Ann Arbor city administrator Steve Powers at the council’s May 12, 2014 working session. He presented his recommended FY 2015 budget to the council in April. The council can amend that budget on May 19.

Under the city charter, the council needs to adopt the budget, with any amendments, on a seven-vote majority. If the council is not able to achieve a seven-vote majority on an amended budget, then under the city charter, the city administrator’s proposed FY 2015 budget will be adopted by default.

At the conclusion of a May 12 city council work session, Tom Crawford, the city’s chief financial officer, reminded councilmembers of the constraints they were working under when considering budget amendments. The forecast for fiscal year 2014, he told the council, is that about $1.5 million in the fund balance reserve will be used – which compares to the budgeted use of about $2.8 million of fund balance.

But Crawford cautioned that the unspent budgeted amount likely reflected a delay in that spending, not an actual savings. Crawford expected that the fund balance reserve at the end of FY 2014 would be about 10% of operating expenses.

The proposed FY 2015 budget would use $2.8 million in fund balance, Crawford told the council, which would take the fund balance down to the 7-9% range. That’s the bottom of the minimum 8-12% range that has been the council’s policy. “I say all that because I want to remind you that you’re entering a budget deliberation with pretty tight constraints,” Crawford said. So Crawford encouraged the council to find offsets to any additional expenses they wanted to incur – whether those were recurring or non-recurring expenses.

Councilmembers were asked to submit drafts of their proposed amendments to staff by the close of business on Thursday so that staff could assist in crafting the amendments. This report includes some additional background on what’s in the budget, as well as a description of 17 possible budget amendments that might be proposed.

Detail is provided on amendments in three areas: police staffing, leaf/compost collection and the local development finance authority (LDFA).

Outline of Possible Amendments

Here’s a bulleted list of possible amendments, not necessarily exhaustive, with potential councilmember sponsors in parens:

• Police staffing. One proposal would increase the number of sworn police officers by five officers instead of an increase of three proposed by the city administrator. Funding would come in part from a reduction in the 15th District Court budget. (Jane Lumm, Jack Eaton, Sumi Kailasapathy) An alternative proposal would increase the number of sworn officers by two officers instead of three, with the savings allocated to human services for the purpose of drug treatment and prevention. (Chuck Warpehoski)
• Forestry staffing.  The proposal would add a city forester position. The funding for the initial year would come from eliminating a proposed corridor study planned for Ellsworth Road. (Eaton)
• Compost/leaf program. One proposal would restore loose leaf collection in the fall and holiday tree pickup in the winter. This would require roughly $406,000 in capital investment and $319,500 in recurring expenses from the millage-supported solid waste fund. (Lumm, Eaton, Kailasapathy) A different proposal would extend the curbside compostables pickup from seasonal to year-round so that food waste could be kept out of the garbage stream year-round, at an increased annual cost of $300,000. (Sabra Briere)
• LDFA, Ann Arbor SPARK. One proposal would eliminate some increases in the budget of the local development finance authority (LDFA) – of $30,000 in incubator operating expense, $20,000 in direct staffing expense, and a $75,000 increase to Ann Arbor SPARK’s marketing plan. Those funds would instead be reserved for “future infrastructure improvements.” (Kailasapathy, Eaton) A separate proposal would eliminate the city general fund allocation of $75,000 to Ann Arbor SPARK and put that money toward human services instead. (Kailasapathy, Eaton)
• Animal control. The proposal would eliminate funding for an inventory of commercial signs in favor of animal control for the Human Society of Huron Valley and for deer herd management costs. (Sally Petersen, Kailasapathy, Eaton)
• Art administration, traffic calming efforts. The proposal is to reduce the amount allocated in the recommended budget for transitional costs associated with the public art program from $80,000 to $40,000. The $40,000 in savings would be used for traffic calming projects in neighborhoods, including but not limited to speed bumps. (Eaton, Kailasapathy)
• 415 W. Washington demolition. One proposal would use about half of the $300,000 in the general fund budget that’s designated for demolition of the city-owned 415 W. Washington property to fund the pedestrian safety and access task force. (Briere, Warpehoski) A separate proposal would simply eliminate general fund support for demolition of the city-owned buildings at 415 W. Washington. (Kailasapathy, Lumm, Eaton)
• Community-facing climate action programs. Money for “community-facing” climate action programs would come in part from $50,000 allocated for the Ellsworth Road corridor study. (Christopher Taylor, Margie Teall, John Hieftje, Warpehoski)
• Warming center. This proposal would allocate $100,000 from the affordable housing trust fund to provide assistance for a warming center. (Lumm, Briere)
• Streets. A proposal about alternative transportation would, for this year, bump the Act 51 allocation for alternative transportation from 2.5% to 5% – which translates to $180,000. The amendment would ask the city administrator to provide information that would help the council determine the appropriate percentage to allocate to alternative transportation. (Briere) A separate resolution would not alter the budget but would ask the city administrator to “study alternatives to increase street funding and present to Council by Sept. 30, 2014 a report outlining options, their financial impact, and the pros and cons of each.” (Lumm, Eaton, Kailasapathy)

In addition to these budget amendments, it’s possible that a resolution will be put forward by Jane Lumm (Ward 2) directing the city administrator to develop a revised retirement plan design for new hires that “includes a defined contribution element and results in lower costs to the city.” The new plan design would be presented to the council by Dec. 31, 2014, with the intent that the revised plan would be applied to all employees hired after Dec. 31, 2015.

FY 2015 Budget Background

Ann Arbor city administrator Steve Powers’ proposed general fund budget for fiscal year 2015, which starts on July 1, 2014, approaches $100 million. [.pdf of FY 2015 budget detailed breakdown] Powers presented the budget to the council at the council’s second meeting in April, as required under the city charter.

Left: Stumps (black) and vacant sites (gray). Right: Maples (purple), Crabapples (red) and oaks (blue). Maps by The Chronicle from the city’s 2009 tree inventory.

Funded as part of the proposed FY 2015 budget are five new full-time employees, four of them in public safety: one additional firefighter; three additional police officers; and an additional rental housing inspection position. The additional police positions will bring the total number of sworn officers in the city of Ann Arbor to 122.

The proposed budget also includes a one-time expense of $1 million to address a backlog in critical pruning and removal of trees that are in the public right of way. The allocation comes in the context of the development of an urban forestry management plan.

The $1 million one-time expense for street trees brings the total of non-recurring expenses in the FY 2015 general fund budget to about $2.8 million. Other one-time expenses budgeted for FY 2015 are: $80,000 to cover transitional costs for public art administration; $606,000 for repairs and maintenance of the city’s hydroelectric dams; $100,000 for consultants to assist with completing the downtown zoning amendments and sign inventory; $300,000 for demolition of city-owned buildings at 415 W. Washington; $200,000 for corridor studies; and $209,000 in operational support for the Ann Arbor Housing Commission’s (AAHC) transition to a rental assistance demonstration program.

The housing commission also accounts for the bulk of a $13.8 million (17%) increase in general fund recurring expenditures compared to last year. That’s due to an accounting change that recognizes 22 AAHC employees as city employees. By recognizing revenue and expenses for AAHC employee compensation through the general fund, the AAHC can avoid the negative impact of a new accounting rule. The GASB 68 rule requires unfunded pension fund liabilities to be recorded in the financial statements for proprietary funds (like the AAHC) but not for governmental funds like the general fund.

Also included in the FY 2015 budget proposal is about $3,000 for a pilot program for closed captioning of public meeting broadcasts on the Community Television Network. According to city of Ann Arbor communications manager Lisa Wondrash, the cable commission recommended approval of the money at its Feb. 25 meeting, and she notified the commission on disability issues about the pilot on April 16. The pilot will begin with meetings of the city’s commission on disability issues, with a goal of testing out a closed captioning system this July.

The $98.1 million of general fund expenditures in FY 2015 will include $95.3 million in recurring expenditures and $2.8 million in one-time expenses.

When the general fund is added in with the rest of the city’s budget – the street fund, water fund, sewer fund, parking fund, and the like – the total expenses proposed for FY 2015 come to $334,434,101.

Loose Leaf Collection, Holiday Trees

Until 2011, the city of Ann Arbor offered an option to residents for the pickup of leaves that allowed residents to sweep their leaves into the street for collection.

The city collected the leaves using street sweepers as pushers, front-end loaders and rented large-volume trucks. The city offered two such pickup days for all parts of the city. As part of the general strategy for moving to wheeled carts for all types of curbside pickups (including garbage and recycling) – which can be serviced by a mechanical arm controlled from a truck cab – the city made compost carts available to residents. The city also still picks up leaves that are “containerized” in paper bags.

The proposed FY 2015 budget does not provide for the loose leaf collection service. Jane Lumm (Ward 2) will likely bring forward an amendment to restore the leaf collection service, as well as holiday tree pickup. According to a staff memo responding to questions about the financial impact, restoration of the program would require $406,000 in one-time capital costs for the additional equipment, and a total of $319,500 in additional recurring annual costs. That’s been roughly the same financial picture the council has been provided in the two previous years.

A truck rented from Premier Truck Sales & Rental for fall containerized (paper bagged) leaf pickup – action back in 2011 on the Old West Side in Ann Arbor.

Last year on budget night, at its May 20, 2013 meeting, the council deliberated over an hour on the restoration of loose leaf collection in the fall. That was the second-longest amount of time spent on any topic. [The longest amount of time was spent by the council on the Ann Arbor Downtown Development Authority budget – about an hour and a half.] It did not result in the restoration of the mass leaf collection service. The proposal failed on a 4-7 vote, with support from Jane Lumm (Ward 2), Sally Petersen (Ward 2), Mike Anglin (Ward 5), and Sumi Kailasapathy (Ward 1).

That was two more votes than the proposal to restore loose leaf collection got the previous year, during the council’s May 21, 2012 FY 2013 budget deliberations. Joining Lumm and Anglin in support that year was only Tony Derezinski (Ward 2).

Compared to last year, the proposal will likely pick up at least one vote – from Jack Eaton (Ward 4), who prevailed over Marcia Higgins in last year’s Democratic primary. But that would leave it one vote shy of the six votes needed to amend the budget.

Loose Leaf Collection: Possible Points of Debate

Context for this item includes the fact that funding for curbside collection of leaves – whatever the method – comes from the solid waste fund, which is supported by a tax at a rate of 2.467 mills. That generates roughly $12 million a year. The proposal from Sabra Briere (Ward 1) to extend compost collection – using curbside carts as well as paper bags – from seasonal to year-round collection would cost about the same as Jane Lumm’s proposal to add loose leaf collection and holiday tree pickup. Either proposal would cost roughly $300,000.

The two proposals intersect on one relatively small point – the pickup of holiday trees, which has a standalone cost of roughly $26,000. Extending compost collection to year-round service could have the practical effect of providing pickup of holiday trees – because many such trees would fit inside the compost carts or could be chopped to fit inside them. Briere’s interest in extending compost pickup to year-round service is motivated by a desire to allow the city’s food scrap composting program – implemented for the first time this spring – to operate year-round.

Briere’s proposed amendment would expect the $300,000 in annual costs to be recovered in part through reduced landfill tipping fees for garbage – as the weight from food scraps would be diverted from the garbage stream. Based on a city sampling of the contents of garbage trucks, about half of the weight is attributable to food waste. So if all of the food waste were eliminated from the garbage stream, the city could expect to cut its tipping fees for residential garbage by half.

Data from the city indicates about 14,500 tons of residential curbside trash picked up in FY 2012. Reducing that figure by half would result in a savings of just $195,000 – based on a tipping fee of $26 a ton paid by the city. Those fees could increase, however, as the city’s contract with the landfill expires in 2017.

Lumm is likely to argue that loose leaf collection is a basic service that residents can reasonably expect to be paid for from their taxes. Further, she’ll likely argue that the sheer volume of leaves that some residents contend with makes bagging the leaves or mulching them impractical, so that paying a private hauler is the only alternative for such residents. She’ll likely point to the current fund balance in the solid waste fund of $11.7 million as adequate to fund the acquisition of the necessary equipment to provide the service.

On the financial side, opponents of restoring the service will likely point to challenges faced by the solid waste fund: increases to tipping fees – as much as 50% – when the city’s landfill contract expires in 2017, construction of a new drop-off center, expansion of commercial food waste recycling, and expansion of multi-family recycling. Other considerations likely to be cited by opponents of restoring loose leaf collection could include localized flooding caused by leaves clogging storm drains, the road hazards to bicyclists and motorcyclists, and the increase in suspended solids that flow into the Huron River. One staff memo on the topic indicates that there’s been a 28% drop in service requests about plugged storm drains since the containerized approach was adopted.

On May 17, Janis Bobrin – former Washtenaw County water resources commissioner – sent an email to all councilmembers on the topic of localized flooding and particulate pollution caused by leaves in the street. Bobrin’s email received a quick reply from Lumm, who attached a photo of a leaf-clogged storm drain from April of this year. Lumm contends that storm drains get clogged with leaves with the containerized approach, because the streets are not systematically cleared of leaves as they would be if the mass loose leaf collection service were implemented.

Police Officer Staffing

The FY 2015 proposed budget would add three police officers – two in community engagement and one for traffic enforcement – bringing the count of sworn officers from 119 to 122. An amendment to be put forward by Jane Lumm (Ward 2), Jack Eaton (Ward 4) and Sumi Kailasapathy (Ward 1) would increase the number of sworn police officers by five officers instead of three. Funding would come in part from a reduction in the 15th District Court budget.

An alternative proposal from Chuck Warpehoski (Ward 5) would increase the number of sworn officers by two instead of three, with the savings allocated to human services for the purpose of drug treatment and prevention.

Last year on budget night, at its May 20, 2013 meeting, the council deliberated a bit under an hour on a proposal to reduce the 15th District Court’s budget by $270,000 and to use the recurring savings to hire three additional police officers. That proposal failed on a 5-6 vote – with support only from Lumm, Kailasapathy, Mike Anglin (Ward 5), Stephen Kunselman (Ward 3) and Marcia Higgins (Ward 4). A proposal to fund a single police position – by eliminating an FTE in the city attorney’s office through a retirement – received shorter debate and less support, with yes votes coming only from Lumm and Kailasapathy.

The previous year, Lumm put forward an unsuccessful amendment to add five police officers – in addition to five that would have been added if a Community Oriented Policing Services (COPS) grant was received. The five non-grant-funded positions would have been paid for with non-specific cuts to other city general fund departments: mayor and council ($8,957); 15th District Court ($94,617); public services ($192,265); and human resources ($35,939). The amendment also called for higher cost recovery for officers for which the Ann Arbor Area Transportation Authority (AAATA) contracts. And the amendment called for use of money designated for a high speed rail grant match. That 2012 budget amendment to add five police officers got support only from Lumm and Kunselman.

Police Officer Staffing: Historical Levels

At a May 12, 2014 work session, police chief John Seto gave the council an update on safety services. Among the data sets he presented were tables that showed the decrease in sworn officer staffing levels for the AAPD over the last 10 years, broken down by category of officer. He allowed that the staffing levels prior to 2005 were even higher.

Ann Arbor Police Department sworn officer staffing levels by category: 2004-2014. The significant decrease from FY 2009 to FY 2010 was the result of several officers taking advantage of an incentivized early retirement offered by the city. Those positions were not filled. (Data from the city of Ann Arbor, chart by The Chronicle.)

Ann Arbor Police Department sworn officer staffing levels by category: 2004-2014 with proposed levels for FY 2015. (Data from the city of Ann Arbor, chart by The Chronicle.)

In his work session presentation to the council, Seto pointed out that the category of lieutenants and sergeants had decreased more than sworn officers overall, which he indicated was a result of flattening the organization so that it was administratively lighter. Computing the ratio of officers in the lieutenant and sergeant category to the other officers illustrates the drop Seto described:

Ratio of lieutenants and sergeants to other officers in the Ann Arbor Police Department. (Data from the city of Ann Arbor, chart by The Chronicle.)

Police Officer Staffing: Crime Trends

At the May 12 work session, Seto also updated the council on major crime trends through the end of last year. He was reprising a presentation he’d given two months earlier at the council’s March 3, 2014 meeting. [.pdf Ann Arbor 2013 crime stats]

Part I crime totals for 2013 were 2,827, down from 3,059 in 2012. Part II crime totals for 2013 were 3,625, down from 3,883 in 2012. Total crimes for 2013 were 6,452, down from 6,942. That’s a 7% drop.

As he had in March, Seto stressed at the working session that the numbers being reported were not the official FBI numbers but they are the internal Ann Arbor police department numbers that are reported to the FBI. For 2013, he said, the year-end reported number of Part I crimes was 2,827. [Part I crimes include: criminal homicide, forcible rape, robbery, aggravated assault, burglary (breaking or entering), larceny, motor vehicle theft and arson.] That represented about an 8% reduction compared to the previous year, Seto said. These statistics don’t include those from the University of Michigan, which reports its crimes separately.

At the work session, Seto cautioned that crime statistics only tell part of the story. He said it’s important also to consider what the community wants and what makes them feel safe, which can include consideration of nuisance-type crimes that might not make it into Part I crime stats.

Ann Arbor crime statistics from 2002 through 2013 for larceny (red) and burglary (blue). (Data from the AAPD. Chart by The Chronicle.)

Ann Arbor crime statistics from 2002 through 2013 for Part I crimes except for larceny and burglary. (Data from the AAPD. Chart by The Chronicle.) The downward trend is consistent in every category except for sexual assault crimes (red).

At the work session, the increasing trend for sexual assault was highlighted by Sally Petersen (Ward 2), who wanted to know if Seto thought it could be in any way related to the increase in prosecuted heroin cases – from 5 in each of 2011 and 2012 to 15 cases in 2013. Seto did not think there was a connection, but noted that the majority of sexual assault cases the department sees involve an assailant who is known to the victim.

The yearly departmental figures presented by Seto are consistent with the monthly breakdown charted out by The Chronicle using data from crimemapping.com over the last three years:

Ann Arbor Monthly Crime Stats: Sexual Assault (Data from crimemapping.com, chart by The Chronicle)

Ann Arbor Monthly Crime Stats: Drug Offenses (Data from crimemapping.com, chart by The Chronicle)

Ann Arbor Monthly Crime Stats: Burglary (Data from crimemapping.com, chart by The Chronicle)

Ann Arbor Monthly Crime Stats: Robbery (Data from crimemapping.com, chart by The Chronicle)

Ann Arbor Monthly Crime Stats: Aggravated Assault (Data from crimemapping.com, chart by The Chronicle)

Police Officer Staffing: Possible Points of Debate – Adequacy

At the city council work session, Seto was cautious in the way he characterized current staffing levels. He described patrol and detective staffing as “adequate,” saying he chose that word because he really felt that AAPD is doing a good job – an adequate job – of reacting, and doing follow-up and solving crimes. But that leaves little time for other things he also feels are important – which are community engagement and proactive policing, Seto said.

Seto’s statements will likely be used at the May 19 meeting for and against adding two additional officers beyond the three already in the recommended FY 2015 budget. His remarks will be used to support the idea that three additional police officers are not enough to accomplish what Seto would like to see. And councilmembers who are not inclined to add two more officers for a total of five will point to his choice of the word “adequate.”

At the May 12 work session, Jack Eaton (Ward 4) pressed Seto to describe his attitude toward the three additional officers: Was the addition of three officers “sufficient” to accomplish what Seto had described in terms of community engagement? Seto came back with his preferred vocabulary, saying: “It is an adequate start.” Seto said it’s difficult to predict the needs of the community.

Sometimes he’s heard that more police are needed downtown. Sometimes Seto has heard that more officers should be available to work with youth. Seto reiterated that the two community engagement officers are “an adequate start.” He continued saying that as police chief, he felt very comfortable with the excellent and professional officers that AAPD has to respond to crimes and to solve them. As far as community engagement and outreach, “I will always think that we can do more, if that’s the answer you are looking for,” Seto concluded.

Police Officer Staffing: Possible Points of Debate – Traffic Enforcement

One of the proposed new positions would be dedicated to traffic enforcement. This could also be part of the May 19 debate – as the council voted at its Dec. 16, 2013 meeting to allocate $125,000 in overtime for additional traffic enforcement for the last six months of the current fiscal year. Those six months run from Jan. 1 through June 30, 2014.

At the May 12 work session, Eaton made the point that this was the staffing equivalent of two FTEs for that six-month period. So it’s possible that he’ll make the argument that to maintain that level of enforcement activity, the city would need to add two officers dedicated to traffic enforcement – not just the one that’s recommended in the FY 2015 budget.

At the May 12 working session, Seto gave the council a breakdown of the activity that’s been funded by the $125,000 to date.

26 Weeks to Safer Streets: Breakdown of 937 Traffic Stops (Data from the city of Ann Arbor, Chart by The Chronicle)

26 Weeks to Safer Streets: Targets of Enforcement by Time (Data from the city of Ann Arbor, Chart by The Chronicle)

Police Officer Staffing: Possible Points of Debate – Human Services

A possible proposal to be brought forward by Chuck Warpehoski (Ward 5) would re-allocate the funding for one police officer to instead pay for human services to treat addiction and promote recovery. Seto’s remarks at the work session could be used to argue for that amendment. During discussion of the increased incidence of drug offenses – in particular, heroin – Seto delivered the following quote: “I would say very cautiously we’re not going to arrest our way out of this.”

Seto noted that the increase in heroin use is a trend that is not unique to Ann Arbor – but rather is noticeable throughout the county and the country. Addressing the issue would require a multi-disciplined approach that includes education and treatment for addiction. Solving the problem would require collaboration across multiple jurisdictions, Seto said. And he’s already spoken to the county sheriff and other police chiefs to talk about how they can manage the situation from a law-enforcement perspective.

Local Development Finance Authority: Infrastructure (Fiber?)

By way of background, the local development finance authority (LDFA) is funded through tax-increment financing (TIF) in a manner similar to the way the Ann Arbor Downtown Development Authority is supported. A TIF district allows authorities like the LDFA and the DDA to “capture” some of the property taxes that are levied by other municipal entities in the district. The district that yields TIF revenue for the LDFA has the same geography as the Ann Arbor DDA. The taxes that are captured are generated by the Ann Arbor Public Schools general operating millage.

If the LDFA did not exist, then the taxes collected on behalf of the AAPS for its general operating millage would not be used directly by AAPS, but rather would go to the state’s School Aid Fund, for redistribution among school districts statewide based on a per-pupil formula as determined on a specified “count day.” The state reimburses the School Aid Fund for the taxes captured by the LDFA.

The main contractor for the LDFA is Ann Arbor SPARK, which operates a business accelerator with LDFA funding. To the extent that the property valuation in the LDFA district (which is the same as the Ann Arbor DDA district) increases, the LDFA revenue budget also increases.

The possible amendment to the LDFA budget, which might be brought forward on May 19, would among other things eliminate $30,000 in increased incubator operating expenses, $20,000 in direct staffing expense, and a $75,000 increase to Ann Arbor SPARK’s marketing plan in order to reserve a total of $165,379 for “future infrastructure improvements.”

The nature of the infrastructure improvements is not specified in the budget amendment, which might be brought forward by Sumi Kailasapathy (Ward 1) and Jack Eaton (Ward 4). But if it’s approved by the council, it could give some direction to the LDFA board as that group contemplates its future spending in the coming years. The LDFA was established for a period of 15 years, which ends in 2018. But state legislation passed in 2012 could allow an extension for an additional 5 or 15 years.

The idea of using LDFA funds as infrastructure investments – specifically the kind of high-speed telecommunications infrastructure represented by fiber-optic networks – is made explicit in the LDFA’s formative documents. From the TIF plan [emphasis added]:

The LDFA District is fully developed with roads, sidewalks, lighting and subsurface utilities. The infrastructure is publicly financed and maintained. The Development Plan does not anticipate large-scale improvements to or expansions of this infrastructure. In the event sufficient revenues become available through this plan, investment may be made to facilitate the expansion of high-speed telecommunications infrastructure throughout the District. Alternatively, the LDFA may become a grant recipient for financing designed to encourage this investment.

The development of a high-speed fiber network is also highlighted in the final report of the economic collaborative task force, established by the council last year at its May 20, 2013 meeting. [.pdf of March 28, 2014 economic collaborative task force report]

Specifically, that report included a recommendation that the city consider technology infrastructure that is “essential for companies to compete globally and for communities to attract the necessary talent.” In that category of infrastructure, the report indicates that the city and Ann Arbor SPARK should “continue their work to develop a proposal for high-speed fiber that would accelerate both commercial and residential Internet speeds.”

Back in 2010, the LDFA had offered $250,000 in support of Ann Arbor’s response to the Google Fiber initiative. Around that time, Stephen Rapundalo, who represented the city council on the LDFA board, indicated that the LDFA would consider making an investment in a fiber-optic network, even if Google did not choose Ann Arbor as a test community. Google did not choose Ann Arbor.

At the March 15, 2010, public hearing on the Google Fiber initiative, former Congressman Wes Vivian urged the city council to think about how they would achieve a fiber-optic network, if Google did not choose Ann Arbor. [From Chronicle coverage: "Mixed Bag: Phones, Fiber, Fire"]:

Wes Vivian introduced himself as a decades-long telecommunications consultant, and told the council that for the last 15-20 years it’s been clear that either the telephone companies will migrate to fiber-optic networks or face domination by cable television companies. That process has begun, he said – AT&T has installed fiber in many communities.

If Google “coughs up the money” that’s great, Vivian said, but we need to find a way to implement this anyway – even if Google decides not select Ann Arbor as a test site. Fiber, he said, was part of the necessary infrastructure of a city – like a street. It wasn’t necessary to provide a system, he said, but just a hole in the ground or a hole in the air.

