 21 meeting, Ford gave an update on the status of the legal framework under which the AATA could transition into a broader transit authority based on Act 196 of 1986.

By way of background, the most recent session of the Washtenaw County board of commissioners – a June 14 working session at which they did not vote – resulted in a long discussion of the documents that would be used to establish a new transit authority. [For recent Chronicle coverage of that working session, see: "Differences on Countywide Transit Debated"]

County commissioners weighed possible amendments to the four-party agreement and articles of incorporation that are associated with a possible expansion of governance and service area of the AATA. The four parties to the agreement are the cities of Ann Arbor and Ypsilanti, Washtenaw County and the AATA.

The city councils of Ann Arbor and Ypsilanti, as well as the AATA board, have approved the documents.

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

At the Ann Arbor city council’s meeting on the evening of June 18, Briere reported on the consensus of the committee. They felt that the possible amendments discussed by the Washtenaw County board would not be brought before the city councils of Ann Arbor and Ypsilanti or the board of the AATA at this time, and that the original language would be allowed to stand.

At the AATA’s June 21 board meeting, Ford confirmed what Briere had reported at the city council’s meeting earlier in the week. Ford also reported that the four-party agreement and the articles of incorporation are scheduled to appear on the Washtenaw County board’s July 11 ways & means committee meeting.

That session, according to one Washtenaw County commissioner, is expected to be a “brawl.”

Comm/Comm: Countywide Transit – U196, Five-Year Service Plan

Board chair Jesse Bernstein reported that progress continues to be made on the possible governance of a new transit authority. The unincorporated board (the U196 board) will not have a July meeting, he said, and that time will be used instead to meet with municipalities throughout the county. A third round of district advisory committee (DAC) meetings is scheduled for August and September. [More information about the U196 board and DAC are on the AATA's Moving You Forward website.]

Part of the possible transition of the AATA to a countywide area of governance and service is the creation of a five-year program of expanded service.

Bernstein asked for an update on efforts to test new routes in the five-year service plan to make sure they’re viable and doable. AATA manager of service development Chris White explained that it’s not just the routes that are tested – it’s all the service components. The scheduled headways and frequencies have to be tested to make sure the various routes can work together as a whole. That testing starts the following week, White said. That same kind of testing will be done with commuter services and with the proposed circulators, White said.

Comm/Comm: LAC

Cheryl Webber gave the report from the AATA’s local advisory council – a body that advises the AATA on issues related to the disability community as well as seniors.

Doug Strong, CEO of the University of Michigan Hospitals and Health Centers, at the UM board of regents June 21, 2012 meeting.

Webber reported that they’d received no response from the University of Michigan Hospitals and Health Centers about the need for sheltered walkways from bus stops to medical center facilities.

Although Sue Gott – who is UM’s university planner, and sits on the AATA board – had indicated she’d facilitate a response, Webber reported the LAC had received no response.

The issue also had been raised at the AATA board’s April 19, 2012 meeting. At that meeting, Clark Charnetski reported that the LAC had sent Doug Strong a letter. Strong is CEO of the UM Hospitals and Health Centers. The LAC had inquired about UM’s plans to provide sheltered walkways for riders of public transportation so they can get from bus stops into the medical center. The LAC had not yet received a reply to the letter, Charnetski reported at that meeting, so they’d be sending out a follow-up letter.

In response to Webber on June 21, Gott said she thought that LAC was going to send her the information that had already been conveyed to UM Hospitals. With that information in hand, she said she could facilitate some kind of response.

Comm/Comm: Vanpools

As part of his verbal report to the board, CEO Michael Ford noted that the AATA has now launched its vanpool program, with five vanpools – two originating out of Adrian and three from Jackson.

By way of background, in the vanpool program, the vehicles are owned and maintained by AATA. The vehicle is stored by the driver, who is a member of the vanpool and who does not need to pay for the service. For vanpools that start and end in Washtenaw County, the minimum number of riders in a pool of four plus the driver is charged $99 per rider per month. For 5-6 riders plus a driver, that per-rider cost drops to $79 per rider. Outside of Washtenaw County, the respective rates for different numbers in the vanpool are $139 and $119.

All five vanpools are affiliated with the University of Michigan. Ford reported that the AATA also is working with Zingerman’s to provide vanpool service to its employees. He noted that 20-25 Zingerman’s employees are interested in a vanpool.

Comm/Comm: Internal AATA Organization

In her report from the planning and development committee, Anya Dale noted that the committee had received a presentation from the Generator Group, which is analyzing AATA’s readiness to change as an organization [in the context of a possible transition to a countywide authority].

Board member Anya Dale reports out from the planning and development committee.

A survey of employees had been completed, Dale said, and there’d been a great response rate. One of the areas of study is employees’ levels of engagement and connection to AATA’s mission. A key finding was that the level of engagement is higher at AATA than other organizations. Board chair Jesse Bernstein asked Dale later in the meeting what was meant by a “high level of engagement.” Dale described that as meaning employees are connected to the overall mission. Bernstein ventured that meant that there’s an alignment of what the board wants to do and what employees believe they should do.

Comm/Comm: Performance Update

Charles Griffith gave an update from the performance monitoring and external relations committee. The AATA is continuing to show increased ridership on the fixed-route service, but he said it’s still a bit down for the demand-response service. The operating expenses per passenger are up, Griffith said, because the AATA has added service [along the Washtenaw Avenue corridor]. It’ll take a while for operational expenses to catch up, he said. Overall, the committee is feeling good about performance levels, Griffith concluded. [.pdf of June 2012 performance report]

Present: Charles Griffith, Jesse Bernstein, Eli Cooper, Sue Gott, Roger Kerson, Anya Dale.

Absent: David Nacht.

Next meeting: A special meeting has been requested for Thursday, July 16, 2012. The tentative location and time are: 4 p.m. at the AATA headquarters at 2700 S. Industrial Highway. [confirm date]

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The contract with Local 693 of the International Association of Fire Fighters (IAFF) is retroactive to July 1, 2010 and runs through June 30, 2014. Ann Arbor’s firefighters have been working without a new contract since the previous agreement expired June 30, 2010. Features of the new contract include the restoration of pay to the 2008 level – the union had previously accepted a wage decrease of 3% in order temporarily to preserve jobs. The restoration to previous wage levels will take place over the course of two years, at 1.5% each year.

The contract reduces the food allowance for firefighters, who work 24-hour shifts. The contract also includes a change in the firefighters’ schedule to increase the average number of hours worked from 50.4 to 54. Health care provided under the contract meets the new state mandated hard caps on health care contributions by public employers.

The new contract with the Command Officers Association of Michigan runs retroactively from July 1, 2009 to June 30, 2013. The command officers have been operating without a contract since the expiration of the previous one.

The health care plan in the contract is similar to the health care offered to non-union city staff, with the state of Michigan’s mandated hard cap on the amount that a public employer can contribute to employees’ health care.

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]

Union members in the audience of the Dec. 14 AAPS board meeting. (Photos by the writer.)

Ann Arbor Public Schools Board of Education meeting (Dec. 14, 2011) Part 2: AAPS board of education trustees approved a contract with D.M. Burr, a Flint company, for heating, cooling, and ventilation services. Many local union members attended the meeting and spoke in opposition of the bid award to a non-local, non-unionized company.

At the opening of the Dec. 14, 2011 board meeting, board president Deb Mexicotte requested a moment of silence to acknowledge the recent loss of two students. Mariel Almendras, a second grader at Dicken, died of complications related to a rare ovarian cancer. Lucina Partis, an 11th grader at Skyline, died of accidental drowning in a bathtub in her home.

The final board meeting of 2011 also saw debate on a new state mandate to change board election dates to November in even-numbered years.

The board also discussed a number of first briefing items, and held discussion on minor resolutions.

Agenda Approval

Near the beginning of the Dec. 14 meeting, a review of the meeting’s agenda included a change proposed by trustee Andy Thomas to combine two agenda items: (1)  an informational presentation and board discussion on local contracting; (2) and the second briefing on the awarding of a contract for HVAC (heating, ventilation, and air conditioning) journeyman services. It was also agreed to move the second briefing items earlier on the agenda, to accommodate the large number of community members in attendance with interest in the journeyman contract.

HVAC Journeyman Bid Award

At the Nov. 30, 2011 regular board meeting, the board had considered as a second briefing a bid to contract with D.M. Burr of Flint, Mich., for 2,000 hours of heating, ventilation, and air conditioning (HVAC) journeyman services. The board typically sees resolutions twice – at a first briefing and at a second briefing, with a final vote taken at the second briefing.

However, on Nov. 30 the board voted to postpone the decision on the D.M. Burr contract. Trustees wanted additional information to be brought to the board’s Dec. 14 meeting by AAPS executive director of physical properties Randy Trent. Local union officials, including the president of the AAPS teachers’ union, spoke early in the meeting in opposition to awarding the bid to D.M. Burr.

HVAC Journeyman Bid Award: Public Commentary

Four local skilled trades workers addressed the board about their opposition to awarding the HVAC journeyman services bid to D.M. Burr.

Tom Yax, representing local plumbers and pipefitters, noted that all but one of D.M. Burr’s contracts with schools are to provide cleaning or maintenance services, not HVAC services. He also said that D.M. Burr has posted a job offer for this position, which says they need someone ASAP. Yax pointed out that more than five other contractors had bid on this, and urged the board to reconsider those bids. He closed with a quote he attributed to Benjamin Franklin: “The bitterness of poor quality remains long after the sweetness of low price is forgotten.”

Jim Burns said he represented approximately 10,000 members and their families from the Washtenaw County skilled building trades. He passed out literature from the 2004 and 2008 sinking fund millage campaigns, and noted that local skilled tradesmen had supported these millages, with the understanding that they would be supported in return. Burns also pointed out that the board did not have a policy on paying prevailing wage, and suggested that such a policy should be crafted.

During clarification on public commentary, trustee Glenn Nelson checked his understanding that the money for the HVAC journeyman would come from the general fund, not the sinking fund, and AAPS superintendent Patricia Green confirmed that was correct.

