Stephen Kunselman (Ward 3) and Ann Arbor Housing Commission executive director Jennifer Hall. (Photos by the writer.)

On the housing side, a unanimous vote of the council approved the transfer of ownership for city properties managed by the Ann Arbor Housing Commission (AAHC) to the commission itself – an arrangement that’s actually more common across housing commissions in other cities. That step will allow conversion of the AAHC’s 355 public housing units to a project-based voucher system under HUD’s Rental Assistance Demonstration (RAD) program. AAHC will then be pursuing low-income housing tax credits through a ground lease of the properties to a private/public limited partnership. The tax credits are intended to fund several million dollars in needed capital improvements to the existing properties, as well as build 20-30 new units.

Other unanimous votes related to the AAHC’s plan included: a resolution to approve a payment in lieu of taxes (PILOT) for the properties now owned by AAHC – so that no property taxes will be owed; a resolution declaring that AAHC employees are and will remain city employees; and a $200,000 allocation from the city’s affordable housing trust fund to support improvements to Miller Manor.

On the transportation side, the council unanimously authorized membership of the city of Ypsilanti in the Ann Arbor Transportation Authority, by approving changes to the articles of incorporation for the AATA. The number of board seats is expanded from seven to nine, with one of the seats to be appointed by the city of Ypsilanti. The transportation authority will go by the name Ann Arbor Area Transportation Authority. The board of the AATA and the city of Ypsilanti also will need to formally approve the new articles, but are expected to do that in a straightforward fashion.

While the amendment of the articles of incorporation changes only the governance of the AAATA, the intent is to provide the potential for increased transportation funding. The AAATA could, with voter approval, levy a uniform millage on all member jurisdictions of the authority – now the cities of Ann Arbor and Ypsilanti. It’s a right the current AATA already has, but has never exercised. Each city itself already levies a transit millage, and transmits the proceeds of those taxes to the AATA. For Ypsilanti, the advantage of a transit authority millage is that it would not count against the state constitutional 20-mill cap that a city can levy – a cap that Ypsilanti has already reached.

Deliberations on those two agenda items – housing and transportation – did not begin until after 11 p.m.

Taking an hour of the council’s time before that was a debate on a change to the city’s public art ordinance. The council unanimously supported eliminating the requirement of an automatic 1% set-aside for public art in the budget for every capital project – known as Percent for Art. But lengthy deliberations unfolded about an additional change: A provision that would allow for the return of previous years’ public art allocations to their funds of origin.

The ordinance revision that had already been given initial approval by the council allowed for such a return just for the FY 2014 public art set-asides. In the end, the council opted for an ordinance change that did not provide for a return of previous years’ public art allocations. That leaves roughly $845,000 in funds that can be used for the public art program as defined in the revised ordinance – one that places the onus on city staff to identify capital improvement projects that might be suitable for incorporating public art.

Another significant item on the council’s June 3 agenda was a resolution encouraging the Ann Arbor Downtown Development Authority to allocate funding for three police officers. That resolution passed on an 8-2 vote. The council also gave final approval to utility rate increases (an annual item) and a reduction in utility improvement charges imposed on first-time connections.

Other business included final approval of rezoning requests for Parkway Place and State Street Center. The Parkway Place rezoning – at 490 Huron Parkway – was from R3 (townhouse dwelling district) to R1B (single-family dwelling district). The State Street Center rezoning, near the intersection of South State and Ellsworth, was from O (office district) to C3 (fringe commercial district).

In anticipation of the upcoming July 4 holiday, the council took initial action on an ordinance that would restrict use of fireworks to the hours of 8 a.m. to midnight.

During public commentary, the topic of Pizza in the Park was reprised as a theme from the council’s previous meeting. Advocates for the homeless community lobbied for a written commitment from the city that a parks and recreation fee would not be imposed on a church that distributes food and other aid at Liberty Plaza, a downtown city park.

Public Housing Conversion

The council was asked to take significant steps to convert the city’s public housing stock to a public/private system in a effort to address a roughly $520,000 deficit in capital improvements funding each year for the next 15 years. Key among those steps was a transfer of ownership from the city of Ann Arbor to the Ann Arbor Housing Commission, which currently manages but does not own the 355 units of public housing in the city.

AAHC executive director Jennifer Hall had briefed the council on the issue at a Feb. 11, 2013 work session.

A total of five resolutions affecting the AAHC originally appeared on the agenda. One of them was removed from the agenda before the meeting started. All were related to the proposed conversion of public housing managed by AAHC to a public/private partnership that would fund the units through project-based vouchers. The conversion would take place under HUD’s Rental Assistance Demonstration (RAD) program. Several million dollars worth of capital improvements will be financed through low-income housing tax credits.

The first resolution was to transfer ownership of the city-owned properties, currently managed by the AAHC, to the AAHC itself. As a land transaction, it required eight votes to pass. Postponement wasn’t a feasible option, because the AAHC’s first grant application is due June 15 – and that grant application needs to demonstrate “site control.”

The AAHC’s original plan was eventually to transfer ownership to a public/private partnership to facilitate the low-income housing tax credit financing. The AAHC selected a co-developer earlier this year at its Jan. 10, 2013 meeting. However, the current plan is for the AAHC to own the land and the buildings, and to convey them through a ground lease to the limited partnership. That’s feasible because a long-term ground lease will satisfy the IRS’s requirement that the limited partnership have an ownership interest in the property.

After the land transfer, next on the council’s agenda was a resolution stating that the current employees of the housing commission are city employees and will continue to be city employees – after the conversion of AAHC properties to project-based vouchers. The third resolution considered by the council was a payment in lieu of taxes for properties in Phase 1 of the planned conversion: 106 Packard Road, 727 Miller, 1701-1747 Green Road, 2742 Packard, and 800-890 South Maple. That will exempt the AAHC from paying property taxes on the properties.

Ann Arbor Housing Commission properties. Color coding indicates phase: Phase 1 (red); Phase 2 (orange); Phase 3 (blue), Phase 4 (green). Image links to dynamic map.

The fourth resolution asked for a $200,000 appropriation from the city’s affordable housing trust fund to support a loan application for improvements at 727 Miller (Miller Manor) and 800-890 South Maple.

The final item was removed from the agenda before the meeting started, at the request of AAHC executive director Jennifer Hall. It had been a request from the city’s general fund to backstop anticipated deficits – even if the AAHC converted all its units to project-based vouchers. The resolution had asked for at least $124,000 – based on “Scenario 3″ described in the council’s information packet – or up to $461,000 if HUD did not allow AAHC to convert its units all in one go (before all financing is formally secured). The request to change the rules had been made by AAHC of HUD in order to lessen the impacts of federal sequestration. But according to Hall, HUD didn’t agree to AAHC’s request to do that. So it’s the $461,000 figure cited in the council’s resolution that would likely come out of the general fund reserve for the three fiscal years FY 2014-16. That item will likely come back to the council for consideration at a future meeting.

The need to rethink the funding and maintenance strategy for Ann Arbor public housing is based on a capital needs assessment conducted in 2009, which determined that AAHC had $40,337 per unit in capital needs over the next 15 years. But at current HUD funding rates, AAHC would receive only $18,000 per unit – which is a $22,000 per unit shortfall in capital repair funding. Without some other funding strategy for its 355 units, AAHC would face roughly $7.8 million or about $520,000 per year in unmet capital needs.

Public Housing Conversion: Public Commentary

Julie Steiner of the Washtenaw Housing Alliance addressed the council on the topic of the transfer of city-owned properties to the Ann Arbor Housing Commission. She pointed out that it’s unusual for a municipality to own the properties managed by the housing commission. More typically, a housing commission owns the properties it manages. So it’s a natural step for the city council to transfer the properties to the housing commission. She allowed that the proposed RAD conversion sounds complicated, but she called it a win-win for everybody. It would allow renovations that could not be done with just the regular federal HUD funding. She warned that the properties could fall into a disastrous state of affairs, if this option is not pursued. Even Albert Berriz has been taking this approach to capital improvements of low-income housing in Florida and Texas for a number of years, she said. [Berriz is CEO of McKinley Inc., a real estate management firm based in Ann Arbor.]

