Seated is Roger Fraser, who attended his last Ann Arbor city council meeting on April 19 as city administrator – he gave a formal presentation to the council of the FY 2012 budget. He’s chatting before the meeting with the city’s chief financial officer, Tom Crawford, who was appointed interim administrator later in the evening. He’s not telling Crawford: “Whatever you do, don’t let the council tie your hands, see?” (Photos by the writer.)

After public hearings on the two medical marijuana laws, the council did not deliberate long in deciding to postpone both votes until its next meeting, on May 2. Substantive amendments that had been presented to councilmembers late that day for consideration made them reluctant to attempt grappling with the amendments in detail. The May 2 vote on the two laws will likely count only as their initial approval, assuming the amendments are adopted at that meeting. The laws would then need an additional final reading after May 2 before they are enacted.

A tweak to the city’s panhandling ordinance was given its second and final approval at the April 19 meeting. That change to the existing ordinance had come as a recommendation from a task force that worked for six months on the issue, following up on a longer effort in the early 2000s that had led to adopting the language in the existing ordinance.

The longest deliberations of the night involved a resolution of instruction to the council’s “mutually beneficial” committee, which is currently negotiating a new contract under which the Ann Arbor Downtown Development Authority would continue to manage the city’s public parking system. The direction given to the committee was not to stay firm with its previous bargaining position, but rather to escalate the city’s expectations for revenues from the public parking system.

Previously, the city’s committee had taken the position that the city should receive 16% of gross parking revenues in the first two years of a 10-year contract, and 17.5% in remaining years. That compared with the DDA’s position that the city should receive a flat 16% across all years. But at the meeting, the council voted to direct its committee to take the position that the city should receive a flat 18%. The council’s deliberations included comments directed towards the DDA that could fairly be described as inflammatory.

Called to the podium to comment on the parking revenue figures and the DDA’s overall financial health was the city’s chief financial officer, Tom Crawford. Later in the meeting, Crawford was appointed interim city administrator, effective April 28. Current administrator Roger Fraser is leaving the post to take a job as a deputy treasurer for the state of Michigan.

Although councilmembers did not comment on it, Fraser was attending his last meeting of the council as city administrator. And in his final major act, he gave a formal presentation to the council of his proposed fiscal year 2012 budget, as required by the city charter. The charter stipulates that the council will need to amend and approve the budget by May 16, its second meeting that month.

Parking Revenue

The longest deliberations of the night took place on the issue of how much revenue from the public parking system the city should take for use at its discretion. Those deliberations took place against the backdrop of the formal budget presentation by the city administrator for fiscal year 2012, which begins July 1, 2011.

Parking Revenue: Background – City-DDA Relations

In front of the council for consideration was a resolution giving instruction to its “mutually beneficial” committee, which is currently renegotiating a new contract under which the Ann Arbor Downtown Development Authority would continue to operate the city’s public parking system.

The city’s negotiating team – councilmembers Carsten Hohnke (Ward 5), Christopher Taylor (Ward 3) and Margie Teall (Ward 4) – had previously insisted that in the first two years of a 10-year contract, 16% of gross revenues to the public parking system would be allocated for use by the city at its discretion, with that amount rising to 17.5% of gross revenues in remaining years.

The DDA’s position had been consistent with the city’s previous request for the first two years of the contract, which would have the city withdraw 16% of gross revenues from the public parking system in each of those years. But the DDA’s current position is that for remaining years of the contract, the city’s share of gross parking revenues should remain at 16% instead of rising to 17.5%.

After the meeting, Christopher Taylor (Ward 3) gives an interview to Andrew Cluley, a reporter with WEMU, about the outcome of the mutually beneficial resolution of instruction.

The decision to bring a resolution of instruction to the council had come at a meeting between the respective mutually beneficial committees of the city council and the DDA on Monday morning, April 11. The resolution was meant to get a reading of the council’s support for either the DDA’s  position or the city committee’s position. [For detailed previous coverage: "City, DDA Continue to Talk Parking, Taxes"]

The existing contract under which the DDA manages the parking system is not based on a percentage of gross transfer. Instead, it’s composed of a transfer to the city’s street repair fund and “meter rent” of $1 million per year. Renewed in 2005 for a 10-year term, the contract allows for the city to transfer up to $2 million in a given year, provided the total amount transferred as “meter rent” does not exceed $10 million for the term of the contract. In each of the first five years of the contract, the city elected to transfer $2 million. Last year, the DDA transferred another $2 million as meter rent to the city, though it was not required under the current contract. [Chronicle coverage: "DDA OKs $2 Million Over Strong Dissent"]

Parking Revenue: Background – City FY 2012 Budget

Fraser’s formal budget presentation – which he previewed at a city council work session on April 11 and at a town hall meeting on April 13 – does not appear to depart in significant ways from the department-by-department budget impacts that department managers have presented to the council at a series of work sessions since the beginning of the year.

Highlights for 2012 include the layoff of five police officers, three other non-officer positions in the police department, and five firefighters. In other, non-safety services departments, Fraser is proposing – through retirements or already vacant positions or layoffs – to eliminate two positions in forestry, a partial position in facilities, one position in trash collection, a fleet mechanic, a management assistant, a Teamster supervisor, an accountant, two IT positions, and a court clerical position.

With additional reductions in FY 2013, the total employee count for the city would decrease to 688 down from a high of 1,005 in 2001 and from 848 in 1987.

Fraser’s proposed FY 2012 budget also includes a reduction of $116,000 in support for human services nonprofits. Other significant savings – roughly $475,000 – are realized through allocation of some forestry operations to the storm water fund. The FY 2012 also assumes that the street repair millage will be renewed by voters in the fall of 2011, and that the millage will subsume the city’s sidewalk repair program, freeing the Metro Act fund to absorb roughly $212,000 in general fund expenses like snow/ice removal and traffic island maintenance/mowing.

Parking Revenue: Background – “Shortfall” in FY 2012 Budget

At the city council work session on April 11, Fraser had responded to scripted questions from Hohnke and Taylor about the impact on the city’s ability to provide services, assuming the flat-16% scenario as compared to the 16-16-17.5% scenario. They were giving Fraser a chance to respond to the observation that had been raised during discussions by DDA board members: If there’s a perceived “shortfall” in the amount of parking revenues withdrawn from the parking system compared to previous years, then that “shortfall” amount is the same in the first two years of the contract, under either the city’s or the DDA’s scenario. That is, on their face, the two different scenarios would not appear to require different budget decisions this year or next (FY 12 and FY 13) – the two years for which the city is currently planning its budget. [Although the city adopts budgets one year at a time, it plans in two-year cycles.]

But Fraser contended at the April 11 work session that the two scenarios would require different choices this year. He explained that under the city’s 16-16-17.5% scenario, in the third year, the city’s public parking revenues would essentially be restored to their previous baseline revenue levels ($10,000 more, actually) – a baseline established over the course of the last six years at a bit less than $3 million total (when the “meter rent” of $2 million, a transfer to the city’s street fund, and two additional parking lots are all factored in). And starting in the fourth year of the contract, the extra revenue would start to compensate for the “shortfall” experienced in the first two years, erasing the cumulative effect of that shortfall between the sixth and seventh years of the contract, generating a total cumulative excess against the baseline of $1.15 million after the ninth year of the contract.

