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

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

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

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

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

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

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

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

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

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

Chapter 7 Ordinance Amendments

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

Chapter 7 Amendments: Background

The revisions considered by the council fell roughly into two categories: (1) those involving board composition and policies; and (2) calculation of tax increment finance (TIF) capture in the DDA district.

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

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

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

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

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

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

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

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

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

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

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

-

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

Chapter 7 Amendments: DDA Director Summary

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

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

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

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

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

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

Chapter 7 Amendments: Board Remarks – Financial

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

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

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

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

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

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

[FY 2008 budget] Amendment 11

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

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

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

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

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

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

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

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

Chapter 7 Amendments: Board Remarks – Policy Issues

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

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

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

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

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

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

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

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

Chapter 7 Amendments: Board Remarks – Positive DDA Impact

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

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

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

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

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

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

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

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

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

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

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

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

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

Chapter 7 Amendments: Board Remarks – Board Composition

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

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

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

Monthly Parking Report

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

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

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

Ann Arbor Public Parking System: Revenue

Ann Arbor Public Parking System: Hourly Patrons

Ann Arbor Public Parking System: Revenue per Space – System

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

Ann Arbor Public Parking System: Revenue per Space – Structures

Communications, Committee Reports

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

Comm/Comm: Rail Station

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

Comm/Comm: Bike House

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

Comm/Comm: Review of D1 Zoning

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

Comm/Comm: Ice-Skating Rink

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

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

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

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

Comm/Comm: Expand DDA Area, Sunday Parking Charges

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

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

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

Absent: Sandi Smith, Newcombe Clark.

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

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From left: Greenbelt advisory commissioners Catherine Riseng and Liz Rother. (Photo by the writer.)

The greenbelt advisory commission (GAC) voted unanimously to recommend Brines for the appointment, which would fill the one open position, an at-large seat. Brines owns Brines Farm in Dexter but lives in Ann Arbor’s Fifth Ward – which GAC member Carsten Hohnke represents on city council. Hohnke, who did not attend Wednesday’s meeting, will likely be the councilmember to put forward Brines’ nomination to council.

Brines also works for the University of Michigan School of Natural Resources and Environment (SNRE), as does GAC vice chair Catherine Riseng. At Wednesday’s meeting, Riseng told commissioners that she’s been appointed to an advisory committee for the county’s natural areas preservation program, and hopes to serve as a liaison between the two groups.

In other action, the commission voted to write a letter of support for continued funding of a federal program for farmland preservation. As Congress hammers out the 2012 farm bill, funds for the program could be at risk. The city received nearly $2.8 million in federal dollars for greenbelt properties during the last fiscal year.

At Wednesday’s meeting the commission also discussed forming a committee to develop a communications plan for the greenbelt program. The intent is to get the word out about the program’s achievements in a consistent, coordinated way.

One of the program’s ongoing efforts at communication is coming up later this month. On Saturday, Oct. 22, a two-hour bus tour will highlight some of the farmland and other properties that are being preserved by the greenbelt program. The tour runs from 11 a.m.-1 p.m. and starts from the Ann Arbor farmers market. Boxed lunches are included in the $15 fee.

Recommendation to Appoint Brines

Two former commissioners – Jennifer Santi Hall and Gil Omenn – were term-limited earlier this year and left the advisory group at the end of June. Liz Rother was appointed by the city council in June to replace Hall, but Omenn’s at-large position remains unfilled.

Shannon Brines has previously expressed interest in the appointment, and had attended GAC’s August meeting. On Wednesday, the commission discussed recommending him formally for appointment by the city council. For most city commissions, members are nominated by the mayor and confirmed by the council. However, greenbelt commissioners are both nominated and confirmed by the city council.

Brines is an Ann Arbor resident and owner of Brines Farm in Dexter – located outside of the city’s greenbelt boundary. He is active in the local food movement, as a board member for Slow Food Huron Valley, and a steering committee member for the annual HomeGrown Festival and Local Food Summit. In a cover letter applying for the GAC appointment, Brines said he’s also assisting with a farming business incubator project in Ann Arbor Township called the Tilian Farm Development Center. Brines serves on its steering committee.