Ken Wadland, a local electrician, reminded the board that they are representing the school system as an employer, and urged trustees to look at the “total value” of a contract like this. Saying he can relate to the temptation to take a ridiculously low bid, Wadland said it usually turns out that those bids have a serious flaw – either the service is poor, the materials are poor, the workers not being paid well – something’s wrong.

Ron Motsinger of the International Brotherhood of Electrical Workers (IBEW) Local Union 252 distributed a picture to trustees of a part of an electrical system that was incorrectly installed, which could lead to a fire or electrocution. He asked the board to consider the risk of hiring less experienced workers to perform HVAC services. He reiterated that local skilled tradesmen go through years of an apprenticeship program and are well trained. Motsinger also urged the board to adopt a bid policy that supports local workers.

During clarification on public commentary, trustee Susan Baskett asked Trent to speak to the picture that Motsinger had distributed. Trent said that some of the AAPS buildings have been around for 100 years, and that when problems are reported, they are fixed. “With HVAC and electrical issues,” Trent said, “We have problems every day that we’re fixing.”

HVAC Journeyman Bid Award: AAEA Report

AAEA president Brit Satchwell began his regular report to board members with a plea for them to reconsider the D.M. Burr bid. Satchwell said he understood the “seductive lure” of low prices, but cautioned the board – “you usually get what you pay for.” He pointed out that D.M. Burr has just started providing HVAC services, which makes it hard to do due diligence on determining if they are fully qualified for this job.

Satchwell noted that his father had designed bids in his professional career, and that his father had always advised to just throw out the outliers – bids at the high and low end – saying that the value was somewhere in the middle. “With such a short, non-existent track record,” Satchwell said, “it sounds to me like a roll of the dice.” He suggested that the board should instead hire experienced, local, trustworthy workers who have supported the school system and community year in and year out.

HVAC Journeyman Bid Award: Staff Report

AAPS executive director of physical properties Randy Trent came to the podium prepared to answer questions on a bid recommendation for HVAC journeyman services. At the Nov. 30 regular meeting, trustees had questioned whether D.M. Burr, the administration’s recommended contractor for this bid, was the right choice. Trent had come to the Dec. 14 meeting prepared to explain the rationale behind his recommendation.

Randy Trent, AAPS executive director of physical properties.

Trent went through a brief presentation that clarified that the D.M. Burr journeyman would not have farther to drive to reach Ann Arbor than the current journeyman servicing the district. He also compared the licenses and work experience of the current and proposed journeymen, in order to show that while D.M. Burr as a company may be new to providing HVAC services, the actual employee who would provide service to AAPS has had years of experience in this area and is fully licensed.

Trent reported that he had contacted 12 additional references for D.M. Burr (in addition to the three he had called initially) and that none of them had complaints. He stressed that the licensed mechanic D.M. Burr would provide is “more than capable of doing the job.” Trent added that D.M. Burr has offered to let the district out of the contract after 30 days for any reason, and that D.M. Burr is willing to adjust its bid higher “whatever the cost,” should it be the board’s desire to ensure that the workers sent to AAPS are paid prevailing wage.

Finally, Trent pointed out, “I fully understand that I work in the support area – every dollar that I can cut can go back into the classroom.” He acknowledged that the board has a difficult decision to make, especially in light of the public interest in this bid, but stood behind his recommendation to award the contract to D.M. Burr.

HVAC Journeyman Bid Award: Board Discussion – AFSCME?

Susan Baskett asked about the possibility of hiring an HVAC journeyman through the American Federation of State, County and Municipal employees (AFSCME) – the union representing current AAPS custodial and maintenance staff. She noted that doing so would actually save AAPS money, since AFSCME workers agreed to a contract last year that resulted in significant pay cuts.

Trent said that while he has been extremely proud of what the district’s custodial and maintenance staff has been able to do, that an AFSCME member could not be brought on to provide the HVAC journeyman services because it would have to be negotiated. Baskett questioned why the district did not simply invite AFSCME officials to reopen contract negotiations in order to be able to add another AFSCME member to the district’s internal staff.

Baskett pointed out that there is a history of going back to reopen specific contract items. She also asked AAPS deputy superintendent of human resources and general counsel Dave Comsa for confirmation that the district is not precluded from going back to any of its bargaining units to negotiate new positions.

Trent noted that hiring internally would be a longer-term engagement, and that it was his best judgment that the district would be better served by bidding out the HVAC services rather than “going back to AFSCME.” Comsa added that there was nothing “to [his] knowledge” precluding AAPS from reopening negotiations with AFSCME.

HVAC Journeyman Bid Award: Board Discussion – Reference Checks

Thomas thanked Trent for doing additional reference checks, and noted that it was well beyond the due diligence usually done for a bid recommendation. Thomas noted that in a list of reference check responses that Trent had prepared for the board, there were many positive references for other services D.M. Burr provided, such as janitorial and security services, but not for HVAC services.

Trent responded that there were three references for HVAC services– one from Carman Ainsworth Community Schools, one from Highland Park Independent School District, and one from a cinema. Baskett countered that in the e-mail the board received from Highland Park schools, HVAC services weren’t mentioned.

Trustees spent a few minutes reading through the references, including feedback that Trent had forwarded to them via e-mail. Simone Lightfoot thanked Trent for following up on more than three references.

HVAC Journeyman Bid Award: Board Discussion – Specific Employees

Lightfoot noted that she had recently toured some of the district’s boiler system and electrical rooms and had been impressed with the size and plethora of pipes and tubes underground and on the roofs, as well as by how much of it was unmarked. Given this, she said, she questioned how training would be done for a new individual who was wholly unfamiliar with the various systems at each AAPS building.

Trent responded that AAPS mechanical staff would work with the new person, just as they did with the current HVAC journeyman from Johnson Controls. Trent said that AAPS staff members have volunteered to come out on their own time to take the new journeyman through each of the buildings. He also noted that D.M. Burr had been given a tour of AAPS facilities when the district was previously looking at outsourcing custodial and maintenance services.

Lightfoot asked if Trent had met the actual individual to be assigned by D.M. Burr to the district, and Trent replied that he had spoken to him. She asked about that specific journeyman’s qualifications, and Trent reiterated that he holds appropriate licensure. Lightfoot asked how D.M. Burr ensures its staff’s licenses are kept current, and Trent explained that state licenses expire if required ongoing professional development is not completed.

Nelson pointed out that the D.M. Burr journeyman holds his own license, while the current Johnson Controls journeyman works under another person’s license. A union member in the audience, Andy Bronson, held up his hand and was recognized by Baskett. Bronson pointed out that he is a Johnson Controls worker who also has his own license, but Trent said Bronson’s license was not relevant – because he is not the current HVAC journeyman under discussion, to whom the potential D.M. Burr journeyman was being compared.

Lightfoot asked Trent if he was concerned that D.M. Burr had placed an ad for this a journeyman position on MLive, and Trent answered, “I am not regarding it and I would recommend that you don’t. I cannot tell you why they placed that ad. It does not concern me at all – I have the licenses of the person who will be working on our job.”

Trustee Christine Stead argued that D.M. Burr was not a qualified bidder, except for the specific journeyman. She suggested that the board should require the names of the specific employees D.M. Burr is assigning to AAPS to be listed in the contract “so there cannot be a bait and switch.” [In addition to the main journeyman, there is also a smaller, less technical maintenance position associated with the HVAC work.] Without the names included in the contract, Stead said, she would be unable to vote for the bid award.

Trustee Irene Patalan asked if an individual employee had ever been named in a bid, and asked Comsa if that was okay. Comsa said the contract can include whatever terms the board wants, including tying it to the specific individuals discussed. Lightfoot asked what happens if those people leave the company, and Comsa explained that the contract could be voided at that point. Mexicotte added that if the D.M. Burr employees were unable to fulfill their duties, the board would have full purview over their replacements.

Stead’s amendment – to tie the D.M. Burr contract to the specific employees AAPS had been offered – was amenable to the board.

HVAC Journeyman Bid Award: Board Discussion – General

Lightfoot said it was “scary” that D.M. Burr was willing to adjust its bid to “whatever the cost.” She said it seemed like a lot of work for the district. “I care that we get it right the first time,” Lightfoot asserted. “There clearly is something wrong with supporting this contract.”

Stead noted that while this is a small contract, AAPS is one of the largest businesses in the city with a budget larger than the city itself. She argued that the district needs a way to value the economic contribution of local businesses when considering bids, and said she had asked Comsa to explore some methodology to do so.

Nelson said he sees a vote for D.M. Burr as directly related to keeping class sizes lower, since the amount of savings brought by voting for this contract would roughly amount to what would be needed to hire another teacher.

Patalan commended Trent for his conscientiousness, and said he made her proud. “You answered my questions,” she said. “You looked out for the district, and you did what the board wanted you to do – to put our dollars as close as possible to the classroom while getting the best value possible.”

Baskett acknowledged that Trent’s work with the district over the years has been commendable, and apologized that she had not stated that sooner. She then listed numerous concerns regarding the D.M. Burr bid, saying that she did not think Trent would have made such a recommendation in the past.

Baskett questioned how long the D.M. Burr employee would be willing to work for such low wages and benefits, and if it will be long enough for him to become fully competent with the district’s HVAC systems. She again suggested going to AFSCME to reopen contract negotiations so someone else could be hired internally instead.

She again expressed concern that D.M. Burr was a significant outlier in terms of the other bids, and said that she did not think the board should “make even a hint of a promise” that the savings would be used to hire another teacher.

Baskett argued, “When I look at D.M. Burr, they are a generalist. I see what they’re doing – they are trying to buy their way in here.” She disagreed with Trent that the current AAPS staff would be as cordial as he is expecting to the D.M. Burr journeyman. “I don’t think the expectation Trent has of the current staff is realistic. Of course they are professional, but this person is coming in to possibly take their jobs.”

After the discussion, Baskett said, she felt even stronger in her position that D.M. Burr is not qualified.

