The March 18, 2013 city council meeting did not adjourn until nearly 2 a.m. From left: Sabra Briere (Ward 1), Margie Teall (Ward 4) and city administrator Steve Powers. (Photos by the writer.)

The council decided to conduct a review of D1 zoning, without imposing a moratorium. That cleared the way to consider the 413 E. Huron project, which the council eventually voted to postpone – at roughly 1:30 a.m. Because of the amount of time spent on just those items, they’ll be included in a separate Chronicle report.

Apart from those two items, the council’s agenda still included a planning and land use focus, as well as a downtown theme. An additional theme was the city council’s relationship to two other public bodies – the city planning commission and the board of the Ann Arbor Downtown Development Authority.

In the case of the planning commission, the council for a second time balked at the commission’s recommendation of R3 (townhouse) zoning for a recently annexed parcel on Ellsworth near Stone School Road – planned as the site of Summit Townhomes, which would be a 24-unit development. The council postponed consideration of the Summit Townhomes site plan and the zoning, having previously postponed the zoning. The council also had previously referred the zoning recommendation back to the planning commission for re-review. The council’s second postponement on March 18 came after the commission’s re-affirmation of its original recommended R3 zoning. The council sent no explicit communication to the planning commission requesting action, beyond the implicit message of postponing the vote.

In the case of the DDA board, the council is weighing changes to the city ordinance governing the composition of that body, but postponed those changes for a second time at its March 18 meeting. The more significant of the ordinance changes involves clarifying how the Ann Arbor DDA’s tax increment finance capture is calculated, which has implications for millions of dollars for the DDA, the city of Ann Arbor, Washtenaw County, Washtenaw Community College and the Ann Arbor District Library.

Also related to the DDA, early in the council’s meeting an oral report was given on a session of the council’s audit committee – held the previous week to review the DDA’s FY 2012 audit. In the middle portion of the council meeting, councilmembers postponed the ordinance changes. And in the early morning hours of March 19, after the voting agenda was concluded, a member of the audit committee – Sally Petersen (Ward 2) – announced her intention to propose a task force on the DDA.

Related to other boards and commissions, the council confirmed the appointment of a chair for the zoning board of appeals (ZBA): Alex Milshteyn. He replaces Carol Kuhnke, who resigned in December 2012 after being elected judge of the 22nd Circuit Court.

In other business, the council gave approval for the zoning and site plan of The Shoppes at 3600, a proposed retail development on Plymouth Road.

The council also voted to object to the renewal of a liquor license for The Arena, a downtown bar located at Division and Washington streets. The basis for the objection – which will be forwarded to the Michigan Liquor Control Commission for final action – was non-payment of taxes.

The council also gave initial approval to a revision to the city’s sign ordinance. It would essentially maintain current conditions, but provide for certain limited digital signs with a restricted range of changeable elements.

Council communications included a briefing on upcoming changes the council will be asked to consider for the city’s public art ordinance. In other communications, the council will be giving a fire station reconfiguration plan some additional explicit discussion at a future working session – although it appears that the idea has insufficient traction to move forward.

Public commentary at the meeting covered a range of topics, including a call for the council to waive privilege on legal advice that councilmembers had received on the D1 moratorium issue – because they’ve now voted not to enact the moratorium.

DDA-Related Issues

Items related to the Ann Arbor Downtown Development Authority came up at three points during the meeting. During council communications at the start of the meeting, Sumi Kailasapathy (Ward 1) – a member of the council’s audit committee – gave a report from the committee meeting held on March 14. Later, the council voted on DDA ordinance revisions that were on the agenda. And sometime around 1:30 a.m. the topic came up again, during the council communications at the end of the meeting.

This report begins with the agenda item.

DDA: Ordinance Revisions

Before the council for its consideration were several revisions to Chapter 7, a city ordinance governing the Ann Arbor Downtown Development Authority (DDA). The ordinance amendments had been postponed at the council’s March 4, 2013 meeting.

A chart by the city of Ann Arbor financial staff showing Ann Arbor DDA TIF (tax increment finance) revenue under various methods of calculation.

Among the revisions to Chapter 7 that are being considered by the council are: a new prohibition against elected officials serving on the DDA board; term limits on DDA board members; a new requirement that the DDA submit its annual report to the city in early January; and a requirement that all taxes captured by the DDA be spent on projects that directly benefit property in the DDA tax increment finance (TIF) district.

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

The proposed ordinance revision would clarify existing ordinance language, which includes a paragraph that appears to limit the amount of TIF that can be captured. The limit is defined relative to projections for the valuation of the increment in the TIF plan, which is a foundational document for the DDA.

If the actual rate of growth outpaces the growth rate that’s anticipated in the TIF plan, then at least half the excess amount is supposed to be redistributed to the other taxing authorities in the DDA district.

DDA board members at their March 6, 2013 meeting indicated that they did not think any reason had been given to amend the ordinance. At a meeting of the city council’s audit committee held on March 14, city CFO Tom Crawford indicated that it was the view of many people, including his own, that the ordinance language on TIF calculation was not clear. During that meeting of the audit committee, Crawford indicated that the FY 2012 audit of the DDA did not include a review of Chapter 7 compliance.

What the proposed ordinance revisions clarify is which estimates in the TIF plan are the standard of comparison – the “realistic” projections, not the “optimistic” or “pessimistic” estimates. However, the ordinance revisions as currently formulated do not clarify whether a “cumulative” method of performing the calculations should be used or if a year-to-year method should be used.

Use of the cumulative method has an impact on whether the redistribution of excess TIF is made on a one-time or recurring basis. Under the cumulative method, other taxing authorities in the Ann Arbor DDA TIF district would see a total on the order of $1 million in additional tax revenue, compared to the way the DDA currently calculates the TIF capture. The city of Ann Arbor’s annual share would be more than half of that amount, around $600,000.

Method: Year-to-Year                   
Refunds                                                         
       City       County      WCC       AADL      Total Ref    DDA TIF
FY14   $429,409   $149,392    $94,257   $40,163   $713,221     $3,964,457
FY15    $11,958     $4,160     $2,625    $1,118    $19,862     $4,774,758

===============================

Method: Cumulative                     
Refunds                                                      
       City       County     WCC        AADL      Total Ref    DDA TIF
FY14   $613,919   $213,583   $134,757   $57,421   $1,019,680   $3,657,998
FY15   $635,108   $211,673   $139,195   $58,539   $1,044,515   $3,773,043

-

The clarification of the ordinance crucially strikes two paragraphs related to bond and debt payments. One of the two paragraphs was key to the DDA’s current legal position – which is that no redistribution of TIF is required under the ordinance, given the DDA’s financial position. The DDA interprets the stricken paragraphs to mean that no redistribution to other taxing authorities needs to be made, until the total amount of the DDA’s debt payments falls below the amount of its TIF capture. At the DDA board’s March 6 meeting, board member Bob Guenzel alluded to this in the context of remarks on the TIF calculations when he observed that the DDA is “on the hook” for some bond payments.

In the FY 2014 budget, adopted by the DDA board at its Feb. 6, 2013 meeting, about $6.5 million is slated for bond payments and interest. That clearly exceeds the amount of anticipated TIF capture in the FY 2014 budget – about $3.9 million. The DDA is able to make those debt payments because about half of that $6.5 million is covered by revenues from the public parking system. The DDA administers the public parking system under contract with the city of Ann Arbor.

This issue first arose back in the spring of 2011. The context was the year-long hard negotiations between the DDA and the city over terms of a new contract under which the DDA would manage the city’s parking system. The Chapter 7 issue emerged just as the DDA board was set to vote on the parking system contract at its May 2, 2011 meeting.

When the issue was identified by the city’s financial staff, the DDA board postponed voting on the new contract. The period of the postponement was used to analyze whether the DDA’s Chapter 7 obligations could be met – at the same time the DDA was ratifying a new parking system contract, which required the DDA to pay the city of Ann Arbor 17% of gross parking revenues. The DDA manages the city’s parking system under contract with the city.

Initially, the DDA agreed that money was owed to other taxing authorities – not just for that year, but for previous years as well. And the DDA paid a combined roughly $473,000 to the Ann Arbor District Library, Washtenaw Community College and Washtenaw County in 2011. The city of Ann Arbor chose to waive its $712,000 share of the calculated excess.

The Chronicle recently learned that during this timeframe in 2011, the TIF calculation topic was the subject of a meeting attended by representatives of all the taxing authorities in the DDA district, as well as by representatives of the DDA. The outcome of the meeting was an expectation by some in attendance that the DDA would work with the other taxing authorities to arrive at a consensus interpretation of the ordinance. But subsequently, the DDA completely reversed its legal position, and contended that no money should have been returned at all. That decision came at a July 27, 2011 DDA board meeting.

The following spring, during the May 21, 2012 city council budget deliberations, Stephen Kunselman (Ward 3) proposed an amendment to the city’s FY 2013 budget that stipulated specific interpretations of Chapter 7, with a recurring positive impact to the city of Ann Arbor’s general fund of about $200,000 a year. Kunselman wanted to use that general fund money to pay for additional firefighters. That year the budget amendment got support from just two other councilmembers: Jane Lumm (Ward 2) and Mike Anglin (Ward 5).

For a Chronicle op-ed on this topic, see: “Column: Let’s Get DDA TIF Capture Right.”

DDA: Ordinance Revisions – Council Deliberations

On March 18, Stephen Kunselman began deliberations on the ordinance amendments by indicating he’d be asking for an additional postponement. [The ordinance changes are sponsored by Kunselman and Sumi Kailasapathy.] One reason for postponing, he said, is that answers to certain questions are still being sought from the DDA. He also noted that there would be a council work session on the DDA budget. [This is now scheduled for March 25.] There’s a lot of concern about how the amendments he’s proposing would affect the DDA budget and its debt obligations. He wanted to reiterate that his goal was to bring some stability, trust and confidence in the DDA as an institution. His intent is that the DDA budget would remain whole.

Based on figures from the city treasurer’s office, Kunselman noted that using the year-to-year method to calculate the excess TIF capture, the city would receive $429,409 in FY 2014. The DDA’s total TIF capture would be $3.9 million for that year. But for the following year, FY 2015, the DDA’s total capture was anticipated to jump to $4.7 million. That’s due to recently completed projects within the geographic areas of the TIF district, which will increase the tax base.

But in the proposed two-year budget the DDA passed recently [at its Feb. 6, 2013 meeting], the anticipated total TIF capture by the DDA was $3.7 million in FY 2015. What had caught his attention was the $1 million increase between the approved budget amount and the projection for actual TIF capture, Kunselman said. So he wanted to have a good discussion about the cumulative method of calculating the excess TIF. Sample language for a further revision to the TIF ordinance – which would stipulate the cumulative method of calculation – had been forwarded to councilmembers, Kunselman said. The following revision would have the effect of clarifying that a cumulative method of calculation should be used [deleted text indicated with strike-through, and added text in italics]:

If the captured assessed valuation derived from new construction, and increase in value of property newly constructed or existing property improved subsequent thereto, grows at a rate faster is greater than that anticipated in the tax increment plan, at least 50% of such additional amounts shall be divided among the taxing units in relation to their proportion of the current tax levies. If the captured assessed valuation derived from new construction grows at a rate of over is greater than twice that anticipated in the plan, all of such excess amounts over twice that anticipated shall be divided among the taxing units.

Kunselman pointed out that under the cumulative calculations, the approved DDA budget of $3.7 million for FY 2015 could be covered as adopted. So that wouldn’t “hamstring” the DDA in its ability to pay its bills, Kunselman concluded.

Regarding the other amendments to the DDA ordinance that he’s proposing – involving membership, term limits and a report filing requirement – he reminded people that for many years the DDA didn’t file its annual report as required by state law. He pointed out that the state-enabling statute for DDAs contemplated the possibility that the DDA could enter into an agreement with the taxing jurisdictions whose taxes are captured – to share a portion of TIF revenues with one of the jurisdictions. How can you do that if an elected official of one of the taxing authorities is on the DDA board? Kunselman asked. He saw this as an ethical conflict.

Kunselman noted that last year, on Jan. 27, 2012, the Ann Arbor District Library sent a letter to the city, expressing the library’s disappointment that a method of TIF calculation was chosen that would return the smallest amount of TIF possible to the taxing jurisdictions whose taxes are captured by the DDA. Kunselman felt that if the method could be clearly specified in the ordinance, the concern of others can be relieved. Kunselman said he didn’t want to wind up in court with the other taxing authorities on the issue.

Kunselman indicated that he hoped councilmembers could take the initial vote on the proposed amendments at the council’s April 1 meeting.

Mayor John Hieftje expressed concern that the city’s general fund could see a negative impact as a result of the ordinance amendments.

Outcome: The council voted unanimously to postpone the question of revising the DDA ordinance until its April 1, 2013 meeting. Even if the council votes to approve any of the proposed amendments on April 1, a second and final vote would be required to enact the ordinance changes.

DDA: Council Communications – Audit Committee

Early in the meeting during council communications time, Sumi Kailasapathy (Ward 1) gave an update on the audit committee’s session held on March 14. She told the council that the meeting had to be called under Robert’s Rules by members of the committee – because the chair of the committee didn’t see a need for the meeting. By way of background, the chair of the committee is Margie Teall (Ward 4). Under Robert’s Rules – which govern all procedures of the council not otherwise addressed in the council’s own rules – a committee meeting can be called by the chair or by two of its members. In addition to Teall and Kailasapathy, other members of the committee include Stephen Kunselman (Ward 3), Chuck Warpehoski (Ward 5) and Sally Petersen (Ward 2).

Kailasapathy said that she and Kunselman had concerns about the TIF calculations and compliance by the DDA with Chapter 7 of the city’s ordinance. She quoted from the DDA TIF plan, which states that: “The DDA submits an annual audit to the City of Ann Arbor that includes the status of the (tax increment finance) TIF account in compliance with the requirements of Section 15(3) of the State of Michigan Downtown Development Authority Act.” Kailasapathy indicated that the result of the audit committee’s conversation was that compliance with TIF regulations was not tested during the FY 2012 audit. The question arose about why that compliance was not part of the audit’s scope, she said.

She went on to say that she and Kunselman had found mistakes in statements from the FY 2012 audit report, giving as an example what she called a “significant error”: a statement that parking bonds are serviced out of the DDA’s parking fund – when TIF funds are also used to service parking bonds.

Kailasapathy indicated a desire to meet with the auditors to discuss that and other statements – to determine if the report needs to be re-issued. She was also interested in understanding why Chapter 7 compliance is not tested as part of the audit procedure. She indicated she was “alarmed” at the delays in getting financial information from the DDA during the audit committee’s inquiry, which had been attributed to the fact that the DDA’s deputy director, Joe Morehouse – who is directly responsible for the DDA financial records – is on medical leave. Kailasapathy questioned why there was no succession plan to provide for his absence. She stated that the nature of her interest in the DDA was compliance with financial standards and was not about “us versus them.” Her remark about “us versus them” could be understood as an allusion to some of the discussion at the March 14 audit committee meeting.

On that occasion, Sally Petersen (Ward 2) had highlighted the portion of the FY 2012 that described the DDA’s relationship to the city: “The Authority is considered a component unit of the City of Ann Arbor, Michigan and is discretely presented in the City of Ann Arbor’s (the primary government) financial statements.” That had been a good reminder to Petersen that “them is us.”

Kailasapathy concluded her remarks during the early council communications by indicating that her interest is in compliance with legal requirements and fairness to the other taxing jurisdictions, whose taxes are captured through the DDA’s TIF.

DDA: Council Communications – TIF/Parking Fund

The FY 2012 audit report statement – which Kailasapathy referred to as inaccurate – was this:

The parking structure bonds are to be serviced with revenues from the parking fund. The City Hall bonds are to be serviced from future tax increment revenues of the general fund.

The use of not just parking revenue, but also TIF revenue, to pay for parking structure bonds also came up near the end of the meeting during council communications.

Christopher Taylor (Ward 3), alluding to the late hour, said he would like to make clear for that “one member of the public who’s still listening” that the TIF fund has been used for parking-related infrastructure for decades and that use of the TIF fund has been perfectly proper. He thought it was useful to state that fact going forward. The DDA is proud of what it does and, for his part, Taylor felt the DDA should be proud.

Kunselman took the opportunity to make clear that the actual issue at stake was not the use of TIF funds to service parking structure bonds per se, but rather the combination of that practice with a transfer of parking revenue to the city. Under the contract between the city and the DDA, the city receives 17% of public parking system gross revenues. Kunselman said that as he understood the state-enabling statute, a sharing of TIF revenues with one of the taxing jurisdictions required an agreement with the other jurisdictions. The part of Act 197 of 1975 to which Kunselman was referring reads as follows:

The authority may enter into agreements with the taxing jurisdictions and the governing body of the municipality in which the development area is located to share a portion of the captured assessed value of the district.

There’s no agreement among the city and the DDA or the other taxing authorities to share the DDA TIF, Kunselman pointed out. Yet through its parking fund, the DDA is providing money to the city – under the parking contract – and also to the Ann Arbor Transportation Authority, through grants to the getDowntown program. At the March 14 meeting of the council audit committee, Kunselman called this “TIF laundering.” This was “very questionable” in Kunselman’s mind. He noted that the way that DDAs operate is starting to catch the attention of the state legislature. [By way of background, HB 4459, if passed, would exclude from capture taxes levied under the state's enabling legislation on zoological authorities or art institute authorities.]

DDA: Background – TIF/Parking Fund

While Taylor’s characterization of the DDA’s historical use of TIF funds to invest in the city’s parking structures was accurate, much of that history predates the transfers of parking system revenues to the city, which began in earnest in 2005.

That’s the year the DDA agreed to transfer $1 million a year to the city for the next 10 years, with the possibility of transferring up to $2 million in any one year, so long as the total through 2015 did not exceed $10 million. With all $10 million paid in the first five years, the city sought to renegotiate the contract – resulting in an agreement ratified finally in May 2011, which now annually transfers 17% of gross public parking system revenues to the city of Ann Arbor.

The payments to the city from the parking system were made in the context of a consistent narrative, beginning at least around 2003 when the DDA’s TIF plan was renewed, around the notion of self-sufficiency for Ann Arbor’s public parking system. From the 2003 TIF plan:

In 2002, the DDA took over operation of the on-street parking meter system in order to meet the community’s goal of a self-sustaining downtown parking system. The DDA is now working to establish rates and policies that will ensure the long-term viability of the full system while serving the special needs of downtown stakeholders.

From the Nelson\Nygaard study of the Ann Arbor parking system completed in 2007:

The public parking system operations can and should be financially self-sustaining, with no need for tax subsidy.

From the DDA’s “Public Parking & Transportation Demand Management Strategies Plan,” written in April 2010:

The public parking system operations are now and should continue to be financially self-sustaining, with no need for tax subsidy. The users of the system should pay for the system, including operation, maintenance, repair, and eventual additions to the system.

And mayor John Hieftje campaigned for re-election in 2010 in part on a contention that the bonds to be issued for the new Library Lane underground parking garage would be serviced with parking system revenue, not with tax money. [See Chronicle coverage of candidate forums on July 10, 2010 and July 1, 2010.]

However, when the city council voted on Feb. 17, 2009, to approve issuance of the bonds for the new Library Lane underground parking structure, the staff memo had indicated that a combination of parking revenue and TIF capture would be used to pay the bonds:

Debt service on the bonds is expected to be paid from revenues of the City’s public parking system and tax increment revenues collected by the Downtown Development Authority.

From an accounting point of view, the DDA’s financial system was set up to reflect a commitment that all parking system expenses would be covered by parking system revenues. But that entailed allowing the parking fund to show a deficit – with the balance in the other DDA funds (including the TIF fund) keeping the DDA solvent in aggregate. However, deficit fund balances are counter to Michigan’s Uniform Budgeting and Accounting Act. And the result of the FY 2010 audit was that the DDA shifted away from that deficit-funding practice.

The required adjustment to the accounting, to show positive balances for all the funds, meant that the accounting showed clearly that TIF tax capture would be used to help pay for the Library Lane underground parking garage.

At the council’s audit committee meeting on March 14, 2013, the city’s chief financial officer, Tom Crawford, sketched out the general history of the DDA, when it used TIF funds at the beginning of its life to repair and construct parking structures. Then the DDA reached a point where the DDA had decided by policy, Crawford explained, that the TIF funds wouldn’t be used for parking, and that TIF revenue would only be used for economic development and other activities. But around 2008-09, Crawford said, when the underground structure was being planned, that approach “was just not going to work.” So the DDA had changed its policy – which is the DDA’s purview, Crawford said.

About the statement in the FY 2012 audit report, which indicated that only parking revenues are used to pay for parking structure debt, Crawford allowed that “the words could be improved.”

DDA: Council Communications – Task Force

During the council communications at the end of the meeting, audit committee member Sally Petersen (Ward 2) alerted her colleagues on the council that she’d be proposing a task force on the DDA, in order to get better alignment between the city and the DDA. She indicated that Stephen Kunselman (Ward 3) was aware of her desire to form a task force. She felt the task force could run in parallel with consideration of the changes to the DDA ordinance. She described the ordinance changes as tactical, implying that the task force would focus on strategic approaches. The task force proposal would likely come to the council on April 1, she said.

Mayor John Hieftje volunteered that every time the city had asked the DDA to do something, the DDA had helped.