Brines is also a lecturer at the University of Michigan and manager of the environmental spatial analysis (ESA) lab at UM’s School of Natural Resources and Environment. Since 2007 he has served on the city’s public market advisory commission, which handles issues related to the farmers market. His current term on that commission ends in 2014.

During a brief discussion of Brines’ appointment, Peter Allen praised UM’s recent efforts to use more locally-produced food at its campus dining halls, and noted that Brines is part of the local food network. Dan Ezekiel added that there were several promising announcements recently about UM’s sustainability efforts. [UM president Mary Sue Coleman announced a range of new sustainability goals for the Ann Arbor campus last month.] It puts the university more in step with the city, he said, noting that’s not always the case.

Mike Garfield asked if the commission typically makes recommendations for appointments. No, Ezekiel said, but in this case, Carsten Hohnke specifically asked for it.

Hohnke – a city councilmember representing Ward 5, where Brines lives – also serves on GAC. It’s likely that Hohnke will put forward the nomination for Brines at an upcoming council meeting. Hohnke did not attend Wednesday’s GAC meeting.

Ginny Trocchio, support staff for the greenbelt program, noted that more seats will be opening next year on the commission, so it’s good to continue to look for possible candidates.

Outcome: Commissioners voted unanimously to recommend that city council appoint Shannon Brines to the greenbelt advisory commission.

Greenbelt Communications Committee

At the commission’s Sept. 14 meeting, Ginny Trocchio had presented an annual report on the greenbelt program for fiscal 2011, which ended June 30. In discussing the report, Carsten Hohnke had asked about the program’s communications strategy, and indicated that he’d like to identify goals for communicating to the public about the greenbelt program and its successes.

On Wednesday, Trocchio reported that she discussed with GAC’s executive committee – chair Dan Ezekiel and vice chair Catherine Rising – the idea of creating a communications committee to develop a plan for those goals. Committee members could work with the city’s communications staff to design branding for the greenbelt, and a logo. Another possibility is to create an impact report about the greenbelt, to distribute to residents. She passed out some examples of brochures and reports that other land preservation groups have developed.

Ezekiel said that this first effort would be important, because it could serve as a template that would just be tweaked in future years. The program is moving from an acquisition mode to a maintenance and publicity mode, he said, so communications will be increasingly important.

Liz Rother, GAC’s newest commissioner, volunteered to on the committee. Other commissioners indicated that they’d think about it.

Support for Federal Funding

The greenbelt program has been successful in tapping matching funds from the U.S. Department of Agriculture’s Farm and Ranchland Protection Program, or FRPP. In fiscal 2011, the greenbelt program, which is funded through a 30-year millage, also received nearly $2.8 million in FRPP funding. Those funds are used to offset costs of the purchase of development rights (PDR) – the primary mechanism that the greenbelt program uses to preserve farmland and open space. To date, the greenbelt has protected more than 3,200 acres.

At Wednesday’s meeting, Ginny Trocchio reported that as part of negotiations in Congress over the 2012 federal farm bill, FRPP funding might be at risk. The Michigan Dept. of Agriculture is asking land preservation programs in the state to submit statements of support for the FRPP. Trocchio said she’s working with local landowners to get letters from individuals who are part of the greenbelt, but she hoped that GAC could also submit a letter.

FRPP funds have helped the greenbelt program achieve its goals, Trocchio said, by leveraging local dollars for federal funds. Without that federal support, Ann Arbor wouldn’t have been able to preserve as much land as it has, she said.

If commissioners agreed, Trocchio said she’d draft a letter for review by GAC’s chair or vice chair before submitting it.

Mike Garfield asked if there seemed to be an immediate threat to FRPP funding. Trocchio replied that everything is on the table. Dan Ezekiel felt the threat was imminent. The so-called “super committee” of Congress that’s working on a proposal to address the budget deficit hasn’t released much information about potential cuts, he noted. “I think when they strike, they’re going to strike fast,” he said.

Outcome: Commissioners unanimously voted to approve writing a letter of support for the FRPP program.

Misc. Communications

There were several updates from commissioners and staff during Wednesday’s meeting.

Misc. Communications: Greenbelt Boundary Changes

Dan Ezekiel reported that he and Ginny Trocchio had attended a recent Lodi Township board meeting, where township trustees approved a resolution encouraging Ann Arbor city council to expand the greenbelt boundaries. The city council is expected to vote on those changes at its second meeting in November.