Thomas said it had been a troubling issue to him for a number of reasons. Although he was not 100% convinced that D.M. Burr is the right choice, he was 99% convinced, and so he supported the bid recommendation.

Outcome: The HVAC journeyman services contract was awarded to D.M. Burr as proposed, with the motion to accept the contract passing 5-2. Trustees Lightfoot and Baskett dissented.

Resolution to Change Board Election Date

At 1:00 a.m., AAPS deputy superintendent of human resources and general counsel Dave Comsa brought a resolution to the board that would officially move the dates of future board elections to Novembers of even-numbered years, as Michigan law now requires.

The current election schedule for AAPS will include odd-numbered years. Deb Mexicotte’s seat is up for election in November 2012; Irene Patalan and Glenn Nelson are up for election in November 2013; Christine Stead and Susan Baskett are up for election in November 2014; and having just been re-elected last November, Simone Lightfoot and Andy Thomas will be up for election in 2015.

AAPS board members serve four-year terms. The recently passed state legislation enables local school boards to extend terms in order to comply with the law. In 2013, AAPS would likely need to extend the terms for Patalan and Nelson so that the seats could remain filled until November 2014. In a telephone interview, AAPS director of communications Liz Margolis told The Chronicle that the board does not need to act immediately – because the next scheduled election (this year) is in an even-numbered year.

Board president Deb Mexicotte pointed out that past legislation has always said that if AAPS began holding November elections, that the district would lose the right to move elections back to a different time of year in the future. Comsa pointed out that AAPS has no choice now except to hold elections in even-numbered Novembers.

Mexicotte argued that this is not a good idea, and expressed frustration that the state had “bludgeoned and coerced” districts into doing this. “It extends terms, or turns the board over in big chunks, and makes people have to run more expensively. I don’t want to pass this resolution. Sue us,” she said.

Comsa responded that it was his recommendation that the board complies with the resolution as presented. “I think you would be in a better position to adopt the resolution,” he added.

Mexicotte quipped, “Will we get more funding? Will they give us funding for mandates they are passing left and right?”

Nelson noted that while he shared Mexicotte’s frustration, he would support the resolution so that staff time and the district’s money would not be wasted fighting a lawsuit.

Thomas agreed. “We have our chief counsel telling us that it is his expert opinion that we should pass this, however distasteful this is.”

Stead noted that the cost of running will significantly shrink the field of board candidates, and asked Comsa what the ramifications would be if the board decided not to pass the resolution. Comsa said he would not speculate, adding, “I didn’t hazard that this issue might come up.”

Baskett referenced a point earlier in the meeting when Satchwell had held up a sign reading “resistance is not futile.” Patalan concurred, saying the community is not in favor of this.

Lightfoot noted that she would rather the district would protest the Race to the Top legislation, and that she would heed Comsa’s recommendation.

Baskett simply thanked Comsa for doing his job.

Outcome: By a vote of 4-3, the board voted against the resolution agreeing to hold board elections in even-numbered Novembers. Stead, Mexicotte, Baskett, and Patalan voted no. Thomas, Nelson, and Lightfoot voted yes.

After the vote, Mexicotte noted that alternate resolutions may be brought forward at a later date, and thanked trustees for their diligence in the matter.

Consent Agenda Approved

A consent agenda consisting of three main items, along with minutes approvals and gift offers, was approved unanimously by the board.

The three main items were the purchase of new sixth grade science kits, the approval of amendments to the district’s pension plans, and the approval of a resolution opposing Michigan House Bill 4770 (Public Employee Domestic Partner Benefit Restriction Act). Each item is briefly discussed below.

Consent Agenda: Sixth Grade Science Kits

At 11:45 p.m., the board opened its second briefing on the purchase of new science kits for sixth grade students. Though the science department chairperson Amy Dillar Deller was still present at the meeting, the board had no questions for her. Mexicotte said that she was impressed with Deller’s patience, and Nelson said to Deller, “Too bad you had to sit there all this time. Thank you for all your work.”

Consent Agenda: Amendment to District Pension Plans

AAPS director of finance Nancy Hoover explained that the law related to the pension plans offered by the district has changed, and asked the board to approve a resolution that authorizes the district to follow the law by amending the plans as required.

The item was presented to the board as a special briefing item, which meant that the board was giving final approval on its initial consideration of the item.

Consent Agenda:  House Bill 4770

Nelson introduced a resolution to formally oppose House Bill 4770, the Public Employee Domestic Partner Benefit Restriction Act. Though the bill had already passed both houses of the state legislature, it was awaiting Gov. Snyder’s signature at the time of the board meeting. Nelson explained that this bill would eliminate benefits for same-sex couples, and argued, “There is a chance that if the governor hears enough opposition, he will not sign it.” [Gov. Snyder did sign HB 4770 into law on Dec. 22, 2011.]

Nelson read the resolution, which noted that HB 4770

… would conflict with the high value we place on respect and celebration of diverse people including but not limited to diverse sexual orientations, gender identities, and gender expressions; … and would lessen the attraction of Ann Arbor and Michigan to people in same-sex relationships, or possibly in such a relationship in the future, and thereby decrease [the district's] ability to attract and retain excellent employees in such relationships.

Baskett thanked Nelson, saying the resolution was wonderful.

Financial Report

Allen began the first quarter financial report by noted that historically most of the changes to the budget take place in the second quarter, after the school year has begun in September. [The district’s fiscal year runs from July 1 to June 30.]

AAPS director of finance Nancy Hoover noted that some savings have been realized by changing to 100% direct deposit for payroll, and that coaches are now also being paid by electronic transfer. Baskett asked whether all vendors, as well as the board members, could be paid electronically. Hoover noted that new software would allow the district to increase the number of electronic payments made.

Financial Report: First Quarter

AAPS deputy superintendent of operations Robert Allen made a brief presentation to the board, and noted that the district had spent 12% of its total budget in the first quarter, and that the board could expect that percentage to rise in the second quarter. He said he has begun to realign the expenditure categories based on audit results, and that those would come as future adjustments.

Stead asked, “Given the adjustments we’re expecting for the second quarter, and in terms of budget planning, what’s your best estimate of the kinds of reductions we need to plan for?” Allen said he still expected the district would need to look at reducing its budget by about $14 million.

Financial Report: Medicaid Revenue

Nelson asked what was meant by Medicaid revenue, which was bullet-pointed in Allen’s presentation.

Green explained that there are certain services that a district can be reimbursed for through Medicaid, depending on the actual service provided to special needs students.  She said that she had been concerned when she became superintendent of AAPS in July 2011, because she had not been able to locate any reimbursements – and she would have expected them to be a source of general fund revenue.

After much research, Green said, she was able to determine that an agreement was made within Washtenaw County a couple of years ago that the Washtenaw Intermediate School District would hold the funding in common, and that a portion of it might be used to purchase new human resources and financial software for the county and its districts.

Green noted that this was not a written agreement, and that it took her a lot of effort to determine that $1.4 million of the district’s funds have accrued over two years. She argued that this money should be returned to the district, and that it is the purview of the school board how this money should be used.

Allen added that the Medicaid revenue will be greater than $1.4 million because it does not yet include reimbursements from 2010-11. Nelson noted that he was very pleased and appreciative of this and pleased to hear it’s a number with seven figures in it. This is an example, he said, of where Green’s experience and “stick-to-it-ive-ness” is paying off.

Mexicotte said the way this money is being reported, and accounted for has been a concern in the special needs community for as long as she’s been involved. She said she is pleased Green has found additional money the district can use.

Outcome: The first quarter financial report will come before the board for a second briefing and a vote at the next regular board meeting.

Budget Planning Update

Allen said he was anticipating having a better sense of where the district stands in terms of funding after the state revenue conference is held in January 2012. Stead asked about the effect of a variety of factors on the possible funding, and Allen said nothing is settled yet. Allen added that the districts receive some information from the Michigan School Business Officials (MSBO), which has lobbyists who follow state actions more closely.

Patalan noted there had been a good turnout at the fall budget forums, and that she believed the community genuinely understood what the district was facing. She asked if there was a place for community feedback on the AAPS website.

Allen said that there is a suggestion box on the district website, and that he has also received some ideas directly via e-mail. Some ideas have been more detailed than others, he said, but all the suggestions are being compiled.

Baskett asked whether dates have been set for winter budget forums, and Allen said they have not been set yet, but that they would not occur until a budget had been proposed.

Budget Planning: Public Commentary

Mark Quigley said he was there to help, and presented two concrete ideas to the board regarding the budget. First, Quigley suggested that the board require restitution from the employees who carried ineligible health care dependents on their insurance plans up until a recent dependent audit. “Is it right, legal, moral, ethical to allow your employees to steal from you? Our money went to fraud, abuse, and waste,” Quigley asserted. The recent audit revealed $766,000 was spent on ineligible dependents.

During clarification on public commentary, AAPS deputy superintendent of human resources and general counsel Dave Comsa clarified that there were 200 employees who self-reported ineligible dependents. He also noted that in order to get maximum participation in the audit, there is a standard clause stating that employees would be held harmless if they responded. Comsa added, “I would be cautious of accusing people of criminal activity – I don’t believe that there was any.” He stressed that AAPS has saved $0.75 million as result of the audit.

Quigley’s second budget suggestion was that the district should shift more of costs of football parking on the Pioneer lot to the University of Michigan (UM). He suggested that the UM should pay for the cost of policing the lot, and noted that the “mulit-million dollar” parking contract is coming up for renegotiation soon – “Let’s put more of the expenses on [UM] and leave more for our children.”

During clarification on public commentary, Mexicotte asked the administration about the status of the current parking negotiations. Allen answered that the AAPS parking contract with UM expires at the end of the year, and that negotiations for a new contract will start in January. Mexicotte asked who was responsible for that negotiation, and Allen answered that it is Tim Gruszczynski, Supervisor of Environmental Services, and the Allen and Trent also have input.

AAPS Educational Foundation Grant Awards

The board held its first briefing of a list of grants being conferred by the AAPS educational foundation (AAPSEF). It was late in the meeting and AAPSEF Wendy Correll, who had made a presentation thanking major donors earlier in the meeting, had left the meeting by the time the item came before the board.