Sumi Kailasapathy (Ward 1) responded to a remark made by Hieftje earlier in the meeting, during the brief deliberations on the ordinance amendments, about his concern that the city’s general fund might be put at risk by the kind of changes she and Kunselman were proposing. She said that for her, it was a matter of making sure that compliance with the state statute was ensured, and that the numbers were right. The first step, she indicated, was to make sure the calculations were correct and that there was compliance with the regulations. After that, the question could be opened about whether money comes back to the city. The city’s motivation should not be to turn the DDA into “a cash cow,” she concluded.

Hieftje told Kailasapathy that he didn’t disagree with what she was saying, but he’d just wanted to make the point that the DDA had been very cooperative.

Summit Townhomes Zoning and Site Plan

At the March 18 meeting, the council was asked to consider the site plan and necessary zoning for the Summit Townhomes project. The property is located at 2081 E. Ellsworth Road.

The parcel for the Summit Townhomes development (shaded yellow). The city council voted to postpone a final decision on zoning the parcel to R3 (townhouse dwelling district). The blue line is the boundary between the Malletts Creek and the Swift Run watersheds.

The developer plans to build 24 attached residential units in four separate buildings, with each building between 80 to 160 feet in length. Each of the 24 units would have a floor area of about 1,300 square feet, and an attached one-car garage. The plan includes two surface parking areas on the east and west sides of the site, each with 12 spaces. To do this, the property needs to be zoned as R3 (townhouse district).

March 18 was the first time the site plan had been before the council. But the R3 zoning for the property, annexed from Pittsfield Township, had been previously considered by the council, and referred to the planning commission for re-review. The planning commission then confirmed its original recommendation for R3 zoning.

In more chronological detail, the zoning item had first appeared on the city council’s Jan. 7, 2013 agenda, when it received initial approval. However, during a public hearing at the council’s Feb. 4, 2013 meeting, about a half dozen people spoke in opposition to the zoning – citing concerns about congestion and overcrowding. So councilmembers voted unanimously to refer the zoning issue back to planning commissioners for another look. The council indicated interest in hearing more detail on drainage issues, and the level of recreational services offered in that general area of the city, as well as information about public safety issues.

At their Feb. 21, 2013 meeting, planning commissioners voted again to recommend that the site be zoned R3 (townhouse district) – the same zoning they had previously recommended at their Nov. 20, 2012 meeting.

The project has been working its way through the city’s approval process for several months. The site plan had been postponed by planning commissioners in June of 2012 and again on Nov. 20, 2012, but was ultimately recommended for approval at the commission’s meeting on Jan. 3, 2013.

Before recommending the site plan, planning commissioners had previously recommended approval of annexation and zoning of the site in 2012. At their June 19, 2012 meeting, commissioners had approved annexing the 2.95-acre site, just east of Stone School Road, from Pittsfield Township into the city of Ann Arbor. The annexation was subsequently authorized by the city council.

Summit Townhomes Zoning, Site Plan: Public Hearings

Thomas Partridge wanted civil rights amendments attached to the rezoning request, as well as for all similar requests, that would ensure access to affordable housing.

Ethel Potts told the council that they’d “wisely” sent the question back to the planning commission for a second look. She said she wouldn’t characterize the commission’s “discussion or lack of discussion.” There are three or four townhouse developments in that area of town, she said, and she didn’t think that part of town needed more townhouses.

Summit Townhomes Zoning, Site Plan: Council Discussion

When the council reached the rezoning item, Marcia Higgins (Ward 4) indicated she wanted to have the city attorney look into a question before voting, so she moved to lay the question on the table. The council voted unanimously to lay the question on the table.

Later in the meeting, when the council reached the agenda item about the site plan, the council took the zoning back up off the table.

Christopher Taylor (Ward 3) led off deliberations by reciting the history of the council’s previous postponement, based on concerns about the already-existing density of the area. He mentioned the council’s decision to refer it back to the planning commission, and the commission’s re-affirmation of the recommended R3 (townhouse) zoning. Taylor stated that he was “unwilling to take that at this time.” So he wanted to postpone the question another 30 days to allow for additional time to reflect on the appropriate zoning for that area – in the context of the city’s master plan and the existing density.

Higgins indicated support for the postponement. She pointed out that it’s the first time the city is applying zoning to this parcel, because the city had just recently annexed the property from the township. There is no pre-existing city zoning. She wanted to see it “a little less dense.”

Sabra Briere (Ward 1), who is the city council’s representative to the planning commission, told the council she would carry the message to the planning commission at its next meeting.

Higgins noted that she didn’t know that there was a particular message to convey to the planning commission, but she encouraged Briere to inform the planning commission that the council had postponed the question and to relate the reason for the postponement.

Stephen Kunselman (Ward 3) said that just because there’s already R3 zoning in the area with several dense townhome developments doesn’t mean it warrants more. At some point, the infrastructure can’t handle it. The traffic on Ellsworth already gets backed up, especially now that Costco has opened, he said. He was looking forward to different zoning. He allowed that R1C might not fit, but said that the topography of the property had to be respected. Townhomes on a hill would require a significant amount of earthmoving – and that has consequences for everybody downhill. As downhill properties he noted Arbor Oaks and Forest Hills. There’s a need to think outside the box, when it goes back to the planning commission, Kunselman concluded. [This remark by Kunselman may have contributed to confusion about expectations for possible planning commission action. According to planning manager Wendy Rampson, who was contacted by The Chronicle later in the week, there has been no direction given to planning staff or the commission to consider the matter further.]

Outcome: The council voted unanimously to postpone the zoning until its April 15, 2013 meeting. The site plan was also similarly postponed, in a separate vote.

Zoning Board of Appeals Chair

On the March 18 agenda was a resolution to appoint a chair for the zoning board of appeals (ZBA): Alex Milshteyn, who already serves on the ZBA. He’s a replacement for Carol Kuhnke, who resigned in December 2012 after being elected judge of the 22nd Circuit Court. The ZBA is somewhat different from most other city boards and commissions, which elect their own chair from within the body. The council appoints the chair of the ZBA.

Sabra Briere (Ward 1), who previously served on the zoning board of appeals, introduced the item. She said she’d enjoyed having the leadership of Carol Kuhnke as chair. Briere was confident that Milshteyn would also be an effective and capable chair of the ZBA.

Outcome: The council voted unanimously to appoint Alex Milshteyn as chair of the ZBA.

The Shoppes at 3600

Before the council for its consideration was the site plan as well as the rezoning for a proposed retail development at 3600 Plymouth Road, just west of US-23 – called The Shoppes at 3600.

Aerial map of the location for The Shoppes at 3600, located off of Plymouth Road west of US-23.

The developer hopes to build a 9,490-square foot, one-story retail building, to be constructed in what’s now the parking lot and front yard for a hotel, at an estimated cost of $1 million. The building would have space for several businesses, including a restaurant with a one-lane drive-through window and outdoor seating. An existing shared driveway off of Plymouth Road would be used to access the site. The site plan calls for 33 parking spots and four covered bike parking spots near the entrance.

The March 18 agenda items on the site plan and the rezoning – from R5 (motel-hotel district) to C3 (fringe commercial district) – followed an initial vote of approval for the zoning at the council’s Feb. 19, 2013 meeting. Voting against the rezoning on the initial consideration was Stephen Kunselman (Ward 3).

The planning commission had recommended approval at its Jan. 15, 2013 meeting. The project had been postponed by the commission on Nov. 7, 2012.

The site is located in the same complex as the Holiday Inn North Campus. Responding to some planning commissioner concerns voiced at the November 2012 meeting, the developer had provided an alternative site plan that was reviewed on Jan. 15. But the developer sought approval for the original layout, which was ultimately recommended for approval by the planning commission. The owner is listed as Ann Arbor Farms Hotel Corp., with property being developed by Diverse Development in Holland, Ohio.

The Shoppes at 3600: Public Hearings

Thomas Partridge questioned the idea that the item could appear on the council’s agenda without the sponsorship of a councilmember or the mayor. He called for an amendment to zoning that would ensure access to the property for affordable transportation.

Warren Attarian addressed the council and objected to the site plan. He noted that it’s the first thing you see coming into the city, and there were five shops squeezed into a little more than an acre. The back of the buildings is up against the sidewalk, with no setback, while the front of the buildings is interior to the development. He noted that the planning commission had asked the developer to present an alternate layout, which the developer did. Although the planning staff had determined the alternate plan was feasible, the developer didn’t pursue it. He asked the council not to approve the site plan, venturing that the real problem was trying to squeeze five stores into one acre.

The Shoppes at 3600: Council Deliberations

Jane Lumm (Ward 2) asked city planning manager Wendy Rampson to explain the landscaping requirements. Rampson explained that the site has frontage on M-14, which requires right-of-way buffering. Some mitigation was also required for some landmark trees. There would be trees around the perimeter, Rampson said, as wells as some lilacs and shrubs on Plymouth. She thought that red oaks would be planted along the M-14 on-ramp.

Rampson explained that the back of the building is the north side.

Outcome: The council voted unanimously to approve the rezoning. Later in the meeting, the council voted to approve the site plan over the lone dissent of Stephen Kunselman (Ward 3).

Liquor Licenses

The Ann Arbor city council considered a resolution objecting to the renewal of the liquor license for The Arena – a bar located on the northeast corner of Washington and Fourth in downtown Ann Arbor.

Jane Lumm at the March 6, 2013 hearing on the non-renewal recommendation of The Arena’s liquor license. She served as hearing officer.

The basis of the objection to the renewal, which needs to be forwarded to the Michigan Liquor Control Commission for final action, was The Arena’s failure to pay a combined $8,755 of 2011 taxes and an additional default judgment. The default judgment was made in the 15th District Court by then-judge Julie Creal in favor of the city for $1,659. It involved non-payment for police services, in connection with outdoor tents for an Oktoberfest event.

A hearing on The Arena’s liquor license renewal was held on March 6, 2013 – presided over by hearing officer Jane Lumm, who represents Ward 2 on the city council. Based on evidence presented by assistant city attorney Bob West, who called city clerk Jackie Beaudry and city treasurer Matt Horning as witnesses, Lumm concluded that the recommendation of non-renewal should be placed on the March 18, 2013 city council agenda.

Also on March 6, a hearing was conducted on the non-renewal of the license for Banfield’s Bar & Grill. Lumm issued a similar verdict on that case, but in the meantime, Banfield’s paid the taxes owed. So Banfield’s was on the agenda with three other establishments that were recommended to have their licenses renewed. The three other establishments recommended for renewal by the council on March 18 – all of which had rectified any issues prior to the March 6 hearings – included Aut Bar, Bagger Dave’s Legendary Burgers & Fries, and Café Zola.

At the council’s March 18 meeting, Lumm introduced the item on objecting to renewal of The Arena’s license. She took the occasion to thank the staff in the city attorney’s office, the building department, fire department, police department, the city clerk’s office and the treasurer’s office. She also thanked her fellow liquor license review committee members, Mike Anglin (Ward 5) and Sumi Kailasapathy (Ward 1).

Outcome: On separate votes, the council recommended renewal of four liquor licenses, and objected to the renewal of The Arena’s license. Based on a subsequent Chronicle visit to The Arena, the owner’s intent is to pay the outstanding bills before the state liquor control commission rules on the license renewal.

Sign Ordinance Amendments

The council was asked to give initial approval to changes in the city’s sign ordinance. If the changes are ratified at a second and final vote, certain kinds of digital signs with specific limitations would be allowed in the city. [.pdf of proposed outdoor advertising ordinance]

Billboards on West Liberty Street at First, near the edge of downtown Ann Arbor, looking east. (Photo illustration by The Chronicle.)

But under the ordinance revisions, new billboards – signs with an area greater than 200 square feet – could not be constructed. And existing signs of that size could not have electronic features added to allow for changeable text or images.

The existing sign ordinance does not allow for any changeable text, except for “noncommercial information which requires periodic change” – like time and temperature. So the proposed changes to the ordinance would allow for changeable portions of a sign, subject to the limitation that the changeable portion of the sign not be more than half the area of any sign and no more than 30 square feet per sign and 15 square feet per sign face. Additional limitations would prevent flashing and scrolling – by not allowing changes to content more often than 15 minutes.

The proposed ordinance changes would place a maximum brightness of any illuminated sign, including those that are digital/electronic: 5,000 nits during the day and 100 nits at night, and in no case greater than 0.1 foot-candles above the already existing amount of light at a residential property line. One nit is defined as one candela per square meter. And a candela is about the amount of light produced by a common tallow candle.

By way of comparison, an iPhone 5 display is reported to have a brightness of about 500 nits.

The ordinance revisions come in the context of a moratorium on digital billboards that’s currently in place throughout the city, but is scheduled to expire on April 11, 2013. The city extended the moratorium for an additional 180 days at its Oct. 1, 2012 meeting, after the moratorium was first enacted for 180 days at the council’s April 17, 2012 meeting.

Falling under the moratorium are “billboards commonly referred to as ‘electronic message centers,’ ‘electronic message boards,’ ‘changeable electronic variable message signs,’ or any billboard containing LEDs, LCDs, plasma displays, or any similar technology to project an illuminated image that can be caused to move or change, or to appear to move or change, by a method other than physically removing and replacing the sign or its components, including by digital or electronic input.”

The moratorium resolution passed by the city council acknowledges that such signs are prohibited by the city’s current sign ordinance. From that ordinance, the list of prohibited signs include those that “… incorporate in any manner or are illuminated by any flashing or moving lights other than for conveyance of noncommercial information which requires periodic change.”

Sign Ordinance Amendments: Council Deliberations

Christopher Taylor (Ward 3) recited the history of the moratorium. The proposed revisions essentially preserve the status quo, he said, by allowing no new billboards. The current ordinance allows for up to 30 billboards citywide, and there are currently 28. That meant that the change eliminates the possibility of an additional two billboards. He stressed that existing billboards could continue to exist as nonconforming signs and continue to be repaired and maintained.

Gas station price signs are covered by the ordinance revisions, he said. There are also a number of changes intended to improve clarity.

He noted that the moratorium expires April 11. If the ordinance revision were given initial approval that evening, and final approval on April 1, then the ordinance changes would be enacted before the expiration of the moratorium.

Sally Petersen (Ward 2) asked for some clarification of the ordinance revisions. Are digital signs permitted as long as they’re not scrolling? How big can they be?

City planning manager Wendy Rampson explained that the ordinance revisions dealt with digital components, because it’s become a popular sign form in the industry. The ordinance would allow for a small amount of changeable copy both for on- and off-premise signs. But the amount of the changeable area could not be more than 50% and could not total more than 15 square feet per side. It would allow for different worship services to be displayed at a church, she explained, or gas station price changes. But she pointed out that the ordinance language specified the changeable part couldn’t change more frequently than once every 15 minutes and couldn’t “scroll, explode, dance” – because that’s perceived as a distraction to vehicular traffic.

The ordinance language states:

Changeable copy shall not and shall not appear to flash, undulate, pulse, blink, expand, contract, bounce, rotate, spin, twist, or otherwise move.

Mike Anglin (Ward 5) asked for some illustrations to make clear what the ordinance language meant, saying, “our imaginations aren’t that fertile” and “the words don’t help.” He felt it was entirely too complicated for someone not familiar with the industry.

Margie Teall (Ward 4) wanted to know if the Pioneer High School sign at Stadium and Main would be affected, venturing that the city did not have jurisdiction over the school. Rampson confirmed that was the case, just as the city had no jurisdiction over the signs at the University of Michigan football stadium.

Petersen wanted to know if Anglin was interested in postponing the vote. Anglin didn’t feel a need to postpone – as long as the staff provided the council with the information he’d requested by the time of the second vote. Anglin ventured that the corner of Madison and Main was “beginning to look like Coney Island.”

Chuck Warpehoski (Ward 5) and Jane Lumm (Ward 2) expressed tentative support for the changes – and were content to vote yes at first reading.

Petersen said she was “hard-pressed to support this at first reading.” She felt that the use of signs is an opportunity to impact economic development. She also pointed out the school district and the University of Michigan don’t have to comply and that would result in a lack of uniformity.

Outcome: The council voted to give initial approval of the revisions to the sign ordinance. Dissenting were
Marcia Higgins (Ward 4) and Sally Petersen (Ward 2).

Argo Parking Lease

A resolution on the council’s March 18 consent agenda related to a $3,000 lease to accommodate overflow parking for the Argo canoe livery. The lease had been recommended for approval by the city’s park advisory commission at its Feb. 26, 2013 meeting. The lease of a parking lot at 416 Longshore Drive – with about 40 spaces – will cover Saturdays, Sundays and holidays from May 25 to Sept. 2, 2013, with an option to renew administratively for two successive one-year periods.

City parks staff reported that the overflow parking at this lot had been used during the 2012 season, and they recommended continuing the lease. According to city records, the land is owned by the Stewardship Network.

Items on the consent agenda are voted on as a group by the council, but any of the items can be separated out for separate discussion. Sabra Briere (Ward 1) asked that the item be separated out.

Briere had heard concerns that the lot is not very well-graded and that there’s a lot of runoff. She wondered if there was a way for the city to enforce maintenance of the lot through the lease. Sumedh Bahl, the city’s community services area administrator, told Briere that would have to be negotiated, and had not been a part of the conversation that went into the lease that the council was being asked to approve.

Briere asked for postponement.

Outcome: The council voted unanimously to postpone the parking lot lease.

Communications and Comment

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

Comm/Comm: Fire Department Resource Deployment

At the request of Marcia Higgins (Ward 4) during communications time, city administrator Steve Powers summarized the feedback that had been heard on a proposal made about a year ago to reconfigure fire stations in the city. The proposal called for deploying a total of three out six existing fire stations – instead of five, which is the current deployment. Powers said what was heard at the seven public meetings and on the online A2 Open City Hall was a lot of divided opinion. He indicated that the significant policy question emerging from that discussion related to the responsibility of the fire department for emergency medical response.

Powers characterized the feedback that staff had received as consistent with the council’s discussion at its March 11, 2013 work session. At that session, there seemed to be a clear majority view that the 3-station plan would not go forward. Higgins indicated interest in exploring alternate ideas and wanted an opportunity to ask more questions. [At the work session, she'd mooted the idea of getting a cost analysis for restoring staffing to six stations.] The result of the back-and-forth between Higgins and Powers was an understanding that deployment of fire department resources might be part of the council’s work session on March 25.

Comm/Comm: Transparency

Between 1:30 a.m. and 2 a.m., two people weighed in on the topic of transparency. Mark Koroi recalled the issue that had arisen in 2009 in connection with emails sent between councilmembers during council meetings. Currently, he said the council has a problem with the way it conducts its closed sessions. He told the council more public commentary was needed – an allusion to the fact that the council does not allow public commentary at its work sessions.

[Under Michigan's Open Meetings Act, a gathering of more than a quorum of councilmembers does not necessarily constitute a "meeting" under the statute, which would require that members of the public are allowed to address the body. However, at work sessions, councilmembers engage in deliberations toward decisions, which makes their work sessions meetings under the statute.]

Koroi also mentioned an appeal that’s been filed on the Dream Night Club case. [The city objected to the renewal of the club's liquor license last year – alleging that the establishment was an ongoing nuisance – and the state liquor control commission followed that recommendation.]

John Floyd led off his comments on a lighthearted note, saying that in deciding his NCAA basketball tournament picks, he’d wanted to go with Michigan, but Wisconsin seems like they’re really starting to gel.

On the topic of transparency, he noted that people speak about how important transparency is. With respect to the legal advice that the council had received on the possible moratorium for D1 site plans, he allowed that it makes sense to receive the attorney’s advice in private. Councilmembers had indicated they’d based their vote on that advice. Now that the council had received the advice and voted, he suggested, the council could choose to release the written advice to the public. It’s not about what council is required to do, Floyd said, but rather about what the council may do. [The sentiment expressed by Floyd had been incorporated in The Chronicle's commentary and questions on the city's draft FOIA policy.]

Comm/Comm: Skating Rink

Alan Haber reminded the council of a continuing effort to have a public skating rink on top of the Library Lane underground parking garage, for people to have fun. [Recent Chronicle coverage of this topic includes the Feb. 26, 2013 park advisory commission meeting when public commentary was delivered advocating for a park atop Library Lane, and a more formal discussion at PAC's March 19, 2013 meeting.]

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

The Chronicle survives in part through regular voluntary subscriptions to support our coverage of publicly-funded entities like the Ann Arbor city council. If you’re already supporting The Chronicle, please encourage your friends, neighbors and coworkers to do the same. Click this link for details: Subscribe to The Chronicle.

Left to right: Councilmembers Sandi Smith (Ward 1), Sabra Briere (Ward 1), Tony Derezinski (Ward 2) and Jane Lumm (Ward 2). (Photos by the writer.)

The issue driving the lengthy meeting was an agreement between four different entities, including the city of Ann Arbor, that would set up a framework for a transition of the Ann Arbor Transportation Authority to a new funding and governance structure. The intent of transitioning to a new authority would be to provide increased transportation service both within the city of Ann Arbor as well as throughout Washtenaw County.

The Ann Arbor city council approved the agreement on Monday night on a 7-4 vote, after postponing it three times previously. That sets the stage for the city of Ypsilanti, Washtenaw County and the AATA to approve it as well. Even after approval by those three entities, several steps would remain before a new transit authority, incorporated under Michigan’s Act 196, could take over transportation services from the AATA.

The council considered several amendments to the agreement, but approved only two relatively minor, clarificational items. [.pdf of agreement as amended]

Toward the end of the meeting, the nomination of University of Michigan planner Sue Gott to the AATA board was given spirited discussion by two councilmembers, but was ultimately confirmed on a unanimous vote.