In contrast, the flat-16% scenario would leave a “shortfall” against the city’s baseline until sometime between year six and seven of the contract, at which point the city would start to recover some of the shortfall in previous years, but still with a cumulative deficit of $1.07 million against the baseline over the first nine years of the contract.

That amounts to the difference between a short-term issue and a structural deficit, said Fraser. So on the city’s 16-16-17.5% scenario it would be appropriate to make up the “shortfall” from the undesignated fund reserve. But on the flat-16% scenario, he said he would recommend taking action to deal with the structural issue in the first year it appeared – by eliminating four police or firefighters in FY 2012 to cover the roughly $400,000 “shortfall,” and two police or firefighters in FY 2013.

Parking Revenue: Background – What Is a Shortfall?

It’s worth noting that the city considers its baseline parking revenue (against which it measures a “shortfall” of revenues from the public parking system) to include all transfers made in the last year. Those transfers include two kinds of transfer that date back at least to 2005 – “meter rent” of up to $2 million per year, and a transfer to the city’s street repair fund, which has an escalator, but stands currently around $840,000. The rationale for the street fund transfer is that the city maintains the streets where on-street metered parking is located. The streets are analogous to a linear, roof-less parking structure/lot, so the logic is that the city should receive at least some portion of the meter revenues to maintain the “parking structure.”

Before the meeting, Joan Lowenstein (left), who is current chair of the Ann Arbor Downtown Development Authority board, chats with councilmembers Margie Teall (Ward 4) and Stephen Rapundalo (Ward 2).

During the April 19 council deliberations, Sabra Briere (Ward 1) said that when she heard that the city would be “held harmless” financially in the renegotiation of the new contract, she assumed that the baseline would include the $1 million annual meter rent figure in the old contract, not the maximum $2 million per year allowable. However, Carsten Hohnke (Ward 5) indicated to Briere that there had been a consensus by both the city and the DDA that it was the $2 million figure for meter rent that was the basis of the “hold harmless” assumption.

Another part of the baseline used by the city, but not necessarily by the DDA, is more recent in its history – revenues from the 415 W. Washington Lot and the Fifth & William Lot. In 2009, revenues from those two lots began to be transferred to the city outside the context of the city-DDA contract, and it’s not clear whether it was really considered as part of the “hold harmless” principle in the term sheet that guided the two “mutually beneficial” discussions. [Chronicle coverage for a timeline on those two lots: "City-DDA Parking Deal Possible"]

Revenues from those lots were part of an agreement between the city and the DDA to forestall the installation of parking meters in residential areas near the downtown, which the DDA opposed for a variety of reasons, among them a skepticism they would actually generate the levels of revenue the city was hoping for. [Chronicle coverage: "City to DDA on Meters: We're Skeptical"]

Although she did not try to argue the point at great length during the April 19 deliberations, Sandi Smith (Ward 1), who has also served on the DDA board since 2004, noted that if the $170,000 combined annual revenues from those two lots were left out of the calculation, the city would be held harmless over the life of a 10-year contract. In any case, the expectation was that those revenues were temporary, she said, with the idea that both parcels had a future that was different from a parking lot.

But based on the sentiments eventually expressed around the city council table on April 19, whether revenues from those two lots were part of the “hold harmless” calculation was of little interest to the council. Councilmembers were interested in the percentage of gross that would correspond to the total amount of parking revenue transferred last year – they wanted at least that amount this year, too. And when Marcia Higgins (Ward 4) heard the city’s CFO, Tom Crawford, say that the hold harmless amount would be roughly 19%, she proposed that number for all 10 years of the contract.

Parking Revenue: Council Deliberations – Intro

Higgins’ amendment to the resolution of instruction to the city’s mutual beneficial committee came after lengthy introductory remarks from Christopher Taylor (Ward 3). He set the context of the conversation about the resolution of instruction on the financial side of the contract by describing the progress made in other areas of the contract, contrasting the “narrative” part from the “numerical” part.

As part of that context, he also pointed to the resolution that the council had passed at its previous meeting, which tasked the DDA to lead a process to explore alternate uses for four city-owned downtown surface parking lots. [Chronicle coverage: "Ann Arbor Council Focuses on Downtown"]

Some key non-numerical areas of the contract include:

• Parking rates/hours to be set by DDA. The city council would not have a veto. [Currently the city council holds a veto on rate changes.] The contract stipulates that rates won’t be changed permanently without first: (1) announcing and providing written communication regarding details of the increase at a DDA board meeting; (2) at a subsequent board meeting, providing all members of the public a chance to speak before the DDA board on the matter – a public hearing; and (3) delaying any vote on the rate change until the board meeting following the public hearing.
• DDA to assist with directing parking enforcement. The contract calls for a Standing Committee to be formed that will meet for regular consultation about parking enforcement. The committee will consist of the executive director of the DDA, the parking manager, deputy police chief, community standards supervisor, and the city’s public services area administrator. This addresses the concern expressed by the DDA that while it already had the authority to set hours of enforcement (for example, for later in the evening), it could not actually schedule community standards officers to do the enforcement. [Currently, many downtown parkers pay for meters past 6 p.m. even though the meters aren't currently enforced that late.]
• City to report information to the DDA. The contract would call for the city to provide regular reports on its enforcement activity – data like how many citations have been issued and in which zones. The contract would also call for the city to provide reports to the DDA on its street maintenance activity in the downtown.
• Parking area defined. The contract provides a map designating exactly which areas the DDA has authority to decide placement of parking meters. Not included in the DDA parking area are any of the residential parking permit areas – a program over which the city will maintain its current control.

Later in deliberations, Sabra Briere (Ward 1) drew out for emphasis the fact that it was only the financial terms of the contract that the council was being asked to consider that evening, not the other aspects of the contract. Still, some of those non-financial terms drew criticism from Stephen Kunselman (Ward 3) during his comments, when he indicated that he would not support giving rate-setting authority to the DDA or allowing the DDA to decide to enforce meters in the evening. He also objected to defining a geographic area where the DDA would determine parking policy.

But Taylor began by portraying the DDA as a generous and cooperative party to the discussions on the contract. He said it was not a “commercial negotiation” – if it were, then the city would have been told to “pound sand” long ago, he said. However, the DDA had not behaved that way, said Taylor. He highlighted the fact that last year, the DDA had decided to make a $2 million transfer to the city that it was not required to make under the existing contract. It was a clear example of the DDA’s good faith, he said.

Parking Revenue: Council Deliberations – Interrogatories on Police

Taylor then called the city’s chief financial officer Tom Crawford to the podium, and the two then performed a dialogue that was virtually identical to the one that he and Hohnke had played out with city administrator Roger Fraser a week earlier at the council’s working session. To re-establish the city’s position that its 16-16-17.5% scenario was tenable without service cuts, but that the DDA’s flat-16% would require service cuts, Taylor and Crawford offered the following kind of back-and-forth:

Taylor: So under Ann Arbor’s [the city's] proposal, the revenue shortfall in the first two years is a “one time” occurrence, then it is reasonably anticipated that it would occur and there are no service cuts associated. Under the DDA proposal of a flat 16%, the administrator at our last work session stated that there would be permanent service cuts associated with that. Is that correct?
Crawford: Yes, that would be the recommendation. Because under a 16% flat scenario, even on the 16-16-17.5, in the out years it is a long time before that deficit is actually made up, and that is beyond, it’s assumption upon assumption to actually get that far. So to have a responsible balanced budget, I think you’ve gone too far. You really need to make the cuts if you’re going to be that low and don’t anticipate it being recovered in the near future.
Taylor: Okay, so under the, for colleagues, so under the flat 16[%] that would result in service cuts and the administrator stated his view that it was approximately four [public safety officers] in the first year, because of the $490,000 drop, and then at least two, he said two, I added the “at least,” thereafter going forward?
Crawford: Two to three.