The idea of working on a “fiber-to-the-premises” project in the city was on the FY 2014 work plan for the city’s IT department, and was described by city administrator Steve Powers in an interview with The Chronicle as follows: “That is very important, and I think it’s part of place-making, part of having an environment that’s conducive to businesses and residents choosing to locate in Ann Arbor and stay in Ann Arbor. ”

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A leaf truck rented from Premier Truck Sales & Rental in action back in 2011 on the Old West Side in Ann Arbor.

The truck rental is an annual approval. The trucks are being rented in order to handle the increased volume of yard waste during the fall season. Based on the staff memo accompanying the resolution, the city has a fleet of three side load compost trucks, which have smaller “hoppers” designed for routine collection of a couple of compost carts per stop. The frequency of “packing” required for the truck – during which no waste can be added – depends on the hopper size. The rental trucks have much larger hoppers so “packing” is less frequent.

Overall, the city of Ann Arbor says it saves money with its current “containerized” leaf collection approach – which allows residents to use paper bags or composting carts – compared to its previous practice of inviting residents to sweep their leaves into the street for mass collection with front loaders and dump trucks.

The bid from Premier Truck Sales & Rental Inc. was just under that of Bell Equipment company – $11,880 compared to $11,920 per truck.

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

The sign on the door to the Ann Arbor city council chamber, installed in the summer of 2013, includes Braille.

That’s actually pertinent to the council’s work – because Ann Arbor chief of police John Seto has a spot on the meeting agenda to provide an update about the implementation of new traffic control measures on home game days. This year for the first time, the council gave approval for street closures around the Michigan Stadium in the hours before kickoff through the end of the game.

The council’s 7-4 vote approving the street closures was taken on Aug. 8, 2013. No council action on the issue appears on the Sept. 16 meeting agenda. However, the council’s approval had included a request for a review after the first three games, which featured three different start times.

The council’s Sept. 16 meeting includes two other items on which it has previously punted a number of times: final approval of revisions to the ordinance regulating the Ann Arbor Downtown Development Authority’s tax increment finance (TIF) capture; and revisions to the council’s internal rules. The council’s Sept. 3 meeting was planned to be the session when the council would tackle those two issues. However, the necessary committee work had not been completed by that time.

A joint committee composed of DDA board members and councilmembers huddled up for a second time on Sept. 10, 2013. And based on that meeting, it’s somewhat unlikely that the council would use its Sept. 16 meeting to take a simple yes-no vote on the ordinance revisions currently in play, which had already been given initial approval back on April 1. Those revisions would enforce the existing language of the ordinance in a way that has an impact on the DDA’s TIF revenue roughly matching the DDA’s projected revenues in its 10-year planning document.

The consensus at the Sept. 10 joint committee meeting appeared to be that the council should give itself a fresh set of downs on the question – by changing the basic conceptual approach to limiting the DDA’s TIF. That approach would impose a cap on TIF revenues with a built-in increase each year. But it’s not clear that a substitute set of changes would be ready for the council to consider at its Sept. 16 meeting.

Starting with a fresh draft of ordinance revisions would mean that the council would again need to give the changes an initial approval, followed by a second vote at a later meeting. The fresh start could also eliminate changes to the governance of the DDA board that had been included in the original revisions initially approved by the council on April 1. Those included term limits for DDA board members.

Among the options in the council’s parliamentary playbook are: tabling, postponing indefinitely, or postponing the DDA ordinance revisions until a date certain. If the council amends the proposal with a substitute proposal, postponement to a date certain would be more likely. However, the council could also choose to vote down the current proposal and leave the committee to come back with a future recommendation.

The council’s rules committee also met on Sept. 10, 2013. Based on discussion at that meeting, the consensus appeared to be that no shortening of speaking turns for the public or for councilmembers should be undertaken, and that the procedure for reserving public commentary time at the start of the meetings should not be altered. Among the substantive changes that survived the committee’s conversation are: adding public commentary to work sessions; changing the order of the agenda to move nominations and appointments to boards and commissions to earlier in the meeting; and prohibiting the use of personal electronic communications devices while at the council table.

The council’s agenda is otherwise fairly light. It includes an expansion of the Honda testing facility on north of Ellsworth on Research Park Drive, formal acceptance of the final report from the North Main Huron River task force, and a $117,200 expenditure for the rental of rear-loading trucks to supplement the city’s fleet during the fall leaf collection season.

Update: An item to reconsider the fossil fuel resolution that failed to pass at the council’s Sept. 3 meeting was added to the agenda on the morning of Sept. 16. The original resolution called on the city’s employee retirement system to divest from fossil fuel companies – but it failed on a 5-4 vote, with two councilmembers absent. Six votes were needed to pass. The motion to reconsider is sponsored on the agenda by Margie Teall (Ward 4).

More detail on other meeting agenda items is available on the city’s Legistar system. Readers can also follow the live meeting proceedings on Channel 16, streamed online by Community Television Network. The Chronicle will be filing live updates from city council chambers during the meeting, published in this article “below the fold.” The meeting is scheduled to start at 7 p.m.

6:33 p.m. Pre-meeting activity. The scheduled meeting start is 7 p.m. Most evenings the actual starting time is between 7:10 p.m. and 7:15 p.m. Three people are already here in the audience. One is hoping to get the general construction contract for the Honda testing facility project that’s on the agenda. Another is a graduate student in political science who’s been attending council meetings for over a year. And the third is Thomas Partridge.

6:50 p.m. City administrator Steve Powers is now here, as is Marcia Higgins (Ward 4). Higgins is the only councilmember here so far.

6:50 p.m. Lots of high school students are in attendance tonight as part of a class requirement to attend a public meeting. Public services area administrator Craig Hupy is chatting with Higgins.

6:56 p.m. Councilmembers are starting to filter in. Mike Anglin (Ward 5), Jane Lumm (Ward 2) and Sabra Briere (Ward 1) are now here.

7:05 p.m. All councilmembers except for Sally Petersen (Ward 2) have now arrived.

7:07 p.m. And the meeting has been called to order.

7:08 p.m. Pledge of allegiance, moment of silence and the roll call of council. Petersen is absent.

7:09 p.m. Mayor John Hieftje reports that Petersen has indicated that she’s running late, but will be here.

7:09 p.m. Public commentary. This portion of the meeting offers 10 three-minute slots that can be reserved in advance. Preference is given to speakers who want to address the council on an agenda item. [Public commentary general time, with no sign-up required in advance, is offered at the end of the meeting.]

Ten people are signed up to speak tonight during city council reserved time. Ward 5 city council write-in candidate Thomas Partridge will be addressing the council on the topic of building affordable housing in the city. David Blanchard, who chairs the city’s housing and human services advisory board, is signed up to talk about that group’s resolution, passed at its most recent meeting, about the changes to the Ann Arbor Downtown Development Authority ordinance. Those ordinance changes are on the agenda for final approval tonight. The HHSAB resolution approved on Sept. 12, 2013 calls for the inclusion of ordinance requirements of funding for affordable housing by the Ann Arbor DDA – at a level of $300,000 annually, adjusted upwards each year to account for inflation.

First Ward candidate for city council, Jeff Hayner – who is on the ballot as an independent – is signed up to talk about non-motorized transportation and the city’s crosswalk ordinance. Kathy Griswold is also signed up to talk about the city’s crosswalk ordinance. By way of background, the city released a memo on Sept. 9, 2013 with a review of the city’s crosswalk ordinance. The planning commission, at its Sept. 10, 2013 meeting, approved the update to the city’s non-motorized plan, and recommended that the city council do the same.

Six people are signed up to talk about the motion to reconsider the resolution on fossil fuel divestment, which was defeated on a 5-4 vote at the council’s Sept. 3, 2013 meeting. The motion to reconsider that resolution will come from Margie Teall (Ward 4). Those who are signed up to speak on the question are Mike Shriberg, Wayne Appleyard, Dina Kurz, Dave Marvin and Laura Hobbs.

7:13 p.m. Thomas Partridge is now at the podium. He notes that he’s a write-in candidate for Ward 5 city council. He calls for reform of the council rules to expand opportunities for public participation. He calls for an unlimited number of public speakers at the start of the meeting. He notes that the Washtenaw County board of commissioners manage their meetings in that manner. He calls for reform of the relationship between the city and the Ann Arbor DDA. He wants the DDA district to expand to include all the commercial areas of the city.

7:16 p.m. Mike Shriberg speaks on behalf of the city’s energy commission. He was also on the climate action plan task force. He teaches energy policy at the University of Michigan. He was surprised that the resolution at the last meeting was not approved, given the recommendation of the energy commission. He calls the resolution a first step to implementation of the plan. He notes there wasn’t a lot of debate at the previous council meeting. He points out that fossil fuel companies have done well in the last several years, but that performance may not be indicative of future results. Examples in 15 other cities have not shown any negative effects of divesting. Shriberg now addresses the slippery slope argument. He notes the supporting petition of citizens. Does this tie our hands? he asks. He says that the resolution in no way takes away fiduciary responsibility. The energy commission had really done its homework, he says.

7:19 p.m. Wayne Appleyard is current chair of the energy commission. He says he wants to impress on the council the importance of passing the resolution. He points out that it got a majority of votes at the previous meeting, just not enough to pass. He stresses that the retirement board is an independent body, so the resolution is only symbolic. Climate change is an important issue, he says. This resolution will send a message to fossil fuel companies and others that the city wants the world to reduce dependency on fossil fuels. He says that fossil fuel investments will become increasingly risky. This resolution will help create the market for non-fossil fuel funds.

7:22 p.m. Dine Kurz is also a member of the energy commission. She talks about the urgency of the request to pass the resolution. The politics are hard to change, but the laws of physics are immutable, she says. It’s not a question of technology, she says, but about the political will that’s necessary. The companies cited in the resolution were chosen for the amount of their carbon reserves. By burning those reserves, those companies could raise the global temperature beyond the “safe level.” It’s a quality of life issue that affects the city’s retirees, she says. It’s a question of social responsibility, she adds. Kurz compares the issue to tobacco and South Africa apartheid.

7:25 p.m. Jeff Hayner cites the crosswalk safety memo and the non-motorized plan update. The recommendations include measures to increase compliance with the crosswalk ordinance. Engineering, education and enforcement are absent from implementation of the crosswalk ordinance, he notes. He says it’s not enough to distribute literature saying that “pedestrians rule.” He adds that the signs for crosswalk compliance are confusing. He calls on appropriate funding levels for the city’s crosswalk program.

7:28 p.m. Dave Marvin is a UM student. He spends 10 months of the year in the forests of Panama. Divestment will align the city’s investments with its climate action plan, he says.

7:31 p.m. Laura Hobbs is an undergrad at UM. She was born and raised in San Francisco. She decided to attend UM because of Ann Arbor, as a socially conscious community. Students like her would like to live and study in an environment of environmental justice. She’s participating in a divestment campaign at UM. As students, they look to Ann Arbor as a leader for progressive change, she says. She wants Ann Arbor to be a role model for UM. She asks councilmembers to pass the resolution on divestment from fossil fuels.

7:34 p.m. David Blanchard introduces himself as chair of the city’s HHSAB. He presents the resolution passed by the HHSAB. There’s a lot in the revisions that go beyond the HHSAB’s purview. But HHSAB is committed to affordable housing in this community, he says. [HHSAB wants the ordinance to require that the DDA set aside $300,000 annually for affordable housing, which is the amount set aside this year. HHSAB wants that amount to increase each year.]

7:37 p.m. Larry Junck speaks in favor of the resolution on divestment from fossil fuels. He’s a professor of neurology. He makes three points. First, it’s a sound investment decision, he says. Second, divestment is consistent with the city’s climate action plan. Third, it’s effective local action. It’s not about getting people in far away cities to take action. In sum, he says, the council has the opportunity to do our part to keep the world a livable place for our children and grandchildren.

7:41 p.m. Kathy Griswold is talking about the pedestrian ordinance. She recalls her public commentary from 2009 and a quote she read about sight distance and how overgrown vegetation can affect that. She mentions that the Ann Arbor Public Schools has adopted the AAA school safety patrol program. Consistent uniform operating procedures are essential, according to AAA, Griswold says. That means we need the same crosswalk laws in the entire country or at least one school district. [She had a map with her to highlight the fact that the AAPS district is much larger geographically than just the city of Ann Arbor.] She asks the council to rescind the crosswalk ordinance.

7:41 p.m. Council communications. This is the first of three slots on the agenda for council communications. It’s a time when councilmembers can report out from boards, commissions and task forces on which they serve. They can also alert their colleagues to proposals they might be bringing forward in the near future.

7:42 p.m. Mike Anglin (Ward 5) recalls the resolution on 1,4-dioxane at the previous council meeting. He suggests that the city should receive the quarterly reports that CARD makes. He says the city needs to get more serious about this issue.

7:44 p.m. Sabra Briere (Ward 1) gives an update on the downtown zoning review. The final public forum is on Sept. 19 at Workantile on Main Street.

7:45 p.m. Mayor John Hieftje, announces that the nomination of Al McWilliams to the board of the Ann Arbor Downtown Development Authority will be re-introduced later in the meeting.

7:45 p.m. UM football street closures. As part of the council’s resolution approving street closures around the University of Michigan’s football stadium on home game days – which passed on a 7-4 vote taken on Aug. 8, 2013 – the council asked that a preliminary assessment of the traffic control measures be given at its Sept. 16 meeting by AAPD chief John Seto. An additional report from Seto – after meeting with neighborhood groups – is to be given to the council at its Oct. 7 meeting.

UM football game day street closures (pink) with detour route (purple).

Most of the traffic controls were approved to be in place for the period starting three hours before a game until the end of the game. However, the closure of the southbound lane on Main Street was restricted to just one hour before the game start. Traffic controls include the following: E. Keech Street between S. Main and Greene streets are closed. Access to Greene Street from E. Hoover to E. Keech streets is limited to parking permit holders. The westbound lane on E. Stadium Blvd. turning right onto S. Main Street (just south of the Michigan Stadium) is closed. And S. Main Street would be closed from Stadium Blvd. to Pauline.

7:49 p.m. Seto is now at the podium. He notes that a community meeting is scheduled for Tuesday, Sept. 24 at 6 p.m. at Pioneer High School. Seto is stressing that tonight’s remarks are his own observations and comments he’s heard, and he’ll reserve conclusions until the community has had an opportunity to make comments, which will be reflected in his final report on Oct. 7.

Seto reports that some people who offer parking on their property noticed some negative impact on the number of people who were able to park. Residents appreciated some of the additional police presence for the perceived curtailment of some disorderly conduct. Seto says that some of the signage was improved after the first game. The closures were much smoother for the second and third games, he says. The general message Seto is giving is that he did not observe any significant issues with respect to traffic during the first three game days. Seto said for the third game, with its noon start time, there had been some congestion and backup of traffic.

7:52 p.m. Public services area administrator Craig Hupy confirms that the detours were tweaked in the course of the three games.

7:52 p.m. Marcia Higgins (Ward 4) is asking questions of Seto. She was concerned about the ability of police to control pedestrians to keep them off the street. She also noticed a lot of open intoxicants, saying that she’d seen some people just fall down from drinking.

7:54 p.m. Seto reports that for the Notre Dame game there were a lot of pedestrians trying to get to the game. He notes that there’s no sidewalk opposite Pioneer High School on Main Street, which affects pedestrian behavior. He reports that there were a lot of citations for open intoxicants.

7:55 p.m. Hieftje says there were about 180 citations issued. He notes that the city is not a fan of night games, but says the AAPD did a good job of keeping the lid on everything.

7:56 p.m. Public hearings. All the public hearings are grouped together during this section of the meeting. Action on the related items comes later in the meeting. The only public hearing is on the Honda testing facility site plan, which was given a recommendation of approval by the city planning commission on Aug. 20, 2013. The addition to the Honda test facility more than doubles the size of the existing facility, which is located north of Ellsworth on Research Park Drive.

7:59 p.m. Honda test facility site plan public hearing. Thomas Partridge wants the chair of the planning commission to attend every council meeting when there’s a site plan – to explain the planning commission’s recommendation to approve the site plan. He says that a representative of Honda should be present. He calls for more accessibility of agenda information on the Internet. He asks where the stormwater will go.

8:00 p.m. Minutes and consent agenda. This is a group of items that are deemed to be routine and are voted on “all in one go.” Contracts for less than $100,000 can be placed on the consent agenda. This meeting’s consent agenda includes just one item – a construction contract to Fonson Inc. for the Belmont sanitary sewer extension project ($71,625). The project entails installing about 196 feet of new 8-inch sanitary sewer to bring service at the residence at 2250 Belmont into conformance with standards. The 2250 Belmont proper is currently being served by sanitary sewer through a shared lead with the adjacent property at 2240 Belmont. And the shared lead is now showing signs of failure.

8:00 p.m. Councilmembers can opt to select out any items for separate consideration. No one selects out the single item for separate consideration.

8:00 p.m. Outcome: The council has voted to approve the consent agenda.

8:00 p.m. DDA ordinance changes. The DDA ordinance revisions on the agenda have already been given initial approval by the council and are awaiting a final vote. The amendments to Chapter 7 include various changes to governance, including term limits for board members, as well as clarifications to the existing language on TIF capture. The amendments would enforce the existing language of the ordinance in a way that has an impact on the DDA’s TIF revenue that would roughly match the DDA’s projected revenues in its 10-year planning document.

However, since that 10-year document was last updated, the amount of new construction in the DDA district has resulted in significant increases in the taxable value on which TIF is computed. About $1 million a year is at stake – which would be distributed to the other jurisdictions whose taxes the DDA captures, instead of being collected by the DDA. The council had postponed a final vote on the changes most recently at its Sept. 3, 2013 meeting. Four months earlier, on May 6, 2013, the council had voted to postpone the final vote until Sept. 3, after giving the changes initial approval at its April 1, 2013 meeting.

Two meetings of a joint committee of DDA board members and city councilmembers have taken place about the ordinance changes – one on Aug. 26, 2013, eight weeks after the committee was appointed, and another one on Sept. 10, 2013. At the Sept. 10 meeting, the group appeared to be ready to recommend that the council table the initially-approved ordinance changes and start from scratch – likely shedding the proposed changes to governance with a fresh start. Under the existing ordinance language, the amount of DDA TIF capture is calibrated to projections in the DDA TIF plan, which is a foundational document for the DDA. The different conceptual approach would establish a basis level for the maximum captured taxable value in the DDA district and then set some clearly defined annual increase, keyed to a specific percentage or some variant of a consumer price index (CPI).

8:01 p.m. Stephen Kunselman (Ward 3) reports on the second joint committee meeting. He says he wants to give the DDA some time to review the numbers. He wants a postponement until Oct. 21.

8:04 p.m. Sumi Kailasapathy (Ward 1) wants clarification on the “dual track” that Kunselman mentioned. She wasn’t sure if the committee recommendation would supercede the existing revision that the council has given initial approval. She says there’s a lot of confusion. What’s going on in the joint committee seems to be totally rewriting the revisions. She’s not comfortable, because there are other taxing jurisdictions involved. She’s not very happy with the way things are turning out. Will the existing revisions be replaced by the version recommended by the committee? she asks.

8:10 p.m. Kunselman says that after the first reading of the revisions passed, there was a lot of angst about the idea that the DDA would first collect and then return tax money to the other taxing authorities. So the joint committee is looking at a TIF cap. He reads aloud the draft language. He says the idea is to make it as clear as possible. There’s no money to be returned because the amount the DDA gets in the first place is subject to the cap. A cap takes away the need to enforce anything.

He doesn’t want to take the initially-approved revision off the table, because it allows the council to make that decision whenever the council chooses. He’s been trying to work cooperatively with the DDA, but allows that DDA board members might not necessarily agree. The TIF cap approach would allow the DDA to set its budget more easily, he says. At the Oct. 21 meeting, the council will likely have the committee’s proposal ready for consideration. He’s focused on the TIF capture methodology, not the governance issue. Amendments on the governance issue could come from the floor on Oct. 21, he ventures.

8:10 p.m. Kunselman says he doesn’t have all the answers and there’s more than one way to do this. He calls the TIF changes the most important of the reforms. Does that help? he asks Kailasapathy.

8:11 p.m. Kailasapathy asks city attorney Stephen Postema if it’s possible for the council to just act unilaterally. He declines to give an analysis right now, but says the council would receive advice on the ordinance as a whole.

8:14 p.m. Lumm is trying to get clarity on what’s going to happen. She highlights the clause that says that the other taxing jurisdictions need to approve the removal of restrictions. Mayor John Hieftje makes a gambit to discuss the issue further, suggesting that city administrator Steve Powers and DDA executive director Susan Pollay could provide some discussion of the TIF cap issue.

8:18 p.m. Hieftje convinces Kunselman to withdraw the motion to postpone. Powers is now talking about the TIF cap. He says that in cooperation with DDA staff, draft language was prepared for an alternative. The draft proposal sets a basis for the taxable value and caps the amount of TIF with yearly increases. The amounts were chosen to recognize the growth that was currently occurring and to allow the DDA to retain that growth. The percentage increases could range from 3% to 10%. Pollay says that the DDA will be assisted by city CFO Tom Crawford in modeling the impact of different percentages.

8:20 p.m. Chuck Warpehoski asks for the draft language to be provided to the council as a whole. The council is taking a break to allow the clerk to make some copies.

8:23 p.m. Recess. The council is now in recess.

8:23 p.m. Here’s a link to the draft language and schedule from the committee meeting.

8:35 p.m. We’re back.

8:41 p.m. Lumm is asking questions. She wants to know the rationale for establishing the baseline value at $167 million. Powers says that would allow some future growth. Lumm points out that this is a $700,000 additional revenue to the DDA. Powers notes that the idea is to provide enough revenue so that the DDA can accomplish the projects in its draft five-year plan. Hieftje says it wasn’t his intent to make a decision, but he wanted the council to have a chance to discuss the issue. Powers noted that the whole council had been provided with the draft five-year plan.

Lumm asked why there was not a lot of enthusiasm from the committee for a CPI index. Taylor explains that the regular CPI is not related to the kind of construction projects the DDA undertakes. So that’s not a neat fit for the kind of costs increases the DDA will have to contend with. It’s key that the escalator be reasonable. Lumm calls 10% “off the charts.” Kunselman says that will be the topic of the next committee meeting.

8:42 p.m. The motion to postpone until Oct. 21 is back.

8:42 p.m. Outcome: The council has voted to postpone the DDA ordinance revisions until Oct. 21, 2013.

8:42 p.m. East Huron River Drive rezoning. The council is being asked to give initial approval of a rezoning request for 3875 E. Huron River Drive from R1A (single-family dwelling) to PL (public land). The site, which is adjacent to the city’s South Pond park, will be used as parkland.

Aerial view of 3875 E. Huron River Drive.

The property was acquired by the city in 2010, but a “life estate” was in place until earlier this year, according to a staff memo. The two-acre site – located on the north side of E. Huron River Drive and west of west of Thorn Oaks Drive – includes a single-family home. The land overlooks South Pond. City assessor records show that the property was previously owned by the Elizabeth Kaufman and Wes Vivian trust.

At its Sept. 8, 2009 meeting, the city council approved the purchase of the property, allocating $636,000 from open space and parkland preservation millage, which is used for greenbelt and parkland purchases. Of that total, $600,000 was designated for the purchase price, with the remainder used for closing costs, a property survey and Phase I environmental site assessment. The deal closed in 2010.

A staff memo prepared for the council in 2009 described the site’s future use as “passive recreation”: “The property would be suitable for a picnic area and possibly a picnic shelter. As water and sewer are already on the site, a restroom structure could be constructed as well. The site would provide boaters with access to South Pond.” Former U.S. Congressman Wes Vivian has now moved out of the residence, according to city planning manager Wendy Rampson, which makes the property now available to the city.

8:44 p.m. Lumm says she’s glad to see this resolution. The city is able to do this because of the generosity of Vivian and his wife. She asks for comment from staff about possible park uses. Planning manager Wendy Rampson says that it might be used for headquarters for the natural areas preservation program, but it’s not clear that would be a good fit.

8:44 p.m. Outcome: The council has voted to give initial approval for the rezoning of 3875 E. Huron River Drive from R1A (single-family dwelling) to PL (public land).

8:44 p.m. Resolution to approve changes to the city council rules. The council is being asked to approve a set of revisions to the council’s rules. A revision to the rules was first presented to the council on June 17, 2013. However, a vote was postponed at that meeting. The revisions were prompted by a desire to allow for public commentary at council work sessions – to eliminate any question about whether councilmembers were engaged in deliberative interactions at those sessions. By allowing for public commentary at work sessions, the council would ensure compliance with Michigan’s Open Meetings Act.

The council’s rules committee also recommended additional changes, including a shortening of the individual speaking turns for public comment as well as shortening of time for councilmembers. Those additional changes were included in the June 17 version of the rules. After again postponing a vote at its July 1, 2013 meeting, the council used its following meeting, on July 15, 2013, to eliminate one of the proposed rule changes – the shortening of public speaking turns. But the council postponed further revisions and a vote until Sept. 3. The council again postponed a vote on Sept. 3, 2013 because the council’s rules committee had not met in the interim.

On Sept. 10, the rules committee did meet, and the consensus appeared to be that no shortening of speaking turns for the public or for councilmembers should be undertaken and that the procedure for reserving public commentary time at the start of the meeting should not be altered. Among the substantive changes that survived the committee’s conversation are: adding public commentary to work sessions; changing the order of the agenda to move nominations and appointments to earlier in the meeting; prohibiting the use of personal electronic communications devices while at the council table.

8:49 p.m. Briere introduces the resolution and reviews the history of the proposed revisions. Councilmembers at the last committee meeting had come up with a fresh proposal, which is being considered by the council tonight. She goes through each change. She hopes that councilmembers have reviewed the set of changes. She notes that she’s filling in for Higgins, who was not able to attend the committee meeting, because she had sustained an ankle injury.