Public Housing Conversion: Council Deliberations

Jennifer Hall, executive director of the Ann Arbor Housing Commission, was asked to the podium by Sabra Briere (Ward 1) to give an overview.

From left: Sabra Briere (Ward 1) and Sally Petersen (Ward 2).

Hall explained that many of the problems associated with the public housing stock are due to a lack of investment by the federal government. Tenant rent is a small part of the budget, she noted. What’s being proposed is a transition from supporting Ann Arbor’s low-income housing as public housing to a project-based vouchers approach. Both of the approaches to subsidizing low-income housing are provided through the U.S. Dept. of Housing & Urban Development (HUD). Ann Arbor doesn’t have large, 500-600 unit housing projects, she pointed out. The RAD program allows for the transition from HUD’s public housing line item to its voucher program, which is projected to be better funded in the future. AAHC already administers vouchers – over 1,500 of them, Hall said.

The transition to a project-based voucher system also will allow AAHC to apply for other funding support. One of the biggest sources is low-income housing tax credits. AAHC has been approved by HUD for RAD, Hall noted. And for the last six months AAHC has been doing due diligence and a feasibility study – which includes inspection of buildings by contractors and architects.

The first grant application by AAHC, for $1 million, is due by June 15, 2013. It’s being made to a Federal Home Loan Bank for two properties. To be eligible for the grant, the AAHC must show site control of the properties. That’s why the city council was being asked to transfer ownership from the city of Ann Arbor to the AAHC.

Hall explained that there’s been a change from the original plan that was presented to the city council. That original plan would have transferred the properties again – from AAHC to a new public/private partnership. But the new plan is for the AAHC to retain ownership of the land and the buildings, and to lease the improvements (buildings) through a ground lease to the limited partnership. A long-term ground lease will satisfy the IRS requirement that the limited partnership have an ownership interest in the property.

Sumi Kailasapathy (Ward 1) wanted to know if the city would still have any controls over the properties after the transfer of ownership. As one way to control what the AAHC does with the properties, Hall noted that the city council appoints the AAHC board. Kailasapathy wanted to have some clarity on issues like rights of first refusal. Assistant city attorney Kevin McDonald explained that there’s a deed restriction that will provide an extra control. He reiterated Hall’s point that the city council still appoints the members of the AAHC board. The council has the ability to remove members of the AAHC board, and McDonald continued by noting that the council has exercised that option before. [Current AAHC board members are Leigh Greden, Christopher Geer, Marta Manildi, Gloria Black and Ronald Woods.]

McDonald also pointed out that HUD controls the properties. If the properties were being mismanaged, HUD could step in, he said.

From left: Sumi Kailasapathy (Ward 1) and Rochelle Lento, a Dykema attorney who’s doing work for the Ann Arbor public housing commission in connection with the RAD conversion.

Kailasapathy asked about the change from the transfer to a public/private partnership to the idea of a ground lease. Hall explained that after 15 years, the properties come back to the AAHC. Kailasapathy raised the specter of an accident that results in a legal liability – venturing that governmental immunity might not apply to a public/private partnership.

Rochelle Lento, who is legal consultant for the AAHC on the RAD conversion, attempted to provide some assurance to Kailasapathy. She noted that HUD’s Hope 6 program uses ground leases as a mechanism. McDonald stated that nothing that’s being proposed is outside the scope of what housing commissions can do.

Stephen Kunselman (Ward 3) wanted to know why the city can’t just lease the properties to the AAHC with a sublease to the public/private partnership. Lento could not say that can’t be done, but told Kunselman she has never seen it done that way.

Kunselman ventured that there must be a valid reason why the city of Ann Arbor currently owns the properties. He thought it might be related to the reason that the Ann Arbor Downtown Development Authority doesn’t own properties – that it’s important to the community to have direct control by the elected body.

Kunselman felt that a five-member board of political appointees – the AAHC board – might not be the best property managers. Kunselman, who said he’d be voting no on the proposal when the council was briefed on it in February, engaged in extended back and forth with Hall, Lento, and McDonald. He asked which properties are proposed to be demolished and rebuilt. Hall told Kunselman that those properties include the North Maple site, four units on Platt, Broadway, and possibly the White/State/Henry location.

Sally Petersen (Ward 2) asked for a description of the limited liability partners and wondered if AAHC has one lined up. Lento indicated that the Great Lakes Capital Fund is interested in AAHC. She described GLCF as an active player in Michigan. She felt the AAHC’s ability to acquire an equity partner is good.

Christopher Taylor (Ward 3) brought up the shortfall in needed capital improvements. Hall responded that it would be burying her head in the sand to think that there will be more funding for public housing at the federal level.

Sally Petersen (Ward 2) and Christopher Taylor (Ward 3).

Taylor asked for the reasonable expectation of the available investment that this proposal would create. Hall described AAHC’s plan to package Miller Manor with South Maple – which will have a $13 million rehabilitation cost. The low-income housing tax credits will generate about $8-9 million for that particular project. She also described using the city’s PACE program to fund some of the cost. The operating pro forma also indicates that those properties should be able to carry $1.6 million in debt. Lento explained that other grant money might be available from the state of Michigan, and a Federal Home Loan Grant program. Sources of funding are often leveraged against each other, she explained.

Alluding to Hall’s previous remark, Jane Lumm (Ward 2) thanked Hall for not sticking her head in the sand, characterizing the situation as complicated and difficult. Lumm acknowledged that something dramatic needs to be done, and the approach Hall was proposing made sense. She noted that federal sequestration complicates the issue. But Lumm called it a clear choice. It’s not consistent with Ann Arbor’s values to do nothing and let the properties continue to deteriorate and eventually disappear, Lumm said, along with the services the properties provide.

Briere observed that it’s easy to lose sight of the fact that there are people involved, who live in the properties – when all the discussion is about just the properties. Prompted by Briere, Hall described a situation at Broadway, involving a stormwater drain. Another building on Platt Road has continuing problems with water in the basement, because it was built in the floodplain. She described sewer backups at one property. Briere asked what happens to the people who live in the properties if some of them are demolished as planned by the AAHC. Hall explained that AAHC has to follow the HUD protocols as far as finding alternate locations for people to live.

Hall described how some of the AAHC properties could support more units than they currently have – with a possible net increase of 20-30 units citywide.

After some back-and-forth with Kunselman, McDonald suggested adding a resolved clause to the council resolution. The additional resolved clause would make the transfer of the city property conditional on review of the proposed ground lease to the public/private partnership. Kunselman asked if the deed restriction could include a requirement that the housing be accessible to those with incomes less than 30% AMI (area median income). McDonald wasn’t sure if HUD will accept the imposition of a more stringent requirement than HUD’s 50% AMI requirement. Hall described the advantage of setting the rents at 50% – because vouchers make up the difference between income and the rent. If rent is set lower, that makes the subsidy lower.

The council took a brief recess so that McDonald could finalize and transmit the wording of the additional resolved clause to councilmembers.

RESOLVED, That each transfer be contingent on the closing of all financing for each transaction in conjunction with the Housing Commission entering into a ground lease with its partners; and …

Outcome on amendment: The council voted unanimously to add the resolved clause.

Kunselman said he’s been “very, very hesitant to go this direction.” He feared unforeseen consequences. He feared it will push out the “poorest of the poor.” On the other hand, there’s a sense that there’s really no other option, he said. The council has spent the last 10 years talking about affordable housing without talking about the Ann Arbor Housing Commission, he said. The 350 units of public housing managed by the AAHC had not received the council’s attention. But Kunselman said he’d support the proposal because of the uncertain future.

Mayor John Hieftje allowed there are some unknowns. But he felt that federal funding is going to go down. If the council did nothing, he felt things would get worse.

Before it went to a vote, Taylor questioned the wording of the added resolution, wondering if the choice of “all” in “all financing” might be too strong. Lento confirmed for Taylor that she was confident “all” could be achieved.