Parking Revenue: Council Deliberations – Fund Balance (Bonds)

The DDA’s board had generally stated, Taylor reported, that its reluctance to adopt the city’s position in the negotiations over the financial terms of the contract was related to their concern about the undesignated fund balance of the DDA. So he then posed a series of questions to Crawford apparently intended to establish: (1) the DDA’s undesignated fund balance is not as important relative to the city’s fund balance; and (2) the reserve fund balances for the DDA on the city’s proposal of 16-16-17.5 would be reasonable, even in the lowest year in the 10-year projections.

Taylor: Okay. The DDA has articulated, the DDA’s description of their lack of comfort with this proposal is based upon what it does to its fund balance. We have stated in the course of our conversations that the city serves as a guarantor of the DDA. And although it’s useful and important for the DDA to maintain some fund balance, that the city serves as its guarantor, so that diminishes the risk of harm to the DDA in the event of a lower fund balance. Is that accurate?
Crawford: That is accurate. In fact the city owns the parking system. And where there has been debt issued on the parking system, the city has issued the debt. And so while the fees from the operation of the decks are the primary source of retiring the debt, the bonds that were issued are capital improvement bonds most recently, and those are in fact guaranteed by the city.
Taylor: Does the DDA fund balance play any role in the determination of Ann Arbor’s bond rating?
Crawford: Not really. The city itself, the DDA is small enough that it really doesn’t, it’s not a material factor, I wouldn’t say.
Taylor: Does the, is the city’s fund balance a material consideration in its bond rating?
Crawford: Yeah. There are many factors. But particularly the general fund balance is something they definitely look at.
Taylor: So if, and this is just for the purposes of fund bal- bond rating, well, why is a bond rating something important to consider?
Crawford: The bond rating, the largest impact of the bond rating financially to the city is in borrowing costs. Your borrowing costs will go up if your bond rating goes down.
Taylor: So if I understand it correctly, then, if we were to privilege the DDA’s fund balance over the city’s fund balance, you know, hold the DDA’s fund balance harmless, or preferred in deference to or over the city’s fund balance, that that at some point, we are not the rating agency, so we don’t know, but at some point that could reasonably be expected to have a negative impact on Ann Arbor’s fund balance [sic]? [Note: Taylor likely meant "bond rating."]
Crawford: Yeah, so to the extent that there is a priority that needs to be given to where fund balance is held, in my view, the city is where the fund balance would need to be maintained. The general fund is a fund that has the ability to transfer monies when it has them available to other funds. It’s not always the case that that can happen in reverse. So it is important to the city have, be healthy.

A few minutes later, mayor John Hieftje and Crawford reprised the same scene about how bond rating agencies evaluate the city:

Hieftje: The other point I wanted to go to, when the bond agencies take a look at who’s qualified and at what interest rate, is their view at the fund balance of the Downtown Development Authority or is their look at the fund balance of the city?
Crawford: The city. They’re evaluating the city.

Parking Revenue: Council Deliberations – Fund Balance (%)

As for the DDA’s fund balance under the city’s desired scenario, Taylor and Crawford seemed interested either in portraying the DDA’s reserves as: (1) adequate on the city’s desired scenario; or else (2) somewhat excessive on the DDA’s desired scenario.

It’s not clear which of those rhetorical points was intended, because Taylor asked for Crawford’s comment on the projected low point of 10.9% fund balance reserve under the DDA’s proposed flat-16% scenario – and the answer seemed to be that what the DDA was proposing wasn’t unreasonable. [When a fund balance is expressed as a percentage, it refers to the balance as a percentage of annual expenses.]

Taylor: … this gets us down from the DDA’s view in the critical year of [FY]15-16 to 10.9%. Is 10.9% a pretty health fund balance, do you think generally for the DDA in these economic times?
Crawford: Fund balance is a gray area, obviously something that people talk about. It’s important, you know each fund has its own characteristics of risk. And so it’s hard to say this is a healthy number or this is not a healthy number. But in my opinion, 10.9 for the risk profile is not unreasonable for that fund. And I say that because when you look at the city’s fund balance policy, which is a range from 8-12[%] and you look at the characteristics of the risk that we have, tax revenues, and then all the fee revenues, state shared revenues, we’re actually in an environment where almost everything is going down. It’s unusual, but it is occurring. In the DDA’s situation, you’re looking at the parking system. The parking system has appeared to be, history would tell us, it’s a fairly stable, more stable revenue source. So certainly expect it to be in that 8-12 range and maybe a little lower.

From later in the exchange between Taylor and Crawford, it appears that 10.9% – from the DDA’s preferred, flat-16% scenario – is still the one they were focused on:

Taylor: Would you have any concerns about the DDA’s fund balance in that critical dip year in the event that we moved to a 16-16-17.5 version?
Crawford: I would want to talk to the DDA more about it. If their plan is 10.9[%] and they’re going to be better than that, then I would not have an issue with that, because as you indicated, it’s my opinion that the TIF [tax increment finance] revenue is conservative in its projection. So no, I don’t have a problem with the 10.9 as it’s projected.

Later in the deliberations, Sandi Smith (Ward 1) focused the conversation on the figure associated with the projected low point for the DDA’s fund balance percentage under the city’s desired contract – the 16-16-17.5 scenario. That number is 7.4%, not the 10.9% that Taylor and Crawford had discussed earlier. She asked Crawford if he really was comfortable with that number. He confirmed that he was, although he allowed that he’d like it to be more – but that the city’s fund balance takes precedence over the DDA’s fund balance.

Smith also asked Crawford to reconcile his statements made around the time the city council was authorizing bonds for the DDA to build the South Fifth Avenue underground parking garage (now under construction) – statements to the effect that a fund balance of 12-15% or perhaps 15-18% would be appropriate. She asked him point blank what the difference was between then and now: What has changed?

Crawford began by saying that he didn’t recall giving the DDA a minimum fund balance that they needed to have. He described it as natural for an organization to save up fund balance reserves for a capital expenditure, then to spend down those reserves for a capital project and possibly dip into the fund balance to a point where it’s not comfortable. He said he didn’t see his comments in 2009 as inconsistent with what he is saying now.

The Chronicle reported Crawford’s comments at the Feb. 17, 2009 city council meeting:

Crawford reported that on looking at the DDA’s financial picture, he noticed that they don’t have a minimum reserve policy. He said he generally used 15-20% as a minimum reserve. In light of the need to maintain adequate reserves, he said that in his view the project is “not affordable with the plans they have.”

A followup email dated March 7, 2009 from then-councilmember Leigh Greden to DDA board members shed additional light on the minimum reserve figure:

I understand there has been some discussion at the DDA that the City does not have a minimum reserve policy similar to the one Tom Crawford has been recommending for the DDA. In fact, the City DOES have a minimum reserve policy, and has had such a policy — in writing – for years. The policy has been printed in the City’s Budget for years, and reads as follows: The City shall “maintain an undesignated General Fund balance with a minimum range of 8% to 12%; provided that when necessary use of these funds occurs, subsequent budgets will be planned for additions to fund balance to maintain this standard over a rolling five-year average.” Tom Crawford has repeatedly urged the City to exceed this policy by maintaining an undesignated General Fund reserve of 15%. Consistent with Tom’s recommendations, the City has exceeded our policy by maintaining an undesignated General Fund reserve of 15-20%.