Falling victim to the lengthy deliberations on the transit agreement was a resolution that would direct the city attorney to delay enforcement of medical marijuana laws for local dispensaries, except for zoning violations. A vote on that resolution was postponed without deliberation, due to the late hour. That resolution comes in the context of a recommendation from the city council’s medical marijuana licensing board, currently pending with the council, to award the first 10 medical marijuana licenses under local legislation enacted last year.

Related to a different kind of licensing, the council approved a resolution that recommends non-renewal of liquor licenses for two establishments in Ann Arbor – Dream Nite Club and Rush Street. A hearing on the two licenses will be held on March 19, with the city council’s final recommendation to the Michigan Liquor Control Commission to be made that same day.

The council also passed several resolutions related to land and its use. The council approved the acquisition of another 58.85 acres under its greenbelt program, as well as the purchase of property on West Kingsley so that a long-vacant house there can finally be demolished. A rain garden is to be constructed on that parcel, because it’s situated in the Allen Creek floodway. In a related item, a new Federal Emergency Management Agency (FEMA) flood map was also given final approval by the council on Monday night.

The council gave initial approval to a revision of parking regulations in open space at the front of land parcels, but postponed any action on a proposed revision that would eliminate a requirement on landscape buffers in areas zoned R4C (multi-family residential).

Receiving approval from the council were a total of nearly $1.7 million in renovations to several of the city parks. The funding includes improvements to ballfields at Veterans Memorial Park, Southeast Area Park and West Park, as well as upgrades to roads and paths at Buhr Park and Cobblestone Farm.

The council also approved the issuance of $120 million in revenue bonds for the reconstruction of the city’s sewage treatment facilities, long planned and in the works.

Four-Party Transit Agreement

For the fourth time, after three postponements dating to the first meeting of 2012, the council considered a four-party transit agreement – with the city of Ypsilanti, Washtenaw County and the Ann Arbor Transportation Authority. The agreement would provide a framework and chronological sequence for the transition of the AATA to a new governance and funding structure. The Ann Arbor approval leaves several steps that would still need to be completed, before such a transition would be possible. [.pdf of four-party agreement as amended on March 5, 2012]

By way of more detailed background, the council had previously postponed voting on the four-party agreement at its Jan. 9 and Jan. 23 meetings. Thirty-nine people spoke at a public hearing held on Jan. 23.

The council postponed the agreement again at its Feb. 6 meeting. But for that meeting, the AATA itself had requested a postponement until March 5.

The council agreed at its Feb. 6 meeting to postpone the vote until March 5 – but with the proviso that postponement to that date certain would be “contingent upon materials being submitted to City Council by Feb. 29, 2012.”

During the Feb. 6 deliberations on postponement, councilmembers were content to give the mayor and city administrator the discretion to hold the item off the agenda, if the desired information was not submitted to the council by Feb. 29. That proviso nearly led to the omission of the item from the March 5 agenda, but in the end, it was presented to the council for its consideration.

Transit Agreement: Public Comment

The four-party transit agreement prompted several people to speak during public commentary.

Thomas Partridge introduced himself as a city resident and former candidate for state senator in the 18th district. He has been and will continue to be a candidate for public office, he said. His platforms call for countywide and region-wide affordable accessible transportation, education and housing. He highlighted the coincidental goal of economic development that would be supported through improved transportation.

Elizabeth Donoghue Colvin introduced herself as a Ward 1 resident of Maiden Lane. She stressed that what she wanted to say were her views, but she knew that many people shared them. Regarding the Fuller Road Station, she understood that the University of Michigan was no longer planning to participate in the project by building a parking structure there. But she said she still favored building a transit center there. It’s near the place where a large number of employees work, and it’s not in a neighborhood, she said. The Fuller Road location has space to accommodate traffic flow. She said she hoped the parkland issue can be resolved in a positive way, perhaps with a trade-off. She felt the highest value is to put a transit center there, in the context of broadening a county transportation system.

That related to a second issue Colvin wanted to address, namely the four-party transit agreement, and she supported broadening transit in that fashion. She sees that as part of a larger plan to broaden transit regionally with neighboring counties. She said she appreciated the funding challenges, but encouraged the council to move the agreement forward. If there were an additional transit millage put on the ballot, she concluded, she would vote for it. “I would like to pay for broadened transportation in this county,” she said.

Carolyn Grawi introduced herself as the director of advocacy and education at the Ann Arbor Center for Independent Living (CIL). Looking at the four-party transit agreement, in light of a recent survey the AATA has done, and in light of recommendations from a financial advisory group, Grawi said she wanted to highlight one point: Of those who were surveyed, 86% talked about the importance of providing those with disabilities and seniors with door-to-door service. Right now that kind of service is provided up to a certain geographic point, but then it stops. If 86% of people want that service, Ann Arbor needs to look at how it fits as the puzzle piece in the center of the county.

Looking at transportation services, Grawi said, she was hopeful that the community would continue to fund local services. The disability community relies on the city council for leadership to ensure that local service continues to be provided.

Christine Green spoke on behalf of the Michigan League of Conservation Voters. She told the council she was there to comment favorably on the four-party agreement. MLCV has worked for many years to support similar initiatives in Michigan. In 2011, MLCV helped pass the Grand Rapids transit millage and that has in turn helped bring state, federal and private revenue to that community. Green then ticked through some reasons why MLCV has used its resources to support public transportation.

Public transportation improves public health, Green said, through reducing particulate pollution, encouraging more active forms of transportation, and reducing runoff from surface pollutants. She also said that public transportation helps create jobs and helps local business. Green pointed to better land use as a result of public transportation, saying that it helps prevent urban and suburban sprawl and protects open spaces. Public transportation, she said, also helps revitalize cities.

Lawrence Baird introduced himself as a Ward 1 resident – a financial advisor for 22 years in Ann Arbor. In his professional capacity he spent a lot of time dealing with budget numbers. He said Ann Arbor has been blessed with a level of financial stability beyond what most Michigan cities have enjoyed.

To illustrate his point, he said, he’d brought along his tax bills from last year. The city’s core values are reflected in the tax bills, he said. What appears on the tax bills is the fact that Ann Arbor is funding education, library, recycling, parks, street maintenance and also transit. So the current debate is not about core values – very few residents are against mass transit, he ventured. Most residents have no problem paying hundreds of dollars a year to fund transit.

Baird had accepted the fact that he pays more to fund transit than many other services – like the library, parks maintenance, and street repair. He said that renters in the city should also receive a copy of the categories on the tax bills so they’d understand how property taxes are used.

The city council is being asked to approve the four-party agreement, which Baird described as the continuation of a process to dissolve a decades-old transportation system. [Baird then alluded to a political tactic that Stephen Kunselman (Ward 3) has used, in which he calls the four-party agreement the "mayor's plan." Mayor John Hieftje has responded consistently with the assertion that he can't take credit for the plan.] Noting that Hieftje has maintained he can’t take credit for the plan, Baird observed that Hieftje had nominated the AATA board members, whom the council then confirmed. Back in 2008 those board members accepted the lead role in the development of the WALLY north-south commuter rail project. [The vote came at a special meeting called by the AATA board.]

Baird then read from a document on the AATA’s website, dating from July 24, 2009:

AATA is funded through a combination of federal, state and local revenues, as well as passenger fares. State funding has remained at the same level since 1997. As a result, AATA has implemented extensive measures to reduce costs. Looking ahead, expected decreases in local property tax revenues threaten our ability to meet current and future ridership demands. AATA is projecting significant reductions in revenue in future years due to a decrease in local property values and continued pressures on state operating assistance.

Baird concluded that while property taxes and state assistance are in flux, the AATA had taken on a commuter rail project from scratch. The AATA had also adopted a vision statement [at its Nov. 18, 2009 meeting] that says:

AATA Vision Statement: The Ann Arbor Transportation Authority shall be the public transportation provider for Washtenaw County. Our customers shall see AATA’s expanded services as the preferred option for traveling to destinations within the county, as well as to and from the county. AATA will offer appropriate modes of transportation with the most efficient use of resources. These services shall enhance the quality of life for Washtenaw County stakeholders while promoting the economy, safeguarding the environment, and strengthening communities.

So during the depths of one of the worst financial crises the country has known, Baird concluded, the AATA had decided to get into the railroad business and to expand its original mandate.

Paul Schreiber introduced himself as the mayor of Ypsilanti. He said councilmembers had likely seen the AATA’s financial task force report. The group had reduced a roughly $60 million funding gap to around $30 million by eliminating rail transportation and concentrating on those services that could be supported with local funding. He said the financial advisory group had done some great work and he encouraged the council to approve the four-party agreement.

Schreiber noted that the agreement includes the authorized 2.5 mill tax currently levied by Ann Arbor and almost a 1 mill tax from Ypsilanti. But he noted that Ypsilanti’s service is contingent on a purchase-of-service agreement (POSA). A countywide transit authority would be a more stable source of funding, he said. He noted that Ypsilanti voters had approved their transit millage in August 2010, and passed it on a 2:1 margin. Due to a technicality, it had to be put on the ballot again in November, when it passed on a 3:1 margin. So Ypsilanti voters support transit, he said.

Transit Agreement: AATA Comment

Michael Ford, CEO of the Ann Arbor Transportation Authority, was asked by mayor John Hieftje to make some remarks, along with some members of the financial advisory group, about the recommendations of that group. It’s been referred to for some time now as a “task force.”

Members of the AATA financial advisory group, from left: Bob Guenzel, Norman Herbert, and Mark Perry.

Ford told the council he was there to ask for the council’s approval of the four-party agreement. He told them that since the last council meeting, councilmembers had been provided with the recommendations from the financial task force, information on survey results and legislative information.

[For an overview of the survey results, see Chronicle coverage: "AATA OKs AirRide; Survey Results Positive." For an overview of pending state legislation, see Chronicle coverage: "Michigan Regional Transit Bills Unveiled."]

Bob Guenzel, former Washtenaw County administrator, co-chaired the financial task force with Albert Berriz, CEO of McKinley Inc. Guenzel attended the council’s meeting, along with two other members of the group – Norman Herbert, retired treasurer of the University of Michigan; and Mark Perry, director of real estate services for Masco Corp. Ford stressed that of all the issues, he wanted to focus on the four-party agreement.

Guenzel told the council that he’d try to be brief, but felt that the financial task force should report to the council. He said he was honored to be part of the task force. It was Berriz who represented the private sector on the task force and had helped bring the business community to the table. The task force was made up of business leaders as well as government leaders, Guenzel said, and others who had an interest in transportation. He noted that the task force had agreed to have only four meetings, and they’d had three – but a subcommittee was formed that had additional meetings.

The task was to review the funding options for the transit master plan and see if they could develop some recommendations. Perry and Herbert were on the subcommittee that had done a service review and had dug into the finances, Guenzel said. The group looked at whether the services should be funded with local money or other sources. A funding gap – between existing revenues and what it would take to pay for expanded service was planned in the first five years of the new transit entity – had been reduced from $62 million, roughly in half to $33 million, he said.

That reduction had been achieved in several ways: (1) cost reductions; (2) enhanced revenues, through increased fares or increased state and federal revenue; and (3) change services. As an example of the third strategy, Guenzel cited an Ann Arbor downtown circulator – while it’s a worthwhile service, the task force was recommending that it be funded privately or through other agencies. Development of regional rail transportation had also been removed from the first five-year plan, Guenzel said.

To try to get a handle on how much funding is needed, if the property tax method of funding were used, it would translate to about 0.5 a mill. That’s not a recommendation, but rather an attempt to give some context to what it might mean for this community, Guenzel said. It still needs some refinement, for example, in terms of fare issues, and state and federal funds. The recommendations of the subcommittee were supported by the whole group as a guide for further development. The group recommends that a final funding recommendation be reserved until the concerns raised by the subcommittee have been addressed. The recommendation is that the task force be put on hold. There may be the need to convene more meetings going forward. As the service plan is developed, Guenzel said, that obviously has some effect on the financing.

Guenzel then read a portion of a letter from Albert Berriz, whom Guenzel described as representing the business community. Guenzel noted that his own career had been in the public sector. From the portion read by Guenzel:

My service on this committee and my work with the senior leadership team at the AATA over the past year has been very rewarding, and I have learned very much. I have scrutinized the people, the process and the numbers like I would in my own business; and I am very comfortable with Michael Ford and his team at the AATA.

No matter how much criticism and commentary this process may receive, I can speak as a CEO of a multi-billion dollar business and say that their results and the work product are solid and real. We should be very comfortable as a community that we have the right people in the right seats running the AATA. The practical reality of regional transportation is that it is a highly subsidized business. In the words of a for-profit guy, you can’t make the numbers work. So what remains is how you decide to raise those public dollars, and is it politically expedient to do so in the current environment that you find yourself in.

Guenzel noted that one way to raise the funds is through a millage, and the other is to look at what is currently being proposed in Lansing. [Some of the state legislation deals with establishing a regional transit authority for the counties of Washtenaw, Wayne, Macomb and Oakland. But another separate bill provides for the possibility of local transit funding through a voter-approved vehicle registration fee.] Guenzel said he agreed with Berriz that it’s premature right now to pursue a millage option until the legislative picture is clearer. But he is pleased that the task force is willing to be on call. He said the task force is ready to continue the study ultimately to make a recommendation. The task force feels, he said, that the rest of the process should proceed.

Norman Herbert then addressed the council. He noted that along with Mark Perry, he’d worked on the subcommittee charged with reviewing transportation services proposed under the AATA’s countywide master transportation plan. He told the council they’d already heard about the benefits of public transportation – access to health care, job opportunities, reduction in traffic congestion and better land use.

The primary conclusion of the task force, Herbert told the council, is that more information is needed before drawing any conclusions about the finances. The subcommittee recommended that certain services only be developed if federal, state or private funding could be identified for those specific services. The result is a focus on local and county service improvements, he said, that also reduced the funding gap from $62 million down to around $33 million. What’s needed now, he said is agreement on what the plan should be. The finance plan should not drive the service plan, he said. What’s needed is a definition of the project. The interested parties of the county need to join Ann Arbor and Ypsilanti to determine the specific elements of that plan.

Ann Arbor, Herbert said, needs to take a leadership role by entering into non-binding discussions. The 0.5 mill property tax is just a proxy to identify the magnitude of what it would cost a county taxpayer – if transportation improvements were made that focus on local and county needs, and if the cost were shared by all the various communities. It’s time to move forward with the planning, and the city council should agree to initiate those discussions with the AATA and the other interested parties, he said. Transit is a key amenity, and it helps everybody, but it helps Ann Arbor the most, Herbert concluded.

Mark Perry, a member of the AATA financial advisory group, with Ann Arbor city councilmember Marcia Higgins (Ward 4).

Mark Perry told the council a bit about how the 0.5 mill was calculated. They’d built an economic forecasting model that included traditional revenue forms. On the revenue side, they’d created a line item for state revenue sources that aren’t identified yet. There’s typically four or five revenue sources in the state of Michigan, he explained: sales and use tax; personal income tax; business income tax; property taxes; and fees. Only the last two can be levied at the local level, Perry noted. The 0.5 mill was based only on what is currently known. He said that the forecasting model the group had used included line items for the other revenue sources, but filled them with zeros.

Perry told the council that the Ann Arbor/Ypsilanti Regional Chamber of Commerce was represented on the task force, but could not attend the council’s meeting, so he’d agreed to read something aloud on their behalf. [.pdf of Ann Arbor/Ypsilanti Regional Chamber letter] An excerpt from the letter:

Our County needs a transit system that is affordable, accessible and practical. Such a system may include fixed-route and other bus and van options, and in the longer term, rail and other modes of transit. Ultimately, this system should connect not just those within Washtenaw County, but it should also enable us to connect throughout the greater southeast Michigan region. The benefits to be derived from such a system are many, including environmental, economic and humanitarian. The process provided through four party agreements allows us to pursue this objective. Should it not be approved, then the process will flounder.

The agreement is not a commitment to a plan or a millage, and it does not set fares. It is merely a process to explore these and other issues further. We have nothing to lose or risk by taking this step, but we have much to lose if this step is not taken. We therefore urge Council to approve the agreement and, as a Chamber, look forward to being actively involved in the planning towards fulfilling these objectives.

[.pdf of budget summary][.pdf of capital budget] [.pdf of operating budget] [.pdf of financial performance data] [.pdf of financial group's final report] [.pdf of financial group's subcommittee report]

Transit Agreement: Council Questions – Finance, Legislation

Sandi Smith (Ward 1) asked Mark Perry if the taxable value used for the property tax calculation was for the entire county. Yes, said Perry, because it’s not clear yet which political subdivisions would be participating – that’ll be determined at a later date. There’s also debate by the state legislature on exemption of tangible personal property. He indicated that if personal property tax were to disappear, as a whole countywide it would not be a large enough number to change the projected transit millage amount.

Smith asked if scenarios had been modeled with less than complete participation throughout the county. Perry indicated that they had not, but the spreadsheet they’d set up is such that different townships can be zeroed out. Norman Herbert added a point that Terri Blackmore, executive director of the Washtenaw Area Transportation Study (WATS), had made during deliberations of the financial task force: To the extent there’s an opt-out by a political subdivision, there’s a corresponding reduction in expenses, due to service reduction in that area.

Smith then asked state representative Jeff Irwin, whose District 53 covers most of Ann Arbor, to comment on pending state legislation.

Irwin thanked the council for taking up the issue. He told councilmembers there are as many as 15 different bills, any of which could have an impact on transportation. He urged them not to let that uncertainty prevent them from moving forward. Nothing in the pending legislation would surpass or supplant what the council is trying to accomplish locally, he said.

Jeff Irwin, state representative for District 53, which covers most of Ann Arbor.

The bill creating a regional transit authority (RTA) would create a four-county RTA, he said, including Washtenaw, Wayne, Macomb and Oakland. The best way to think about that authority is as an “overlay authority,” governing services that cross jurisdictions, he said.

The RTA would also be responsible for creating connections between regional service and local service, Irwin said. For example, he said, if the RTA establishes service along I-94, then local service needs to meet those vehicles as they come into town. The new RTA would have the same relationship with AATA as to SMART (the Suburban Mobility Authority for Regional Transportation) and DDOT (the Detroit Dept. of Transportation).

Irwin then described a bill that’s separate from the RTA bill, which would establish the ability of local jurisdictions to impose voter-approved vehicle registration fees. That would open up another funding option, he said. Irwin noted that all of these ideas have been around for a long, long time. He was not sure it is wise to hang our hopes on any of these bills that are currently pending. Local governments have been asking for decades for the ability “to be more artful” in the way they generate revenues, Irwin said, and he didn’t see any of that changing in Lansing. So we need to “seize our own destiny locally,” he said.

Irwin went on to say that if details in the bill are changed that would make Washtenaw County an afterthought, then that should be viewed with caution. However, he felt that as the RTA bill is currently written, it protects Washtenaw County’s interests, because federal dollars will still go to Washtenaw. Right now it looks like it’s moving in a productive way. He ventured that the community needs to be mindful, but not paralyzed with fear.

Transit Agreement: Deliberations – Initial Commentary

As early as during the council’s communications time toward the start of the meeting, Stephen Kunselman (Ward 3) raised the topic of the four-party agreement. He reprised his commentary from the previous council meeting on Feb. 21, 2012, when he complained that the AATA was not living up to terms of a 1974 agreement with the city to provide certain regular reports. [.pdf of Sept. 30, 1974 agreement]

By way of background, the 1974 agreement was signed in the context of litigation that was pending at the time between the city and the AATA. It was a lawsuit over the handling of $221,000 in funds dating from 1970. The AATA contended it was entitled to the money, while the city of Ann Arbor administration had claimed the money had been loaned to the AATA and needed to be repaid. So the city had subtracted that sum from the millage money collected by Ann Arbor for the AATA before the money was passed through to the AATA.

Kunselman had previously quoted from the agreement:

11. REPORTING To ensure that council is kept apprised of the AATA’s activities, the AATA will submit to Council at least quarterly a written report indicating its activities to include such key elements as levels of ridership, budget variances and other service level information.

Kunselman noted that the council had not received the specified quarterly reports. According to the agreement, Kunselman said, the council is also supposed to receive the AATA’s proposed budget for review by April each year.

At the council’s March 5 meeting, Kunselman returned to his point that the council is supposed to receive the AATA’s budget by April 1. Given that it’s now March, he said, he figured the council would have it by now.

He again complained that the AATA is sending commuter express buses to Chelsea and Canton, primarily empty in order to pick up commuters. Does that make sense? he asked, then answered his own question by saying it doesn’t make sense to him. Yet the AATA proposes to expand that kind of service, he said.

Transit Agreement: Unsuccessful Amendments – Summarized

Jane Lumm (Ward 2) proposed a series of amendments to the four-party agreement, one of which she asked Stephen Kunselman (Ward 3) to introduce – the one that would increase Ann Arbor’s representation on the board of the new transit authority. Kunselman had indicated at a previous meeting that he’d wanted to see the agreement amended in that way.

The four amendments are presented here first as a complete group, for readers’ convenience. None of them were approved by a majority of the council [additions in italics and deletions indicated with line-through]. TA refers to transit authority.