Outcome: On a 10-0 vote, including Kunselman, the council voted to transfer the city-owned public housing properties to AAHC. Chuck Warpehoski (Ward 5) was absent.

Public Housing Conversion: Ancillary Resolutions

Without deliberation, the council acted on the second and third resolutions associated with the RAD conversion.

Outcome: The council approved the confirmation of AAHC-assigned employees as city employees.

Outcome: The council unanimously approved the payment in lieu of taxes (PILOT) for AAHC properties.

On the resolution about allocating $200,000 to the city’s affordable housing trust fund for Miller Manor improvements, councilmembers made some brief remarks. Briere mentioned that the $200,000 appropriation from the city’s affordable housing trust fund was recommended by the housing and human services advisory board (HHSAB) some time ago. Lumm indicated support for the resolution, saying that’s what the money in the affordable housing trust fund is for.

Outcome: The council unanimously approved the grant for improvements at Miller Manor.

Ypsilanti Membership in AATA

The council was asked to approve changes to Ann Arbor Transportation Authority’s articles of incorporation in a way that would admit the city of Ypsilanti as a member of the AATA. The AATA board and the Ypsilanti city council will also need to approve the document. Given the unanimous vote of the Ypsilanti city council requesting membership – and the AATA board’s generally positive response to the request – it’s expected those two bodies will also vote to approve the revised articles of incorporation. [.pdf of proposed AAATA articles of incorporation][.pdf of existing AATA articles of incorporation]

Ypsilanti’s request for membership came in the context of a demised attempt in 2012 to expand the AATA to all of Washtenaw County. Since then, conversations have continued among a smaller cluster of communities geographically closer to Ann Arbor.

From left: AATA outside legal counsel Jerry Lax and AATA staff members Bill De Groot and Mary Stasiak.

In addition to admitting the city of Ypsilanti as a member, the revised articles expand the size of the board from seven to nine members. One of the new seats will be appointed by the city of Ypsilanti. [Previous Chronicle coverage: "Ypsi Waits at Bus Stop, Other Riders Unclear."]

While the change to the articles will affect the governance of the AATA, the goal of the governance change is to provide a way to generate additional funding for transportation. The AATA could, with voter approval, levy a uniform property tax on the entire geographic area of its membership – but the AATA does not currently do that. The cities of Ann Arbor and Ypsilanti currently levy their own millages, which are transmitted to the AATA. However, Ypsilanti is at its 20-mill state constitutional limit. A millage levied by the AATA would not count against that 20-mill cap.

A millage proposal would require voter approval. There’s an outside chance for the AATA to place a millage on the November 2013 ballot – if the change to the articles of incorporation are also approved in straightforward fashion by the AATA board and the Ypsilanti city council. Any decision to place a millage request on the November ballot would need to be made by late August. [Ballot language needs to be certified to the county clerk by Aug. 27, 2013.] But the practicalities of mounting a successful millage campaign mean that a decision to make a millage request would likely need to come sooner than that.

The change in the articles of incorporation also calls for a name change – to the Ann Arbor Area Transportation Authority (AAATA). Customary pronunciation of the current name is to sound out each letter: A-A-T-A. One possibility that’s been suggested is to pronounce the new letter sequence Triple-A-T-A.

The council’s June 3 resolution on the AATA articles of incorporation was co-sponsored by mayor John Hieftje, Sabra Briere (Ward 1) and Stephen Kunselman (Ward 3). Along with Sally Petersen (Ward 2) and Chuck Warpehoski (Ward 5), the three have participated in ongoing meetings among the “urban core” communities. The next such meeting is scheduled for June 27 at Pittsfield Township hall, starting at 4 p.m.

Ypsilanti Membership in AATA: Council Deliberations

Sabra Briere (Ward 1) introduced the proposal.

Stephen Kunselman (Ward 3). In the background is his wardmate, Christopher Taylor.

Stephen Kunselman (Ward 3) added his support to the proposal, but called it a small step. He wondered if it’s appropriate for the Ann Arbor city council to take action before the AATA board takes action. His concern was that to add other members – like Ypsilanti Township or Pittsfield Township – it might require amending the articles of incorporation again within a short time frame. There’s a strong connection of the communities to the east of Ann Arbor, so they need a voice at the table, Kunselman said, and this step that the council is being asked to take will help to do that.

Mike Anglin (Ward 5) asked for someone from the AATA to explain the proposal to the public. Responding to Anglin’s request, Jerry Lax, AATA’s outside legal counsel, went to the podium. Joining Lax were Bill De Groot and Mary Stasiak, staff with the AATA. Lax explained that the city of Ypsilanti has explicitly requested membership. The document in front of the council resulted from a discussion between the city of Ann Arbor, AATA, and the city of Ypsilanti, Lax said. He noted that this step the council is being asked to take does not itself create new funding. But it creates a mechanism by which voters could approve new funding.

Responding to a question from Anglin, Lax described the benefit to residents of Ann Arbor as allowing for a more coherent approach to providing transportation. Mayor John Hieftje described the background of the “urban core” meetings. Sally Petersen (Ward 2) stated that her own notion of “urban core” is Ann Arbor and Ypsilanti. She asked if that’s also the AATA’s view. Lax ventured that two townships – Pittsfield and Ypsilanti – might also be considered a rational part of the system.

Petersen expressed some concern about renaming the authority as the Ann Arbor Area Transportation Authority. She suggested calling it the Ann Arbor Ypsilanti Transportation Authority. Lax told Petersen that some initial drafts did include AAYT as a possibility. But he didn’t feel that the name change was the major accomplishment – something that Petersen agreed with. Kunselman ventured that naming it as Petersen suggested would result in a shortening that he seemed to indicate wouldn’t be optimal: “Ypsi-Arbor Transportation Authority.”

In support of the addition of Ypsilanti to the AATA and the relationship of Ypsilanti to Ann Arbor, Hieftje suggested looking at where high school graduates are attending school. Many Ann Arbor high school grads attend Eastern Michigan University in Ypsilanti, he said.

Hieftje also noted that Ypsilanti has already set up a dedicated funding mechanism for transit with its voter-approved millage. He wanted the Ann Arbor city council to be able to affirm the action that the Ypsilanti city council had taken when it requested membership. He said he was impressed with the AATA’s ability to account for where the various millage dollars were going. Hieftje indicated that he wouldn’t have a problem in “bleed-over” from the city of Ann Arbor funding for Routes #4 and #5 between Ann Arbor and Ypsilanti.

Jane Lumm (Ward 2) thanked staff for providing answers to her questions earlier in the day. She recited much of the recent history of efforts to expand transportation in the county. She complained that information on Ypsilanti’s financial commitment was only provided in response to councilmembers who had requested it. She lamented the fact that there’s not a framework for adding additional members beyond Ypsilanti. But Lumm said that Ypsilanti is Ann Arbor’s most natural partner in transportation, so she’d support the proposal.

Sumi Kailasapathy (Ward 1) drew out the fact that a new AAATA millage would be levied uniformly in the entire geographic area of the transportation authority. That is, if the combined votes in the cities of Ann Arbor and Ypsilanti were in favor of an additional transit millage, then that additional millage would apply at the same rate in both cities.

Outcome: The council unanimously approved adding the city of Ypsilanti to the AATA.

Future of Public Art Program

On the council’s agenda was the final vote on a change to the city’s public art ordinance, so that capital improvement projects are no longer required to set aside 1% of their budgets for public art – a funding mechanism known as the Percent for Art. The council had given initial approval to the ordinance change at its May 13, 2013 session.

The main change to the ordinance is to eliminate any reference to a specific percentage for art in a capital project budget. Also, art funds would not be pooled as they are now – which entails setting aside money from projects into which it would be difficult to incorporate public art. Under the amended approach, city staff will work to determine whether a specific capital improvement should have enhanced design features “baked in” to the project – either enhanced architectural work or specific public art. The funding for any of the enhanced features would be included in the project’s budget and incorporated into the RFP (request for proposals) process for the capital project.