The on-demand online video archive of CTN recordings no longer includes the Feb. 17, 2009 city council meeting – it existed previously here: [link to Feb. 17, 2009 meeting archive]. According to CTN, some meetings were deleted because of storage-space issues. The Chronicle requested to view a copy of the DVD of the meeting, but according to CTN, as of April 22, staff had not been able to locate the DVD of that meeting – it’s missing from the binder where it was stored. CTN staff continue their efforts to locate it.

Parking Revenue: Council Deliberations – Fund Balance (TIF)

The conversation about the DDA’s fund balance included a focus on the issue of anticipated TIF revenues to the DDA. The TIF (tax increment finance) district of the DDA, in broad strokes, works by capturing property taxes that would otherwise be collected by entities like the city of Ann Arbor, Washtenaw County, the Ann Arbor Transportation Authority, the Ann Arbor District Library, and Washtenaw Community College. The DDA’s capture is only from the value of improvements to properties (hence, the word “increment”) and does not apply to future appreciation on the increased value.

In its 10-year planning, the DDA has typically projected 2% growth in its TIF revenues. It’s also typically added TIF revenues to its 10-year projections only when the taxes are on the books. The Zaragon II and 601 S. Forest projects – primarily residential developments – are under construction in the DDA district:

Taylor: Do the TIF figures for the DDA’s 10-year plan include any monies associated with 601 S. Forest or Zaragon II?
Crawford: Not that I can tell.
Taylor: Do you have any notion as to, well, do you have any notion as to what those properties would gain the DDA in terms of TIF revenue?

Crawford’s recollection given to Taylor was in the ballpark of the exact numbers provided subsequently to The Chronicle by the city treasurer’s office: Zaragon II and 601 S. Forest projects are expected annually to generate $206,391 and $286,645, respectively.

The DDA has also not included TIF revenues in its 10-year projections that the city reports have already been filed with the state of Michigan for FY 2011. Specifically, the DDA’s 10-year plan indicates TIF revenue of $3,796,929 for FY 2011, but according to the city treasurer’s office, $3,908,576 is actually on the books for this year.

And looking ahead to future years, when construction on Zaragon II and 601 S. Forest is completed, that difference will be even greater. The city’s point, essentially, is that the DDA is under-representing in its 10-year plan what it could reasonably anticipate for TIF revenues. In response to Taylor’s prompt, Crawford responded:

Crawford: Off the top of my head, because I did not bring that with me, I believe, you know, I don’t know what year they pulled those, but we are seeing substantially more than that in [FY12]. … So the tax numbers have been close to finalized now, and we are in the neighborhood of $450,000 more, I would say, in this category.
Taylor: Would you believe it if I, well, I , I I, I didn’t remind you to bring this email, but for 411 [Lofts], we’re bringing in $408,000 in FY12, and for Zaragon I there was $271,000 brought in, is that about right? So that’s several hundred thousand dollars that are already in the bank for FY12 that are going to be going forward …

Mayor John Hieftje also stressed that TIF revenue has continued to climb – at double-digit pace in the last three years, while the city’s general fund tax revenue has shown decreases of 1-4% each year. Hieftje had stressed this point at a March 30 meeting of the DDA operations committee (known officially as the bricks and money committee).

Parking Revenue: Council Deliberations – Economic Development

Contrasted with comments y Taylor and Hieftje on increased TIF revenue, remarks by Sandi Smith (Ward 1) focused more on the parking fund within the DDA, as opposed to the overall fund balance of the DDA. The overall fund balance is shored up by TIF-capture revenues from a range of other taxing jurisdictions, not just the city of Ann Arbor’s. [Previous Chronicle coverage on that issue: "City, DDA Continue to Talk Parking, Taxes: It's about parking fund balances, not TIF revenues"]

Sandi Smith (Ward 1) arrives to the April 19 council meeting.

Smith was consistent at the April 19 meeting with a theme she’s highlighted in recent weeks on the use of the parking fund as an economic development tool. She pointed to the Village Green project planned for the First and Washington parcel, saying that if another opportunity like that came along, the DDA would not currently be in a position to take advantage of it. [The DDA has committed to paying back $9 million of bonds for the construction of a 244-space parking deck on the lower two stories of a 9-story, 156 unit residential development. According to Village Green, the purchase option is still on course to be completed this spring. That would result in a $3 million payment to the city of Ann Arbor, which will go into the construction fund for the new municipal center.]

Smith characterized the issue as a difference in philosophy: Is the parking system and its revenue stream an economic development tool, or is it a way to prop up the city’s general fund? She noted that it was particularly important to consider the city’s efforts in support of economic development, in light of the fact that the city’s economic development fund is being eliminated as part of the proposed FY 2012 budget. The remaining money in that fund – established originally in the amount of $2 million to provide monies as an incentive for Google to locate its offices in downtown Ann Arbor – was folded into the general fund reserve.

In responding to Smith’s talk of economic development, Stephen Kunselman (Ward 3) was not saying anything he has not said before: The city is not in the business of economic development – that is Ann Arbor SPARK‘s job, he said. He, as an elected official, is responsible for health, safety and welfare, not economic development, Kunselman said. He thinks of his role as providing good roads, clean water and good public safety.

Stephen Rapundalo (Ward 2) also challenged the notion that the DDA’s mission was economic development, citing the mission statement of the DDA, which refers to supporting public buildings. He remarked that if the mission of the DDA included economic development, then he’d like to see some kind of economic development plan, adding that he’d also like to see some kind of plan from Ann Arbor SPARK.

Smith responded to Rapundalo by pointing out that the second part of the DDA’s mission statement actually includes encouraging private investments:

The mission of the Ann Arbor Downtown Development Authority (DDA) is to undertake public improvements that have the greatest impact in strengthening the downtown area and attracting new private investments.

On the relationship of parking revenues to the city’s general fund, Mike Anglin (Ward 5) was willing to say it out loud: To fund the city’s request for additional parking revenue money, the council was basically asking the DDA to raise parking rates.

Along those lines, during the course of the mutually beneficial committee negotiations, an exasperated Roger Hewitt on the DDA board suggested at one point that the arrangement should simply be year-to-year, and should work on a two-step process each year: (1) The city tells the DDA how much money it would like to take out of the parking system; and (2) the DDA sets rates to generate that amount of revenue. Hewitt also raised the specter of signage on parking meters and parking structures indicating what percentage of a downtown public parking dollar goes to the city’s general fund as a “tax.”

The idea received little traction. At that committee meeting, the DDA’s executive director, Susan Pollay, cautioned that demand for parking was at least somewhat elastic. At some price point, people would begin to seek alternatives to paying for public parking or opt out of visiting downtown Ann Arbor.

During the April 19 council deliberations, Hewitt was invited to the podium to report on the level of parking demand. He told councilmembers that revenues continued to increase, but that the increased revenue over the last two years did not match the increase in parking rates. That could indicate a slight softening of demand.