GAC had voted to recommend the changes at its Sept. 14 meeting. If approved by the council, the greenbelt boundaries would expand in Lodi and Salem townships. The recommendation also calls for allowing the city to acquire development rights on property adjacent to (but outside of) the greenbelt boundary, if it’s under the same ownership as an inside-the-boundary property that’s being considered for the program.

Ezekiel indicated that Salem Township’s board will also be weighing in with a recommendation to approve the boundary changes.

Trocchio noted that the the changes would require votes by council at two consecutive meetings, but there would still be time to solicit applications from landowners in the newly added areas before February 2012. That’s the deadline to apply for matching funds from the federal Farm and Ranchland Protection Program, which helps offset the cost of the city’s greenbelt acquisitions.

Misc. Communications: Riseng on NATAC

Catherine Rising informed her colleagues that she’s been appointed to Washtenaw County’s natural areas technical advisory committee (NATAC). The county board of commissioners approved her appointment at their Oct. 5 meeting.

NATAC advises the county parks & recreation commission regarding its natural areas preservation program. Like the city’s greenbelt program, NAPP is funded by a millage and works to preserve natural areas and farmland throughout the county.

Riseng – an aquatic ecologist researcher at the University of Michigan’s School of Natural Resources and Environment – said she hopes to serve as a liaison between the two advisory groups.

Misc. Communications: Meeting Times

As they had at last month’s meeting, commissioners again discussed possible new dates for their monthly meetings, which now fall on the second Wednesday of each month at 4:30 p.m. For Dan Ezekiel and Catherine Rising – the commission’s chair and vice chair – the current time requires them to leave faculty meetings related to their jobs.

After additional discussion of possible alternative dates, Ezekiel suggested deferring the decision. He noted that two current commissioners – Carsten Hohnke and Laura Rubin – weren’t there to weigh in. Nor was the potential new commissioner, Shannon Brines.

Closed Session

Commissioners spent the last 40 minutes of their meeting in closed session to discuss possible land acquisitions. They did not take any additional action when they emerged from closed session.

Present: Peter Allen, Tom Bloomer, Dan Ezekiel, Mike Garfield, Catherine Riseng, Liz Rother. Also: Ginny Trocchio.

Absent: Carsten Hohnke, Laura Rubin.

Next regular meeting: Wednesday, Nov. 9 at 4:30 p.m. in the second-floor council chambers at city hall, 301 E. Huron St., Ann Arbor. [confirm date]

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The partially dismantled Sun Dragon sculpture at Fuller Pool – it's the colored plastic on the roof that extends (in red) toward the pool. Previously, it extended to the end of the beam that juts out over the pool. City maintenance workers took it apart to repair the beam, which had rotted, and some parts of the sculpture broke. (Photo by the writer.)

The group discussed another sculpture – the Sun Dragon, designed by AAPAC chair Margaret Parker and located at Fuller Pool – which was damaged during recent repair work. The hope is to restore the piece before the pool opens on May 29.

Parker reported that Herbert Dreiseitl was in town last month and used bamboo poles to build a temporary full-scale mock-up of the large water sculpture that’s commissioned for the exterior of the new police/courts building on Fifth and Huron. But the German artist still hasn’t provided additional information regarding two interior pieces for the building, prompting one commissioner to ask, “He’s lost interest, maybe?”

And in reporting on a potential new member to the commission – Lee Doyle, who’s director of the UM Film Office – commissioner Elaine Sims noted that Pierce Brosnan will be making art in public (shooting a film) outside the Law Quad on the afternoon of May 18. The actor is part of the cast for Salvation Boulevard, which is already in town shooting at various sites on campus.

Much of the meeting dealt with more prosaic topics, however: governance, planning and PR.

Planning Issues: Won’t Someone Please Be Chair?

As head of the planning committee, Cheryl Zuellig reminded commissioners of the annual planning meeting they’d be having the following evening, to review their work for the past year and look ahead to fiscal 2011.

AAPAC is still seeking nominations for new commissioners. AAPAC will make recommendations to the mayor, who is responsible for nominating commissioners, who must then be confirmed by the city council.