8:54 p.m. The council has now accepted the substitute, fresh version of the rules. Higgins thanks the committee for doing a great job while she wasn’t there. She calls it a great piece of work. Hieftje said one thing stuck out for him. He notes that the public commentary time for work sessions is supposed to begin at 8:45 p.m. on the agenda. So Hieftje wonders if that’s feasible. Powers indicates that some flexibility might be required.

Warpehoski notes that working sessions have not always started at 7 p.m. So he suggests that the beginning of public commentary time could be specified to be 105 minutes after the posted start time. City attorney Stephen Postema says that the council could vote to suspend that rule and change the procedure. Hieftje says that he would feel more comfortable if the time would be 9:15 p.m. Lumm suggests that perhaps no time needs to be specified.

8:57 p.m. Higgins allows the changes won’t affect her [because she's leaving council]. She notes that the council for some time has been working with the city administrator on the structure of work sessions. She ventures that the rule could simply be suspended and she didn’t think that it would happen very often. Lumm thanks the committee for its work. She says that the initial proposal to shorten speaking turns was an overreaction to a couple of very long meetings. She says it was a good move to abandon that approach.

8:57 p.m. Sally Petersen (Ward 2) has now arrived at the meeting.

9:02 p.m. Lumm says that the addition of public commentary will add the opportunity for additional public dialogue. She’s happy to support the rules changes. Hieftje says that he appreciates Lumm’s comments. The committee had wanted to get the whole council’s feedback.

Warpehoski moves to strike the language setting the time when public comment at work sessions would start. Taylor says it’s not that big a deal. He said he inferred that Powers’ remark on the subject as meaning that the staff would find some mention of a time as helpful discipline. Kunselman says he’ll follow Taylor’s lead on this. Briere says that because the rules can be amended and there’s no limit on the number of speakers, it gives members of the public a clear indication of when they need to appear in order to speak. It gives a firm commitment to the public, Briere says. She notes that it’s a school night.

9:04 p.m. Teall says she’ll support the amendment. She doesn’t think 15-20 minutes one way or another will make a big difference.

9:05 p.m. Outcome on Warpehoski’s amendment: The amendment fails on a 5-6 vote. Voting against it were Higgins, Anglin, Briere, Petersen, Taylor and Kunselman. So the “no later than” start time stays in the public commentary for work sessions.

9:05 p.m. Outcome: The council has voted to approve changes to its internal rules.

9:05 p.m. Resolution accepting the North Main Huron River corridor vision task force report. The North Main Huron River Corridor task force was established at the council’s May 7, 2012 meeting, and its report had been due at the end of July 2013. However, Sabra Briere (Ward 1), who served on the task force, had apprised the council during communications time at previous council meetings to expect a slight delay.

The resolution formally accepts the group’s final report and directs the city administrator to program the recommendations “as feasible within the constraints of available resources and other priorities.” The report includes some before-after photos depicting possible improvements, like a pedestrian bridge across the Huron River connecting Argo berm to the MichCon property, as well as recommendations on the use of city-owned property at 721 N. Main.

9:06 p.m. David Santacroce is at the podium to present the report. He chaired the committee. He’s ticking through the main elements of the report. “This is what you asked us to do,” he says.

9:07 p.m. He notes that there were 19 public meetings of the committee. He reviews the public engagement process.

9:09 p.m. Not a lot had happened as a result of the two previous studies, he says. The little secret of the river is out, he notes, and the area is now “packed.” Residents come from all corners of town, he says. “We’ve got a river in the middle of town.” The public wants and expects improvements, he says.

9:12 p.m. The recommendation for the two buildings on 721 N. Main is to demolish them, he says.

9:16 p.m. Santacroce talks about the idea of asking the planning commission to explore the concept of “riverside zoning” for North Main.

9:18 p.m. Santacroce talks about how many people cross the RR tracks illegally – including himself. It’s dangerous, illegal, but highly used, he says.

9:20 p.m. Santacroce is summing up, saying that it’s hard to imagine a more thoroughly vetted proposal by the public. He calls many of the recommendations “soft,” which means that they are recommendations to study this or look at that. Hieftje praises the work of the committee.

9:25 p.m. Petersen asks about the riverside zoning. Santacroce notes that it’s prime real estate. The idea is that the proper city commission with the proper expertise – the planning commission – should take a look at it. Lumm applauds the effort of the committee. The report has lots of important suggestions for this important gateway, Lumm says. She was around when the two previous studies were done and they pretty much sat on a shelf, she says.

Higgins calls the riverfront zoning an excellent idea. She reminds the council that M1 zoning is being reduced throughout the city, and points out that a place for that light industrial use will need to be found.

9:25 p.m. Outcome: The council has voted to accept the North Main Huron River task force report.

9:25 p.m. Resolution recognizing Michigan Ability Partners (MAP) as a civic nonprofit organization for the purpose of obtaining a charitable gaming license. According to the staff memo accompanying the resolution, Michigan Ability Partners (MAP) is a 501(c)3 nonprofit organization that partners with veterans and people with disabilities to help them achieve self-sufficiency. MAP plans to hold a fundraising raffle on Nov. 6, 2013 for which it needs the designation as a civic nonprofit, so that it can obtain the gaming license.

9:25 p.m. Outcome: The council has voted to recognize MAP as a civic nonprofit.

9:25 p.m. Reconsideration of fossil fuel divestment resolution. Margie Teall (Ward 4) has brought back for reconsideration a resolution calling on the employee retirement system to divest from fossil fuels companies. It failed on a 5-4 vote at the council’s Sept. 3, 2013 meeting. Voting against it on that occasion were: Stephen Kunselman (Ward 3), Margie Teall (Ward 4), Mike Anglin (Ward 5) and Sally Petersen (Ward 2). Jane Lumm (Ward 2) and Marcia Higgins (Ward 4) were absent from that meeting. Teall voted with the prevailing side and this is the next regular meeting after the question was originally considered. So it needs just a simple six-vote majority to be approved. If the motion on reconsideration passes, the council will vote on the divestment resolution again.

9:25 p.m. The council’s resolution stems from an energy commission resolution passed on July 9, 2013, which recommended that the city council urge the city’s employee retirement system board to cease new investments in fossil fuel companies and to divest current investments in fossil fuel companies within five years. The resolution defines a “fossil fuel company” to be any of the top 100 coal companies or top 100 gas and oil extraction companies. The top three coal companies on the list are: Severstal JSC; Anglo American PLC; and BHP Billiton. The top three gas and oil companies on the list are: Lukoil Holdings; Exxon Mobil Corp.; and BP PLC.

The basic consideration of the resolution is the importance of the role that greenhouse gas emissions play in global warming. The resolution cites the city of Ann Arbor’s Climate Action Plan, which has a goal of reducing greenhouse gas emissions by 25% by 2025 and 90% by 2050. The resolution warns that fossil fuel companies have enough fossil fuel reserves that, if burned, would release about 2,795 gigatons of CO2. That’s five times the amount that can be released without causing more than 2°C global warming, according to the resolution.

9:25 p.m. By way of background, at the council’s Sept. 3, 2013 meeting, executive director of the city’s employee retirement system Nancy Walker had told the council that moving to separately managed accounts from the system’s preferred strategy – of using co-mingled funds, mutual funds, and particularly indexed funds – would cost 30-40 basis points more in fees, independent of any difference in the return on investments.

9:27 p.m. Outcome: The council has voted to unanimously to reconsider the resolution on fossil fuel divestment.

9:31 p.m. Teall says that she’s learned a lot more about the issue and would like to see the resolution passed. Anglin recalls the remarks that Nancy Walker had made at the previous meeting. Petersen notes that there are significant costs associated with the divestment, according to Walker. Petersen points out that fiscal responsibility is one of the council’s stated goals. She says she’s done additional research. She pegs the costs in the hundreds of thousands of dollars. She ticks through the five council priorities identified in December 2012. She suggests a different approach for such a resolution. Instead of divesting, she suggests that a call for investment in clean energy would be more proactive.

9:36 p.m. Taylor says it’s an important issue. He notes that the council doesn’t control the pension board. He proposes an amendment. He wants to replace the next-to-last resolved clause on the timeline – that the city council acknowledges that compliance with the requests has to be consistent with the pension board’s fiduciary responsibility.

Kunselman says he doesn’t want his name in the newspaper five years from now, associated with council action that had caused underfunding of pensions. So he feels that Taylor’s amendment helps with that. Kunselman cautions against meddling in other organizations.

9:38 p.m. Outcome: Taylor’s amendment is approved over objection from Petersen.

9:41 p.m. Nancy Walker is now at the podium. Briere says she has only easy questions. At the last meeting, Briere said her understanding was that there were no funds in which the board could invest that didn’t include fossil fuels. Walker indicated that on initial review, there were not any indexed funds that specifically screened out fossil fuels, but there were some “socially responsible” funds. Briere ventures that there are perhaps no such funds because there’s no demand for them. By asking the board to look at divesting, that might help to generate demand for such funds. “If it’s never asked for, it’s never going to be given,” says Briere.

9:44 p.m. Kailasapathy recalls that at the last meeting that Walker said the costs would be 30-40 basis points to move from indexed funds. That would apply to as much as half of the total investments of the fund, says Walker.

9:44 p.m. Exact wording of Taylor’s amendment is: “RESOLVED, That the City Council acknowledges that compliance, if any, with the requests above must be consistent with the Retirement Board’s fiduciary duties; and …”

9:49 p.m. Higgins says she feels like the council is going off on a tangent by not asking the pension board what it could do with such a resolution. She didn’t feel like there is “enough meat” in the resolution. Higgins won’t support it, but suggests postponing until the pension board meets to discuss the issue.

Walker says the trustees on the pension board are eager for dialogue, but this could require a substantial amount of research. Higgins wants a dialogue with the pension board. Kunselman adds that he wants a public hearing on this. He agrees with the idea of postponing. He says that California’s pension board has adopted a policy to be socially responsible. Does the city’s pension board have such a policy? Kunselman asks? No, says Walker.

Kunselman says he really wants to be able to vote for it, but struggles with the obligation to the taxpayers. He notes that none of the large universities have gotten on board with this idea of divesting from fossil fuels. He adds that he works with energy issues at the University of Michigan. Kunselman concludes that he would support a postponement.

9:56 p.m. Lumm is now asking questions of Walker. She says she had to scramble to educate herself, because she missed the last meeting and the item was added to this meeting’s agenda just today. Lumm and Walker are talking about basis points for fees. Lumm says that back in the 1990s, there was a socially responsible policy, which was then abandoned because the returns were significantly lower.

Briere moves for postponement until Oct. 7 to give time for the pension board to meet and review. Taylor suggests that the timeframe be extended. Conversation is now focusing on the timing of the postponement. The date certain is Oct. 21.

Kunselman wants to add a public hearing for Oct. 21. Higgins says the public hearing comments wouldn’t be informed by the pension board’s communications. Kunselman withdraws his request that a public hearing be added.

10:01 p.m. Hieftje says he doesn’t see any need to postpone. He says there’s no reason to delay. He argues that no harm will be done to the pension fund – it’s just a request that the pension board take a look at something.

Anglin says he’ll support the postponement, given that a lot had been heard on both sides of the issue. Warpehoski says he’ll support the postponement, because he feels that the longer it stays in the news, that fits into the campaign for putting pressure on fossil fuels companies. For now, he says, let’s keep the conversation going, because “What else do we have to do on a Monday night?”

10:08 p.m. Petersen focuses on the “resolved” clause with the five-year timeframe. She calls the timeframe of five years very significant. She would rather vote on it tonight because she feels so strongly. But she thinks that it’s the council that needs to do some work. She wants the energy commission to consider a more proactive resolution on investing in clean energies, instead of divesting from fossil fuels.

Briere says there’s a difference between fossil fuels and apartheid, but they both are social issues. It’s about money, but it’s also about people and the future. She says she’s content to let the energy commission take a look at it and to have the pension board look at it. The postponement is not meant to bury the resolution, she notes, adding that if the council is not ready to vote in a month from now, it probably never will be.

10:09 p.m. Lumm says she’s ready to vote tonight. She doesn’t support the resolution. It has everything to do with being a good steward of taxpayer money, she says. It’s divesting from an entire sector of the economy. She’s torn on the postponement, she says. There’s an opportunity to understand the issue more thoroughly. She notes that the city has a defined benefit plan. She’s been pushing the city to convert to a defined contribution plan.

Hieftje says that he’s been persuaded to support a postponement.

10:09 p.m. Outcome: The council has voted unanimously to postpone the fossil fuel divestment resolution until Oct. 21.

10:09 p.m. Honda testing facility site plan. The proposal would more than double the size of the existing facility and increase the number of American Honda Motor Co. employees who work at the site from 6 to 10, according to the city planning staff.

Aerial view of Honda test site, north of Ellsworth on Research Park Drive.

The existing 19,357-square-foot building, built in 1975 and used for vehicle testing, is located at 3947 Research Park Drive on a 2.72-acre site. The proposal calls for building a two-story, 24,116-square-foot addition. Part of that square footage includes a basement level. According to Honda, the expansion will include a state-of-the-art environmental testing chamber, to help Honda develop vehicles with cleaner fuel emissions. Two of the site’s seven landmark trees would be removed, and mitigated by planting six new trees. In addition, 32 shrubs will be planted in front of the new addition. A 5-foot public sidewalk will also be built along Research Park Drive. A variance related to the size of the existing curbcut was needed from the city’s zoning board of appeals.

The site is zoned RE (research district) and no rezoning is requested. The project is being managed by Poggemeyer Design Group in Bowling Green, Ohio. The estimated construction cost is $4.3 million.

10:10 p.m. Outcome: The council has voted unanimously without discussion to approve the Honda testing facility site plan.

10:11 p.m. Recess. The council has again taken a recess.

10:17 p.m. We’re back.

10:17 p.m. Resolution authorizing a contract with Premier Truck Sales & Rental Inc. for truck rental for leaf collection ($117,200). The trucks are being rented in order to handle the increased volume of yard waste during the fall season. Based on the staff memo accompanying the resolution, the city has a fleet of three side load compost trucks, which have smaller “hoppers” designed for routine collection of a couple of compost carts per stop. The frequency of “packing” required for the truck – during which no waste can be added – depends on the hopper size. The rental trucks have much larger hoppers so “packing” is less frequent.

A leaf truck rented from Premier Truck Sales & Rental in action back in 2011 on the Old West Side in Ann Arbor.

10:18 p.m. Lumm has a question about how many employees are used for the fall yard waste collection – how many hours and the cost. She’s content to have that information forwarded later.

10:19 p.m. Outcome: The council has voted to approve the rental of additional trucks for use in fall leaf collection.

10:19 p.m. Resolution on public utilities easement at 1900 Manchester Road. The resolution would vacate the existing public utilities easement and accept a new one from Memorial Christian Church. According to the staff memo, the new easement is for the same area as the old one, but adopts the standard approach used by the city for easements, and prohibits any further establishment of structures by the church in the easement area.

10:19 p.m. Outcome: The council has voted to accept the easement from the Memorial Christian Church.

10:20 p.m. Nominations. Nominations to boards and commissions tonight, on which the council will be asked to vote at its next meeting, include Brock Hastie to the employees’ retirement system board of trustees. That’s a re-appointment. Being nominated to the city’s energy commission tonight are Erik Eibert (replacing Cliff Williams), Elizabeth Gibbons (replacing Josh Long), and Wayne Appleyard (re-appointment). Nominated to fill a vacancy on the housing and human services advisory board is Kyle Hunter, and to fill a vacancy on the recreation advisory commission is Katie Lewit.

10:20 p.m. Appointments. The council is being asked to confirm the nomination of Pamela Meadows to the city’s human rights commission. The nomination was made on April 1, 2013.

10:21 p.m. Outcome: The council has voted to confirm Pamela Meadows’ appointment to the city’s human rights commission.

10:22 p.m. Al McWilliams to the Ann Arbor Downtown Development Authority board. This nomination is now being brought back, after it was withdrawn during deliberations at a previous meeting.

10:23 p.m. Hieftje says that younger professionals are under-represented on city boards and commissions. He notes that McWilliams is supported by the director of the Main Street Area Association [Maura Thomson]. He wants someone to replace Newcombe Clark in that regard.

10:26 p.m. Kunselman says he won’t be voting for McWilliams. He’s met with McWilliams and describes him as “not ready for prime time.” He says he won’t belabor the insults that McWilliams uses in Tweets, and the foul language in his blog posts. You wouldn’t want your mother reading those posts, he says. Kunselman says McWilliams is not mature enough – the city needs someone who can show some tact.

10:29 p.m. Petersen agrees with Kunselman. She cites McWilliams’ use of profanity as one objection. Kailasapathy, having come up with the feminist movement, says she finds his position on women to be degrading. Hieftje says, sarcastically, that he’s “shocked” that profanity would be used on the Internet.

10:31 p.m. Taylor says he’ll support McWilliams. Taylor indicates that he thinks McWilliams will serve well on the board. He characterizes McWilliams as showing traits typical of his generation – ironic irreverence. Warpehoski says he doesn’t think that profanity and saying inappropriate things disqualifies someone from public service.

10:35 p.m. Briere says that she did not find herself offended by what McWilliams had written on the Internet. But it had been pointed out to her that this behavior could be considered immature and so she had talked with him: “We did not exchange expletives, mine or his.” She’d asked him about what he wanted to accomplish on the board of the DDA. She said she didn’t find anything to worry about – except that he wanted to dig into the mission of the DDA and what it was supposed to be accomplishing. She was impressed that he’d chosen Ann Arbor, and had other opportunities. He saw himself as an independent player and had not taken a subservient role. For councilmembers who were concerned that some DDA board members didn’t know when to say no to the council, she thought that could be a benefit. She’d enjoyed talking to him.

10:37 p.m. Outcome: Al McWilliams has been confirmed to the DDA board on a 6-5 vote. Voting against the appointment were Anglin, Kailasapathy, Petersen, Lumm and Kunselman.

10:37 p.m. Public commentary. There’s no requirement to sign up in advance for this slot for public commentary.

10:41 p.m. Thomas Partridge again asks voters to write in his name on Nov. 6 for Ward 5 city council. He says the council and the clerk should be urging people to register to vote. He says the city should put information about how to write in their selection for city council. No one in Ward 5 is able to stand up to the mayor’s “surly” attitude towards a variety of different demographics, including women, children and people with disabilities, he says.

10:43 p.m. Partridge berates Hieftje for a bit. Hieftje asks Partridge if he’d like to be removed.

Kai Petainen talks about shareholder activism. Sometimes the best strategy is to buy shares and show up to shareholder meetings. It’s also possible to take a stand about individual companies, he says. By excluding an entire sector, no one will care. If you avoid energy, Petainen says, no one cares, because someone else will buy it.

10:43 p.m. Adjournment. We are now adjourned. That’s all from the hard benches.

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

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From left: Chuck Warpehoski (Ward 5), Christopher Taylor (Ward 3) and Stephen Kunselman (Ward 3). Budget deliberations pushed the meeting until nearly 2 a.m.

The council considered several amendments to the FY 2014 budget. But the total impact on the general fund of all the successful amendments was not significant, leaving mostly intact the “status quo” budget that had been proposed by city administrator Steve Powers a month earlier. That was a budget with $82.9 million in general fund expenditures. [.pdf of one-page summary of possible amendments] [.pdf of longer detail on FY 2014 budget amendments]

Most of the successful amendments were voted through with relatively little debate, and involved amounts of $100,000 or less. For example, the Washtenaw Health Initiative received an additional $10,000 allocation, and the Miller Manor senior meals program received a $4,500 boost. Allocations to human services nonprofits were increased by $46,899. And the general fund balance was tapped to conduct a $75,000 study of sidewalk gaps so that projects could be prioritized.

The affordable housing trust fund received an infusion of $100,000 from the general fund reserve. The council also approved an amendment prohibiting the spending of $326,464 that was set aside in the FY 2014 budget for public art, in anticipation of a final affirmative vote on a change to the public art ordinance. A vote on amending that ordinance is likely to take place on June 3, before the fiscal year begins on July 1.

The “parks fairness” amendment, which came after deliberations on all other amendments, was a straightforward calculation in accordance with a city policy. The policy requires that any increase in general fund spending be matched by a parallel increase for parks. The council approved that $22,977 amendment with scant remark.

Just three issues took about 80% of the council’s roughly 4.5-hour budget deliberations: (1) the budget of the Ann Arbor Downtown Development Authority, (2)  the possible reduction of the 15th District Court budget in order to pay for three additional police officers, and (3) the proposed restoration of loose leaf collection in the fall.

Of the most time-consuming items, the change to the DDA’s budget was ultimately approved – after escalating political rhetoric led to a kind of compromise that had almost unanimous support. The DDA compromise budget amendment called for a $300,000 transfer from the DDA’s TIF (tax increment finance) fund to the DDA’s housing fund, and a recommendation to spend $300,000 of TIF money on the replacement of Main Street light poles. Only Christopher Taylor (Ward 3) dissented.

The lone dissenting vote on the budget as a whole was Jane Lumm (Ward 2), who issued a verbal spanking of her colleagues and the city administrator – for proposing and approving a budget she did not feel reflected a priority on public safety. Countering Lumm was Taylor, who pointed out that roughly half of the general fund expenditures are related to public safety.

Budget: Time Overview

For a time-stamped chronological account of the deliberations that was posted live during the meeting, see “May 20, 2013 Ann Arbor City Council: In Progress.” The summary of deliberations below is presented in the rough order of time spent on each of the amendments.

FY 2014 budget: Time spent on deliberations, by topic. The proportionate times are estimated from time stamps from The Chronicle’s live updates. Time from the roughly 10-minute recess was assigned to the immediately preceding item of discussion, which was the DDA budget debate.

Occupying most of the council’s time – around an hour and a half – was discussion of the Ann Arbor Downtown Development Authority’s budget. The council wound up with a compromise that transferred $300,000 from the tax increment finance (TIF) fund to the housing fund, and a recommendation from the city council to spend $300,000 on replacement of light poles on Main Street. The sole dissent on the compromise was Christopher Taylor (Ward 3).

The second-longest amount of time spent in the council’s budget deliberations related to a service previously provided by the city but discontinued a few years ago: collection of loose leaves in the fall. The loose leaf collection program invited residents to push leaves into the street, where the leaves were collected on a neighborhood-by-neighborhood schedule. That’s been replaced with collection through carts and bags – a purely “containerized” approach. The discussion lasted over an hour and did not result in the restoration of the mass leaf collection service. The proposal got support only from Jane Lumm (Ward 2), Sally Petersen (Ward 2), Mike Anglin (Ward 5), and Sumi Kailasapathy (Ward 1).

And taking a bit under an hour’s worth of deliberations was a proposal to reduce the 15th District Court’s budget by $270,000 and to use the recurring savings to hire three additional police officers. That proposal failed on a 5-6 vote – with support only from Lumm, Anglin, Kailasapathy, Stephen Kunselman (Ward 3) and Marcia Higgins (Ward 4). A proposal to fund a single police position – by eliminating an FTE in the city attorney’s office through a retirement – received shorter debate and less support, with yes votes coming only from Lumm and Kailasapathy.

DDA Budget: Background

In the summary of possible amendments compiled for the council before the meeting, there were competing amendments on the DDA budget – one championed by mayor John Hieftje, with the other put forward by Stephen Kunselman (Ward 3). Both dealt with the fact that the DDA’s tax increment finance (TIF) capture is now expected to be $568,000 more in FY 2014 than the roughly $3.9 million on which the DDA based its FY 2014 budget.

Hieftje’s version of the amendment specified three areas on which the additional revenue was supposed to be spent: housing, replacement of failing Main Street lamp posts, and the economic development agency Ann Arbor SPARK. It specified a $100,000 transfer to the DDA’s housing fund. Kunselman’s version was confined to housing, and transferred $500,000 from the DDA’s TIF fund to the DDA’s housing fund.

The council considered Kunselman’s amendment, and ultimately approved it in amended form – transferring $300,000 to the housing fund from the TIF fund and recommending that an additional $300,000 be spent on light poles on Main Street.

By way of background, the DDA is financially a “component unit” of the city. The DDA captures some of the taxes that would otherwise go to the jurisdictions that levy taxes within a specific geographic area. But it’s just the initial increment – between the taxable value of an unimproved property and the value of a property after improvements are built – on which the Ann Arbor DDA captures taxes.

The Ann Arbor DDA was established under a city ordinance in Chapter 7 of the city code, which appears clearly to limit the amount of the TIF revenue the DDA is supposed to receive to an amount that’s a function of the forecasted revenue in the TIF plan – a foundational document of the DDA.

The Ann Arbor DDA has given Chapter 7 a different interpretation since 2011, when the implications of Chapter 7 were reportedly first noticed. On the Ann Arbor DDA’s interpretation, the relevant language does not actually limit the amount of TIF revenue that the DDA receives. That led to an attempt earlier this spring by the city council to clarify the language of the ordinance so that the DDA did not have the flexibility of interpretation in the future. At its May 6, 2013 meeting, the council postponed that effort at clarification until September 2013.

The Ann Arbor DDA also operates the city’s public parking system under a contract with the city. Under the terms of that contract, the city receives 17% of gross revenues from the parking system.

With respect to the DDA’s budget, the state’s enabling statute for downtown development authorities indicates that an authority is supposed to adopt its budget after the governing municipality approves it [emphasis added]:

125.1678 Budget; cost of handling and auditing funds. Sec. 28. (1) The director of the authority shall prepare and submit for the approval of the board a budget for the operation of the authority for the ensuing fiscal year. The budget shall be prepared in the manner and contain the information required of municipal departments. Before the budget may be adopted by the board, it shall be approved by the governing body of the municipality. Funds of the municipality shall not be included in the budget of the authority except those funds authorized in this act or by the governing body of the municipality. (2) The governing body of the municipality may assess a reasonable pro rata share of the funds for the cost of handling and auditing the funds against the funds of the authority, other than those committed, which cost shall be paid annually by the board pursuant to an appropriate item in its budget

However, the Ann Arbor DDA board has typically adopted its budget before the city council approves the city’s fiscal year budget, of which the DDA’s budget is a component. That was the case this year as well, when the DDA board adopted budgets for FY 2014 and 2015 on Feb. 6, 2013. [.pdf of DDA FY 2014-15 budget]

DDA Budget: Deliberations

Stephen Kunselman (Ward 3) led off the deliberations by reminding his council colleagues of some proposals he’d mentioned at the council’s May 6, 2013 meeting. That was the occasion on which the council postponed the DDA ordinance amendments until Sept. 3.