Mexicotte noted that the total amount of grants being awarded was $177,000, and that the impact of these grants would be felt by more than 30,000 students. “These are substantial awards around important programs,” she said, adding in reference to the fact that Correll was no longer present, “I look forward to saying additional things at second briefing.”

Board members highlighted individual grants on the list for recognition, including seed money for document cameras, the elementary enrichment coordinator program, and scholarship programs.

Green noted that one of the grants is the Karen B. Thomas Memorial Fund, started in honor of trustee Andy Thomas’ late wife. Green invited Thomas to describe the work of the grant.

Thomas explained that the purpose of the grant is to encourage reading and a love of reading at the elementary level, particularly among students who are economically disadvantaged. He described some projects funded by the grant, including the addition of classic literature at Pittsfield, co-support of an after-school reading club at Mitchell, and the refreshing of the library at Bryant. Thomas said in the future that that the Karen B. Thomas Memorial Fund might be used to purchase a set of Kindles for student use.

Patalan thanked Thomas for the grant, and said she was glad the board took a minute to talk about the literacy projects. “The whole piece of literacy … it’s simple,” she said, “but we can’t take it for granted.”

Outcome: Discussion and approval of these AAPSEF grants will continue as a second briefing item at the next regular board meeting.

Fines and Obligations Policy

Green introduced this item, saying that she was hoping this policy would streamline some of the inconsistencies she has seen across the district in terms of how student fines and obligations are handled. She noted that there has not previously been a district-wide policy on this issue One one goal of such a policy would be to ensure that students are not kept out of school because of outstanding fines or obligations.

Green invited Robert Allen and Alesia Flye, AAPS deputy superintendent of instruction, to discuss the proposed policy and associated regulations. Allen began by noting that he and Flye had worked with a committee, solicited input from building principals, and reviewed similar policies in other districts.

Allen read the proposed policy in its entirety:

The District will provide educational material, including textbooks or other tools and supplies necessary to access the curriculum during the normal academic year. Students are expected to return all educational materials in satisfactory condition at the time and location designated by school personnel. Should material be determined lost or stolen, or the material returned is in unsatisfactory condition, the superintendent or designee has the authority to collect an amount equal to the replacement value of the material. Circumstances may be such that alternative arrangements can be made with designated school personnel.

Trustees had no comments regarding the policy itself, but did suggest a few changes to the regulations. The board does not have purview over the regulations directly, but can make recommendations about them to administration.

Flye noted that earlier in the 2011-12 school year, there had been an incident where students had lost instructional time due to fines, and that that was not acceptable. Baskett questioned how these staff errors were addressed, and Comsa answered that an investigation was undertaken and that principals were advised that school policies should not prohibit students from participating in instructional time. Baskett said she knew of a student who had requested a letter of apology over the matter, and AAPS assistant superintendent of secondary education Joyce Hunter confirmed that such a letter had been sent.

Lightfoot suggested including parents earlier in the communitcation loop regarding fines.

Baskett suggested some clarifying wording changes, and confirmed that students do get a receipt when they return a book or other materials. She suggested that PowerSchool could be used to record receipts instead of generating more paper.

Thomas stated that this is a very well-crafted and well-designed policy that strikes a good balance between protecting the rights of students to receive an education, but still providing some consequences if they don’t return a book without making arrangements.

Nelson suggested cross-referencing this policy with the equity policy to make their relationship explicit.

Mexicotte suggested that the replacement value charged to students should reflect the condition of the book, and that she would suggest giving school administration the power to use their best judgment in waiving fees. She said she would like to see a way for students to agree on the condition of the books they are given when they receive their textbooks, and agreed that parents should be kept in the loop better.

She expressed some discomfort with the punitive nature of the policy, but said she was pleased that students’ instructional time and grades will not be affected by outstanding fines. She wanted to be sure that being on a payment plan was seen as sufficient in allowing students to participate in extracurricular activities.

Mexicotte also said she liked the idea of having related policies noted, and wanted to be sure that the policy is the same across all grades and all schools. Finally, she asked if there were other items that should be included, such as instruments or field trips fees.

Thomas noted that holding the final report card is an empty threat, meaning it would not be a motivation to pay fines.

Mexicotte thanked the administration for their work on this policy and its regulations, saying it showed how AAPS is passionate about getting students the equipment they need.

Outcome: This was the first briefing on this item. Any suggested changes or modifications will be incorporated before this item comes back to the board for a second briefing.

Other Public Commentary

The meeting also included public commentary on other topics.

Other Comment: Buses

Peggy Connors spoke to the board about bus service to Slauson middle school and Pioneer High School. She said that buses have been taken away from kids living between Liberty Street and Scio Church Road. In the morning, she said, it’s dark, and there are wooded areas lining the walk route. Saying she had tried the route herself, Connors noted that she was almost hit by a car, and argued that it’s a dangerous route for kids. She asserted that the costs of using the Ann Arbor Transportation Authority buses are prohibitive if a low-income family has multiple children with an adult who also needs to use public transportation to get to work. She requested that AAPS restore bus service to the area as soon as possible.

Other Comment: Buses, Privatization

Ronnie Rosner spoke to the board as volunteer and mother of five. She stated that she was there to strongly voice her opposition to the privatization of custodial staff and bus drivers. Saying she believed this could compromise the safety of AAPS school children, and lead to the layoff of some of custodial staff and bus drivers. Their pensions could also be negatively affected, she said. “There is no guarantee that privatizing these jobs could save money,” she argued.

During clarification on public commentary, Green and Lightfoot shared a concern regarding the busing situation that Connors had mentioned, and Green requested that Allen contact Connors and take another look at that situation. Mexicotte also pointed out that there is no proposal currently being considered by the board to privatize bus drivers or custodians.

Board Associations

The board invited regular reports from six organizations – the Youth Senate, the Ann Arbor Parent Advisory Committee on Special Education (AAPAC), the Parent-Teacher-Organization Council (PTOC), the Black Parents Student Support Group (BPSSG), the Ann Arbor Administrators Association (AAAA), and the Ann Arbor Education Association (AAEA). At the Dec. 14 meeting, the AAPAC and the AAEA were present to address the board.

Board Associations: AAPAC

Kathy Zager-Doxey thanked her son’s teacher, and Kelly Van Singel, a parent who recently gave a presentation highlighting how the iPod and iPad can be used to help students with special needs. Zager-Doxey pointed out that the slides from Van Singel’s presentation, “Happy to be Appy” are available on the AAPAC website.

Zager-Doxey also said the AAPAC is looking forward to increased partnership with SISS, and thanked Erik Thompson, assistant director of student intervention and support services for elementary buildings, for recently giving AAPAC a district update.

Finally, she noted that the district’s Disability Awareness Workshops would continue, and said that the AAPAC was looking forward to an upcoming report from AAPS superintendent Patricia Green on disproportionality in special education services, because many behaviors among special education students are manifestations of their disabilities.

Board Associations: AAEA

In addition to the part of his report regarding the journeyman services bid [described above], teachers’ union president Brit Satchwell noted that the State Senate is considering a bill (SB 865) which would “referendum-proof” the newly-enacted state emergency manager law (Public Act 4). He argued, “Many of these emergencies that we’re facing, that cities are feeling, are in part manufactured emergencies, for which those people are then blamed and have to suffer. How they do this without tanks rolling in the street is amazing to me.”

Satchwell urged everyone to advocate for the repeal of PA 4, and pointed out that the state is considering sending emergency managers to Detroit and Inkster. “If those two cities fall,” Satchwell pointed out, “over half of the African-Americans in this state will have lost their vote and be under authoritarian rule – no mayor, no county commissioners, no school board … If you’re an American this has to bother you.”

Awards and Accolades

The board acknowledged two major donations at the meeting, as well as successes of various students, staff, and schools.

Awards and Accolades: AAPS Education Foundation

Green pointed that the AAPS Educational Foundation (AAPSEF) recently received two substantial donations that she felt needed recognition in front of the board. AAPSEF executive director Wendy Correll expressed appreciation for a $50,000 donation from IMRA America (IMRA), a local high-tech company, and for a $10,000 gift from the Dearborn Federal Credit Union (DFCU).

Correll also announced that the AAPSEF would be partnering with Champions for Charity to put on the first Ann Arbor Marathon, Half Marathon, and 5K and 1.2 mile runs, and will be receiving philanthropic donations from the events.

Baskett asked how the AAPSEF formed relationships with IMRA and DFCU. Correll explained that IMRA approached the district as a way of being philanthropic in their community, and that DFCUapproached the AAPSEF because it is part of their mission to support education. Nelson expressed his excitement about the partnerships, and noted that the equipment that can be purchased with their donations makes learning math and science even more fun.

Board members thanked Correll for her work and for her leadership. Correll thanked the board for giving the space at this meeting to acknowledge these donors.

Awards and Accolades: Superintendent’s Report

Superintendent Green acknowledged “activities that have brought honor to our students and our schools,” including winners of various statewide competitions and contests, and community services projects undertaken by various school groups.

Student Disciplinary Action

Mexicotte explained that the board needed to share its reasoning behind a decision recently made in closed session concerning a student disciplinary action. She moved that the board reduce the disciplinary action to “level 3” to allow Student A to return to his or her school of origin, and noted that “this reduction in disciplinary action was due to the board’s determination that the weapon was not possessed for use as a weapon.”

Baskett questioned whether the word “weapon” should be used twice, and Mexicotte said the wording had come out of the closed session and could not be changed.

Outcome: The board unanimously approved Mexicotte’s motion to reduce the disciplinary aciton.

Agenda Planning

Mexicotte noted that she would be contacting each board member about the proposed agenda for the board’s upcoming organizational meeting on Jan. 18. The meeting will include the assignment of officer positions, ad-hoc committee positions, and board representation on administrative and community committees.

New Process and Procedure

The Dec. 14 board meeting saw the introduction of two new items.