8. Contingencies to Closing. The closing of the transfer of assets and assumption of liabilities by the NEW TA is contingent upon all of the following occurring on terms acceptable to all parties:
…
(d) In exchange for the mayor’s nomination with council confirmation, of seven eight directors of New TA’s board, …
…
Ann Arbor agrees … (iii) designate the New TA, as successor to AATA, as the contracting agency for use of the 2.5 mills tax levy under Section 8.18 of the Ann Arbor City Charter and allocated the tax levy in its entirely to AATA at the 2012 millage rate or as adjusted by State of Michigan statute less a municipal service charge of one percent (1%) of the annual millage at the time of the collection of taxes upon transfer from an Act 55 to an Act 196 authority. Said designation shall not become effective until AATA has submitted satisfactory evidence, which the City has independently confirmed, that the cost of the minimum level of service to the City under the NEW TA is equal to or greater than to the amount of millage funds levied and assigned to the NEW TA under this Article. After succession to the AATA, the NEW TA shall be required to maintain this level of services to millage funds relationship as a condition of continued assignment of the City tax levy.
…
g. A minimum participation level in the NEW TA of fifty percent (50%) of the jurisdictions within Washtenaw county.
…
12. Termination of Agreement.
…
d. Regional Transit Authority, Continuation of Agreement. The general purpose of the 4-Party Agreement is to address future governance, management, operations, and financial obligation before, during and at date of transition (“Transition Period”) from the existing services provided by AATA to a Act 196 NEW TA providing Authority-wide public transportation services. The parties acknowledge that Regional Transportation Authority (RTA) legislation may be adopted during this Transition Period which may suggest that changes to certain provisions of this Agreement are necessary or desirable to effectuate the purposes of the Agreement or that termination of the Agreement is appropriate. The parties agree that should RTA legislation be adopted prior to the completion of the transition to a NEW TA (e.g. Closing) they will, before the effective date of any RTA legislation, jointly review the provisions of this Agreement and mutually determine whether modifications are necessary or appropriate or it should be terminated.

Deliberations on each of these proposed amendments are described below.

Transit Agreement: Unsuccessful Amendment – Minimum Service Level

At the council’s Jan. 23, 2012 meeting, the council had already amended the agreement to include the requirement that the new transit authority provide “at a minimum, the continued level of services provided by its predecessor-in-interest, AATA.”

Jane Lumm (Ward 2) characterized her added language – that satisfactory evidence, independently confirmed, be provided on service levels – as a policy statement that would provide comfort. She said she appreciated the time that Eli Cooper, the city’s transportation program manager and AATA board member, had spent with her. She indicated that Cooper felt that in terms of process and substance, the amendment could work.

Tony Derezinski (Ward 2) stated that, like it or not, Ann Arbor is the bellwether, and other communities are watching what Ann Arbor does. He then adduced an analogy to which he often appeals when the council is presented with a complex proposal. It’s pretty tightly wound, he said, and when you pull at one part, other things begin to unravel.

By way of background, at the council’s Nov. 16, 2009 meeting, Derezinski made similar remarks about the A2D2 zoning initiative that some councilmembers wanted to amend. From The Chronicle’s meeting report [which also reveals The Chronicle's affinity for the verb "adduced"]:

Tony Derezinski (Ward 2) then adduced an analogy to which he’d return later in the deliberations: The zoning ordinance as proposed was tightly wound, and if they began picking it apart, it would unravel.

And commenting on the desire to amend the city’s capital improvements plan (CIP), at the council’s Feb. 1, 2010 meeting Derezinski offered similar sentiments. From The Chronicle’s meeting report:

Tony Derezinski (Ward 2) also objected to the idea of pulling out a single line item in the CIP. He used a similar analogy to the one he had adduced in describing his colleagues’ attempts to amend a recent major rezoning initiative: It’s like pulling strings off of a tightly wound ball, with the risk that it would all unravel.

At the council’s March 5 meeting on the four-party transit agreement, Derezinski wondered what signal would be sent. The amendment has an easy appeal to those who live in Ann Arbor, he said. He stated that there is much to be lost if the step of the four-party agreement is not taken – the time is now, he said. Derezinski then followed another of his habits, by offering a literary quotation, saying, “There is a tide in the affairs of men. Which, taken at the flood, leads on to fortune;” [It's from Shakespeare's "Julius Caesar," and the speaker is Brutus, who's conveying to Cassius that it's important to act while the ratio of military forces is most advantageous.]

Sabra Briere (Ward 1) asked whether Michael Ford and Mark Perry had had a chance to review the proposed amendment – Perry had not. Ford said he’d only had time to review the amendments briefly. The amendments were circulated for the first time to many of the interested parties during a recess in the council meeting that was called just before deliberations on the four-party agreement began. Ford indicated he did have some concerns about what’s being proposed. Briere said she was hoping for some insight into the economic forecasting model. Briere wanted to know if it were possible to pull out of the model what the current costs are.

Perry told Briere that the way the model was constructed was not that granular.

Responding to Ford’s comment, Lumm stated that in ensuring that the amount of service is greater than or equal to current levels, what she was asking for is not different from AATA’s resolution on the RTA, which it approved at its most recent board meeting.

Lumm then cited a document prepared by AATA service development manager Chris White. [.pdf of White's notes] White described legitimate concerns in a multi-county context for the RTA, which Lumm compared to the same concerns she had about the multi-jurisdictional situation internal to the county. She wanted to safeguard and protect the AATA. She said she’d shared a memo with the mayor a week ago and that her amendment is just addressing the concerns raised in the memo.

Ford indicated that the AATA has been working with Dennis Schornack, a special advisor to Gov. Rick Snyder on transportation, to ensure the AATA is protected. Ford said the AATA had also worked with the chair of the Washtenaw County board of commissioners, Conan Smith. Ford stated that Lumm’s amendment sounded somewhat restrictive in terms of its flexibility in delivering the service.

From left: City councilmembers Carsten Hohnke (Ward 5) and Mike Anglin (Ward 5).

Carsten Hohnke (Ward 5) had a question for Lumm: Given that this agreement is the product of significant input among a great array of stakeholders, have you shared this language with those stakeholders and what has their reaction been? Lumm appeared annoyed by the question, saying that what she’s proposing are amendments. “I’ve done a lot of homework,” she said. On the last occasion when the four-party agreement was amended, she said, amendments were floated at 10 p.m. at night. She said she’d sent the amendments to some people on Feb. 24. In response to that, she’d had various exchanges with staff, and she’d met with Eli Cooper, the city attorney, and the city administrator. That sort of review didn’t occur with other amendments, she said.

Hohnke then observed that Lumm seemed to have taken offense at his question, but contended that he didn’t intend to offend. So Hohnke turned to Cooper, who also serves on the board of the AATA. Hohnke noted that Lumm’s amendment would make the AATA responsible for ensuring that a precise level of service was achieved according to some metric. Hohnke ventured that it would be a complex undertaking, to ensure that three, four or five years from now, the service Ann Arbor is receiving relative to the funds generated is the correct relationship.

Cooper did not give the reply that Hohnke had seemed to invite, and explained instead that it would be relatively straightforward to measure service levels in any number of ways – including revenue miles or route miles. Cooper said the amendment speaks to providing satisfactory evidence. He felt it was relatively straightforward. Said Cooper, “The term ‘benchmark’ comes to mind.” Whatever the parameter is, it’s a relatively straightforward relationship. Hohnke insisted that while something might seem straightforward in theory, it might not prove to be straightforward in practice.

Hohnke said he felt that the protection offered in Lumm’s amendment is provided through Ann Arbor’s representation on the new transit authority’s board. Ann Arbor has a heavy weight on the board, Hohnke said. So he would not support Lumm’s amendment.

Sabra Briere (Ward 1) noted that the language of the agreement [added by amendment at a previous meeting] already guarantees a minimum level of service. What was the expectation for guaranteeing it? She wanted to know if Lumm’s amendment was an added burden or an added clarification? Ford indicated that the AATA has said throughout the process that it would maintain the level of service in Ann Arbor. Briere wanted to know if the language changed anything in practice or only clarified what was already intended. [It was a distinction that eventually allowed Briere to persuade her council colleagues to approve two other amendments she brought forward later.]

Christopher Taylor (Ward 3) said he appreciated the intent of Lumm’s proposed amendment and said it provides value. But he declined to support the amendment – because future councils can ask their own questions and demand their own answers. He felt the amendment functionally seeks to bind councils in the future and seeks to do the work of the future new transit authority board. There are many opportunities to “bug out” of the process, Taylor said, and he did not want to bind future councils.

Marcia Higgins (Ward 4) indicated she was disappointed with what she was hearing. It’s up to the council to define expectations, she said. She noted that Cooper had said it would be straightforward. Ann Arbor has a right to know that it will have the right to the same level of transportation service in the future. She did not understand the amendment as binding future councils, other than to require the council to look at that data. She said she’d support the amendment, because it’s a clarification.

Margie Teall (Ward 4) echoed the sentiments Derezinski had expressed in terms of the message it sent to other communities.

Mike Anglin (Ward 5) said he saw the amendment as a clarification. Citizens have gotten accustomed to the level of service and the current millage, he said. Citizens have never decided not to levy the millage, he said. [The transit tax in Ann Arbor is perpetual, so voters do not renew it on a regular basis.] Anglin said that a wise person would ask if Ann Arbor will get a better system or not.

Anglin was dismissive of the way that AATA had sought to increase ridership, saying that the way to increase ridership would, for example, be to go to Washtenaw Community College and ask how many people would take the bus if you ran it at a certain time. Anglin said the AATA needs to get Ann Arbor on board so that residents don’t feel hoodwinked. And the more the agreement can be clarified, he said, the more people will get on board.

Sandi Smith (Ward 1) stated that the four-party agreement is not a binding agreement. She noted that if a service plan comes out that shows there’s going to be less service in Ann Arbor, and voters are asked to approve a millage with more money and less service, they won’t approve it. She saw no reason to layer things onto the agreement that will make potential partners wonder. It’s time for Ann Arbor to take a leadership position, and to let the conversation go forward, she said. She felt the amendment was micromanaging at a level that she’s not fond of.

Stephen Kunselman (Ward 3) stated that the discussion is all over the place. He said that Ypsilanti’s 1 mill doesn’t pay for what they’re getting today. He compared the $9 million that Ann Arbor contributes to transportation to the roughly $280,000 that Ypsilanti’s millage generates. It’s a question about Ann Arbor tax dollars, he said. The vote could be put to the people, he said, but it’s not yet known which jurisdictions are going to opt in.

Kunselman returned to the political tactic he’s adopted of calling the four-party agreement “the mayor’s proposal.” The AATA board consists of the mayor’s nominees and the policy direction comes out of the mayor’s office, he said. Why is AATA pursuing incorporation under Act 196? he asked. As Kunselman appeared ready to continue, mayor John Hieftje, who chairs the council meetings, asked Kunselman to speak to the amendment the council was considering. Kunselman contended that other councilmembers were also not necessarily restricting their comments to the amendment, but indicated he was content to yield if he’d have another chance to speak later.

Outcome on minimum service level amendment: The amendment failed on a 5-6 vote, with support only from Anglin, Briere, Lumm, Kunselman and Higgins.

Transit Agreement: Unsuccessful Amendment – Review on RTA Passage

Next up was Lumm’s amendment that would require the four parties to reconsider the agreement if the state legislature passed the bill establishing a regional transit authority (RTA) for Washtenaw, Wayne, Macomb and Oakland counties.

Briere noted that a new transit authority for Washtenaw County [not the same as an RTA] could change both the governance and financial aspects of the current local system. She was concerned about what happens if broader RTA is enacted, or additional local funding options are available, after a countywide millage has been approved. Would it be the expectation that the new transit authority levy the entire amount? Briere noted the history of the Ann Arbor District Library, which has historically not always levied the entire amount that voters have approved.

Ford indicated that his understanding is that the AATA would not have to levy the full amount every year. Back and forth between Briere and Ford covered the possibility that the new RTA might decide to offer service to Detroit Metro airport, which the AATA itself has recently decided to establish. If the four-county RTA were to add that service, that could mean that AATA would not be in the business of offering service to the airport – but that would also mean a corresponding drop in expenses.

State Rep. Jeff Irwin came to the podium to say that Ford was characterizing the role of the RTA correctly. If the RTA were to step in and say it was going to pay for something along the I-94 corridor, it might have an impact on how AATA provides service on Washtenaw Avenue. But ultimately it will be the board of the new transit authority that makes that decision. If there is additional, non-millage funding available, or existing millage funds are not needed for a specific service, the board could roll back the millage, or perhaps decide to meet some other, unmet transportation need.

Lumm reviewed what the amendment does and said it’s important to speak with one voice about the RTA – a lot of people are speaking about the RTA, she said. She was alluding to the fact that Conan Smith, chair of the Washtenaw County board of commissioners, had indicated in testimony made on Feb. 14 before the Michigan senate’s transportation committee that he’d be willing to see Washtenaw County give up one of its two board seats on the RTA, if that’s what it took to get the legislation passed.

Derezinski pointed out there there’s a lot of contingencies in the four-party agreement already. He wondered how hamstrung people should be. He weighed in against relying on another legislative body to act. Having served in Lansing, he said, a lot of things can come and go. He characterized it as too far-fetched to agree with.

Briere compared the effort to drafting a prenuptial agreement when you don’t trust the other person. But the four-party agreement is not marriage, so it doesn’t need a divorce, she said. She allowed that part of the reason she supports the agreement is she has “faith” that if the world changes (with the passage of RTA legislation), that the four parties would be back around the table anyway. She felt this particular amendment has gone down the road to mistrust instead of trust.

Outcome on required reconsideration upon passage of RTA legislation: The amendment failed on a 3-8 vote, with support only from Anglin, Lumm and Kunselman.

Transit Agreement: Unsuccessful Amendment – Minimum Participation Level

Next up was an amendment that required 50% of jurisdictions to participate in the new Act 196 authority as a condition to closing the deal. In introducing it, Lumm indicated that Eli Cooper said the requirement made sense, because it established a baseline for participation.

Briere ventured that in spirit, the proposed amendment was similar to an amendment that had been made at a previous meeting. That previous amendment provided for automatic termination of the agreement, if the city of Ann Arbor were the only participant in the new Act 196 authority. Briere ventured that the added language belongs in the section on automatic termination.

Smith stated that she found the 50% number entirely random. Even if half the townships participated, that could be the least amount of participation in terms of population, she said. If the minimum participation level talked about population centers or something similar, she might be inclined to support it.

Hieftje elicited from Ford the fact that after initial formation, and after the authority operated for a while, other jurisdictions could join, even after they’d initially opted out. Lumm expressed concern that a geographic district might get a seat on the board, even if only one jurisdiction in the district participates in the Act 196 authority.

Kunselman returned to a point he’s made before: Under Act 55 of 1963 (the statute under which AATA is currently incorporated), any jurisdiction can request to join. When Grand Rapids converted to Act 196, only the communities already receiving service opted in, he said. Lansing’s transit authority (Capitol Area Transportation Authority) is an Act 55 entity, and is serving all those that this community wants to have served, Kunselman contended. Under the proposal for Washtenaw County, Chelsea could opt in, without communities between Ann Arbor and Chelsea participating. That would mean running buses past communities along the way without stopping.

Briere drew out the fact that a minimum of 50% of municipalities in Washtenaw County would translate to 14.

Taylor said he’d decline to support the amendment. The four-party agreement is a framework for ongoing conversation about service and funding. If it’s of value for Ann Arbor, then the necessary steps would be taken to effect the closing. The amendment muddies the waters, Taylor said.

Invited to the podium to comment was Jeff Ammon, a Grand Rapids area attorney who’s been consulting for the AATA on legal issues surrounding transit authority governance. Ammon assured Kunselman that under the four-party agreement, “you’re not locked in.” Only if things happen in a certain way, does the closing happen. The initial formation of the Act 196 authority was simply an “empty shell.” After incorporation, they’d wait 30 days to see which jurisdictions opted out. At that point there’d be something on the map. At that point, the question would be: How does it look? Also with respect to the proposed service plan, if the council’s response is “That doesn’t look so good,” Ammon said, then that’s the end of the story, and the AATA would be back to the drawing board. The four-party agreement would just get the ball rolling, Ammon said.

Kunselman attempted to explore the history of the Grand Rapids Act 196 conversion with Ammon, which the two did briefly. Hieftje eventually encouraged the focus to return to the amendment.

Anglin noted that Lumm had indicated Cooper had been consulted on the question. Anglin said he liked the idea of setting a minimum threshold. To launch something, Anglin said, you need something with an enthusiastic start. Asked at the meeting to comment on the 50% minimum participation, Cooper appeared to put some distance between himself and the amendment. He stated that it had not been put to him as an open-ended question. He allowed that 50% seems like a reasonable critical mass.

Outcome on amendment requiring 50% minimum participation: The amendment failed on a 4-7 vote, with support only from Anglin, Lumm, Kunselman and Higgins.

Transit Agreement: Unsuccessful Amendment – Ann Arbor Majority

Kunselman put forward the amendment giving Ann Arbor eight of the 15 proposed board seats for the new transit authority. Ann Arbor, he said, would have the majority of the population and money in the new authority. He allowed that the amendment would not be in the interest of township politicians who want to make sure Ann Arbor doesn’t control the new authority.

Smith ventured that even with seven of 15 seats, if Ann Arbor wanted to accomplish some significant change in service, they’d need to talk to only one other party on the board. Ann Arbor could talk to Ypsilanti and gang up on the rest of the board. Ann Arbor would need only one other “conspirator,” she said. She felt that Ann Arbor is well-represented, but not to the point of scaring off the other participants. Politically it’s important to maintain a balance, she said.

Hohnke said he shared Smith’s view. He asked Kunselman to think about the view of other participants in the new authority. Kunselman had taken a conservative perspective on protecting Ann Arbor’s interests, Hohnke said, adding that he understands that conservative inclination. But the goal, Hohnke said, is to make some progress and find ways to collaborate countywide. Seven seats provides for very strong representation for Ann Arbor, he concluded.

Lumm said she’d support an Ann Arbor majority on the board. Under any funding plan, Ann Arbor will provide more than half the funding. She pointed out that the council had just voted down all the amendments that would conserve Ann Arbor’s interest. Adding an Ann Arbor seat to the board would be a good thing, she said, to ensure that there’s taxation with representation.

Briere told her colleagues that over the past “interminable” weeks some of the consistent messages she’d heard were: I don’t feel I’m represented by the AATA board; I don’t feel the AATA board listens to me; I want a better transit system; I want a board consisting of Ann Arbor appointees.

Standing is councilmember Sabra Briere (Ward 1). Margie Teall (Ward 4) is in the foreground, with Marcia Higgins (Ward 4) farthest from the camera.

In her conversations with constituents, Briere reported, they’d talked about the fact that the area currently served by AATA includes townships, and there are people who don’t live in Ann Arbor on the board [e.g., David Nacht] who represent a view on the board about a need for service in those areas. In the future, Briere said, she imagined the mayor might focus on making appointments to the new Act 196 board only to represent Ann Arbor’s interests, because townships will have their own representatives. She noted that the seven Ann Arbor appointees will need to cooperate internally – and getting seven people in Ann Arbor to agree on anything can be difficult, she said.

Derezinski said he would not support the amendment because of the signals it sends. One way to defeat something is to kick it down the road, he noted, and another way is to put in things that you know other communities won’t support. He cited the comment made by Norman Herbert at the start of the deliberations: Transit helps everyone, but it helps Ann Arbor the most.

Taylor also said he wouldn’t support adding an Ann Arbor seat to the board. It’s in Ann Arbor’s interest to be collaborative, he said. Ann Arbor should lead the Act 196 board not through dominance but rather through persuasion. Demanding a majority of seats is at odds with collaboration, he said.

Higgins noted that if Ann Arbor already has seven members, it can already dominate. If it’s all about collaboration, why isn’t the formula one member per jurisdiction? Either we weight it or we don’t, she said. Kunselman said he was having a hard time with this proposal because it’s creating an inequity. He said the AATA’s transit policy is to subsidize Canton and Chelsea, for example, but it’s giving Ypsilanti just a 9-month contract.

Briere said that in Grand Rapids, some of the different jurisdictions in the Act 196 authority have different millage rates. She also noted that Lansing has people sitting on boards in disproportionate amounts. Lansing and East Lansing don’t dominate the board of the Capitol Area Transit Authority, she said. If we’re asking people to support mass transit, Briere said, we need to give them a reasonable voice. She liked Higgins’ idea of disentangling the money from the representation. She said she had a problem with the idea that the wealthy can speak louder.

Higgins asked Ford how the 15-member board was determined, with Ann Arbor receiving 7 seats. Ford deferred to state representative Jeff Irwin. Irwin said he’d taken it upon himself with Terri Blackmore – executive director of the Washtenaw Area Transportation Study (WATS) – to survey community leaders. They’d met with folks from the townships and other transportation service providers in the county. In the end, he said, they’d realized that there’s a million different ways to cut up this pie. They’d put out some suggestions about what some “rough justice” looks like.

One representative per jurisdiction doesn’t seem to work, Irwin said. Basing it just on population didn’t respect the additional financial contribution of Ann Arbor. Ann Arbor has roughly 1/3 the population of the county but would be contributing more resources. They’d wanted to respect that with some additional representation. They’d concluded that Ann Arbor should get about half. Given a half-and-half deal, it’d make the most sense to go with 7 out of 15, so that as the plan was pitched to other communities, they wouldn’t feel Ann Arbor is dominating.

Outcome on amendment giving a majority of board seats to Ann Arbor: The amendment failed on a 3-8 vote, with support only from Anglin, Lumm and Kunselman.