At the council’s April 1, 2013 meeting, a vote was taken to extend a moratorium on spending of public art funds – through May 31. The council had originally enacted the moratorium on spending at its Dec. 3, 2012 meeting.

The action to impose a moratorium came in the context of a failed millage proposal in November 2012, which was meant to provide an alternative funding mechanism to the Percent for Art approach. The millage proposal was put forward in part in response to objections that voters had not explicitly approved the Percent for Art mechanism, which taps all capital funds – even those deriving from fees and millages designated for other purposes.

In two other separate agenda items on June 3, the council was asked to return to their funds of origin some of the money that had previously been set aside for public art.

Both proposals were to change the council’s budget, which under the city charter means that an eight-vote majority was required on the 11-member council.

The first resolution, sponsored by Jane Lumm (Ward 2) and Sumi Kailasapathy (Ward 1), would have returned monies to their funds of origin that had been set aside for public art in previous years under the ordinance. It was limited to those funds that have not yet been allocated to specific art projects.

However, the changes to the public art ordinance, as proposed for a final vote on June 3, allowed the council to return only the FY 2014 set-asides to their funds of origin. So the deliberations on the return of set-asides from previous years were primed for inclusion in deliberations on the ordinance itself – because a further amendment was necessary in order to vote on the Lumm/Kailasapathy amendment later in the agenda.

Returning public art set-asides from previous years would have shifted the following amounts for a total of $845,029:

• 002-Energy: $3,112
• 0042-Water Supply System: $61,358
• 0043-Sewage Disposal System: $451,956
• 0048-Airport: $6,416
• 0069-Stormwater: $20,844
• 0062-Street Millage: $237,314
• 0071-Parks Millage: $28,492
• 0072-Solid Waste: $35,529

The second fund-return resolution – sponsored by members of the council’s public art task force, Margie Teall (Ward 4), Stephen Kunselman (Ward 3), Christopher Taylor (Ward 3), Sally Petersen (Ward 2) and Sabra Briere (Ward 1) – proposed to return just the money set aside in the FY 2014 budget, which was approved by the council on May 20, 2013. This second resolution proposed to return the following amounts to various funds, for a total of $326,464:

• 0042-Water Supply System: $113,500
• 0043-Sewage Disposal System $50,050
• 0069-Stormwater: $33,500
• 0062-Street Millage: $120,700
• 0071-Parks Millage: $8,714

The council had already included explicit language in the public art ordinance amendment allowing for the return of money to the funds of origin that had been set aside in the FY 2014 budget for public art.

Future of Public Art Program: Public Comment

The council heard support for public art during public commentary reserved time. Mark Tucker quipped that his name, spelled “Turner” on the agenda, “has been misspelled worse.” He spoke in support of public art. And he noted that the newly-proposed ordinance changes included language acknowledging the positive impact that government can have in supporting the arts. He spoke specifically in favor of episodic and temporary public art. [Tucker is co-founder of the annual FestiFools parade in downtown Ann Arbor.] Tucker hoped that the revised ordinance signals the beginning of a dialogue.

Bob Miller, chair of the Ann Arbor Public Art Commission, addressed the council speaking on behalf of himself. He suggested that the council add to the ordinance a requirement that private construction contribute to a public art fund.

Thomas Partridge spoke at several of the public hearings offered at the meeting, including the one on the public art ordinance change. He was generally critical of the public art program and in particular the Dreiseitl water sculpture in front of city hall – funded by the public art program.

Also speaking at the public hearing on the public art ordinance was John Kotarski. He disagreed with Partridge’s assessment on the merits of the Dreiseitl work. Kotarski – a member of the city’s public art commission – thought the proposed ordinance amendments will strengthen the public art program. He argued that the “baking in” of public art into capital projects would result in more public art. He told the council and the city administrator that he’s ready to help.

Future of Public Art Program: Council Deliberations

Margie Teall (Ward 4) led off deliberations by thanking everyone, highlighting the work of Sabra Briere (Ward 1), who did much of the work on the council’s task force. Teall didn’t think it’s now a perfect ordinance. She highlighted the portion of the ordinance that she’d added, which Mark Tucker had noted during public commentary – about the government playing a role in supporting art.

By way of specific background, the language cited by Teall and Tucker reflects a softening from the original ordinance, which indicated a responsibility of the government to foster the arts [added language in italics; deleted language in strike-through].

City Council recognizes the role that government can play and the support that government can offer to foster the development of culture and the arts.
City Council recognizes the responsibility of government to foster the development of culture and the arts.

Briere also thanked everyone, including the staff. She noted that the task force didn’t have solutions for some things. She gave an example of a problem that the council did not have a solution for: How to pay for public art administration, and what to do with currently pooled public art funds.

Craig Hupy, the city’s public services area administrator, came to the podium, quipping that he’d give the council an engineer’s version of finance. Financing the administration of the public art program is a challenge, he said. Using the city’s municipal service charge wouldn’t be feasible, he said, because that charge is assessed “looking backwards.” Hupy indicated that it would be possible to craft a program supported by the general fund for an interim period, until the new program becomes fully functional.

CFO Tom Crawford came to the podium and explained that his recommendation for funding public art administration was for the council to use the existing pooled funds that are set aside for public art to get the program through the next two years. Sumi Kailasapathy (Ward 1) questioned the legal basis on which the pooled funds could be used for administration. The basis of her concern was the restriction on the use of public funds that requires a thematic link between the purpose of the fund (e.g., water fund) and the work of art.

Jane Lumm (Ward 2) and Christopher Taylor (Ward 3).

Christopher Taylor (Ward 3) ventured that what’s needed is not administrative support for specific projects, but for those that might be considered as a part of a specific capital improvements project. He gave the example of a parks capital improvements project, where the question might arise as to whether it would be appropriate to incorporate public art into the project. It might be the case that a determination is made that a particular parks project wasn’t suitable for incorporation, he said. But that would be part of the administrative cost of the public art program, and would be allowed to be funded out of the parks millage set-aside, under the same reasoning that planning for the parks project itself is fundable from the parks millage. And if no art were incorporated into that parks capital project, he continued, it would be the same as if the question had been weighed: Should another basketball court be added? Even if the answer were no, the administrative activity associated with the weighing of that question would be fundable from the parks capital improvement millage.

Jane Lumm (Ward 2) noted that the total of uncommitted funds that have been set aside in the public art fund is around $845,000. She suggested that maybe 10% of it could be retained as transition money to the new program. Crawford indicated that if money were pulled from the pooled funds, it would be done proportionally from the respective funds of origin.

Future of Public Art: Council Deliberations – Additional Amendment

Lumm then proposed an additional amendment to the ordinance to allow the return of funds set aside in previous years to their funds of origin. This was an additional ordinance change that would be necessary in order to implement Lumm’s resolution later on the agenda, which actually returned the funds. Lumm’s proposed added language was as follows:

(8) City Council may, at its discretion, amend the Fiscal Year 2014 budget or any subsequent budget to return to their respective funds of origin some or all uncommitted funds allocated for art prior to Fiscal Year 2014 under the prior Section 1:833, including funds that have been pooled in accordance with Section 1:834.

Briere and Teall both weighed in against this amendment. The task force had considered this option but chose not to pursue it. Teall said that the public art program needs a full-time administrator. Based on that financial need, she argued, the money should stay in the public art fund.

Kunselman indicated he wouldn’t support Lumm’s further amendment to the ordinance. He worked on the council’s public art task force, he noted, and there was a lot of compromise involved. Lumm responded to Kunselman by saying that he could support her amendment but then keep some of the money as transition money. Lumm returned to the fact that there’s roughly $845,000 of uncommitted money in the art fund. She called for a “clean break” from the Percent for Art program. She wanted to know what specific art that uncommitted money would be used for – instead of sewer and street improvements, for example.