New Process: Online Meeting Packets

The district piloted a new, online board packet at the Dec. 14 meeting. It can be viewed at this link: AAPS online board packet. Board secretary Amy Oskinski spent 15 minutes at the beginning of the Dec. 14 meeting orienting trustees to the new system and highlighting its technical features.

New Process: Meeting Adjournment Procedure

Mexicotte requested a motion to adjourn the meeting, a new parliamentary procedure for the board, which she said will help prevent her from inadvertently adjourning the meeting preemptively. The Dec. 14, 2011 meeting was adjourned at 2:07 a.m.

Present: President Deb Mexicotte, vice-president Susan Baskett, secretary Andy Thomas, treasurer Irene Patalan, and trustees Simone Lightfoot, Glenn Nelson and Christine Stead.

Absent: None

Next Regular Meeting/Annual Organizational Meeting: Jan. 18, 2012, 7 p.m., in the fourth-floor conference room of the downtown Ann Arbor District Library, 343 S. Fifth Ave.

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Russ Collins (left) shakes hands with former board member Gary Boren, who was recognized for his service at the DDA's Sept. 7, 2011 board meeting. (Photos by the writer.)

The Near North decision came over the objection of three board members, who expressed concern over unanswered questions about the project’s timeline. Avalon had also requested that the intent of the resolution be expressed in the form of a contractual agreement and that the period of the grant be two and a half years, instead of the maximum two years normally attached to DDA grants. The additional time is needed in order to cover a sufficient period to achieve LEED certification.

Representatives of the construction trades, who objected to the selection of the Grand Rapids-based Rockford Construction as the general contractor for the Near North project, as well as a resident spoke against the DDA’s grant award during the time allowed for public participation.

The three votes against the grant renewal came from Newcombe Clark, Roger Hewitt and Russ Collins. With the absence of board members Keith Orr and Bob Guenzel, the 12-member board still achieved the minimum seven votes it needed for approval of the grant.

Despite his absence from Wednesday’s meeting, Guenzel was voted as the new chair of the DDA board, filling a vacancy in that position left when the recently elected chair, Gary Boren, was not nominated for reappointment to the board when his term expired on July 31. Boren was on hand to accept a resolution of appreciation for his service on the board.

In connection to the officer election timing issue, Clark asked for a review of the board’s bylaws by the board’s executive committee. Clark has raised the issue during the July officer elections for the last two years. Because the mayor has been reticent about his intended appointments, DDA board members have elected their officers for the coming year without knowing if all board members with expiring terms will be reappointed. Clark asked that the bylaws possibly be changed so that board officers are elected after appointments are made, so that it’s clear who will be serving on the board.

In other business, the board unanimously passed a resolution of support for the RiverUp! program amid some discussion of the appropriateness of the resolution – in light of the fact that the Huron River does not flow through the DDA tax district.

The board also passed a resolution encouraging the Washtenaw County board of commissioners to enact an economic development tax on county residents. About half of the tax proceeds would go to Ann Arbor SPARK. The resolution came at the request of DDA board member Leah Gunn, who also serves on the Washtenaw County board. The Ann Arbor city council had previously passed a resolution encouraging the county board to enact the tax. The county board gave initial approval to the tax later that evening.

As part of the reports from various board committees, Roger Hewitt stressed that the parking rates and hours of enforcement discussed at the previous week’s operations committee meeting were merely the start of the discussion. The DDA is currently discussing what kind of proposal it will present to the city council at a November joint work session on parking. Under its new contract with the city to manage the public parking system, the DDA’s authority to set rates and hours of enforcement comes with specific requirements on public input.

The city council also has directed the DDA to explore alternate uses for some of the city-owned surface parking lots in the downtown. Board members got an update on the status of the DDA’s effort to plan how to implement that directive. 

Near North Housing Grant

The board was asked to consider renewal of a grant to Avalon Housing that board members had originally approved in early 2010 for the Near North affordable housing project on North Main Street.

The grant is for $400,000, with another $100,000 available if the project achieves certification under the Leadership in Energy and Environmental Design (LEED) – a green building certification system. The grant would be paid when the project receives a certificate of occupancy. Avalon must also have an agreement in place with the city/county office of community development to ensure that income eligibility requirements are met for all residents.

A vacant house on North Main Street on the site of the planned Near North housing project.

The income eligibility requirements for the 39 units in Near North are based on affordability as defined for two categories of apartments. For 25 apartments, rents must be affordable to households with incomes at less than 50% of area median income (AMI). The remaining 14 apartments are for supportive housing and will have Section 8 rent subsidies.

The Near North project is outside the DDA tax district boundary, but is within the quarter-mile radius established by DDA board policy for such housing fund expenditures.

The planned unit development (PUD) for the Near North project was given approval by the Ann Arbor city council on Sept. 21, 2009.

Near North Grant: Public Commentary

Michael Appel, Avalon’s associate director, led off public participation time by describing the request for an extension of a previous grant the board had authorized to Avalon for its Near North affordable housing project. He sketched out the basics of the project: There would be 39 units on North Main Street, the main entryway to downtown. The project will meet the city’s housing goals, he said.

Appel ticked through some of the timeline points for the project. He noted that Avalon was awarded the DDA funds early in 2010.

By way of background, it was at the Jan. 6, 2010 meeting that the DDA board took that vote. By board policy, grants automatically expire at the end of the fiscal year following the year they are awarded. That board policy was established by a vote of the board at its March 4, 2009 meeting.

While the DDA grant period has come to be thought of as a two-year period, two years is actually a maximum in calendar terms. That maximum could occur if a grant were awarded in early July, just after the start of the DDA’s fiscal year – the grant would be good through the end of the fiscal year, ending on June 30 two years later. But if a grant is awarded in early June, the end of the next fiscal year would be only 13 months away.

In a followup email to The Chronicle, Appel clarified some of the dates, which he’d inadvertently misstated in addressing the board. The accurate timeframe for Avalon’s application for tax credits was spring 2010. The tax credits were awarded in the summer of 2010. Appel went on to explain that a key piece of funding – brownfield tax credits from the state of Michigan – were eliminated by the legislature during tax reform legislation after the 2010 elections. By the summer of 2011 new legislation had been passed, which preserved the brownfield funding source.

In addressing the board, Appel stressed that the general contractor Avalon had selected [Rockford Construction] had worked hard to solicit a wide range of bids for subcontractors. Around 1,500 solicitations had been sent out, he said.

Appel concluded with two specific requests of the DDA. He noted that the DDA doesn’t typically sign grant contracts, but rather works off of resolutions. Avalon was requesting that the resolution before the DDA staff include authorization of the DDA staff to draw up a formal contract. The four-minute time limit on public speaking time expired before Appel could get to his second request: to extend the grant period beyond the usual timeframe, which would have ended the grant period on June 30, 2013.

The rationale for the extension was based on the need to have the building in operation for some period of time in order to gather sufficient data to achieve LEED certification. The DDA’s grant makes $100,000 contingent on achievement of LEED certification and the other $400,000 contingent on a certificate of occupancy.

Tom Yax spoke on behalf of U.A. (United Association) Local 190, a union of plumbers, pipefitters, service technicians and gas distribution workers. He told the DDA board the local union basically supports the awarding of the grant.

However, Yax described his union’s opposition to the award of the general construction contract to Rockford Construction, because of Rockford’s location in Grand Rapids and concern that, as general contractor, Rockford would award subcontracts to non-local workers. When you give work to outside contractors, Yax said, they make money, then leave the community, and they don’t do any charity work in the community. Yax described a range of community efforts by the union. He encouraged the use of local businesses and contractors. Every dollar spent locally passes through the economy six times, he said.

So Yax explained that the union was against awarding the grant unless assurance could be given that there would be local contractors. Why spend money on contractors who leave? he asked. Near North is a prevailing wage job, so there’s no reason not to hire local contractors with local workers, he said.

During the time for public participation at the end of the meeting, Margaret Schankler introduced herself as a resident who lived behind the Near North property. She called it unfortunate that the board had extended its usual grant period to December 2013, but that they didn’t have four minutes for additional public participation before the vote.

By way of background on public commentary, the DDA board entertains public participation at the start of its meetings by allowing up to four people to speak – it’s possible to sign up in advance. If fewer than four people sign up, people from the audience who have not signed up are invited to address the board. In no case are more than four people allowed to address the board at the start of the meeting.

Later, at the conclusion of the meeting, an unlimited number of people can address the board. The time limit for all speakers is four minutes. Public bodies like the DDA board are required under the state’s Open Meetings Act to allow any member of the public to address them during their meetings.

Schankler told the board that she’d heard the phrase “closing in a few weeks” more times than she could count. She commended board member Newcombe Clark for asking questions. She noted that the neighborhood had worked with developers and negotiated something they thought the whole neighborhood could live with. That had come after the neighborhood had urged Avalon to build a much smaller project – but they’d been told it needed to be that large to make the numbers work. She criticized the fact that only 14 of the 39 units in Near North are for supportive housing.

She said that the still-unbuilt units of Near North are being counted as replacements for the 15 units that Avalon is eliminating in connection with its project at 1500 Pauline. Considering the 1500 Pauline project and Near North, the two projects together result in no net gain for supportive housing in Ann Arbor, she said.

Schankler also contended that the existing houses (now vacant for two years) previously rented for rates that were half what will be charged for the new units. She also pointed to the high cost of construction for the new units – $378 per square foot. She told the board that’s twice as much as it would cost to build a two-bedroom condo.

Schankler criticized the lack of more publicly documentable progress on the project. She also criticized the fact that the existing houses had been allowed to deteriorate beyond repair, which she contended was intentional in order to ensure brownfield funding.

Now, the DDA had a chance to step back from the project and to redirect scare resources more wisely inside the DDA district. [The Near North project is outside the DDA tax district, but within the quarter-mile radius the DDA board has set as the area in which it's willing to invest housing dollars. In this the DDA has relied on advice from its legal counsel that it is legal to take this approach.]