Elaine Sims said she’s talked with Lee Doyle, who is chief of staff for the University of Michigan Office of the Vice President for Communications and a member of the President’s Advisory Committee for Public Art. Doyle is also a founder of the university’s Arts on Earth program, and oversees the UM Film Office. “I think she’s a strong candidate,” Sims said. [Doyle was featured in a recent Concentrate article about film industry activity in this area.]

Connie Brown asked how they would handle a situation if there were too many nominations. Marsha Chamberlin suggested getting people involved at the committee level.

Jim Curtis pointed to the lengthy period between discussing the candidates and selecting them, noting that it takes several months. He wondered if that process could be accelerated. Margaret Parker, saying it was often difficult to reach people, added “we’re doing the best we can.”

Zuellig also discussed a proposal to add two new positions to the board’s leadership structure. In addition to the board chair, the positions of chair-elect and past chair would “help spread the joy of those responsibilities,” she said. Parker, who’s served as board chair since AAPAC was formed and has been pushing for someone else to take on that role, also suggested having the chair’s term limited to one year, “so it wouldn’t be like a life …”

“… sentence?” joked Cathy Gendron.

Chamberlin, who’s also president of the Ann Arbor Art Center, said the board of that nonprofit has found that one-year terms are too short. She also said it would be helpful to know exactly what the board chair’s duties are. Parker said she was compiling a list.

Commissioners agreed to discuss it at an upcoming organizational session, which will be facilitated by Connie Pulcipher of the city’s systems planning staff. Pulcipher attended Tuesday’s AAPAC meeting, and explained that she’d be interviewing each commissioner privately in preparation for the session, which will likely be held in late June or July.

Pulcipher said she’d be collecting information about what commissioners see as issues or opportunities for AAPAC, what works well, what could be improved, and how AAPAC works with city staff and the public, among other things. She said her report will be a summary of responses, and that comments won’t be attributed.

Projects: West Park, Fuller Road Station, Ann Arbor Skatepark

From the projects committee, Connie Brown updated commissioners on the status of several efforts. The design hasn’t been finalized for the West Park public art project, being done in conjunction with major renovations underway there by the city’s parks staff. A contract with the artist – Traven Pelletier of Lotus Gardenscapes – was recently signed.

The general concept for the work had been described at AAPAC’s March 9, 2010 meeting:

The artist’s conceptual proposal for the site includes creating two metal “trees” at each end of the top tier of the concrete seating area. Each tree would have a circular trunk made from recycled metal, about 8-10 inches at its base and standing about 10 feet tall. Branches near the top of the trunks would also be made from recycled metal. The trees would either be painted or left natural to weather. In addition, large boulders would be incorporated into the seat walls, as well as around the base of each tree. The artist would also help the parks staff place additional fieldstone boulders in the area between the seats and the bandshell, for seating and aesthetic purposes.

Brown also reported that the projects committee is forming a task force to work on the proposed Fuller Road Station. The group would help select public art for the building, which will initially be a large parking structure and bus station on the south side of Fuller Road, just east of East Medical Center Drive.

And as she reported at last month’s AAPAC meeting, they aren’t currently working on a public art component for the Ann Arbor Skatepark, since it’s not a city-funded project. Brown went to the group’s public design workshop in April, where skatepark designer Wally Hollyday presented several conceptual designs. Marsha Chamberlin said the final conceptual design for the skatepark will be unveiled on May 22 at an event held at the Ann Arbor Art Center.

Unresolved Questions in Working with the DDA

As they’ve done at other meetings over the past several months, commissioners discussed AAPAC’s working relationship with the Ann Arbor Downtown Development Authority, which also funds public art. Connie Brown reported that she and Jim Curtis have drafted a letter outlining what tasks AAPAC can do for the DDA. They haven’t sent the letter yet, she said.

Curtis said they’re still waiting to hear back from DDA executive director Susan Pollay, whom they’d met with several months ago. She was going to talk to her board members, he said, but he’s unsure if that’s happened. So he and Brown decided to come up with a list of items to send to the DDA, outlining how they might work together.