Parking Revenue: Council Deliberations – Committee’s Role

The city’s mutually beneficial committee had essentially brought two choices on a percentage-of-gross figure to their council colleagues for consideration: (1) a 16-16-17.5% scenario; or (2) a flat-16% scenario. Early in deliberations, it became clear that there was considerable support for a third option, which was for the city’s negotiating committee to return to their DDA counterparts with an escalated offer. Marcia Higgins (Ward 4) began discussion on that figure at 19%.

Met with resistance from members of the city’s committee, Higgins noted at more than one point during deliberations that the purpose of the resolution was for the council to give the committee direction. The committee had come to ask the council for direction, she observed, but the committee responded by saying it was uncomfortable going back with the higher request – she asked if they would really negotiate based on the council’s direction.

Left to right: Ann Arbor Downtown Development Authority board members John Splitt and Roger Hewitt, and the city’s CFO, Tom Crawford.

Higgins’ remarks along these lines were consistent with the theme she’d highlighted at the council’s previous meeting, when it had authorized the DDA to lead a process to explore alternate uses of city-owned downtown surface parking lots. On that occasion, the city’s negotiating committee had resisted other councilmembers’ desire to limit the scope of the DDA’s work to just four of the downtown city-owned properties. Higgins had said the last time she checked, a city council meeting was an opportunity for councilmembers to give their opinions, which was what she was doing.

At the April 19 council meeting, Carsten Hohnke – a member of the committee – responded to Higgins by saying he would debate the percentage figure at that meeting, but once the number was decided, he would negotiate that number.

Taylor’s take on the issue was that he would accept the council’s direction on the matter, but that did not mean he felt it was calculated for wisdom or success.

On the issue of the relationship of the council to its negotiating committee, Sabra Briere (Ward 1) noted that the DDA’s committee had consulted with the entire DDA board multiple times to get explicit direction, but this was the first time the city council had been asked for direction. She said she was sorry that this left the committee with little time to resolve the issue.

By way of logistical background, the respective committees of the city and the DDA are scheduled to meet again on April 25. The full DDA board will meet at noon on May 2 and the council will meet the same day at 7 p.m. The time is the usual one for the council, but the DDA’s meeting was shifted from the following Wednesday, to allow more board members to attend.

The May 2 DDA board meeting will be the last opportunity for the DDA board to alter its already-approved budget, before the city council must approve the city’s budget – at the second meeting of the month, on May 16. The DDA’s approved budget at this point includes a transfer of parking revenues to the city of around $1 million, covering the street repair fund money, and money from two specific parking lots – at 415 W. Washington and Fifth & William.

When the city votes on May 16, it will be giving final approval to the DDA’s budget, which is part of the city’s budget.

Parking Revenue: Council Deliberations – DDA as Arm of the City

The fact that the city council must ultimately approve the DDA’s budget was a point Stephen Kunselman (Ward 3) made during deliberations.

By way of historical background, that approval is not simply a formality – on at least one occasion previously, the council has reached an arm into the DDA’s already approved budget and changed an item on the same night it approved the city’s budget as a whole. From the May 21, 2007 city council minutes [Fund 0003 is the TIF fund]:

[FY 2008 budget] Amendment 11

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

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

The possibility that the city council could change the DDA’s budget is affecting how the DDA is currently proceeding with its energy saving grant program. The budget approved by the DDA board includes $100,000 in FY 2012 for that program. But Dave Konkle – former energy manager for the city and now consulting for the DDA on its energy saving grant program – has stressed at recent meetings of the DDA’s partnerships committee that he cannot give assurances to potential grant recipients that the money will be there – until the city council approves the budget.

During deliberations at the April 19 council meeting, mayor John Hieftje reiterated his view, expressed often in various contexts, that the DDA is not an independent body, but rather an arm of the city. At a recent DDA board meeting – the mayor sits on that board – Hieftje compared the DDA to a child, whose parent must co-sign for a loan.

Christopher Taylor (Ward 3) looks on as his ward colleague Stephen Kunselman (Ward 3) weighs in against Taylor’s view that the city should accept a 16-16-17.5% arrangement for a new contract with the DDA.

Kunselman echoed that sentiment, saying that the DDA is like a teenager that needs some tough love. He asserted the primacy of the city council, as elected officials, over the members of the DDA board, which has members who are nominated for appointment by the mayor and confirmed by the council. Kunselman allowed that everyone needed to come together as a team, but he was careful to single out the city councilmembers as the “star players of the team.”

In his assessment of the situation, city administrator Roger Fraser said he was surprised that the council was even still considering “subsidizing” the DDA. The rest of the city’s departments had been skinnied down, he said, yet no one was asking the question of whether we should have “less DDA.”

At one point Taylor noted that the conversation around the table seemed to suggest an assumption that city council could act without the DDA’s assent, which prompted the mayor to interject his disagreement – a breach of parliamentary protocol that appeared to startle Taylor briefly:

Taylor: We are having this conversation as if it is entirely our choice …
Hieftje: … no we’re not!
Taylor: [4-second pause] I understand, uh, I, I, well, it is my perception that that is the nature of this conversation, and I would just recollect to my colleagues that that is not the case …

Parking Revenue: Council Deliberations – 19% Tactic

The opening gambit of a request for 19% of gross parking revenues was based on Crawford’s answer to the question of what the “hold harmless” percentage would be if it were applied to just FY 2012. Marcia Higgins (Ward 4) proposed that as an amendment to the resolution before the council.

She tipped the fact that it was a negotiating tactic, when mayor John Hieftje eventually invited her to reduce the number to 18% in order to achieve a greater consensus. Her reply was that she was “not yet” ready. Only just before the vote on her amendment did she change the figure to 18%, with agreement from Kunselman, who was the seconder on the amendment to 19%.

Other councilmembers, including members of the negotiating committee, expressed concern that 19% was over the top – too far in the other direction. Sabra Briere (Ward 1) noted, however, that if the city’s need is great this year, and if the DDA’s burden to the parking fund is somewhat less this year [because it's using some TIF dollars to shoulder the burden of down payment and bond payments on the underground parking garage], then perhaps the city should be asking for 20% in the initial year, with less in subsequent years.

Parking Revenue: Council Deliberations – 18% Vote

The vote on the amendment of the resolution of instruction to set the percentage-of-gross parking revenue figure at 18% was 8-3. Hohnke – a member of the negotiating committee that had argued for the 16-16-17.5% scenario – joined the majority as the last person to weigh in on the roll call vote.

Dissenting were the other two members of the committee, Teall and Taylor, and Smith, who serves on the DDA board.

Outcome on amendment: The council voted 8-3 to amend the resolution of instruction to negotiate based on an 18% figure across all 10 years of a 10-year contract.

The vote tally on the resolution as amended changed by one from the outcome on the amendment. Teall said that the consensus of the council was clear and that she would thus support the resolution.

Outcome: The council voted to direct the committee to ask the DDA for 18% of gross parking revenues in each year of a 10-year contract. The vote was 9-2, with dissent from Christopher Taylor (Ward 3) and Sandi Smith (Ward 1).

Medical Marijuana

In front of the council for consideration were votes on both the zoning and licensing ordinances that were being considered for their final votes.