On May 6, Kunselman had sketched out a number of possible proposals: (1) 10% of the DDA’s TIF capture would be earmarked for affordable housing; (2) the DDA’s housing fund would be reserved for affordable housing at 30% of the area’s average median income; (3) 50% of the city of Ann Arbor’s TIF “rebate” would be deposited into the city’s affordable housing trust fund; and (4) for the FY 2014 budget, $0.5 million of the DDA’s TIF would be transferred to the DDA’s housing fund.

On May 20, Kunselman continued deliberations by specifying how he wanted to see the DDA spend the $500,000 that his budget amendment would transfer into the DDA housing fund. Kunselman wanted it to be used on Miller Manor, an Ann Arbor housing commission property located at 727 Miller Ave. Miller Manor is not located within the DDA district.

Ann Arbor Housing Commission properties. The size of the dot is proportional to the number of units in the location. The largest dot is Miller Manor. (Map by The Chronicle. Image links to interactive map.)

However, under an adopted Ann Arbor DDA policy, investments of DDA TIF can be made outside the geographic boundary of the district, as long as they are within 0.25 miles of the boundary. The western edge of the DDA district boundary on Miller Road is Chapin Street, and Miller Manor is located about 0.21 miles from Chapin – within the area described in the DDA’s policy. But Kunselman noted that the city could not tell the DDA how to spend the money – saying the city could simply put the money into the housing fund. And that meant it would have to be spent on housing.

Leaving most of the additional money in the TIF fund – as mayor John Hieftje’s proposed amendment would do – still provided complete flexibility for the DDA to spend the money as it wished, cautioned Kunselman. Under his own amendment, Kunselman argued, the DDA would need to spend it all on housing. But he argued for spending the money on Miller Manor, because it was public housing stock, which was meant to be accessible to those with incomes of 30% of the area median income (AMI). Kunselman described the kind of housing the DDA had supported with City Apartments, a private development under construction at First and Washington, as supporting the 80% AMI level.

Kunselman also contended that it was not a surprise to anyone that the DDA would be receiving the additional $568,000, and he didn’t understand why the DDA had not put that additional revenue in its proposed budget when it was adopted in February. Kunselman called it a “lowballed” budget. The additional funds had not been brought up until he’d advanced his proposed amendment to the DDA ordinance earlier in the spring, he said. Kunselman’s contention was that the DDA could have reasonably known that its TIF revenue would be closer to $4.5 million than to the $3.9 million it budgeted near the end of February.

Hieftje invited city CFO Tom Crawford and Susan Pollay, executive director of the DDA, to the podium to answer questions. Hieftje asked Pollay when the numbers for the tax assessment are available to the DDA. She said that the DDA saw the numbers when the council did – April 1. Pollay contended that the DDA is not privy to the estimates that are being formulated. So the DDA does its best to estimate based on previous years, she said.

Kunselman asked Crawford to confirm what Crawford had told Kunselman in response to the question of when estimates of assessed value were available – saying he’d been told it was Jan. 1. Crawford said there are a lot of things that go on between January and April. It’s closer to April when it’s final, explained Crawford. But Kunselman pointed out that the board of review notices are sent out in March, which means that the numbers are available before then. Crawford responded by saying that “they have to process that stuff.” It’s around April that the numbers are actually known. Crawford allowed that estimates can be done on fairly good data in January, but the final numbers are available in April.

Pollay then responded to Hieftje’s prompting about the nature of the DDA board’s discussion at a special meeting on May 13. Hieftje contended that the DDA achieved a quorum on that occasion and reached a consensus on the allocation of additional TIF revenue. A quorum would be seven of the 12-member DDA board.

Later in the meeting, Hieftje described his own resolution as based on the “DDA action last week.” [In an email to the council, DDA board chair Leah Gunn had characterized the May 13 meeting as "informal." That description is consistent with the fact that no resolutions were voted on or discussed. Gunn's email indicated that seven board members had attended. The Chronicle recorded only the following six board members as present: Leah Gunn, Joan Lowenstein, John Splitt, Sandi Smith, Roger Hewitt and Newcombe Clark.]

Pollay told the council that there’s an interest on the board in replacing the lamp posts on Main Street, which are rusting from the inside.

Ann Arbor Main Street rusted light pole. (Photo from April 2012 by city of Ann Arbor staff.)

Pollay also indicated that the DDA wants to support some affordable housing efforts and economic development, which are council priorities. She described the possibility of sending DDA board members and SPARK officials to other communities to find out what they’re doing better than Ann Arbor. Specific places to visit, for example, were Chapel Hill, North Carolina, and Madison, Wisconsin. [.pdf of DDA's summary of May 13, 2013 meeting]

Sabra Briere (Ward 1) noted that the amendment proposed by Kunselman is to allot 100% of the additional TIF revenue to affordable housing. She asked Pollay how those funds would be used in the future.

Pollay responded by saying that that the DDA is planning to meet with housing providers in the near future, and that will help determine how the board might spend the $500,000 on affordable housing.

Briere asked if the DDA has a plan for housing that has criteria to determine how grants are made to housing. Pollay responded to Briere by describing the “full spectrum” of housing. The DDA is interested in housing at all levels for all people, Pollay said.

Sally Petersen (Ward 2) contrasted the alternative amendments – Kunselman’s compared to Hieftje’s. She wanted to see if they could be combined. She asked Kunselman if he’d consider lowering the amount to $300,000 – as a friendly amendment to his budget resolution. [Amendments that are considered friendly by the sponsors don't require a vote.] Kunselman rejected Petersen’s offer by saying he felt a vote should be taken on that.

Sumi Kailasapathy (Ward 1) reminded the council that the public hearing on the DDA ordinance – on April 15 and May 6 – made clear there’s a gap that’s perceived by the community in affordable housing. [Several members of the homeless community spoke during that hearing in support of the DDA.] Some residents have been left behind, she said. Not everybody is meant to be a Google worker. She wanted to stick with the $500,000 for affordable housing that was in Kunselman’s resolution.

Hieftje then invited public services area administrator Craig Hupy to the podium to talk about the urgent need to replace the light poles on Main Street. Hupy indicated that no provision has been made in the city’s budget to replace them. Up to now, Hupy said, the discussion has been centered on the idea of the DDA paying for the light pole replacement, because the DDA did the original installation. He identified the general fund as the source of the funding, if the city were to pay for the light pole replacement.

[At the May 13 gathering of the DDA board, Pollay indicated that she'd been informed that if the city undertook the installation, it would take a more functional approach and install a fewer number of replacement light poles – using "cobra head" fixtures, instead of the decorative lamp posts currently in place. That cost for the functional approach was estimated at $50,000.]

Responding to a question from Kunselman, Hupy described an interest in not having the same “design error” going forward. [At the May 13 gathering of the DDA board, Pollay had described how the light poles that are rusting sit flush on the concrete and may sit in water. A newer design has the base of the poles elevated on "fingers."]

The cost is estimated to be around $465,000, Hupy said. [In a follow-up email responding to a query from The Chronicle, Hupy indicated that no detailed specification and bidding has been done at this point. So the pricing is somewhat "soft," indicating that when staff puts initial estimates together, they try to make sure they can do the job for the price that's estimated.]

Chuck Warpehoski (Ward 5) got clarification from CFO Tom Crawford about how much the council could control in the DDA’s spending. Essentially, Crawford indicated that the council could make transfers between funds, but could not mandate which projects the money was spent on or in which year it was spent. Warpehoski said the light pole replacement is important – as they’ve been falling down. He proposed a change from $500,000 to $400,000 for the transfer to the DDA’s housing fund, with $100,000 for light poles. Kunselman indicated that would be a friendly amendment. Kunselman stressed that it would actually just reduce the amount of the transfer to $400,000, but not specify the $100,000 be designated to light poles.

Some back-and-forth ensued between Crawford and Christopher Taylor (Ward 3) about the nature of one of the resolved clauses and the importance of recognizing the additional revenue to the TIF fund.

Briere drew out the fact that the unbudgeted TIF amount, not originally anticipated by the DDA in its budget, is actually $568,343. She wanted to know why the full amount is not being dealt with. City administrator Steve Powers explained that it’s because $500,000 is the amount Kunselman put in the resolution and city staff didn’t take the liberty of changing it. Briere wanted to change the amendment to reflect the actual amount. The council was amendable to revising the amount of additional TIF revenue recognized to $568,343.

Briere highlighted another project the DDA wants to undertake – South University improvements. Pollay also mentioned that the brick streets of North Fifth Avenue are “waiting for us” to be improved.

Kailasapathy described the additional TIF revenue as a “windfall.” Pollay countered Kailasapathy by saying that $3.4 million will go toward debt service. Pollay also brought up the $508,000 that the DDA gives the city annually – as part of an $8 million grant the DDA awarded toward the bond payments for the new Justice Center.

Warpehoski introduced an idea promoted by Dave DeVarti and Alan Haber – that the DDA would pay off the loan on the former Y lot, located between Fourth and Fifth avenues, north of William. Such an action would free up the proceeds of the eventual sale of that city-owned land to be dedicated to affordable housing. This approach has the advantage that the proceeds wouldn’t have to be spent on properties within the DDA district, he noted.

Alluding to Hieftje’s version of the DDA budget amendment, Briere indicated that she’s not a 100% fan of SPARK. But she’s still concerned about allocating funds for some kind of economic development.

Referring to a resolution approved by the council earlier in the meeting, Petersen indicated she’s not expecting the need for the economic development task force to incur expenses by traveling to other cities. The task force was not set up with a budget, she noted. She was grateful for the spirit of generosity in Hieftje’s amendment that would put the DDA in a position to provide those funds. But she figured any expenses would be nominal and would be shared among the entities represented on the task force – the city, the DDA, and SPARK.

Hieftje returned to the issue of the light poles on Main Street. Hupy indicated that it would not be possible to hang banners on the poles until the poles were replaced. Responding to Warpehoski’s idea that the light poles could be replaced over a period of time, Hieftje asked Hupy if efficiencies would be gained by replacing them all at one time. Essentially, Hupy’s response was yes. He identified issues like a need to inspect the light poles that were in need of replacement, and the possibility that replacing only selected poles could result in mismatches in the style of poles.

As far as other projects the DDA is looking to pursue, Hieftje returned to the issue of South University and Pollay described wanting to finish off the Fifth and Division street project in the Kerrytown area.

Hieftje then said he had some concerns about trying to tell the DDA what to do. He referred to Kunselman’s approach as a command-and-control strategy. He reiterated his concern about the light poles on Main Street.

Taylor concurred with Hieftje, saying that the resolution was an attempt to micromanage the DDA. Downtown is a complex place, Taylor said, and the city doesn’t understand the downtown as well as the DDA – “that’s just the truth.” He called on the council to approach the DDA’s budget with humility, in light of the fact that the council does not have all the information – but the DDA does. He contended that the amendments offered by Hieftje and Kunselman took different approaches. [The original amendments differed materially only with respect to the dollar amount to be transferred from the DDA TIF fund to the DDA housing fund – $500,000 versus $100,000. With the friendly amendment that was in place at the time of Taylor's remarks, the difference was $400,000 versus $100,000.] Taylor called Kunselman’s amendment a blunt instrument for a delicate task, and stated that he’d vote against it.

Jane Lumm (Ward 2) responded to Hieftje’s characterization of the amendment as a “command-and-control” approach. She stressed the fact that the message the council had heard in response to the proposed DDA ordinance changes was clearly about affordable housing.

Kailasapathy disagreed with Taylor’s assessment of the DDA as a sophisticated organization. She quoted from an email Pollay wrote back in October 2008 to a resident. [The resident was Peter Zetlin, who subsequently pasted Pollay's email to him in a comment on The Chronicle's live updates filed from the meeting.] Pollay wrote:

For what it’s worth, the proposed parking structure would be paid for with parking revenues (not tax dollars), and unnoted in the local press, the demand for public parking has been increasing every year – including this year, where the numbers of people paying to park exceeds the numbers in all previous years.

Kailasapathy noted that it did not prove to be the case that the new Library Lane parking structure was paid for only with parking revenues. This year, she noted, 87% of the TIF dollars went to bond payments. She disagreed with the idea that the DDA was a sophisticated organization. She said it was good to have oversight of the DDA and important to give guidance.

Hieftje reminded Kailasapathy that she wasn’t serving on the council back in 2008: “Just to point out, Councilmember Kailasapathy, because I know you weren’t here, the underground parking structure was fully supported by city council.”

[The Feb. 17, 2009 vote on issuing the bonds for the underground parking structure was 10-1, with dissent from Mike Anglin. Hieftje's remark was reminiscent of one he made at the council's Dec. 1, 2008 meeting, in reminding Sandi Smith, Kailasapathy's predecessor in that Ward 1 seat, that she had not served on the council at the time the former YMCA property had been purchased.]

Kunselman then told Hieftje, “Of course, you’re not going to support anything that I bring to the table.” [Kunselman was in some sense echoing Hieftje's opening to an email that Hieftje had sent to Kunselman a few weeks earlier, which Hieftje began with: "I understand your need to automatically oppose anything I may be in favor of but wanted to reply just to try and put us all on the same page."]

Kunselman pointed out that there’s only a $300,000 difference between the amended amendment Kunselman was proposing and Hieftje’s proposal. Kunselman indicated he felt that Hieftje’s criticism of the approach as “command and control” could be applied to Hieftje’s own proposal. Kunselman contended that “This is about loyalty to the DDA; this is not about loyalty to the citizens of Ann Arbor.”

Kunselman pointed out that next year, the DDA’s bond payments made out the TIF fund will go from $3.4 million down to $2 million – $1.4 million less. That could be spent on all kinds of light poles, he said. Kunselman discounted the idea that $300,000 was a big difference in that context. He ventured that Hieftje would not have even proposed a DDA budget amendment if Kunselman had not indicated his intent to bring one forward.

Kunselman then addressed Hieftje’s description of the DDA’s board meeting on May 13 and the attendance by the press. From what Kunselman understood from the press, the board didn’t pass a resolution at that meeting, and the DDA didn’t amend its budget. He characterized it as “all talk.” Kunselman accused Hieftje of playing politics.

Marcia Higgins (Ward 4) then said she was not opposed to putting more money toward affordable housing. But she was not sure that this support for affordable housing should come through the DDA. Even if the council transfers $400,000 to the DDA housing fund, the council has no guarantee that the DDA will spend that $400,000 in the way the council would like to see it spent. If the council really wants to support affordable housing, it should simply take money out of the general fund, she said, and put it in the city’s affordable housing trust fund. If the council wants the DDA to be independent, she didn’t see how the resolution did that.

Higgins noted that the light poles fell down a year ago, so she wondered why it had become a crisis situation that had to be dealt with. She didn’t remember hearing about how it was a crisis. She indicated a lack of support for either Kunselman’s or Hieftje’s amendment.

Margie Teall (Ward 4) said she had the words “micromanagement” in her notes as well. She wanted to work with the DDA collaboratively, not by directing the DDA. She wanted the city to be the entity that supports affordable housing. She didn’t want the city to tell the DDA “how to run their business.”

Briere responded to Kunselman’s remarks about the resolution being about “loyalty to the DDA” – saying she didn’t believe the vote is a litmus test on blind support for the DDA or not. She was disappointed by the direction the rhetoric had taken. Responding in part to Higgins’ question about why the light poles had suddenly become a crisis, Briere reported that she’s been nagging about the light poles for a year. City staff have said they don’t have it in the budget, she said. The Main Street Area Association asked the DDA if the DDA could pay for the light poles, and Pollay had responded by saying the DDA would have to find a way to pay for it, Briere reported. Briere stressed that the DDA is responsible for downtown infrastructure. For her, spending the money on infrastructure is the most important part of the DDA’s work.

Briere stressed the fact that the DDA’s housing fund is not specifically designated for affordable housing. She again rejected the idea that the vote on the resolution is a loyalty test.

Hieftje responded to Kunselman’s earlier remark by saying he didn’t disagree with everything Kunselman brought forward. Hieftje just wanted to make sure the light poles are fixed. He suggested a compromise, splitting the amounts between light poles and affordable housing.

Kunselman agreed to the split, saying it was a nominal difference anyway.

Lumm then proposed to divide the question on affordable housing and to vote separately on affordable housing and light poles. Hieftje responded to Lumm by saying that’s not what he was proposing to do.

The specifics of the compromise budget amendment resolution were to transfer $300,000 of the additional TIF to the DDA’s housing fund and to request that the DDA spend $300,000 on Main Street light poles.

Outcome: The council approved the DDA budget amendment, with dissent only from Christopher Taylor (Ward 3). After the vote, the council went into a short recess.

Leaf Collection

By way of background, leaf collection is now provided as part of the city’s containerized compost pickup program. Residents can place yard waste, including leaves, in carts – which can be emptied with automatic robot-arm-equipped trucks. The city also collects yard waste in paper bags.

In the past, the city invited residents to push their leaves into the street after they fell every autumn. The pickups occurred on a predetermined schedule, with each area of the city serviced twice per autumn. The city then used street sweepers equipped with pusher adaptations to pile the leaves together, and then used front-end loaders to load dump trucks with the leaves. Eliminating the loose leaf pickup program was originally estimated to save $100,000 a year starting in FY 2011. According to the city, it’s proven to save closer to $300,000 a year.

From left: Jane Lumm (Ward 2), Marcia Higgins (Ward 4) and public services area administrator Craig Hupy.

The solid waste fund is supported by a millage levied at a rate of 2.4670 mills. A mill is $1 for every $1,000 of taxable value. That millage generates roughly $11 million a year. The funds are used for compost collection, recycling collection as well as garbage collection. [.pdf of solid waste fund status]

Details of the resolution brought forward by Jane Lumm (Ward 2) were as follows: Use $395,000 of the solid waste fund balance to buy two street sweepers; use projected savings from reduced tipping fees and other expenses to cover the $311,000 annual recurring cost. The proposal also included the restoration of holiday tree pickup. It was essentially the same proposal she’d brought to the council last year, when it approved the FY 2013 budget. Last year in Lumm’s bid to have fall loose leaf pickup restored she was joined only by her then-wardmate Tony Derezinski and Mike Anglin (Ward 5).

This year, Ward 2 was again unified in its support – with recently-elected Sally Petersen substituting for Derezinski. Anglin was also consistent in his support. The effort picked up one other vote – from Sumi Kailasapathy (Ward 1). So Lumm’s attempted resolution was defeated on a 4-7 vote, but not before the council took an hour and 10 minutes to debate the issue.

Leaf Collection: Council Deliberations

When she introduced the amendment, Lumm described her attempt the previous year, as well as the technical details of the funding. She contended that for some areas of the city, taking away the service had been a hardship. She contended that loose leaf pickup is a basic service that residents reasonably expect the city to provide – especially in light of the fact that they pay a dedicated solid waste millage that generates over $11 million a year. The holiday tree pickup, she allowed, might not be considered a “core” service, but she felt that it’s a nice, convenient service that can be provided cheaply, for $26,000 a year. Bagging and mulching for some residents isn’t a feasible option, she said. So residents still wind up paying someone to haul their leaves away, which loses the economy of scale that the city could achieve, Lumm contended.

She allowed that there are risks to the fund balance of the solid waste fund. [In round numbers, of the $28.6 million solid waste fund balance, only about $8.6 is "available" for use. Up to $9.4 million in risk has been identified by city staff just to cover the cost of building a replacement drop-off station and to cover requirements of GASB 68, a new accounting standard that must be implemented starting in FY 2015.] But Lumm felt that using $395,000 of the fund balance was appropriate, characterizing it as 4% of the fund balance. The recurring cost was only 2% of the revenue brought in by the millage, she said. Lumm saw value in restoring the service.

After the amendment was introduced by Lumm, Anglin was first to be called on to speak by mayor John Hieftje. Anglin said that in certain areas of the city, leaf pickup is a problem. Ward 2 makes a contribution to the city with its plentiful trees, he indicated, through regulation of stormwater runoff and temperature regulation. He said he wanted to see the amendment approved and “see how it works out.” He said he’d continue to rake his own leaves and put them in the compost carts – because he lives in that kind of neighborhood. In a limited part of Ward 5, he said, there’s a similar problem to Ward 2 for leaf pickup. He cited the stress that the aging population feels about the situation.

Kailasapathy argued from the perspective of economies of scale. She stated that the role of a local government is to provide good services to its citizens. She compared privatizing a certain part of the leaf collection to school busing: If you eliminate school busing, a few children might walk instead, or a few might ride their bicycles, but most parents will drive their children in cars. She stated that it’s more efficient to pick up holiday trees all at one time, instead of thousands of people taking their individual trees to a drop-off point.

Petersen, Lumm’s wardmate, also said she’d support the amendment. She compared the leaf pickup service in its monetary impact to that of the service the city provided recently – on Feb. 28 – when a storm hit and brought down a lot of branches. The city’s effort to pick up storm debris after that happened had been extended to residents citywide, Petersen pointed out, not just to Ward 2 residents. The city was able to absorb that into the budget, and she felt that the city could absorb leaf pickup into the budget as well. Leaves would fall onto the street, whether the city picks them up or not, so she figured it made sense to try to pick them up and take advantage of the economies of scale.

Margie Teall (Ward 4) noted that she’d previously argued against continuing this kind of leaf pickup service. She noted that the city still provides leaf pickup, but it’s done differently now – with compost carts. She felt that the community’s values are in keeping the Huron River as clean as possible and in keeping the streets as clean as possible.

Responding to photographs that Lumm had circulated of piles of leaf bags, Teall said she was sorry that’s happening – but said she didn’t know why those leaves were in the street, because they were not supposed to be in the street. She noted that leaves can be raked every week and a few bags can be put out every week. “There are ways to do this.” She expressed concern about bike lanes – when leaves freeze in the street. She advised keeping holiday trees in your backyard for the birds. So there are ways to deal with the issue that don’t cost the city any money, she ventured.

From left: Sumi Kailasapathy (Ward 1), Sabra Briere (Ward 1), Sally Petersen (Ward 2) and mayor John Hieftje.

Teall argued against Petersen’s point about the city’s effort this year to pick up storm debris – by saying that if the city spends money on loose leaf pickup, it might not have the capacity in the future to implement pickup of storm debris as it did this year.

At Briere’s request, public services area administrator Craig Hupy and solid waste manager Tom McMurtrie came to the podium to field questions. Briere asked Hupy for an explanation of why the city had changed its policy. She reported she’d received emails from people that same day advocating for keeping things the way they were – with no loose leaf pickup. Hupy told Briere the change to the current system of containerized pickup originally had been advocated by those who were concerned about pollution loading to the streams, but that argument had never gained traction.

However, when the “Great Recession” occurred, the city was forced to look at it from an economic point of view, Hupy said. Using only the containerized approach had been expected to save $100,000, Hupy said. Now that the city has gained some experience with that approach, the city saves about $300,000, he said. Community feedback has been heard on both sides, he said. Some people miss being able to rake the leaves out into the street, Hupy said. Others say the streets are cleaner and neater. If he were asked which sentiment was more prevalent, he felt that unscientifically, the “cleaner streets” had it by a margin. But the reason for the change was the economic reality, he reported.

Briere ventured that the amount of compost collected has decreased as a result of the change in leaf pickup method. McMurtrie explained it’s been reduced in part because people mulch the leaves into their lawns or compost leaves in their backyards. Hupy also noted that the amount of leaves picked up by the city is measured by the ton. And when leaves sit in the street, they pick up moisture, making them heavier. When they’re bagged, they stay drier. So the staff believe, Hupy said, that less weight is being recorded on the scales due to drier leaves.

McMurtrie allowed that the tonnages have declined since the containerized program was implemented. He also added that there are seasonal variations. Briere offered an anecdote about a mother and her kids who now use a tarp to drag the leaves out to the back of the house into the woods.

Lumm asked about the private contractors who are now hauling leaves for people: Are they hauling the leaves to the city’s compost site? Yes, said McMurtrie. He noted that haulers are not being charged a tipping fee for bringing in the material.

Chuck Warpehoski (Ward 5) inquired about the quality of the composting product you get from a cart-based approach versus storing the leaves on the street for a while. He recalled reading in the city’s “Waste Watcher” publication that the advice to residents is not to put street leaves into their home compost. Hupy reported that the city has sampled the quality of the leaves. There’s not a difference revealed in the testing so far, he said.

Warpehoski’s question was motivated by the fact that the product resulting from the city’s composting operation is sold. Hupy said that nothing has triggered Michigan Dept. of Environmental Quality (MDEQ) regulations. Hupy indicated that the city’s concern was actually with the reduced amount of organic material that was swept up by street sweepers in the fall – because the leaves were not being swept into the street as a result of the leaf pick up program. So far things are ok, Hupy said. There’s one more round of sampling to be done this fall.

Chuck Warpehoski (Ward 5).

Warpehoski asked about an anticipated revenue shortfall in the city’s solid waste fund. It’s anticipated to come in FY 2016, he said. Later clarification confirmed that a $375,000 shortfall is projected for that year.