Also at the end of the meeting, during time allotted for public participation, Ron Motsinger of the International Brotherhood of Electrical Workers (IBEW) Local Union 252 told the board that the local union represented hundreds of building contractors in all trades. He pointed to current levels of unemployment in some trades of over 33%. Local workers are hurting for jobs, he said. He had been excited to see the Near North project come in, but was disappointed that Rockford Construction was chosen as the general contractor.

Motsinger contended that Rockford has a track record of not using local contractors. Hutzel, a 150-year-old local company, had not been notified to bid on the project. He had no confidence Rockford would use local labor. Motsinger said the local had done $100,000 worth of charity and community work, citing specifically that it had bought scoreboards for Skyline High School. It really would have been nice to make sure it’s local people who are hired, he said. There are local general contractors who could have done the job. He said it was disappointing to see the resolution rushed through.

Rob Turner who represents District 1 on the county board of commissioners, also addressed the board at the end of the meeting. He is the owner of Turner Electric Service Inc. in Dexter. He said he was excited when the Near North project was approved – it helped poor people and he was happy for that. It could also help the building trades, he said. But when he heard that Rockford Construction had been selected as the general contractor, he was disappointed. As an alternative, he mentioned O’Neal Construction as a local general contractor who has experience with federally-funded projects.

Turner described Rockford as dealing with “non-responsible bidders.” Non-local firms don’t shop and buy locally, he said. He acknowledged that his firm was asked to bid on the Near North project. However, he’d received the invitation to bid just one week before. He’d tried to get a set of plans online but was unable to obtain them that way. They had been available physically in Grand Rapids and Bloomfield Hills, he said. He asked the board if that kind of bid process sounded conducive to local contractors. Given that the grant contract is not done, he said, he thought some language could be added to ensure that local companies had better access to the work.

Near North Grant: Board Deliberations

When the board took up the issue of the grant renewal, Appel was asked to the podium to clarify the nature of Avalon’s request. Appel explained that Avalon anticipated closing on their deal in the next month or so. The other funders will want written assurance that the $400,000 plus the $100,000 (contingent on LEED certification) is committed from the DDA. When Avalon closes, Appel said, the other funders will want to know that the $500,000 commitment is secured. DDA executive director Susan Pollay had told him, Appel said, that it’s not DDA standard practice to create a grant agreement.

DDA board member Newcombe Clark.

The second part of the request was a longer-than-usual grant period. If renewed now, then June 30, 2013 would be the natural expiration, he said. Appel requested that it be extended through Dec. 31, 2013, because by then the building would be operating long enough to achieve LEED certification.

Joan Lowenstein asked what the potential impact would be if the decision were put off until the operations committee could again review it and bring it back to the board. Appel said he was worried that a delay could affect the closing on the deal. Lowenstein invited Appel to talk about the bidding and the local contracts, which had been raised during public participation time at the start of the meeting.

Appel said that Avalon had looked at a number of issues in selecting a general contractor. Among them were the contractor’s experience in Washtenaw County, the experience building this type of housing, and experience with the Michigan State Housing Development Authority (MSHDA). Avalon had selected Rockford Construction because Rockford brought the most to the table, including experience in Washtenaw County. Before issuing bids, Appel said, Avalon had made sure that local subcontractors were well represented. For the early bid packets, only one-quarter came from western Michigan, where Rockford is located.

Appel said that because the project has federal funding, it brings with it various requirements for oversight – that includes prevailing wage requirements. There’s a highly-regulated open bid process. The bids were widely circulated for anyone to download the specifications, Appel said. He said he understood and respected the desire to support local businesses. Federal regulations make sure that everybody has access to the bidding process, he said.

Appel cautioned that a delay at this point would not allow Avalon to bring a document to the closing that showed the funding is secure.

Board member Newcombe Clark indicated that he thought the urgency was generated by the DDA board’s bylaws, not by Avalon’s timetable.

Pollay explained that the Avalon grant had sun-setted on June 30, 2011. The renewal had been discussed at the previous week’s operations committee meeting, Pollay said.

Clark said he had supported the Near North project and that he still supported it. He wanted to see it “come out of the ground,” he said. But Clark he said he also wanted to see his questions answered. He felt the DDA board was being rushed into creating closing documents, and the extension was for longer than the DDA’s usual grant period – it was for a 2.5 year extension. He’d wanted to explore several questions. Clark concluded that he could not support the project, based only on the information he had.

Responding to a question from board member Leah Gunn, Appel explained that the overall Near North project is relying on the DDA grant money – other funders need to know that the DDA’s commitment is there. Clark chimed in, “We’re free equity.”

Appel continued by saying that a copy of a DDA board resolution is not what real estate attorneys are accustomed to seeing at a closing. He said Avalon needed something that third parties would understand in the context of a real estate closing. Board member Roger Hewitt observed that the board was being asked to support the resolution when the document doesn’t exist yet.

Mayor John Hieftje said that the DDA’s offer of a grant was very sincere and he didn’t have a problem putting it in writing. He said he trusted the executive committee of the DDA board to do that. [According to DDA board bylaws, the executive committee consists of the chair, vice chair, treasurer and recording secretary. The last former chair is a non-voting member, and the executive director is a non-voting ex-officio member of the executive committee.]

Hieftje said that Avalon has to balance a lot of different factors with other entities that are larger than the DDA. Timing issues are hard. He said the DDA had committed to the Near North project a long time ago. Board member John Splitt also indicated that he had no problem with voting for the resolution. Board member John Mouat also supported the project. He noted that an incredible amount of time and work has been put in to make the project work. He said the DDA board owed it to the community to support it.

Responding to the concerns raised by representatives of trade unions, Gunn explained that the board doesn’t have the ability to say who gets a contract. She also noted that new state legislation forbids CUB (Construction Unity Board) agreements – it’s not for the DDA to decide. [CUB agreements are negotiated between local trade unions and contractors, and require that contractors who sign the agreement abide by terms of collective bargaining agreements for the duration of the construction project. In return, the trade unions agree that they will not strike, engage in work slow-downs, set up separate work entrances at the job site or take any other adverse action against the contractor.]

Comments from Hieftje and Gunn established that the city of Ann Arbor and Washtenaw County both needed to take action to revise policies to make them conform to the new state legislation on CUB agreements.

Clark asked for information on the site plan and whether it needed to be renewed with the city. Lacking other information, he said, he had to default to his own expertise. Clark said he did not want to go through the winter with vacant houses sitting on the site. He lamented the fact that the board did not have more time to consider the resolution.

Board member Sandi Smith said she’d been trying for seven years since she’d been appointed to the DDA board to spend the housing fund balance. It’s been difficult to add even a single unit of affordable housing, she said. If the DDA were to pull its commitment from the Near North project, it’s not as simple as picking another project that comes along. It would take a lot of time to develop another project. The DDA has been familiar with the Near North project for a long time, Smith said. She echoed Clark’s sentiment, however, that the houses need to come down. There’d been problems with people squatting inside them, she said.

Clark then suggested that out of the $500,000 grant, $100,000 be slated specifically for demolition and be paid upfront, not made contingent on a certificate of occupancy or LEED certification. If the project meets the DDA’s goals and the board is already willing to spend the money, then “Let’s have lots, not squatter places.” Lowenstein, who was chairing the meeting, noted that Clark’s suggestion would need to come in the form of an amendment to the resolution.

Smith seconded Clark’s suggestion that the DDA would front the $100,000 to Avalon to carry out the demolition of the houses. Hewitt said he was supportive of the project, but still had the same concern that the board would simply be trusting that everything will be worked out. The board needs better documentation, he said.

Smith asked if the demolition could be incorporated into the terms of the grant contract. Mouat felt it would further complicate what is already very complicated. He felt the board needs to be supportive of the project and make it happen as soon as possible. Adding a condition on the demolition would be another hindrance, he said.

Board member Russ Collins “called the question” on the amendment earmarking $100,000 for demolition of the existing housing on the Near North site.

Outcome on amendment: Clark’s amendment earmarking $100,000 for Avalon to demolish the houses on North Main received support only from one other board member, Russ Collins.

Almost immediately after the vote on the amendment, Gunn called the question on the main resolution.

Outcome on resolution: The board approved the $500,000 grant extension to Avalon, with dissent from Clark, Collins and Hewitt.

Near North Grant: Coda on Calling the Question

At the conclusion of the board meeting, Hieftje asked that the board bylaws be reviewed with respect to the parliamentary procedure of “calling the question,” to ensure that everyone has a chance to speak twice before the question has been called. He said he’d had his hand raised to speak on the Near North question and didn’t get to say something.

By way of background, under Robert’s Rules, the parliamentary move to close debate is actually called “moving the previous question.” More colloquially it’s referred to as “calling the question.” The motion needs a second, then requires a vote with 2/3 majority. The motion itself is not debatable, however.

At Wednesday’s meeting, the calling of the question on both occasions did not receive a vote. When something like this happens, contrary to the rules of procedure, it’s always in order for someone to raise a point of order to insist on the proper administration of the rules. Had Hieftje done so, it’s possible that his desire to speak might have been recognized at that point.

Parking Rates, Enforcement

At the meeting of the DDA board’s operations committee meeting the week before, on Aug. 30, 2011, the committee meeting packet included a set of items proposed to be included as part of the agenda for a joint city council/DDA board working session scheduled for  Nov. 14. The board did not have an item on its Sept. 7 agenda concerning parking rates.

Parking Rates, Enforcement: Background

A recent report in AnnArbor.com left the impression with some readers that a set of items in the Aug. 30 committee materials was already a recommendation of the DDA board. The article did not include the context of the DDA’s April 2010 Parking Report, which is referenced in the committee meeting materials.

That parking report had been produced by the DDA in response to a city council directive, given in late 2009. The city council directive had stemmed directly from a resolution considered by the city council, but not passed at that time, calling for the extension of parking meter enforcement hours.

The city council’s idea to extend evening enforcement hours was part of a strategy to replace revenue that the city had projected for new parking meters the city had wanted to install in areas near the downtown – against the advice of the DDA. The city wound up not installing most of the meters.