The medical marijuana zoning ordinance received its initial approval by the council at its Oct. 18, 2010 meeting. The delay since the initial Oct. 18, 2010 zoning vote stems from the city of Ann Arbor’s strategy in legislating zoning and licensing of medical marijuana businesses – that strategy has been to bring both licensing and zoning before the city council 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. The council also directed the city’s planning commission to develop zoning regulations for medical marijuana businesses.

Subsequently, the city attorney’s office also began working on a licensing system. The council undertook several amendments to the licensing proposal at four of its meetings over the last three months: on Jan. 3, Feb. 7, March 7 and March 21. The council finally gave initial approval to the licensing proposal at its March 21 meeting. [.pdf of Michigan Medical Marijuana Act]

Medical Marijuana: Public Hearings

Two separate public hearings were held – one for the licensing and one of the zoning regulations. Many of the same people spoke at both, and many had spoken previously to the council. Here’s a sampling from both April 19 hearings:

Weighing in against the idea of ordinances that provide a locally legal way for people to gain access to medical marijuana was Thomas Partridge. He called on the council to freeze progress of the ordinances. He pointed to national and state news reports of illegal shipments of drugs and cautioned against the violence that is associated with illegal drugs. He said he was committed to not using illegal drugs. He said that marijuana use is intertwined with other addictive drug uses.

After the public hearing, Dennis Hayes (right) and Thomas Partridge (left) discuss their differing views on medical marijuana.

Countering Partridge was Tim Beck, of the Detroit Coalition for Compassionate Care, who said that in the two years the Michigan Marijuana Law has been in effect, Ann Arbor has not fallen into a wave of crime. On the issue of regulating caregivers, he encouraged the council to “let it ride.” He pointed out that in Grand Rapids, when a similar law was enacted, no one ever applied for a license.

Gersh Avery introduced himself as a resident of Dexter, and founder of the Cannabis Cancer Project – which aims to develop cancer-killing agents from essential oils extracted from the cannabis plant. He claimed some success already, and stressed that the goal is not merely symptom relief, but rather to kill cancer and cure other diseases. He pointed to Crohn’s disease as an example of a category of illnesses that may be responsive to treatment with essential oils. Countering Partridge’s point about addictive behavior, he said that a recent study showed that prescription drugs are five-times more likely to be a gateway drug than marijuana is.

Rhory Gould introduced himself as representing Arborside Health and Wellness. He said the proposed number of 15-20 licenses would not be enough to serve Ann Arbor. He suggested that adding 5-10 more would mean 5-10 more businesses and 30-60 more jobs. He criticized the idea of requiring dispensaries to maintain a permanent list of suppliers, saying it would do more harm than good. He also complained about the length of the proposed moratorium, noting that businesses that began operation before it was imposed and are grandfathered in are happy with it.

Along with several other demonstrators outside city hall before the meeting, Chuck Ream told the council that the regulation of cultivation facilities and the requirement of list-keeping included in the ordinances needs to be removed. He also criticized city attorney Stephen Postema for his handling of the medical marijuana issue.

Postema was also sharply criticized by Trena Moss, who described an encounter with Postema on Liberty Street when she was collecting petition signatures for the medical marijuana referendum. [Postema sometimes walks to work downtown along Liberty Street from his home in the Eberwhite neighborhood.] She asked him if he remembered the encounter, which he apparently did not. She told him that she remembered him well, and reported that he’d told her she was wasting his time – that he and his friends wouldn’t let it pass, even if they collected enough signatures to get the measure placed on the ballot. She asked him if perhaps he had something personal against medical marijuana patients, and that if he did, then he should perhaps step aside.

During council deliberations, Carsten Hohnke (Ward 5) said that Postema had accepted the guidance of the council in working on Ann Arbor’s medical marijuana ordinances.

Dennis Hayes addressed the 1,000-foot setbacks required in the zoning regulations by suggesting either 500 or 200 foot setbacks. He also encouraged the council to consider office districts as allowable locations for dispensaries under the zoning code.

Several speakers, including Matthew Abel, noted that the federal government is interested in getting information about caregivers and patients. Abel also noted that caregivers should be able to grow the amount of marijuana allowable under the state law without restrictions. The only real concern that the council should be addressing in legislation on growing, he said, was the possibility that people could buy houses for the sole purpose of setting them up as “grows.”

Medical Marijuana: Council Deliberations

The number of amendments that had been proposed by councilmembers and the city attorney’s office as late as the afternoon of April 19 led Sandi Smith (Ward 1) to start deliberations with the suggestion that the council delay the votes on both measures until May 2. Smith noted that councilmembers had received the most recent updates in proposed amendments at 3:38 p.m. and 6:29 p.m. that same day – the council meeting’s scheduled start was 7 p.m.

Sabra Briere (Ward 1) said that it was difficult to provide the public with the material that the council would be considering in advance of the meeting, because she’d been told by the city attorney’s office that it had to be vetted by the whole council before it could be shared publicly. Seated next to Briere, city attorney Stephen Postema told her that proposed changes suggested by councilmembers or by others could be shared with the public. She replied: “I was not told that.”

Subsequent back-and-forth among councilmembers, the mayor and the city attorney confirmed that if proposed amendments are passed on May 2, it would likely reset both ordinances to their first readings, which would require that they receive an additional second reading.

In discussing postponement, some councilmembers pointed to specific issues that they wanted to focus on in the postponed deliberations. Christopher Taylor (Ward 3) indicated he was not certain that the proposed legislation yet achieved the goal of providing a “safe harbor” for caregivers.

Carsten Hohnke (Ward 5) and Tony Derezinski (Ward 2) check over the April 19 agenda.

Taylor said that on further reflection, he felt that patients who are availing themselves of the opportunity to gain access to medical marijuana do so with the full knowledge that the product they’re getting has not been certified with the rigor that the federal Food and Drug Administration would apply. So he alerted his colleagues to the idea that he might be more inclined to support some kind of disclaimer

Carsten Hohnke (Ward 5) and mayor John Hieftje responded to the suggestion raised during public commentary that the city attorney or councilmembers had personal issues against marijuana. Hieftje said he would support legalization of marijuana, if a way could be found around the risks posed to young people. Hohnke said his background in neuroscience led him to conclude that the medical benefit of marijuana is well documented.

To prepare for future deliberations, Briere asked her colleagues to reflect on the appropriateness of licensing cultivation facilities. She pointed out that home occupation businesses are not required to be licensed under the proposed ordinances, but cultivation facilities are. The difference, she said, boils down to whether growing by a caregiver takes place in one’s own home or in some other location (making it a “cultivation facility”). She also pointed to a newly proposed amendment, which requires a zoning compliance permit, as potentially posing problems by creating records about caregivers, which the city might be forced to produce, even if the city were to fight a request to produce those records.

Following up on Briere’s remarks, Stephen Kunsleman (Ward 3) gave notice to his colleagues that he would not be supporting the text that refers to zoning compliance permits.

Outcome: The council voted unanimously to postpone deliberations on the zoning and licensing of medical marijuana businesses until May 2.

Interim Administrator

Added to the council’s agenda at the start of the meeting was a closed session to discuss applications that had been solicited internal to the city for the interim city administrator’s job. The section of Michigan’s Open Meetings Act allowing for a closed session under those circumstances reads:

15.268 Closed sessions; permissible purposes. Sec. 8. A public body may meet in a closed session only for the following purposes: …
(f) To review and consider the contents of an application for employment or appointment to a public office if the candidate requests that the application remain confidential. However, except as otherwise provided in this subdivision, all interviews by a public body for employment or appointment to a public office shall be held in an open meeting pursuant to this act.