Warpehoski asked Hupy to comment more on pollution-loading issues. Hupy explained that back in the timeframe of the early 2000s, there was more concern about pollution loading, with a focus on phosphorus. Hupy indicated that the concern is at the level of TSS (total suspended solids) – the particulate matter itself, not necessarily the chemical makeup. Warpehoski referred to a letter that the council had received from Washtenaw County water resources commissioner Evan Pratt about the impact of sedimentation in places like the Sister Lake area. Hupy indicated that leaves on the bottom of such lakes don’t necessarily decompose. He ventured that the containerized approach would cause less sedimentation. Hupy also ventured that the approach of sweeping leaves into the street could lead to a detrimental effect on stormwater detention facilities – like the one at Pioneer High.

Stephen Kunselman (Ward 3) got clarification that the city sweeps the leaves that happen to fall naturally into the street. Residents aren’t asked to sweep those leaves. Hupy indicated that whatever falls into the street naturally is well within the capability of a street sweeper to handle. Kunselman described last winter seeing places where no sweeping had been done. He ventured that it’s just a guess as to the environmental loading. He felt it would be a great service if the city could provide the loose leaf collection. He also understood the environmental issues.

Kunselman’s statement “I don’t bag leaves by any means” prompted Warpehoski to kid him: “Do you burn ‘em?” This was a reference to a discussion the council had previously about the fees charged to residents for open burning.

Kunselman questioned whether there is now any enforcement against people pushing leaves into the street. Hupy said that people are given a door-tag notice. Kunselman said when he lived on Seventh Street near Pauline, he watched the neighbors push the pile of leaves down in front of somebody else’s house. “Have you ever actually issued a ticket?” Hupy told Kunselman he didn’t think so. The city had, however, made repeated “educational visits.” Kunselman concluded that enforcement is a cost.

Kunselman got clarification that the $311,000 recurring cost would be for two pickups in the fall. On the $395,000 one-time purchase cost for sweepers to push the leaves, Hupy also explained that the pushers the city had used in the past were modified with a blade for pushing. Renting wasn’t an option, because the rental companies would not accept the vehicles being returned with weld and burn marks on them from the necessary modifications. Kunselman indicated he was not sure how he would vote.

Mayor John Hieftje asked Hupy to explain the capital expenditures in the solid waste fund budget. Hupy described an expansion of two programs – residential recycling into multifamily residences, and the addition of food waste to the composting stream. A long-term goal is concern about the drop-off center at Platt and Ellsworth. It’s sitting on the old landfill, Hupy said, and it’s slowly becoming part of the landfill. One corner is sinking and will need to be rebuilt.

McMurtrie described discussions with Recycle Ann Arbor and other jurisdictions to see which of them might be willing and able to partner on construction of a new facility. In the coming months, he hoped to be able to bring forward some proposals. The draft solid waste plan needs to be approved by the council, McMurtrie indicated. After that, there can be some capability added for food waste composting. Hieftje asked Hupy and McMurtrie to confirm that there was, in effect, a plan to spend the fund balance in the solid waste fund.

Hieftje then explained that he’d be opposing the restoration of loose leaf pickup. He reiterated Teall’s point that the city still does pick up leaves – in compost carts and paper bags. Hieftje then described how he lives in a relatively leafy neighborhood, but is able to dispose of them with the compost carts and by composting them in his back yard.

Sumi Kailasapathy (Ward 1) and Mike Anglin (Ward 5).

Kailasapathy then inquired about the cost savings that were supposed to have resulted from a conversion to single-stream recycling. McMurtrie confirmed that collection costs have gone down, even with an upwards contract adjustment with Recycle Ann Arbor. But he allowed that revenue has declined. Two factors contributed to that. First, the market has dropped. And the material the city previously processed from Lansing and Toledo no longer comes to Ann Arbor, McMurtrie explained. That’s due to competition, he said.

Petersen then opened up a line of inquiry about alternative solutions to pushing the leaves into big piles, and asked about the possibility of using trucks equipped with large vacuums. She mentioned Cummins engines as the possible power plant for such trucks. [That's a reflection of employment with Cummins early in her professional career.] She wanted to know why the city can’t explore that kind of approach?

Hupy explained that “pushing and loading” is more efficient than vacuums. He explained that sticks, branches and pumpkins after Halloween get included in the piles that are put on the street, which clogs the vacuums. This has been demonstrated by vendors who’ve sought to sell the city on the idea of using large vacuums, but then discover that when the “pushing and loading” method is matched against vacuuming, the “pushing and loading” method has proved superior – to the surprise of the vendors.

Briere inquired if other options exist besides pushing or vacuuming. Responding to Briere, Hupy described a conveyer system as a possible alternative. Briere ventured that whatever method the city uses, it’s still labor intensive for her. She reported that of the various methods, she prefers bagging or putting leaves in the carts. About the current containerized approach, she keeps asking herself, “Is it broken?”

At that point Hieftje indicated that he was hoping the council could soon move to a vote on the question. However, Christopher Taylor (Ward 3) asked for a more detailed explanation of the impact that Lumm’s amendment would have on the solid waste fund.

Hupy reviewed Lumm’s list of cuts, which she proposed to offset the expense of loose leaf collection. The $105,000 reduction in tipping fees might or might not be achievable, Hupy explained. He indicated that street leaf pickup could have the impact of heavier loads, which based on his previous remarks would result from increased moisture. And that would cause increased tipping fees.

For the $14,000 in contingencies for field operations, those are step increases based on labor contracts if they progress in their skill levels, Hupy explained. The $25,000 in solid waste systems planning would take away from the consultant work to be done on an educational campaign. Hupy described the retirement of a person in the solid waste department who works on communication issues. The city is proposing that some of her work would be picked up by a consultant. The $15,000 in printing of promotional material would be for “Waste Watcher,” a publication that is sent out each year to residents. The $76,500 in other service budgets identified by Lumm as a source of savings is for equipment and contracted services – which he described as a difficult cut to make.

Teall then followed up on her earlier point about the storm debris collection this year. She asked how much the storm debris pickup cost earlier this year. Hupy reported that cost at about $375,000. The staff would be coming to the council with a request for an appropriation from the solid waste fund balance, Hupy said. Teall ventured that storms generating debris that might need to be picked up could be happening more frequently. Hupy allowed that if money had to be taken out of the fund balance, then it left less in reserves to deal with various issues.

Teall also highlighted the problem that in-street leaf collection had caused for streets like White Street, where there is parking on both sides of the street. It’s a student neighborhood where the vehicles aren’t moved frequently.

Lumm then defended the savings that she’d identified to fund the restoration of loose leaf pickup, responding to Hupy’s assessment of the impact of her identified savings. She gave a shout-out to the Ann Arbor Newshawks’ satirical treatment of the loose leaf pickup issue – inviting people to look for the video, which is posted on YouTube. She described living in her neighborhood for 35 years, saying that previously the leaves didn’t sit as long in the street before they were picked up. Eventually, she declared: “I think I’ve exhausted this topic.”

Hieftje reiterated his objections, based on the stress it would place on the solid waste fund, given the projection of a shortfall in FY 2016.

Stephen Kunselman (Ward 3).

Kunselman asked for a description of practices in comparative communities. McMurtrie listed off communities that collect leaves in a containerized way (Lansing, Ypsilanti, Beverly Hills, Hazel Park, Troy, Saugatuck, Plymouth Township, Douglas, Tecumseh), compared to loose leaf collection (Berkeley, Birmingham, Clawson, Ferndale, Huntington Woods, Oak Park, Pleasant Ridge, Royal Oak, Adrian, Midland and Holland).

Taylor stated that if the city could provide the service perfectly, he might have a different position – but he stressed “might.” Even with the city’s best efforts, however, he felt there’s no possibility the city would be able to perform the service well. “Leaves will not cooperate, rain and wind and snow will not cooperate,” he said. The costs are material, he said. The cost and benefit were not right for him, so he wouldn’t support the amendment.

Anglin then contended that the failure to provide this service targets those who take virtually no services from the city – the elderly. Even though their kids are out of school, they still pay school taxes, he said. They don’t use the parks, yet their taxes go to support that. The elderly are asking what they get from the city in the way of service.

The council should look at all the demographics of people and ask what services are provided by the city to them. The elderly feel they’re not being fairly treated, he said. The projected shortfall is just a projection, not a reality, he said. So Anglin indicated he’d vote for the amendment.

Warpehoski said he still wasn’t sure how he’d vote. He asked for more information about the financial impact of leaf pickup in the context of freezing weather. Warpehoski also asked about the impact of flooding due to clogged storm grates. Hupy said it’s more labor intensive to clear storm grates when the approach to leaf collection is to push leaves into the street.

Hieftje called on Petersen to speak, but Higgins offered a mild objection, venturing that the councilmembers were exceeding their allotted two speaking turns. Hieftje contended Petersen had a speaking turn left.

Petersen countered Taylor’s point about the ability of the city to perform the task well. She ventured that the city doesn’t do snow plowing well, either, but it’s still a basic service that the city should try to provide.

Kunselman then stated he’d vote no. He cited technological advancements that people can use to take care of their lawns: “Why anybody would vacuum their lawn I have no idea, but they do.” He didn’t want to base leaf collection policy just on the needs of the older population. They’d still have to rake their leaves or hire someone to do it, he said. He suggested that if the city were to provide the service, then some kind of subscription service might be best.

Outcome: The vote on the leaf collection budget amendment was 4-7, getting support only from Jane Lumm (Ward 2), Sally Petersen (Ward 2), Sumi Kailasapathy (Ward 1), and Mike Anglin (Ward 5).

Police Officers/15th District Court

Another amendment put forward by Jane Lumm (Ward 2) was to provide funding for three police officers, with $270,000 taken from the 15th District Court budget.

Lumm indicated that she’d been encouraged by the city council’s identification of public safety as a priority at its December 2012 retreat. She’d also been encouraged by a success statement embraced by the council that defined success in terms of police officers having 25-30% of their time available for proactive policing.

Lumm said the amendment was not meant to “pick on the courts.” She cited the court’s decreasing caseload as one reason to decrease the court’s budget compared to the previous year’s amount.

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

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

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In her proposal, Lumm was comparing the FY 2014 request of $4,379,290 to the FY 2013 budgeted amount of 4,066,865. She reasoned that the $270,000 by which she was proposing to reduce the FY 2014 budget still left the court with more money than was budgeted in FY 2013.

Sumi Kailasapathy (Ward 1) compared 2002 and 2013 FTE levels across departments. The police department has been reduced by about 40%, she said, which was the most of any department. She wanted to restore FTEs. She pointed out that Lansing and Ann Arbor have comparable populations, but Lansing has 226 sworn officers. She allowed that Ann Arbor also has the University of Michigan campus police, but contended that Lansing does as well. She said it was an “apples to apples” comparison. She noted that Ann Arbor’s police force was effective on a reactive basis, but she wanted to make sure it was also able to be proactive, to enhance quality of life and a sense of security that Ann Arbor residents deserve.

Mayor John Hieftje pointed out that Lansing doesn’t have campus police, because Michigan State University is in East Lansing.

Keith Zeisloft, the administrator for the 15th District Court, was asked to come to the podium to answer questions.

Sabra Briere (Ward 1) asked Zeisloft what the impact would be of a $270,000 reduction. He replied that the court would need to look at the only area that’s not mandated by law – the probation department. He felt that a $270,000 would mean losing three of six probation officers. He felt that would mean the loss of the “eyes and the ears of the court.” Without probation officers, the judges would have less ability to sentence offenders in a way that was thoughtful and had any real meaning, he said.

Zeisloft also raised the possibility of impacts to the specialty court dockets: veterans court, sobriety court, domestic violence court, and street outreach court. He said the loss of probation officers could “severely cripple” those programs. The court would lose a probation officer who arrives at work at 6 a.m. every day to conduct preliminary breath tests. That ensures that participants in the sobriety court start the day sober. Zeisloft also pointed out that there’s a reduction in revenue that would come from probation fees. Reducing probation officers might reduce the recovery rate of fines, he said.

Chief financial officer Tom Crawford and Sumi Kailasapathy (Ward 1).

Kailasapathy highlighted the 49% decline in civil infractions – from 2007 to 2011. Responding to Kailasapathy, Zeisloft allowed that there’s been a dramatic decrease in the number of cases. In the last six months, however, there’s been a one-third increase in citations. He described how the workforce has also somewhat declined as the caseload has declined.

Zeisloft called the court “frugal.” Lumm responded by saying she had a different definition of frugal. She listed out increases in various categories.

Lumm and Zeisloft went back and forth about an executive secretary position that was restored last year. She told Zeisloft that historically, the 15th District Court has not met its budget reduction targets.

Then Lumm cited an average 9.6% pay increase given to court workers in October 2012, which was authorized by chief judge of the 15th District Court – Libby Hines. Zeisloft allowed that’s correct. But he pointed out that until then, the court employees had four-and-a-half years of a wage freeze, with a decrease in one of those years. Retention of workers had become an issue.

Zeisloft described how human resources had been asked to do a comparative analysis, and that some of the workers had been found to be dramatically underpaid – in some cases $10,000-$16,000 less than their counterparts in other courts. The increase brought them up to a competitive wage. He ventured that this “softened the blow” of a 9.6% average wage increase. Lumm seemed unpersuaded: “It doesn’t soften the blow for me.” She pointed out that the council had heard from the Ann Arbor Housing Commission director about her struggles with keeping her staff’s pay at a competitive level.

Kailasapathy pointed out that the wage increase given to court workers was an average of 9.6% increase – which meant that some workers would have received an even higher increase.

By way of background, this increase did not apply to judges’ salaries, which are reimbursed to jurisdictions based on state statute. However, the district courts in Michigan fall under the administrative orders of the state Supreme Court, and do not have complete latitude to set wages of their employees independently of their governing municipality.

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

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

It’s not clear if the 15th District Court is required by the city of Ann Arbor to submit a “lineitem detail” budget.

Mayor John Hieftje asked Zeisloft to review the cuts that would have to be made. Zeisloft again identified non-mandated services – probation. He reviewed how three out of six positions would have to be eliminated.

Lumm pointed out that the cut would still leave a slight increase comparing the FY 2013 budget to the FY 2014 budget.

Hieftje asked chief of police John Seto to field questions. In 2011, Ann Arbor crime levels were at a record low, Seto reported. In 2012 there was a slight increase, but it was still relatively low.

Hieftje argued that 226 Lansing officers compared to the 179 in Ann Arbor – when you count UM campus safety officers – is comparable, when you consider the reduced crime in Ann Arbor compared to Lansing.

Briere said she sees both the courts and the police officers as safety services. We need the police officers but we also need the courts as well, Briere said.

Christopher Taylor (Ward 3) agreed with Briere that this amounts to a service cut. His focus was not the change in the budget from this year to last year, he said, but the amount of services those budgets could purchase. He didn’t think the three police officers who would be added would add to the actual or perceived safety in the community. The total city budget for FY 2014 reflects around 50% in support of safety services, so he felt the administrator’s budget reflected the council’s priority on public safety. He wouldn’t support the amendment.

Stephen Kunselman (Ward 3) asked where the court revenue goes. It’s based on a state formula, Zeisloft explained.

Kunselman ventured that there would be other ways to accommodate the $270,000 reduction besides laying people off. Zeisloft countered Kunselman by saying that the main costs of the court, like any governmental entity, is personnel.

Hieftje recited some statistics in support of the idea that Ann Arbor is safe. Hieftje indicated he’d be supporting the allocation of DDA budget funds for police in the downtown area. He didn’t think that the proposed budget amendment would have a net public safety benefit when it would have a negative impact on the probation system.

Lumm drew out the fact that in the last 10 years, the DDA hasn’t provided any money for beat cops. She did this by asking CFO Tom Crawford how much money the DDA had allocated for downtown beat cops. Crawford, who was visibly under the weather at the meeting, said he didn’t know off the top of his head. Lumm told Crawford it was a softball question. She’d previously submitted that question to staff, she said, and “The answer is zero.” [.pdf of memo from Crawford on beat cops]

Kunselman asked Hieftje how the DDA could provide recurring revenue to support downtown beat cops, when it can’t plan to replace light poles.

Susan Pollay, executive director of the DDA, traced the original parking agreement from 2005 between the city and the DDA as originating in a desire to provide support to downtown beat cops. A $300,000 allocation escalated to $1 million a year, she noted, but even that did not result in the preservation of beat cops downtown.

Kunselman objected to the idea that increases in parking rates might be used to fund police officers. He cited $1.20/hour parking in Pasadena, which he recently visited, compared to $1.50/hour in Ann Arbor.

Mike Anglin (Ward 5) wanted to send a message about support for public safety that would come from hiring more police officers.

Sally Petersen (Ward 2) observed that there seems like a lot of agreement that more police are needed downtown, but she wonders what that would mean for this amendment.

Kunselman indicated he’d support the amendment. He didn’t take the possible cut to three probation officers lightly but thought there could be other ways to deal with a reduced budget. He pointed out that the 15th District Court had a nice new building. And responding to Hieftje’s count of UM campus safety officers with the total number of sworn officers in Ann Arbor, Kunselman said the campus police don’t help Ann Arbor neighborhoods.

Outcome: The amendment to reduce 15th District Court funding by $270,000 failed on a 5-6 vote, getting support only from Jane Lumm (Ward 2), Stephen Kunselman (Ward 3), Mike Anglin (Ward 5), Marcia Higgins (Ward 4), and Sumi Kailasapathy (Ward 1).

Police Officer/City Attorney

Another public safety amendment was to allocate $90,000 of the recurring savings from the retirement of assistant city attorney Bob West to the police services area – to pay for an additional police officer. The recommendation associated with the amendment was to eliminate an FTE from the city attorney’s office for next year – that is, FY 2015.

In introducing the amendment, Sumi Kailasapathy (Ward 1) noted the attorney’s office has had the least amount of decline in FTEs over the last 10 years.

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

Sabra Briere (Ward 1) seconded Kailasapathy’s amendment. But she offered a friendly amendment that specified the assignment of the saved funds simply be returned to the general fund. That is, the outcome of the amendment was simply to reduce the FTE count by one, without specifying that a police officer would be added. Briere was interested in staying consistent with the argument that she’d given against the 15th District Court budget reduction, which was based on the idea that she didn’t favor shifting funds between two positions that served public safety.

Kailasapathy appeared amenable to the amendment.

Then Jane Lumm (Ward 2) said she had been set to support the original amendment, but only because it would have added a police officer. Lumm knew from her experience serving on the liquor license review committee that West played a significant role in that. If it meant that West’s position would have to be absorbed with no hire of an additional police officer, Lumm would not support the budget amendment.

Faced with a choice between having Briere’s support or Lumm’s, Kailasapathy reverted to her original amendment – which specified that a police officer would be hired with the savings.

Christopher Taylor (Ward 3) asked chief of police John Seto to come to the podium. Taylor wanted to know if he’d been asked about this change. Seto indicated that the police department worked closely with West.

City attorney Stephen Postema explained that West did more in his job function than just prosecute civil infractions. Among those duties was the defense of police officers in lawsuits and the training of the officers. In contemplating West’s replacement, that person would take more time than West does to complete those duties, Postema said. It’s incorrect to say that the attorney’s office has been reduced less, he contended. He described going from 14 FTEs to 12 FTEs. He said that eliminating the position “willy nilly” would do a disservice to the police department and the city attorney’s office.

Outcome: The amendment to eliminate the retiring assistant city attorney position failed on a 2-9 vote. Only Sumi Kailasapathy (Ward 1) and Jane Lumm (Ward 2) supported it.

Affordable Housing

This budget amendment brought forward by Sabra Briere (Ward 1) tapped the general fund for $100,000 and placed it in the city’s affordable housing trust fund. She led off deliberations by saying that before she was elected to the council, the city transferred $100,000 every year into the city’s affordable housing trust fund. That practice had ended even as the city continued to spend money in the fund, she said.

Mayor John Hieftje hoped there’d be agreement and that the vote could be taken quickly. Briere called the $100,000 a modest amount. She said that in the context of the earlier discussion about altering the DDA’s budget to transfer $300,000 from the DDA’s TIF fund into its housing fund, she wanted the city to demonstrate that it, too, had some “skin in the game.” She wanted it to be a recurring amount each year, not just a one-time allocation.

Jane Lumm (Ward 2) said she wouldn’t support the budget amendment. She asked that her name be removed as a sponsor, saying that had been mistakenly attached. She supports affordable housing, she said, but did not support the amendment. She would prefer to use the increased DDA TIF revenues as the funding source for additional affordable housing support.

Sally Petersen (Ward 2) indicated that if Lumm’s name was coming off as a sponsor, that would leave room for Petersen’s name to be added as a sponsor. Like Briere, Petersen felt the city should have “skin in the game.” Affordable housing is one of the council’s priorities, she noted. One of the outcomes of the economic development task force, she said, was to help determine when support for affordable housing would come from the DDA and when it would come from the city. Until that could be done, both entities should have skin in the game.

Lumm reiterated that she supported affordable housing and also thought the city should have “skin in the game,” but stated that it matters where the “skin is found.” She felt the $100,000 should be transferred from identified savings, not simply by making an additional expenditure – saying that in this regard she was a fiscal conservative. She asked CFO Tom Crawford if he could identify $100,000 in savings. Crawford was circumspect: “Staff’s work is reflected in the city administrator’s recommendation.”

Hieftje ventured that early in his service as mayor, the city’s budget was such that $100,000 could be found somewhere. Now that the city is leaner, it’s not easy to find that $100,000, he said.

Marcia Higgins (Ward 4) indicated that she’d support the $100,000 transfer because the direction is for staff to find a way to put it in the budget every year.

Outcome: The $100,000 transfer from the general fund reserve to the city’s affordable housing trust fund was approved, with dissent only from Jane Lumm (Ward 2).

Washtenaw Health Initiative

This amendment, brought forward by Sabra Briere (Ward 1), was to allocate $10,000 to the Washtenaw Health Initiative (WHI), a countywide collaboration focused on how to make healthcare more accessible and improve care coordination for disadvantaged populations. It was meant to help prepare for federal healthcare reform.

The WHI is co-chaired by former county administrator Bob Guenzel and retired University of Michigan treasurer Norman Herbert, along with Ellen Rabinowitz, executive director of the Washtenaw Health Plan. The city joined the WHI on July 2, 2012. Washtenaw County is also a member of WHI.

Outcome: The council unanimously approved the $10,000 for WHI without debate.

Public Art Funding

The amendment proposed eliminating $326,464 in spending on public art. This anticipates possible approval of revisions to the public art ordinance. If the council enacts those revisions – likely on June 3, 2013 – it would require a subsequent vote with an eight-vote majority to restore the public art monies to their funds of origin.

By way of background, the current Percent for Art funding mechanism sets aside 1% from all capital projects, to be used for public art. Those monies are pulled from numerous funding sources, depending on how the capital project is funded. The ordinance revisions that are being brought forward would, if approved, eliminate the Percent for Art approach.

Chuck Warpehoski (Ward 5) questioned whether it’s possible to make this amendment, under the existing ordinance. Assistant city attorney Abigail Elias explained that the amendment continues the public art set-aside, but prevents spending it.

Christopher Taylor (Ward 3) indicated that he expects there’ll be a change in the public art ordinance, but until it’s changed he wants to stay the course and support the existing program. So he’d oppose the amendment.

Mayor John Hieftje concurred with Taylor’s reasoning.

Outcome: The vote on preventing the spending of the FY 2014 public art set aside was 7-4, with dissent from Chuck Warpehoski (Ward 5), mayor John Hieftje, Christopher Taylor (Ward 3) and Margie Teall (Ward 4).

Sidewalk Gaps

This budget amendment would tap the general fund for a one-time use of $75,000 to fund a sidewalk gap prioritization study.

Sabra Briere (Ward 1) asked why neither Act 51 money nor the sidewalk millage could be used for new sidewalk construction. Public services area administrator Craig Hupy explained that millage money is supposed to be used only for repair and maintenance of existing sidewalks. Act 51 is not for first-time improvements, Hupy said.

Citywide, there’s more than $25 million worth of sidewalk construction that could take place, Hupy explained. That’s why it’s important to prioritize.

Mayor John Hieftje said that reductions in transportation by the Ann Arbor Public Schools have highlighted where some of the sidewalk gaps are. Stephen Kunselman (Ward 3) noted that some neighborhoods have no sidewalks at all. How does that fit in? Hupy indicated that’s the reason the prioritization study is needed. Kunselman wanted to know if the study will be done in-house. Hupy thought it would require a fair amount of community engagement. So outside assistance would be tapped for that.

Jane Lumm (Ward 2) said she’s inclined not to support it, but probably will.

Mike Anglin (Ward 5) told Hupy that he’s glad conversations are happening between the city and AAPS.

Outcome: The council unanimously approved the sidewalk gap prioritization study.

Miller Manor Senior Meals

This amendment would replace $4,500 in funding lost due to federal sequestration for a senior meals program. Miller Manor is an Ann Arbor housing commission property.

Outcome: Without debate, the council unanimously approved the $4,500 for Miller Manor senior meals

Human Services

This item increased by $46,899 the amount of funding available for human services nonprofit entities. The city allocates this money through a coordinated funding process with the Ann Arbor Area Community Foundation, the United Way of Washtenaw County, Washtenaw County and the Washtenaw Urban County. The city has participated in this coordinated funding approach for three years now. Initially the agreement was for two years, and the partners extended for a year.

In introducing the amendment, Sabra Briere (Ward 1) noted that the total amount of funding allocated in the budget for human services nonprofits could change after this year. The additional $46,899 brings the amount to $1,244,629, which is the same as the last two years.

Outcome: Without discussion beyond Briere’s introductory remarks, the council unanimously approved the $46,899 increase in funding to nonprofits that provide human services.

Parks Fairness

Under Ann Arbor city policy policy, the general fund allocations to parks and recreation must not suffer any decrease beyond what other areas in the general fund do. So in the course of making amendments to the other parts of the budget, that can have implications for adherence to this policy.

At the end of all the amendments, financial services staff provided the council with the adjustment that needed to be made to the parks budget, in order to comply with the policy. This year, that amount is an increase of $22,977.