The city council’s revenue replacement strategy was put together by Sandi Smith, who is both a city councilmember (representing Ward 1) and a DDA board member. Included as part of Smith’s revenue replacement strategy was the assignment of revenue from two city-owned lots – 415 W. Washington and Fifth & William – directly to the city of Ann Arbor.

Additional context includes a planned joint working session with the city council. At its Aug. 30 meeting, the operations committee discussed items to be proposed to the council at that joint working session. The session, scheduled for Nov. 14, is contractually required as the result of a new agreement struck in May of 2011 under which the DDA manages the city’s public parking system. From the contract:

Joint Working Session. As part of the annual established calendar for City Council Working Sessions, City Council shall designate one working session in the fall of each calendar year as a joint working session with the DDA. The agenda for the working session shall be prepared by the City Administrator in accordance with Council Rules and in consultation with the Executive Director of the DDA. It is recommended that a portion of such agenda be dedicated to a discussion of operations under this Agreement and the utility of creating a joint study committee to address areas of mutual interest.

The timeline for rate increases stipulated in the contract requires three DDA board meetings, over the span of at least two months. The contract calls for announcing and indicating in writing the intent to increase rates at a DDA board meeting. At the next subsequent board meeting, members of the public must have an opportunity to address the board on that issue. And the board is contractually bound not to vote on the rate increase until the board meeting after that.

Based on the assumption that the DDA would not formally proceed with the contractually-stipulated changes to rates or enforcement hours before the council/DDA joint working session on Nov. 14, the DDA board could not take a vote on those changes until its February board meeting. On that scenario, the announcement of intent would come at the board’s December meeting, the public hearing would take place at the January meeting, and a vote could take place at the February meeting.

Parking Rates, Enforcement: Possible Agenda Items

In broad strokes, on Aug. 30 the operations committee was presented with possible items for the Nov. 14 joint working session that fell into two broad categories: hours of enforcement and parking fees. The note on hours of enforcement indicates that a possible item on the working session agenda could be a recommendation to extend the current on-street meter enforcement hours (currently from 8 a.m. to 6 p.m.) to 10 p.m.

The possible agenda items for parking rate changes include: increases in monthly permit parking for some structures and lots; increases in entrance fees to some structures; and increases in miscellaneous categories like art fair and meter bags.

Possible agenda items for rate changes also include adjustment downward of some parking fees, as part of a proposal to set rates based on demand. On-street spaces in highest demand would have a higher rate ($1.80/hour); on-street spaces in lowest demand would have a lower rate ($1.00/hour); and on-street spaces in the middle of the demand range would not have their rates changed.

Demand is defined in terms of the amount of revenue currently brought in by each meter. The pilot program described in the committee’s packet would be implemented in a rectangle bounded by State Street on the east and First Street on the west. Huron and William streets would be the respective north and south boundaries of the pilot program to set meter rates based on demand.

Parking Rates, Enforcement: Public Commentary

Maura Thomson, executive director of the Main Street Area Association (MSAA), addressed some recent talk about proposed changes to parking rates and enforcement hours. Back in late 2009, a resolution was considered by the city council that contemplated evening enforcement hours. [Chronicle reporting from that timeframe includes "City-DDA Parking Deal Possible" and "Most Aspects of Parking Deal Approved"] Thomson reminded the DDA board that in 2009, merchants were vocal in opposition to evening enforcement. [Within hours of the appearance on the city council's agenda of the resolution calling for evening enforcement, the Ann Arbor Area chamber of commerce had fired off a memo in opposition.]

In the wake of that city council discussion [which ultimately did not result in a formal call for evening enforcement], the DDA was then asked to come up with a plan. Thomson said that the MSAA was involved in that work through participation in focus groups. The MSAA had also surveyed its membership, Thomson said. She indicated that there was overwhelming opposition to extending enforcement hours. There was also a sentiment that some kind of free parking component needs to be included. She said it feels like “we’re back to where we started.” Part of the balance of higher rates and longer enforcement hours outlined in the April 2010 parking report produced by the DDA is a free parking component as part of the demand management strategy, Thomson said.

Thompson was alluding specifically to a passage from the April 2010 report that reads:

Free structure parking is being used in other Michigan cities with mixed use downtowns, as the offer of free is very attractive and easily understood. The DDA believes that every parking space has value, but if used correctly, using this pricing strategy may lessen demand at the meters and extend parking more broadly throughout the system.

Thomson asked the DDA board to consider that aspect of the plan – it allows for a positive communications strategy. She was dismissive of a free parking component based on the hours of enforcement early in the morning [also discussed in the report]. If we’re all being honest, she said, the free component from 8-9 a.m. has no correlation to evening enforcement. She compared that strategy to saying that enforcement of meters from 6-8 a.m. would have a positive impact on parking revenue. So she asked that “truly free” parking be tied into any plan to extend hours of enforcement.

Tom Murray introduced himself as a member of the MSAA and owner of Conor O’Neill’s on Main Street. He warned that if the DDA enacts the plan as currently discussed, people will go elsewhere for entertainment. Addressing the issue of employee parking in the evening, Murray said that the DDA was directed to provide a plan to communicate specific options for evening employees. But the discussion from the last committee meeting the previous week didn’t indicate any specific options, Murray said.

Murray ventured that his staff would continue to find a way to get outside and feed the meters. Customers, on the other hand, won’t go outside and they’ll receive tickets – that will become a problem. Murray said that when we read about employees, we forget that employees are also customers. We need to incentivize employees, not punish them. A truly free parking component needs to be explored, Murray said.

Murray encouraged the DDA to find creative ways to reach out to employees. Employees would take advantage of alternatives if they are safe and affordable, he said. He also suggested that the entire program should be on a pilot basis, not just the meter rate schedule. The plan current under consideration hurts downtown, Murray concluded.

Addressing the board at the time for public commentary at the end of the meeting, Jessica Johnston of Falling Water on Main Street asked the board to reconsider any decision to extend hours of parking enforcement. Based on face-to-face interaction with her customers, she told the board there would be a negative reaction to it. The downtown economy is already fragile, she cautioned, and she ventured that the dinner crowd could be eliminated by the proposal.

As part of his report from the Downtown Citizens Advisory Council, Ray Detter said the advisory council continues to support the DDA’s effort to implement parking/transportation demand management. He said some of the things in the media he’d read were not terribly accurate. He stated that the advisory council had always assumed that the possibility of extending hours would include a free component.

At the start of public commentary, Joan Lowenstein, who was chairing the meeting, had stressed that public commentary is not the occasion for a back-and-forth kind of thing. However, board members do sometimes use their own time at the board table to respond to concerns raised during public commentary.

And in response to the public commentary, board member Roger Hewitt stressed that the operations committee meeting had been the start of a discussion – he appreciated the input from the public. Hewitt said he felt the way the proposal had been characterized in media reports was unfortunate.

Naming Guenzel Chair, Thanking Boren

On the agenda were resolutions to name Bob Guenzel as board chair and Leah Gunn as vice chair, and to thank Gary Boren for his service on the board. [Guenzel did not attend the board's meeting.]

Naming Guenzel, Thanking Boren: Background

The board had been without a chair because board member Gary Boren, who had been elected to that post by his board colleagues at their July 6, 2011 meeting, was not nominated by mayor John Hieftje for reappointment. Boren’s term expired on July 31. Boren was replaced on the board by local attorney Nader Nassif.

Guenzel, who retired last year as Washtenaw County administrator, was elected vice chair of the board at the July meeting. Gunn’s other public service currently includes representing District 9 on the Washtenaw County board of commissioners.

The evening before the DDA’s board meeting, at the Sept. 6 city council meeting, three nominations to the DDA board were on the agenda for confirmation: Joan Lowenstein (reappointment), John Mouat (reappointment), and Nader Nassif (new appointment replacing Boren). The nominations had been announced at the council’s previous meeting, on Aug. 15.

At the council’s Sept. 6 meeting, Stephen Kunselman (Ward 3) made the rare request that the council’s confirmation of the mayoral nominations be done separately on roll call votes for each nominee. The votes on the appointments of Mouat and Nassif were unanimous. However, Kunselman voted against the reappointment of Lowenstein. All other councilmembers present voted for her.

Naming Guenzel, Thanking Boren: Board Deliberations

At the DDA board’s Sept. 7 meeting, Newcombe Clark noted that the board is tasked by its bylaws to elect officers at the July annual meeting. [That has historically come before the mayor has chosen to announce whether he would be reappointing board members whose terms were expiring later in the month.] Clark reminded board members that he’d raised the issue at the last two annual meetings. From The Chronicle’s report of the 2011 annual meeting:

Roger Hewitt nominated current vice chair Gary Boren to serve as chair.

Newcombe Clark asked if Boren’s term was being renewed – that is, would he be reappointed by the mayor to serve on the board? By way of background, outgoing chair Joan Lowenstein’s term on the board ends on July 31, 2011, as do the terms for Gary Boren and John Mouat. Boren has been a vocal proponent of the idea that the DDA is an independent corporate body and not an arm of the city of Ann Arbor.

Last year, Clark had pointedly abstained from voting in the officer elections over the lack of information about reappointments to the board. From Chronicle coverage of the July 7, 2010 DDA annual meeting:

Abstaining from each of the officer votes was board member Newcombe Clark.

Clark explained to The Chronicle after the meeting that there’d been no indication from the mayor whether the two board members whose appointments are expiring July 31 – Jennifer S. Hall and John Splitt – would be reappointed. Clark said he could thus not be certain of the full range of choices for board officers.

Splitt was reappointed; Hall was not. Bob Guenzel was appointed instead of Hall.

In response to Clark’s question this year, Lowenstein said they did not know that yet. Mayor John Hieftje, sitting at the board table, did not offer any statement about whether he planned to nominate Boren for the city council’s approval for reappointment.

At Wednesday’s meeting, Clark stated that he would like to see the bylaws adjusted so that officer elections are not held until after the status of reappointments is known. Otherwise, he said, board members are being asked to vote for chair and vice chair without knowing if they’ll continue on the board. Nothing is lost and a lot is gained by making the change, Clark said. He stated that he wanted formally to ask the executive committee to look into it: “We owe each other more than this.”