Kailasapathy indicated that she wouldn’t support using restricted funds for general art administration. Assistant city attorney Abigail Elias confirmed that this amendment of Lumm’s would be necessary for the Lumm-Kailasapathy resolution later in the meeting, which would actually return public art money from prior years to the funds of origin. Briere drew out the fact that the current amount in the art administration fund will be zero by the end of this fiscal year on June 30, 2013.

From left: Jane Lumm (Ward 2) and Sumi Kailasapathy (Ward 1).

Petersen ventured that even the administration costs have a “nexus” issue – which means that the money set-aside for public art must be spent in a way that is thematically linked to the fund from which the money was taken. Kailasapathy noted that the public art administration fund came from an 8% allocation initially. That initial 8% has now been spent down, so to take another 8% from the set-aside for additional administration would essentially be double-dipping, she said.

Hupy pointed out that to implement the recommendation for a full-time instead of a part-time administrator, it will cost more. [The current public art administrator, Aaron Seagraves, serves in a part-time position.] Taylor described how the work of the public art administrator in the future will involve how to bake in art to various capital projects. If the administrator is thinking about incorporating art into streets, then that’s an adequate thematic link to streets to fund the art administrator’s work. As long as the administrator allocates time proportionally among the source funds, there shouldn’t be a problem, Taylor contended.

Briere asked what the “fall back position” is for the city – if all the money is returned to the funds of origin. Crawford explained that if all the pooled art money is returned to the funds of origin, then the only option he saw for funding the administration of the public art program was to use general fund reserve money.

Lumm returned to her idea simply to leave a small portion of the uncommitted art funds to pay for administration. She stressed that the sewer fund contributed the majority of the money that was currently in the public art fund. Petersen argued that if the amendment were approved, it gives the council some flexibility in the future. She was implying that the restoration of that money to its funds of origin need not be settled that night. The flexibility would help the council deal with some unknowns she identified, which included: (1) How much money is needed? (2) What’s the art administrator’s job description?

Hieftje indicated he wouldn’t support Lumm’s amendment. He contended that when the conversation about changing the public art program was started, many councilmembers had expressed their comfort with leaving the existing funds in the public art fund. He linked public art with economic development.

Outcome: The amendment proposed by Lumm failed, with support only from Kailasapathy, Petersen and Lumm.

Future of Public Art: Council Deliberations – Continued

When the council returned to the main question, Kunselman talked about working together and compromising. His concern had always been about the legality of the program, he said. The task force had done a lot compromise coming to an agreement. In that spirit, he said, he wouldn’t be asking for a state attorney general opinion on the legality of the program – which he’d previously said he would. He allowed that he’d voted for the program in 2007, unaware of the implications of the Percent for Art funding mechanism. And he hoped that the community could find funds for other kinds of art besides capital improvements. He indicated a preference for gatherings of people having a good time, rather than monumental art. He supported the ordinance change.

Lumm thanked the task force. She supported the part of the ordinance change that eliminates the automatic 1% set-aside. If any community could fund public art with private sources, it’s Ann Arbor, she contended.

But Lumm was still concerned that the structure of the program leaves in place a mechanism that takes money from capital improvement projects. She expressed disappointment that her amendment was not approved. She returned to the point of the $845,000 that remains uncommitted in the public art fund. She re-argued the case for her amendment that would have allowed the council to restore uncommitted public art money from all previous years to their funds of origin. She indicated a grudging support for the ordinance change.

Taylor said he was delighted and proud to have participated in the task force. He called the ordinance revision an improvement – but he felt there’s some uncertainty. Public art will compete with other priorities and find its proper level of support, he felt.

Briere summarized the task force work as the result of councilmembers approaching the topic from their individual peculiar attitudes toward public art. Thinking through all the implications had been hard, she said. She didn’t think everything has been solved. How it’ll play out in the next three years remains to be seen, she said. The council will be determining how much public art there is and where – based on advice from the staff about which projects should have art incorporated in them, she explained.

Kailasapathy indicated support for the ordinance revision, but still had reservations about leaving the money in the art fund balance. She allowed she’s not a legal expert, but felt it was on shaky legal grounds.

Responding to a question from Kunselman, Hupy allowed that he couldn’t imagine that $845,000 could be spent on public art administration in two years. Crawford indicated that that amount could be used for administration but also on art projects.

Kunselman urged councilmembers to stop looking back and to start looking forward. It was tough for him to disagree with Lumm and Kailasapathy, but he wanted to focus on looking forward.

Marcia Higgins (Ward 4) asked about the resolution later on the agenda that restored funding that had been set aside for public art in FY 2014 just recently: How was that different? Crawford explained that particular resolution applied just for FY 2014. There was a second resolution that would return money from previous years – which Lumm’s amendment to the ordinance was meant to facilitate.

Outcome: The council gave unanimous final approval to the changes to the public art ordinance.

Future of Public Art: Return of Funds Prior to FY 2014

Deliberations on the proposed return of public art money to its funds of origin for years prior to FY 2014 were scant. That’s because the ordinance amendment that would have facilitated the fund transfer earlier in the evening did not pass.

Outcome: Lumm withdrew the resolution, given that her attempt to amend the ordinance – in a way that was necessary for the resolution to be considered – failed earlier in the meeting.

Future of Public Art: Return of Funds Just for FY 2014

Briere introduced this resolution to return public art set-asides in FY 2014 to their funds of origin.

Lumm indicated she supported the resolution. But she again complained that the council didn’t act to amend the ordinance to allow the return of previous years’ allocations to their funds of origin.

Outcome: The council voted to return the FY 2014 public art set-asides to their funds of origin.

DDA Funding of Downtown Police

On the agenda was a formal resolution encouraging the Ann Arbor Downtown Development Authority to consider paying for three police officers to be assigned to the downtown. The total annual cost would be about $270,000.

DDA Funding of Downtown Police: Background

The resolution came in the context of the council’s vote on May 20, 2013 that set the city’s FY 2014 budget – during a debate that ultimately rejected funding for three additional police officers. The proposed budget amendment, which failed on a 5-6 vote, had been brought forward by Jane Lumm (Ward 2). The amendment would have reduced the budget of the 15th District Court by $270,000.

The council’s June 3 resolution was brought forward by Lumm and Sumi Kailasapathy (Ward 1), who both supported the unsuccessful attempt to reduce the 15th District Court budget to fund police. The June 3 resolution came partly in response to sentiments expressed during the FY 2014 budget debate, when some councilmembers on the prevailing side had said they’d prefer for additional police to be paid for by the DDA.

The DDA itself has designated $300,000 in its parking fund budget for the next year as “discretionary” and has previously discussed allocating that money to a “clean and safe” initiative – which could include funding police officers. However, sentiments on the DDA board have been mixed about the exact nature of the staffing that the DDA would like to pay for. Some DDA board members have indicated a preference for hiring staff who would act as “ambassadors” – not police.

DDA Funding for Downtown Police: Council Deliberations

Jane Lumm (Ward 2) introduced the resolution, which she co-sponsored with Sumi Kailasapathy (Ward 1) and Sally Petersen (Ward 2). Stephen Kunselman (Ward 3) indicated he would support the resolution. His understanding was that the DDA likes direction from the city council in the form of resolutions.

Christopher Taylor (Ward 3) allowed that it would not be irrational for the DDA to review this question. But he indicated that he didn’t think the resolution helped to rebuild a relationship of trust with the DDA. He pointed out that the DDA had already included an option in its budget to fund public safety. So he’d be voting against the resolution.

Sabra Briere (Ward 1) alluded to the council’s December 2012 retreat priorities on public safety. She indicated that her support for the resolution was based on the fact that it’s advisory. But she noted that the work plan developed by the city administrator, Steve Powers – in response to the council’s priority on public safety – includes a lot of elements that don’t depend on a count of officers. [.pdf of draft work plans for FY 2014-15 for all service areas] But the resolution is only about a number of police officers, Briere said. She wanted to move the discussion beyond numbers, to talk about policy.