Margaret Parker expressed concern over who would pay for some of these tasks, or who would provide the volunteer time. There was also the issue of the DDA “pre-selecting” a project, she said. At Hanover Park, on the northwest corner of Packard and Division, the DDA has built a a circular dais that’s about 25 feet in diameter, enclosed by a seat wall, with an empty center that’s suitable for a sculpture or plantings. They’ve asked AAPAC to help select a piece of public art for that site.

Curtis explained that the DDA wants AAPAC to take the lead – that’s why he and Brown made a list of what tasks AAPAC can do. He said he didn’t think it should take as long as it has to move forward.

Several commissioners said they thought there should be more clarity regarding who pays for administrative work, which tasks will be handled by volunteers, and whether those volunteers would be commissioners or others from the community. They agreed to discuss it further at a planning session the following night.

Gift Selection Panel: Thanks, But No Thanks

Jim Curtis reported that about 14 months ago, AAPAC was approached by an artist who wanted to donate a sculpture to the city. Over the past year, commissioners have debated what to do, he said. [Though during Tuesday's meeting the sculptor was not mentioned by name, in previous meetings he was identified as Garo Kazan, who proposed donating a large bronze sculpture of a horse.]

A peer review committee was formed earlier this year, Curtis said, which included two University of Michigan representatives, one private sector designer, a community advocate and a city employee who’s an engineer. They were given AAPAC’s gift selection guidelines and went to view the sculpture. On April 29, the committee met and discussed the gift. Ultimately, Curtis said, the committee was appreciative of the offer, but decided unanimously not to accept the gift. He noted that although he and Katherine Talcott, the city’s public art administrator, facilitated the group, neither of them voted.

The committee’s concerns centered on aesthetics, maintenance and liability, Curtis reported. They were worried that the piece might be vandalized, and that liability would be an issue if people climbed on it.

Cheryl Zuellig cautioned that there needed to be a public record of the reasons for rejecting the artwork, and those reasons should be tied to AAPAC’s bylaws. They need to be consistent and transparent in making these decisions. She also wondered whether maintenance and vandalism issues for this piece would differ from any other – all public art would have those concerns, to some extent, she noted. If those were always a concern, then you could end up rejecting everything. She and other commissioners thanked Curtis for his work on the project.

Fuller Pool’s “Sun Dragon” Damaged

Margaret Parker reported that maintenance workers at Fuller Pool had damaged the Sun Dragon – an outdoor sculpture attached to the pool’s shower, which uses water that’s heated with solar energy. A wooden beam, which supported both the sculpture and a pipe carrying the heated water, had rotted. When maintenance workers removed part of the sculpture to repair the beam, parts of the artwork were broken. “They chopped the head right off,” said Parker, the artist who designed the Sun Dragon in 2003.

The pool manager, Dan McGuire, wasn’t aware that AAPAC should be contacted before doing any repair work that involves public art, Parker said. The situation highlights the need to coordinate with city staff, she said, and to come up with an overall maintenance plan for the city’s public art works.

Cathy Gendron asked where the funding for repairs would come from. There’s not yet an estimate from the fabricator, Parker said. It could be paid for out of a maintenance fund for public art that’s held by the Ann Arbor Area Community Foundation, she said – there’s a balance of about $18,000 in that. Or it could be paid for from the parks budget. “The funding question is something that has to be answered,” Parker said.

The pool is still closed for the winter season – it reopens May 29. The staff hopes to complete repairs before then.

Dreiseitl Update

Margaret Parker reported that Herbert Dreiseitl came to Ann Arbor on April 16-17 and worked with staff of Quinn Evans Architects, the Ann Arbor firm that the city has contracted to be project manager for the police/courts building, also known as the municipal center. They did a full-size mock-up of the large water sculpture that the city has commissioned the German artist to create – the mock-up was made of bamboo poles, Parker said, adding that the sculpture as mocked up seemed larger than it did in Dreiseitl’s drawings.

There are still unanswered questions regarding two interior pieces, she said – they still don’t have a new pricing estimate, for example. That prompted commissioner Cheryl Zuellig to observe, “He’s lost interest, maybe?” Parker replied that they chose someone who has an international reputation, so of course he’s very busy. They expect to have answers in early June.