Transit Agreement: Successful Amendments

Two amendments put forward by Sabra Briere (Ward 1) were ultimately successful. An attempt by Marcia Higgins (Ward 4) to strike the phrase “Notwithstanding anything in this Agreement to the contrary,” failed. Briere’s two amendments were as follows [additions in italics, deletions with line-through]:

7. Full Faith and Credit. The parties agree that Washtenaw County does not by virtue of its action in creating the New TA, provide its full faith and credit for any project undertaken by the New TA. The parties further agree that the Cities of Ann Arbor and Ypsilanti shall not be required to, and do not by virtue of execution of this Agreement, pledge their respective full faith and credit for any project assumed by the NEW TA at Closing or undertaken by the New TA thereafter when operational.
…
9. Ann Arbor Approval. Notwithstanding anything in this Agreement to the contrary, if voters in the City of Ann Arbor fail to approve the NEW TA Act 196 funding source at any interim vote prior to December 31, 2014, regardless of whether it is approved or not by the other voting jurisdictions, then the City shall have the right to, but is not required to (i) withdraw from this Agreement without penalty; (ii) veto any attempted termination by AATA of the AATA-City operation agreement; and (iii) refuse to designate and/or assign its millage under Section 3(a). If Ann Arbor voters fail to approve the NEW TA Act 196 funding source before December 31, 2014, regardless of whether it is approved or not by the other voting jurisdictions, then the City shall withdraw from this agreement without penalty, shall veto any attempted termination by AATA of the AATA-City operation agreement, and shall refuse to designate and/or assign its millage under Section 3(a).

In broad strokes, the amendments won support based on the fact that other councilmembers were persuaded that the amendments did not change the substance of the agreement, but merely clarified the existing intent of the language.

Outcome on Briere’s amendments: The council approved both of Briere’s amendments. The amendment on full faith and credit won unanimous approval. The amendment on voter approval and withdrawal from the agreement passed on a 9-2 vote, with dissent from Derezinski and Teall.

Transit Agreement: Council’s Concluding Deliberations

Marcia Higgins (Ward 4) wanted to know what the future is for a high-capacity north-south connector within the city of Ann Arbor.

City councilmember Marcia Higgins (Ward 4).

She said she’d advocated for such a system for 13 years and wanted to know why there was a zero on the funding line for that project. Michael Benham, AATA strategic planner, told Higgins it reflects that the project is being deferred to focus on those services that can be provided just with local funding. He told Higgins that local millage dollars would not be allocated, but state and federal dollars could be put toward it. An application has been made for preliminary engineering, he said. Higgins was content that the connector not being tabled and that it’s still a recognized need.

By way of background to illustrate how long the concept of the connector described by Higgins has been around, a series of articles from the Ann Arbor District Library’s Old News archive documents that the idea of a high-capacity, elevated guideway connector between the University of Michigan north campus, central campus, and the Amtrak station was conceived in the early 1970s. [Oct. 30, 1973][Nov. 2, 1973] [Dec. 6, 1973]

Mike Anglin (Ward 5) expressed concern that approval of the four-party agreement would mean approval of Fuller Road Station, which the council had not done. [See Chronicle coverage: "UM, Ann Arbor Halt Fuller Road Project"] He felt that the transit plan incorporates Fuller Road Station without a vote.

Benham explained that the Fuller Road Station project is in the five-year plan as a program, but there’s nothing that the financial advisory group has recommended that endorses the project. Anglin stated that the AATA is putting forward uses at the site at Fuller Road for a transit station but the city council has never taken a vote on that. Benham told Anglin that nothing precludes the council from voting on that issue. The reason the Fuller Road Station is included is that it’s a project that’s desired by many people, he said.

Benham indicated that the AATA would be publishing the detailed five-year service program in late April or May.

Sandi Smith (Ward 1) expressed her thanks to those who’d worked on the issue and said that so far, AATA has had a grueling marathon journey – but it’s just the first 5 miles. She said she’s heard consistently from emails and at the podium that Ann Arbor and greater Washtenaw County want a higher level of transportation service – it’s good now, but not good enough.

She said it’s time to vote on the four-party agreement and to vote on it in the affirmative. She hoped that her colleagues could put aside their concerns about the way the agreement had arrived at its current form. “This is what’s in front of us,” she said.

Stephen Kunselman (Ward 3) said he appreciated the optimism expressed by Smith, but maintained it’s his responsibility to do due diligence. He compared improving the transportation system to homebuilding – he wouldn’t tear down a house, when he can build an addition, he said. He described the approach that the AATA is taking as not the best way, but rather the most complex way. He ticked through a variety of other options for creating an Act 196 authority or retaining an Act 55 authority. He read aloud extensively from a document that he said he’d found on the AATA’s website, which outlines the comparative advantages and disadvantages of Act 196 and Act 55.

As Kunselman continued to read, mayor John Hieftje pointed out that Kunselman had been speaking for seven minutes. Kunselman challenged the idea that there was a time limit – but Hieftje noted that the council rules provide for one. [It's five minutes for the first speaking turn on a topic and three minutes for the second speaking turn.]

Kunselman said that if the proposal were for the city of Ann Arbor to incorporate an Act 196 authority, he’d be on board. But he objected to what he characterized as turning everything over to the county. He contended that Washtenaw County would “control” the articles of incorporation for the new transit authority.

Assistant city attorney Mary Fales was asked to comment and she noted that Section 3.04 of the articles of incorporation identifies the role of the county:

The Washtenaw County Clerk/Register shall endorse these Articles of Incorporation after their adoption by the Washtenaw County Board of Commissioners and the “New” Authority shall publish them once in a newspaper of general circulation throughout the County on a date at least 10 days, but not more than 30 days, after their adoption.

As far as amending the articles after their adoption and filing, Fales noted that it would require a 2/3 vote of the new transit authority’s board.

Carsten Hohnke (Ward 5) said he’d support the four-party agreement – because he wanted the option of talking about it some more. He responded to Kunselman’s frequent refrain that it’s the mayor’s proposal by saying that it was brought forward by Michael Ford and those who worked on it for the AATA.

Tony Derezinski (Ward 2) echoed what Hohnke said, noting it’s just the initial step and that he’s glad the council is taking that first step.

Jane Lumm (Ward 2) said she regretted there’s not more of an appetite to tighten up the language. But she said a majority of the council felt it’s not in Ann Arbor’s interest that Ann Arbor have a majority on the board or that 50% is a reasonable critical mass for minimum participation.

Kunselman then directed a question to Hieftje asking him why, because Hieftje brought it forward, was Hieftje suggesting that Ann Arbor turn this authority over to the county? Hieftje indicated that he’d respond later as to why he would be supporting the four-party agreement.

Christopher Taylor (Ward 3) said he was delighted to support the four-party agreement. Responding to Lumm’s interpretation of the financial task force’s message that things should be put on hold, he said he’d heard the financial task force say only that the funding be put on hold. The message he’d heard from the task force was that the council should forge ahead. About the agreement, Taylor said, it doesn’t bind the council to move forward, but only to do so in a particular manner if they decide to move forward. It provides full authority for Ann Arbor to “bug out” if AATA doesn’t provide full value.

Sabra Briere (Ward 1) highlighted among the various reasons to support the agreement her desire to ensure that residents get the chance to vote.

When it came time for Hieftje to weigh in, he said he thought the council had been presented with a financial plan. The task force had put a number on the amount required, but had not said what the methodology is going to be. It would still require a vote of the residents. The plan had been developed over a long period of time, with over 70 public meetings. It wasn’t something Ford dreamed up, he said.

Hieftje pointed to the support that had been expressed by the Ann Arbor/Ypsilanti Regional Chamber of Commerce and the Michigan League of Conservation Voters. Hieftje drew an analogy of the four-party agreement to another decision the council had made – on the agreement of all but one councilmember [Anglin] to build the underground parking garage. Hieftje said Ann Arbor wants to be a community that continues to grows jobs.

Kunselman then challenged the mayor to answer Kunselman’s previous question. Hieftje said he’d just done that.

Outcome on four-party transit agreement: The agreement was approved on a 7-4 vote, with dissent from Anglin, Lumm, Kunselman, and Higgins.

Gott Nomination to AATA Board

One of the mayoral nominations that the council was asked to confirm at its March 5 meeting was for the appointment of University of Michigan planner Sue Gott to the board of the Ann Arbor Transportation Authority.

Councilmembers generally vote on confirmation of mayoral nominations to board and commissions “all in one go” in the same way that consent agenda items are voted. And in the same way that individual consent agenda items are sometimes pulled out for separate consideration (which can be done at the request of any councilmember), Marcia Higgins (Ward 4) wanted to separate out Gott’s nomination from some others and to request a roll-call vote on that.

Higgins said she had some concerns with a University of Michigan employee being appointed to the board, because UM contracts for services with the AATA, and because of the weight that UM has in the community. She felt the appointment could be better used for other citizens in the community.

Stephen Kunselman (Ward 3) added that Gott would be the second UM employee serving on the AATA board, to which mayor John Hieftje replied, “I’m not aware of that.” Kunselman countered with the name of the other UM employee who serves on the board, Anya Dale. By way of background, Dale was employed by Washtenaw County at the time of her appointment to the AATA on May 17, 2010 – which earned her a dissenting vote from Sabra Briere (Ward 1). But at least as early as mid-June 2011 it was publicly known that Dale would be leaving her post with Washtenaw County to take a position in the UM sustainability office. Dale’s position within UM is not particularly high level.

Also useful by way of background is the fact that the AATA board member whom Gott is replacing was a relatively high-level administrator, Rich Robben, executive director for plant operations.

Kunselman then went on to point out to Hieftje that when the vacancy came up, Kunselman had suggested appointing someone to the AATA board from one of the jurisdictions with which the AATA has a purchase-of-service (POS) arrangement. By way of background, that suggestion had come at the city council’s Jan. 23, 2012 meeting. That type of appointment, ventured Kunselman, would perhaps start the collaborative effort for countywide transit. Kunselman noted that Hieftje had responded to his suggestion on that occasion by questioning whether it would be legal to have an elected official from a township serve on the AATA board. But Kunselman noted that David Nacht (who currently serves on the AATA board) was originally a Scio Township trustee around the time he was first appointed to the AATA board.

Kunselman stressed that Gott is a wonderful person, but said he shared Higgins’ concern that the AATA board needs a little more breadth, and the communities contracting with AATA for service have been wanting a seat on the board, he said.

Hieftje responded to Kunselman by saying that Ypsilanti is participating in the framework of the as-yet unincorporated Act 196 (U196) board, and is pretty happy they’re being represented. With Gott’s base of planning knowledge, Hieftje said, it’s appropriate that she have a seat on the ATA board at a time when plans are being made for the future. Gott has lived in the community for a very long time, Hieftje said.

Briere then asked Hieftje to help explain which skills Gott would bring to the AATA board. Hieftje said that Gott had a breadth of knowledge that covers such a wide range – she’s familiar with UM plans. He ventured that if you read her resume you’d see a lot of experience in transportation planning.

Councilmember Stephen Kunselman (Ward 3).

Tony Derezinski (Ward 2) echoed what Hieftje had said, noting that he’d worked with Gott on some issues with University of Michigan in his capacity as a city planning commissioner. Hieftje then said that people on city council also work for UM and he doesn’t see a conflict of interest – an allusion to Kunselman’s employment with UM as an energy liaison.

Kunselman countered that there’s a big difference between being an elected versus an appointed official. Kunselman then said he knew Gott from “way way back” and would support her nomination. But he lamented the fact that the opportunity had not been taken to appoint someone who represented an entity that has a purchase-of-service agreement.

Outcome: Sue Gott’s appointment to the AATA board was unanimously confirmed.

Direction on Medical Marijuana

On the council’s agenda was a resolution that would direct the city attorney, Stephen Postema, to “delay all enforcement activities against medical marijuana dispensaries and cultivation facilities except for claims that they violate Section 5:50.1(3) of the City Code [zoning regulations], until the Council amends or rejects amendments to the zoning and licensing ordinances for medical marijuana.”

The resolution reflects an ongoing tension between the city’s medical marijuana licensing board and the city attorney’s office.

That tension between the board and the city attorney’s office is reflected in a statement sent by members of the board to city councilmembers on March 2, which reads in part: “[The city attorney's office] has been aggressively trying to shut [dispensaries] down while we actively try to license them.” The statement goes on to point out that a representative from the city attorney’s office had been present at all of the board’s meetings and that the board’s recommendations had been reported to the city council. But after that, the city attorney’s office had sent out new letters to all dispensaries requesting them to provide information about how their business operates. [.pdf of entire statement from Ann Arbor's medical marijuana licensing board to the Ann Arbor city council]

The part of the city code called out for continued enforcement in the resolution, Section 5:50.1(3), specifies the zones in the city where medical marijuana businesses may be located. From the code: “Medical marijuana dispensaries shall only be located in a district classified pursuant to this chapter as D, C, or M, or in PUD districts where retail is permitted in the supplemental regulations. Medical marijuana cultivation facilities shall only be located in a district classified pursuant to this chapter as C, M, RE, or ORL.” [.pdf of Section 5:50.1(3)]

The resolution on the March 5 agenda stemmed from a meeting of the city’s medical marijuana licensing board on Feb. 28 that was convened in response to concerns by several dispensary owners, who had received letters dated Feb. 24 from the city attorney’s office. The letters make specific inquiries into several aspects of the business model of dispensaries – in order to assess whether they are in compliance with Michigan’s Medical Marijuana Act. Compliance with the MMMA is a requirement for issuance of a medical marijuana license, and recipients of the letters have license applications pending with the city. Although the legal position of the city attorney appears to be that it’s possible for a dispensary to operate in compliance with the MMMA, no explication of what that model would entail has been set forth.

Among the questions being posed to all dispensaries in the letters are the following: “Does any person or entity deliver marijuana to [Dispensary Name]? If so, does [Dispensary Name] ever pay, donate, or in any way give money to the person or entity who delivers the marijuana or to anyone else? If so, to whom is the money paid, donated, or given and how much?” [.pdf of set of letters]

The city council resolution was sponsored on the agenda by Sabra Briere (Ward 1), who is the city council’s representative to the medical marijuana licensing board. After its Jan. 31, 2012 meeting, the board submitted a required report to the council with recommendations on the issuance of the first dispensary licenses and revisions to the city’s medical marijuana ordinance. The report recommends to the council that 10 dispensaries be issued licenses.

The city council enacted zoning and licensing regulations for medical marijuana businesses at its June 20, 2011 meeting.

The resolution requests that the council decide on recommendations for amendments to the city’s medical marijuana ordinance before June 18, 2012.

The council did not reach the item on its agenda until around 12:30 a.m. Briere ventured that the item was complex and deserved the council’s attention and its “ability to stay awake,” so she moved for a postponement, a move that was met with consensus without any deliberation.

Outcome: The council voted unanimously to postpone consideration of the item to its March 19 meeting.

Liquor License Non-Renewals

The council considered a resolution with a recommendation that liquor licenses for two businesses – Dream Nite Club and Rush Street – not be renewed this year. The vote was based on the recommendation of the council’s liquor license review committee. For Dream Nite Club, the non-renewal recommendation is based on maintenance of a nuisance and patron conduct. For Rush Street, the issue relates to non-payment of $8,040.42 in taxes.

Blue dots are locations of liquor licensees. Note that the map includes licensees of all categories, not just those that have licenses permitting on-premise consumption. (Image links to dynamic map, that allows zooming and clicking and the like.)

The council’s resolution and subsequent notification of the two businesses meets the requirement of Chapter 109, Section 9:79 of the city code – that a business be notified of the council’s intent to object to the renewal of its liquor license by the Michigan Liquor Control Commission, and that a hearing be convened to afford a business an opportunity to plead its case. [.pdf of Chapter 109 Section 9:79]

Hearings for the two businesses were set for March 19, which is the soonest they could be held – 10 days after notification. The hearing officer will be Tony Derezinski (Ward 2), who chairs the city council’s liquor license review committee. Later that same day, on March 19, the city council will need to make a final recommendation to the MLCC. The MLCC’s deadline is March 31.

The council’s resolution was based on the recommendation of its liquor license review committee, which met on Feb. 23, 2012 to conclude its annual review of licenses in the city.

During the brief city council deliberations, Derezinski characterized the resolution as simply reflecting the recommendation of the liquor license review committee. He stressed that there was a time element, due to the time of notice that had to be provided to the licensees.

Mike Anglin (Ward 5), who also serves on the review committee with Derezinski and Jane Lumm (Ward 2), asked him to explain the reason that the two establishments were recommended for non-renewal. Derezinski clarified for the council that one related to police reports and patron conduct (Dream Nite Club) while the other related to non-payment of taxes (Rush Street).

Outcome: The council voted unanimously to recommend non-renewal of two liquor licenses and to set the hearings for March 19.

Greenbelt Land

The council considered a resolution authorizing the use of $82,576 from its open space and parkland preservation millage to acquire development rights to the Newton Farm property – 58.85 acres in Ann Arbor Township. The city’s contribution will be paired with an equal amount from Ann Arbor Township and matched with a federal farm and ranchland protection program grant of $158,676 for a deal worth a total of $323,828.

Deliberations on the item were limited to a comment by Jane Lumm (Ward 2), who characterized it as a strong proposal. It’s strong, she said, because it meets the goals of the greenbelt program, the city’s share is less than one-third of the cost, the township is matching the city’s share, local dollars are leveraging federal funds, and it’s adjacent to other properties protected by the greenbelt program. She said she hoped that future greenbelt acquisitions would be similarly structured.

Outcome: The council voted unanimously to approve the acquisition of development rights on the Newton Farm property.

W. Kingsley House

The council considered a resolution approving the purchase of two parcels on the northern edge of downtown Ann Arbor, at 215 and 219 W. Kingsley. The purchase price is $185,000. That will clear the way to the demolition of a long-vacant house, considered by many to be an eyesore. The money for the purchase was awarded as a pre-disaster mitigation grant from the Federal Emergency Management Agency (FEMA), which the city council accepted through a resolution passed at its Nov. 15, 2010 meeting.

The parcels at 215-19 W. Kingsley are outlined in red. Blue area is the floodway. Green area is the floodplain. Image is a screen shot from the joint Washtenaw County/City of Ann Arbor flood mapping website. (Image links to higher resolution file.)

The delay in the purchase of the property was due in part to the owner’s initial reluctance to sell the property to the city at the appraised price.

After the city acquires the land, the house on one of the parcels will be demolished and a rain garden will be installed, using stormwater utility funds as part of the city’s capital improvements plan (CIP). The parcels are located in the FEMA floodway as determined by the new map given final approval by the city council the same night the purchase was approved. [.jpg image of parcels and floodway]

The city’s public art commission, at its Nov. 30, 2011 meeting, approved the new rain garden as a project in which to include public art, establishing a project budget between $20,000 and $27,000.

W. Kingsley House: Deliberations

Sandi Smith (Ward 1), who sponsored the item on the agenda, led off deliberations by saying that she was pretty happy to be able to bring the item forward. The house had been vacant for 12-14 years, the basement has been crumbling in for some time, the garage has been set on fire, but was finally removed, she said. The house has been boarded up for around eight years.

Smith described it as a delicate balance between private property rights and dealing with nuisances. She mentioned that with the fund established at the council’s Feb. 21, 2012 meeting, now the city has ways to deal with such cases. Smith noted that the money being used for the acquisition comes from FEMA money – which is possible because the property is in the floodway.

Given that Jerry Hancock, the city’s stormwater and floodplain manager, had remained at the meeting well after midnight to field any questions, Smith invited him to the podium to describe for the council what was special about the acquisition and demolition of the property. Hancock described the history of the city’s efforts with the property as starting with an enforcement action through the city attorney’s office because of the nuisance it posed. Then the city learned it was eligible for FEMA money because of the city’s flood mitigation plan that was approved in 2007. The city felt that pursuing FEMA funding might be a more palatable enforcement path, so an application was made in 2008.

Like everything associated with the project, Hancock said, the application has taken longer than expected. FEMA issues held things up and it took a while to get clear title. The grant from FEMA covers 75% of the cost, he said, and the rest will come from the stormwater fund. The property also needed to be deed-restricted, he said – because that’s a FEMA requirement.

Instead of filling in the basement, Hancock continued, it was felt that some flood storage capacity could be established there. So a project on was put on the city’s capital improvements plan (CIP) to create a rain garden. The city hired Patrick Judd of the Ann Arbor-based Conservation Design Forum, who had also worked on the landscaping at the new city hall plaza. Part of Judd’s proposal was to coordinate with Ann Arbor’s public art commission. So, Hancock said, there will not only be a rain garden but also a public art installation at the site. Smith ventured that there would be a neighborhood block party there when it’s done.

Questions from Jane Lumm (Ward 2) and Stephen Kunselman (Ward 3) drew out the fact that the council’s resolution that night was just for the acquisition. The money had already been accepted and the rain garden did not require city council approval. Responding to a question from Kunselman, Hancock explained that a few more steps remain before a contractor can be hired to perform the demolition – a grading plan and a survey needs to be in place before it can be bid out. He estimated 4-6 weeks before a contractor would be lined up.

Mike Anglin (Ward 5) ventured that it’s going to be good to drive by a nicer-looking site. He asked about other sites that might be eligible for FEMA money for demolition. Hancock responded by saying there’s only one other site on which the city has moved forward with FEMA applications: 721 N. Main St., a city-owned property.