Kailasapathy stressed that the funds in the DDA’s budget are undesignated. That’s part of the basis on which she supported the resolution. Petersen described the perception of public safety as high until someone has a problem – and police downtown might be able to prevent problems before they happen. Her mention of the perception of safety was an allusion to the inclusion in the council’s definition of success of Ann Arbor being perceived as safe.

Mike Anglin (Ward 5) indicated he’d support the resolution. He allowed that just having more police officers doesn’t automatically make a safer city, but more police officers means that the city is able to respond when someone calls for help.

Marcia Higgins (Ward 4) expressed appreciation for the fact that the resolution was brought forward. But she also expressed some reservations about specifying the exact number of officers. She raised the possibility of making an amendment to the resolution to make it nonspecific with respect to the number of officers. Lumm indicated a preference for her original version, specifying three officers.

Briere then asked police chief John Seto to come to the podium. She asked how many officers are dedicated to the DDA area. Seto says none are assigned to the DDA specifically. It’s part of the “Adam” district – bounded by Huron, Main, Stadium and Packard – and 12-14 officers are assigned to that area. Briere wanted to know if three officers were added, how the staffing would be adjusted. Seto answered that the additional three officers would be additional bodies that would be assigned to the “Adam” district. The officers assigned to other areas of the city would remain the same, he says.

Mayor John Hieftje stated that Ann Arbor is one of the safest cities in the nation. Most of the literature indicates that adding police doesn’t reduce crime, he said. His interest was in reducing nuisance issues. Hieftje noted that the DDA board [on which he sits] has discussed the possibility of funding ambassadors who would have direct communication with the police. Hieftje indicated agreement with Taylor’s remarks.

Hieftje felt the context of the council’s consideration of revising the ordinance governing DDA TIF (tax increment finance) capture was relevant. [The council is considering clarifying the existing language in the ordinance that describes a cap in TIF revenue to the DDA, calibrated to the amount of anticipated revenue in the TIF plan, a foundational document of the DDA.] Hieftje expressed concern that the funding for police staffing, if they’re to be added as staff, needs to be sustainable.

Hieftje said he couldn’t predict how the DDA would perceive the resolution. He wanted councilmembers to be prepared for a range of reactions from the DDA board. He felt it would be a worthy discussion at the DDA. [At the DDA's June 5, 2013 meeting, the council's resolution was referred to the operations committee.]

Outcome: The council voted 8-2 to encourage the DDA to consider funding three police officers to be deployed in the downtown. Dissent came from Christopher Taylor (Ward 3) and Margie Teall (Ward 4). For a Chronicle op-ed on this general topic, see: “Counting on the DDA to Fund Police?“

Sidewalk Definition Change

The council considered initial approval of a change to the definition of “sidewalk” in the city’s code.

The new definition of “sidewalk” would expand the existing definition to include non-motorized paths that are [emphasis added] “designed particularly for pedestrian, bicycle, or other nonmotorized travel and that is constructed (1) in the public right of way or (2) within or upon an easement or strip of land taken or accepted by the city or dedicated to and accepted by the city for public use by pedestrians, bicycles, or other nonmotorized travel, …”

When the ordinance change comes to the council for a second and final approval, an additional resolution will be voted on, which would accept certain sidewalks for public use.

Impacts from this change include funding for repair and maintenance of such facilities and responsibility for snow clearance. The changed definition will allow the city to use sidewalk millage money to repair and maintain the facilities. However, it will also place responsibility on the abutting property owner for snow clearance during the winter.

City staff have identified 33 cross-lot sidewalks that would be affected by the ordinance change. A notice is supposed to be sent to all property owners abutting those sidewalks, informing them that a formal resolution accepting those sidewalks for public use is pending. According to the staff memo accompanying the council’s agenda item, a question and answer session is scheduled for June 27 from 5-7 p.m. in the basement conference room at city hall.

During the brief deliberations, Sabra Briere (Ward 1) indicated she would support the ordinance to move it to a second reading, but she had some questions she’d want answered when it comes back to the council for final approval. Her concern stemmed from sidewalks in the city that don’t run along streets but rather between groups of houses to connect one area to another. She noted that the city’s recently approved sidewalk maintenance millage relieved property owners from having to maintain and repair the sidewalks that adjoined their property. But that meant that a different question became important: Who’s responsible for shoveling snow off the sidewalks during the winter? Depending on the neighborhood, this could be a burden, she said. Briere felt the council will want to look carefully at the definition change.

Outcome: The council gave unanimous initial approval to the change in the definition of “sidewalk.”

Mack Pool Roof Replacement

The council considered an item to approve replacement of the roof on Mack indoor pool, located within the Ann Arbor Open school near the corner of Miller and Brooks.

At its May 21, 2013 meeting, the Ann Arbor park advisory commission had recommended awarding a contract to Pranam GlobalTech Inc. for $193,000 to cover the roof replacement and painting refurbishment. A 10% construction contingency brings the project’s budget to $212,300.

Pranam provided the lowest of two bids. The other bidder was Wm. Molnar Roofing Co. Inc., which bid $271,319 for the work. Pranam was previously selected to replace the roof at Veterans Memorial Park Ice Arena. The contract for that project was approved by the city council at its May 20, 2013 meeting.

According to parks staff, the existing roof from the early 1990s was expected to last just 15 years. There are leaks and rusted steel lintels and joists, which need to be replaced. The project also includes removing rust and painting the pool ceiling and joists.

Funding for the project is available from two sources: (1) $186,088 from the fund balance of the parks maintenance and capital improvements millage; and (2) $26,212 from the Ann Arbor Public Schools, which pays annually into a capital facilities escrow account earmarked for Mack Pool.

The work will be done in June and July, while school is out of session. The pool is not open during the summer months.

Outcome: Without deliberation, the Mack Pool roof contract was unanimously approved.

Pension Ordinance Change

The council considered final approval of a change to the city’s pension ordinance. The change would potentially affect a single person – a former city dispatcher.

When dispatch operations for the city were contracted out to the Washtenaw County sheriff’s office, the pension benefit change was negotiated as part of the consolidation with the Ann Arbor Police Officers Association, which represented the city dispatchers. The amendment allows a former dispatcher to collect city pension benefits at the same time they would have if they’d remained employees with the city.

Outcome: Without discussion, the council gave unanimous final approval to the change to the pension ordinance.

Distribution of Non-Motorized Plan

The council was asked to take another step toward incorporating an update to the city’s non-motorized transportation plan into the city’s master plan.

The specific action requested of the council was to approve distribution of the plan to adjoining jurisdictions and stakeholders, including the Washtenaw County board of commissioners, DTE Energy, the University of Michigan, the Ann Arbor Transportation Authority, and the Ann Arbor Public Schools. These entities will have 42 days to submit comments.

A recommendation to distribute the city of Ann Arbor’s draft non-motorized transportation plan update had been unanimously approved by the city’s planning commission at its April 16, 2013 meeting. [.pdf of staff report and draft non-motorized plan]

This is an update of a plan that was initially approved in 2007. It makes policy recommendations as well as specific project proposals, primarily related to pedestrian and bicycle travel. Planning commissioners had been briefed on the draft update by Eli Cooper, the city’s transportation program manager, at a March 12 working session.

Outcome: On a unanimous vote without deliberation, the council authorized the distribution of the draft non-motorized plan.

Appointments

Several issues involving appointments were on the council’s agenda.

Appointments: Greenbelt – Fike

The council was asked to confirm Jennifer Fike as a member of Ann Arbor’s greenbelt advisory commission. She had been nominated at the council’s meeting on May 20, 2013. Fike, who is finance director of the Huron River Watershed Council, is replacing Laura Rubin, HRWC’s executive director. Rubin’s term on the commission ends in June.

Fike had attended the April 4, 2013 meeting of the commission to introduce herself and express her interest in serving.

By way of background, nominations for GAC are made by the city council, not by the mayor. The procedure followed by the council is to place on the agenda a resolution making the appointment at one council meeting, but to postpone it until the following meeting. For mayoral nominations, the names are placed before the council at a meeting as a communications item – on which no council vote is required. The confirmation vote takes place at a subsequent meeting.