Outcome: The council approved the “parks fairness” adjustment without debate.

FY 2014 Budget Deliberations

Jane Lumm (Ward 2) explained why she’d be opposing the budget again this year, like she did last year. She contended that this year’s budget makes no progress toward making public safety a priority.

Stephen Kunselman (Ward 3) understood Lumm’s position, but said that politics is the art of compromise. He’d seen a lot of compromise that night. He pointed to the small increases in the number of firefighters. [This was an increase by four firefighter positions compared to FY 2013, but the positions had been added after the FY 2013 budget was adopted.] He pointed out that there’s no longer a plan to close fire stations, which he counted as progress. Kunselman said he believes in patience and putting his shoulder to the pile, as in rugby, and pushing toward a score.

Marcia Higgins (Ward 4) as well as other councilmembers thanked staff for their hard work in preparing the budget. Sabra Briere (Ward 1) said she wouldn’t vote against the budget because she has to “own it” even if she doesn’t like every item in it.

Outcome: The council voted 10-1 to approve the FY 2014 budget. Dissenting was Jane Lumm (Ward 2).

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

Next council meeting: Monday, June 3, 2013 at 7 p.m. in the council chambers at 301 E. Huron. [Check Chronicle event listings to confirm date]

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In the couple of weeks leading up to the May 21, 2012 meeting, councilmembers had their hands literally full with the FY 2013 budget. (Photo by the writer, taken on May 18.)

The amendments approved by the council included modifications that added a secretary position to the 15th District Court, increased human services funding by $46,899, added $78,000 to the Ann Arbor Housing Commission budget, and eliminated a contract with RecycleBank to administer a coupon program to encourage residents to recycle.

One resolution – which did not actually modify the budget – simply directed the city administrator to bring a future mid-year budget amendment to add up to six firefighters to the budget – if a federal grant and increased state fire protection allocations materialize.

Amendments that were brought forward, but that did not win council approval, included a proposal to leave money in various city funds, totaling $307,299, instead of transferring that amount to the public art fund. Also failing to win approval was an amendment that would give a specific interpretation to the city’s downtown development authority tax increment finance (TIF) capture ordinance – that would have benefited the city’s general fund by around $200,000. Both of those amendments were brought forward by Stephen Kunselman (Ward 3).

Another amendment that failed would have restored loose leaf collection service in the fall, as well as holiday tree pickup. And an amendment to fund additional police officers also did not succeed. Both of those amendments were proposed by Jane Lumm (Ward 2). Lumm was joined by Mike Anglin (Ward 5) in dissenting on the final budget vote.

The total expenditure budget for FY 2013 as proposed – across all funds, including utilities, solid waste and the like – came to $404,900,312 in revenues against $382,172,603 in expenses.

The originally proposed budget for the much smaller general fund – out of which the city pays for services like fire and police, planning, financial services, administration, parks and recreation – showed $79,193,112 in revenues against expenses totaling $78,869,750 for a planned surplus of $323,362. The following year, FY 2014, had been projected to be basically a break-even year.

The cumulative impact of the amendments approved by the council on Monday night increased expenditures to $79,070,842 against revenues of $79,193,112, for a surplus of $122,270. Below is a detailed list of proposed amendments and outcomes.

• Increase District Court budget by $76,193 to add a secretary position. Outcome: Approved on a 10-1 vote, with Jane Lumm (Ward 2) dissenting. The amendment was put forward by Christopher Taylor (Ward 3).
  The increased expenditure did not identify a source of funds other than to tap the general fund. Rationale for the added position was that it restored a job that had been eliminated when it was uncertain whether Gov. Rick Snyder would appoint a replacement for judge Julie Creal, who resigned in 2011. Joe Burke was eventually appointed on Feb. 15, 2012 to replace her. The argument for adding the position was essentially that Burke needs the support staff.
• Policy Direction: Upon receipt of additional funding for fire protection from the federal or state government, make a future mid-year budget amendment to hire up to six additional firefighters for a total of 88 firefighters. Outcome: Approved on a unanimous vote. The amendment was put forward by Margie Teall (Ward 4).
  The funding for additional firefighters would potentially be a combination of a federal grant – for which the city has applied through a FEMA program called Staffing for Adequate Fire & Emergency Response grants (SAFER) – and possible increases in the state of Michigan’s fire protection allocation to municipalities that are home to state-owned institutions like the University of Michigan. The number of 88 had been identified by fire chief Chuck Hubbard as ideal at a working session conducted on March 12, 2012.
• Define DDA TIF capture on an interpretation of Chapter 7 that’s different from that of the Ann Arbor Downtown Development Authority, add $199,360 to general fund, and add two firefighter positions. Outcome: Rejected on a 3-8 vote. The amendment was put forward by Stephen Kunselman (Ward 3). It got support only from Kunselman, Jane Lumm (Ward 2) and Mike Anglin (Ward 5).
  The interpretation of Chapter 7 was controversial since it was first identified last year by city financial staff as having an impact on the amount of tax increment finance (TIF) capture to which the Ann Arbor DDA is entitled in its downtown district. For more detail see: “Column: Let’s Take Time on Ann Arbor Budget.” The interpretation of the ordinance and method of calculation of the TIF capture proposed by Kunselman would have had a substantial impact on the city’s revenue, as well as that of other taxing authorities in the DDA district, including the Ann Arbor District Library.
• Increase human services allocation by $46,899. Outcome: Approved on a unanimous vote. The amendment was brought forward by Jane Lumm (Ward 2) and Sandi Smith (Ward 1).
  Last year for FY 2012, the council amended the proposed budget to increase human service funding by $85,600, to bring the total allocation to nonprofits providing human services to $1,244,629. Compared to the originally proposed FY 2012 human services amount, this year’s FY 2013 amount is about $39,000 greater. But that reflects a $46,899 decrease from the level to which the council amended the budget last year.
• Decrease mayor/council travel budget by $6,500. Outcome: Rejected on a 2-9 vote. The amendment was brought forward by Sabra Briere (Ward 1), and won support only from Briere and Jane Lumm (Ward 2).
  The amount of $6,500 appears to arise out of an allocation of $550 for each of 10 councilmembers and $1,000 for the mayor. Two years ago on March 1, 2010, as the council was giving direction to then-city administrator Roger Fraser, a proposal was made to direct Fraser to eliminate travel for the mayor and councilmembers. The council decided on that occasion to preserve mayor John Hieftje’s allocation of $1,000.
• Eliminate RecycleBank funding, with virtually no impact this year to the solid waste budget. Outcome: Approved on a 8-3 vote. The amendment was brought forward by Sabra Briere (Ward 1), Carsten Hohnke (Ward 5), Stephen Kunselman (Ward 3), and Jane Lumm (Ward 2). It was opposed by Tony Derezinski (Ward 2), Margie Teall (Ward 4) and Christopher Taylor (Ward 3).
  RecycleBank administers a coupon-based reward program that is intended to increase rates of curbside recycling in the city. At its Sept. 19, 2011 meeting, the city council voted to retain the contract it had signed the previous year with RecycleBank. Leading up to that vote, there had been some interest on the council in canceling the contract entirely – because it was not clear that the impact of the coupon-based incentives was commensurate with the financial benefit to the city. But the council settled on a contract revision that was favorable to the city. The cost of continuing the contract this year would be $103,500. The cost of canceling is $107,200 – $90,000 in an equipment purchase settlement in accordance with terms of the contract and $17,200 for 60 days of contractual notice. Savings will be realized in subsequent years.
• Eliminate $307,299 in transfers to public art. Outcome: Rejected on a 2-9 vote. The amendment was brought forward by Stephen Kunselman (Ward 3) and Jane Lumm (Ward 2). It got support only from its two sponsors.
  The amendment stipulated that the transfers from various city funds into the public art fund would not take place, “notwithstanding city code” – a reference to the city’s Percent for Art ordinance. The Percent for Art ordinance requires that 1% of all capital improvement projects, up to a cap of $250,000 per capital project, be set aside for public art. The amendment would have prevented the transfer of $60,649 out of the drinking water fund, $22,400 out of the stormwater fund, $101,750 out of the sewer fund, and $122,500 out of the street millage fund. The council had re-debated its public art ordinance most recently at its May 7, 2012 meeting, in the context of a sculpture for the Justice Center lobby, which was ultimately approved.
• Increase Ann Arbor Housing Commission budget by $78,000 to offset cost of allocating retiree healthcare costs. Outcome: Approved on a unanimous vote. The amendment was brought forward by Sandi Smith (Ward 1) and Margie Teall (Ward 4).
  The resolution did not identify a source of revenue other than the general fund surplus to pay for the increase. However, the resolution made clear that the increase was for one year only, to give the AAHC time to find additional revenue. The increase to AAHC is intended to offset the additional costs to AAHC from the new method of allocating retiree health costs to different departments – based on where the liability is accruing. For the city’s general fund departments, this resulted in decreased costs this year totaling around $1 million. But for some organizations within the city, like AAHC, it resulted in increased costs. For detail on retiree cost allocation methodology, see The Chronicle’s coverage of a Feb. 13, 2012 working session.
• Count golf course support as parks support. Outcome: Approved with dissent only from Stephen Kunselman (Ward 3). The amendment was brought forward by Carsten Hohnke (Ward 5).
  The background to the amendment is a 2006 administrative policy approved by the council in connection with the parks maintenance and capital improvements millage. Among other things, under the 2006 administrative policy, general fund support for parks will decrease only in concert with the rest of the general fund budget. The council has revised the 2006 administrative policy twice previously. On May 17, 2010, the city council revised the 2006 administrative policy to eliminate the natural area preservation program’s automatic 3% increase, and reset NAP funding to levels proportionate with other programs. And on May 16, 2011 the council revised the 2006 administrative policy to allow non-millage funds to count as general fund support for the parks, for purposes of the policy that require general fund support. The parks maintenance and capital improvements millage will likely be put on the ballot for renewal in the Nov. 6, 2012 general election.
  The result of the other budget amendments that the council passed on the evening of May 21 would have triggered a need to adjust parks funding upwards by $49,000. The budget amendment on golf support did not change the 2006 administrative policy. Rather, it stipulated that the $272,220 included in the FY 2013 budget proposal as a transfer to the golf courses covered the adjustment (the $49,000) that would have been required to meet the 2006 policy.
• Restore non-containerized fall leaf collection and holiday tree pickup, through a one-time use of $383,000 and recurring use of $275,280 money from the solid waste fund. Outcome: Rejected on a 3-8 vote. The amendment was brought forward by Jane Lumm (Ward 2). Joining her in support were only Tony Derezinski (Ward 2) and Mike Anglin (Ward 5).
  The one-time use of funds would be for purchasing two sweeper/pusher vehicles. The amendment also called for recurring use of $275,280 to pay for labor/equipment costs. Of that amount, $25,204 would have gone to fund the curbside pickup of holiday trees. The amendment called for a range of different savings within the solid waste fund that might have been used to fund the recurring costs, including savings from the elimination of the RecycleBank contract.
• Add up to 10 sworn police officers – five to be funded through a federal Community Oriented Policing Services (COPS) grant and five to be funded through reductions in other departments. Outcome: Rejected with support only from Jane Lumm (Ward 2) and Stephen Kunselman (Ward 3). The amendment was brought forward by Lumm.
  The five positions to be added through the COPS grant would have been added only if the grant were awarded. The other five positions would have been funded from non-specific cuts to other city general fund departments: mayor and council ($8,957); 15th District Court ($94,617); public services ($192,265); and human resources ($35,939). The amendment also called for higher cost recovery for officers for which the Ann Arbor Transportation Authority (AATA) contracts.

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Jack Eaton and Margie Teall, candidates for the Ward 4 city council seat, engage in the subtleties of negotiation over who would deliver their opening remarks first. (Photos by the writer.)

City council representatives are elected for two-year terms and each of the city’s five wards has two seats on the council, one of which is elected each year. Also in attendance at Tuesday’s forum was Marcia Higgins, the Ward 4 council representative who won re-election in November 2009, defeating independent challenger Hatim Elhady.

Besides Higgins, other elected officials and candidates for office who were introduced at the forum included: LuAnne Bullington (candidate for the 11th District county board of commissioners seat), Ned Staebler (candidate for the 53rd District state Representative seat), Leah Gunn (county commissioner representing the 9th District of the county and seeking re-election), Patricia Lesko (candidate for Ann Arbor mayor). All the candidates are Democrats.

Eaton’s main theme was a need to focus more on infrastructure – those things we need, not the things that might be nice to have. Eaton was keen to establish that his candidacy was not meant as a personal attack on Teall, saying that he expected his supporters to focus on the issues and to conduct themselves in a civil way. His opening remarks were heavy on thanks and appreciation for Teall’s long service on council, particularly with regard to the creation of Dicken Woods, which is now a city-owned nature area.

In the course of the forum, a pointed question to Teall on her biggest regret while serving on the council elicited an acknowledgment from her that she regretted her contribution to the problem last year with city councilmembers emailing each other during council meetings. Eaton was quick to give Teall credit for publicly apologizing in a timely way for her role in the scandal.

For her part, Teall focused on setting forth accomplishments while serving on the council. Those ranged from the longer-term budgeting strategies that she said had helped ensure that Ann Arbor was weathering the economic crisis better than other Michigan cities, to the budget amendment she introduced and the council passed in May, which proposed using $2 million from the Downtown Development Authority, plus more optimistic estimates for state revenue sharing, to eliminate the need to lay off some police and firefighters.

The candidates exchanged different views on basic infrastructure issues like the Stadium Boulevard bridges and stormwater management, to single-stream recycling and leaf collection, to Georgetown Mall, and the transparency of government.

The candidate responses are ordered largely in the order in which they were made. But in some cases, questions of similar theme are grouped in a way not consistent with their chronological order.

Opening Statement

Each candidate gave an opening statement.

Eaton’s Opening Statement

Eaton began by thanking everyone for taking time out of their busy lives to come listen to the candidates and to “ponder the future of our city.” He specifically thanked Tom Johnson and Greg Hebert, co-chairs of the Ward 4 Democratic Party, for organizing the forum. He also thanked Teall for her many years of service on the city council – he thought many people did not understand how much time and effort serving on the city council actually takes.

Jack Eaton, candidate for Ann Arbor city council Ward 4, gives his opening statement during the candidate forum sponsored by the Democratic Party.

He also said that he wanted to thank Teall on behalf of his neighborhood for helping to protect Dicken Woods – they’d stopped a developer and managed to turn it into a park. He said he wanted to make clear that he was not running against Teall for any personal reasons – he does not dislike her, he said, and he would “not say mean things about her.” He and Teall “simply disagree about some issues.”

Addressing his supporters, he asked them to conduct themselves in a civil way – that they discuss the issues and not the people, that they make it a campaign they could be proud of organizing together.

“I am running for city council because I disagree with the current council’s vision for our city.” He went on to say that he disagreed with the current city council’s budget priorities.

Ann Arbor is a great town, he said, that is unique and special – we have fabulously talented people, and live with Midwestern values. Michigan, he said, is facing difficult economic times, as is Ann Arbor, but not to the extent that Detroit, or Flint, or Battle Creek are facing them. Nonetheless, he said, we will have a difficult budget to manage in the near future. The Southeast Michigan Council of Governments (SEMCOG), he said, had estimated that 69% of Ann Arbor residents over the age of 25 have at least a bachelor’s degree. So Ann Arbor has a highly educated workforce that is prepared for the modern economy, he said. As result, Ann Arbor has a lower unemployment rate than other areas in Michigan, and our property values have declined less than other areas of the state. Nevertheless, he cautioned, we will see a decline in property tax revenues, as well as a decrease in state revenue sharing.

During the next two years, he said, we need to focus on our core public services – public safety, roads, bridges and infrastructure, and maintenance of our parks and recreation program. We especially need to pay attention to human services, he said, and to help those who are least able to help themselves.

During these difficult economic times, he said, the city needs to withdraw from real estate speculation and projects that are not necessary but merely desirable. If we take care of core services, he suggested, the highly educated population would draw employers, the economy will stabilize, property tax revenues will stabilize, and we can move on to pursue a different vision. In the short term, however, we have to focus on those things that are absolutely necessary, and put aside the things that are merely desirable.

Eaton promised that as a city councilmember, he would support citizens’ needs and desires for fundamental services.

Teall’s Opening Statement

Teall also began by thanking everyone, including the organizers of the forum, Tom Johnson and Greg Hebert, the co-chairs of the Ward 4 Democratic Party. She also thanked Eaton for his kind comments – she confirmed that it is a lot of hard work serving on the city council.

Margie Teall, Ward 4 city council incumbent, responds to questions during the candidate forum.

Since 2002, she said, the council had been able to accomplish some “pretty amazing things.” What makes that significant, she said, was that the challenges have and continue to be significant. We currently face the most severe economic downturn since the Great Depression, she said, and sources of state and federal funds that cities have counted on for decades have been drying up. Funding that was previously available in the ’80s and ’90s and also in the early part of the current decade was no longer available, she said. Across the state, she said, cities are seeing their budgets stretched past the limits.

Some other cities were letting their fund reserve balances get dangerously low and have put their bond ratings at risk. Ann Arbor, however, has been very careful to protect its bond rating, said Teall. Royal Oak, she reported, was looking at 43 layoffs in July – including 14 firefighter positions and 16 police officers. Grand Rapids is asking voters to increase their income tax rate and they are looking at 14 more layoffs on top of the 125 positions that were eliminated this past cycle.

Teall stated that Ann Arbor was fortunate to have a mayor and city council who had the foresight to make necessary structural budget changes early on. When she was first elected in 2002, she said, the council had prioritized the budget at its first goal-setting session. They had focused on the basics of city government and operation. As a result, she said, Ann Arbor was weathering the economic storm as well or better than any other city in the state. Despite the fact that Ann Arbor had lost up to 5% of its property tax revenues due to the sale of the Pfizer property to the University of Michigan, Ann Arbor was still answering the demands that decades of neglect of roads, water treatment, and sewer infrastructure had left them, she said.

Ann Arbor is still not raising taxes and the fund reserve balance is healthy enough to maintain a very high bond rating, Teall said. That had been the result of very careful planning and decision-making, she said. She herself had accomplished a great deal for Ward 4 residents, she said, as well as for the city as a whole. The very first neighborhood meeting she attended in November of 2002, she said, was in the same room as the forum that evening – and the topic of the meeting had been the threat to the area that is now Dicken Woods.

Teall worked with many of the residents to stop the sale of the land to the developer and to work out a plan to arrange for the city itself to purchase the land, she said. She gave credit to the neighborhood for making the area what it is today, saying that they had taken a “diamond in the rough and polished it.” She thanked the neighbors for “taking the ball and running really hard with it.” She reported that last week the city council had voted to make Dicken Woods officially city of Ann Arbor parkland.

Two years ago, she said, she had worked with her colleague from Ward 4, Marcia Higgins, to rezone part of Lower Burns Park to prevent more single-family residences from being broken up into multiple rental units. More recently, she said she had written and co-sponsored a resolution to create a neighborhood task force to work with the city attorneys and planning staff to provide oversight and input into the redevelopment of the vacant Georgetown Mall and to address concerns about its current security.

Last month, she said, she had sponsored a budget amendment to prevent football-Saturday parking in Allmendinger and Frisinger parks. A year ago, she continued, the Ann Arbor Senior Center had been slated to close two days after the candidate forum was being held – July 1, 2010. She said she had taken the lead during last year’s budget process to reverse that decision – she wrote the resolution creating the senior center task force and had chaired that task force over the last year. The task force had made dozens of recommendations and the city staff had subsequently implemented them to make the senior center sustainable in the future, she said.

On the city’s environmental commission, she said, she had worked on the ordinance that restricts the use of phosphorus in lawn fertilizer. She also cited her role in helping to convert Ann Arbor’s recycling system from a dual-stream to a single-stream system – that would help to establish Ann Arbor as the leader that it previously was in the field of recycling, she said, stating that it would save the city about $650,000 a year in labor and tipping fees.

She concluded her list of accomplishments by saying that she had taken the lead on an amendment to the budget this last spring that prevented the layoff of police officers and had kept all of the fire stations opened. The fire chief had assured the council that response times and staffing levels would not be adversely impacted, and neither would residents’ insurance rates. She said she looked forward to serving the city for another two years – the turbulent economic times required the kind of continuity that only the current leadership could offer, she concluded.

Georgetown Mall

Question: Please comment on the future of the Georgetown Mall. [The property, now a vacant strip mall, is located on Packard Road, between Pine Valley and King George boulevards.]

Teall on Georgetown Mall

Teall indicated that she had been working with a citizens group to follow closely what the current owner is doing – they had taken a tour of the property last month and they have another meeting on July 15. The city attorney and city planning staff are working with the group. They are optimistic that the owner will take the group’s suggestions and input, Teall reported.

Eaton on Georgetown Mall

Eaton said that Georgetown Mall represents an unfortunate failure of the city council to act, based on its first lesson on urban blight. Out on Jackson Road, he said, the old Michigan Inn was allowed to “waste away for years” without any response in the form of legislation that addresses urban blight. The same thing appears to be happening with Georgetown Mall, he cautioned.

There are no ordinances, he contended, that address responsibilities of landowners with regard to abandoned property – the site is a magnet for vagrants and crime. The issue needs to be addressed on a broader level than just the one site, he contended. That’s because apparently the city will face more of this kind of thing, he said. There is an abandoned site at the bottom of Broadway Hill that used to be a neighborhood shopping center – Kroger – that is now just a field of weeds, and there’s an abandoned site at Washtenaw and Platt across the street from the Whole Foods store with a few abandoned buildings – it’s also filled with weeds, he said.

In a best case scenario, Eaton said, Georgetown Mall would be demolished and become a field of weeds. It is important, he said, to assign responsibility to landowners with respect to abandoned property so that properties don’t just “fester” in the neighborhoods as urban blight.

State of the City

Question: How is the city better than it was 10 years ago?

Teall on State of the City

Teall said that the most basic way she felt the city was better is the fact that the budget is much more solid than it was previously. The city is addressing infrastructure needs that had been neglected 10 years ago, she said. When the city was flush and the city had the money to do a lot of things, the city didn’t do them. As examples of projects the city is now undertaking, she pointed to the storm water project at Pioneer High School and the renovations to the water treatment plant. In addition, the greenbelt, she said, was enhancing the quality of life in the whole city.

Eaton on State of the City

Eaton said he’s running for city council because he thinks that in some ways the city is not better than it was 10 years ago. But he said that he did believe there were wonderful things that have happened in the last 10 years. As examples, he said the city has added to its park system, Adopt-a-Park has been implemented, neighborhoods have been activated to become more involved in politics – there are a lot of exciting things happening in town. What’s better now, he said, is that the town has a robust sense of community and continues to improve it.

The Democratic Party

One question was directed only to Eaton.

Question: Can you tell us what you have done for the Ann Arbor Democratic Party in the last few years?

Eaton on Democratic Party

Eaton began by saying that he voted regularly. He also contributed to Democratic candidates, he said. He also said he had helped organize neighborhood organizations in town that focus around Democratic-based issues.

Malletts Creek and Drainage Issues

Question: As a long-time resident of Lansdowne I have witnessed the deterioration of Malletts Creek as an asset of Ward 4. Unfortunately, stormwater and silt from the new developments west of Ward 4 and from within Ward 4 have been directed into the creek. When is the city council going to review the work of the drain commissioner?

Eaton on Drainage Issues

Eaton began by saying he did not think it was the work of the city council to direct the county drain commissioner [now called the water resources commissioner]. But he noted that the city has flooding problems in a variety of areas – not just Malletts Creek. A couple of years ago, the city council had commissioned and paid for a study on flooding, but had refused the results, he contended. It’s becoming a more and more important issue, he said.

Eaton said he was not living in Ann Arbor in 1968 when the city had experienced a huge flood, but he noted that there was an increasing frequency of floods. He said he had visited Lansdowne to look at the problem that they are having with Malletts Creek. It would require a joint effort on the part of the neighborhood, which owns some of the infrastructure, and the city, which owns the bridge. But the flooding problem needs a city response, he said. We can’t allow development to proceed, he said, without gauging impact on drainage and surface water.

Referring to a heavy-rain-related incident that was reported to the city council at a recent meeting, Eaton said that no one should wake up and find 70,000 gallons of water in their basement. It’s not an individual’s problem that happens, he said, but rather a failure of the city to address its fundamental stormwater problems and to address them in a broad-based manner.

Teall on Drainage Issues

Teall said the flood map that she thought Eaton had referred to was expected to be ready in the fall. She said that she and the other Ward 4 representative, Marcia Higgins, had visited the location where a resident had had their basement flooded with 70,000 gallons of water, and toured the entire area with city staff – Cresson Slotten, a senior project manager, and Craig Hupy, who is head of systems planning. She characterized the failure as a failure of the system that had been installed – it had been designed to take the stormwater and treat it in a certain way and the system had failed for that specific heavy rain event.

Teall indicated that the neighborhood association has ownership of some of the infrastructure for a bridge between two ponds.

Malletts Creek Bridge

Question: What about the bridge that goes across Malletts Creek between Morehead and Delaware? It’s been out of service for two years and is getting to be a nuisance.

Teall on Malletts Creek Bridge

Teall indicated it was the same bridge that she was talking about before – it’s a pedestrian bridge. The footings on the bridge are not in good shape, she said, so the city could not simply go in and replace the bridge above the footings. With respect to the ownership of the bridge, Teall was uncertain which parts were privately owned and which parts were owned by the city.

Eaton on Malletts Creek Bridge

Eaton chimed in to say that the structures under the bridge were owned by the neighborhood association, but the bridge itself is a park bridge, built and owned by the city. The neighborhood, Eaton said, was complaining because they’d been trying to work with the city to find a resolution to the problem that has persisted for a couple of years and they have become frustrated.