The city had received approval of a grant to remove two storage structures in the floodway on the 721 N. Main site, but that grant has been delayed because the city’s All-Hazard Plan has expired. The city’s emergency manager, along with the city attorney’s office, is updating that, Hancock explained. Once that All-Hazard Plan is complete, the city will be able to move ahead with that grant. However, no other sites besides the two storage structures at 721 N. Main have been identified for FEMA applications, Hancock said.

Outcome: The council unanimously authorized the acquisition of the West Kingsley properties for demolition.

New Flood Map

The council considered a resolution giving final approval to an ordinance change that will adopt a new Flood Insurance Rate Map (FIRM) for the city. Initial approval had been given by the council at its Feb. 21, 2012 meeting.

By way of background on those maps, the National Flood Insurance Program (NFIP) makes flood insurance available for properties in participating communities – Ann Arbor is a participant. If a building has a federally-backed mortgage and it’s located within the “1% annual change floodplain” (previously called the “100-year floodplain) then flood insurance is required.

Ann Arbor’s most recent FIRM dates from Jan. 2, 1992. In 2004, the Federal Emergency Management Agency (FEMA) began a map revision process for Washtenaw County. Various drains in the city were re-analyzed, using updated data, and on July 27, 2007, FEMA issued preliminary maps. After required public review, appeal and revisions, on Oct. 3, 2011, FEMA issued a letter with a final determination, indicating that the new maps would become effective on April 3, 2012. [.pdf of Oct. 3, 2011 letter] [.pdf of Dec. 20, 2011 reminder letter]

Compared to the previous 1992 maps, 321 parcels are no longer analyzed as lying within a floodplain. However, 116 parcels that were previously not analyzed as in a floodplain are now in a floodplain, according to the new maps. Building-wise, 452 structures are no longer analyzed as lying within a floodplain, while 88 buildings are now in a floodplain, according to the new maps. [See also Chronicle coverage: "Column: Digital Information Flood."]

During the public hearing on the new map only one person spoke. Thomas Partridge called on the council to go beyond this ordinance to enact construction guidelines and restrictions in Ann Arbor to give adequate protection to residents from private companies involved in construction activities that flagrantly violate noise ordinances, worker protections, and threaten health and safety of pedestrians and drivers.

The council did not deliberate on the new flood map, having entertained some discussion when the ordinance was given initial approval at the council’s previous meeting.

Outcome: The council voted unanimously to adopt the new flood map.

Park Renovations

The council considered two major contracts for renovations of city parks.

The first, for $893,030 with RMD Holdings, covers the renovation of softball and baseball diamonds at Veterans Memorial Park, Southeast Area Park, and West Park. The second, with Fonson Inc. for $786,536, will cover renovation of roads and parking lots, build paths and improve stormwater management at Buhr Park and Cobblestone Farm. Both contracts also include an additional 10% contingency.

The projects were discussed by the city’s park advisory commission and recommended for approval – the Buhr/Cobblestone project on Feb. 28, 2012, and the ballfield renovations on Jan. 24, 2012.

Christopher Taylor (Ward 3), who is one of two city council representatives to the park advisory commission, noted that PAC was particularly excited about this project. The ballfields have been an area of particular concern. Carsten Hohnke (Ward 5) remarked that anybody who’s been around the fields knows how much use they get when the weather is nice. It’s a nice step forward for those who use those amenities, he said.

Mike Anglin (Ward 5), the other council appointee to PAC, said the public should know that the city will receive more revenue down the road, because more teams will return to using the fields, given that the ballfield renovations are in the city’s Park and Recreation Open Space (PROS) plan. Sandi Smith (ward 1) confirmed with Taylor that commencement of the work will wait until after the summer season ends.

On the Buhr Park renovations, Stephen Kunselman (Ward 3) said Buhr Park is just down the street from him, so he was pleased to see potholes in the entry road taken care of.

Outcome: On separate votes, the two park renovation items were unanimously approved.

Land Use Buffer Changes

The council considered a change in landscaping and land use buffer requirements in the city code.

The first change would restrict some requirements that have been added recently just to those plans that require city planning commission or city council approval: (1) providing landscaped islands for every 15 parking spaces; and (2) providing bioretention areas in 50% of the interior landscaping areas. Administrative amendments to existing plans would not trigger the requirements.

The second change involves requirements to provide buffers between parcels with conflicting land uses. Recent amendments added requirements that properties in R3 (townhouse dwelling) and R4 (multiple-family dwelling) districts include a buffer along the side and rear property lines if the parcel is immediately adjacent to a property that is principally used or zoned as residential.

The amendment considered on March 5 would remove the R4C zoning district from the recently-added land use buffer requirement. The rationale for exempting the R4C sites from the requirement is characterized in the staff memo as due to the fact that the R4C sites “are typically located on small lots in older neighborhoods near downtown. Most R4C lots are too small to accommodate a 15 foot wide conflicting land use buffer along the entire side and rear property lines.”

Land Use Buffer Changes: Council Deliberations

Sabra Briere (Ward 1) said that when she saw the item on the agenda, she noticed how dependent the changes were on the R4C area. She noted that the R4C zoning district study committee has not yet reported its work, so she had some concerns about protections being removed for residents who live in such areas. Why does the ordinance need to be done tonight, instead of waiting? asked Briere.

Wendy Rampson, head of planning for the city, explained that the R4C item was not urgent, and might be delayed. But for the other items, she suggested it would be useful to move ahead. Administrative amendments to site plans were causing a bioswale requirement to be triggered, she said. She allowed that a petitioner can still go to the planning commission to get an exemption, but that seemed like an extra, unnecessary step.

As an example, Rampson gave a Glacier Hills nursing home construction project. The ordinance would have required the nursing home, in light of a small modification to the site plan, to take 50% of the landscape islands and convert them to bioswales. She ventured that if the council wanted to remove the R4C buffer requirement from the amendment package and move the other two amendments forward, the staff would prefer that.

Tony Derezinski (Ward 2), who serves as the city council’s representative to the planning commission, supported Rampson’s remarks. The review of the R4C/R2A zoning area has taken a long time due to the amount of the public input that has been included, he said. Rather than cut off that public input, the planning commission had decided to delay that report. Derezinski said that hopefully within the next couple of weeks, that report would be done. About the R4C/R2A review committee’s work, he said that issues like the landscape buffer are the “grist of what we were dealing with.” He said that in terms of the final recommendations, nobody got everything, but everybody got something.

Alluding to the delay in the R4A/R4C report, Stephen Kunselman (Ward 3) noted that he had paid attention to the R4A/R4C study report because the council hasn’t yet received it. But he asked if a maximum lot size within R4C was within the proposed recommendations.

By way of background, Kunselman has raised the point of placing a maximum lot size on R4C parcels in the past. From The Chronicle’s report on the council’s Oct. 24, 2011 meeting, in the context of deliberations on establishing a historic district in an area that includes R4C parcels:

Kunselman noted the issue certainly has a long history. He said he’d recently visited Chicago, where he’d seen a neighborhood that had some zoning in place that prevented the accumulation of parcels. He asked if it were possible to pass a zoning ordinance that specified a maximum lot size. The answer from assistant city attorney Kevin McDonald was: Yes, it’s possible.

Kunselman said he had no problem having a historic district study committee, but he was also looking to the existing R4C/R2A zoning district study committee. If that committee doesn’t take action, then he’d initiate a change in the zoning code to establish a maximum lot size. He said he’d hate to have something like City Place on Hamilton Place [the next street to the east from Fifth Avenue, where City Place is likely to be built]. In the Chicago neighborhood, he said, it was possible to have modern single-family homes right next to the old ones. The city has to allow for rebuilding, he said. He was open to learning and listening like [Christopher] Taylor, but concluded by saying that the council needed to move in some way.

In response to Kunselman’s question on March 5, Rampson said that the R4C committee had talked about reducing the possibilities for combining parcels. Kunselman asked for details on how that reduction of possibilities would work. Rampson said she did not know – no zoning language proposal is included in the report. What’s described in the report are concepts. The only numbers specified are in places where there was sufficient consensus. She indicated that the next step for the report would be submission to the planning commission.

So Kunselman ventured that what he was asking for won’t be in the report, which Rampson confirmed. The committee spent a lot of time getting to what the concepts are that people agree on, she said. She suggested that the council would want to spend some time going through the report, because it’s quite complex.

Kunselman ascertained that there’s sentiment on the committee to put constraints on combining lots. If that’s going to be months and months and months away from implementation, he wondered what would prevent another project like City Place from happening. [The controversial City Place project on South Fifth Avenue had combined seven parcels to create a single project.] Rampson allowed that nothing would prevent the kind of combination of lots like City Place. She characterized the R4C committee work as very deliberative. She expected that the committee’s report would be in the city council’s meeting information packet sometime in April at same time the planning commission looks at it during a working session.

Marcia Higgins (Ward 4) suggested postponing the ordinance revision for two weeks. Asked by Sabra Briere (Ward 1) why she wanted to postpone it, Higgins said she would just like to review it further.

Outcome: The council voted unanimously to postpone, until March 19, all the landscape ordinance revisions, including one that would eliminate the need for a landscape buffer for R4C areas.

Off-Street Parking Regs

The council also considered changes to its off-street parking code.

The first change reduces the exceptions allowed for front open space parking for sites that have more than one front lot line. Currently, a site with three frontages can have a parking area for two of the frontages – between the building face and the public right of way. The code revision would limit parking areas to a single frontage.

The second change would require that any new driveways serving drive-up windows in the front open space of a site be no wider than 12 feet and provide a raised sidewalk with bollards where the sidewalk crosses a drive-up lane. The change is meant to improve pedestrian safety.

The third change relates to minimum off-street parking requirements in the downtown districts, zoned D1 and D2. Developers currently have the option of making a payment in lieu of providing the required parking. The revision to the ordinance would add the option of signing a contract for parking permits in the city’s public parking system.

The council did not deliberate on the item before voting to give it initial approval.

As a change to the city’s ordinances, the revisions will need to be given a second and final approval by the city council at a subsequent meeting after a public hearing.

Outcome: The council voted unanimously to give initial approval to the new off-street parking regulations.

Dexter Avenue Improvements

The council was asked to consider authorizing an agreement with Michigan Department of Transportation for the Dexter Avenue improvements project in the amount of $2,353,425. That amount corresponds to the amount provided by the Federal Surface Transportation Fund (STPU). The project, which involves reconstruction of the street, as well as necessary utility improvements, has a total cost of about $6 million, which will be divided as follows: STPU, $2,353,425; city street millage fund, $1,407,850; city storm water fund, $1,360,635; water fund, $881,000; special assessments, $18,590. The special assessments on property owners were given final city council approval at its Dec. 6, 2011 meeting.

During deliberations, Mike Anglin (Ward 5) praised the work of the city staff in seeking the participation of the community.

Jane Lumm (Ward 2) questioned how bike lanes could be added if the curb-to-curb width did not change. The explanation from project manager Elizabeth Rolla was that the current lanes are extra wide.

Rolla also indicated that after opening the bids, the cost was about $900,000 lower than anticipated. Lumm also wanted to know how the locations of the three new pedestrian crosswalks had been decided – was it similar to the way Plymouth Road crosswalk locations had been determined? Rolla explained that Dexter Avenue is different from Plymouth Road – Dexter Avenue is just two lanes. The exact locations were based on input from public meetings, and factored in school traffic and bus traffic. Also factored in were hills and sight distances.

Outcome: The council voted unanimously to approve the Dexter Avenue MDOT contract.

Consent Agenda: Water Meters, Aerial Photography

Two items were separated out from the council’s consent agenda for separate consideration. For one of them, some confusion ensued, when Jane Lumm (Ward 2) requested a different item be separated out than the one she actually wanted to question. It resulted in the council’s reconsideration and re-voting of the steps for approving the consent agenda.

The item Lumm had wanted to discuss was a $53,340 contract with Photo Science Geospatial Solutions to do a flyover and to generate aerial photography of the city, so that stormwater rates can be computed for each parcel. The city uses a formula that depends on the amount of impervious surface on a parcel as determined by infrared aerial photography.

Lumm questioned the selection of the contractor with the highest bid. [The other bids were for $44,213 and $49,409.] The city’s head of IT, Dan Rainey, said that non-price factors outweighed the lower cost offered by other vendors, citing specifically the ability of the selected vendor to provide the service on demand, on whatever day the city wanted the flyover done. The quality of the flyover was the most important consideration, he said.

Sabra Briere (Ward 1) pulled out the other item from the consent agenda for individual scrutiny. It authorized the purchase of water meters from Midwest Municipal Instrumentation Inc. for $50,000. Briere confirmed with interim public services area administrator Craig Hupy that the devices were “smart meters” in the sense that they did not require a human agent to collect their data.

Outcome: The council voted unanimously to approve all the consent agenda items, including the two separated out for special consideration.

Communications and Comment

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

Comm/Comm: Parks Millage

Christopher Taylor (Ward 3), who serves as one of two city council representatives to the park advisory commission (PAC), alerted his council colleagues to a topic at the council’s next working session on March 12: the parks maintenance and capital improvements millage. The city staff and a PAC working group have been discussing the issue, he said. Taylor called it a preview of the public conversation, which will cover the options of millage renewal, expansion, or retraction. [The city of Ann Arbor levies a 1.1 mill tax for park maintenance and capital improvements, last approved in 2006 for a period of six years.]

Comm/Comm: Board and Commission Open Positions

Sabra Briere (Ward 1) alerted the public to a slew of open positions on various boards and commissions. She invited the public to think about applying. [Information about applying is on the city clerk's webpage.]

Stephen Kunselman (Ward 3), who serves as the council’s representative to the taxicab board, noted that among the vacancies are two openings on that board. He said the board had some serious business to address.

Comm/Comm: Chief Jones Retires

City administrator Steve Powers announced that chief of police Barnett Jones would be retiring. He thanked Jones for five years of service to the city of Ann Arbor and 30 years of service statewide. Powers indicated that the appointment of an interim would be announced at a later time. Later in the week, it was announced that deputy chief John Seto would serve as interim.

Comm/Comm: Council Rules

At the conclusion of the meeting, during public commentary, Michael Benson noted that the council had outlasted CTN. [Although the live broadcast ends at midnight, the entire meeting is recorded for broadcast later.] Benson suggested revising the council rule on public commentary reserved time at the start of council meetings so that speaking turns would be limited to two minutes instead of the current three minutes. But that would be balanced against an increase in the total time allotted from 30 minutes to 40 minutes. Such a change would double the number of people who could sign up to speak – from 10 to 20.

Benson also suggested making the first preference for those people who wish to speak on agenda items more restrictive – to require that it be an action item on the agenda. Another suggestion put forward by Benson was to model a rule for public speaking used by the University of Michigan regents, which would give first preference to those people who had not addressed the council recently.

Comm/Comm: Warming Center

During public commentary, Orian Zakai followed up on the way that mayor John Hieftje had responded to her comments at the council’s previous meeting.

At the previous meeting she’d addressed the issue of 100 units of affordable housing that were lost when the old YMCA at Fifth and William streets was demolished. She quoted Hieftje’s response: “A lot of people don’t understand that the council has been working steadily for years to replace those units.” One of the people who doesn’t understand, Zakai ventured, is the head of the Washtenaw Housing Alliance. When Zakai had asked her for an interpretation of the mayor’s response, she had had no clear idea where the 70 new units had been built, which Hieftje had described. Zakai said she and her group don’t want to get between the city and the county, but two people in such a state of misunderstanding on such a crucial issue raises doubts about how seriously the goal of ending homelessness is taken, she said.

Regarding Hieftje’s allusion to efforts to create a warming center, Zakai maintained that this had been denied by WHA. The only group working on a warming center, she concluded, is a group she’s working with, Imagine Warming Centers. The group has encountered trouble communicating with the city. The group has visited the city-owned property at 721 N. Main. She described it as needing some repairs, but because it was a workplace until as recently as three years ago, those repairs can be effected. It’s also full of furniture that her group had been told is surplus. Her group could use the furniture or sell it, she said.

Alan Haber told the council he didn’t want to repeat anything too much, but Imagine Warming Centers has been seeking a space for people who need warmth. The group had looked at private properties as well as the city-owned 721 N. Main site. They’d looked through it with the city administrator and they’d identified problems with the building. But now, Haber said, progress is getting bogged down.

Haber said the group would like to rent the 721 N. Main from the city for a year for a nominal low rent. The group would provide liability insurance and pay utilities. Members who have skills would do repairs. Longer-term improvements would be negotiated with city staff, he said. He felt the building could be safely worked in. The building is also full of stuff with real value, he said, which could be put on the market. The space would be too low-tech for Ann Arbor SPARK, he said, but could be a great productive space. The group now needed the city to say, Okay, we’ll lease it to you. He told the council to open their hearts, open their minds, open the door.

Thomas Partridge led off his turn at public commentary at the conclusion of the meeting by alluding to the late hour, saying it was almost time to plan for breakfast. He stressed the urgency of planning for government services not in the future but now. He told the council he’d come to some public meetings after standing out in snowstorms with inadequate clothing and no boots, with only a few dollars in his pocket. He told them he’d personally suffered – he’s a victim of multiple sclerosis. He said when people advocated for a warming center, they’re really calling for affordable 24-7 housing support.

Later in the meeting, Hieftje responded to the commentary by indicating that he could get a report on the units of housing that had been constructed in the city. Sabra Briere (Ward 1) prodded Hieftje to mention the ongoing meetings he’s having about creating a warming center – he said he had one on his calendar on Friday. As far as the discussion on 721 N. Main, Hieftje said there are many issues, including the location of the property in the floodway. [The parcel also arose during discussion of another item on the agenda – the acquisition and demolition of a house in the floodway on West Kingsley. The city's stormwater and floodplain manger, Jerry Hancock, said that two storage buildings at the 721 N. Main site were planned to be demolished, using funds applied for from the Federal Emergency Management Agency (FEMA).]

Comm/Comm: Israel, Palestine

Henry Herskovitz told the council that his friend Herman had called him to say he’d heard on talk radio that Israeli prime minister Benjamin Netanyahu had welcomed Obama’s statements on Israel’s right to self-defense. Herskovitz called that political code language for giving Israel the green light to attack Iran preemptively.

Herskovitz’s friend told him he’d heard on the radio that Israel is a small country, and being threatened by a neighbor, and that gives it the right to self-defense. Herskovitz said he’d asked his friend, a black man living in Detroit, how he’d feel if whites living in Grosse Pointe had evicted him in an attempt to transform Detroit to a white city. His friend had replied that he’d fight to the end to defend his right to live in his home. Herskovitz then drew an analogy from that to the history of the Middle East.

Herskovitz said that attacking Iran is nothing new for Israel. Eight years ago the drums were also being beaten for Iran.

Present: Jane Lumm, Mike Anglin, Margie Teall, Sabra Briere, Sandi Smith, Tony Derezinski, Stephen Kunselman, Marcia Higgins, John Hieftje, Christopher Taylor, Carsten Hohnke.

Next council meeting: Monday, March 19, 2012 at 7 p.m. in the council chambers at 301 E. Huron. [confirm date]

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Susan Pollay, left, executive director of the Ann Arbor Downtown Development Authority, with councilmembers Sandi Smith (Ward 1) and Margie Teall (Ward 4, sitting) before the start of the March 21 council meeting. Pollay was distributing copies of the downtown street outreach task force report. (Photos by the writer.)

The council has now been formally considering the new licensing ordinance for three months. The ordinance will next come before the council at its Tuesday, April 19 meeting for final approval. Also on April 19, the council will take a final vote on a zoning ordinance that would apply to medical marijuana businesses. The moratorium on use of property in the city for medical marijuana businesses – originally enacted on Aug. 5, 2010 to last for 120 days, but subsequently extended – was extended again at Monday’s meeting through June 30, 2011. [.pdf of medical marijuana licensing ordinance as amended on March 21, 2011]

In a lower-profile but logistically significant move, the council voted to move its second meeting of April from Monday to Tuesday, April 19, because sundown on that Monday marks the start of the week-long Passover celebration in the Jewish tradition.

Other business conducted by the council included: (1) approving a recommendation for non-renewal of a liquor license for the Fifth Quarter; (2) authorizing transfer of $90,000 to the Ann Arbor Downtown Development Authority to improve a public plaza near the Forest Street parking structure; (3) setting a public hearing to establish an industrial development district that could lead to tax abatements for the firm Sakti3; (4) authorizing a letter of support for a Washtenaw County grant application to the state for acquisition of a natural area; and (5) authorizing the city’s own application to the state for grants to support park improvement projects and a new skatepark.

Council deliberations on the park improvement grant applications resulted in the prioritization of a grant to support construction of the skatepark over one to support improvements to the Gallup park canoe livery. The city hopes both grants will be approved by the state.

The council also heard a presentation on a plan for the Millers Creek area, and later in its meeting adopted the plan. It could eventually lead to establishing the creekshed formally as a “drain,” in the sense that the county water resources commissioner (formerly the drain commissioner) uses the term. That designation will increase the area’s eligibility for various funding mechanisms to pay for projects there.

The council heard a presentation from its street outreach task force, summarizing its work over the last six months. That work includes a proposed revision to the city’s panhandling ordinance, which the council will begin considering at its April 4 meeting.

The council also passed a resolution establishing a search committee for a new city administrator. The committee will bring a recommendation to the council at its April 19 meeting on an interim administrator, who will assume responsibilities when current city administrator Roger Fraser departs at the end of April.