Outcome: The board unanimously approved the resolution thanking Gary Boren for his service, as well as the resolution naming Bob Guenzel chair of the board. Boren, who attended the meeting to receive the recognition from his colleagues, made his way around the table and shook hands with the board members.

County Economic Development Tax

The board was asked to consider a resolution urging the Washtenaw County board of commissioners to use Act 88 of 1913 to levy a tax in support of economic development in the county. A public hearing on the tax was scheduled for the county board’s meeting later that evening.

At its Aug. 15 meeting, the Ann Arbor city council passed a similar measure urging county commissioners to levy the tax.

For the last two years, the county board has levied the tax. It has previously used a rate of 0.043 mill. (One mill is $1 for every $1,000 of a property’s taxable value.) This year, the county board is contemplating a millage rate of 0.05 mills. Because Act 88 predates the state’s Headlee legislation, the county board does not need to put the issue before voters in order to levy the tax. The county board could, by the Act 88 statute, levy such a tax up to 0.5 mills, or 10 times the amount it is considering for next year.

The Act 88 tax received initial approval by a 7-3 vote at the county board’s Sept. 7 meeting. The three commissioners voting against it were Alicia Ping (R-District 3), Wes Prater (D-District 4) and Dan Smith (R-District 2). Commissioner Ronnie Peterson was absent. A final vote is expected on Sept. 21.

The anticipated $688,913 in millage proceeds will be allocated to several local entities: Ann Arbor SPARK ($230,000), SPARK East business incubator ($50,000), the county’s dept. of community & economic development ($131,149), Eastern Leaders Group ($100,000), promotion of heritage tourism ($65,264), Food System Economic Partnership (FSEP – $15,000), Washtenaw 4-H, operated by the Michigan State University Extension program ($82,500) and Washtenaw Farm Council 4-H Youth Show ($15,000).

During the brief DDA board deliberations on the resolution, Leah Gunn, who also serves as a county commissioner, indicated that it was “very small millage,” that would cost $5.38/year for the average homeowner. It supports important economic development efforts like Ann Arbor SPARK and agriculture, she said. Gunn told her DDA board colleagues that she would appreciate them voting for it, so that she could take it to the county board of commissioners meeting later that evening.

Outcome: The DDA board voted unanimously in favor of the resolution urging the county board to levy the economic development tax.

RiverUp!

Before the board was a resolution expressing support of RiverUp!, a collaborative effort among several organizations – including the Huron River Watershed Council, the National Wildlife Federation, and the Michigan League of Conservation Voters – to improve the Huron River corridor.

The resolution states that the DDA will assist in wayfinding efforts that would help connect the river with visitors to the downtown, but it does not specify a budget for that effort. [For background on the RiverUp! initiative, see Chronicle coverage: "RiverUp! Focuses on Revitalizing Huron River"]

During board deliberations, mayor John Hieftje stressed that he’s been involved with the RiverUp! project since the beginning and expressed his support for the resolution.

John Mouat questioned the project’s relevance to the DDA. He said as much as he wished it did, the Huron River doesn’t flow through Ann Arbor’s DDA district. What caused him concern, he said, is when something becomes “a bit of a stretch” and he wanted to voice that as a general concern. He wanted to know specifically how support of the DDA board adds to the project.

Sandi Smith pointed out the focus on wayfinding in the DDA’s resolution. She said her thought in bringing forward the resolution is that a University of Michigan freshman might be standing on campus and not know about the recreation amenity just 3/4 mile to the north. She allowed that the DDA can’t relocate the downtown to the river, but it’s also important not to forget that it’s there.

Outcome: The DDA board voted unanimously in favor of the resolution expressing support of RiverUp!

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: The Varsity, Alleys

Ray Detter reported out from the Downtown Citizens Advisory Council, which meets monthly on the evening just before the DDA board meetings. He noted that The Varsity at Ann Arbor would be coming before the planning commission on Sept. 20. [The Varsity is a proposed 13-story, 173-unit, 178,380-square-foot apartment building for approximately 418 students. It would include 77 parking spaces, and would replace the two-story office building and parking lot currently on the site, located on Washington Street, just west of the First Baptist Church.]

Detter said that the advisory council would continue to support the city’s newly enacted downtown design guidelines – the advisory council doesn’t oppose The Varsity. He reported that members of the advisory council had attended the design board review meeting for The Varsity, as well as the citizen participation meeting, and offered their suggestions. Detter said that in response to feedback, the developer had made some changes, but had not really addressed the issue of the view from East Huron Street.

Detter praised the work that the developer had done with the First Baptist Church, which had resulted in plans for a walkway connecting East Huron and Washington Street.

Detter said the hope was that the south entrance to that walkway on Washington would connect to the alley that runs between Washington and Liberty. That alley, Detter said, has been allowed to turn into a place for smelly dumpsters and urinating panhandlers. Detter reported that the advisory council had met with DDA executive director Susan Pollay, assistant city attorney Kevin McDonald, interim city administrator Tom Crawford and mayor John Hieftje.

As a result, Detter reported, that group has moved ahead to form a committee to develop a plan for the alley. Some of the goals are to get better placement of the dumpsters, add awnings, and install better lighting. He expressed the hope that it could be turned from a dangerous, dirty, disgraceful alley into an asset.

Comm/Comm: Downtown Parcels

As part of the report from the board’s partnerships committee, Sandi Smith reported that the committee continues to discuss how the DDA will implement a city council directive to explore alternate uses of some city-owned parcels in the downtown. Smith stressed that the idea is to build on all the work that’s come before, not to recreate everything.

Amber Miller, the DDA’s planning and research specialist, had sketched out a draft of a process, to which committee members had responded favorably. It involved two parallel tracks – a technical component and a community outreach component. Doug Kelbaugh, former dean of the University of Michigan’s college of architecture and urban planning, and Kit McCullough, who teaches at the college, attended the partnerships committee meeting. They’d previously pitched their services to the DDA to facilitate a public engagement process.

The two UM architecture faculty were receptive to Miller’s sketch and suggested that they could develop a “road show” as a presentation that could be delivered by DDA staff or some other person on multiple occasions to different community groups. The conversation about the alternative use of downtown parcels was to continue at the committee’s next meeting on Sept. 14.

Comm/Comm: Regular Parking Report

Roger Hewitt delivered highlights from the monthly parking report from July: hourly patrons were down 5%, revenues up 2%. Art fair revenue was down about $5,000 (2%) compared to last year. Hewitt said the weather had an impact, but the horrible, hot temperatures had put a smaller dent in revenues than he’d been anticipating. Responding to a question from John Mouat, Hewitt said the revenue from art fair parking is not budgeted separately. Russ Collins called the $5,000 variance not significant. Hewitt agreed that it’s “a drop in the bucket.”

Comm/Comm: Unaudited FY 2011 Budget Numbers

Roger Hewitt pointed to the unaudited financial statements from the end of the 2011 fiscal year. He noted that by state law the DDA has to amend its budget every year to reflect the best estimate of where the organization stands financially. The audit is in process now, and the DDA expects that the numbers will be the same at the end of the audit.

Of the items that Hewitt ticked through, the scaling back of expenditures on parking maintenance drew scrutiny from board member Newcombe Clark. He wanted to know if the amount reflected an additional revised downward expenditure on maintenance. Yes, answered Hewitt, but the reduced maintenance activity was still within the DDA’s engineering consultant’s recommendations.

Clark noted that painting is cosmetic unless you don’t do it for several years – then it becomes structural. Hewitt assured Clark that over a 10-year period, the DDA would spend the same amount it had originally planned. Hewitt described the DDA’s approach to maintenance as “fanatical,” so felt like the DDA was in very good shape with respect to the maintenance issue.

Hewitt noted that the fund balance had decreased considerably from a high of around $20 million several years ago and the DDA had spent down a good deal of it. Those numbers would continue to go down, he said.

Comm/Comm: go!pass

John Mouat reported that the getDowntown advisory board had advised increasing the cost of go!passes to employers from $5 to $10. With the popularity of the program, all of the funds had been expended, he said. However, the Ann Arbor Transportation Authority (AATA) had passed a resolution at its last meeting adjusting the price it charges for go!pass rides over the next two years to calibrate it to the amount already pledged by the DDA for that period. That led Mouat to conclude that: “We’re covered for go!passes.” [For detailed Chronicle coverage of the go!pass AATA funding decision, see "AATA Reduces Charge for go!pass Rides"]

Comm/Comm: Bicycle Parking

John Mouat gave an update on information about bicycle parking downtown, provided by a DDA summer intern. Highlights included: 1,000 bike parking spaces downtown; 83% of bikes parked are locked to hoops instead of lampposts; the bicycle map has been updated; the last of new vegetable-shaped hoops have been installed at the farmers market.

Comm/Comm: Construction Updates

John Splitt reported that the Fifth and Division streetscape improvement project is mostly complete, except for the 300 block of South Fifth Avenue – that section will need to wait until construction of the underground parking structure on South Fifth is further along. On the 200 block of South Fifth, just some lampposts remain to be installed.

The underground parking structure site along Fifth Avenue is now is getting very busy, Splitt reported. Waterproofing work is being done on the east dog-leg side of the project. Columns and slabs are getting poured in the other two phases – the middle and the Fifth Avenue side. [The project is being built from east to west.]

Comm/Comm: State of the Downtown Report

At the board meeting, the previous release of the DDA’s State of the Downtown Report was acknowledged. The report features a raft of statistical information about the DDA district, including acreage, building square footage by category, population trends, real estate occupancy rates, crime trends, and the like. Interspersed through the text are photos, including a cover photo by Seth McCubbin.

Present: Nader Nassif, Newcombe Clark, Roger Hewitt, John Hieftje, John Splitt, Sandi Smith, Leah Gunn, Russ Collins, Joan Lowenstein, John Mouat

Absent: Keith Orr, Bob Guenzel

Next board meeting: Noon on Wednesday, Oct. 5, at the DDA offices, 150 S. Fifth Ave., Suite 301. [confirm date]

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