Eaton indicated that he was uncertain what the city had done or not done, but that he understood that there could be frustration when a process took a couple of years. Given the recent flooding issues during a major rainstorm, he said, now was perhaps the time to take responsibility for Malletts Creek and the bridge.

Stadium Bridges

Question: What could you do to prevent the Stadium bridges fiasco?

[For background on the Stadium bridges, including a timeline of events related to the bridges see Chronicle coverage: "Budget Round 6: Bridges, Safety Services" ]

Teall on Stadium Bridges

Teall began by reviewing some of the history of the issue. The railroad bridge had been at 61.5 out of 100 on the Federal Sufficiency Rating (FSR) scale and the State Street bridge had been at 21.2. She said that they’d begun meeting with the public back in 2007 – there’d been a plan developed by city engineers and staff which had included various efficiencies that come from combining multiple projects.

The project at that point included lowering State Street to allow for trucks to go under the bridge, and was to include construction of non-motorized amenities on Main Street and on Stadium Boulevard. Opposite Pioneer High School, on the east side of Main, she said, sidewalks and bike lanes were to be installed, as well as from White Street to Main Street along the south side of Stadium Boulevard. The proposal would have required land from the Ann Arbor Golf and Outing Club, she said, and residents were incensed. She said she’d received numerous handwritten letters from people upset about it.

At that point, she said, the city had decided to take a step back to reduce the scale of the project. In 2009, she said, there were two additional public meetings asking for input on the design. Within that timeframe, the rating on the State Street bridge had fallen to 2 out of 100. Beams were removed from the south side of the bridge.

The current rating, she said, was 23.5. She indicated that she did not consider it to be a “fiasco” but rather a “long process” which she looked forward to seeing completed. She characterized as “foolish” the idea of going ahead with reconstruction of the bridges this fall – that is, using the road millage dollars for the next few years. The city’s strategy was to see if they could get funding from the federal government and the state government. She said she felt the city had a good chance of getting that funding – it’s what other cities do as a funding strategy.

Eaton on Stadium Bridges

Eaton said that in 2007 the spans were already rated at 21-22 out of 100 – where a score of 50 or less out of 100 means that you need to consider repairing or replacing the bridge. As currently proposed, the project does not include the intersection of Main and Stadium – a plan that does not include the controversial aspects involving the sidewalks that required land from the Ann Arbor Golf and Outing Club. But when the Obama administration offered stimulus money for this very kind of project, Eaton said, the city did not have a “shovel-ready” plan – the city had lost out on the chance at that point in time.

Now, he continued, the city was counting on much smaller sums of money that are distributed much more widely. The city had not received TIGER I money [the federal Transportation Investment Generating Economic Recovery grant] and would likely not receive TIGER II money either, Eaton said. Given that a score of 50 out of 100 meant that the bridge should be considered for repair or replacement, Eaton said, the bridge, with its history of FSR scores under that number, meant that the problem had been ignored for too long.

He suggested that bonds should be floated if necessary to reconstruct the bridge and that road millage dollars be used to retire those bonds over time. We need to take care of the problem and not just let it linger, he said, hoping that “free money” would come to town. It’s ridiculous to continue to put it off, he concluded.

Airport Runway

Question: Are you for or against the airport runway extension project?

[For background on a possible airport runway extension see Chronicle coverage: "Ann Arbor Airport Study Gets Public Hearing"]

Eaton on the Airport Runway

Eaton said that he was against the extension, citing a variety of other airports in the area that can handle larger aircraft. It’s important to maintain the municipal airport for enthusiasts who fly, but there are other facilities available for heavier aircraft carrying heavier loads. He understood, he said, that pilots always prefer a longer runway, but the concerns of the surrounding neighborhood need to be respected.

Teall on the Airport Runway

Teall indicated she did not have much to add – she is not in favor of a runway extension. She’d been in favor of the environmental assessment [conducted in connection with a possible extension project] because of the drinking water wells that are located on the airport property – the wells were important to protect, she said.

Single-Stream Recycling

Question: What is your position on single-stream recycling?

[For an opinion piece covering much of the background material on single-stream recycling, see: "Column: Recycling Virtues and MORE"]

Teall on Single-Stream Recycling

Teall began by describing the process as one that we’d all be getting more familiar with starting next week, when we begin putting all recycling materials in one cart [instead of the two different totes that the city now uses]. Chicago, as well as many other cities, are now using that approach, she said. She described it as a money-saver for the city as well as an opportunity to increase the city’s recycling performance.

Teall described the participation rate in recycling as high, but said that as a city, not as much material was being recovered as the city could achieve. She cited a view that had been expressed by Dan Ezekiel [who serves on the city's greenbelt advisory commission (GAC)], who has said that recycling won’t be really successful until it’s as easy to recycle as it is to throw something away.

She said she looked forward to being issued her new cart and being able to throw everything – paper, plastic, and the rest – into the same cart. It also would keep the streets cleaner, she said.

Eaton on Single-Stream Recycling

Eaton began by contrasting dual-stream with the single-stream system. Under the current dual-stream system, he began, you put your paper in one bin and the bottles and cans in another bin. Under the new system, he continued, we’ll be issued “another one of those carts that we all love so much.” [The reference there is to the wheeled carts that the city has issued for trash collection (blue) and compost/leaf collection (brown).]

The purpose of recycling is not to see how much you can get people to put in the bin, he said, but rather to see how much of the material can be put into recycled products. The problem with single-stream recycling, he cautioned, is that it all goes in together – it would be cross-contaminated. There would be broken glass and tomato sauce amongst the paper – it would be a mess, he warned, and would result in less material available to go into products made from recycled material.

The solid waste millage, he said, had accumulated a $6 million surplus, which the city was now going to use to convert to a single-stream recycling process. He said he would have preferred to reduce taxes instead of creating a new system. The new system would provide a new cart, he said, which could be used to recycle margarine and yogurt cups, but it would no longer be possible to put motor oil out for curbside pickup. And when people go to the drop-off center, they’ll have to pay a new $3 entry fee to drop off items they used to put out at the curb.

The $6 million surplus was being spent on the new single-stream recycling system, he said, but the city was discontinuing the loose leaf collection program where residents could sweep their leaves into the street. They’d have to be put into a compost cart, he said. You could put your cart out once a week through the fall, and after that, if you had more leaves, you’d be stuck. In addition, he said, we’d be employing low-wage workers to separate the materials – people we don’t currently have to employ because residents separate the materials when they fill their bins.

Leaf Collection

There was a specific question on leaf collection, tacked on to a question about the “bucket system” of budgeting, which is presented here separately.

Question: “… without cutting popular services like leaf collection?”

Eaton on Leaf Collection

On leaf collection, Eaton said he was going to miss the leaf collection. “I have lot of leaves!” he said. The idea of dragging his compost cart repeatedly through the fall out to the curb, instead of having two mass leaf collections, does not appeal to him.

Teall on Leaf Collection

Teall said that the leaf collection issue had been looked at for a long time – Ann Arbor is the only city of similar size that still collects leaves by having people sweep them into the street and then using bulldozers and dump trucks to haul them away. The new approach would keep the streets and the stormwater system cleaner and she’d been encouraging the change to happen for some time.

Teall pointed out that paper bags could be used in addition to the compost carts. She also pointed out that bicyclists would be a lot happier [to not have leaves dumped where they ride in the street], especially in the colder months after the snow falls and the leaves freeze.

Bucket System of Accounting

Question: How do you feel about the current “bucket system” of budgeting? Shouldn’t a program with a surplus be allowed to help fund programs with a shortfall …?

Eaton on Bucket Accounting

Eaton addressed the issue of the “bucket method” by saying that it was simply fund allocation budgeting – there are certain funds that have limited uses. So, for example, when we tax ourselves with a solid waste millage, we can only use that money to address solid waste issues. Monies collected for the water system can only be used for the water system.

But the city takes this one step further, Eaton explained. Within the general fund, the city allocates to specific funds – like the attorney’s office, or the IT department or the mayor’s office – and they refer to those funds as “buckets” as well. The implication, he said, is that it’s not possible to take money out of the legal department and use it to pay for police or to take money out of the IT department and use it to pay for firefighters. And that, he said, is not true.

To the extent that the term “bucket” is misleading, he said, he is against that. But fund allocation of budgeting is an accepted method of budgeting, he pointed out. It is important to understand which funds have actual restrictions on them and which ones are fungible. You can choose to shift money among funds that don’t have legal restrictions on them, he said.

He pointed out that the federal government does not accept the fund allocation method of budgeting for their annual reporting. The city needs to produce a separate Comprehensive Annual Financial Report, which is filed with the IRS, and which he characterized as a more reliable way of looking at how the city uses its money.

To the extent that it’s just an analogy, he said, he had no objection to the “bucket” method.

Teall on Bucket Accounting

With respect to fund allocations, Teall said that Eaton was correct about the fact that there are certain millages that by state law cannot be moved into other funds. When voters tax themselves for a service, you can’t just move it to a different fund for another kind of operation.

In terms of fund allocations within the city, she pointed out that for the legal and IT funds, those departments support other operations. The legal and IT departments do not just work for themselves independently, she said – they support other departments, like safety services. She summarized by saying that “We can’t starve one area in order to feed another area.”

Street Lighting

Questions: Are you in favor of special assessment districts [to fund street lights]? How do you feel about the city turning off street lights in certain areas?

[Special assessment districts and other options for reducing city expenses for streetlights were discussed at a spring budget meeting: "Budget Round 4: Lights, Streets, Grass"]

Teall on Street Lighting

Teall said that special assessment districts for lighting are something that should be considered. The street lights that are being turned off, she said, would save money by reducing lighting in areas that are “overlit,” according to federal and state standards. The initiative to turn off street lights, she said, was something that had been passed as part of the budget in May. She stressed that the light posts are not being removed. The city would evaluate the results of the program, she said, as it was implemented. [The city describes the current program as a "pilot."]

Eaton on Street Lighting

Eaton stated that he was against special assessment districts for street lighting – he could not imagine taxing people on the basis of how many street lights are in their neighborhood. He is also opposed to turning off street lights.

He noted that the police force had been reduced significantly over the course of the last six to eight years, and said that the state is releasing criminals they can no longer afford to imprison. “And now we are going to darken our streets?” he asked. We pay a lot of taxes, he said. If we don’t build underground parking lots, if we don’t spend $0.5 million planning “a train station that may or may not be necessary,” if we don’t do the things that we just want to do, then we would not have to turn off street lights, he concluded. [Eaton's reference to a "train station" is to Fuller Road Station. Most recent Chronicle coverage: "PAC Softens Stance on Fuller Road Station" ]

City Worker Pay and Benefits

Question: How do pay and benefits for the private sector compare to city workers?

Eaton on City Worker Pay and Benefits

Eaton began by saying that as Michigan’s economy has declined, it’s become more obvious that public employees are relatively highly paid and may have higher benefits than a lot of people in the private sector.

A few years ago, the mayor commissioned a blue-ribbon panel, he said, to study city benefits and retirement policy, but had acted on none of the findings of that committee. We need to work with city unions, to address the problem, Eaton suggested.

He reported that he’d received the endorsement of the firefighters union and the way he’d done that was to restore trust and honesty at the bargaining table. He’d told them that the city needed to cut employee costs, but he also told them that he wanted the bargaining to be honest and trustworthy.

They’re willing to work with the city, he reported, but they believe that they’re being lied to. In Ann Arbor, Eaton said, there are a large number of public sector employees that can be used as comparatives – there are a large number of such employees at the University of Michigan, he said. So it’s not just a private-public comparison, he noted. It was important to find a way to work with employees, he concluded.

Teall on City Worker Pay and Benefits

Teall said that the city’s employees are “decently compensated” but said it was not her place as a councilmember to bargain with unions. That’s something that the city administrator and the labor attorneys did, and it was their job to do. If she were to step into that, it would make impossible the job the city administrator had been hired to do. The city’s bargaining side comes back and checks with the council to see if it’s okay to move forward and that’s a councilmember’s role. On the whole, she said, the city was encouraging its employees to take on a lot more in terms of paying for health care and benefits.

Regrets

One question was addressed specifically to Teall.

Question: What has been your greatest regret serving on council?

Teall on Regret

Teall said that her greatest regret was contributing to the problem that the council had last year when councilmembers were sending emails back and forth to each other during city council meetings.

She said the result was that the council had quickly changed the council rules so that emails between councilmembers during meetings are restricted. She said it was a mistake for councilmembers to have done that and that she had said so last year.

Eaton weighed in by saying that he felt Teall deserved credit for promptly making a public apology over the “email brouhaha.”

Email Policy

Question: What will be your policy/practice regarding constituent emails – will you respond to them?

Eaton on Email Policy

Eaton said that, yes, he would respond to emails. He said it would be his intention to respond promptly. He also said he would favor adopting a council rule that all council business with their constituents be conducted through a councilmember’s official government email address, so that requests under the Freedom of Information Act can be easily met by the city. He said he would not conduct city business through his private email account – he believes in transparency and responsiveness. He said he believed that the council needed rules to govern this.

Teall on Email Policy

Teall indicated that she did try to respond to emails from constituents – she allowed that she did not always do so quickly. She said if she went out of town she might not necessarily take her computer with her. But she said that it was certainly her intent to respond to emails in some fashion.

With respect to transparency, she said she agreed with Eaton. In her experience, she said, constituents emailed her on her government account and receiving emails on a private account had not been an issue.

Transparency in Government

Question: If elected or re-elected, what would you do to create transparency in government?

Teall on Transparency

Teall began by saying that she didn’t think there was a more transparent municipal government in the state than Ann Arbor’s. She pointed to the numerous boards and commissions that the city had, which had meetings that were posted and open to anybody to attend. The city had high ratings – the top 10% – for the transparency of its budget. In her estimation, Teall said, they did everything they could to communicate openly. She told the audience that she knew they had come to a lot of those meetings and they were welcome to come to a lot more.

Eaton on Transparency

[Eaton discusses various aspects of the city charter, which are laid out in some detail in this opinion piece: "Getting Smarter About the City Charter"]

Eaton began by reacting to Teall’s contention that Ann Arbor’s government was transparent by saying cheerily, “I disagree!” He noted that the city charter mandates that city documents are to be available to the public – we have a right to see what goes on. Specifically, he said, when the city attorney renders an opinion, those documents are to be made public so that we can see what the legal advice is on which the council is acting.

On an ongoing basis, Eaton said, you have to file a request under the Freedom of Information Act (FOIA) to find out why a police officer is patrolling your neighborhood with unusual frequency. You have to file a FOIA request to obtain documents that should be readily available.

Even filing a FOIA request will not cause the city to produce any opinion that the city attorney has rendered, Eaton said. Instead, the city attorney has taken the position that his opinions are attorney-client privileged information between him and the council. Eaton said he would, therefore, propose a resolution that would waive attorney-client privilege for opinions of the city attorney that do not relate to ongoing litigation. We have a right to know what advice council is being given and how they are acting on that advice, Eaton said.

As someone who attends many council meetings, Eaton said that many times councilmembers will indicate that an issue is going to be decided in a particular way – before the public hearing and the vote. The decision has already been made, he said, and they know how the vote is going to go, before members of the public take the podium and tell councilmembers what they want them to do. That’s not transparent government, but rather “pro forma” government – they go through the motions of committee meetings and public hearings and responding to FOIA requests, but decisions are made before that input.

As an example of the kind of change he would seek, Easton suggested that a council “committee of the whole” would meet during the off weeks between regular meetings, so that they would have open discussions in front of the public about what they were thinking.

Summary

Both candidates gave closing statements.

Eaton Sums Up

Eaton began by saying that Ann Arbor does not need dramatic change – we don’t need to demolish sections of neighborhoods in order to make “shiny new towers,” he said. What we need to do is maintain what we have. Ann Arbor has the third-worst roads in the state of Michigan, he said, but we have several million dollars in the road repair budget – it may go to the bridge or some other project. In any event, he said, the city has not been spending enough money in the last few years on road repair, and it showed.

The Allen’s Creek Watershed Group had reported that the water system was at near capacity, Eaton said– so if we continue to encourage more development, we will extend past the city’s ability to provide water and wastewater services. Instead of going on a “building binge” that would add to the already-high vacancy rate that the city has in rental and residential properties, we need to take care of our streets and bridges, our water system – the infrastructure that we can’t see. When the economy turns around, he suggested, we will then have the capacity to handle the new building that will take place.

We can’t build all of these projects and take care of our infrastructure – the state of the city now demonstrates, he said, that we can’t do both. He promised that he would focus on essential services during tight budget times, so that Ann Arbor would be in a position to grow when the time is right.

He concluded by asking audience members for their vote.

Teall Sums Up

Teall used her summary time to address some of the statements that Eaton had made through the forum.

First, she stressed that when a development goes into downtown Ann Arbor, the developer pays for any necessary capacity increases in the water and sewer systems that result.

On the subject of single-stream recycling and possible cross-contamination of material, she allowed that 10 years ago, when it was first introduced, the contamination issue was valid. Now, however, in the last few years, with improved technology, it was not. Environmental groups in the city supported the switch, she said.

As far as comparing Georgetown Mall to Michigan Inn, she said, Michigan Inn had been a huge problem for the city and for the city’s attorney, because the owner had not been at all cooperative. She said she was confident that the owner of Georgetown Mall would be cooperative.

On street lights, there would be no streets darkened as a result of the “downlighting” and noted that crime rates were down quite a bit in the last decade.

She thanked everyone for attending and thanked those who had supported her in elections and during her time in office. She said she’d worked hard with her Ward 4 colleague Marcia Higgins and with mayor John Hieftje “to create a solid foundation for the city – economically, socially, and environmentally.” It was essential, she said, to keep the leadership that would keep the city on course. She said that she hoped voters would “hire” her for two more years to keep the city’s ship sailing steady and strong as the flagship of the state of Michigan. We need the continuity that only the current leadership could provide, Teall said, and she asked the audience for their vote on Aug. 3.

Editor’s note: Tuesday, July 6 is the last day for residents to register to vote in the Aug. 3 primary. For information about your registration status or how to register, contact the city clerk at 734-794-6140 or cityclerk@a2gov.org, or go to the city clerk’s election website.

Sue McCormick, the city's public services area administrator, showed the city council a map of streetlights during Monday's meeting. (Photo by the writer.)

On Monday, Sue McCormick, public services area administrator, was front and center, describing for council how the public services budget “lives within the general fund.” The basis for the discussion was budget impact sheets prepared for the public services area, which she distributed.

Councilmembers had several questions for her about a possible special assessment district (SAD) to fund streetlighting, with much of the discussion centered around what it means for an area to be “overlit.” A streetlighting SAD would require property owners to pay for streetlights.

Also generating a fair amount of discussion among councilmembers was the $100,000 annual cost for traffic control on University of Michigan football game days and the city’s plan to reduce that cost through judicious rescheduling of personnel to avoid overtime expenses.

McCormick also pitched to the council the idea of relaxing the constraints of the “box” defining how the parks maintenance and capital improvements millage is administered. The proposal would have the council rescind the part of a previous resolution that requires millage funding for natural area preservation to increase by 3% every year. That savings, McCormick said, could be put towards hand-trimming of grass in the parks. Reduction of hand-trimming, she said, would have a negative visual impact on the parks – they’ll look “fuzzy.”

Also related to yard-waste type issues, McCormick briefed the council on the idea of eliminating collection of loose leaves in the fall, and moving to an approach requiring leaves to be put into containers. She also told them about  a proposal that would be coming before them in the next 30 days to transition the city’s composting facility to a merchant operation, similar to the city’s materials recovery facility (MRF) for recyclables. That proposal was met with strong criticism from Stephen Kunselman (Ward 3).

Councilmembers also heard from McCormick that residents will face a 3.88% increase in water rates, unless council directs that more budget cuts be made.

Towards the end of the meeting, city administrator Roger Fraser warned that accounting services manager Karen Lancaster and chief financial officer Tom Crawford would put them to sleep with an explication of how the city’s municipal service charge (MSC) works. However, Lancaster and Crawford were unable to make good on Fraser’s threat.

Streetlights and Parking

Sue McCormick, the city’s public services area administrator, began by establishing that the main challenge in the field operations area was coming up with a way to replace anticipated revenues from  parking meters – which were to have been installed over the last year in neighborhoods near downtown. Their installation had been part of the FY 2010-11 budget plan (the current year), but was met with opposition from residents in those neighborhoods.

Parking Meters

After adoption of the FY 2010 budget in the spring of 2009, Sandi Smith (Ward 1) convinced her council colleagues to establish a moratorium on the parking meter installation. With support from Sabra Briere (Ward 1), Carsten Hohnke (Ward 5), and Mike Anglin (Ward 5), Smith worked to find additional revenues to offset the losses that would result from not installing meters as planned near certain neighborhoods downtown. A timeline overview:

• June 15, 2009: The city council approves a moratorium until Oct. 5, 2009 on installation of some parking meters in neighborhoods near downtown. The meter installation was planned as a part of the FY 2010 budget. The council also approves raising the rates at the 415 W. Washington parking lot, with all net proceeds to be directed to the city’s general fund, not split with the Downtown Development Authority. [link]
• July 1, 2009: The DDA board approves a rate increase and the redirection of 415 W. Washington parking revenues to the city. [link]
• Oct. 5, 2009: The city council extends the moratorium on installation of parking meters until Dec. 21, 2009. [link]
• Dec. 21, 2009: The city council passes a resolution suspending plans to install its own city meters in connection with a request from the DDA for a report on parking strategies. Part of the resolution is approval to redirect net revenues from the Fifth & William parking lot (aka the old Y lot) to the city. [link]
• Jan. 6, 2010: The DDA board approves redirection of the net revenues from the Fifth & William lot to the city, with the provision that it be a minimum of $100,000. [link]

On Monday, McCormick painted a grim parking picture for the council. A 7.5% targeted reduction in the $1,327,102 field operations budget – a percentage every service unit was asked to achieve by the city administrator  –  translated to $99,533. Without the $551,733 in revenue that had been planned, based on parking meter installation, field operations was starting with a $651,266 deficit it needed to make up.

Sandi Smith (Ward 1) zeroed in on the fact that the additional revenue from the two parking lots – 415 W. Washington and Fifth & William – did not seem to be included in the calculation. [It's about $170,00 per year for the two lots combined.] McCormick deferred the question, but CFO Tom Crawford would later clarify that the revenue from the two lots was not yet incorporated into the budget – it would be, he assured Smith.

Smith also wondered where the offset for the procurement costs of parking equipment was recorded. McCormick told Smith that it was included in this year’s FY 2010 budget, not FY 2011.

Smith noted that residential parking permit fees were slated to increase by $5 – to $55. That does not cover the cost of administering the program, which is over $100 per permit. Smith noted that the going rate for a parking spot behind someone’s house is $75 a month, so she felt that there was some untapped value in the residential parking permits. Smith allowed that a residential permit for street parking did not provide a specific space for a driver’s use, but she felt there was more value than what the city was charging.

On residential permits, McCormick explained that she’d worked with three councilmembers to arrive at a $105 cost, a longer-term goal for the rate, which would be achieved through incremental adjustments.

With respect to some new loading zone permits – which are listed in the budget impact statement as projected to increase revenue by $20,000 – Stephen Kunselman (Ward 3) wondered if meters might be more effective. McCormick said she was working with the DDA on that question – one of the challenges is the variable size of the vehicles, which could take up anywhere from one to three spaces.

Streetlights: Background

As it turns out, the added $170,000 of revenue to the city from the 415 W. Washington and Fifth & William parking lots would just about cover the field operations deficit to its reduction target ($158,286) – after implementing a streetlighting assessment district (SAD) that targeted just those areas of the city that are “overlit.”

The idea of implementing a SAD for streetlights was floated at the council’s December 2009 budget retreat, and McCormick’s discussion on Monday was a follow-up to that. But it’s not a new idea.

As recently as 2007, the idea of a street lighting special assessment district has been proposed. On that occasion, the Ann Arbor DDA paid the city about $630,000 to delay and reduce a street light tax that would have been assessed on downtown property owners. That tax would have generated around $170,000 annually. The DDA money was used to begin an LED retrofit program for downtown streetlights.

From the June 6, 2007 DDA resolution:

…
Whereas, DDA approval of this Committee recommendation would provide the necessary funds so that a downtown special assessment would not be necessary; RESOLVED, The DDA approves a grant to the City’s Energy Fund in the amount of $630,000 to the City of Ann Arbor to be used to retrofit all downtown globe streetlights with more energy efficient LED fixtures.
RESOLVED, In providing this grant the DDA respectfully asks City Council to consider dissolving the downtown lighting assessment district given the energy cost reduction the City will see from this retrofit project.

Sandi Smith (Ward 1) alluded to that episode on Monday when mayor John Hieftje reported that some of the more sophisticated energy-savings technologies available with the LED bulbs – like dimming them to 50% or 20% – did not actually result in cost-savings to the city. DTE bills the city based on the wattage of the bulbs – it’s based on estimated usage, because the lights are not metered. “[Bulb dimming] works just fine, but we wouldn’t get credit for it,” said Hieftje.

Smith, who serves on the DDA board currently and who served on it when the LED conversion funding was approved, called the inability of the city to translate the full energy-savings capability of the LED bulbs into cost savings as “unfortunate.” The rationale behind the DDA funding was to avoid the establishment of a SAD, she noted. She asked McCormick if there would be additional pressure applied at the state level through the Michigan Public Service Commission to push for reform. McCormick assured Smith that there would be additional pressure applied.

According to Michigan Public Service Commission spokeswoman Judy Palnau, the MPSC issued an order on Jan. 11, 2010 that required DTE to file an application with MPSC seeking approval of rates on un-metered streetlights that would accommodate newer lighting technologies. The deadline for submission was Feb. 10, 2010. However, the issue of these LED rates is still pending at the MPSC.

Some savings is realized through LED retrofits, due to the reduced frequency of bulb replacement – 7-8 years compared to every 3 years.