The city’s IT director, Dan Rainey, was on hand to receive a Digital Cities award recognizing the city’s efforts to improve services through digital technology. Fraser mentioned during his communications time that the council’s meetings are now being streamed live over the Internet: CTN Channel 16 Live.

Medical Marijuana Licensing

At its March 21 meeting, the council considered a set of licensing requirements for medical marijuana businesses. All new ordinances require an initial approval, plus a final vote by the city council after a formal public hearing. The council had first considered the licensing scheme at its Dec. 6, 2010 meeting. Councilmembers undertook several amendments to the licensing proposal at three of its meetings over the last three months: on Jan. 3, Feb. 7 and March 7.

Dennis Hayes, who has addressed nearly every meeting of the city council when it has discussed medical marijuana, and councilmember Sabra Briere (Ward 1).

At its Oct. 18, 2010 meeting, the council gave initial approval to a set of zoning regulations for medical marijuana businesses, but it has not yet given its final approval to those regulations. The council’s strategy is to bring licensing and zoning forward at the same time for a final vote. The context for development of zoning regulations was set at the council’s Aug. 5, 2010 meeting, when councilmembers voted to impose a moratorium on the use of property in the city for medical marijuana dispensaries or cultivation facilities, and directed its planning commission to develop zoning regulations for medical marijuana businesses. Subsequently, the city attorney’s office also began working on a licensing system.

The moratorium on using additional facilities in the city as medical marijuana dispensaries and cultivation facilities – first enacted on Aug. 5, 2010 and subsequently extended – was extended a second time by the council at its Jan. 18 meeting to go through March 31, 2011.

During the course of Monday’s deliberations, mayor John Hieftje elicited from the city attorney’s office an estimate that there are 15 marijuana dispensaries currently operating in the city, plus three dispensaries that are operating in areas that would be prohibited, if the city’s zoning ordinance is given final approval.

Medical Marijuana Licensing: Public Commentary

Gersh Avery reported to the council that a lot of people come to him asking for help – cancer patients who are in stage four, typically. They ask him to make an extract of cannabis that can be used as chemotherapy. In Michigan, there have been 15-20 skin cancer cases cured, he said. He stressed that this is not palliative care, but curative. This kind of cancer research is taking place in other states and other countries, so he wanted to know why it was not taking place in Ann Arbor. A research laboratory to test these materials, he said, needs to be protected, not persecuted. Ann Arbor should be made a center of medical advancement, he said.

Rory Gould told councilmembers he had moved to Ann Arbor from New York 10 years ago, because he wanted to raise his children in a place where they would not be on top of each other, where people are nice to one another, where they’d be exposed to cultural diversity, and have access to high quality education. He thanked the council for their hard work on the ordinance – it’s an example of the spirit of tolerance Ann Arbor is famous for, he said.

Still, he cautioned that there are some remaining concerns. Requiring permanent record-keeping of growers might put good people in danger, he said, and could put a damper on supply. He also expressed concern about the number of dispensary licenses. Most of the existing dispensaries are very well run, he said, but a license might fall into the wrong hands. He said there are some places that are not well run that have no handicapped access and don’t supply locally-grown cannabis. He suggested that licenses also be made transferable on approval of the city council.

Dennis Hayes observed that it’s a now familiar cast of characters who have been speaking and he thanked the council for the work they’ve done. He noted that there are some councilmembers who are spending an extraordinary amount of time to get it right. The Michigan Medical Marijuana Act is helping people get access to high quality medicine, he said. There are still some restrictions, however, that he feels are not helpful to patients. One of those restrictions is that the applications require disclosure of a substantial amount of information about the ownership of the entity – which could be burdensome for dispensaries organized as collectives.

Chuck Ream thanked the council for the opportunity to address them. He said he’d met with Sabra Briere (Ward 1) and the mayor the previous Friday about the issue of documenting the source of the product. He agreed with the intent of the ordinance – we should know where the product comes from in the event of a health emergency. He suggested language that would allow relevant local, county, or state health officials to take action. He suggested that records be kept for 30 days – there’s no reason to keep them for longer than that. He called the need for a cultivation license “pernicious,” because it attempts to restrict the right of people to grow marijuana. About the ordinance requirement that cultivation facilities need a license, he called on the council to “get it out of there,” or everyone who’s currently growing in Ann Arbor will file suit.

Medical Marijuana Licensing: Council Deliberations

The council undertook a series of additional amendments to the ordinance.

Medical Marijuana Licensing – Amendment on Code Section

Sabra Briere (Ward 1) began with an amendment to move the proposed licensing code out of Title VI of the city code, which is designated “Food and Health,” and to move it to Title VII, “Businesses and Trades.” The move entailed a new chapter number – it was proposed that it be changed from Chapter 71 to Chapter 95. The amendment also changed the name of the chapter by striking the word “business.”

At council’s March 7 meeting, Marcia Higgins (Ward 4) had complained to city attorney Stephen Postema that the new chapter was not included in an existing chapter on business licenses – which is also in Title VII. The proposed amendment could be seen as a partial accommodation to Higgins’ concern. The introduction as amended reads:

That a new Chapter 95 be added to Title VII of the Code of the City of Ann Arbor to read as follows:

CHAPTER 95. MEDICAL MARIJUANA LICENSES FOR CULTIVATION FACILITIES AND DISPENSARIES

Postema indicated that he had no problem with the change.

Outcome: The council unanimously approved the amendment changing the code section and title.

Medical Marijuana Licensing – Amendment on License Eligibility

An amendment was proposed to make the ordinance consistent with a different amendment made at the council’s previous meeting – it disqualified people based on a felony conviction only if the felony was for a controlled substance offense. Previously, section 6:415 (2) had disqualified a person based on any felony conviction. As amended, it reads:

6:415. License Required, Number of Licenses Available, Eligibility. …
(2) A cultivation facility or dispensary shall not be eligible for a license if any person required under this chapter to be named on the application has ever been convicted of a felony involving controlled substances as defined under the Michigan public health code, MCL 333.1101, et seq, the federal law, or the law of any other state.

Outcome: The council approved the amendment restricting disqualification just to controlled substance felony convictions, with dissent from Stephen Rapundalo (Ward 2).

Medical Marijuana Licensing – Amendment on Board Activity

An additional amendment to 6:415 added the phrase “taking into consideration recommendations from staff” to the way the licensing board would make its recommendations:

6:415. License Required, Number of Licenses Available, Eligibility.
…
(7) … The Board will annually review and recommend the licensing criteria, the number of licenses authorized, the license fee structure taking into consideration recommendations from staff, …

Outcome: The council unanimously approved the amendment without comment.

Medical Marijuana Licensing – Amendment on Home Occupations

At the request of Sandi Smith (Ward 1), the following amendment was added to allow for the possibility of voluntary registration with the city by home occupation businesses – which the ordinance does not require to be licensed:

6:415. License Required, Number of Licenses Available, Eligibility.
…
(9) Medical marijuana home occupations do not require licenses but may register with the City by providing the address of the home occupation and the registry number on the caregiver registry identification card or that the MDCH issued to the caregiver who is delivering the marijuana, or some other form of identification.

Smith indicated that the idea is to allow the opportunity to have clarity, in the event that someone gave a tip to the police about suspected illegal activity at a location and that there could be a police raid. She wasn’t sure if anyone would take advantage of that opportunity to voluntarily register with the city to avoid the police storming in. She said she didn’t see any harm.

Sabra Briere (Ward 1) suggested that “registry identification card” be supplemented with “some other form of identification.” [The Chronicle understood this to have been accepted as a friendly amendment, but the city clerk's records do not include it as part of the amendment.]

Carsten Hohnke (Ward 5) wondered if this kind of thing was something usually found in an ordinance or rather was simply a service the city is providing. Postema said it wasn’t usual but said it was also appropriate. The police could have their own program based on a council resolution, he said.

Outcome: The council approved the amendment on a roll call vote, with dissent from Stephen Rapundalo (Ward 2) and Stephen Kunselman (Ward 3).

Medical Marijuana Licensing – Amendment on Titling

The next amendment simply made the subsections of 6:417 parallel by giving them each a title:

6:417. Application Requirements for New Annual License or Renewal of Existing License; License Requirements for New License and for Renewed License
(1) Application Acceptance. …
(2) Application Requirements. …
(3) License Requirements. …

Outcome: The council approved the titling of the subsections.

Medical Marijuana Licensing – Amendment on Signage

Originally proposed at the previous council meeting, but inadvertently amended out of the proposed amendment, was language specifying the size of letters on the required signage:

(3) License Requirements. A new license shall not be issued to a dispensary or cultivation facility until the applicant for the license complies with all of the following requirements:
…
(d) The applicant has installed a sign in a location visible to all persons who enter the premises, which contains the following statement in letters that shall be no less than one inch high: …

Tony Derezinski (Ward 2) wanted to strike the hyphen included in the phrase “one-inch” that appeared in the amendment as offered. Postema indicated that it was not a legal issue, and the hypen was dropped.

Outcome: The council approved the requirement on lettering size for the signs.

Medical Marijuana Licensing – Amendment on Labeling, Record Keeping

Sabra Briere (Ward 1) and Sandi Smith (Ward 1) had developed an alternative to the package labeling requirements that was meant to address concerns about record-keeping and the need of a patient to contact someone about the product they were provided. Record-keeping requirements in subsections 6:419 (5) and 6:419 (10) were also eventually added to the discussion and moved as part of the same amendment, with revisions made along the way. As amended and approved by the council, the material read:

6:419. Conduct of Business at Cultivation Facility or Dispensary.
…
(4) All marijuana delivered to a patient shall be packaged and labeled as provided in this chapter. The label shall include:
(a) a unique alphanumeric identifier for the person to whom it is being delivered;
(b) a unique alphanumeric identifier for the cultivation source of the marijuana;
(c) that the package contains marijuana;
(d) the date of delivery, weight, type of marijuana and dollar amount or other consideration being exchanged in the transaction; and,
(e) a certification that all marijuana in any form contained in the package was cultivated, manufactured, and packaged in the state of Michigan.
(f) the warning that:
THIS PRODUCT IS MANUFACTURED WITHOUT ANY REGULATORY OVERSIGHT FOR HEALTH, SAFETY OR EFFICACY. THERE MAY BE HEALTH RISKS ASSOCIATED WITH THE INGESTION OR USE OF THIS PRODUCT. USING THIS PRODUCT MAY CAUSE DROWSINESS. DO NOT DRIVE OR OPERATE HEAVY MACHINERY WHILE USING THIS PRODUCT. KEEP THIS PRODUCT OUT OF REACH OF CHILDREN. THIS PRODUCT MAY NOT BE USED IN ANY WAY THAT DOES NOT COMPLY WITH THE MICHIGAN MEDICAL MARIJUANA ACT OR BY ANY PERSON WHO DOES NOT POSSESS A VALID MEDICAL MARIJUANA PATIENT REGISTRATION CARD.
(g) The name, address, e-mail address, and telephone number of an authorized representative of the dispensary whom a patient can contact with any questions regarding the product.
(h) The name, address, e-mail address, and telephone number of at least one governmental or non-profit organization that may be contacted by a patient who has concerns about substance abuse of drugs, including marijuana.
(5) All of the required labeling information, including coded patient and caregiver information shall be maintained and available for inspection at a cultivation facility or dispensary for no less than 180 days one year after dispensing.
…
(10) A cultivation facility or dispensary shall keep records of the caregivers from whom they receive marijuana in any form, and shall make the records available to the City in a health emergency upon request to promote health, safety and welfare, or to otherwise verify compliance with this chapter.

Stephen Rapundalo (Ward 2) wanted to know what the rationale was for the alphanumeric coding. Smith explained that it would be a way for dispensaries to create a code to allow tracing of product origin without using the codes provided by the state. If it turned out to be necessary to find someone who grew or delivered some particular product, you’d be able to find them.

Briere indicated that they’d learned that the state would not release any information to the city based on Michigan Dept. of Community Health codes unless it’s related to a criminal investigation, so the previous version of the ordinance would not help in the event of a health emergency.

Margie Teall (Ward 4) wanted to know about the requirement that a “certification” be required that the product originated in Michigan. Briere answered by saying that would have to be figured out – it might wind up just being an assertion.

Tony Derezinski (Ward 2) expressed some irritation at the timing of some of the information, saying it had come at the “eleventh hour.” He wanted to hear comments from the city attorney on possible effects on the ability of the police to enforce the law. City attorney Stephen Postema indicated that it’s not new that the state won’t give out information related to registry numbers. The issue, he said, is what kind of record-keeping the council wants dispensaries to have. He didn’t have a problem with the changes. But Postema said that it’s more than just a health issue – the state’s statute intends that there be a close relationship between the patient and the product, he said. He then advocated for enabling the licensing board to look at dispensary records in order to ascertain that the product is grown in Michigan.

Briere noted that even if the city had registry card numbers, the state would not confirm that a number is an authentic registry card number.

Derezinski said he was interested not just in the health issue but also the origin of the product. He wanted to make sure the numbering system would allow for the board to verify that the product was being grown in Michigan. He wanted to know if the board would be able to do spot checks or if the process would be driven by complaints. Postema again advocated for the council to require that records be turned over not just in the event of an emergency, but also to verify that the product originated in Michigan.

Smith suggested adding 6:419 (5) to the amendment on the floor at the time.

Stephen Rapundalo (Ward 2) wanted to know what the rationale was for maintaining the records only 180 days. Smith indicated that just a few hours earlier, there was a draft that indicated 30 days, but she’d be willing to think about an even longer period.

Marcia Higgins (Ward 4) worried about having just a single unique identifier – perhaps there should be some way of cross checking. Smith indicated that patients would know what their own unique identifier is – they could give it to someone else if they wanted that person to pick up their medication for them.

As he scanned down the other sections, Stephen Kunselman (Ward 3) wondered about the idea of site visits – would the licensing board be visiting dispensaries? He said he was leery of having inspections conducted, because it would put city staff in positions they might not want to be in or qualified to handle. He wanted to know what other communities are doing in this regard. Postema indicated that few other communities were trying to enact any ordinances and were instead continuing to “punt,” in some cases by extending moratoria for another two years. Ypsilanti and Ypsilanti Township had developed some legislation, Postema said.

Postema continued by picking up on Smith’s comment about someone picking up another person’s medication for them. There needs to be some additional thought about ensuring that the product goes to a qualified patient, Postema said.

Derezinski indicated he was troubled by questions about when the information on the coding would have to be made available. Briere noted that this was dealt with in subsection (10), and that the council was then discussing just (4) and (5) – would he like (10) to be added to the discussion? Derezinski agreed he wanted it to be added.

At that point, Christopher Taylor (Ward 3) suggested including (10) to the same amendment – which deals explicitly with conditions on which the coded information would need to be made available. Taylor made the suggestion that instead of a medical emergency, more general conditions could result in a request to produce records: “… upon request to promote health, safety and welfare, or to otherwise verify compliance with this chapter.”

Rapundalo indicated his support for the additional language. He asked if the 180 days could be extended to a full year – that was accepted as a friendly amendment.

Carsten Hohnke (Ward 5) wondered how the record-keeping for labeling information – for example, “that the package contains marijuana” – would be handled. Briere explained the logic was that you would just run off two labels, and put one on the package and stick one in a book.

Outcome: The council unanimously approved the labeling and record-keeping amendments as revised during deliberations.

Medical Marijuana Licensing – Amendment on License Renewal

The last amendment introduced was one that dealt with how licenses get renewed.

6:417. Application Requirements for New Annual License or Renewal of Existing License; License Requirements for New License and for Renewed License
…
(8) A license issued under this chapter shall expire one year after the date of issuance. To renew an existing license, the licensee shall submit an application in the same manner as is required to apply for a new license no sooner than ninety (90) days before the expiration date and no later than sixty (60) before the expiration date.

Briere explained that the language had been developed in response to concerns expressed in the community that with an annual license renewal, a dispensary might have to compete with everyone else who wanted a license. She had not been able to come up with language that made clear that existing license holders would not compete for renewal of their license with others who wished to obtain a license for the first time.

Postema said it would not be his expectation that a dispensary with a license would have to compete in that way. Rapundalo noted that it was an important issue, because the city had seen what could happen when an extra liquor license became available a few years ago – it was confusing to determine who might have had a grandfathered-in request. Mayor John Hieftje stressed that the renewal of a license for a dispensary would not be automatic.

Christopher Taylor (Ward 3) felt that appropriate language to afford first-in-line status could be drafted by the time of the second reading of the ordinance.

Final outcome: The council voted unanimously to give initial approval to the marijuana licenses. The second and final votes on its medical marijuana business licensing proposal and its medical marijuana zoning ordinance are scheduled for council’s April 19, 2011 meeting. The moratorium on the use of property in the city as a medical marijuana dispensary or a medical marijuana cultivation facility was extended from March 31, 2011 to June 30, 2011.

[.pdf of medical marijuana licensing ordinance as amended on March 21, 2011]

Medical Marijuana Non-Disclosure Policy

Before the council for consideration was a policy on non-disclosure of certain information, like names and birth dates for patients and caregivers, that might be collected in the course of the zoning and licensing process for medical marijuana businesses. The non-disclosure policy had been discussed, but postponed, at the council’s March 7, 2011 meeting.

The resolution had originally been introduced by Sabra Briere (Ward 1) in the context of the council’s current work on zoning and licensing ordinances for medical marijuana businesses – legislation that has not yet been given final approval by the council. [.pdf of original draft resolution]

Because the medical marijuana licensing ordinance that received initial approval that same evening ultimately did not include the collection of any personal information, Briere – who’d sponsored the resolution – indicated she wished to withdraw it.

Outcome: No council action was taken, as the resolution was withdrawn.

Non-Renewal and Renewal of Liquor Licenses

The council considered two resolutions regarding liquor licenses – one for renewal and one for non-renewal. At its previous meeting, the council had authorized the appointment of Tony Derezinski (Ward 2) as a hearing officer to entertain appeals – a move that was made over the objection of Stephen Rapundalo (Ward 2), Marcia Higgins (Ward 4) and Sabra Briere (Ward 1). The appointment of Derezinski as a single hearing officer had come as an amendment to the original council resolution that night, which had called for the council’s liquor license review committee to serve as a hearing board.

Since appointment as hearing officer, Derezinski has handled two non-renewal recommendations. The city’s intent to pursue non-renewal of a liquor license for Studio Four – located at 314 S. Fourth Ave. – had been based on non-payment of taxes, but they’d since been paid, Derezinski reported at Monday’s meeting. So that license was now being recommended for renewal.

Derezinski’s finding of facts concerning The Fifth Quarter, however, included more than 89 calls for police service at the establishment between Jan. 1, 2010 and Oct. 25, 2010, and reports of fights among patrons, and between Fifth Quarter staff and their patrons. [The club is located at 210 S. Fifth Ave.] The report included one occasion on which 25 officers from Ann Arbor police department, University of Michigan department of public safety, and the Washtenaw sheriff’s office had monitored crowds exiting the establishment and had needed to arrest several people for disorderly conduct.

Outcome: In separate votes, the council voted unanimously to recommend renewal of Studio Four’s liquor license, over dissent from Stephen Rapundalo (Ward 2) and Sabra Briere (Ward 1), and unanimously to recommend non-renewal of The Fifth Quarter’s license.

Applications to MDNRE

Before the council were two items concerning applications to the Michigan Dept. of Natural Resources and Environment (MDNRE) – the city’s own applications, and an application that Washtenaw County is making.

MDNRE City Applications – Skatepark, Canoes, Boats

For two of the MDNRE grants – for improvements to the Gallup livery and park, and for the proposed skatepark at Veteran’s Memorial Park – the city is applying to MDNRE’s Michigan Natural Resources Trust Fund. For the third grant, the city is applying to MDNRE’s Waterway Grant-in-Aid program to upgrade the boat launches at Gallup and Argo parks.

The city’s park advisory commission recommended approval of the applications at its most recent meeting. ["PAC Supports Grants for Skatepark, Gallup"]

MDRNR City Apps – Skatepark, Canoes, Boats: Council Deliberations

An amendment offered by Carsten Hohnke (Ward 5) prioritized the skatepark project over the Gallup renovations – based on the opportunity to leverage $400,000 of matching funds from the county, which will expire unless the skatepark’s construction is under contract by Jan. 1, 2012.

The amendment came after clarification with Sumedh Bahl, the city’s community services area administrator, that just two of the applications are ranked by the city in the application process – those for the skatepark and the Gallup canoe livery. Both are for $300,000 from the Michigan Natural Resources Trust Fund. The other grant, to improve boat launches, is from a different source – the Waterway Grant-in-Aid fund.

In the course of deliberations, Mike Anglin (Ward 5) wanted to know if it were possible to apply to the waterway fund for the canoe liveries – which would eliminate the need to rank the skatepark against any other project. Bahl said it was not possible.

Hohnke’s reasoning was that the skatepark grant could ultimately mean the transfer of a $1 million asset from the Friends of the Skatepark to the city. But if it doesn’t happen this year, the matching grant funding – from the Washtenaw County parks & recreation commission – won’t be available. An application for improvements to the Gallup canoe livery, on the other hand could be applied for next year, reasoned Hohnke.

Tony Derezinski (Ward 2) wanted to know what it would mean to “prioritize” the applications. It’s simply a matter of designating one as the preferred application, explained Bahl. Bahl pointed out that there’s precedent for communities with two applications to have both of them approved.