Jim Curtis said he’s starting to feel a little uncomfortable about it, but Connie Brown noted that they hadn’t accepted the proposal for the interior pieces. Parker pointed out that Dreiseitl is communicating more with Quinn Evans at this stage. “Many questions are being answered,” she said.

Public Relations: Survey, Open House, Website

An online survey soliciting input on public art had yielded 236 responses as of Tuesday, reported Marsha Chamberlin, a member of the public relations committee. She’s working on other ways to promote it before they close it at the end of May.

There are seven nominations for the annual Golden Paintbrush awards, which recognize contributions to public art. Cathy Gendron, who’s also on the PR committee, asked that commissioners look at the nominations and vote by May 21st. They’ll plan to give out a maximum of five awards, but could give fewer, she said. Winners will be presented with the awards at a June meeting of the Ann Arbor city council.

An open house is scheduled for Wednesday, June 23, to highlight the commission’s work and seek public input. There was some discussion about the time of the event – a room in the library is reserved for 7-9 p.m., but several commissioners thought that was too late. Margaret Parker said she’d try to move the time to 6-8 p.m.

The event will be organized around a speaker, Gendron said. Commissioner Jeff Meyers, who didn’t attend Tuesday’s meeting, is trying to confirm Chrisstina Hamilton, director of visitors’ programs for the UM School of Art & Design, as the speaker.

Gendron described the event as a time for networking, and said she wants it to be fun and engaging, giving people the opportunity to talk with commissioners and ask questions. They plan to use the map that was posted at last year’s open house – people used it to indicate locations where they’d like to see public art. AAPAC also plans to convey results of its online survey at the event. Cheryl Zuellig suggested providing a way for people who attend the open house to take the survey, if they haven’t already.

Gendron gave an update on AAPAC’s website and Facebook page. The Facebook page hasn’t launched yet, and commissioners discussed what kind of information to include and how to update it. For Facebook posts, Chamberlin described how they handle it at the Ann Arbor Art Center. Each day is assigned to a different person on staff, who is responsible for posting on that day. It works well, she said, and doesn’t burden any one individual.

After AAPAC is set up on Facebook, Gendron said, she’ll start working on their presence on the new Arts Alliance website. They’ll also be moving ahead with changes to AAPAC’s page on the city’s website, and will eventually be taking down their secondary site, which was designed by Annie Wolock of Keystone Media. Wolock attended Tuesday’s meeting and was introduced as a new member of the PR committee.

Commissioners present: Connie Brown, Marsha Chamberlin, Jim Curtis, Cathy Gendron, Margaret Parker, Elaine Sims, Cheryl Zuellig.

Absent: Jeff Meyers

Next regular meeting: Tuesday, June 8 at 4:30 p.m., 7th floor conference room of the City Center Building, 220 E. Huron St. [confirm date]

Rob Cleveland

Toyota is something of an instant Greek tragedy as of late. Having displaced General Motors as the world’s biggest automaker, the gods of conveyance quickly punished the Japanese automaker for hubris and success, leaving the company wandering dazed and confused in the loneliest place on earth … at number one.

But the story is more than technical problems resulting in Toyota’s largest U.S. recall ever.

It also is about Toyota’s culture and how their approach to communications during this crisis exacerbated an already difficult situation.

The facts, as they appear now, anyway, seem to indicate that Toyota had a clear understanding of the defects for many months and had ample time to respond to the acceleration issue, with serious investigations underway as early as last August following a crash killing four people. The problem originally was blamed on the design of the floor mat and the matter seemed to be closed, at least in Toyota’s eyes.

This initial milestone was the first in a series of missteps driven by the company’s culture. Although Toyota is famous for its “andon cord” – a cord next to the assembly line that lets anyone stop production if they see a problem – the Japanese corporate culture is very top down. When a supervisor, or someone with significant authority, renders a decision, it rarely is challenged from people below.

That management approach may have precluded engineers and other managers from offering other points of view: points that became increasingly relevant as other theories about the acceleration began to manifest.

Gas pedals in contemporary vehicles typically do not have the kind of mechanical links to the throttle compared with older models. Instead they rely on sensors and software to not only provide direction to the engine’s throttle control, but also tactile feedback to the driver’s foot.

When a second theory began to surface around a malfunction of the pedal sensor itself in early January, Toyota was caught flatfooted and there was no communication whatever to the public.