Christopher Taylor (Ward 3), who serves as the city council appointee to the greenbelt advisory commission, briefly described Fike’s background and thanked Rubin for her service on GAC.

Outcome: The council voted unanimously to confirm Fike’s appointment to GAC.

Appointments – Misc.

The one mayoral nomination from the previous meeting was Lloyd E. Shelton for the city’s commission on disability issues.

Outcome: Shelton’s appointment to the city’s commission on disability issues was unanimously confirmed.

Nominations put before the council for consideration at its next meeting included the re-appointments to the planning commission of Bonnie Bona and Tony Derezinski. Also among the nominations was LuAnne Bullington to the taxicab board.

In addition, members of the downtown area citizens advisory council were re-nominated at the June 3 meeting, having first appeared on the council’s May 13, 2013 meeting agenda for re-appointment. The names had not been presented to the council for confirmation on May 20. The terms of all the members had expired. The council will need to vote to confirm these re-appointments at a future meeting.

Street Improvements

The council was asked to approve a couple of items related to street improvements.

Street Improvements: West Madison

One street-related item was a $2,283,524 contract with Pamar Enterprises Inc. for work on West Madison Street – from South Seventh Street to South Main Street. The total cost of the project is $3,162,000. It’s being paid for with a combination of street funds, water funds and stormwater funds. It includes water main replacement and stormwater improvements.

Stephen Kunselman (Ward 3) recalled when that section of Madison was repaved years ago and it had been in pretty good shape for a short period of time. He felt that the buses seemed to impact the pavement and it kept sloughing down the hill. He wondered if the base of the road would be beefed up to prevent the sloughing of the pavement. Public services area administrator Craig Hupy introduced project manager Igor Kotlyar at the podium.

Left to right: Public services area administrator Craig Hupy and Mike Anglin (Ward 5).

Kotlyar assured Kunselman that the project would entail a full reconstruction of the street, including stormwater improvements with proper cross section and thickness of pavement for buses. Responding to a question from Kunselman, Kotlyar indicated that the construction would last, saying he didn’t want to come back to do repairs.

Mike Anglin (Ward 5) asked for an explanation of the stormwater features. Kotlyar described how the project would use a range of techniques, based on the soil composition along different sections of the road – including rain gardens and plans for infiltration on the uphill portions of the street. And in lower parts of the project, where soils aren’t suitable for infiltration, oversized piping would serve as a temporary detention system, he explained.

Outcome: The West Madison Street improvements contract was unanimously approved.

Street Improvements: Stone School Road Design

Also related to street improvements was a request for approval of a $101,140 contract for design work with Northwest Consultants Inc. (NCI) for the Stone School Road reconstruction between I-94 and Ellsworth Road. The staff memo explained why a stormwater engineer was being consulted on the project:

A portion of the project includes alternatives for addressing the existing, failed, Mallett’s Creek culvert located under Old Stone School Road near the I-94 pedestrian overpass, as well as stream bank stability issues associated with the existing culvert located under Stone School Road and other storm water quality and quantity issues associated with Stone School Road itself.

Stephen Kunselman (Ward 3) said he’s looking forward to this project. He’s personally seen the failed culvert, but added, “don’t ask why.” He reported that a former city employee – who owns property adjacent to the site – had pointed out the failed culvert. Responding to a question from Kunselman, city engineer Nick Hutchinson told Kunselman that construction is expected in 2014.

Jane Lumm (Ward 2) said that as a member of the Malletts Creek coordinating committee, she was grateful that the project would be addressing Malletts Creek issues.

Outcome: The Stone School Road design work contract was unanimously approved by the council.

Time Limitation on Fireworks

The council was asked to take initial action to revise the city’s local ordinance on the use of fireworks.

The change would mean that it wouldn’t be possible to explode fireworks for the continuous 72-hour period from July 3-5. Instead, people would have to confine their use of fireworks to the period between 8 a.m. and midnight on those days.

The local ordinance change depends on state legislation that’s yet to be enacted. But a bill already approved by the Michigan House, and expected to be ratified by the Senate and signed into law by July 4 this year, would give local municipalities the ability to regulate the hours during which fireworks can be exploded.

State law currently prohibits local municipalities from regulating the use of fireworks on the day preceding, the day of, and the day after a national holiday. The bill that’s working its way through the state legislature would allow local municipalities to impose restrictions on those days – but only by regulating the hours – to 8 a.m. through midnight. For New Year’s Day, local municipalities could regulate the use of fireworks by allowing them from 8 a.m. through 1 a.m., which would allow for midnight fireworks celebrations.

Briere recalled the loud July 4 last year and the complaints about fireworks that had come on July 5. She described rockets found in yards the next day. While the number of complaints might not have been great, those that were heard were dramatic, she said. That resulted from a change in state law that allows residents to use “more exciting” fireworks.

Briere said the state legislature had received a lot of complaints. She gave an update on the legislative activity in the House. She noted it lacked Senate approval and hadn’t been signed into law. But the initial approval by the council that night would set up the council to give final approval of the local ordinance before July 4, if “with any luck” the state law as actually changed, she said. If the legislature did not act, Briere noted that Ann Arbor’s local law needed to be revised in any case to update some obsolete references.

Jane Lumm (Ward 2) asked for clarification about the impact of the local ordinance change. Briere assured Lumm that it was only display fireworks that required a permit, but that consumer fireworks did not.

Outcome: The council gave unanimous initial approval to the change in the fireworks ordinance. The second reading will come before the council on June 17.

Utility Improvement Charges

The council was asked to give final approval to changes in the way utility improvement charges are calculated.

The initial approval was given on May 13, 2013 at a meeting that had started on May 6. The improvement charges will be calculated in a way that significantly reduces the rates for the next two years. That would give the city time to hire a consultant to give a more comprehensive review to the charges.

The charges are due when a single- or two-family property connects to water and sewer for the first time. The charges are paid by either the contractor/developer or the property owner, depending on who makes the request for a connection. [.pdf of connection charge comparison]

The action on improvement charges came after the council had debated proposed increases to the charges at its Jan. 22, 2013 meeting, and ultimately rejected the increase for this year.

The charges, which could be as high as $40,000, were seen as an obstacle to in-fill development of vacant lots in the city.

Sabra Briere (Ward 1) led off deliberations by announcing that the city attorney’s office had recommended a change to the amendment. She read aloud the change and allowed that “it’s not entirely enlightening.” The change related to property outside a development, adding the following language:

(13) For a residential property outside a benefited development that connects during the period July 1, 2013 through June 30, 2015, to a water main or sanitary sewer improvement or identified portion thereof that was built as provided in this section 1:277, including water main or sanitary sewer improvements constructed both before and after January 20, 2004, the improvement charge that is imposed at the time of connection shall be:

Improvement Charge = (N)(4)(Y)(CC)

For purposes of this calculation, “N,” “Y” and “CC” shall have the same meaning as in subsections 1:277(3) and (5), and the value of Y shall be 19.

The change was accepted in a friendly way, which meant that the council did not vote on the added language. Jane Lumm (Ward 2) thanked sponsors of the ordinance – Briere, Stephen Kunselman (Ward 3) and Sumi Kailasapathy (Ward 1). She also thanked the staff for their work and expressed her support for the ordinance change.

Outcome: The council gave unanimous final approval to the change in the utility improvement charges.

Ann Arbor Utility Rate Increases

The council was asked to give final approval to water, sewer and stormwater rate increases.

In terms of revenue generated to the city, the rate increases are expected to generate 3.55% more for drinking water ($739,244), 4.25% more for the sanitary sewer ($955,531), and 4% more for stormwater ($233,811). [.pdf of complete utility rate changes as proposed]

According to the city, the rate increases are needed to maintain debt service coverage and to maintain funding for required capital improvements. The city estimates that the impact on an average customer will be a $20.66 per year increase in total utility charges.