Christopher Taylor (Ward 3) – who serves as one of two ex officio city council representatives to the city’s park advisory commission (PAC) – noted PAC was very interested at its last meeting in seeing the Gallup canoe livery project go forward. They were anticipating those improvements being useful in the context of the increased canoe traffic that may result from construction of the Argo Dam bypass, which is due to start construction this season. He later stressed that PAC had itself not expressed a priority ranking of Gallup canoe liveries versus skatepark.

Taylor wanted to know if prioritization of the skatepark would significantly reduce the chances of receiving the grant to improve canoe liveries – and if so, what the negative impact would be. Bahl responded by saying that it’s not just a matter of increased boat traffic, but also the safety for pedestrians and the boats. The turnaround for taking canoes from Gallup back up to Argo is logistically challenging. There are also accessibility improvements planned as part of the project.

Taylor drew out the fact that the Gallup canoe livery project is a $750,000 project – the city’s share would be $450,000. Taylor summed up his thinking by saying that a $300,000 grant for the livery would give the city roughly half a project, whereas the $300,000 for the skatepark would mean that they are pretty much “all the way home.” Based on that, he was willing to support prioritization of the skatepark.

Mayor John Hieftje said there’d been an unexpected “bonus” of sales of gas and oil leases into the state trust fund, so it had more money in it now than anyone could remember. He said if the council didn’t accept Hohnke’s amendment, it would essentially leave the prioritization to the state.

Sandi Smith (Ward 1) wanted to know if the canoe livery improvements would be revenue positive – she noted that as far as she understood, the skatepark would not generate revenues. Bahl confirmed that the improvements at the canoe liveries would generate additional revenue – through more boats and more programming.

Stephen Kunselman (Ward 3) indicated he’d be supporting the prioritization, pointing to the chance to leverage funds from the county. He said his understanding was that grant applications that had matching support were generally stronger than other applications. Kunselman noted that a lot of money had already been invested in canoeing recently, whereas there’d been no corresponding support for skateboarders – it was their turn.

Stephen Rapundalo (Ward 2) indicated that he’d support the amendment, but said it would be a hard choice if it came down to it. He said he didn’t want to dismiss the idea that there’s a need for the canoe livery improvements. For him, the county’s match was the crucial point, and he would be willing to cross his fingers that both projects would receive funding.

Outcome on priority amendment: The council voted to approve the prioritization, over dissent from Sandi Smith (Ward 1).

Outcome on approval of applications: The council voted unanimously to approve the three grant applications.

MDNRE: County Application – Land Acquisition

The city council had received a recommendation from Ann Arbor’s greenbelt advisory commission (GAC) to send a letter of support for an application from Washtenaw County to the Michigan Natural Resources Trust Fund. Through its natural areas preservation program, the county hopes to secure funds from the state to help purchase a parcel in Ann Arbor Township now owned by a subsidiary of Domino’s Farms.

At its most recent meeting, GAC had recommended that the city council consider a letter of support, after Carsten Hohnke (Ward 5), the council’s representative to GAC, had cautioned against GAC’s sending such a letter before confirming that the county’s application would not dilute the city’s own chances to win grant funding. [Chronicle coverage: "Greenbelt, County Look to Partner on Farms"]

During brief deliberations, Hohnke mentioned his earlier concern about the possibility that the county’s application could dilute the city’s own chances for its grants. But he had clarified with city staff that the source of the grant money comes from two separate state funds – one for parks improvements and one for land acquisition.

Outcome: The council voted unanimously to approve the letter of support for Washtenaw County’s grant application.

“Transformer Plaza”

Before the council for consideration was authorization of a transfer of $90,000 from its parks memorials and contributions fund to the Ann Arbor Downtown Development Authority.

During a council break, Susan Pollay, executive director of the DDA, shows Sabra Briere her book. (Photo links to close-up of book cover. Kudos to readers who can guess before clicking through what Pollay is reading these days.)

The money will be used by the DDA for the design and construction management of improvements to a plaza near the Forest Street parking structure. Because of the number of DTE Energy transformers that are situated near the plaza, it’s known in some circles as Transformer Plaza.

The $90,000 figure stems from the $50,000 and $40,000 contributions made to the parks fund by the 601 S. Forest and Zaragon I developments, respectively, which are located in the vicinity of the plaza. As part of any site plan review process in the city of Ann Arbor, developers are asked to make a donation of land so that new residents have access to adequate open space. But the city also accepts cash donations in lieu of land contributions.

Sabra Briere (Ward 1) noted that the residents of the South University area would be pleased – it’d been discussed a lot. Mayor John Hieftje said the project had been in the pipeline a long time.

Outcome: The council voted unanimously to approve the transfer of funds.

Millers Creek

Scott Dierks gave a presentation to the council on the background for the Millers Creek improvement plan, which the council was asked to adopt by resolution later in the meeting. Dierks introduced himself as representing the Huron River Watershed Council, as a member and volunteer. He described Millers Creek as one of six creeksheds in the city, covering about 2.5 square miles in the vicinity of Plymouth and Huron Parkway. The creekshed drains to the Huron River.

He traced the origin of the improvement plan back to 1992 as a grassroots effort by Environmental Research Institute of Michigan (ERIM). ERIM had reached out to the HRWC and to the landscape design firm Peter Pollack & Associates. That eventually led to a Pfizer-funded effort in 2003-04, to develop an improvement plan, which made specific recommendations in light of current and future land use in the creekshed. The plan was approved by the Michigan Dept. of Environmental Quality and the Environmental Protection Agency. The Millers Creek watershed improvement plan is still used as an example of good watershed planning by the EPA, and is accessible through the EPA’s website, Dierks said.

He listed off some specific accomplishments that have grown out of the plan: 56 rain barrels installed; 6 rain gardens installed; 2 detention pond retrofits, including Thurston Pond, which help control stormwater runoff on around 36 acres; planting of oak savannah; and 500 feet of bank stabilization along Huron Parkway.

The resolution before the council, Dierks said, formalizes the work that has already been done and would serve three purposes: (1) acknowledge the plan, which will guide development in the Millers Creek watershed; (2) help designate the watershed as a county drain; and (3) continue to facilitate relationships between creek groups, the University of Michigan, the city, and the neighborhood.

During council deliberations, Stephen Rapundalo (Ward 2) – in whose ward the creekshed is located – complimented those who’d done the long and hard work on the plan. He noted that he’d served on the action team that had worked on the plan in the earlier part of the decade. The city’s planning commission had approved the plan back in 2006, he said. What had been missing was the formal adoption by the city council. He pointed to the designation of Millers Creek as a county drain as a priority when that opportunity presents itself – the designation as a drain would allow it to be eligible for grant funding, he said.

Outcome: The council unanimously adopted the Millers Creek improvement plan.

Sakti3 Development District Hearing Set

The council was asked to vote to set a public hearing on establishing an industrial development district (IDD), which could lead to tax credits for Sakti3.

The company is a University of Michigan spin-off focused on advanced battery technology, headed by Ann Marie Sastry. The IDD would be established for just under an acre of land, located at 1490 Eisenhower Place. Sakti3 is reportedly considering an investment of $2.4 million in new equipment and hopes to hire five additional people.

The hearing will be held at the council’s April 4, 2011 meeting, which starts at 7 p.m. in the city council’s chambers on the second floor of city hall at 100 N. Fifth Ave. [Previous Chronicle coverage mentioning Sakti3: "No Secret Sakti3 Wants Its Batteries in Cars" and "Lutz Rides Current Motors Potential"]

During brief deliberations, Tony Derezinski (Ward 2) said that Sakti3 is an incredible business, saying that it represents the future and is cutting edge.

Outcome: The council voted unanimously to set the hearing on establishing an industrial development district.

City Administrator Hiring Plan

Before the council for consideration was a resolution calling on the mayor to appoint a five-member city council committee, which is to include the mayor, to handle the search process to find a replacement for outgoing city administrator Roger Fraser. Fraser announced his resignation at the council’s Feb. 28, 2011 working session. At the end of April, Fraser will leave the city to become a deputy treasurer for the state of Michigan.

The resolution charged the search committee with providing a recommendation to the council at its April 19 meeting for an interim city administrator. At that meeting, the committee is also expected to present a plan for a selection process to hire a permanent administrator. The plan is to provide for internal as well as external candidates.

Marcia Higgins (Ward 4) and Mike Anglin (Ward 5) share a laugh before the March 21 meeting.

Mayor John Hieftje led off council deliberations on the resolution by saying it was gracious of Fraser to stay on through the end of April. He thanked mayor pro tem Marcia Higgins (Ward 4) for putting together the resolution. He said he hoped to finish the hiring process before the end of the summer, if not in mid-summer.

Hieftje announced that the following councilmembers would serve on the committee: Sabra Briere (Ward 1); Christopher Taylor (Ward 3); Marcia Higgins (Ward 4); and Tony Derezinski (Ward 2). Higgins will chair the committee. Hieftje indicated that the committee members had not been chosen by seniority, but rather to get a good mix of experience and perspective. He stressed that the committee would only make recommendations and that the whole council would need to approve all the decisions.

Sandi Smith (Ward 1) asked that when the plan is presented to the council, they get a cost impact analysis for various options for doing the search.

Derezinski described himself as bringing “a lot of baggage” to the committee, having been involved in some searches for the superintendent of schools. He also said he’d been through the process when the Eastern Michigan University board of regents had chosen Bill Shelton as president. He described it as a unique dynamic. The two main functions of the city council are to hire and fire the city manager and to approve the city budget, but it’s not often that the council has the opportunity to do it. [The council also hires and fires the city attorney.]

Derezinski said his bias was to seek expertise from professionals who help with searches, like Colin Baenziger & Associates or the Michigan Municipal League [.pdf of Michigan Municipal League executive search services description]. He said there’d need to be full and robust discussion by the whole council as well as the public. He described it as “a balance” between adhering to the requirements of open government and the interest by some candidates in maintaining confidentiality in the early stages of a search.

Outcome: The council voted unanimously to appoint the search committee.

Schedule Change for Passover

The council considered a resolution to revise its regular meeting schedule for the year by changing its second meeting in April to Tuesday, April 19. The shift was prompted by observation of Passover, the week-long Jewish festival and holy day – its start is celebrated at sundown on Monday, April 18. The council has been holding its meetings recently in the Washtenaw County administration building, due to renovations at city hall. But they are expected to have returned to their chambers on the second floor of city hall for the April 19 meeting, which will begin at 7 p.m.

During deliberations, Marcia Higgins (Ward 4) questioned why they are moving the meeting, given that Passover lasts a whole week. Mayor John Hieftje indicated he had no explanation. City administrator Roger Fraser indicated that it was a suggestion from the city staff, based on previous city council practice. He noted that it would affect the planning commission’s meeting as well. [The planning commission typically meets on Tuesdays, but during the week of Passover its meeting is scheduled for Thursday, April 21.] Hieftje allowed he was not an expert in this area. He said he was interested “only in taking the correcting action here.” Sabra Briere (Ward 1) provided the insight that the first night of Passover is considered especially important.

Outcome: The council voted to change its calendar due to the Passover holiday, with dissent from Marcia Higgins (Ward 4).

Council OKs Property Transfer to Avalon

Before the council for consideration was a resolution to approve the transfer of property at 1500 Pauline from the Washtenaw Affordable Housing Corp. (WAHC) to Avalon Housing. The council also approved the release of WAHC from all terms of their $700,000 federal HOME loan, $300,000 federal CDBG (Community Development Block Grant) loan and Housing Affordability Agreement.

The nonprofit Avalon is currently managing all of WAHC’s properties as part of a consolidation, described as a “merger,” that began two years ago. At its Feb. 22, 2011 meeting the city council approved a site plan for the 1500 Pauline property, allowing Avalon to construct 32 dwelling units and 39 surface parking spaces. The plan includes demolition of four existing apartment buildings – known as the Parkhurst Apartment complex – containing 48 units.

The new construction would include six new buildings totaling 53,185 square feet. Five of the buildings would include one-, two- and three-bedroom apartments and three-bedroom townhomes. The sixth building would be a community center with a playground. The project won a recommendation from the city’s planning commission at that body’s Jan. 20, 2011 meeting.

Outcome: Without comment, the council voted to approve the transfer.

Street Task Force: “Have a Heart, Give Smart”

The council heard a presentation from its street outreach task force, which the council appointed at its Sept. 20, 2010 meeting and charged with developing cost-effective recommendations for addressing the issue of downtown panhandling and the needs of those who panhandle. [Previous Chronicle coverage: "Ann Arbor Task Force Consults Panhandlers"]

The report was given by two members of the task force – Maggie Ladd, executive director of the South University Area Association, and Charles Coleman, a project coordinator with Dawn Farm.

Highlights of the report included recommendations that: (1) the city council revise the city’s ordinance on solicitation to prohibit panhandling in additional locations; (2) the police chief increase police attention downtown during the busiest hours of the week; (3) the city’s community standards division increase their interaction with the public; and (4) the mayor’s downtown marketing task force take an expanded role working with residents, merchants and service providers. The task force report describes an educational campaign to advise downtown visitors and University of Michigan students about options they have besides giving money to panhandlers, a campaign with the slogan “Have a Heart, Give Smart.” [.pdf of street outreach task force report]

During her communications time, Sabra Briere (Ward 1), chair of the task force, told her council colleagues that a revision to the city’s ordinance on solicitation would be presented to them for consideration at their April 4, 2011 meeting.

Communications and Comment

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

Comm/Comm: 415 W. Washington Update Scheduled

Mayor John Hieftje noted that last year, the council had approved a three-way collaboration between the city, the Allen Creek Greenway Conservancy, and the Arts Alliance to work on a plan for the future of the city-owned lot at 415 W. Washington. He allowed that a report was owed to the council about progress on that project, and there’d be a half hour presentation at the council’s April 4 meeting. [By way of background, the resolution establishing the collaboration specified: "RESOLVED, That a progress report be delivered to City Council at the first meeting in February, 2011." Chronicle coverage: "City Restarts 415 W. Washington Process" ]

Comm/Comm: Increased Public Accessibility for Meetings

During his communications time, city administrator Roger Fraser mentioned that the city council’s meetings would now be available streamed live over the web: CTN Channel 16 Live. Previously, the city has provided access to archived coverage of public meetings through Community Television Network’s video-on-demand service: Ann Arbor Public Meetings Archive. [CTN also provides live broadcasts of the meeting on its cable TV community access channel.] The accomplishment of the live streaming came relatively quickly after Fraser had first mentioned the possibility at the city council’s Feb. 14, 2011 work session on the budget. From Chronicle coverage of that session [emphasis added]:

Community Television Network

Included in the impact sheets was one for CTN, which Fraser indicated was not part of the general fund, but which is also trying to meet reduction targets. The impact sheet indicates an expenditure for a capital investment of $97,431 – to transition to an appropriate digital format. The new format, said Fraser, would allow for live streaming on computers instead of on television.

Comm/Comm: DDA-City

Christopher Taylor (Ward 3) gave the council an update on progress of discussions between two committees – one from the city council and another from the Ann Arbor Downtown Development Authority – to reach agreement on a new contract under which the DDA would continue to manage the city’s public parking system. The committees have been meeting weekly, he said, and had reached the point of discussing contract language. He said they are making good progress and would be able soon to bring forward a document that could form the basis of a spirited, but fruitful, conversation. [As of the meeting on the morning of March 21, the DDA and the city's committees are still not in agreement on what the percentage of gross parking revenues should be that the DDA pays to the city, or on the specifics about the contract's term. For background on these discussions, see Chronicle coverage: "Parking Money for City Budget Still Unclear"]

Comm/Comm: Labor Report

In January, Stephen Rapundalo (Ward 2), the chair of the council’s labor committee, indicated that he would be using the council communications slot on the agenda to give updates on the status of labor negotiations. Since that time, he has done that on several occasions. On Monday, he announced that he wanted to respond to some statements in an article that had appeared about a week before in a publication called AnnArbor.com.

Rapundalo said he’d already conveyed his responses to the author of that article, but that he would not be commenting on the author’s “vivid prose,” which described Rapundalo’s reaction to a report that he’d been looking at. [From the article's opening line: "It's early on a Friday morning and Ann Arbor City Council Member Stephen Rapundalo is shaking his head, a look of distaste frozen in his eyes."]

Rapundalo began by addressing the reporting of some background material provided in the article, which Rapundalo said portrayed some confusion with respect to the purpose of the state’s Act 312 statute.

Rapundalo stressed that Act 312 had not taken away the right to strike by police and fire personnel provided in exchange for compulsory arbitration. [From the AnnArbor.com article: "When it was put in place in 1969, it was seen as a solution to a problem: By sending disputing parties to arbitration, cities could avoid public safety strikes, and police and fire personnel would be guaranteed an arbitrator would consider their requests."] Instead, Rapundalo pointed out, the Public Employment Relations Act 336 of 1947 already prohibited strikes by public sector employees. He quoted the act: “A public employee shall not strike.”

Later, in 1969, the legislature passed Act 312, which Rapundalo then quoted to show again that the right to strike was already prohibited when Act 312 was passed: “It is the public policy of this state that in public police and fire departments, where the right of employees to strike is by law prohibited, …”

Rapundalo also took issue with any implication from statements reported in the article that the city had not bargained in good faith in prior negotiations. Rapundalo said the city had based its negotiations on the economics of that time, noting that economic conditions had changed, even in a very short time period. Today’s economic reality is different, he said, and the city is now negotiating based on current conditions.

Rapundalo then took issue with statements attributed to a representative of the Ann Arbor Police Officers Association (AAPOA) about reduction in health care benefits. Rapundalo stressed that the city had not asked and was not asking for reductions in health care benefits. Health coverage is not the issue, he stressed, but rather employee contributions to their own health coverage and retirement.

Rapundalo took issue with the statement by AAPOA reported in the article that expressed a willingness of the union to continue their 2009 contract, without any wage increases. If the union thinks that forgoing a wage increase is a fair sacrifice, Rapundalo contended, then they really haven’t been paying attention to what’s been going on around the rest of the state and the country. Other unions have given up longevity bonuses, uniform allowances and retirement plan contribution matches, he said. The “step increases” based on years of service that are a part of the current police contract, together with other features of the contract, will result in a 3.5% increase in costs in FY 2012 compared to the current fiscal year, Rapundalo said – when other groups’ costs are going down.

Rapundalo also disputed a claim by AAPOA that exposure to radon in the city hall building resulted in greater need for health care by its members, and that their health care plans should be left in place. Rapundalo stated that there’d been no demonstrable link between conditions in the building where they’d been previously housed and any increased need for health care. If there were such a link, Rapundalo concluded, it would be covered under a worker’s compensation claim, not under the city’s health care plan.

Comm/Comm: Digital Cities Award

Robert Blake, regional vice president for government and education at AT&T, presented Dan Rainey, the city of Ann Arbor’s IT director, with the 6th place Digital Cities Award for cities in its category for the survey – those with populations from 75,000-124,999.

Though it's not part of his day-to-day responsibilities as head of the city's IT department, Dan Rainey was wrangling cable at the start of the city council meeting. The meeting was held at the Washtenaw County administration building boardroom, where council is meeting temporarily due to renovations at city hall.

The top cities for that category – in order of ranking, including ties – were: Pueblo, Colo.; Olathe, Kan.; Lee’s Summit, Mo.; Roseville, Calif.; High Point, N.C.; Independence, Mo.; Simi Valley, Calif.; Ann Arbor, Mich.; West Palm Beach, Fla.; Arvada, Colo.; Roanoke, Va.; Schaumburg, Ill.; and Berkeley, Calif.

Blake noted that it was the third year in a row that Ann Arbor had been included in the top ten. This year the ranking was especially meaningful, he said, because it was based on a new scoring system that is based on actual results. Among the specific initiatives cited by Blake were: a shared data center with Washtenaw County and adoption of cloud technology; use of in-car digital video in police cars; online water consumption data for consumers; and the city’s use of Facebook and Twitter.

Comm/Comm: Police Incident

Mike Anglin (Ward 5) related how a resident of his ward had called in a report to the police about something and had wound up being cited for a violation, which had caused the person to become very upset. Anglin described how the situation had resolved itself with an apology from the police, and concluded that in this town, you can fight city hall. Anglin portrayed the episode as reflecting positively on the police department.

Comm/Comm: Palestine

Henry Herskovitz addressed the council with two items he said he thinks will help promote peace in Palestine: (1) passing a human rights resolution for the cessation of military aid to Israel; and (2) his group’s forum to be held on March 29 at 7 p.m. at the Mallets Creek branch of the Ann Arbor District Library. He told the council that they might think it was risky to challenge the local Jewish community, but he gave them an example of a food co-op in Olympia, Wash. that had passed a boycott of Israeli goods, and had become stronger as a result of it.

Herskovitz told the council that he’d joined the Olympia food co-op and and showed them a picture of himself standing in front of the co-op. He told councilmembers that standing for social justice can, in fact, have an impact. He quoted Rosie the Riveter from World War II: “We can do it!” He asked council members to “shed past acrimonies” and to attend the Mallets Creek forum on March 29.

Present: Stephen Rapundalo, Mike Anglin, Margie Teall, Sabra Briere, Sandi Smith, Tony Derezinski, Stephen Kunselman, Marcia Higgins, John Hieftje, Christopher Taylor, Carsten Hohnke.

Next council meeting: Monday, April 4, 2011 at 7 p.m. in the city council chambers on the second floor of city hall at 100 N. Fifth Ave. [confirm date]