Instead, the media picked up the story first: an incredible blunder. Had Toyota come out in front of the story, the media would have picked up the facts both from Toyota and other sources, but instead they ran with what they had – speculation and theory from “experts” in the field.

This information vacuum was driven from the top down too. Toyota President Akio Toyoda, grandson of the company’s founder Kiichiro Toyoda, made only a passing comment to a Swiss journalist before calling a hasty but belated press conference a week later to apologize for the problems. In a stark illustration of Toyota’s problem, Japanese journalists chastised Toyoda for calling the press conference with little advance warning, and then saying nothing of any substance except his expression of regret. That kind of aggressive journalism is very rare in Japan where the media and large corporations share a relationship more described as cooperation than investigation.

Here culture again played a role. Japanese companies in particular are very deliberate in their message – there is no such thing as improvisation. Announcements and directives are carefully vetted weeks before delivery. Nothing is left to chance. The president of Toyota did not come out with a clear message for the media and for customers about a solution to the problem because they simply were not ready (unlike American media responses thrown together so quickly that they often forego proper grammar.)

Jim Lentz, president and CEO of Toyota Motor Sales, did make an attempt at reeling back in the story by appearing on the Today Show with host Matt Lauer, one of several TV and radio stops made that day in an effort to quell the rising frenzy. No luck. For a guy covering sextuplets and travel destinations, Mr. Lauer deftly put the thumbscrews to Mr. Lentz, whose answers rang more as coached than genuine.

And it kept coming. The last lesson of a crisis with this magnitude is that there always are aftershocks.

The first of these aftershocks came from U.S. Transportation Secretary Ray LaHood. In an interview, LaHood suggested that Toyota owners should consider not driving their cars. In the context of the interview, the comment was offhanded; clearly not a prescription or a remedy being endorsed by the federal government. LaHood later retracted his comment, offering further clarification. But the damage was done and out of the interview, the media focused on the sound bite that made the biggest headline.

Next came the revelation that the antilock braking system on the Prius was under a recall too, adding another log on the fire and threatening one of Toyota’s most valuable and successful models from a brand perspective.

Had Toyota’s voice been out in front of the discussion, these corollary issues would have been muted, but because the media was driving the bus, each problem amplified the original acceleration problem. Even with no direct link between the Prius brakes and the larger throttle problem, the media made the connection declaring a wider, more systemic breakdown at Toyota.

And that is unlikely. Toyota has led the approach to – and results in – quality for decades. It would be irresponsible to marginalize these quality issues in the light of the fatalities that resulted. But there have been much larger recalls. Ford’s 1996 recall for a faulty ignition switch still ranks at the top of the list, and the Firestone tire debacle also ranks as one of the most publicized recall episodes in automotive history. But in these cases, Ford was out in front of each issue. Bill Ford himself was on the television attempting to reassure customers during the tire recall that the company was taking every measure to resolve the problem quickly and safely.

And GM. Having walked over hot coals last summer through their bankruptcy to emerge not only intact from a brand perspective but actually gaining ground in the public eye is the result of herculean efforts from their communications machine. The value of the results probably can be quantified with some clever math. And I would bet they are in the billions.

Toyota does now have a “mea culpa” marketing program running in an attempt to repair the damage. But the story still is resonating on the front page of newspapers and the lead in news broadcasts. The longer the story stays current, the harder it will be for dealers to get cars off of their lots. As a result, Toyota now is trying to run with big cash incentives to get buyers back. Just ask General Motors how that strategy plays out in the long run.

Is it fair to penalize Toyota for not having experience with recalls? Probably not. But Toyota is the largest car company in the world today (for the moment) and even if the excuse is having gotten it right for the last 50 years, a company of this size and scope has to have all of its disciplines executing at the highest level to stay that way.

It’s time for Toyota to learn once again from a pivotal moment in their brand’s history, and create a culture that allows the company to open up clear and frank dialogue with its customers and from people at the execution level, not executive. It will be an absolute must if they plan to hold on to that number one spot … that is, if they want it anymore.

About the author: Rob Cleveland is CEO of ICON Creative Technologies Group and a co-owner of Grange Kitchen and Bar in Ann Arbor.