After the closed session, two items were added to the agenda – one to establish a process for hiring the permanent administrator, and another to appoint an interim. The city’s current administrator, Roger Fraser, announced at the end of February that he would be resigning to take a job with the state of Michigan as a deputy treasurer.

Marcia Higgins (Ward 4) is chair of the search committee, which brought both recommendations to the council. Other members of that committee were: Sabra Briere (Ward 1), Tony Derezinski (Ward 2), Christopher Taylor (Ward 3) and mayor John Hieftje.

Higgins reviewed the search committee’s work over the last few weeks, which included a total of four meetings. The committee’s recommendation was to appoint Tom Crawford as interim city administrator. Crawford currently serves as the city’s chief financial officer.

The job for permanent city administrator will now be posted and advertised. Affion Public will be contracted to assist the city’s human resources department with the search – for a flat fee of $18,000 plus additional travel expenses expected to total less than $25,000. The targeted salary range for recruitment will be $145,000-$150,000.

Affion’s work will begin with a visit to Ann Arbor in the first week of May to meet with councilmembers, city employees, and members of the public to get a clearer idea of the intangible qualities that are desired in an applicant. An ideal timeline would include closing the application window after 30 days, using late May and June to winnow the field and interview candidates, with an offer to be made by July 1. On the ideal timeline, the new administrator would start work on Aug. 1.

Although the city’s public services area administrator Sue McCormick had been widely assumed to be a natural choice for interim, a condition on the interim appointment was that the person would not be a candidate for the permanent job. [Previous Chronicle coverage: "Ann Arbor Fills City Administrator Job"]

Outcome: The council voted unanimously to adopt the hiring process recommended by the search committee and to appoint Tom Crawford as interim city administrator, effective April 28, 2011.

Panhandling Ordinance

In front of the council for consideration was final approval to a revision to the city’s code on disorderly conduct – the part dealing with solicitation, which is more commonly known as panhandling. All ordinances must be approved on two separate votes before the council, the second of which must be preceded by a public hearing. The panhandling ordinance revision received its initial approval from the council at its April 4 meeting.

The revised ordinance prohibits panhandling in one generally-defined additional location (in or within 12 feet of a public alley) and one specific location (within 12 feet of the downtown location of the Ann Arbor District Library.) [.pdf of revisions to existing ordinance as they were drafted at the start of the April 19, 2011 meeting]

The proposal to revise the law grew out of a street outreach task force, which was appointed at the council’s 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"]

At the council’s March 21, 2011 meeting, the council received a report from 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. A recommendation contained in the report included revising the city’s ordinance on solicitation to prohibit panhandling in additional locations. [.pdf of street outreach task force report]

Panhandling: Public Hearing

Four people spoke during the public hearing on the ordinance. Thomas Partridge said it was a very curious time to be considering the ordinance – a time when the city, county and state all have budget concerns. He characterized the change in the law as a measure that would “clamp down” on the most vulnerable members of society. He called for postponing the vote, until the sociological and psychological ramifications could be studied on an academic basis. Partridge noted that politicians also ask for handouts when they ask for contributions to their political campaigns.

Bob Dascola introduced himself as the owner of a two-generation family business since 1939 and a board member of the State Street Area Association. He told the council that he had been a member of the last task force that had addressed the issue of downtown panhandling, in 2001-2003. He told the council that they’d identified three kinds of panhandlers: (1) substance abusers; (2) the mentally ill; and (3) opportunists. He said that most of the panhandlers in the area of his barbershop are opportunists. He described the previous ordinance revision as raising the bar for acceptable behavior in the community, and urged support for the current ordinance revision and the other recommendations of the task force.

Bob Dascola (left) and Peter Ludt (right) seated in the audience before the start of the April 19 council meeting.

Ray Detter introduced himself as the head of the downtown citizens advisory council, saying that he’d participated in the previous effort in 2001-2003. He noted that last summer there had been a noticeably worsening situation. He said that a member of the DCAC had walked from her home on East Liberty to the White Market on William, and had been accosted four times by panhandlers. They’d taken up the issue with chief of police Barnett Jones, deputy chief John Seto and Ward 1 representative Sabra Briere. Of the new task force that had been formed out of those communications, Detter joked, “I was on it, but I still say it did an excellent job.”

Detter stressed that no one needs to panhandle due to hunger, given the various resources in the community. He said that almost universally, panhandlers are not homeless. He noted that the recommendation of the task force was to emphasize education of people who might be inclined to give money to panhandlers – the marketing slogan is “Have a heart, give smart.”

Peter Ludt introduced himself as a board member of the State Street Area Association and a member of the street outreach task force. He said he was a manager of a coffee shop on the 300 block of State Street and had resorted to calling the police department about panhandlers on more than one occasion. He affirmed the First Amendment rights of people to panhandle, but also noted that some people feel uncomfortable when they’re solicited. He recognized that with the city’s budget cuts, the beat cops would not be brought back. Most people, he said, don’t know if the activity they are witnessing is illegal. The number one message, he said, is education.

Panhandling: Council Deliberations

Because Sabra Briere (Ward 1), who chaired the task force, had briefly left the table when the council came to the agenda item, mayor John Hieftje filled the time by noting that he was around when the previous task force had been appointed. He told the council that professionals say that giving panhandlers money is not the correct thing to do. He noted that almost all panhandlers are not homeless and that free meals are available three times a day in Ann Arbor. He said that previously the downtown merchants had tried collection boxes placed at cash registers to provide an alternative way for people to give cash.

Andrew LaBarre, new vice president for government affairs for the Ann Arbor/Ypsilanti Chamber of Commerce, before the meeting. A former staffer for Congressman John Dingell, he apologized when he introduced himself to the council for not wearing a jacket. He had locked it inside his new office and was without a key.

Hieftje said that the city respected the right of people to solicit, and he complimented the task force’s work

When she returned, Briere stressed that the ordinance change is just one of three “legs in the stool,” the others being education and community commitment.

Tony Derezinski (Ward 2) said he’d received a lot of communications from constituents about the ordinance, including a long message from a law school student and comments from merchants at a meeting of the Main Street Area Association. He said it would be important to evaluate how well the ordinance is serving its intended purpose.

That same evening, Andrew LaBarre introduced himself to the council as the new vice president of government affairs for the Ann Arbor/Ypsilanti Regional Chamber of Commerce. The chamber is related to the panhandling ordinance inasmuch as the mayor’s downtown marketing task force was tapped by the panhandling task force as leading the educational component of its recommendations. At recent meetings of the council and the DDA board, Hieftje has pointed to the vacancy at the chamber, left by Kyle Mazurek, as the reason that his marketing task force has been on hiatus.

Outcome: The council voted unanimously to give final approval to the ordinance revision.

Former Bessenberg Bindery Site Plan

In front of the council for consideration was a site plan for 215 N. Fifth Ave. – formerly the site of the Bessenberg Bindery, which has moved to the Thomson-Shore Inc. facility in Dexter. The Fifth Avenue property is now owned by Jon and Lisa Rye. Jon Rye, a University of Michigan alumnus, is president and chairman of Greenfield Partners and Greenfield Commercial Credit, both located in Bloomfield Hills.