Streetlights: How a SAD Would Be Implemented

McCormick mentioned more than once at Monday’s meeting that a SAD would require four council resolutions to be implemented. The Chronicle has identified three resolutions in the city’s ordinances, plus one in the city charter:

• Code Chapter 13 1:286 “By resolution the city council shall approve the plans and specifications for the improvement; determine that the cost shall be paid by special assessment upon the property especially benefited; designate the district or land and tax parcels upon which special assessments shall be levied; and direct the Assessor to prepare a special assessment roll in accordance with the city council’s determination.”
• Code Chapter 13 1:288 “… Upon receipt of a special assessment roll the City Council shall order it and the information presented to the City Council by the City Administrator pursuant to Section 1:284 filed in the office of the City Assessor for public examination; shall fix the time and place when it will meet and review the roll.”
• Code Chapter 13 1:191 “After the hearing and review, the council may confirm the special assessment roll with the corrections as it may have made, if any, …”
• Charter SECTION 10.3 “No control or expenditure … shall be made for any public improvement, the cost of which is to be paid by special assessment upon the property especially benefited thereby, until the Council has passed a resolution determining to proceed with such public improvement.”

Streetlights: What Kind of SAD?

McCormick briefed the council on five different options for creating a special assessment district for streetlights. Based on the budget impact statements, which mention only two of the five options, one that appears unlikely to be implemented is to purchase streetlights from DTE and install LED bulbs. DTE owns around 5,200 of the 7,200 streetlights in the city. DTE has told the city that they would need to be paid to develop estimates for the work of selling and removing lights from their system.

Also not included in the budget impact statement is a SAD targeting just the city-owned streetlights. The third option not included in the statement is one that would not create a SAD, but would rather  “de-energize” DTE-owned streetlights – which would entail turning off power to the light. DTE bills those de-energized lights at a rate equal to 60% of the standard rate. De-energizing half of the 3,000 DTE-owned streetlights outside of downtown would save $120,000 annually.

The two options included on the budget impact statements for field operations are: (Option I) a SAD targeting areas in the city that are “overlit” – this would generate $370,000 annually; (Option II) a SAD for all streetlight expenses – it would generate $1.7 million at an average cost per parcel of $52 annually.

Streetlights: Overlighting

The notion of “overlighting” prompted a great deal of discussion among councilmembers. Part of the confusion resulted from the term itself, which is suggestive that “too much” lighting is being provided – on analogy with scores of other words like overbill, overreact, overeducate, overemphasize, overgeneralize or … overanalyze.

Based on that understanding, Margie Teall (Ward 4) and Marcia Higgins (Ward 4) questioned why more lighting was currently being added in an area that was already “overlit,” namely, the Stadium Boulevard corridor between Pauline and 7th streets. The 24 cobra-head lights in that corridor, which a map provided by McCormick indicated was currently “overlit,” is being supplemented by 67 LED lampposts.

McCormick explained that this was driven by input from the community – the neighbors had opted for more lighting at public forums on the Stadium Boulevard re-surfacing project. Higgins responded by saying that she’d attended those meetings and that no one had asked for 67 additional light fixtures. She pointed out that the issue was somewhat urgent, given that the corridor is under construction.

McCormick characterized the issue of “overlighting” as a good policy question that the council needed to contemplate: Should the city “overlight” in any area where it was requested, or rather only in those areas where a SAD was established?

Carsten Hohnke (Ward 5) elicited from Cresson Slotten, who’s a senior project manager with the city, the fact that the “Orange Book” with the city’s lighting specifications has been in place for 23 years, and was developed by the city. That is, it’s not a set of state or national standards. Hohnke stated that it would  be useful to look at comparable standards in other communities to get a clearer idea of what “overlighting” means.

City administrator Roger Fraser then tackled the question of what “overlighting” means. He cautioned councilmembers that just because the amount of lighting in an area was over the minimum Orange Book standard did not mean that the amount of lighting was “excessive.” An area might be lit so that it becomes a comfortable place to be and a place that people are attracted to. Even if an area is “overlit,” he said, it still might be smart to light it that way. The notion of “overlighting,” Fraser said, should be interpreted in the context of the minimum standard specified in the Orange Book.

To get an idea of how an overlighting-based SAD would work, Sabra Briere (Ward 1) asked McCormick if the following would be a fair summary: If people in an area wanted additional lighting above the minimum standard, the city will say “It’ll cost more,” and that area will be a SAD. McCormick confirmed that this would be roughly how it would work. She cautioned, however, that it would not be like ordering out of a catalog.

Stephen Rapundalo (Ward 2) noted that many overlit areas were close to schools, and that “it should be that way.” He said a SAD was a way of “demanding payment,” which he quickly revised to “requesting payment.”

McCormick stated that the cost of operating streetlights – around $1.7 million – was significant enough that the city needed to “do something.”

Fraser characterized it as a matter of some parts of the community getting a higher benefit from lighting than others. The issue of whether the city should change to a SAD strategy to reflect that different benefit was a policy question. He noted that part of the consideration was how to deal with a situation that was in part simply “inherited.”

Reflecting out loud on the fact that the term “overlighting” was somewhat of a misnomer and that streetlighting is a public benefit that is somewhat flexible – there are various interests with respect to more or less lighting – Christopher Taylor (Ward 3) wondered if it were an option to make the assessment based on “what exists.” That was essentially the first option outlined in the cover memo, McCormick told him. [Note that Option I in the budget impact statement is the overlighting-based SAD. The cover memo's first option shows up as Option II in the budget impact statement.]

Streets

Public services includes not just streetlighting, but also the streets themselves.

The city divides streets into categories of major and local streets. That’s consistent with the way that money in the Michigan Transportation Fund (MTF) is distributed to municipalities. The MTF was established by Act 51, and its monies are collected as motor fuel taxes and vehicle registration fees. The city’s major street fund [Fund 0021] and local streets fund [Fund 0022] are projected in FY 2011 to have budgets of $7 million and $1.75 million, respectively.

The MTF money is used for snow plowing, pothole repair, crack sealing and the like. Actual reconstruction of streets is paid for out of the city’s street repair and reconstruction millage.

With respect to activity in these funds, results of a recent unscientific online survey administered by Sabra Briere (Ward 1) showed that around 55% of the more than 700 respondents felt a reduction in snow plowing was “not at all unacceptable not at all acceptable.” [.pdf file of survey summary results]

Streets: Non-Motorized Transportation

Act 51 requires that 1% of MTF funds distributed to municipalities be invested in non-motorized facilities. On May 19, 2003, in approving the city’s FY 2004 budget, the Ann Arbor city council passed an amendment that bumped Ann Arbor’s expenditures of Act 51 money on non-motorized facilities from 1% to 5% every year, targeting an increase in the number of bicycle lanes, focusing particularly on areas near the University of Michigan campus. Any of the 5% not spent in a given year was to be deposited in an alternative transportation fund.

In deliberations on that budget amendment, which addressed not just that fiscal year’s budget, but all future years, then-councilmember Mike Reid offered an amendment that specified the 5% allocation would extend just for 10 years. The amendment received support only from Marcia Higgins (Ward 4). Reid was then the lone dissenter on that amendment to the budget.

The timeframe was likely a moot point – budget resolutions must be approved every year, so there is a “baked in” opportunity for the council to reassess the 5%. If anything, the 2003 budget amendment was a direction to the city administrator to prepare budgets incorporating the 5% allocation to non-motorized facilities. Whether the council approves that aspect of the budget in any given year is not constrained by the council’s own prior budget resolution for FY 2004.

If a budget were presented without that 5% allocation, the council could choose to approve it, contrary to the expressed intent of the FY 2004 budget resolution.

Based on the budget impact statements for next year, FY 2011, that seems to be what happened for FY 2010. The impact sheets indicate a reduction from 5% to 2.5% in the Act 51 allocation to alternative transportation for FY 2010, with the same 2.5% reduction planned for FY 2011.

Stephen Rapundalo (Ward 2) raised the issue of reducing the Act 51 allocation to alternative transportation at the council’s December 2009 budget retreat. However, when the council met in late February for its third meeting of the year focused just on budget issues, when mayor John Hieftje read the item off the list, the topic had no takers.

With the Act 51 line item laid out in front of them on the budget impact statements provided at Monday’s meeting, councilmembers did not discuss the issue.

Streets: Traffic Control for UM Football

An item on the budget impact sheets that did receive a great deal of discussion on Monday was a $101,043 cost savings that could be achieved by eliminating traffic control for University of Michigan football games. Part of that game-day operation involves converting Sout Main Street to one-way leading out of town and providing manual control of traffic signals to accommodate pedestrian build-ups. The signals are also manually controlled to prevent vehicles at the I-94 off-ramp at Ann Arbor-Saline road from backing up onto the interstate.

McCormick noted that simply not implementing the traffic controls would make chief of police Barnett Jones “pull his hair out.” The alternative to that, she said, was to use a strategy to avoid overtime pay for the nine people required to handle the signs and signals on a football Saturday. The idea would be to schedule only two of them on the Monday before, leaving the rest with a Tues.-Sat. work week with no overtime.

The scheduling shift, said McCormick, would save around $45,000. Craig Hupy, head of systems planning for the city, clarified for Marcia Higgins (Ward 4), that the signals could, in fact, be controlled from a remote location by one person, but that tactic would not give the needed ability to change the signals based on the needs of the dynamically changing situation. Sandi Smith (Ward 1) asked for confirmation from Hupy that failure to implement traffic controls would mean “a real mess.” Hupy replied by saying that if the council gave that direction, then he had some vacation days he would like to use.

Stephen Rapundalo (Ward 2) inquired about the possibility that the University of Michigan would foot the bill for traffic controls: Had they been asked? Hupy said that UM had said no. Higgins suggested that if the city did not implement the controls, UM would hear from its alumni about that. McCormick said that the university’s rationale was that the benefits to the community that derive from the event compensate for the cost.

Christopher Taylor (Ward 3) asked how much of it was an issue of convenience versus public safety.  Chief of police Barnett Jones stated that it was all safety-related. Without the combination of cars, barricades and signals, he said, “it would be a major malfunction.”

Although it was not discussed at the work session, a recent (unscientific) survey administered online by Sabra Briere (Ward 1) included one football Saturday-related item: Of the more than 700 respondents, 90% found a reduction of investigation in underage drinking on football Saturdays to be either “completely acceptable” or “somewhat acceptable.” [.pdf file of survey summary results]

Parks Maintenance

The parks maintenance and capital improvements millage was authorized in November 2006. It combined what had previously been two separate millages. Sue McCormick described the various constraints built into the administration of the millage as a “box.” She ticked through the sides of the box in a way that was consistent with previous Chronicle coverage ["Budget Round 2: What's the Big Idea"]:

Before November 2006, the city levied two separate millages at 0.5 mill each – one for parks maintenance and the other for capital improvements. Within the combined millage, taxes are collected at a rate of 1.0 mill, but money is allocated to maintenance or capital improvements on a more flexible basis than the previous 50-50 split that was legally enforced by the specialized purpose of each millage.

However, there’s not complete flexibility to allocate money to maintenance or capital improvements within the unified millage. Percentage allocation is guided by a city council resolution passed in October 2006. The resolution specifies a range of 60% to 80% for maintenance, with the remainder going to capital improvements.

But there are some “hold harmless” clauses in the resolution as well. The resolution also calls for any reduction in the overall general fund to be reflected no more severely in parks programs supported by the general fund than in other general fund activities. For example, if the general fund were to suffer a 7.5% reduction, then parks programs supported by the general fund would suffer no greater a reduction than 7.5%.

Subsequent to the passage of the millage, in preparation of the FY 2007 budget, the city initially calculated the baseline for general fund parks activity without the Leslie Science and Nature Center – which had been spun off by the city as an independent nonprofit. The reasoning was that the item itself was no longer in the general fund, so it was not a matter of the general fund being reduced. However, in response to public criticism, funding was put back into parks programs to bring funding to the level it would have been with the Leslie Science and Nature Center as a part of the calculation.

Another “hold harmless” clause in the resolution on the administration of the parks maintenance and capital improvements millage affects the city’s natural area preservation program (NAP).

3. The Natural Area Preservation Program budget be established at a minimum of $700,000 for first year of the millage budget and that it receive a minimum 3% annual increase for each of the subsequent five years of the millage to enhance the stewardship of increased acreage of natural park areas;

It’s likely that the clause was intended to ensure that funding for NAP kept pace with funding increases to other areas, as millage revenues increased due to increased property values. But the effect of the clause now, as millage revenues decline, is to hold NAP harmless – and even to increase NAP’s budget.

The distribution of funds to various park-related tasks – which is specified in Attachment A accompanying the resolution – includes the stipulation that mowing and snow removal for parks be funded exclusively out of the general fund. The millage fund, then, is “held harmless” against mowing and snow removal costs.

At Monday’s meeting, McCormick stated that staff had pushed the allowed ratio to its maximum allocation for maintenance – 80%. The 20% designated for capital improvements, McCormick said, was focused exclusively on rehabbing existing facilities, not building anything new – refurbishing paths, for example.

Asked by Stephen Rapundalo (Ward 2) what the bill for mowing and snow removal was for parks, McCormick gave figures of $1.25 million and $355,000, respectively.

The part of the “box” McCormick recommended that the council consider was the requirement that NAP’s allocation be increased every year by 3%. The specific recommendation was to reduce NAP’s budget by $81,000.

McCormick explained that the $81,000 could be put towards hand-trimming of grass in the parks. The rationale she offered involved the planned reduction in frequency for mowing in the parks. This spring the average frequency will drop from once every 14 days to once every 19 days, she said. And with the start of the fiscal year on July 1, 2010, that would drop again to once every 23 days. “The public will visually notice the difference,” McCormick said.

It’s the reduction in hand-trimming that becomes apparent most quickly, she said. “Things get fuzzy.”  So the $81,000 of NAP money would restore some of the hand-trimming.

Results of a recent unscientific online survey administered by Sabra Briere (Ward 1) showed that around 20% of more than 700 respondents would find reduction in park maintenance to be “completely acceptable” and an additional 55% would find it to be “somewhat acceptable” [.pdf file of survey summary results]

Grass and Leaves

Trimming of grass and the generation of other yard waste was a topic that arose also in a residential context.

McCormick began by noting that the solid waste millage sees the same kind of reduction in revenues that other property taxes are now showing, due to the overall reduction in property values associated with the down economy. McCormick said that the reduction in the solid waste budget would be around $450,000.

The solid waste millage can be enacted by the city council under state enabling legislation – it appears as “CITY REFUSE” on Ann Arbor property tax bills.

Leaf Collection

Among the ideas recorded on the budget impact statements is the elimination of the collection of loose leaves in the fall. The current leaf collection program organized by the city entails notifying residents of the day their neighborhood is scheduled for pickup and asking them to rake leaves into the street the day before they’re scheduled for pickup.

The budget impact sheets indicate a $104,000 savings would come from eliminating the loose leaf collection program in favor of collecting them as part of the city’s containerized yard waste collection program. Residents can either put their yard waste in paper bags or use a city-issued brown cart, which can be emptied via an automatic arm operated by a driver from inside the collection truck.

The amount of savings that would come from requiring containers for leaves, said McCormick, assumes that residents would put out the same volume of leaves as they do with the loose leaf collection program. But she expected that the actual volume would decrease – for some residents it would be somewhat easier to compost and mulch on site than to put their leaves in containers for pickup.

Christmas Trees

McCormick also indicated that eliminating the curbside Christmas tree pickup would save $28,500. Results of a recent unscientific online survey administered by Sabra Briere (Ward 1) showed that around 85% of more than 700 respondents would find the elimination of that service to be “completely acceptable” or “somewhat acceptable.”

At Monday’s meeting, Briere asked where residents could take their holiday trees for pickup. McCormick said they could talk about that. The city has a drop-off station, and another possibility was to establish locations in parks, where the trees could then be chipped right in the park.

Conversion to Merchant Composting Operations

McCormick’s budget impact statement for solid waste also indicates a net gain of $150,000 for the possible transfer of the city’s composting facility to a merchant operation. That gain was due to a one-time capital recovery for the sale of equipment to the successful bidder on the request for proposals (RFP). The city’s RFP for the composting operations indicates that the equipment would include items like front-end loaders, light-duty trucks, and tub grinders.

Tony Derezinski (Ward 2) inquired about any implications for the city’s labor agreement. McCormick told him there were two full-time positions at the city that would be lost – a mechanic and a supervisor – but that the city had held vacancies open for them in other parts of the organization.

Sabra Briere (Ward 1) wondered what would happen if the city contracted with a merchant, then elected to decide against that contractor based on performance and then opt for a different contractor. McCormick indicated that the city had received four strong responses to the RFP.

Stephen Kunselman (Ward 3) was clear about his opposition to the the proposed conversion to merchant operations: “I’m really opposed to this,” he said. At the second round of budget talks he had already expressed skepticism about the idea.

Kunselman’s opposition is based in part on an inherent skepticism about the viability of yard waste compost as a commodity, along the lines of recyclable material. [The city uses a merchant operation for its materials recovery facility.] Because it’s not a commodity that can be reliably sold in large quantities, said Kunselman, the city would essentially be providing the merchant with tax-free land to store compostable material, until it could eventually be moved on the market. He said he did not imagine that they would be able to sell the material in 50-pound bags at Lowes.

Kunselman’s opposition is also based on the idea that there’s a built-in assumption that the merchant operation will accept yard waste from other surrounding communities – even while the city is trying to encourage its own residents to “keep it home” and reduce the amount of yard waste that is hauled from one place to another. [The elimination of the loose leaf collection program is one example.] Conversion to merchant operations, he said, was a way of subsidizing yard waste collection for surrounding suburban communities. Promoting the idea of trucking and hauling yard waste, Kunselman said, is “going in the wrong direction.”

Kunselman also noted that the composting facility was located in the southeast part of the city – his ward – and he did not want to see additional truck traffic on the roads in that part of town.

In response to Kunselman, McCormick indicated that the council would be receiving the merchant operation proposal in the next 30 days.

McCormick also told the council that the subject of privatization of residential trash collection would would be one for the following year’s FY 2012 budget, not this coming year.

Water

The budget impact statements for the water supply system show a decrease in revenue of $1 million, for a $22.5 million budget. The drop is due to a decrease in consumption of water, plus a decrease in connection charges that are applied to new construction. In FY 2009, there was only $100,000 collected in such connection charges, McCormick said, whereas an average year might bring in $1.5 million.

The decrease in revenues due to decreased consumption, McCormick explained, was partly offset by a decrease in costs for treatment of the water.

Still, without additional cuts beyond purchase delays of heavy equipment and elimination of software updates indicated on the budget impact statements, McCormick said a rate increase of  3.88% could be expected.

Marcia Higgins (Ward 4) clarified with McCormick that the 3.88% increase in water rates would be requested, if no other cuts were made. McCormick told Higgins that if the council wanted to see a smaller increase, then she needed direction sooner rather than later.

Municipal Service Charge

The water fund provided a question from Stephen Kunselman that segued to the presentation from accounting services manager Karen Lancaster and chief financial officer Tom Crawford on how the municipal service charge (MSC) works.

Why, asked Kunselman, did the MSC for the water fund drop from roughly the same levels of $535,548 in FY 2008 and $548,940 in FY 2009 down to $404,902 in FY 2010?

Similarly, he wondered, why did the solid waste fund’s MSC increase from roughly the same levels of $192,588 in FY 2008 and $197,400 in FY 2009 to $274,851 in FY 2010?

MSC: True Cost Concept

It’s worth distinguishing between the idea behind the municipal service charge compared to an internal service fund charge, like the charge for information technology (IT). Charges from the IT department to other funds are based on specific purchases and use of services – a new computer, with software and support services, installed at a desk, for example.

Calculation of an MSC is not an attempt to bill for products and services, but rather an attempt to distribute the burden of “administrative and overhead” costs to those parts of the city’s operations that cause the existence of those costs.

For example, take the city council, which could be considered a parade example of an administrative and overhead cost. The city council and mayor are paid a salary, which is an expense that is a direct dollar cost to the city. But what about the additional costs the council drives that are not necessarily reflected in a dollar amount in a city checkbook?

Those costs will probably vary, depending on the people who serve on council at any given time. An active city council that is constantly asking the city attorney’s office for analysis and feedback on various ordinance revisions causes more work for the city attorney’s office. The city attorney does not bill the city council for that work. But if the goal is to measure the true cost of the city council to the organization, then the cost of that work needs to be factored in.

Last year, for FY 2010, the city council’s “true cost” was calculated to be an additional $284,711 beyond the salaries of councilmembers. So the MSC listed out in last year’s “budget book” is $284,711. The bulk of that additional cost – $204,000 worth – was attributed to work done by the city attorney.

This “true cost” calculation does not attempt to accommodate various ways in which city councilmembers might conceivably save the organization money – by helping staff to identify more efficient ways to provide service, or by handling a constituent concern without burdening city staff.

Once the “true cost” of an entity like the city council is determined – along with various other administrative and overhead-type costs that are borne inside the city’s general fund – it’s then possible to consider the city’s departments that live outside the general fund. How do departments that exist outside the general fund benefit from the existence of those centralized administrative services supported by the general fund?

Take the water fund as an example. The city’s water department benefits from the centralized payroll services of the city and the city attorney’s office in ways that are fairly clear. It even benefits from the city council. For example, the water rate increases that will be requested this year will need to be weighed, considered and approved by the city council.

There is a lag in the calculations, because the calculations are based on actual costs. A study is performed every two years by an outside consultant – the city uses a firm called Maximus – which corresponds to the city’s two-year budget planning cycle. For the first year of a budget planning cycle, the city uses the numbers from the consultant’s study. For the second year, the city applies an inflationary adjustment of 2-3%.

MSC: Water and Solid Waste

Here’s a breakdown of the calculation for the way the water fund and the solid waste fund were charged the “true cost” of centralized administrative services in FY 2008, and how it was budgeted in FY 2010. The numbers in the columns correspond to the consultant’s report on FY 2006 – used for the FY 2008 budget – and the consultant’s report on FY 2008 – used for the FY 2010 budget.

Water Fund
                              Actual  Budget
                             FY 2008 FY 2010
Building Depreciation              0       0
Equipment Depreciation             0       0
Mayor & Council               34,658  49,185
City Administrator            50,738  49,972
Facility Management                0       0
Human Resources               99,621 110,353
Procurement                        0       0
City Attorney                137,866  47,754
City Clerk                    21,858  42,129
Finance Administration        29,426  48,054
Accounting                    99,837 103,819
Assessor                           0       0
Treasurer                      7,465  10,137
Non-Department Expenses        5,437   8,386
Community Development              0       0
Public Svcs Redistribution       318     543
Public Svcs Gen Fund Retiree       0       0
Parks & Recreation Admin           0       0
Parks & Rec Gen Fund Retiree       0       0
Community Svcs                     0       0
Building Dept Redistribution       0       0
Utilities Redistribution      30,666  30,078
Customer Service Call Center       0       0
Environmental Coordinator     17,661       0
Total Allocated              535,551 404,902 

=====

Solid Waste Fund
                              Actual  Budget
                             FY 2008 FY 2010
Building Depreciation            361       0
Equipment Depreciation             0       0
Mayor & Council               17,688  33,957
City Administrator            25,177  27,921
Facility Management                0       0
Human Resources               62,154  68,406
Procurement                    3,208   7,353
City Attorney                 16,415  11,951
City Clerk                    11,155  29,094
Finance Administration        15,019  33,186
Accounting                    33,340  50,378
Assessor                           0       0
Treasurer                      4,879   7,717
Non-Department Expenses        2,986   4,856
Community Development              0       0
Public Svcs Redistribution         0      22
Public Svcs Gen Fund Retiree       0       0
Parks & Recreation Admin           0       0
Parks & Rec Gen Fund Retiree       0       0
Community Svcs                     0       0
Building Dept Redistribution       0       0
Utilities Redistribution           0       0
Customer Service Call Center       0       0
Environmental Coordinator          0       0
Total Allocated              192,589 274,851

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So Kunselman’s question about the differences in the MSC for these funds can be given the first part of an answer by looking at this breakdown. For the water fund, the decrease in MSC can be attributed primarily to an increase decrease in the amount attributed to the city attorney: a drop from $137,866 to $47,754.

For the solid waste fund, there are increases across several services, perhaps most notably the doubling of the amounts attributed to the city council and to finance administration.

MSC: Why Do It?

At Monday’s council meeting on the budget, Karen Lancaster stressed that the idea behind the MSC was about cost recovery to the general fund. In FY 2008, the total amount of administrative and overhead costs identified in the general fund budget for FY 2010 and FY 2011 – the current two-year cycle – was about $12 million.

Out of that $12 million, around 75% of it goes to support general fund activities. So it’s only a little over $3 million that is recovered to the general fund from outside the general fund.

Other funds besides the general fund get their revenue in various ways. Some funds, like the solid waste fund, have their own dedicated millage. Other funds, like the water fund, get their revenues from fees.  For funds that are fee-based, it’s reasonable to want the rates that are charged to be an accurate reflection of the true cost of providing the product. The idea is that rates should be high enough so that consumers of city water are paying an accurate price for the water they use, without an administrative subsidy from the general fund.

To the extent that a consumer of city water is also a property taxpayer to the general fund, there might be a reasonable expectation that delivery of water is a core city service. That is, the property taxes that someone already pays – and has no way to influence up or down through one’s day-to-day behavior – could be expected to pay for administration and overhead costs of the water fund, so that property tax payers can enjoy a slightly reduced rate for their water.

On the other side, not all consumers of city water support the general fund through property taxes.

In FY 2009, the University of Michigan used – and paid for – about $7.3 million in water and sewer services from the city. But UM does not pay property taxes. Without an MSC that allows the general fund to recover the cost of administration, general fund property tax payers would, in effect, be subsidizing a part of UM’s water bill.