The city’s drinking water charges are based on a “unit” of 100 cubic feet – 748 gallons. Charges for residential customers are divided into tiers, based on usage. For example, the first seven units of water for residential customers have been charged at a rate of $1.31 per unit and will now be increased to $1.35 per unit. Since 2004 the city has used four tiers of rates, based on usage. For this year, however, the amount charged for the top tier – for usage over 45 units – is proposed to be identical with the next lower tier. Currently the top tier is charged at $6.78, but is proposed to drop to the third tier rate of $4.88.

Sewer rates are charged as a function of water usage. The commodity rate is proposed to increase from $3.48 to $3.65.

The city’s stormwater rates are based on the amount of impervious area on a parcel and are billed quarterly. For example, the lowest tier – for impervious area less than 2,187 square feet – has been $13.68 per quarter. Under the new rate structure, that increases to $14.20.

Water usage for Ann Arbor city residents is available on the city’s website. [You'll need your account number to access information.]

The council had given initial approval to the utility rate changes at its May 20, 2013 meeting.

Outcome: Without further deliberation, the council gave unanimous final approval to the utility rate increases.

State Street Center Rezoning

The council was asked to give final approval to a rezoning request for State Street Center, near the intersection of State and Ellsworth. The rezoning had been given initial approval by the council at its May 13, 2013 meeting. A site plan for the project has not yet received council action.

The rezoning request – from O (office) to C3 (fringe commercial) – stems from an incorrectly recording of the zoning designation in the city’s documents. The development is located adjacent to a new Tim Hortons restaurant, which opened last year.

The project calls for demolishing a vacant 840-square-foot house on this site. In its place, the developer plans a one-story, 1,700-square-foot drive-thru Jimmy John’s restaurant facing South State Street. A one-story, 6,790-square-foot retail building will be built behind the restaurant. The driveway off South State Street would be relocated and widened. The site would include 39 parking spaces, as well as covered bicycle parking between the buildings.

The project is estimated to cost $900,000. The property, which is located in Ward 4, is owned by Jack Schwarcz of Oak Park, Mich.

The site plan approval would be contingent on dedicating a 50-foot South State Street right-of-way to the city prior to any permits being issued.

The project was approved by the city planning commission at its April 2, 2013 meeting. It had originally been on the commission’s March 19, 2013 agenda. At that time, the city’s planning staff recommended postponement after discovering that the city’s official zoning map had been incorrectly labeled. It showed the site as zoned C3 (fringe commercial). The developer had made plans based on that erroneous labeling. But during background research for this proposal, planning staff discovered that the site actually had been zoned as O (office) in 2003.

Outcome: Without discussion, the council unanimously approved the State Street Center rezoning.

490 Huron Parkway Rezoning: Final OK

The council was asked to give final approval to a rezoning request for 490 Huron Parkway, from R3 (townhouse district) to R1B (single-family dwelling). Initial approval had been given at the council’s May 13, 2013 meeting.

The Parkway Place proposal had not won approval from the city planning commission at its Dec. 18, 2012 meeting. At that meeting, planning commissioner Bonnie Bona said she couldn’t support the rezoning. With 70,000 people commuting into Ann Arbor each day, it didn’t make sense to build single-family homes in that area, she said. The 5-1 planning commission vote meant that the project did not get the six votes it needed for a recommendation of approval.

The rezoning will allow the currently vacant 1.22-acre site, located north of Ruthven Park, to be divided into three separate lots. City planning staff had recommended the rezoning, and noted that the adjacent parcel at 500 Huron Parkway is also zoned R1B.

During the brief deliberations, Jane Lumm (Ward 2) thanked staff for their response to a question about unstable soils. Staff had inspected the site and confirmed that the soils were stable, she said.

Sabra Briere (Ward 1), who serves as the city council appointee to the planning commission, explained that the recommendation of denial from the planning commission resulted from the attendance of only six of nine commissioners. The objection was based on the contention that the project, however worthy, didn’t fit the master plan for the area. She noted the rationale for those commissioners voting for it: They thought it would be an improvement to the area.

Outcome: The council unanimously approved the 490 Huron Parkway rezoning.

Communications and Comment

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

Comm/Comm: D1 Zoning Review

During public commentary reserved time, councilmembers heard from residents disappointed with the council’s May 13, 2013 decision to approve the 413 E. Huron development. The planning commission is now supposed to implement the direction given by the council, at its April 1, 2013 meeting, to review the D1 (downtown core) zoning by Oct. 1. Speakers encouraged the council to look at specific issues related to that zoning review.

Jeffrey Crockett congratulated the winners of the historic district commission awards that were announced at the start of the meeting. He thanked city planner Jill Thacher for her staff support of the historic district commission. He criticized the provision for “mitigation” of landmark trees in the zoning code. He concluded there is no meaningful protection for landmark trees in the D1 zoning code. The 413 E. Huron project involved mitigation of landmark trees.

Peter Nagourney also commented on the 413 E. Huron project. He criticized the council’s decision to approve the project, based on the threat of a lawsuit.

Steve Kaplan called the 413 E. Huron project emblematic of problems to come. He focused on the possible traffic issues that the project could cause.

Comm/Comm: Sophistication of DDA

During communications time, Christopher Taylor (Ward 3) referred to a 2008 email cited at the council’s previous meeting in which Ann Arbor Downtown Development executive director Susan Pollay described the financing of the Library Lane underground parking structure. She indicated in that email that tax dollars would not be used to finance it, but rather parking system revenue would fund that project. That approach proved not to be the one that the DDA took, using tax increment finance (TIF) funds to pay for part of the cost. Taylor portrayed Pollay’s statement not as reflecting a lack of competence on the DDA’s part, but rather of changing plans when reality changes. The part that had changed, according to Taylor, was the DDA’s willingness to change the terms of the contract under which the DDA operates the public parking system.

Comm/Comm: Pizza in the Park

At a previous council meeting – on May 20, 2013 – several people had spoken in opposition to the imposition of a fee that was apparently charged to the Vineyard Church of Ann Arbor as part of its Friday evening homelessness ministry, which the church conducts at Liberty Plaza. The plaza at the southwest corner of Division and Liberty is part of the city’s parks & recreation system.

At the June 3 meeting, there was some follow-up during public commentary reserved time, as there was an interest in thanking city officials for their efforts to ensure the event could continue, as well as an interest in getting some kind of written commitment from the city.

Seth Best asked everyone in the audience to stand who was attending the council meeting to support Pizza in the Park, and a couple dozen people stood up. He thanked the mayor and staff for their efforts to ensure that the program, sponsored by the Vineyard Church, can continue. The program distributes food and other aid to the homeless community in Liberty Plaza. He hoped for something in writing. Nicholas Goodman described an increased police presence deployed in the city, which he perceived as designed to break up tent communities.

Antonio Benton also thanked the mayor and the council for agreeing to allow the Pizza in the Park to continue. He described himself as a full-time student, but also homeless. Pizza in the Park is the one meal that many in the homeless community get, he said.

After public comment, mayor John Hieftje explained what happened to cause a misunderstanding concerning Pizza in the Park. It involved a vehicle being parked in a private driveway. He gave an assurance that Pizza in the Park will be allowed to continue. From the audience, Caleb Poirer asked Hieftje if some kind of written commitment could be provided affirming that. Hieftje indicated he didn’t think there was a legal basis for not being able to continue that event.

During public commentary at the conclusion of the meeting, Poirer addressed the council asking for a binding, written agreement indicating that humanitarian aid providers will not be charged a parks and recreation fee. And Best echoed Poirer’s sentiments. He was concerned that a policy might be applied that requires a permit if you advertise a gathering in a public space that could draw more than 50 people.

Comm/Comm: Thomas Partridge

During public commentary reserved time and during several of the nine public hearings held on various topics, Thomas Partridge addressed the council – to advance the cause of human rights and civil rights, affordable housing, and public transportation for all residents, especially those with disabilities and seniors.

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

Absent: Chuck Warpehoski.

Next council meeting: Monday, June 17, 2013 at 7 p.m. in the council chambers at city hall, 301 E. Huron. [Check Chronicle event listings to confirm date]

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