The plan calls for tearing down the one-story building and constructing a two-story, single-family, owner-occupied house with an attached two-car garage. The entrance will be oriented to the north, and the garage will be accessed from the public alley on the west side of the site. The site is directly north of the Armory condos and south of a two-story residential rental property.

The project requires a site plan because the single-family house is on property that’s not zoned solely for residential purposes. It’s zoned D2 (downtown interface) and is located in the Old Fourth Ward Historic District. The Ann Arbor historic district commission already reviewed the site plan and issued a certificate of appropriateness at its Feb. 10, 2011 meeting. The Ann Arbor city planning commission had given its recommendation for approval of the site plan at its March 15, 2011 meeting.

During the public hearing at the city council meeting, only one person spoke – the architect on the project, Dick Mitchell, of the Ann Arbor firm Mitchell and Mouat. He stressed that the planned design met the requirements of the zoning ordinance with respect to setbacks and height, and had been approved by the city’s historic district commission. The design was also supported by the downtown citizens advisory council, he said. He indicated that he was available for any questions.

Later in the meeting, when the council’s vote was taken, there were no questions or deliberations by the council. Mayor John Hieftje thanked Mitchell for sitting through the meeting, which had included lengthy deliberations on the contract under which the Ann Arbor Downtown Development Authority manages the city’s parking contract.

Outcome: The council voted unanimously to approve the site plan for 215 N. Fifth Ave.

Near North PUD

The council was asked to consider an authorization for revisions to the elevations of the Near North planned unit development (PUD) affordable housing project on North Main Street. The city council originally approved rezoning for the project – a four-story, 39-unit mixed use residential building on a 1.19-acre site – on Sept. 21, 2009.

The changes include modifying the locations where exterior materials – glazing, panelized exterior cladding materials, plus accent materials – will be used. Roof lines have also been proposed, but the building is still under the maximum height permitted. The changes, which were prompted by alterations to the interior layout of the building, were presented to the surrounding neighbors at a meeting on March 17, 2011.

Developer Bill Godfrey of Three Oaks was present at the meeting, but was not asked to the podium to answer any questions from the council.

Outcome: The council voted unanimously to approve the changes to the Near North PUD.

Loan Forgiveness

In front of the council for consideration was approval of a policy that grants to the city administrator the authority to forgive certain loans made by the city on affordable housing units that have affordable housing covenants. The city administrator would need to determine that loan forgiveness is necessary to protect the long-term affordability of the housing, and that loan forgiveness would facilitate the transfer of ownership to other income-qualified purchasers.

The request to have such a policy came from the office of community development. It arose from two recent foreclosures on properties in Stone School Townhomes, one of three housing developments where the city currently has affordable housing covenants. The other two are Ashley Mews and Northside Glen.

When a property is foreclosed, the affordable housing covenant automatically terminates.

Outcome: The council voted unanimously without comment to approve the loan forgiveness policy.

City Energy, Emissions Goals

On the agenda was a resolution setting a goal of reducing greenhouse gas emissions in Ann Arbor’s municipal operations by 50%. The baseline standard for the percentage reduction would be emission levels in 2000, which measured 46,435 tons of carbon dioxide equivalent (CDE). The city’s goal is to achieve the 50% reduction target by 2015. The city’s most recent figures, from 2010, put CDE emissions for municipal operations at 34,445 tons, which is roughly a 26% reduction from 2000 levels.

As part of the same resolution, the council also set a goal of reducing greenhouse gas emissions by 8% throughout the community for the same time period. In 2000, the city estimates the entire city produced 2,087,463 tons of CDE, which has improved little in the most recent year for which figures are available, 2009: 2,054,221 tons.

The resolution also updated goals on renewable energy use. The city had previously had a goal of 20% renewable energy for municipal operations by 2010, which was subsequently increased to 30%. The 20% target was met – when the figure was rounded upward only slightly. The resolution approved on April 19, 2011 reset the goal of 30% renewable energy in municipal operations and 5% community-wide by 2015.

The resolution also directs city staff to consider options to purchase long-term, fixed-rate renewable electricity from Michigan wind turbines.

Outcome: The council voted unanimously without comment to approve the reset goals.

Police Car Purchase

In front of the council for consideration was approval of the purchase of two police cars totaling $54,625 – a Chevy Caprice for $25,604 and a Chevy Tahoe for $29,021 from Shaheen Chevrolet. At the council’s Feb. 22, 2011 meeting, it had authorized the purchase of five police cars – Crown Victoria Police Interceptors – for $20,730 each, a total of $103,650.

But at that meeting, city administrator Roger Fraser had indicated that the city might opt not to purchase all five. From The Chronicle’s report of that meeting: “The city might decide not to buy all five Crown Victorias, and instead purchase a new model that Chevrolet is making available in late summer or early fall, Fraser said.”

The two purchases authorized on April 19 will replace cars under the police union’s contract that stipulates cars cannot exceed 80,000 miles or a six-year life. Adding the Caprice to the Dodge Charger that the department purchased previously will allow the Ann Arbor Police Department to assess how it wants to stock its fleet in the future, given that the Crown Victoria is going out of production. A third option besides the Caprice and the Charger would be whatever model Ford uses to replace the Crown Victoria.

The Chevys that were authorized by the Ann Arbor city council would be purchased under the cooperative bidding programs of the State of Michigan, Oakland County, and Macomb County. Shaheen Chevrolet in Lansing was the lowest bidder under the State of Michigan’s program.

Outcome: The council voted without comment to approve the purchases of the Chevy police cars.

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: Parkinson’s Disease Awareness

Kathleen Russell and others were on hand to receive a mayoral proclamation designating April as Parkinson’s Awareness Month.

Comm/Comm: Volunteer of the Month

John Dentler was honored as volunteer of the month for his service to the Ann Arbor police department.

Comm/Comm: Historical Perspective

In her communications time, Sabra Briere (Ward 1) noted that April 19 is the second night of Passover, which is about liberation through sacrifice. She also noted that on the same day 236 years ago, the first shot in the Revolutionary War was fired at Lexington and Concord. She noted that on that evening the council was engaged in politics. She mused that John and Sam Adams would be surprised, perhaps, at the topics they would be discussing. She figured that Abigail Adams would be pleased that there were women at the table [Briere, Sandy Smith, Margie Teall and Marcia Higgins]. She allowed, however, that they have a long way yet to go.

Comm/Comm: Library Lot

Mike Anglin (Ward 5) noted that the Library Lot request for proposals (RFP) had been put aside, but that the community continues to discuss the issue. He wondered who the stakeholders will be. He noted that some city councilmembers had attended a recent meeting of the city’s Democratic Party club where the issue of the Library Lot had been discussed.

Comm/Comm: What Would Christ Say?

As the only speaker who signed up for public commentary reserved time at the start of the meeting, Thomas Partridge introduced himself as a Washtenaw County and Ann Arbor city Democratic Party member. He called the council’s attention to the fact that April is a particularly prayerful month – the month of Palm Sunday, Good Friday and Easter. He posed the same question that he has during recent weeks at public commentary at a range of different public meetings: What would Christ say? Would Christ fund affordable housing, education, and transportation for the most vulnerable? Partridge declared that he is a Christian and an advocate for seniors, disabled people, children, middle class families, teachers and other public employees. He encouraged people to recall Gov. Rick Snyder.

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: May 2, 2011 at 7 p.m. in the second-floor council chambers at city hall, 301 E. Huron St. [confirm date]